XML 69 R25.htm IDEA: XBRL DOCUMENT
v3.25.4

Leases | 12 Months Ended
--- | ---
Dec. 31, 2025
Leases [Abstract] |
Leases | Leases Lessee We have noncancelable operating leases primarily associated with rights-of-way and transportation equipment. We also have noncancelable finance leases primarily associated with compressors and transportation equipment. Our remaining lease terms range from less than one year to 39 years with renewal options ranging from 3 to 40 years, and some agreements have multiple renewal options. The components of lease cost are as follows (in thousands) (1):
|  |  | Year Ended December 31,
|  |  |  |  | 2025 |  | 2024 |  | 2023
Components of lease costs |  |  |  |  |  |  |  |  |
Operating lease cost |  |  |  |  | $ | 8,610 |  |  | $ | 10,370 |  |  | $ | 11,533 |
Finance lease cost: (1) |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  |  |  |  | 5,637 |  |  | — |  |  | — |
Interest on lease liabilities |  |  |  |  | 1,491 |  |  | — |  |  | — |
Total finance lease cost |  |  |  |  | 7,128 |  |  | — |  |  | — |
Short-term lease cost |  |  |  |  | 6,691 |  |  | 7,359 |  |  | 5,031 |
Variable lease cost |  |  |  |  | 905 |  |  | 1,261 |  |  | 3,826 |
Total lease cost |  |  |  |  | $ | 23,334 |  |  | $ | 18,990 |  |  | $ | 20,390 |
(1) An immaterial amount of finance lease costs was included in operating lease costs during the years ended December 31, 2024 and 2023.
Supplemental balance sheet information related to leases is as follows: |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Year Ended December 31,
|  |  |  |  |  |  | 2025 |  | 2024
Weighted-average remaining lease term (years) for operating leases |  |  |  |  |  |  | 3.5 |  | 3.4
Weighted-average discount rate (1) operating leases |  |  |  |  |  |  | 7.5 | % |  | 7.4 | %
Weighted-average remaining lease term (years) for finance lease |  |  |  |  |  |  | 3.4 |  | 3.5
Weighted-average discount rate (1) finance lease |  |  |  |  |  |  | 7.5 | % |  | 8.4 | %
(1) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842. |  |  |  |  |  |  |  |  |
Maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
Year Ended December 31, | Operating |  | Finance
2026 | $ | 3,384 |  |  | $ | 10,108 |
2027 | 1,978 |  |  | 9,941 |
2028 | 902 |  |  | 6,892 |
2029 | 232 |  |  | 4,179 |
2030 | 124 |  |  | 1,155 |
2031 and thereafter | 851 |  |  | — |
Total lease payments | 7,471 |  |  | 32,275 |
Less: present value discount | 893 |  |  | 3,676 |
Lease liabilities | $ | 6,578 |  |  | $ | 28,599 |
Lessor We are the lessor under certain agreements for gathering, transportation, storage, terminalling, and offloading with Delek Holdings. These agreements have remaining terms ranging from 2 to 11 years with renewal options of 5 years, and some agreements have multiple renewal options. Revenue from these leases are recorded in affiliate revenue in the consolidated statements of income. For details on Lease Revenue, see Note 5. During 2024, we executed renewals to certain agreements between DKL and Delek Holdings. The renewals required the embedded leases within these agreements to be reassessed under ASC 842. As a result of these lease assessments, certain leases were reclassified from an operating lease to a sales-type lease. Accordingly, the underlying property, plant and equipment, net, and associated deferred revenue, if any, were derecognized and the present value of the future lease payments and the unguaranteed residual value of the assets were recorded as a net investment in sales-type lease during the respective periods. The net investment in sales-type leases is recorded utilizing the estimated fair value of the underlying leased assets at contract modification date and are nonrecurring fair value measurements. The leased assets were valued using a cost method valuation approach which utilizes Level 3 inputs. We recognized any billings in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in Net Revenues - Affiliate in the accompanying consolidated statements of income and comprehensive income. We did not elect to use the practical expedient to combine lease and non-lease components for lessor arrangements. The tables below represent the portion of the contracts allocated to the lease component based on relative standalone selling price. Lease income included in the consolidated statements of income and comprehensive income was as follows:
|  | Year Ended December 31, |  |
(in thousands) |  |  | 2025 | 2024 | 2023 |  |
Operating leases: |  |  |  |  |  |  |
Lease revenue |  |  | $ | 200,180 |  | $ | 268,843 |  | $ | 311,096 |  |  |
Sales-type leases: |  |  |  |  |  |  |
Interest income (Sales-type rental revenue-fixed minimum) |  |  | 112,456 |  | 47,709 |  | — |  |  |
Lease revenue (Revenue from variable lease payments) |  |  | 15,708 |  | 7,673 |  | — |  |  |
Sales-type lease income |  |  | $ | 128,164 |  | $ | 55,382 |  | $ | — |  |  |
The following presents the consolidated financial statement impact of sales-type leases on commencement or modification date for the year ended December 31, 2024. These transactions are non-cash transactions. We did not have any sales-type leases that commenced during the year ended December 31, 2025. The amount recognized on commencement date was recorded in contributions in the consolidated statements of partners' equity (deficit), given the underlying agreements are between entities under common control.
|  |  | Year Ended December 31,
(in thousands) |  |  |  |  |  | 2024
Lease receivables |  |  |  |  |  | $ | 217,263 |
Unguaranteed residual assets |  |  |  |  |  | 10,573 |
Property, plant and equipment, net |  |  |  |  |  | (108,143) |
Amount recognized on commencement date |  |  |  |  |  | $ | 119,693 |
The following is a schedule of annual undiscounted minimum future lease cash receipts on the non-cancelable operating leases as of December 31, 2025 (in thousands):
2026 | $ | 50,331 |
2027 | 38,240 |
2028 | 7,680 |
2029 | 1,567 |
2030 | 1,567 |
2031 and thereafter | 784 |
Total minimum future lease revenue | $ | 100,169 |
Annual future minimum undiscounted lease receipts under our sales-type leases were as follows as of December 31, 2025 (in thousands):
2026 | $ | 108,927 |
2027 | 78,858 |
2028 | 78,858 |
2029 | 78,858 |
2030 | 78,858 |
2031 and thereafter | 183,905 |
Total minimum future lease revenue | 608,264 |
Less: Imputed interest | 402,243 |
Lease receivable | $ | 206,021 |
The components of our aggregate net investment in sales-type leases are as follows:
| Year Ended December 31,
| 2025 |  | 2024
Lease receivable | $ | 206,021 |  |  | $ | 203,803 |
Less: Current lease receivables (1) | 36,362 |  |  | 22,783 |
Long-term lease receivables | 169,659 |  |  | 181,020 |
Unguaranteed residual assets (noncurrent) | 15,997 |  |  | 12,106 |
Net lease investment - affiliate | $ | 185,656 |  |  | $ | 193,126 |
(1) Presented in Lease receivable - affiliate, in the consolidated balance sheets.
The following table summarized our investment in assets held under operating lease by major classes (in thousands):
| December 31,
| 2025 |  | 2024
Land | $ | 10,995 |  |  | $ | 11,643 |
Building and building improvements | 22 |  |  | 387 |
Pipelines, tanks and terminals | 240,822 |  |  | 419,528 |
Other equipment | 812 |  |  | 2,229 |
Property, plant and equipment | 252,651 |  |  | 433,787 |
Less: accumulated depreciation | (103,897) |  |  | (143,961) |
Property, plant and equipment, net | $ | 148,754 |  |  | $ | 289,826 |
Leases | Leases Lessee We have noncancelable operating leases primarily associated with rights-of-way and transportation equipment. We also have noncancelable finance leases primarily associated with compressors and transportation equipment. Our remaining lease terms range from less than one year to 39 years with renewal options ranging from 3 to 40 years, and some agreements have multiple renewal options. The components of lease cost are as follows (in thousands) (1):
|  |  | Year Ended December 31,
|  |  |  |  | 2025 |  | 2024 |  | 2023
Components of lease costs |  |  |  |  |  |  |  |  |
Operating lease cost |  |  |  |  | $ | 8,610 |  |  | $ | 10,370 |  |  | $ | 11,533 |
Finance lease cost: (1) |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  |  |  |  | 5,637 |  |  | — |  |  | — |
Interest on lease liabilities |  |  |  |  | 1,491 |  |  | — |  |  | — |
Total finance lease cost |  |  |  |  | 7,128 |  |  | — |  |  | — |
Short-term lease cost |  |  |  |  | 6,691 |  |  | 7,359 |  |  | 5,031 |
Variable lease cost |  |  |  |  | 905 |  |  | 1,261 |  |  | 3,826 |
Total lease cost |  |  |  |  | $ | 23,334 |  |  | $ | 18,990 |  |  | $ | 20,390 |
(1) An immaterial amount of finance lease costs was included in operating lease costs during the years ended December 31, 2024 and 2023.
Supplemental balance sheet information related to leases is as follows: |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Year Ended December 31,
|  |  |  |  |  |  | 2025 |  | 2024
Weighted-average remaining lease term (years) for operating leases |  |  |  |  |  |  | 3.5 |  | 3.4
Weighted-average discount rate (1) operating leases |  |  |  |  |  |  | 7.5 | % |  | 7.4 | %
Weighted-average remaining lease term (years) for finance lease |  |  |  |  |  |  | 3.4 |  | 3.5
Weighted-average discount rate (1) finance lease |  |  |  |  |  |  | 7.5 | % |  | 8.4 | %
(1) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842. |  |  |  |  |  |  |  |  |
Maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
Year Ended December 31, | Operating |  | Finance
2026 | $ | 3,384 |  |  | $ | 10,108 |
2027 | 1,978 |  |  | 9,941 |
2028 | 902 |  |  | 6,892 |
2029 | 232 |  |  | 4,179 |
2030 | 124 |  |  | 1,155 |
2031 and thereafter | 851 |  |  | — |
Total lease payments | 7,471 |  |  | 32,275 |
Less: present value discount | 893 |  |  | 3,676 |
Lease liabilities | $ | 6,578 |  |  | $ | 28,599 |
Lessor We are the lessor under certain agreements for gathering, transportation, storage, terminalling, and offloading with Delek Holdings. These agreements have remaining terms ranging from 2 to 11 years with renewal options of 5 years, and some agreements have multiple renewal options. Revenue from these leases are recorded in affiliate revenue in the consolidated statements of income. For details on Lease Revenue, see Note 5. During 2024, we executed renewals to certain agreements between DKL and Delek Holdings. The renewals required the embedded leases within these agreements to be reassessed under ASC 842. As a result of these lease assessments, certain leases were reclassified from an operating lease to a sales-type lease. Accordingly, the underlying property, plant and equipment, net, and associated deferred revenue, if any, were derecognized and the present value of the future lease payments and the unguaranteed residual value of the assets were recorded as a net investment in sales-type lease during the respective periods. The net investment in sales-type leases is recorded utilizing the estimated fair value of the underlying leased assets at contract modification date and are nonrecurring fair value measurements. The leased assets were valued using a cost method valuation approach which utilizes Level 3 inputs. We recognized any billings in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in Net Revenues - Affiliate in the accompanying consolidated statements of income and comprehensive income. We did not elect to use the practical expedient to combine lease and non-lease components for lessor arrangements. The tables below represent the portion of the contracts allocated to the lease component based on relative standalone selling price. Lease income included in the consolidated statements of income and comprehensive income was as follows:
|  | Year Ended December 31, |  |
(in thousands) |  |  | 2025 | 2024 | 2023 |  |
Operating leases: |  |  |  |  |  |  |
Lease revenue |  |  | $ | 200,180 |  | $ | 268,843 |  | $ | 311,096 |  |  |
Sales-type leases: |  |  |  |  |  |  |
Interest income (Sales-type rental revenue-fixed minimum) |  |  | 112,456 |  | 47,709 |  | — |  |  |
Lease revenue (Revenue from variable lease payments) |  |  | 15,708 |  | 7,673 |  | — |  |  |
Sales-type lease income |  |  | $ | 128,164 |  | $ | 55,382 |  | $ | — |  |  |
The following presents the consolidated financial statement impact of sales-type leases on commencement or modification date for the year ended December 31, 2024. These transactions are non-cash transactions. We did not have any sales-type leases that commenced during the year ended December 31, 2025. The amount recognized on commencement date was recorded in contributions in the consolidated statements of partners' equity (deficit), given the underlying agreements are between entities under common control.
|  |  | Year Ended December 31,
(in thousands) |  |  |  |  |  | 2024
Lease receivables |  |  |  |  |  | $ | 217,263 |
Unguaranteed residual assets |  |  |  |  |  | 10,573 |
Property, plant and equipment, net |  |  |  |  |  | (108,143) |
Amount recognized on commencement date |  |  |  |  |  | $ | 119,693 |
The following is a schedule of annual undiscounted minimum future lease cash receipts on the non-cancelable operating leases as of December 31, 2025 (in thousands):
2026 | $ | 50,331 |
2027 | 38,240 |
2028 | 7,680 |
2029 | 1,567 |
2030 | 1,567 |
2031 and thereafter | 784 |
Total minimum future lease revenue | $ | 100,169 |
Annual future minimum undiscounted lease receipts under our sales-type leases were as follows as of December 31, 2025 (in thousands):
2026 | $ | 108,927 |
2027 | 78,858 |
2028 | 78,858 |
2029 | 78,858 |
2030 | 78,858 |
2031 and thereafter | 183,905 |
Total minimum future lease revenue | 608,264 |
Less: Imputed interest | 402,243 |
Lease receivable | $ | 206,021 |
The components of our aggregate net investment in sales-type leases are as follows:
| Year Ended December 31,
| 2025 |  | 2024
Lease receivable | $ | 206,021 |  |  | $ | 203,803 |
Less: Current lease receivables (1) | 36,362 |  |  | 22,783 |
Long-term lease receivables | 169,659 |  |  | 181,020 |
Unguaranteed residual assets (noncurrent) | 15,997 |  |  | 12,106 |
Net lease investment - affiliate | $ | 185,656 |  |  | $ | 193,126 |
(1) Presented in Lease receivable - affiliate, in the consolidated balance sheets.
The following table summarized our investment in assets held under operating lease by major classes (in thousands):
| December 31,
| 2025 |  | 2024
Land | $ | 10,995 |  |  | $ | 11,643 |
Building and building improvements | 22 |  |  | 387 |
Pipelines, tanks and terminals | 240,822 |  |  | 419,528 |
Other equipment | 812 |  |  | 2,229 |
Property, plant and equipment | 252,651 |  |  | 433,787 |
Less: accumulated depreciation | (103,897) |  |  | (143,961) |
Property, plant and equipment, net | $ | 148,754 |  |  | $ | 289,826 |
Leases | Leases Lessee We have noncancelable operating leases primarily associated with rights-of-way and transportation equipment. We also have noncancelable finance leases primarily associated with compressors and transportation equipment. Our remaining lease terms range from less than one year to 39 years with renewal options ranging from 3 to 40 years, and some agreements have multiple renewal options. The components of lease cost are as follows (in thousands) (1):
|  |  | Year Ended December 31,
|  |  |  |  | 2025 |  | 2024 |  | 2023
Components of lease costs |  |  |  |  |  |  |  |  |
Operating lease cost |  |  |  |  | $ | 8,610 |  |  | $ | 10,370 |  |  | $ | 11,533 |
Finance lease cost: (1) |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  |  |  |  | 5,637 |  |  | — |  |  | — |
Interest on lease liabilities |  |  |  |  | 1,491 |  |  | — |  |  | — |
Total finance lease cost |  |  |  |  | 7,128 |  |  | — |  |  | — |
Short-term lease cost |  |  |  |  | 6,691 |  |  | 7,359 |  |  | 5,031 |
Variable lease cost |  |  |  |  | 905 |  |  | 1,261 |  |  | 3,826 |
Total lease cost |  |  |  |  | $ | 23,334 |  |  | $ | 18,990 |  |  | $ | 20,390 |
(1) An immaterial amount of finance lease costs was included in operating lease costs during the years ended December 31, 2024 and 2023.
Supplemental balance sheet information related to leases is as follows: |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Year Ended December 31,
|  |  |  |  |  |  | 2025 |  | 2024
Weighted-average remaining lease term (years) for operating leases |  |  |  |  |  |  | 3.5 |  | 3.4
Weighted-average discount rate (1) operating leases |  |  |  |  |  |  | 7.5 | % |  | 7.4 | %
Weighted-average remaining lease term (years) for finance lease |  |  |  |  |  |  | 3.4 |  | 3.5
Weighted-average discount rate (1) finance lease |  |  |  |  |  |  | 7.5 | % |  | 8.4 | %
(1) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842. |  |  |  |  |  |  |  |  |
Maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
Year Ended December 31, | Operating |  | Finance
2026 | $ | 3,384 |  |  | $ | 10,108 |
2027 | 1,978 |  |  | 9,941 |
2028 | 902 |  |  | 6,892 |
2029 | 232 |  |  | 4,179 |
2030 | 124 |  |  | 1,155 |
2031 and thereafter | 851 |  |  | — |
Total lease payments | 7,471 |  |  | 32,275 |
Less: present value discount | 893 |  |  | 3,676 |
Lease liabilities | $ | 6,578 |  |  | $ | 28,599 |
Lessor We are the lessor under certain agreements for gathering, transportation, storage, terminalling, and offloading with Delek Holdings. These agreements have remaining terms ranging from 2 to 11 years with renewal options of 5 years, and some agreements have multiple renewal options. Revenue from these leases are recorded in affiliate revenue in the consolidated statements of income. For details on Lease Revenue, see Note 5. During 2024, we executed renewals to certain agreements between DKL and Delek Holdings. The renewals required the embedded leases within these agreements to be reassessed under ASC 842. As a result of these lease assessments, certain leases were reclassified from an operating lease to a sales-type lease. Accordingly, the underlying property, plant and equipment, net, and associated deferred revenue, if any, were derecognized and the present value of the future lease payments and the unguaranteed residual value of the assets were recorded as a net investment in sales-type lease during the respective periods. The net investment in sales-type leases is recorded utilizing the estimated fair value of the underlying leased assets at contract modification date and are nonrecurring fair value measurements. The leased assets were valued using a cost method valuation approach which utilizes Level 3 inputs. We recognized any billings in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in Net Revenues - Affiliate in the accompanying consolidated statements of income and comprehensive income. We did not elect to use the practical expedient to combine lease and non-lease components for lessor arrangements. The tables below represent the portion of the contracts allocated to the lease component based on relative standalone selling price. Lease income included in the consolidated statements of income and comprehensive income was as follows:
|  | Year Ended December 31, |  |
(in thousands) |  |  | 2025 | 2024 | 2023 |  |
Operating leases: |  |  |  |  |  |  |
Lease revenue |  |  | $ | 200,180 |  | $ | 268,843 |  | $ | 311,096 |  |  |
Sales-type leases: |  |  |  |  |  |  |
Interest income (Sales-type rental revenue-fixed minimum) |  |  | 112,456 |  | 47,709 |  | — |  |  |
Lease revenue (Revenue from variable lease payments) |  |  | 15,708 |  | 7,673 |  | — |  |  |
Sales-type lease income |  |  | $ | 128,164 |  | $ | 55,382 |  | $ | — |  |  |
The following presents the consolidated financial statement impact of sales-type leases on commencement or modification date for the year ended December 31, 2024. These transactions are non-cash transactions. We did not have any sales-type leases that commenced during the year ended December 31, 2025. The amount recognized on commencement date was recorded in contributions in the consolidated statements of partners' equity (deficit), given the underlying agreements are between entities under common control.
|  |  | Year Ended December 31,
(in thousands) |  |  |  |  |  | 2024
Lease receivables |  |  |  |  |  | $ | 217,263 |
Unguaranteed residual assets |  |  |  |  |  | 10,573 |
Property, plant and equipment, net |  |  |  |  |  | (108,143) |
Amount recognized on commencement date |  |  |  |  |  | $ | 119,693 |
The following is a schedule of annual undiscounted minimum future lease cash receipts on the non-cancelable operating leases as of December 31, 2025 (in thousands):
2026 | $ | 50,331 |
2027 | 38,240 |
2028 | 7,680 |
2029 | 1,567 |
2030 | 1,567 |
2031 and thereafter | 784 |
Total minimum future lease revenue | $ | 100,169 |
Annual future minimum undiscounted lease receipts under our sales-type leases were as follows as of December 31, 2025 (in thousands):
2026 | $ | 108,927 |
2027 | 78,858 |
2028 | 78,858 |
2029 | 78,858 |
2030 | 78,858 |
2031 and thereafter | 183,905 |
Total minimum future lease revenue | 608,264 |
Less: Imputed interest | 402,243 |
Lease receivable | $ | 206,021 |
The components of our aggregate net investment in sales-type leases are as follows:
| Year Ended December 31,
| 2025 |  | 2024
Lease receivable | $ | 206,021 |  |  | $ | 203,803 |
Less: Current lease receivables (1) | 36,362 |  |  | 22,783 |
Long-term lease receivables | 169,659 |  |  | 181,020 |
Unguaranteed residual assets (noncurrent) | 15,997 |  |  | 12,106 |
Net lease investment - affiliate | $ | 185,656 |  |  | $ | 193,126 |
(1) Presented in Lease receivable - affiliate, in the consolidated balance sheets.
The following table summarized our investment in assets held under operating lease by major classes (in thousands):
| December 31,
| 2025 |  | 2024
Land | $ | 10,995 |  |  | $ | 11,643 |
Building and building improvements | 22 |  |  | 387 |
Pipelines, tanks and terminals | 240,822 |  |  | 419,528 |
Other equipment | 812 |  |  | 2,229 |
Property, plant and equipment | 252,651 |  |  | 433,787 |
Less: accumulated depreciation | (103,897) |  |  | (143,961) |
Property, plant and equipment, net | $ | 148,754 |  |  | $ | 289,826 |

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-30/tableOfContent + Details
Name: | us-gaap_OperatingLeasesOfLessorDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration