Company: DK
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001628280-25-050541
Chunk: 99

Company: Delek US Holdings, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 99
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 commitments ("MVCs"). To the extent that our logistics volumes are not subject to MVCs, our Logistics revenue may be negatively impacted in periods where our customers are experiencing economic pressures or reductions in demand for their products. Additionally, certain of our throughput arrangements contain deficiency credit provisions that may require us to defer excess MVC fees collected over actual throughputs to apply toward MVC deficiencies in future periods. With respect to our equity method investments in pipeline joint ventures, our earnings from those investments (which is based on our pro rata ownership percentage of the joint venture's recognized net income or loss) are directly impacted by the operations of those joint ventures. Items impacting the joint venture net income (loss) may include (but are not limited to) the following: long-term throughput contractual arrangements and related MVCs and, in some cases, deficiency credit provisions; the demand for walk-up nominations; applicable rates or tariffs; long-lived asset or other impairments assessed at the joint venture level; and pipeline releases or other contingent liabilities. With respect to our West Texas marketing activities, our profitability is dependent upon the cost of landed product versus the rack price of refined product sold. Our logistics segment is generally protected from commodity price risk because inventory is purchased and then immediately sold at the rack. 

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Management's Discussion and Analysis

Logistics Segment Operational Comparison of the Three and Nine Months Ended September 30, 2025 versus the Three and Nine Months Ended September 30, 2024 

Revenues

Q3 2025 vs. Q3 2024

Net revenues increased by $47.2 million, or 22.0%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by:

•increase in incremental revenue associated with the Gravity acquisition of $20.7 million and an increase in revenue associated with the H2O Midstream acquisition of $11.0 million;

•increased revenue of $15.5 million related to the DPG dropdown agreement that went into effect in the second quarter of 2025;

•increased revenue of $2.4 million in our West Texas marketing operations primarily driven by an increase in volumes sold, increase in average prices of diesel per gallon and an increase in RINs revenue partially offset by a decrease in average sales prices of gasoline per gallon: 

◦the volumes of gasoline and diesel sold increased by 0.4 million and 1.2 million gallons, respectively;

◦the average sales prices of gasoline sold decreased by $0