DKLHIGH SIGNALOPERATIONAL10-K

DKL underwent massive operational expansion with revenue surging 324% alongside significant infrastructure changes and pipeline capacity adjustments.

The dramatic revenue increase to $584M suggests either major acquisitions or substantial business expansion, supported by doubling of capital expenditures to $268M. However, the reduction in pipeline miles from 2,204 to 1,326 miles while increasing processing capacity indicates strategic asset optimization and potential divestiture of underperforming assets.

Comparing 2026-02-27 vs 2025-02-26View on EDGAR →
FINANCIAL ANALYSIS

DKL experienced explosive growth with revenue jumping 324% to $584M, accompanied by proportional increases in working capital components including accounts receivable (+247%) and inventory (+230%), suggesting genuine business expansion rather than accounting changes. The balance sheet expanded significantly with total assets growing 36% to $2.8B and debt increasing 25% to $2.3B, while current liabilities surged 302% to $357M, indicating aggressive growth financing but potentially stressing short-term liquidity. Capital expenditures more than doubled to $268M, confirming substantial investment in growth infrastructure, though the 74% increase in interest expense to $143M will pressure future profitability.

FINANCIAL STATEMENT CHANGES
Revenue
P&L
+324.5%
$137.6M$584.0M

Strong top-line growth of 324.5% — accelerating demand or successful expansion into new markets.

Current Liabilities
Balance Sheet
+301.6%
$88.8M$356.5M

Current liabilities surged 301.6% — significant near-term obligations; verify ability to meet short-term debt.

Accounts Receivable
Balance Sheet
+246.6%
$15.4M$53.3M

Receivables surged 246.6% — revenue recognized but not yet collected; watch for collection issues or channel stuffing.

Inventory
Balance Sheet
+230.1%
$5.4M$17.9M

Inventory surged 230.1% — growing significantly faster than typical sales pace; potential demand softening or supply chain overcorrection.

Current Assets
Balance Sheet
+174.7%
$145.9M$400.8M

Current assets grew 174.7% — improving short-term liquidity or inventory/receivables build.

Capital Expenditure
Cash Flow
+107.5%
$129.0M$267.8M

Capital expenditure jumped 107.5% — major investment cycle underway; assess returns on deployment.

Cash & Equivalents
Balance Sheet
+102.3%
$5.4M$10.9M

Cash position surged 102.3% — strong cash generation or capital raise providing significant financial cushion.

Interest Expense
P&L
+74%
$82.3M$143.2M

Interest expense surged 74% — significant debt increase or rising rates materially impacting earnings.

Total Assets
Balance Sheet
+36.1%
$2.0B$2.8B

Asset base grew 36.1% — expansion through organic growth, acquisitions, or capital deployment.

Total Debt
Balance Sheet
+25%
$1.9B$2.3B

Debt rose 25% — additional borrowing for investment or operations; monitor coverage ratios.

LANGUAGE CHANGES
NEW — 2026-02-27
PRIOR — 2025-02-26
ADDED
At February 20, 2026, there were 53,512,343 common limited partner units.
Management's Discussion and Analysis of Financial Condition and Results of Operations 57 Item 7A.
Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Joint Ventures Approximately 1,326 miles of crude and refined product pipeline (1) Approximately 10.0 million barrels of active shell capacity Approximately 310 MBbl/d of water disposal capacity Approximately 1,015 MBbl/d of operations capacity Approximately 195 MMcf/d of gas processing capacity 9 light product distribution terminals Approximately 1.3 million barrels active shell capacity Sales of wholesale products in the West Texas market.
161 tractors and 306 trailers Crude oil pipeline joint ventures: Andeavor Logistics Rio Pipeline LLC ("Andeavor Logistics") Caddo Pipeline LLC ("CP LLC") Red River Pipeline Company LLC ("Red River") Wink to Webster Holdings, LLC ("W2W Holdings") (1) Excludes approximately 462 miles of decommissioned gathering system pipeline.
The following chart illustrates the Partnership's current structure: 7 | Business and Properties Our Vision We are a full-suite provider offering integrated crude, gas and water services to the Partnership's customers in the Permian basin.
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REMOVED
At February 20, 2025, there were 53,667,523 common limited partner units.
Management's Discussion and Analysis of Financial Condition and Results of Operations 60 Item 7A.
Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Joint Ventures Approximately 2,204 miles of crude and refined product pipeline (1) Approximately 10.0 million barrels of active shell capacity Approximately 310 MBbl/d of water disposal capacity Approximately 945 MBbl/d of operations capacity Approximately 88 MMcf/d of gas processing capacity 9 light product distribution terminals Approximately 0.9 million barrels active shell capacity Sales of wholesale products in the West Texas market.
161 tractors and 306 trailers Crude oil pipeline joint ventures: Andeavor Logistics Rio Pipeline LLC ("Andeavor Logistics") Caddo Pipeline LLC ("CP LLC") Red River Pipeline Company LLC ("Red River") Wink to Webster Holdings, LLC ("W2W Holdings") (1) Includes approximately 240 miles of leased capacity and 489 miles of decommissioned gathering system pipeline.
The following chart illustrates the Partnership's current structure, which reflects the issuance of 2,175,209 common limited partner units on January 2, 2025, in connection with the closing of the Gravity Acquisition: 7 | Business and Properties Our Vision Our core vision is to be a full suite (crude, gas and water) service provider to the Partnership's customers in the Permian basin.
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