BRENTWOOD, Tenn., Feb. 23, 2021 /PRNewswire/ -- Delek Logistics
Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its
financial results for the fourth quarter 2020. For the three months
ended December 31, 2020, Delek
Logistics reported net income attributable to all partners of
$40.7 million, or $0.94 per diluted common limited partner unit.
This compares to net income attributable to all partners of
$21.6 million, or $0.52 per diluted common limited partner unit, in
the fourth quarter 2019. Net cash from operating activities was
$58.4 million in the fourth quarter
2020 compared to $45.8 million in the
fourth quarter 2019. Distributable cash flow was $55.9 million in the fourth quarter 2020,
compared to $33.0 million in the
fourth quarter 2019. Reconciliation of net cash from operating
activities as reported under U.S. GAAP to distributable cash flow
is included in the financial tables attached to this
release.
For the fourth quarter 2020, earnings before interest, taxes,
depreciation and amortization ("EBITDA") was $64.0 million compared to $43.3 million in the fourth quarter 2019. Results
improved on a year-over-year basis primarily due to the drop down
of the Big Spring Gathering System and Trucking Assets and a
reduction in operating expenses by $7.5
million, partially due to a decrease in contract services.
Reconciliation of net income attributable to all partners as
reported under U.S. GAAP to EBITDA is included in the financial
tables attached to this release.
Uzi Yemin, Chairman, President
and Chief Executive Officer of Delek Logistics' general partner,
remarked: "I'm pleased to announce zero recordable incidents for
the year, which is a true testament to our employees and our core
values. Our fourth quarter results rounded out a stellar year for
our company, as we delivered strong relative stock performance,
despite macro headwinds for the industry. Net income and EBITDA in
the fourth quarter increased approximately 88% and 48%,
respectively, versus last year. Distribution growth in the quarter
was 2.8% on a year-over-year basis and we delivered on our
commitment of 5% distribution growth on a full-year basis. We
expect another 5% increase in distributions in 2021, underpinned by
our outlook for continued strong operational performance."
Mr. Yemin continued, "Eliminating the incentive distribution
rights (IDRs) last year helped lower our cost of capital and
positions our company for the next phase of growth. We exceeded our
year-end distribution coverage and leverage ratio targets earlier
than expected, creating tremendous flexibility as we progress into
2021."
Distribution and Liquidity
On January 22, 2021, Delek Logistics declared a quarterly
cash distribution of $0.910 per
common limited partner unit for the fourth quarter 2020, which
equates to $3.640 per common limited
partner unit on an annualized basis. This distribution was paid on
February 9, 2021 to unitholders of record on February 2,
2021. This represents a 0.6% increase from the third quarter 2020
distribution of $0.905 per common
limited partner unit, or $3.620 per
common limited partner unit on an annualized basis, and a 2.8%
increase over Delek Logistics' fourth quarter 2019 distribution of
$0.885 per common limited partner
unit, or $3.540 per common limited
partner unit annualized. For the fourth quarter 2020, the total
cash distribution declared to all partners was approximately
$39.5 million, resulting in a
distributable cash flow coverage ratio of 1.41x.
1
As of December 31, 2020, Delek
Logistics had total debt of approximately $992.3 million and cash of $4.2 million. Additional borrowing capacity,
subject to certain covenants, under the $850.0 million credit facility was $103.4 million. The total leverage ratio was
within the requirements of the maximum allowable leverage ratio
under the credit facility.
Financial Results
Revenue for the fourth quarter 2020 was $140.1 million compared to $138.6 million in the prior-year period. The
increase in revenue is primarily attributable to the drop downs of
the Big Spring Gathering System and Trucking Assets but this was
largely offset by lower revenue in the West Texas wholesale business. Total operating
expenses were $14.9 million in the
fourth quarter 2020, compared to $22.3
million in the fourth quarter 2019. The decrease was
primarily due to cost control measures put in place at the end of
the first quarter 2020 and a lack of spill related expenses that
were included in fourth quarter 2019 results. Total contribution
margin was $62.0 million in the
fourth quarter 2020 compared to $42.5
million in the fourth quarter 2019, mainly driven by the
aforementioned contribution from new assets and lower expenses.
General and administrative expenses were $5.6 million for the fourth quarter 2020,
compared to $5.8 million in the
prior-year period.
Pipelines and Transportation Segment
Contribution margin in the fourth quarter 2020 was $44.0 million compared to $25.2 million in the fourth quarter 2019.
The drop downs of the Big Spring Gathering System and the Trucking
Assets in the first half of 2020 were the primary drivers behind
the year-over-year growth. Operating expenses were $10.3 million in the fourth quarter 2020 compared
to $18.7 million in the prior-year
period largely driven by a lack of environmental remediation costs
that were incurred in the fourth quarter of 2019.
Wholesale Marketing and Terminalling Segment
During the fourth quarter 2020, contribution margin was
$18.1 million, compared to
$17.3 million in the fourth quarter
2019. The increase in contribution margin was primarily due to
higher volumes associated with assets and agreements that support
the Delek Big Spring refinery in the fourth quarter of 2020, which
was partially offset by lower West
Texas wholesale margins.
Average terminalling throughput volume of 153,243 barrels per
day during the fourth quarter 2020 decreased on a year-over-year
basis from 160,298 barrels per day in the fourth quarter
2019. During the fourth quarter 2020, average volume under
the East Texas marketing agreement
with Delek US was 73,584 barrels per day compared to 73,016 barrels
per day during the fourth quarter 2019.
Fourth Quarter 2020 Results | Conference Call
Information
Delek Logistics will hold a conference call to discuss its
fourth quarter 2020 results on Wednesday,
February 24, 2021 at 7:30 a.m.
Central Time. Investors will have the opportunity to listen
to the conference call live by going to www.DelekLogistics.com.
Participants are encouraged to register at least 15 minutes early
to download and install any necessary software. An archived
version of the replay will also be available at
www.DelekLogistics.com for 90 days.
Investors may also wish to listen to Delek US' (NYSE: DK) fourth
quarter 2020 earnings conference call on Wednesday, February 24, 2021 at 8:30 a.m. Central Time and review Delek US'
earnings press release. Market trends and information disclosed by
Delek US may be relevant to Delek Logistics, as it is a
consolidated subsidiary of Delek US. Investors can find information
related to Delek US and the timing of its earnings release online
by going to www.DelekUS.com.
About Delek Logistics Partners, LP
Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, was formed by Delek US
Holdings, Inc. (NYSE: DK) to own, operate, acquire and construct
crude oil and refined products logistics and marketing assets.
Safe Harbor Provisions Regarding Forward-Looking
Statements
This press release contains forward-looking statements that are
based upon current expectations and involve a number of risks and
uncertainties. Statements concerning current estimates,
expectations and projections about future results, performance,
prospects, opportunities, plans, actions and events and other
statements, concerns, or matters that are not historical facts are
"forward-looking statements," as that term is defined under the
federal securities laws. These statements contain words such
as "possible," "believe," "should," "could," "would," "predict,"
"plan," "estimate," "intend," "may," "anticipate," "will,"
"if," "expect" or similar expressions, as well as statements
in the future tense, and can be impacted by numerous factors,
including the fact that a substantial majority of Delek Logistics'
contribution margin is derived from Delek US, thereby subjecting us
to Delek US' business risks; risks relating to the securities
markets generally; risks and costs relating to the age and
operational hazards of our assets including, without limitation,
costs, penalties, regulatory or legal actions and other effects
related to releases, spills and other hazards inherent in
transporting and storing crude oil and intermediate and finished
petroleum products; the impact of adverse market conditions
affecting the utilization of Delek Logistics' assets and business
performance, including margins generated by its wholesale fuel
business; the impact of the COVID-19 outbreak on the demand for
crude oil, refined products and transportation and storage
services; uncertainties regarding future decisions by OPEC
regarding production and pricing disputes between OPEC members and
Russia; an inability of Delek US
to grow as expected as it relates to our potential future growth
opportunities, including dropdowns, and other potential benefits;
the results of our investments in joint ventures; adverse changes
in laws including with respect to tax and regulatory matters; and
other risks as disclosed in our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and other reports and filings with
the United States Securities and Exchange Commission.
Forward-looking statements include, but are not limited to,
statements regarding future growth at Delek Logistics;
distributions and the amounts and timing thereof; potential
dropdown inventory; expected earnings or returns from joint
ventures or other acquisitions; expansion projects; ability to
create long-term value for our unit holders; financial flexibility
and borrowing capacity; and distribution growth of 5% or at all.
Forward-looking statements should not be read as a guarantee of
future performance or results and will not be accurate indications
of the times at, or by, which such performance or results will be
achieved. Forward-looking information is based on information
available at the time and/or management's good faith belief with
respect to future events, and is subject to risks and uncertainties
that could cause actual performance or results to differ materially
from those expressed in the statements. Delek Logistics
undertakes no obligation to update or revise any such
forward-looking statements to reflect events or circumstances that
occur, or which Delek Logistics becomes aware of, after the date
hereof, except as required by applicable law or regulation.
2
Non-GAAP Disclosures:
Our management uses certain "non-GAAP" operational measures to
evaluate our operating segment performance and non-GAAP financial
measures to evaluate past performance and prospects for the future
to supplement our GAAP financial information presented in
accordance with U.S. GAAP. These financial and operational non-GAAP
measures are important factors in assessing our operating results
and profitability and include:
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") - calculated as net income before net interest expense,
income tax expense, depreciation and amortization expense,
including amortization of customer contract intangible assets,
which is included as a component of net revenues in our
accompanying condensed consolidated statements of income.
- Distributable cash flow - calculated as net cash flow from
operating activities plus or minus changes in assets and
liabilities, less maintenance capital expenditures net of
reimbursements and other adjustments not expected to settle in
cash. Delek Logistics believes this is an appropriate reflection of
a liquidity measure by which users of its financial statements can
assess its ability to generate cash.
EBITDA and distributable cash flow are non GAAP supplemental
financial measures that management and external users of our
condensed consolidated financial statements, such as industry
analysts, investors, lenders and rating agencies, may use to
assess:
- Delek Logistics' operating performance as compared to other
publicly traded partnerships in the midstream energy industry,
without regard to historical cost basis or, in the case of EBITDA,
financing methods;
- the ability of our assets to generate sufficient cash flow to
make distributions to our unitholders;
- Delek Logistics' ability to incur and service debt and fund
capital expenditures; and
- the viability of acquisitions and other capital expenditure
projects and the returns on investment of various investment
opportunities.
Delek Logistics believes that the presentation of EBITDA,
distributable cash flow and distributable cash flow coverage ratio
provide useful information to investors in assessing its financial
condition, its results of operations and the cash flow its business
is generating. EBITDA, distributable cash flow and distributable
cash flow coverage ratio should not be considered in isolation or
as alternatives to net income, operating income, cash flow from
operating activities or any other measure of financial performance
or liquidity presented in accordance with U.S. GAAP.
Non-GAAP measures have important limitations as analytical
tools, because they exclude some, but not all, items that affect
net income and net cash provided by operating activities. These
measures should not be considered substitutes for their most
directly comparable U.S. GAAP financial measures. Additionally,
because EBITDA and distributable cash flow may be defined
differently by other partnerships in its industry, Delek Logistics'
definitions of EBITDA and distributable cash flow may not be
comparable to similarly titled measures of other partnerships,
thereby diminishing their utility. See the accompanying
tables in this earnings release for a reconciliation of these
non-GAAP measures to the most directly comparable GAAP
measures.
3
Delek Logistics
Partners, LP
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In thousands,
except unit and per unit data)
|
|
|
December 31,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,243
|
|
|
$
|
5,545
|
|
Accounts
receivable
|
|
15,676
|
|
|
13,204
|
|
Accounts receivable
from related parties
|
|
5,932
|
|
|
—
|
|
Inventory
|
|
3,127
|
|
|
12,617
|
|
Other current
assets
|
|
331
|
|
|
2,204
|
|
Total current
assets
|
|
29,309
|
|
|
33,570
|
|
Property, plant and
equipment:
|
|
|
|
|
Property, plant and
equipment
|
|
692,282
|
|
|
461,325
|
|
Less: accumulated
depreciation
|
|
(227,470)
|
|
|
(166,281)
|
|
Property, plant and
equipment, net
|
|
464,812
|
|
|
295,044
|
|
Equity method
investments
|
|
253,675
|
|
|
246,984
|
|
Operating lease
right-of-use assets
|
|
24,199
|
|
|
3,745
|
|
Goodwill
|
|
12,203
|
|
|
12,203
|
|
Marketing Contract
Intangible, net
|
|
123,788
|
|
|
130,999
|
|
Rights-of-way
|
|
36,316
|
|
|
15,597
|
|
Other non-current
assets
|
|
12,115
|
|
|
6,305
|
|
Total
assets
|
|
$
|
956,417
|
|
|
$
|
744,447
|
|
|
|
|
|
|
LIABILITIES AND
DEFICIT
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
6,659
|
|
|
$
|
12,471
|
|
Accounts payable to
related parties
|
|
—
|
|
|
8,898
|
|
Interest
payable
|
|
2,452
|
|
|
2,572
|
|
Excise and other taxes
payable
|
|
4,969
|
|
|
3,941
|
|
Current portion of
operating lease liabilities
|
|
8,691
|
|
|
1,435
|
|
Accrued expenses and
other current liabilities
|
|
5,529
|
|
|
5,765
|
|
Total current
liabilities
|
|
28,300
|
|
|
35,082
|
|
Non-current
liabilities:
|
|
|
|
|
Long-term
debt
|
|
992,291
|
|
|
833,110
|
|
Asset retirement
obligations
|
|
6,015
|
|
|
5,588
|
|
Deferred tax
liabilities
|
|
616
|
|
|
215
|
|
Operating lease
liabilities, net of current portion
|
|
15,418
|
|
|
2,310
|
|
Other non-current
liabilities
|
|
22,078
|
|
|
19,261
|
|
Total non-current
liabilities
|
|
1,036,418
|
|
|
860,484
|
|
Total
liabilities
|
|
1,064,718
|
|
|
895,566
|
|
Equity
(Deficit):
|
|
|
|
|
Common unitholders -
public; 8,697,468 units issued and outstanding at December 31, 2020
(9,131,579 at December 31, 2019)
|
|
164,614
|
|
|
164,436
|
|
Common unitholders -
Delek Holdings; 34,745,868 units issued and outstanding at December
31, 2020 (15,294,046 at December 31, 2019)
|
|
(272,915)
|
|
|
(310,513)
|
|
General partner - 0
units issued and outstanding at December 31, 2020 (498,482 at
December 31, 2019)
|
|
—
|
|
|
(5,042)
|
|
Total
deficit
|
|
(108,301)
|
|
|
(151,119)
|
|
Total liabilities and
deficit
|
|
$
|
956,417
|
|
|
$
|
744,447
|
|
4
Delek Logistics
Partners, LP
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(In thousands,
except unit and per unit data)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
revenues:
|
|
|
|
|
|
|
|
Affiliate
|
$
|
92,927
|
|
|
$
|
69,484
|
|
|
$
|
382,666
|
|
|
$
|
261,014
|
|
Third-party
|
47,185
|
|
|
69,126
|
|
|
180,752
|
|
|
322,978
|
|
Net
revenues
|
140,112
|
|
|
138,610
|
|
|
563,418
|
|
|
583,992
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
Cost of materials and
other
|
63,217
|
|
|
73,760
|
|
|
269,094
|
|
|
336,473
|
|
Operating expenses
(excluding depreciation and amortization presented
below)
|
14,575
|
|
|
22,023
|
|
|
53,846
|
|
|
71,341
|
|
Depreciation and
amortization
|
10,780
|
|
|
6,443
|
|
|
33,737
|
|
|
24,893
|
|
Total cost of
sales
|
88,572
|
|
|
102,226
|
|
|
356,677
|
|
|
432,707
|
|
Operating expenses
related to wholesale business (excluding depreciation and
amortization presented below)
|
281
|
|
|
314
|
|
|
2,433
|
|
|
2,816
|
|
General and
administrative expenses
|
5,614
|
|
|
5,769
|
|
|
22,587
|
|
|
20,815
|
|
Depreciation and
amortization
|
499
|
|
|
457
|
|
|
1,994
|
|
|
1,808
|
|
Other operating
expense (income), net
|
41
|
|
|
129
|
|
|
(66)
|
|
|
34
|
|
Total operating costs
and expenses
|
95,007
|
|
|
108,895
|
|
|
383,625
|
|
|
458,180
|
|
Operating
income
|
45,105
|
|
|
29,715
|
|
|
179,793
|
|
|
125,812
|
|
Interest expense,
net
|
10,020
|
|
|
12,164
|
|
|
42,874
|
|
|
47,328
|
|
Income from equity
method investments
|
(5,818)
|
|
|
(4,972)
|
|
|
(22,693)
|
|
|
(19,832)
|
|
Other expense,
net
|
30
|
|
|
139
|
|
|
133
|
|
|
600
|
|
Total non-operating
expenses, net
|
4,232
|
|
|
7,331
|
|
|
20,314
|
|
|
28,096
|
|
Income before income
tax expense
|
40,873
|
|
|
22,384
|
|
|
159,479
|
|
|
97,716
|
|
Income tax
expense
|
156
|
|
|
746
|
|
|
223
|
|
|
967
|
|
Net income
attributable to partners
|
$
|
40,717
|
|
|
$
|
21,638
|
|
|
$
|
159,256
|
|
|
$
|
96,749
|
|
Comprehensive income
attributable to partners
|
$
|
40,717
|
|
|
$
|
21,638
|
|
|
$
|
159,256
|
|
|
$
|
96,749
|
|
|
|
|
|
|
|
|
|
Less: General
partner's interest in net income, including incentive distribution
rights
|
—
|
|
|
8,834
|
|
|
18,724
|
|
|
33,080
|
|
Limited partners'
interest in net income
|
$
|
40,717
|
|
|
$
|
12,804
|
|
|
$
|
140,532
|
|
|
$
|
63,669
|
|
|
|
|
|
|
|
|
|
Net income per
limited partner unit:
|
|
|
|
|
|
|
|
Common units -
basic
|
$
|
0.94
|
|
|
$
|
0.52
|
|
|
$
|
4.18
|
|
|
$
|
2.61
|
|
Common units -
diluted
|
$
|
0.94
|
|
|
$
|
0.52
|
|
|
$
|
4.18
|
|
|
$
|
2.61
|
|
|
|
|
|
|
|
|
|
Weighted average
limited partner units outstanding:
|
|
|
|
|
|
|
|
Common units -
basic
|
43,435,153
|
|
|
24,419,189
|
|
|
33,594,284
|
|
|
24,413,294
|
|
Common units -
diluted
|
43,441,693
|
|
|
24,424,715
|
|
|
33,597,418
|
|
|
24,418,641
|
|
|
|
|
|
|
|
|
|
Cash distribution per
limited partner unit
|
$
|
0.910
|
|
|
$
|
0.885
|
|
|
$
|
3.605
|
|
|
$
|
3.440
|
|
5
Delek Logistics
Partners, LP
|
Condensed
Consolidated Statements of Cash Flows (Unaudited) (In
thousands)
|
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
|
$
|
159,256
|
|
|
$
|
96,749
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
35,731
|
|
|
26,701
|
|
Non-cash lease
expense
|
|
6,075
|
|
|
193
|
|
Amortization of
customer contract intangible assets
|
|
7,211
|
|
|
7,211
|
|
Amortization of
deferred revenue
|
|
(1,888)
|
|
|
(1,688)
|
|
Amortization of
deferred financing costs and debt discount
|
|
2,412
|
|
|
2,629
|
|
Accretion of asset
retirement obligations
|
|
427
|
|
|
397
|
|
Income from equity
method investments
|
|
(22,693)
|
|
|
(19,832)
|
|
Dividends from equity
method investments
|
|
25,436
|
|
|
16,108
|
|
Gain on disposal of
assets
|
|
(66)
|
|
|
(197)
|
|
Deferred income
taxes
|
|
401
|
|
|
496
|
|
Other non-cash
adjustments
|
|
491
|
|
|
1,061
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(2,472)
|
|
|
8,382
|
|
Inventories and other
current assets
|
|
11,363
|
|
|
(7,702)
|
|
Accounts payable and
other current liabilities
|
|
(13,479)
|
|
|
(4,836)
|
|
Accounts
receivable/payable to related parties
|
|
(14,628)
|
|
|
1,065
|
|
Non-current assets and
liabilities, net
|
|
(561)
|
|
|
3,662
|
|
Changes in assets and
liabilities
|
|
(19,777)
|
|
|
571
|
|
Net cash provided by
operating activities
|
|
193,016
|
|
|
130,399
|
|
Cash flows from
investing activities
|
|
|
|
|
Asset acquisitions
from Delek Holdings, net of assumed liabilities
|
|
(100,527)
|
|
|
—
|
|
Purchases of
property, plant and equipment
|
|
(13,271)
|
|
|
(9,070)
|
|
Proceeds from sales
of property, plant and equipment
|
|
107
|
|
|
144
|
|
Purchases of
intangible assets
|
|
(13)
|
|
|
—
|
|
Distributions from
equity method investments
|
|
2,741
|
|
|
804
|
|
Equity method
investment contributions
|
|
(12,175)
|
|
|
(139,294)
|
|
Net cash used in
investing activities
|
|
(123,138)
|
|
|
(147,416)
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from
issuance of additional units to maintain 2% General Partner
interest
|
|
10
|
|
|
8
|
|
Distributions to
general partner
|
|
(27,635)
|
|
|
(31,654)
|
|
Distributions to
common unitholders - public
|
|
(31,532)
|
|
|
(30,626)
|
|
Distributions to
common unitholders - Delek Holdings
|
|
(77,665)
|
|
|
(51,388)
|
|
Distributions to
Delek Holdings unitholders and general partner related to Trucking
Assets Acquisition
|
|
(47,558)
|
|
|
—
|
|
Distribution to
general partner for conversion of its interest and IDR
elimination
|
|
(45,000)
|
|
|
—
|
|
Proceeds from
revolving credit facility
|
|
599,600
|
|
|
564,700
|
|
Payments on revolving
credit facility
|
|
(441,400)
|
|
|
(433,000)
|
|
Net cash (used in)
provided by financing activities
|
|
(71,180)
|
|
|
18,040
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(1,302)
|
|
|
1,023
|
|
Cash and cash
equivalents at the beginning of the period
|
|
5,545
|
|
|
4,522
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
4,243
|
|
|
$
|
5,545
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
|
Interest
|
|
$
|
40,582
|
|
|
$
|
44,791
|
|
Income
taxes
|
|
$
|
98
|
|
|
$
|
144
|
|
Non-cash investing
activities:
|
|
|
|
|
Increase (decrease) in
accrued capital expenditures
|
|
$
|
198
|
|
|
$
|
917
|
|
Equity issuance to
Delek Holdings unitholders in connection with Big Spring Gathering
Assets Acquisition
|
|
$
|
109,513
|
|
|
$
|
—
|
|
Non-cash financing
activities:
|
|
|
|
|
Sponsor contribution
of property, plant and equipment
|
|
$
|
2,938
|
|
|
$
|
—
|
|
Non-cash lease
liability arising from obtaining right of use assets during the
period
|
|
$
|
32,090
|
|
|
$
|
1,285
|
|
Non-cash lease
liability arising from recognition of right of use assets upon
adoption of ASU 2016-02
|
|
$
|
—
|
|
|
$
|
2,654
|
|
6
Delek Logistics
Partners, LP
|
Reconciliation
of Amounts Reported Under U.S. GAAP
|
(In
thousands)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
Net Income to EBITDA:
|
|
|
|
|
|
|
|
Net income
|
$
|
40,717
|
|
|
$
|
21,638
|
|
|
$
|
159,256
|
|
|
$
|
96,749
|
|
Add:
|
|
|
|
|
|
|
|
Income tax
expense
|
156
|
|
|
746
|
|
|
223
|
|
|
967
|
|
Depreciation and
amortization
|
11,279
|
|
|
6,900
|
|
|
35,731
|
|
|
26,701
|
|
Amortization of
customer contract intangible assets
|
1,803
|
|
|
1,803
|
|
|
7,211
|
|
|
7,211
|
|
Interest expense,
net
|
10,020
|
|
|
12,164
|
|
|
42,874
|
|
|
47,328
|
|
EBITDA
|
$
|
63,975
|
|
|
$
|
43,251
|
|
|
$
|
245,295
|
|
|
$
|
178,956
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash from operating activities to distributable cash
flow:
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
58,362
|
|
|
$
|
45,809
|
|
|
$
|
193,016
|
|
|
$
|
130,399
|
|
Changes in assets and
liabilities
|
1,236
|
|
|
(14,793)
|
|
|
19,777
|
|
|
(571)
|
|
Non-cash lease
expense
|
(3,839)
|
|
|
2,361
|
|
|
(6,075)
|
|
|
(193)
|
|
Distributions from
equity method investments in investing activities
|
18
|
|
|
—
|
|
|
2,741
|
|
|
804
|
|
Maintenance and
regulatory capital expenditures
|
(536)
|
|
|
(2,947)
|
|
|
(1,296)
|
|
|
(8,569)
|
|
Reimbursement from
Delek Holdings for capital expenditures
|
182
|
|
|
3,221
|
|
|
263
|
|
|
5,828
|
|
Accretion of asset
retirement obligations
|
(107)
|
|
|
(99)
|
|
|
(427)
|
|
|
(397)
|
|
Deferred income
taxes
|
589
|
|
|
(611)
|
|
|
(401)
|
|
|
(496)
|
|
Other operating
(expense) income, net
|
(41)
|
|
|
102
|
|
|
66
|
|
|
197
|
|
Distributable Cash
Flow
|
$
|
55,864
|
|
|
$
|
33,043
|
|
|
$
|
207,664
|
|
|
$
|
127,002
|
|
Delek Logistics
Partners, LP
|
Distributable
Coverage Ratio Calculation
|
(In
thousands)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
Distributions to
partners of Delek Logistics, LP
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Limited partners'
distribution on common units
|
$
|
39,533
|
|
|
$
|
21,616
|
|
|
$
|
127,070
|
|
|
$
|
83,873
|
|
General partner's
distributions
|
—
|
|
|
444
|
|
|
986
|
|
|
1,711
|
|
General partner's
incentive distribution rights
|
—
|
|
|
8,573
|
|
|
17,632
|
|
|
31,781
|
|
Total distributions
to be paid (1)
|
$
|
39,533
|
|
|
$
|
30,633
|
|
|
$
|
145,688
|
|
|
$
|
117,365
|
|
|
|
|
|
|
|
|
|
Distributable cash
flow
|
$
|
55,864
|
|
|
$
|
33,043
|
|
|
$
|
207,664
|
|
|
$
|
127,002
|
|
Distributable cash
flow coverage ratio (2)
|
1.41x
|
|
|
1.08x
|
|
|
1.43x
|
|
|
1.08x
|
|
|
|
(1)
|
The distributions for
the three months ended and year ended December 31, 2020 reflect the
impact of the distribution waiver that waived all of the
distributions for the first quarter of 2020 on the 5.0 million
Additional Units, related to the Big Spring Gathering Assets
transaction, with respect to base distributions and the IDRs. In
addition, the distributions for the three months ended and year
ended December 31, 2020 reflect the waiver of distributions in
respect of the IDRs associated with the Additional Units for at
least two years. Subsequently, the IDRs were eliminated in the
Restructuring Transaction on August 13, 2020.
|
(2)
|
Distributable cash
flow coverage ratio is calculated by dividing distributable cash
flow by distributions to be paid in each respective
period.
|
7
Delek Logistics
Partners, LP
|
Segment Data
(unaudited)
|
(In
thousands)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Pipelines and
Transportation
|
|
|
|
|
|
|
|
Net
revenues:
|
|
|
|
|
|
|
|
Affiliate
|
$
|
65,588
|
|
|
$
|
42,517
|
|
|
$
|
233,873
|
|
|
$
|
155,211
|
|
Third party
|
3,009
|
|
|
6,374
|
|
|
17,596
|
|
|
23,107
|
|
Total pipelines and
transportation
|
68,597
|
|
|
48,891
|
|
|
251,469
|
|
|
178,318
|
|
Cost of sales:
|
|
|
|
|
|
|
|
Cost of
materials and other
|
14,312
|
|
|
4,955
|
|
|
45,934
|
|
|
22,826
|
|
Operating
expenses (excluding depreciation and amortization)
|
10,331
|
|
|
18,718
|
|
|
42,267
|
|
|
54,827
|
|
Segment contribution
margin
|
$
|
43,954
|
|
|
$
|
25,218
|
|
|
$
|
163,268
|
|
|
$
|
100,665
|
|
Total
Assets
|
$
|
723,317
|
|
|
$
|
509,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Marketing
and Terminalling
|
|
|
|
|
|
|
|
Net
revenues:
|
|
|
|
|
|
|
|
Affiliates (1)
|
$
|
27,339
|
|
|
$
|
26,967
|
|
|
$
|
148,793
|
|
|
$
|
105,803
|
|
Third party
|
44,176
|
|
|
62,752
|
|
|
163,156
|
|
|
299,871
|
|
Total wholesale
marketing and terminalling
|
71,515
|
|
|
89,719
|
|
|
311,949
|
|
|
405,674
|
|
Cost of sales:
|
|
|
|
|
|
|
|
Cost of
materials and other
|
48,905
|
|
|
68,805
|
|
|
223,160
|
|
|
313,647
|
|
Operating
expenses (excluding depreciation and amortization)
|
4,525
|
|
|
3,619
|
|
|
14,012
|
|
|
19,330
|
|
Segment contribution
margin
|
$
|
18,085
|
|
|
$
|
17,295
|
|
|
$
|
74,777
|
|
|
$
|
72,697
|
|
Total
Assets
|
$
|
206,918
|
|
|
214,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
Net
revenues:
|
|
|
|
|
|
|
|
Affiliates
|
$
|
92,927
|
|
|
$
|
69,484
|
|
|
$
|
382,666
|
|
|
$
|
261,014
|
|
Third
party
|
47,185
|
|
|
69,126
|
|
|
180,752
|
|
|
322,978
|
|
Total consolidated
|
140,112
|
|
|
138,610
|
|
|
563,418
|
|
|
583,992
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
Cost of
materials and other
|
63,217
|
|
|
73,760
|
|
|
269,094
|
|
|
336,473
|
|
Operating
expenses (excluding depreciation and amortization presented
below)
|
14,856
|
|
|
22,337
|
|
|
56,279
|
|
|
74,157
|
|
Contribution
margin
|
62,039
|
|
|
42,513
|
|
|
238,045
|
|
|
173,362
|
|
General and
administrative expenses
|
5,614
|
|
|
5,769
|
|
|
22,587
|
|
|
20,815
|
|
Depreciation and
amortization
|
11,279
|
|
|
6,900
|
|
|
35,731
|
|
|
26,701
|
|
Other operating
expense (income), net
|
41
|
|
|
129
|
|
|
(66)
|
|
|
34
|
|
Operating
income
|
$
|
45,105
|
|
|
$
|
29,715
|
|
|
$
|
179,793
|
|
|
$
|
125,812
|
|
Other
Assets
|
$
|
26,182
|
|
|
$
|
20,522
|
|
|
|
|
|
Total
Assets
|
$
|
956,417
|
|
|
$
|
744,447
|
|
|
|
|
|
|
|
(1)
|
Affiliate revenue for
the wholesale marketing and terminalling segment is presented net
of amortization expense pertaining to the marketing contract
intangible we acquired in connection with the Big Spring
acquisition.
|
8
Delek Logistics
Partners, LP
|
Segment Capital
Spending
|
(In
thousands)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
Pipelines and
Transportation
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Maintenance capital
spending
|
$
|
1,265
|
|
|
$
|
2,434
|
|
|
$
|
1,732
|
|
|
$
|
6,435
|
|
Discretionary capital
spending
|
2,942
|
|
|
40
|
|
|
5,899
|
|
|
165
|
|
Segment capital
spending
|
$
|
4,207
|
|
|
$
|
2,474
|
|
|
7,631
|
|
|
6,600
|
|
Wholesale Marketing
and Terminalling
|
|
|
|
|
|
|
|
Maintenance capital
spending
|
$
|
232
|
|
|
$
|
1,199
|
|
|
1,712
|
|
|
2,588
|
|
Discretionary capital
spending
|
4,092
|
|
|
295
|
|
|
6,106
|
|
|
799
|
|
Segment capital
spending
|
$
|
4,324
|
|
|
$
|
1,494
|
|
|
7,818
|
|
|
3,387
|
|
Consolidated
|
|
|
|
|
|
|
|
Maintenance capital
spending
|
$
|
1,497
|
|
|
$
|
3,633
|
|
|
3,444
|
|
|
9,023
|
|
Discretionary capital
spending
|
7,034
|
|
|
335
|
|
|
12,005
|
|
|
964
|
|
Total capital
spending
|
$
|
8,531
|
|
|
$
|
3,968
|
|
|
$
|
15,449
|
|
|
$
|
9,987
|
|
Delek Logistics
Partners, LP
|
|
|
|
|
Segment Data
(Unaudited)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Pipelines and
Transportation Segment:
|
|
|
|
|
|
|
|
Throughputs
(average bpd)
|
|
|
|
|
|
|
|
El Dorado
Assets:
|
|
|
|
|
|
|
|
Crude pipelines (non-gathered)
|
66,521
|
|
|
69,910
|
|
|
74,179
|
|
|
49,485
|
|
Refined products pipelines to Enterprise Systems
|
48,900
|
|
|
53,960
|
|
|
53,702
|
|
|
37,716
|
|
El Dorado Gathering
System
|
13,308
|
|
|
15,919
|
|
|
13,466
|
|
|
15,325
|
|
East Texas Crude
Logistics System
|
16,719
|
|
|
16,612
|
|
|
15,960
|
|
|
19,927
|
|
Big Spring Gathering
System (1)
|
76,795
|
|
|
—
|
|
|
82,817
|
|
|
—
|
|
Plains Connection
System (1)
|
120,304
|
|
|
—
|
|
|
104,770
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Wholesale
Marketing and Terminalling Segment:
|
|
|
|
|
|
|
|
East Texas - Tyler
Refinery sales volumes (average bpd) (2)
|
73,584
|
|
|
73,016
|
|
|
71,182
|
|
|
74,206
|
|
Big Spring marketing
throughputs (average bpd)
|
84,219
|
|
|
79,985
|
|
|
76,345
|
|
|
82,695
|
|
West Texas marketing
throughputs (average bpd)
|
9,915
|
|
|
9,972
|
|
|
11,264
|
|
|
11,075
|
|
West Texas gross
margin per barrel
|
$
|
2.36
|
|
|
$
|
3.12
|
|
|
$
|
2.37
|
|
|
$
|
4.44
|
|
Terminalling
throughputs (average bpd)
|
153,243
|
|
|
160,298
|
|
|
147,251
|
|
|
160,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Throughput for the
Big Spring Gathering System and the Plains Connection System are
for 275 days we owned the assets following the Big Spring Gathering
Assets Acquisition effective March 31, 2020.
|
(2)
|
Excludes jet fuel and petroleum
coke.
|
Information about Delek Logistics Partners, LP can be found on
its website (www.deleklogistics.com), investor relations webpage
(ir.deleklogistics.com), news webpage
(www.deleklogistics.com/news-releases) and its Twitter account
(@DelekLogistics).
9
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SOURCE Delek Logistics