Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today
announced its financial results for the third quarter 2018. For the
three months ended September 30, 2018, Delek Logistics
reported net income attributable to all partners of $23.3 million,
or $0.68 per diluted common limited partner unit. This compares to
net income attributable to all partners of $16.9 million, or $0.50
per diluted common limited partner unit, in the third quarter 2017.
Net cash from operating activities was $6.0 million in the third
quarter 2018 compared to $30.2 million in the prior year period.
Distributable cash flow was $32.4 million in the third quarter
2018, compared to $21.6 million in the prior-year period.
For the third quarter 2018, earnings before
interest, taxes, depreciation and amortization ("EBITDA") was $43.0
million compared to $29.7 million in the prior-year period. This
increase was primarily due to the contribution from the Big Spring
logistics assets acquired from Delek US Holdings, Inc.
(“Delek US”) effective March 1, 2018, improved performance from the
Paline Pipeline and higher gross margin per barrel in west Texas
that benefited from increased crude oil drilling activity in the
Permian Basin.
Uzi Yemin, Chairman and Chief Executive Officer
of Delek Logistics' general partner, remarked: "Our operations
performed well during the quarter with a 45 percent increase in
EBITDA and 50 percent increase in distributable cash flow on a
year-over-year basis that was driven by the completion of the Big
Spring acquisition and the Paline Pipeline expansion. This
performance supported a distributable cash flow coverage ratio of
1.25x, which improved on a year-over-year basis. On a year to date
basis through the third quarter 2018, our distributable coverage
ratio is 1.26x. We were pleased to announce the 10.5 percent
year-over-year increase in our declared third quarter
distribution."
Yemin concluded, "We continue to explore
opportunities to build on our Permian Basin position to create
long-term value for our unitholders. These include ways to partner
with Delek US to support its Permian Basin crude oil supply needs
for its refining system, as well as third party growth
options. Delek US has recently announced additional growth in
its midstream assets through construction of its Big Spring crude
oil gathering system in the Permian Basin and proposed
participation in a long haul crude oil pipeline project. This
should increase the drop down inventory beyond the Krotz Springs
logistic assets. We increased our borrowing capacity on our
revolver and expect that our leverage ratio should continue to
improve to a range of 4.1x to 4.3x by year end, which should better
prepare us to support future growth. The combination of our
financial flexibility provided by our balance sheet and our focus
on growth initiatives should support a distribution per limited
partner unit increase of at least 10% annually through 2019."
Distribution and LiquidityOn
October 23, 2018, Delek Logistics declared a quarterly cash
distribution of $0.79 per common limited partner unit for the third
quarter, which equates to $3.16 per common limited partner unit on
an annualized basis. This distribution will be paid on
November 9, 2018 to unitholders of record on November 2,
2018. This represents a 2.6 percent increase from the second
quarter 2018 distribution of $0.77 per common limited partner unit,
or $3.08 per common limited partner unit on an annualized basis,
and a 10.5 percent increase over Delek Logistics’ third quarter
2017 distribution of $0.715 per common limited partner unit, or
$2.86 per common limited partner unit annualized. For the third
quarter 2018, the total cash distribution declared to all partners,
including IDRs, was approximately $26.0 million. Based on the
declared distribution for the third quarter 2018, the distributable
cash flow coverage ratio for the third quarter was 1.25x.
As of September 30, 2018, Delek Logistics
had total debt of approximately $776.7 million and cash of $19.0
million. Additional borrowing capacity, subject to certain
covenants, under the $850.0 million credit facility was $316.8
million. The total leverage ratio for the third quarter 2018 was
approximately 4.53x, which is within the current requirements of
the maximum allowable leverage of 5.50x. At the end of September
2018, the credit facility commitments were increased from $700.0
million to $850.0 million and the maturity was extended to
September 2023 from the previous maturity of December 2019.
Financial ResultsRevenue for
the third quarter 2018 was $164.1 million compared to $130.6
million in the prior-year period. The increase in revenue is
primarily due to higher sales prices in the west Texas wholesale
business, combined with the Big Spring acquisition that was
effective March 1, 2018. Total operating expenses were $15.4
million in the third quarter 2018, compared to $10.7 million in the
third quarter 2017. This increase was primarily due to the
contribution from the acquired Big Spring assets and
employee-related expenses. Total segment contribution margin
was $43.1 million in the third quarter 2018 compared to $30.8
million in the third quarter 2017. General and administrative
expenses were $3.1 million for the third quarter 2018, compared to
$2.8 million in the prior-year period.
Pipelines and Transportation
SegmentContribution margin in the third quarter 2018 was
$25.2 million compared to $17.5 million in the third quarter 2017.
This increase was primarily due to the contribution from the Big
Spring acquisition in March 2018 and improved performance from the
Paline Pipeline. Operating expenses were $9.5 million in the third
quarter 2018 compared to $8.6 million in the prior-year period,
primarily due to the Big Spring acquisition.
Wholesale Marketing and Terminalling
SegmentDuring the third quarter 2018, contribution margin
was $17.9 million, compared to $13.3 million in the third quarter
2017. This increase was primarily due to the contribution from the
Big Spring acquisition in March 2018 and improved margin
performance in the west Texas wholesale operations. Operating
expenses increased to $5.9 million in the third quarter 2018,
compared to $2.1 million in the prior-year period primarily due to
the Big Spring acquisition.
In the west Texas wholesale business, average
throughput in the third quarter 2018 was 12,197 barrels per day
compared to 12,929 barrels per day in the third quarter 2017. The
west Texas gross margin per barrel increased year-over-year to
$4.65 per barrel and included approximately $0.3 million, or $0.29
per barrel, from renewable identification numbers (RINs) generated
in the quarter. During the third quarter 2017, the west Texas
gross margin per barrel was $4.00 per barrel and included $1.6
million from RINs, or $1.32 per barrel. On a year-over-year
basis, continued growth in crude oil drilling activity in the
Permian Basin increased fuel demand and improved the supply/demand
balance, which led to improved performance in the west Texas
wholesale business.
Average terminalling throughput volume of
167,491 barrels per day during the third quarter 2018 increased on
a year-over-year basis from 127,229 barrels per day in the third
quarter 2017 primarily due to the addition of the Big Spring
terminal. During the third quarter 2018, average volume under
the East Texas marketing agreement with Delek US was 79,404 barrels
per day compared to 74,357 barrels per day during the third quarter
2017. During the third quarter 2018, average volume under the Big
Spring marketing agreement with Delek US was 80,687 barrels per
day.
Third Quarter 2018 Results | Conference
Call InformationDelek Logistics will hold a conference
call to discuss its third quarter 2018 results on Wednesday,
November 7, 2018 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. For those who cannot listen to the live broadcast, a
telephonic replay will be available through February 7, 2019 by
dialing (866) 326-3086, passcode 7994276. 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) third quarter 2018 earnings conference call on
Wednesday, November 7, 2018 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,
LPDelek 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 StatementsThis press release contains
“forward-looking” statements within the meaning of 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; an inability of Delek US to successfully integrate the
businesses of Delek US and Alon USA Energy, Inc., to grow as
expected and realize the synergies and the other anticipated
benefits of its merger with Alon, which became effective as of July
1, 2017, 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; expansion of the Paline
Pipeline and potential benefits therefrom; distributions and the
amounts and timing thereof; potential dropdown inventory; ability
to create long-term value for our unit holders; financial
flexibility and borrowing capacity; and distribution growth of 10%
or at all. There can be no assurance that actual results will not
differ from those expected by management or described in
forward-looking statements of Delek Logistics. Delek Logistics
undertakes no obligation to update or revise such forward-looking
statements to reflect events or circumstances that occur, or which
Delek Logistics becomes aware of, after the date hereof.
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 (loss) before net interest
expense, income tax expense, depreciation and amortization expense,
and adjusted to include 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 revision is a more
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-U.S.
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 Delek Logistics' 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 from operations 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. See the accompanying tables in this earnings release
for a reconciliation of these non-GAAP measures to the most
directly comparable GAAP measures.
Delek Logistics Partners,
LPCondensed Consolidated Balance Sheets (Unaudited)(In
thousands, except unit and per unit data)
ASSETS |
|
September
30,2018 |
|
December 31,2017 |
|
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
19,006 |
|
|
$ |
4,675 |
|
Accounts receivable |
|
21,815 |
|
|
23,013 |
|
Accounts receivable from related parties |
|
51,235 |
|
|
1,124 |
|
Inventory |
|
4,198 |
|
|
20,855 |
|
Other current assets |
|
418 |
|
|
783 |
|
Total current assets |
|
96,672 |
|
|
50,450 |
|
Property,
plant and equipment: |
|
|
|
|
Property, plant and equipment |
|
448,722 |
|
|
367,179 |
|
Less: accumulated depreciation |
|
(134,052 |
) |
|
(112,111 |
) |
Property, plant and equipment, net |
|
314,670 |
|
|
255,068 |
|
Equity
method investments |
|
105,233 |
|
|
106,465 |
|
Goodwill |
|
12,203 |
|
|
12,203 |
|
Intangible
assets, net |
|
155,840 |
|
|
15,917 |
|
Other
non-current assets |
|
8,951 |
|
|
3,427 |
|
Total assets |
|
$ |
693,569 |
|
|
$ |
443,530 |
|
LIABILITIES AND DEFICIT |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
11,513 |
|
|
$ |
19,147 |
|
Excise and other taxes payable |
|
2,849 |
|
|
4,700 |
|
Tank inspection liabilities |
|
902 |
|
|
902 |
|
Pipeline release liabilities |
|
1,019 |
|
|
1,000 |
|
Accrued expenses and other current liabilities |
|
9,953 |
|
|
6,033 |
|
Total current liabilities |
|
26,236 |
|
|
31,782 |
|
Non-current
liabilities: |
|
|
|
|
Long-term debt |
|
776,684 |
|
|
422,649 |
|
Asset retirement obligations |
|
5,099 |
|
|
4,064 |
|
Other non-current liabilities |
|
15,977 |
|
|
14,260 |
|
Total non-current liabilities |
|
797,760 |
|
|
440,973 |
|
Deficit: |
|
|
|
|
Common unitholders - public; 9,101,137 units issued and
outstanding at September 30, 2018 (9,088,587 at December 31,
2017) |
|
172,875 |
|
|
174,378 |
|
Common unitholders - Delek; 15,294,046 units issued and
outstanding at September 30, 2018 (15,294,046 at December 31,
2017) |
|
(296,427 |
) |
|
(197,206 |
) |
General partner - 497,861 units issued and outstanding at
September 30, 2018 (497,604 at December 31, 2017) |
|
(6,875 |
) |
|
(6,397 |
) |
Total deficit |
|
(130,427 |
) |
|
(29,225 |
) |
Total liabilities and deficit |
|
$ |
693,569 |
|
|
$ |
443,530 |
|
|
|
|
|
|
|
|
|
|
Delek Logistics Partners,
LPCondensed Consolidated Statements of Income
(Unaudited)(In thousands, except unit and per unit data)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
Affiliate |
$ |
63,835 |
|
|
$ |
40,131 |
|
|
$ |
178,559 |
|
|
$ |
116,574 |
|
Third-party |
100,275 |
|
|
90,495 |
|
|
319,752 |
|
|
270,294 |
|
Net revenues |
164,110 |
|
|
130,626 |
|
|
498,311 |
|
|
386,868 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of
materials and other |
105,596 |
|
|
89,120 |
|
|
330,644 |
|
|
266,749 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
14,489 |
|
|
9,940 |
|
|
40,501 |
|
|
28,789 |
|
Depreciation and amortization |
6,252 |
|
|
4,744 |
|
|
18,287 |
|
|
14,227 |
|
Total
cost of sales |
126,337 |
|
|
103,804 |
|
|
389,432 |
|
|
309,765 |
|
Operating
expenses related to wholesale business (excluding depreciation and
amortization presented below) |
906 |
|
|
722 |
|
|
2,388 |
|
|
2,197 |
|
General
and administrative expenses |
3,076 |
|
|
2,751 |
|
|
9,798 |
|
|
8,255 |
|
Depreciation and amortization |
450 |
|
|
718 |
|
|
1,434 |
|
|
2,170 |
|
Loss
(gain) on asset disposals |
717 |
|
|
(5 |
) |
|
648 |
|
|
2 |
|
Total
operating costs and expenses |
131,486 |
|
|
107,990 |
|
|
403,700 |
|
|
322,389 |
|
Operating
income |
32,624 |
|
|
22,636 |
|
|
94,611 |
|
|
64,479 |
|
Interest expense,
net |
11,108 |
|
|
7,124 |
|
|
30,096 |
|
|
16,657 |
|
Income from equity
method investments |
(1,924 |
) |
|
(1,584 |
) |
|
(4,681 |
) |
|
(3,005 |
) |
Other expense (income),
net |
8 |
|
|
(1 |
) |
|
8 |
|
|
(1 |
) |
Income before income
tax expense |
23,432 |
|
|
17,097 |
|
|
69,188 |
|
|
50,828 |
|
Income tax expense |
106 |
|
|
174 |
|
|
285 |
|
|
333 |
|
Net income attributable
to partners |
$ |
23,326 |
|
|
$ |
16,923 |
|
|
68,903 |
|
|
50,495 |
|
Comprehensive income
attributable to partners |
$ |
23,326 |
|
|
$ |
16,923 |
|
|
$ |
68,903 |
|
|
$ |
50,495 |
|
|
|
|
|
|
|
|
|
Less: General partner's
interest in net income, including incentive distribution
rights |
6,636 |
|
|
4,745 |
|
|
18,478 |
|
|
13,406 |
|
Limited partners'
interest in net income |
$ |
16,690 |
|
|
$ |
12,178 |
|
|
$ |
50,425 |
|
|
$ |
37,089 |
|
|
|
|
|
|
|
|
|
Net income per
limited partner unit: |
|
|
|
|
|
|
|
Common units -
(basic) |
$ |
0.68 |
|
|
$ |
0.50 |
|
|
$ |
2.07 |
|
|
$ |
1.52 |
|
Common units -
(diluted) |
$ |
0.68 |
|
|
$ |
0.50 |
|
|
$ |
2.07 |
|
|
$ |
1.52 |
|
|
|
|
|
|
|
|
|
Weighted
average limited partner units outstanding: |
|
|
|
|
|
|
|
Common units -
basic |
24,395,183 |
|
|
24,361,457 |
|
|
24,387,995 |
|
|
24,341,921 |
|
Common
units - diluted |
24,401,908 |
|
|
24,389,582 |
|
|
24,395,880 |
|
|
24,382,426 |
|
|
|
|
|
|
|
|
|
Cash distribution per
limited partner unit |
$ |
0.790 |
|
|
$ |
0.715 |
|
|
$ |
2.310 |
|
|
$ |
2.110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delek Logistics Partners,
LPCondensed Consolidated Statements of Cash Flows
(Unaudited)(In thousands)
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
|
|
|
Cash flows from
operating activities |
|
|
|
Net income |
$ |
68,903 |
|
|
$ |
50,495 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
19,721 |
|
|
16,397 |
|
Amortization of customer contract intangible assets |
4,207 |
|
|
— |
|
Amortization of deferred revenue |
(1,095 |
) |
|
(1,004 |
) |
Amortization of deferred financing costs and debt discount |
1,984 |
|
|
1,438 |
|
Accretion
of asset retirement obligations |
267 |
|
|
219 |
|
Deferred
income taxes |
— |
|
|
158 |
|
Income
from equity method investments |
(4,681 |
) |
|
(3,005 |
) |
Dividends
from equity method investments |
5,128 |
|
|
765 |
|
Loss on
asset disposals |
648 |
|
|
2 |
|
Unit-based compensation expense |
518 |
|
|
545 |
|
Changes
in assets and liabilities: |
|
|
|
Accounts
receivable |
1,198 |
|
|
(1,115 |
) |
Inventories and other current assets |
17,022 |
|
|
2,028 |
|
Accounts
payable and other current liabilities |
(4,311 |
) |
|
8,501 |
|
Accounts
receivable/payable to related parties |
(50,030 |
) |
|
2,092 |
|
Non-current assets and liabilities, net |
(1,879 |
) |
|
(365 |
) |
Net cash
provided by operating activities |
57,600 |
|
|
77,151 |
|
Cash flows from
investing activities |
|
|
|
Asset acquisitions, net
of assumed ARO liabilities |
(72,222 |
) |
|
(6,443 |
) |
Purchases of property,
plant and equipment |
(8,674 |
) |
|
(9,187 |
) |
Proceeds from sales of
property, plant and equipment |
465 |
|
|
— |
|
Purchases of intangible
assets |
(144,219 |
) |
|
(2,560 |
) |
Distributions from
equity method investments |
957 |
|
|
753 |
|
Equity method
investment contributions |
(172 |
) |
|
(3,531 |
) |
Net cash
provided by (used in) financing activities |
(223,865 |
) |
|
(20,968 |
) |
Cash flows from
financing activities |
|
|
|
Proceeds from issuance
of additional units to maintain 2% General Partner interest |
20 |
|
|
21 |
|
Distributions to
general partner |
(17,010 |
) |
|
(12,839 |
) |
Distributions to common
unitholders - public |
(20,500 |
) |
|
(19,208 |
) |
Distributions to common
unitholders - Delek |
(34,335 |
) |
|
(31,555 |
) |
Distributions to Delek
unitholders and general partner related to Big Spring Logistic
Assets Acquisition |
(98,798 |
) |
|
— |
|
Proceeds from revolving
credit facility |
678,000 |
|
|
205,700 |
|
Payments of revolving
credit facility |
(324,700 |
) |
|
(439,500 |
) |
Proceeds from issuance
of senior notes |
— |
|
|
248,112 |
|
Deferred financing
costs paid |
(5,264 |
) |
|
(5,937 |
) |
Reimbursement of
capital expenditures by Delek |
3,183 |
|
|
4,254 |
|
Net cash
provided by (used in) financing activities |
180,596 |
|
|
(50,952 |
) |
Net increase in
cash and cash equivalents |
14,331 |
|
|
5,231 |
|
Cash and cash
equivalents at the beginning of the period |
4,675 |
|
|
59 |
|
Cash and cash
equivalents at the end of the period |
$ |
19,006 |
|
|
$ |
5,290 |
|
Supplemental
disclosures of cash flow information: |
|
|
|
Cash paid during the
period for: |
|
|
|
Interest |
$ |
24,446 |
|
|
$ |
9,288 |
|
Income
taxes |
$ |
136 |
|
|
$ |
60 |
|
Non-cash
investing activities: |
|
|
|
Decrease
in accrued capital expenditures |
$ |
(1,836 |
) |
|
$ |
(491 |
) |
Non-cash
financing activities: |
|
|
|
Sponsor
contribution of fixed assets |
$ |
— |
|
|
$ |
67 |
|
|
Delek Logistics Partners,
LPReconciliation of Amounts Reported Under U.S. GAAP(In
thousands)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation
of net income to EBITDA: |
|
|
|
|
|
|
|
Net income |
$ |
23,326 |
|
|
$ |
16,923 |
|
|
$ |
68,903 |
|
|
$ |
50,495 |
|
Add: |
|
|
|
|
|
|
|
Income
tax expense |
106 |
|
|
174 |
|
|
285 |
|
|
333 |
|
Depreciation and amortization |
6,702 |
|
|
5,462 |
|
|
19,721 |
|
|
16,397 |
|
Amortization of customer contract intangible assets |
1,803 |
|
|
— |
|
|
4,207 |
|
|
— |
|
Interest
expense, net |
11,108 |
|
|
7,124 |
|
|
30,096 |
|
|
16,657 |
|
EBITDA |
$ |
43,045 |
|
|
$ |
29,683 |
|
|
$ |
123,212 |
|
|
$ |
83,882 |
|
|
|
|
|
|
|
|
|
Reconciliation
of net cash from operating activities to distributable cash
flow: |
|
|
|
|
|
|
|
Net cash
provided by operating activities |
$ |
5,957 |
|
|
$ |
30,241 |
|
|
$ |
57,600 |
|
|
$ |
77,151 |
|
Changes
in assets and liabilities |
28,079 |
|
|
(8,460 |
) |
|
38,000 |
|
|
(11,141 |
) |
Distributions from equity method investments in investing
activities |
297 |
|
|
252 |
|
|
957 |
|
|
753 |
|
Maintenance and regulatory capital expenditures |
(2,380 |
) |
|
(698 |
) |
|
(3,721 |
) |
|
(5,011 |
) |
Reimbursement from Delek for capital expenditures (1) |
1,292 |
|
|
392 |
|
|
2,179 |
|
|
1,730 |
|
Accretion
of asset retirement obligations |
(92 |
) |
|
(73 |
) |
|
(267 |
) |
|
(219 |
) |
Deferred
income taxes |
— |
|
|
(39 |
) |
|
— |
|
|
(158 |
) |
Gain
(loss) on asset disposals |
(717 |
) |
|
5 |
|
|
(648 |
) |
|
(2 |
) |
Distributable
Cash Flow |
$ |
32,436 |
|
|
$ |
21,620 |
|
|
$ |
94,100 |
|
|
$ |
63,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) During the year ended December 31, 2017, the reimbursed
capital expenditure amounts in the determination of distributable
cash flow were revised to reflect the accrual of reimbursable
capital expenditures from Delek US rather than the cash amounts
received for reimbursed capital expenditures during the three and
nine months period ended September 30, 2017. This resulted in
decreases to the distributable cash flow of a nominal amount and
$2.5 million from the amounts presented on our Quarterly Report on
Form 10-Q for the three and nine months period ended September 30,
2017, respectively.
Delek Logistics Partners,
LPDistributable Coverage Ratio Calculation(In
thousands)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Distributions to
partners of Delek Logistics, LP |
2018 |
|
2017 |
|
2018 |
|
2017 |
Limited partners'
distribution on common units |
$ |
19,272 |
|
|
$ |
17,418 |
|
|
$ |
56,343 |
|
|
$ |
51,380 |
|
General
partner's distributions |
393 |
|
|
355 |
|
|
1,149 |
|
|
1,047 |
|
General
partner's incentive distribution rights |
6,295 |
|
|
4,497 |
|
|
17,449 |
|
|
12,650 |
|
Total distributions to
be paid |
$ |
25,960 |
|
|
$ |
22,270 |
|
|
$ |
74,941 |
|
|
$ |
65,077 |
|
|
|
|
|
|
|
|
|
Distributable cash
flow |
$ |
32,436 |
|
|
$ |
21,620 |
|
|
$ |
94,100 |
|
|
63,103 |
|
Distributable cash flow
coverage ratio (1) |
|
1.25x |
|
|
|
0.97x |
|
|
|
1.26x |
|
|
|
0.97x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Distributable cash flow coverage ratio is calculated by
dividing distributable cash flow by distributions to be paid in
each respective period.
Delek Logistics Partners,
LPSegment Data (unaudited)(In thousands)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Pipelines and
Transportation |
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
|
Affiliates |
|
$ |
36,132 |
|
|
$ |
27,805 |
|
|
$ |
99,624 |
|
|
$ |
81,972 |
|
Third
party |
|
3,653 |
|
|
3,177 |
|
|
11,618 |
|
|
7,910 |
|
Total
pipelines and transportation |
|
39,785 |
|
|
30,982 |
|
|
111,242 |
|
|
89,882 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
5,055 |
|
|
4,883 |
|
|
14,691 |
|
|
13,691 |
|
Operating
expenses (excluding depreciation and amortization) |
|
9,499 |
|
|
8,573 |
|
|
29,054 |
|
|
24,661 |
|
Segment
contribution margin |
|
$ |
25,231 |
|
|
$ |
17,526 |
|
|
$ |
66,839 |
|
|
$ |
51,530 |
|
Total Assets |
|
$ |
431,173 |
|
|
$ |
344,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
Marketing and Terminalling |
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
|
Affiliates (1) |
|
$ |
27,703 |
|
|
$ |
12,326 |
|
|
$ |
78,935 |
|
|
$ |
34,602 |
|
Third
party |
|
96,622 |
|
|
87,318 |
|
|
308,134 |
|
|
262,384 |
|
Total
wholesale marketing and terminalling |
|
124,325 |
|
|
99,644 |
|
|
387,069 |
|
|
296,986 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
100,541 |
|
|
84,237 |
|
|
315,953 |
|
|
253,058 |
|
Operating
expenses (excluding depreciation and amortization) |
|
5,896 |
|
|
2,089 |
|
|
13,835 |
|
|
6,325 |
|
Segment
contribution margin |
|
$ |
17,888 |
|
|
$ |
13,318 |
|
|
$ |
57,281 |
|
|
$ |
37,603 |
|
Total Assets |
|
$ |
262,396 |
|
|
$ |
78,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
|
Affiliates |
|
$ |
63,835 |
|
|
$ |
40,131 |
|
|
$ |
178,559 |
|
|
$ |
116,574 |
|
Third
party |
|
100,275 |
|
|
90,495 |
|
|
319,752 |
|
|
270,294 |
|
Total
consolidated |
|
164,110 |
|
|
130,626 |
|
|
498,311 |
|
|
386,868 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
105,596 |
|
|
89,120 |
|
|
330,644 |
|
|
266,749 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
15,395 |
|
|
10,662 |
|
|
42,889 |
|
|
30,986 |
|
Contribution margin |
|
43,119 |
|
|
30,844 |
|
|
124,778 |
|
|
89,133 |
|
General
and administrative expenses |
|
3,076 |
|
|
2,751 |
|
|
9,798 |
|
|
8,255 |
|
Depreciation and amortization |
|
6,702 |
|
|
5,462 |
|
|
19,721 |
|
|
16,397 |
|
Loss
(gain) on asset disposals |
|
717 |
|
|
(5 |
) |
|
648 |
|
|
2 |
|
Operating
income |
|
$ |
32,624 |
|
|
$ |
22,636 |
|
|
$ |
94,611 |
|
|
$ |
64,479 |
|
Total Assets |
|
$ |
693,569 |
|
|
$ |
422,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
Delek Logistics Partners,
LPSegment Capital Spending(In thousands)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Pipelines and
Transportation |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Maintenance capital
spending |
|
1,528 |
|
|
1,521 |
|
|
2,585 |
|
|
4,564 |
Discretionary capital
spending |
|
558 |
|
|
1,397 |
|
|
1,735 |
|
|
2,151 |
Segment capital
spending |
|
$ |
2,086 |
|
|
$ |
2,918 |
|
|
$ |
4,320 |
|
|
$ |
6,715 |
Wholesale
Marketing and Terminalling |
|
|
|
|
|
|
|
|
Maintenance capital
spending |
|
$ |
877 |
|
|
$ |
351 |
|
|
1,451 |
|
|
$ |
768 |
Discretionary capital
spending |
|
28 |
|
|
517 |
|
|
1,669 |
|
|
1,213 |
Segment capital
spending |
|
$ |
905 |
|
|
$ |
868 |
|
|
$ |
3,120 |
|
|
$ |
1,981 |
Consolidated |
|
|
|
|
|
|
|
|
Maintenance capital
spending |
|
$ |
2,405 |
|
|
$ |
1,872 |
|
|
$ |
4,036 |
|
|
$ |
5,332 |
Discretionary capital
spending |
|
586 |
|
|
1,914 |
|
|
3,404 |
|
|
3,364 |
Total capital
spending |
|
$ |
2,991 |
|
|
$ |
3,786 |
|
|
$ |
7,440 |
|
|
$ |
8,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delek Logistics Partners,
LPSegment Data (Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Pipelines and
Transportation Segment: |
|
|
|
|
|
|
|
Throughputs (average
bpd) |
|
|
|
|
|
|
|
Lion Pipeline
System: |
|
|
|
|
|
|
|
Crude
pipelines (non-gathered) |
59,150 |
|
60,247 |
|
56,672 |
|
59,653 |
Refined
products pipelines |
43,762 |
|
51,623 |
|
47,154 |
|
50,933 |
SALA Gathering
System |
16,704 |
|
15,997 |
|
16,705 |
|
16,160 |
East Texas Crude
Logistics System |
14,284 |
|
15,260 |
|
16,402 |
|
15,006 |
|
|
|
|
|
|
|
|
Wholesale
Marketing and Terminalling Segment: |
|
|
|
|
|
|
|
East Texas - Tyler
Refinery sales volumes (average bpd) (1) |
79,404 |
|
74,357 |
|
77,349 |
|
71,917 |
Big Spring Marketing -
Refinery sales volume (average bpd) (for period owned) (2) |
80,687 |
|
— |
|
79,819 |
|
— |
West Texas marketing
throughputs (average bpd) |
12,197 |
|
12,929 |
|
13,453 |
|
13,647 |
West Texas gross margin
per barrel |
$ |
4.65 |
|
$ |
4.00 |
|
$ |
5.88 |
|
$ |
3.62 |
Terminalling
throughputs (average bpd) (3) |
167,491 |
|
127,229 |
|
159,457 |
|
123,780 |
|
|
|
|
|
|
|
|
(1) Excludes jet fuel and petroleum coke.(2) Throughputs for the
nine months ended September 30, 2018 are for the 214 days we
marketed certain finished products produced at or sold from the Big
Spring Refinery following the execution of the Big Spring Marketing
Agreement, effective March 1, 2018.(3) Consists of terminalling
throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant,
Texas, our El Dorado and North Little Rock, Arkansas and our
Memphis and Nashville, Tennessee terminals. Throughputs for the Big
Spring terminal are for the 214 days we operated the terminal
following its acquisition effective March 1, 2018. Barrels per day
are calculated for only the days we operated each terminal. Total
throughput for the nine months ended September 30, 2018 was 41.4
million barrels, which averaged 151,646 bpd for the period.
Investor / Media Relations Contact:Keith
JohnsonVice President of Investor Relations615-435-1366
Media/Public Affairs Contact:Michael P.
RalskyVice President - Government Affairs, Public Affairs &
Communications615-435-1407
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