Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today
announced its financial results for the fourth quarter 2018. For
the three months ended December 31, 2018, Delek Logistics
reported net income attributable to all partners of $21.3 million,
or $0.58 per diluted common limited partner unit. This compares to
net income attributable to all partners of $18.9 million, or $0.57
per diluted common limited partner unit, in the fourth quarter
2017. Net cash from operating activities was $90.4 million in the
fourth quarter 2018 compared to $9.8 million in the prior year
period. Distributable cash flow was $27.6 million in the fourth
quarter 2018, compared to $21.9 million in the prior-year period.
Reconciliation of 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 2018, earnings before
interest, taxes, depreciation and amortization ("EBITDA") was $40.8
million compared to $31.2 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. 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.
For 2018, net income attributable to all
partners was $90.2 million, or $2.65 per diluted common limited
partner unit. This compares to net income attributable to all
partners of $69.4 million, or $2.09 per diluted common limited
partner unit in 2017. Net cash from operations was $148.0 million
and distributable cash flow was $121.6 million in 2018 compared to
net cash from operations of $87.0 million and distributable cash
flow of $85.0 million in 2017. EBITDA was $164.0 million in 2018,
compared to $115.0 million in 2017.
Uzi Yemin, Chairman and Chief Executive Officer
of Delek Logistics' general partner, remarked: "DKL continued its
growth in 2018 with a 43 percent increase in EBITDA and 43%
increase in distributable cash flow on a year over year basis
compared to 2017. This performance supported a distributable cash
flow coverage ratio of 1.19x for 2018. While our balance
sheet is positioned for the next step in growth through the
potential drop down of the Krotz Springs logistics assets, we
continue to explore opportunities in the Permian Basin to support
our future growth. Currently, we are supporting Delek US in the
construction process of its Big Spring Gathering system, which
along with Delek US' proposed participation in a long haul crude
oil pipeline project, should support an increased drop down
inventory. We were pleased to announce the 11.7 percent
year-over-year increase in our fourth quarter distribution. The
combination of our financial flexibility provided by our balance
sheet and our focus on growth initiatives sustained our
distribution growth in 2018, and should support our continued
commitment to grow our distribution per limited partner unit by at
least 10% annually through 2019."
Distribution and Liquidity
On January 24, 2019, Delek Logistics
declared a quarterly cash distribution of $0.81 per common limited
partner unit for the fourth quarter, which equates to $3.24 per
common limited partner unit on an annualized basis. This
distribution was paid on February 12, 2019 to unitholders of
record on February 4, 2019. This represents a 2.5 percent
increase from the third quarter 2018 distribution of $0.79 per
common limited partner unit, or $3.16 per common limited partner
unit on an annualized basis, and an 11.7 percent increase over
Delek Logistics’ fourth quarter 2017 distribution of $0.725 per
common limited partner unit, or $2.90 per common limited partner
unit annualized. For the fourth quarter 2018, the total cash
distribution declared to all partners, including IDRs, was
approximately $26.9 million. Based on the distribution for the
fourth quarter 2018, the distributable cash flow coverage ratio for
the fourth quarter was 1.02x.
As of December 31, 2018, Delek Logistics
had total debt of approximately $700.4 million and cash of $4.5
million. Additional borrowing capacity, subject to certain
covenants, under the $850.0 million credit facility was $393.3
million. The total leverage ratio, calculated in accordance with
the credit facility, for the fourth quarter 2018 was approximately
4.1x, which is within the current requirements of the maximum
allowable leverage ratio of 5.25x. This is a reduction from a 4.5x
calculated ratio at September 30, 2018.
Financial Results
Revenue for the fourth quarter 2018 was $159.3
million compared to $151.2 million in the prior-year period. The
increase in revenue is primarily due to the Big Spring acquisition
that was effective March 1, 2018 and service revenue associated
with the development of Delek US' Big Spring Gathering project.
Total operating expenses were $15.9 million in the fourth quarter
2018, compared to $12.3 million in the fourth quarter 2017. This
increase was primarily due to the contribution from the acquired
Big Spring assets. Total segment contribution margin was
$45.1 million in the fourth quarter 2018 compared to $32.7 million
in the fourth quarter 2017. General and administrative expenses
were $7.4 million for the fourth quarter 2018, compared to $3.6
million in the prior-year period. This increase was primarily due
to services provided to Delek US to support the development and
operations of the Big Spring Gathering project, which included an
approximate $2.7 million presentation change in the fourth quarter
2018 between general and administrative expenses and revenue.
Pipelines and Transportation
Segment
Contribution margin in the fourth quarter 2018
was $26.3 million compared to $18.7 million in the fourth quarter
2017. This increase was primarily due to the contribution from the
Big Spring acquisition that was effective March 1, 2018 and benefit
from the services agreement with Delek US to support the
development of the Big Spring Gathering project, partially offset
by lower performance from the Paline Pipeline. Operating expenses
were $10.9 million in the fourth quarter 2018 compared to $8.6
million in the prior-year period, primarily due to the Big Spring
acquisition.
Wholesale Marketing and Terminalling
Segment
During the fourth quarter 2018, contribution
margin was $18.8 million, compared to $14.0 million in the fourth
quarter 2017. This increase was primarily due to the contribution
from the Big Spring acquisition that was effective March 1, 2018,
partially offset by a lower gross margin in west Texas.
Operating expenses increased to $5.0 million in the fourth quarter
2018, compared to $3.7 million in the prior-year period primarily
due to the Big Spring acquisition.
In the west Texas wholesale business, average
throughput in the fourth quarter 2018 was 12,938 barrels per day
compared to 14,322 barrels per day in the fourth quarter 2017. The
west Texas gross margin per barrel decreased year-over-year to
$4.60 per barrel and included approximately $0.2 million, or $0.14
per barrel, from renewable identification numbers (RINs) generated
in the quarter. During the fourth quarter 2017, the west
Texas gross margin per barrel was $5.18 per barrel and included
$1.7 million from RINs, or $1.26 per barrel.
Average terminalling throughput volume of
164,028 barrels per day during the fourth quarter 2018 increased on
a year-over-year basis from 130,547 barrels per day in the fourth
quarter 2017 primarily due to the addition of the Big Spring
terminal. During the fourth quarter 2018, average volume
under the East Texas marketing agreement with Delek US was 77,896
barrels per day compared to 78,810 barrels per day during the
fourth quarter 2017. During the fourth quarter 2018, average volume
under the Big Spring marketing agreement with Delek US was 84,135
barrels per day.
Fourth Quarter 2018 Results | Conference
Call Information
Delek Logistics will hold a conference call to
discuss its fourth quarter and full-year 2018 results on Wednesday,
February 20, 2019 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 May 21, 2019 by dialing
(855) 859-2056, passcode 4568528. 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 and full-year 2018 earnings conference
call on Wednesday, February 20, 2019 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; 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; 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. 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
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 attributable to partners
before net interest expense, income tax expense (benefit),
depreciation and amortization expense, including amortization of
customer contract intangible assets, which is included as a
component of net revenues in our accompanying 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-U.S.
GAAP supplemental financial measures that management and external
users of our 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 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, LP |
Condensed Consolidated Balance Sheets (Unaudited) |
(In thousands, except unit and per unit
data) |
|
|
|
December 31, |
|
December 31, |
|
|
2018 |
|
2017 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
4,522 |
|
|
$ |
4,675 |
|
Accounts
receivable |
|
21,586 |
|
|
23,013 |
|
Accounts
receivable from related parties |
|
— |
|
|
1,124 |
|
Inventory |
|
5,491 |
|
|
20,855 |
|
Other
current assets |
|
969 |
|
|
783 |
|
Total
current assets |
|
32,568 |
|
|
50,450 |
|
Property, plant and
equipment: |
|
|
|
|
Property,
plant and equipment |
|
452,746 |
|
|
367,179 |
|
Less:
accumulated depreciation |
|
(140,184 |
) |
|
(112,111 |
) |
Property,
plant and equipment, net |
|
312,562 |
|
|
255,068 |
|
Equity method
investments |
|
104,770 |
|
|
106,465 |
|
Goodwill |
|
12,203 |
|
|
12,203 |
|
Intangible assets,
net |
|
154,038 |
|
|
15,917 |
|
Other non-current
assets |
|
8,452 |
|
|
3,427 |
|
Total
assets |
|
$ |
624,593 |
|
|
$ |
443,530 |
|
LIABILITIES AND DEFICIT |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
14,226 |
|
|
$ |
19,147 |
|
Accounts
payable to related parties |
|
7,833 |
|
|
— |
|
Excise
and other taxes payable |
|
4,069 |
|
|
4,700 |
|
Tank
inspection liabilities |
|
902 |
|
|
902 |
|
Pipeline
release liabilities |
|
4,419 |
|
|
1,000 |
|
Accrued
expenses and other current liabilities |
|
5,056 |
|
|
6,033 |
|
Total
current liabilities |
|
36,505 |
|
|
31,782 |
|
Non-current
liabilities: |
|
|
|
|
Long-term
debt |
|
700,430 |
|
|
422,649 |
|
Asset
retirement obligations |
|
5,191 |
|
|
4,064 |
|
Other
non-current liabilities |
|
17,290 |
|
|
14,260 |
|
Total
non-current liabilities |
|
722,911 |
|
|
440,973 |
|
Deficit: |
|
|
|
|
Common
unitholders - public; 9,109,807 units issued and outstanding
at December 31, 2018 (9,088,587 at December 31, 2017) |
|
171,023 |
|
|
174,378 |
|
Common
unitholders - Delek Holdings; 15,294,046 units issued and
outstanding at December 31, 2018 (15,294,046 at December 31,
2017) |
|
(299,360 |
) |
|
(197,206 |
) |
General
partner - 498,038 units issued and outstanding at December 31, 2018
(497,604 at December 31, 2017) |
|
(6,486 |
) |
|
(6,397 |
) |
Total
deficit |
|
(134,823 |
) |
|
(29,225 |
) |
Total
liabilities and deficit |
|
$ |
624,593 |
|
|
$ |
443,530 |
|
|
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, |
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net revenues: |
|
|
|
|
|
|
|
|
Affiliate |
|
$ |
62,250 |
|
|
$ |
39,706 |
|
|
$ |
240,809 |
|
|
$ |
156,280 |
|
Third-party |
|
97,048 |
|
|
111,501 |
|
|
416,800 |
|
|
381,795 |
|
Net revenues |
|
159,298 |
|
|
151,207 |
|
|
657,609 |
|
|
538,075 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
98,417 |
|
|
106,141 |
|
|
429,061 |
|
|
372,890 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
15,423 |
|
|
11,365 |
|
|
55,924 |
|
|
40,154 |
|
Depreciation and amortization |
|
5,821 |
|
|
4,799 |
|
|
24,108 |
|
|
19,026 |
|
Total
cost of sales |
|
119,661 |
|
|
122,305 |
|
|
509,093 |
|
|
432,070 |
|
Operating
expenses related to wholesale business (excluding depreciation and
amortization presented below) |
|
432 |
|
|
923 |
|
|
2,820 |
|
|
3,120 |
|
General
and administrative expenses |
|
7,367 |
|
|
3,585 |
|
|
17,166 |
|
|
11,840 |
|
Depreciation and amortization |
|
448 |
|
|
718 |
|
|
1,882 |
|
|
2,888 |
|
Loss
(gain) on asset disposals |
|
243 |
|
|
(22 |
) |
|
891 |
|
|
(20 |
) |
Total
operating costs and expenses |
|
128,151 |
|
|
127,509 |
|
|
531,852 |
|
|
449,898 |
|
Operating
income |
|
31,147 |
|
|
23,698 |
|
|
125,757 |
|
|
88,177 |
|
Interest expense,
net |
|
11,167 |
|
|
7,287 |
|
|
41,263 |
|
|
23,944 |
|
(Income) loss from
equity method investments |
|
(1,549 |
) |
|
(1,948 |
) |
|
(6,230 |
) |
|
(4,953 |
) |
Other expense (income),
net |
|
— |
|
|
— |
|
|
8 |
|
|
(1 |
) |
Income before income
tax expense (benefit) |
|
21,529 |
|
|
18,359 |
|
|
90,716 |
|
|
69,187 |
|
Income tax expense
(benefit) |
|
249 |
|
|
(555 |
) |
|
534 |
|
|
(222 |
) |
Net income attributable
to partners |
|
$ |
21,280 |
|
|
$ |
18,914 |
|
|
90,182 |
|
|
69,409 |
|
Comprehensive income
attributable to partners |
|
$ |
21,280 |
|
|
$ |
18,914 |
|
|
$ |
90,182 |
|
|
$ |
69,409 |
|
|
|
|
|
|
|
|
|
|
Less: General partner's
interest in net income, including incentive distribution
rights |
|
7,065 |
|
|
5,023 |
|
|
25,543 |
|
|
18,429 |
|
Limited partners'
interest in net income |
|
$ |
14,215 |
|
|
$ |
13,891 |
|
|
$ |
64,639 |
|
|
$ |
50,980 |
|
|
|
|
|
|
|
|
|
|
Net income per
limited partner unit: |
|
|
|
|
|
|
|
|
Common units -
(basic) |
|
$ |
0.58 |
|
|
$ |
0.57 |
|
|
$ |
2.65 |
|
|
$ |
2.09 |
|
Common units -
(diluted) |
|
$ |
0.58 |
|
|
$ |
0.57 |
|
|
$ |
2.65 |
|
|
$ |
2.09 |
|
|
|
|
|
|
|
|
|
|
Weighted
average limited partner units outstanding: |
|
|
|
|
|
|
|
|
Common units -
basic |
|
24,397,085 |
|
|
24,366,291 |
|
|
24,390,286 |
|
|
24,348,063 |
|
Common units -
diluted |
|
24,405,661 |
|
|
24,382,560 |
|
|
24,396,881 |
|
|
24,376,972 |
|
|
|
|
|
|
|
|
|
|
Cash distribution per
limited partner unit |
|
$ |
0.810 |
|
|
$ |
0.725 |
|
|
$ |
3.120 |
|
|
$ |
2.835 |
|
|
Delek Logistics Partners, LP |
Condensed Consolidated Statements of Cash Flows
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
Net
income |
|
$ |
90,182 |
|
|
$ |
69,409 |
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
25,990 |
|
|
21,914 |
|
|
|
Amortization of customer contract intangible assets |
|
6,009 |
|
|
— |
|
|
|
Amortization of deferred revenue |
|
(1,497 |
) |
|
(1,234 |
) |
|
|
Amortization of deferred financing costs and debt discount |
|
2,577 |
|
|
2,048 |
|
|
|
Accretion
of asset retirement obligations |
|
359 |
|
|
292 |
|
|
|
Deferred
income taxes |
|
152 |
|
|
(111 |
) |
|
|
Income from
equity method investments |
|
(6,230 |
) |
|
(4,953 |
) |
|
|
Dividends
from equity method investments |
|
6,936 |
|
|
2,346 |
|
|
|
Loss (gain)
on asset disposals |
|
891 |
|
|
(20 |
) |
|
|
Unit-based
compensation expense |
|
674 |
|
|
721 |
|
|
|
Changes in
assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
1,427 |
|
|
(3,811 |
) |
|
|
|
Inventories
and other current assets |
|
15,178 |
|
|
(11,692 |
) |
|
|
|
Accounts
payable and other current liabilities |
|
(1,747 |
) |
|
10,859 |
|
|
|
|
Accounts
receivable/payable to related parties |
|
9,038 |
|
|
1,682 |
|
|
|
|
Non-current
assets and liabilities, net |
|
(1,986 |
) |
|
(500 |
) |
|
Net cash provided by operating activities |
|
147,953 |
|
|
86,950 |
|
|
Cash flows from investing activities |
|
|
|
|
|
Asset
acquisitions, net of assumed ARO liabilities |
|
(72,380 |
) |
|
(6,443 |
) |
|
Purchases
of property, plant and equipment |
|
(12,931 |
) |
|
(18,184 |
) |
|
Proceeds
from sales of property, plant and equipment |
|
502 |
|
|
46 |
|
|
Purchases
of intangible assets |
|
(144,219 |
) |
|
(2,560 |
) |
|
Distributions from equity method investments |
|
1,162 |
|
|
753 |
|
|
Equity
method investment contributions |
|
(173 |
) |
|
(3,531 |
) |
|
Net cash provided by (used in) financing activities |
|
(228,039 |
) |
|
(29,919 |
) |
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds
from issuance of additional units to maintain 2% General Partner
interest |
|
26 |
|
|
21 |
|
|
Distributions to general partner |
|
(23,698 |
) |
|
(17,691 |
) |
|
Distributions to common unitholders - public |
|
(27,721 |
) |
|
(25,978 |
) |
|
Distributions to common unitholders - Delek Holdings |
|
(46,417 |
) |
|
(42,490 |
) |
|
Distributions to Delek Holdings unitholders and general partner
related to Big Spring Logistic Assets Acquisition |
|
(98,798 |
) |
|
— |
|
|
Proceeds
from revolving credit facility |
|
735,000 |
|
|
277,100 |
|
|
Payments of
revolving credit facility |
|
(458,200 |
) |
|
(489,800 |
) |
|
Proceeds
from issuance of senior notes |
|
— |
|
|
248,112 |
|
|
Deferred
financing costs paid |
|
(5,264 |
) |
|
(5,951 |
) |
|
Reimbursement of capital expenditures by Delek Holdings |
|
5,005 |
|
|
4,262 |
|
|
Net cash provided by (used in) financing activities |
|
79,933 |
|
|
(52,415 |
) |
|
Net
(decrease) increase in cash and cash equivalents |
|
(153 |
) |
|
4,616 |
|
|
Cash and
cash equivalents at the beginning of the period |
|
4,675 |
|
|
59 |
|
|
Cash and
cash equivalents at the end of the period |
|
$ |
4,522 |
|
|
$ |
4,675 |
|
|
Supplemental disclosures of cash flow
information: |
|
|
|
|
|
Cash paid
during the period for: |
|
|
|
|
|
Interest |
|
$ |
38,959 |
|
|
$ |
19,441 |
|
|
Income taxes |
|
$ |
137 |
|
|
$ |
60 |
|
|
Non-cash
investing activities: |
|
|
|
|
|
(Increase)/Decrease in accrued capital expenditures |
|
$ |
(1,363 |
) |
|
$ |
194 |
|
|
Non-cash
financing activities: |
|
|
|
|
|
Sponsor contribution of fixed assets |
|
$ |
154 |
|
|
$ |
67 |
|
|
|
Delek Logistics Partners, LP |
Reconciliation of Amounts Reported Under U.S.
GAAP |
(In thousands) |
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation
of net income to EBITDA: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
21,280 |
|
|
$ |
18,914 |
|
|
$ |
90,182 |
|
|
$ |
69,409 |
|
Add: |
|
|
|
|
|
|
|
|
Income
tax expense (benefit) |
|
249 |
|
|
(555 |
) |
|
534 |
|
|
(222 |
) |
Depreciation and amortization expense |
|
6,269 |
|
|
5,517 |
|
|
25,990 |
|
|
21,914 |
|
Amortization of customer contract intangible assets |
|
1,802 |
|
|
— |
|
|
6,009 |
|
|
— |
|
Interest
expense, net |
|
11,167 |
|
|
7,287 |
|
|
41,263 |
|
|
23,944 |
|
EBITDA |
|
$ |
40,767 |
|
|
$ |
31,163 |
|
|
$ |
163,978 |
|
|
$ |
115,045 |
|
|
|
|
|
|
|
|
|
|
Reconciliation
of net cash from operating activities to distributable cash
flow: |
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
$ |
90,353 |
|
|
$ |
9,799 |
|
|
$ |
147,953 |
|
|
$ |
86,950 |
|
Changes
in assets and liabilities |
|
(59,910 |
) |
|
14,603 |
|
|
(21,910 |
) |
|
3,462 |
|
Distributions from equity method investments in investing
activities |
|
205 |
|
|
— |
|
|
1,162 |
|
|
753 |
|
Maintenance and regulatory capital expenditures |
|
(3,485 |
) |
|
(4,433 |
) |
|
(7,326 |
) |
|
(9,444 |
) |
Reimbursement from Delek for capital expenditures |
|
936 |
|
|
1,723 |
|
|
3,115 |
|
|
3,453 |
|
Accretion
of asset retirement obligations |
|
(92 |
) |
|
(73 |
) |
|
(359 |
) |
|
(292 |
) |
Deferred
income taxes |
|
(152 |
) |
|
269 |
|
|
(152 |
) |
|
111 |
|
Gain
(loss) on asset disposals |
|
(243 |
) |
|
22 |
|
|
(891 |
) |
|
20 |
|
Distributable
Cash Flow |
|
$ |
27,612 |
|
|
$ |
21,910 |
|
|
$ |
121,592 |
|
|
$ |
85,013 |
|
|
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 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Limited partners'
distribution on common units |
|
$ |
19,770 |
|
|
$ |
17,677 |
|
|
$ |
76,114 |
|
|
$ |
69,057 |
|
General
partner's distributions |
|
404 |
|
|
361 |
|
|
1,552 |
|
|
1,408 |
|
General
partner's incentive distribution rights |
|
6,775 |
|
|
4,739 |
|
|
24,224 |
|
|
17,389 |
|
Total distributions to
be paid |
|
$ |
26,949 |
|
|
$ |
22,777 |
|
|
$ |
101,890 |
|
|
$ |
87,854 |
|
|
|
|
|
|
|
|
|
|
Distributable cash
flow |
|
$ |
27,612 |
|
|
$ |
21,910 |
|
|
$ |
121,592 |
|
|
85,013 |
|
Distributable cash flow
coverage ratio (1) |
|
|
1.02x |
|
|
|
0.96x |
|
|
|
1.19x |
|
|
|
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, LP |
Segment Data (unaudited) |
(In thousands) |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Pipelines and Transportation |
|
|
|
|
|
|
|
|
Net
revenues: |
|
|
|
|
|
|
|
|
Affiliates |
|
$ |
38,794 |
|
|
$ |
27,327 |
|
|
$ |
138,418 |
|
|
$ |
109,298 |
|
Third party |
|
3,531 |
|
|
4,520 |
|
|
15,149 |
|
|
12,431 |
|
Total pipelines and transportation |
|
42,325 |
|
|
31,847 |
|
|
153,567 |
|
|
121,729 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
Cost of materials and other |
|
5,187 |
|
|
4,519 |
|
|
19,878 |
|
|
18,210 |
|
Operating expenses (excluding depreciation and amortization) |
|
10,880 |
|
|
8,579 |
|
|
39,934 |
|
|
33,240 |
|
Segment contribution margin |
|
$ |
26,258 |
|
|
$ |
18,749 |
|
|
$ |
93,755 |
|
|
$ |
70,279 |
|
Total
Assets |
|
$ |
387,333 |
|
|
$ |
349,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Marketing and Terminalling |
|
|
|
|
|
|
|
|
Net
revenues: |
|
|
|
|
|
|
|
|
Affiliates (1) |
|
$ |
23,456 |
|
|
$ |
12,379 |
|
|
$ |
102,391 |
|
|
$ |
46,982 |
|
Third party |
|
93,517 |
|
|
106,981 |
|
|
401,651 |
|
|
369,364 |
|
Total wholesale marketing and terminalling |
|
116,973 |
|
|
119,360 |
|
|
504,042 |
|
|
416,346 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
Cost of materials and other |
|
93,230 |
|
|
101,622 |
|
|
409,183 |
|
|
354,680 |
|
Operating expenses (excluding depreciation and amortization) |
|
4,975 |
|
|
3,709 |
|
|
18,810 |
|
|
10,034 |
|
Segment contribution margin |
|
$ |
18,768 |
|
|
$ |
14,029 |
|
|
$ |
76,049 |
|
|
$ |
51,632 |
|
Total
Assets |
|
$ |
237,260 |
|
|
$ |
94,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
Net
revenues: |
|
|
|
|
|
|
|
|
Affiliates |
|
$ |
62,250 |
|
|
$ |
39,706 |
|
|
$ |
240,809 |
|
|
$ |
156,280 |
|
Third party |
|
97,048 |
|
|
111,501 |
|
|
416,800 |
|
|
381,795 |
|
Total consolidated |
|
159,298 |
|
|
151,207 |
|
|
657,609 |
|
|
538,075 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
Cost of materials and other |
|
98,417 |
|
|
106,141 |
|
|
429,061 |
|
|
372,890 |
|
Operating expenses (excluding depreciation and amortization
presented below) |
|
15,855 |
|
|
12,288 |
|
|
58,744 |
|
|
43,274 |
|
Contribution margin |
|
45,026 |
|
|
32,778 |
|
|
169,804 |
|
|
121,911 |
|
General and administrative expenses |
|
7,367 |
|
|
3,585 |
|
|
17,166 |
|
|
11,840 |
|
Depreciation and amortization |
|
6,269 |
|
|
5,517 |
|
|
25,990 |
|
|
21,914 |
|
Loss (gain) on asset disposals |
|
243 |
|
|
(22 |
) |
|
891 |
|
|
(20 |
) |
Operating income |
|
$ |
31,147 |
|
|
$ |
23,698 |
|
|
$ |
125,757 |
|
|
$ |
88,177 |
|
Total Assets |
|
$ |
624,593 |
|
|
$ |
443,530 |
|
|
|
|
|
|
|
(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, LP |
Segment Capital Spending |
(In thousands) |
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
Pipelines and Transportation |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Maintenance capital
spending |
|
$ |
1,084 |
|
|
$ |
4,079 |
|
|
$ |
3,669 |
|
|
$ |
8,643 |
|
Discretionary capital spending |
|
1,436 |
|
|
3,468 |
|
|
3,171 |
|
|
5,619 |
|
Segment
capital spending |
|
$ |
2,520 |
|
|
$ |
7,547 |
|
|
$ |
6,840 |
|
|
$ |
14,262 |
|
Wholesale Marketing and Terminalling |
|
|
|
|
|
|
|
|
Maintenance capital spending |
|
$ |
1,429 |
|
|
$ |
1,693 |
|
|
2,880 |
|
|
$ |
2,461 |
|
Discretionary capital spending |
|
176 |
|
|
467 |
|
|
1,845 |
|
|
1,680 |
|
Segment
capital spending |
|
$ |
1,605 |
|
|
$ |
2,160 |
|
|
$ |
4,725 |
|
|
$ |
4,141 |
|
Consolidated |
|
|
|
|
|
|
|
|
Maintenance capital spending |
|
$ |
2,513 |
|
|
$ |
5,772 |
|
|
$ |
6,549 |
|
|
$ |
11,104 |
|
Discretionary capital spending |
|
1,612 |
|
|
3,935 |
|
|
5,016 |
|
|
7,299 |
|
Total
capital spending |
|
$ |
4,125 |
|
|
$ |
9,707 |
|
|
$ |
11,565 |
|
|
$ |
18,403 |
|
|
|
|
|
|
|
|
|
|
|
Delek Logistics Partners, LP |
Segment Data (Unaudited) |
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Pipelines and
Transportation Segment: |
|
|
|
|
|
|
|
|
Throughputs (average
bpd) |
|
|
|
|
|
|
|
|
Lion Pipeline
System: |
|
|
|
|
|
|
|
|
Crude pipelines
(non-gathered) |
|
45,416 |
|
|
58,497 |
|
|
51,992 |
|
|
59,362 |
|
Refined products
pipelines |
|
41,496 |
|
|
54,874 |
|
|
45,728 |
|
|
51,927 |
|
SALA Gathering
System |
|
15,536 |
|
|
15,013 |
|
|
16,571 |
|
|
15,871 |
|
East Texas Crude
Logistics System |
|
13,602 |
|
|
18,078 |
|
|
15,696 |
|
|
15,780 |
|
|
|
|
|
|
|
|
|
|
Wholesale
Marketing and Terminalling Segment: |
|
|
|
|
|
|
|
|
East Texas - Tyler
Refinery sales volumes (average bpd) (1) |
|
77,896 |
|
|
78,810 |
|
|
77,487 |
|
|
73,655 |
|
Big Spring Marketing -
Refinery sales volume (average bpd) (for period owned) (2) |
|
84,135 |
|
|
— |
|
|
81,117 |
|
|
— |
|
West Texas marketing
throughputs (average bpd) |
|
12,938 |
|
|
14,322 |
|
|
13,323 |
|
|
13,817 |
|
West Texas gross margin
per barrel |
|
$ |
4.60 |
|
|
$ |
5.18 |
|
|
$ |
5.57 |
|
|
$ |
4.03 |
|
Terminalling
throughputs (average bpd) (3) |
|
164,028 |
|
|
130,547 |
|
|
155,193 |
|
|
124,488 |
|
|
|
(1) |
Excludes
jet fuel and petroleum coke. |
(2) |
Throughputs
for the year ended December 31, 2018 are for the 306 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 306 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
year ended December 31, 2018 was 56.6 million barrels, which
averaged 155,193 bpd for the period. |
|
|
Investor / Media Relations Contact:Keith
JohnsonVice President of Investor
Relations
615-435-1366
Media/Public Affairs Contact:Michael P.
RalskyVice President - Government Affairs, Public Affairs &
Communications615-435-1407
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