- Net income attributable to all partners of $32.6
million
- Quarterly EBITDA of $101.5 million
- Distributable cash flow of $68.0 million, DCF coverage ratio
of 1.35x
- In 2024, successfully executed $850 million debt offering
and $138 million equity offering:
- Improved liquidity from approximately $300.0 million to
$800.0 million
- Added 3.6 million units for a total 47.2 million outstanding
units and increased volume activity
- Improved leverage ratio to 4.01x from 4.34x at year-end
2023
- Delivered 45 consecutive quarters of distribution growth
with recent increase to $1.070/unit
Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics")
today announced its financial results for the first quarter 2024,
with reported net income attributable to all partners of $32.6
million, or $0.73 per diluted common limited partner unit. This
compares to net income attributable to all partners of $37.4
million, or $0.86 per diluted common limited partner unit, in the
first quarter 2023. The decrease in net income attributable to all
partners was driven by higher interest expense. Net cash provided
in operating activities was $43.9 million in the first quarter 2024
compared to $29.2 million in the first quarter 2023. Distributable
cash flow was $68.0 million in the first quarter 2024, compared to
$61.8 million in the first quarter 2023.
For the first quarter 2024, earnings before interest, taxes,
depreciation and amortization ("EBITDA") was $101.5 million
compared to $93.2 million in the first quarter 2023.
“Delek Logistics had a strong quarter, delivering another solid
financial and operational performance,” said Avigal Soreq,
President of Delek Logistics' general partner.
"I'm proud of the team for successfully executing the debt and
equity offerings during the quarter," Soreq continued. "We improved
DKL's financial strength and flexibility with these transactions.
The leverage ratio was lowered to 4.01x, down from 4.34x at
year-end 2023, and liquidity was improved to approximately $800.0
million. Additionally, we saw new investor interest and increased
volume activity in the units, enhancing our opportunities with
DKL."
“In April, the Board continued its commitment to return value to
unitholders and approved the 45th consecutive increase in the
quarterly distribution to $1.070 per unit," Mr. Soreq
concluded.
Distribution and
Liquidity
On April 25, 2024, Delek Logistics declared a quarterly cash
distribution of $1.070 per common limited partner unit for the
first quarter 2024. This distribution will be paid on May 15, 2024
to unitholders of record on May 8, 2024. This represents a 1.4%
increase from the fourth quarter 2023 distribution of $1.055 per
common limited partner unit, and a 4.4% increase over Delek
Logistics’ first quarter 2023 distribution of $1.025 per common
limited partner unit. For the first quarter 2024, the total cash
distribution declared to all partners was approximately $50.5
million, resulting in a distributable cash flow ("DCF") coverage
ratio of 1.35x.
As of March 31, 2024, Delek Logistics had total debt of
approximately $1.60 billion and cash of $9.7 million. Additional
borrowing capacity, subject to certain covenants, under the $1.15
billion third party revolving credit facility was $584.8 million.
The total leverage ratio as of March 31, 2024 of approximately
4.01x was within the requirements of the maximum allowable leverage
ratio under the credit facility.
Consolidated Operating
Results
First quarter 2024, EBITDA was $101.5 million compared with
$93.2 million in the first quarter 2023. The $8.3 million increase
reflects higher contributions from the Delaware Gathering systems,
terminalling and marketing rate increases, as well as continued
strong throughput on joint venture pipelines. The increase was
partially offset by higher operating expenses driven by the growth
in operations.
Gathering and Processing
Segment
EBITDA in the first quarter 2024 was $57.8 million compared with
$55.4 million in the first quarter 2023. The increase was primarily
due to higher throughput from Permian Basin assets.
Wholesale Marketing and Terminalling
Segment
EBITDA in the first quarter 2024 was $25.3 million, compared
with first quarter 2023 EBITDA of $22.0 million. The increase was
primarily due to higher terminalling utilization.
Storage and Transportation
Segment
EBITDA in the first quarter 2024 was $18.1 million, compared
with $13.4 million in the first quarter 2023. The increase was
primarily due to increased storage and transportation rates.
Investments in Pipeline Joint Ventures
Segment
During the first quarter 2024, income from equity method
investments was $8.5 million compared to $6.3 million in the first
quarter 2023.
Corporate
EBITDA in the first quarter 2024 was a loss of $8.1 million
compared to a loss of $4.0 million in the first quarter 2023.
First Quarter 2024 Results | Conference
Call Information
Delek Logistics will hold a conference call to discuss its first
quarter 2024 results on Tuesday, May 7, 2024 at 11:30 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.
About Delek Logistics Partners,
LP
Delek Logistics is a midstream energy master limited partnership
headquartered in Brentwood, Tennessee. Through its owned assets and
joint ventures located primarily in and around the Permian Basin,
the Delaware Basin and other select areas in the Gulf Coast region,
Delek Logistics provides gathering, pipeline and other
transportation services primarily for crude oil and natural gas
customers, storage, wholesale marketing and terminalling services
primarily for intermediate and refined product customers, and water
disposal and recycling services. Delek US Holdings, Inc. ("Delek
US") owns the general partner interest as well as a majority
limited partner interest in Delek Logistics, and is also a
significant customer.
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 significant portion of Delek Logistics' revenue 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; risks and uncertainties related to the
integration of the 3 Bear business following the recent
acquisition; 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; projected capital expenditures,
scheduled turnaround activity; 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; projected benefits of the Delaware
Gathering acquisition; 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. 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 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 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.
Our EBITDA and distributable cash flow measures are non 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 on a current and on-going
basis;
- 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.
We believe that the presentation of EBITDA and distributable
cash flow measures provide information useful to investors in
assessing our financial condition and results of operations and
assists in evaluating our ongoing operating performance for current
and comparative periods. EBITDA and distributable cash flow should
not be considered 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. EBITDA and distributable cash flow 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. Additionally, because EBITDA and
distributable cash flow may be defined differently by other
partnerships in our industry, our definitions of EBITDA and
distributable cash flow may not be comparable to similarly titled
measures of other partnerships, thereby diminishing their utility.
For a reconciliation of EBITDA and distributable cash flow to their
most directly comparable financial measures calculated and
presented in accordance with U.S. GAAP, please refer to "Results of
Operations" below. 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
Consolidated Balance Sheets
(Unaudited)
(In thousands, except unit
data)
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
9,672
$
3,755
Accounts receivable
56,993
41,131
Accounts receivable from related
parties
36,588
28,443
Inventory
1,655
2,264
Other current assets
615
676
Total current assets
105,523
76,269
Property, plant and equipment:
Property, plant and equipment
1,336,053
1,320,510
Less: accumulated depreciation
(406,009
)
(384,359
)
Property, plant and equipment, net
930,044
936,151
Equity method investments
238,185
241,337
Customer relationship intangible, net
176,811
181,336
Marketing contract intangible, net
100,352
102,155
Rights-of-way, net
60,141
59,536
Goodwill
12,203
12,203
Operating lease right-of-use assets
17,641
19,043
Other non-current assets
13,471
14,216
Total assets
$
1,654,371
$
1,642,246
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable
$
26,313
$
26,290
Current portion of long-term debt
—
30,000
Interest payable
12,710
5,805
Excise and other taxes payable
7,638
10,321
Current portion of operating lease
liabilities
6,442
6,697
Accrued expenses and other current
liabilities
4,098
11,477
Total current liabilities
57,201
90,590
Non-current liabilities:
Long-term debt, net of current portion
1,601,226
1,673,789
Operating lease liabilities, net of
current portion
7,367
8,335
Asset retirement obligations
10,225
10,038
Other non-current liabilities
20,819
21,363
Total non-current liabilities
1,639,637
1,713,525
Total liabilities
1,696,838
1,804,115
Equity (Deficit):
Common unitholders - public; 12,898,253
units issued and outstanding at March 31, 2024 (9,299,763 at
December 31, 2023)
290,051
160,402
Common unitholders - Delek Holdings;
34,311,278 units issued and outstanding at March 31, 2024
(34,311,278 at December 31, 2023)
(332,518
)
(322,271
)
Total deficit
(42,467
)
(161,869
)
Total liabilities and deficit
$
1,654,371
$
1,642,246
Delek Logistics Partners, LP
Consolidated Statement of Income and
Comprehensive Income (Unaudited)
(In thousands, except unit and per unit
data)
Three Months Ended March
31,
2024
2023
Net revenues:
Affiliate
$
139,625
$
124,999
Third-party
112,450
118,526
Net revenues
252,075
243,525
Cost of sales:
Cost of materials and other -
affiliate
92,882
91,071
Cost of materials and other - third
party
30,810
35,025
Operating expenses (excluding depreciation
and amortization presented below)
31,695
24,215
Depreciation and amortization
25,167
19,764
Total cost of sales
180,554
170,075
Operating expenses related to wholesale
business (excluding depreciation and amortization presented
below)
221
525
General and administrative expenses
4,863
7,510
Depreciation and amortization
1,328
1,341
Loss on disposal of assets
567
142
Total operating costs and expenses
187,533
179,593
Operating income
64,542
63,932
Interest expense, net
40,229
32,581
Income from equity method investments
(8,490
)
(6,316
)
Other income, net
(171
)
(2
)
Total non-operating expenses, net
31,568
26,263
Income before income tax expense
32,974
37,669
Income tax expense
326
302
Net income attributable to partners
$
32,648
$
37,367
Comprehensive income attributable to
partners
$
32,648
$
37,367
Net income per limited partner
unit:
Basic
$
0.74
$
0.86
Diluted
$
0.73
$
0.86
Weighted average limited partner units
outstanding:
Basic
44,406,356
43,569,963
Diluted
44,422,817
43,585,297
Cash distribution per common limited
partner unit
$
1.070
$
1.025
Delek Logistics Partners, LP
Condensed Consolidated Statements of
Cash Flows (In thousands)
(Unaudited)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities
Net cash provided by operating
activities
$
43,858
$
29,190
Cash flows from investing
activities
Net cash used in investing activities
(9,861
)
(26,979
)
Cash flows from financing
activities
Net cash (used in) provided by financing
activities
(28,080
)
783
Net increase in cash and cash
equivalents
5,917
2,994
Cash and cash equivalents at the beginning
of the period
3,755
7,970
Cash and cash equivalents at the end of
the period
$
9,672
$
10,964
Delek Logistics Partners, LP
Reconciliation of Amounts Reported
Under U.S. GAAP (Unaudited)
(In thousands)
Three Months Ended March
31,
2024
2023
Reconciliation of Net Income to
EBITDA:
Net income
$
32,648
$
37,367
Add:
Income tax expense
326
302
Depreciation and amortization
26,495
21,105
Amortization of marketing contract
intangible
1,803
1,803
Interest expense, net
40,229
32,581
EBITDA
$
101,501
$
93,158
Reconciliation of net cash from
operating activities to distributable cash flow:
Net cash provided by operating
activities
$
43,858
$
29,190
Changes in assets and liabilities
25,787
37,670
Non-cash lease expense
(1,939
)
(2,200
)
Distributions from equity method
investments in investing activities
2,133
1,440
Regulatory and sustaining capital
expenditures not distributable
(1,279
)
(4,246
)
Reimbursement from Delek Holdings for
capital expenditures
286
337
Accretion of asset retirement
obligations
(187
)
(176
)
Deferred income taxes
(101
)
(111
)
Loss on disposal of assets
(567
)
(142
)
Distributable Cash Flow
$
67,991
$
61,762
Delek Logistics Partners, LP
Distributable Coverage Ratio
Calculation (Unaudited)
(In thousands)
Three Months Ended March
31,
2024
2023
Distributions to partners of Delek
Logistics, LP
$
50,514
$
44,664
Distributable cash flow
$
67,991
$
61,762
Distributable cash flow coverage ratio
(1)
1.35x
1.38x
(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 March 31,
2024
Gathering and
Processing
Wholesale Marketing and
Terminalling
Storage and
Transportation
Investments in Pipeline Joint
Ventures
Corporate and Other
Consolidated
Net revenues:
Affiliate
$
52,553
$
52,882
$
34,190
$
—
$
—
$
139,625
Third party
43,330
66,388
2,732
—
—
112,450
Total revenue
$
95,883
$
119,270
$
36,922
$
—
$
—
$
252,075
Segment EBITDA
$
57,772
$
25,274
$
18,127
$
8,477
$
(8,149
)
$
101,501
Depreciation and amortization
21,154
1,712
2,775
—
854
26,495
Amortization of customer contract
intangible
—
1,803
—
—
—
1,803
Interest expense, net
—
—
—
—
40,229
40,229
Income tax expense
326
Net income
$
32,648
Capital spending
$
14,723
$
(84
)
$
526
$
—
$
—
$
15,165
Three Months Ended March 31,
2023
Gathering and
Processing
Wholesale Marketing and
Terminalling
Storage and
Transportation
Investments in Pipeline Joint
Ventures
Corporate and Other
Consolidated
Net revenues:
Affiliate
$
52,761
$
33,751
$
38,487
$
—
$
—
$
124,999
Third party
39,671
78,558
297
—
—
118,526
Total revenue
$
92,432
$
112,309
$
38,784
$
—
$
—
$
243,525
Segment EBITDA
$
55,445
$
21,954
$
13,422
$
6,316
$
(3,979
)
$
93,158
Depreciation and amortization
16,447
1,689
2,102
—
867
21,105
Amortization of customer contract
intangible
—
1,803
—
—
—
1,803
Interest expense, net
—
—
—
—
32,581
32,581
Income tax expense
302
Net income
$
37,367
Capital spending
$
32,789
$
3,116
$
196
$
—
$
—
$
36,101
Delek Logistics Partners, LP
Segment Capital Spending
(In thousands)
Three Months Ended March
31,
Gathering and Processing
2024
2023
Regulatory capital spending
$
—
$
—
Sustaining capital spending
837
—
Growth capital spending
13,886
32,789
Segment capital spending
$
14,723
$
32,789
Wholesale Marketing and
Terminalling
Regulatory capital spending
(72
)
61
Sustaining capital spending
(12
)
2,931
Growth capital spending
—
124
Segment capital spending
$
(84
)
$
3,116
Storage and Transportation
Regulatory capital spending
$
—
$
24
Sustaining capital spending
526
172
Growth capital spending
$
—
$
—
Segment capital spending
$
526
$
196
Consolidated
Regulatory capital spending
$
(72
)
$
85
Sustaining capital spending
1,351
3,103
Growth capital spending
13,886
32,913
Total capital spending
$
15,165
$
36,101
Delek Logistics Partners, LP
Segment Operating Data
(Unaudited)
Three Months Ended March
31,
2024
2023
Gathering and Processing
Segment:
Throughputs (average bpd)
El Dorado Assets:
Crude pipelines (non-gathered)
73,011
63,528
Refined products pipelines to Enterprise
Systems
63,234
55,003
El Dorado Gathering System
12,987
13,872
East Texas Crude Logistics System
19,702
22,670
Midland Gathering System
213,458
222,112
Plains Connection System
256,844
240,597
Delaware Gathering Assets:
Natural Gas Gathering and Processing
(Mcfd(1))
76,322
74,716
Crude Oil Gathering (average bpd)
123,509
103,725
Water Disposal and Recycling (average
bpd)
120,269
88,182
Wholesale Marketing and Terminalling
Segment:
East Texas - Tyler Refinery sales volumes
(average bpd) (2)
66,475
34,816
Big Spring marketing throughputs (average
bpd)
76,615
78,380
West Texas marketing throughputs (average
bpd)
9,976
8,696
West Texas gross margin per barrel
$
2.15
$
5.47
Terminalling throughputs (average bpd)
(3)
136,614
93,305
(1) Mcfd - average thousand cubic feet per
day.
(2) Excludes jet fuel and petroleum
coke.
(3) Consists of terminalling throughputs
at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, El
Dorado and North Little Rock, Arkansas and Memphis and Nashville,
Tennessee terminals.
Information about Delek Logistics Partners, LP can be found on
its website (www.deleklogistics.com), investor relations webpage
(https://www.deleklogistics.com/investor-relations), news webpage
(https://www.deleklogistics.com/news-releases) and its X account
(@DelekLogistics).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507761042/en/
Investor Relations and Media/Public
Affairs Contact: Rosy Zuklic, Vice President of Investor
Relations and Market Intelligence investor.relations@delekus.com;
rosy.zuklic@delekus.com; 615-767-4344
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