BRENTWOOD, Tenn.--(BUSINESS WIRE)--Aug. 3, 2016-- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the second quarter 2016. For the three months ended June 30, 2016, Delek Logistics reported net income attributable to all partners of $18.9 million, or $0.66 per diluted common limited partner unit. This compares to net income attributable to all partners of $18.3 million, or $0.70 per diluted common limited partner unit, in the second quarter 2015. Distributable cash flow was $23.7 million in the second quarter 2016, compared to $20.9 million in the prior-year period. The increase on a year-over-year basis is primarily due to better performance in west Texas, higher terminal volume and lower capital spending, partially offset by lower pipeline and transportation segment performance.
Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics' general partner, remarked: “We increased distributable cash flow compared to the second quarter 2015. Our operating expenses and G&A declined on a year-over-year basis partly due to cost reduction initiatives that have been implemented. We maintained financial flexibility, ending the quarter with approximately $330.0 million of capacity on our credit facility and a leverage ratio of 3.5 times. Our performance in the second quarter and financial position allowed us to declare an increase in our distribution by 14.5 percent year-over-year and maintain a 1.31 times distributable cash flow coverage ratio."
Yemin concluded, "We remain focused on growth to create long term value for our unit holders. During August, we expect our RIO pipeline joint venture project in west Texas to be completed. Our second joint venture project, the Caddo pipeline, is expected to be completed in January 2017. In addition to investing in the pipeline projects, we continue to evaluate potential third party acquisition opportunities. We believe that our balance sheet should allow the flexibility to support these initiatives and our targeted growth in our distribution per limited partner unit of 15% in 2016."
Distribution and Liquidity
On July 25, 2016, Delek Logistics declared a quarterly cash distribution for the second quarter of $0.63 per limited partner unit, which equates to $2.52 per limited partner unit on an annualized basis. This distribution is payable on August 12, 2016 to unitholders of record on August 5, 2016. This represents a 3.3 percent increase from the first quarter 2016 distribution of $0.61 per limited partner unit, or $2.44 per limited partner unit on an annualized basis, and a 14.5 percent increase over Delek Logistics’ second quarter 2015 distribution of $0.55 per limited partner unit, or $2.20 per limited partner unit annualized. For the second quarter 2016, the total cash distribution declared to all partners, including IDRs, was $18.1 million.
As of June 30, 2016, Delek Logistics had total debt of approximately $362.6 million. Additional borrowing capacity, subject to certain covenants, under the $700.0 million credit facility was approximately $329.9 million.
Financial Results
Revenue for the second quarter 2016 was $111.9 million compared to $172.1 million in the prior year period. Total operating expenses were $8.7 million compared to $10.8 million in the second quarter 2015. This reduction in operating expenses is primarily due to a decrease in maintenance, outside services and insurance expenses. Contribution margin increased to $30.0 million in the second quarter of 2016 compared to $28.8 million in the second quarter 2015. General and administrative expenses decreased to $2.7 million for the second quarter 2016 compared to $3.0 million in the prior-year period, which was primarily due to lower professional fees and employee related expenses. For the second quarter 2016, EBITDA was $27.1 million compared to $25.7 million in the prior-year period.
Pipelines and Transportation Segment
Performance in the Pipeline and Transportation segment benefited from lower expenses and improved performance in the Lion Pipeline system crude oil volume, which was offset by reduced performance in the trucking operations and in other pipelines on a year-over-year basis. Net sales for the pipelines and transportation segment were $32.0 million in the second quarter 2016 compared to $33.7 million for the second quarter of 2015. The decrease was attributable to reduced performance in the trucking operations and decreased fees on the Paline Pipeline System. Cost of goods sold was $4.8 million and $5.1 million for the second quarter of 2016 and 2015, respectively. The decrease in cost of goods sold was attributable to decreased cost of sales on our trucking assets and lower pipeline allowance losses. Operating expenses were $6.9 million in the second quarter 2016 compared to $7.7 million for the second quarter of 2015. The decrease in operating expenses was primarily due to decreases in maintenance costs in the second quarter of 2016 compared to the second quarter of 2015. The combination of these factors resulted in a second quarter 2016 contribution margin of $20.3 million compared to $20.9 million in the second quarter 2015.
Wholesale Marketing and Terminalling Segment
Performance in the Wholesale Marketing and Terminalling segment benefited from lower operating expenses, a higher gross margin in west Texas and increased volume through the terminals. Net sales for the wholesale marketing and terminalling segment were $79.8 million in the second quarter 2016 compared to $138.4 million for the second quarter of 2015. The decrease was primarily attributable to decreases in the average sales prices per gallon of gasoline and diesel and in volumes sold in our west Texas marketing operations. Decreases in the average cost per gallon of gasoline and diesel also drove a $59.1 million decrease in cost of goods sold to $68.3 million in the second quarter 2016 from $127.4 million in the prior year period, as purchases in our west Texas operations were impacted by the decline. Operating expenses were $1.8 million in the second quarter 2016, compared to $3.1 million in the second quarter of 2015. The decrease in operating expenses was primarily due to decreases in maintenance costs associated with our assets in our west Texas operations. The combination of these factors resulted in a second quarter 2016 contribution margin of $9.7 million, compared to $8.0 million in the second quarter 2015.
In the west Texas wholesale business, average throughput in the second quarter 2016 was 12,594 barrels per day compared to 17,490 barrels per day in the second quarter 2015. The wholesale gross margin per barrel in west Texas increased year-over-year to $2.13 and included approximately $1.3 million, or $1.12 per barrel from renewable identification numbers (RINs) generated in the quarter. During the second quarter 2015, the wholesale gross margin per barrel was $1.31 and included $1.7 million from RINs, or $1.06 per barrel. An outage in a third party pipeline that serves the west Texas market in late May and early June had a positive effect on gross margin, but reduced volume during the second quarter 2016. On a year-over-year basis, a low crude oil price environment continues to affect market conditions through reduced drilling and economic activity in the west Texas area.
Average terminalling throughput volume of 126,476 barrels per day during the quarter increased on a year-over-year basis from 113,578 barrels per day in the second quarter 2015 primarily due to higher throughput at the Tyler, Texas and El Dorado, Arkansas terminals. During the second quarter 2016, average volume under the east Texas marketing agreement with Delek US was 70,188 barrels per day compared to 66,860 barrels per day during the second quarter 2015.
Project Development Update
In March 2015, Delek Logistics, through wholly owned subsidiaries, entered into two joint ventures (Caddo Pipeline and RIO Pipeline). Delek Logistics’ total projected investment for the two joint ventures, which is subject to change pending revisions in construction schedules and costs in the Caddo project, has increased to approximately $99.0 million and will be financed through a combination of cash from operations and borrowings under its revolving credit facility. Through June 30, 2016, approximately $74.2 million has been invested in these projects. The RIO Pipeline construction is expected to be completed in August and construction on the Caddo Pipeline is expected to be completed in January 2017.
Second Quarter 2016 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its second quarter 2016 results on Thursday, August 4, 2016 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 November 4, 2016 by dialing (855) 859-2056, passcode 48842490. 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) second quarter 2016 earnings conference call on Thursday, August 4, 2016 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 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 Holdings, thereby subjecting us to Delek US Holdings' 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 affects 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 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. 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.
Factors Affecting Comparability:
The following tables present financial and operational information for the six months ended June 30, 2016 and 2015. On March 31, 2015, Delek Logistics acquired the Tyler crude oil storage tank and the El Dorado rail offloading facility (the "Logistics Assets") from Delek US. These assets were accounted for as transfers between entities under common control. Accordingly, the accompanying financial statements of the Partnership have been retrospectively adjusted to include the historical results of these assets. For the period ended March 31, 2015, the acquisition date of the Logistics Assets, the retrospective adjustments were made to the financial statements. The historical results of the Logistics Assets, prior to the acquisition date, are referred to as the "Logistics Assets Predecessor".
Non-GAAP Disclosures:
EBITDA and distributable cash flow are non-U.S. GAAP supplemental financial measures that management and external users of our combined 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 and distributable cash flow provide useful information to investors in assessing its financial condition, its results of operations and cash flow its business is generating. EBITDA and distributable cash flow 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. 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 its industry, Delek Logistics' definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships. Please see the tables below 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.
We also include the results of our operations excluding the results of our Logistics Assets Predecessor. We believe that the presentation of our results of operations excluding results of our Logistics Assets Predecessor will provide useful information to investors in assessing our results of operations by allowing them to analyze operations of our business under our current commercial agreements with Delek US.
| |
| Delek Logistics Partners, LP |
| Condensed Consolidated Balance Sheets (Unaudited) |
| |
| |
|
June 30, |
|
December 31, |
| |
|
2016 |
|
2015 |
| |
|
|
|
|
| |
|
(In thousands) |
| ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
— |
|
|
$ |
— |
|
| Accounts receivable |
|
17,217 |
|
|
35,049 |
|
| Accounts receivable from related parties |
|
1,222 |
|
|
— |
|
| Inventory |
|
9,759 |
|
|
10,451 |
|
| Other current assets |
|
652 |
|
|
1,540 |
|
| Total current assets |
|
28,850 |
|
|
47,040 |
|
| Property, plant and equipment: |
|
|
|
|
| Property, plant and equipment |
|
328,211 |
|
|
325,647 |
|
| Less: accumulated depreciation |
|
(81,073 |
) |
|
(71,799 |
) |
| Property, plant and equipment, net |
|
247,138 |
|
|
253,848 |
|
| Equity method investments |
|
73,362 |
|
|
40,678 |
|
| Goodwill |
|
12,203 |
|
|
12,203 |
|
| Intangible assets, net |
|
14,951 |
|
|
15,482 |
|
| Other non-current assets |
|
5,267 |
|
|
6,037 |
|
| Total assets |
|
$ |
381,771 |
|
|
$ |
375,288 |
|
| LIABILITIES AND DEFICIT |
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable |
|
$ |
5,567 |
|
|
$ |
6,850 |
|
| Accounts payable to related parties |
|
— |
|
|
3,992 |
|
| Excise and other taxes payable |
|
3,513 |
|
|
4,871 |
|
| Tank inspection liabilities |
|
1,055 |
|
|
1,890 |
|
| Pipeline release liabilities |
|
1,226 |
|
|
1,393 |
|
| Accrued expenses and other current liabilities |
|
2,221 |
|
|
1,694 |
|
| Total current liabilities |
|
13,582 |
|
|
20,690 |
|
| Non-current liabilities: |
|
|
|
|
| Revolving credit facility |
|
362,550 |
|
|
351,600 |
|
| Asset retirement obligations |
|
3,637 |
|
|
3,506 |
|
| Other non-current liabilities |
|
11,259 |
|
|
10,510 |
|
| Total non-current liabilities |
|
377,446 |
|
|
365,616 |
|
| Deficit: |
|
|
|
|
| Common unitholders - public; 9,504,264 units issued and outstanding at June 30, 2016 (9,478,273 at December 31, 2015) |
|
198,583 |
|
|
198,401 |
|
| Common unitholders - Delek; 14,798,516 units issued and outstanding at June 30, 2016 (2,799,258 at December 31, 2015) |
|
(201,035 |
) |
|
(280,828 |
) |
| Subordinated unitholders - Delek; 0 units issued and outstanding at June 30, 2016 (11,999,258 at December 31, 2015) |
|
— |
|
|
78,601 |
|
| General partner - 495,975 units issued and outstanding at June 30, 2016 (495,445 at December 31, 2015) |
|
(6,805 |
) |
|
(7,192 |
) |
| Total deficit |
|
(9,257 |
) |
|
(11,018 |
) |
| Total liabilities and deficit |
|
$ |
381,771 |
|
|
$ |
375,288 |
|
| |
|
|
|
|
|
|
|
|
| |
| Delek Logistics Partners, LP |
| Condensed Consolidated Statements of Income (Unaudited) |
| |
| |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| |
|
|
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 (1)
|
| |
|
|
|
|
|
|
|
|
| |
|
(In thousands, except unit and per unit data) |
| Net sales: |
|
|
|
|
|
|
|
|
| Affiliate |
|
$ |
36,694 |
|
|
$ |
39,871 |
|
|
$ |
75,454 |
|
|
$ |
72,151 |
|
| Third-Party |
|
75,159 |
|
|
132,263 |
|
|
140,455 |
|
|
243,495 |
|
| Net sales |
|
111,853 |
|
|
172,134 |
|
|
215,909 |
|
|
315,646 |
|
| Operating costs and expenses: |
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
73,101 |
|
|
132,494 |
|
|
139,854 |
|
|
240,901 |
|
| Operating expenses |
|
8,730 |
|
|
10,798 |
|
|
19,194 |
|
|
21,575 |
|
| General and administrative expenses |
|
2,698 |
|
|
2,982 |
|
|
5,611 |
|
|
6,391 |
|
| Depreciation and amortization |
|
4,812 |
|
|
4,744 |
|
|
9,808 |
|
|
9,244 |
|
| Gain on asset disposals |
|
— |
|
|
(23 |
) |
|
(44 |
) |
|
(18 |
) |
| Total operating costs and expenses |
|
89,341 |
|
|
150,995 |
|
|
174,423 |
|
|
278,093 |
|
| Operating income |
|
22,512 |
|
|
21,139 |
|
|
41,486 |
|
|
37,553 |
|
| Interest expense, net |
|
3,284 |
|
|
2,616 |
|
|
6,483 |
|
|
4,773 |
|
| Loss on equity method investments |
|
206 |
|
|
149 |
|
|
435 |
|
|
149 |
|
| Income before income tax expense |
|
19,022 |
|
|
18,374 |
|
|
34,568 |
|
|
32,631 |
|
| Income tax expense |
|
129 |
|
|
63 |
|
|
227 |
|
|
317 |
|
| Net income |
|
$ |
18,893 |
|
|
$ |
18,311 |
|
|
$ |
34,341 |
|
|
$ |
32,314 |
|
| Less: loss attributable to the Logistics Assets Predecessor |
|
— |
|
|
— |
|
|
— |
|
|
(637 |
) |
| Net income attributable to partners |
|
18,893 |
|
|
18,311 |
|
|
34,341 |
|
|
32,951 |
|
| Comprehensive income attributable to partners |
|
$ |
18,893 |
|
|
$ |
18,311 |
|
|
$ |
34,341 |
|
|
$ |
32,951 |
|
| |
|
|
|
|
|
|
|
|
| Less: General partner's interest in net income, including incentive distribution rights |
|
2,791 |
|
|
1,109 |
|
|
5,044 |
|
|
1,996 |
|
| Limited partners' interest in net income |
|
$ |
16,102 |
|
|
$ |
17,202 |
|
|
$ |
29,297 |
|
|
$ |
30,955 |
|
| |
|
|
|
|
|
|
|
|
| Net income per limited partner unit: |
|
|
|
|
|
|
|
|
| Common units - (basic) |
|
$ |
0.66 |
|
|
$ |
0.71 |
|
|
$ |
1.23 |
|
|
$ |
1.28 |
|
| Common units - (diluted) |
|
$ |
0.66 |
|
|
$ |
0.70 |
|
|
$ |
1.22 |
|
|
$ |
1.27 |
|
| Subordinated units - Delek (basic and diluted) |
|
$ |
— |
|
|
$ |
0.71 |
|
|
$ |
1.09 |
|
|
$ |
1.28 |
|
| |
|
|
|
|
|
|
|
|
|
Weighted average limited partner units outstanding: (2)
|
|
|
|
|
|
|
|
|
| Common units - basic |
|
24,281,930 |
|
|
12,224,007 |
|
|
20,653,210 |
|
|
12,220,248 |
|
| Common units - diluted |
|
24,367,091 |
|
|
12,360,519 |
|
|
20,735,389 |
|
|
12,350,621 |
|
| Subordinated units - Delek (basic and diluted) |
|
— |
|
|
11,999,258 |
|
|
3,626,149 |
|
|
11,999,258 |
|
| |
|
|
|
|
|
|
|
|
| Cash distribution per limited partner unit |
|
$ |
0.630 |
|
|
$ |
0.550 |
|
|
$ |
1.240 |
|
|
$ |
1.080 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes the historical results of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
|
(2)
|
|
In February 2016, the requirements under the partnership agreement for the conversion of all subordinated units into common units were satisfied and the subordination period ended. This affected the weighted average units outstanding during the six months ended June 30, 2016. |
| |
|
|
| |
| Delek Logistics Partners, LP |
| Consolidated Statements of Income (Unaudited) |
| Reconciliation of Partnership to Predecessor |
| |
|
|
|
|
|
|
|
|
| |
|
Delek |
|
El Dorado Rail |
|
Tyler Crude |
|
Six Months |
| |
|
Logistics |
|
Offloading |
|
Oil Storage |
|
Ended June 30, |
| |
|
Partners, LP |
|
Racks (1)
|
|
Tank (1)
|
|
2015 |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
El Dorado |
|
|
|
|
| |
|
|
|
Assets |
|
Tyler Assets |
|
|
| |
|
|
|
Predecessor |
|
Predecessor |
|
|
| |
|
(In thousands) |
| Net Sales |
|
$ |
315,646 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
315,646 |
|
| Operating costs and expenses: |
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
240,901 |
|
|
— |
|
|
— |
|
|
240,901 |
|
| Operating expenses |
|
21,408 |
|
|
167 |
|
|
— |
|
|
21,575 |
|
| General and administrative expenses |
|
6,391 |
|
|
— |
|
|
— |
|
|
6,391 |
|
| Depreciation and amortization |
|
8,774 |
|
|
372 |
|
|
98 |
|
|
9,244 |
|
| Gain on asset disposals |
|
(18 |
) |
|
— |
|
|
— |
|
|
(18 |
) |
| Total operating costs and expenses |
|
277,456 |
|
|
539 |
|
|
98 |
|
|
278,093 |
|
| Operating income (loss) |
|
38,190 |
|
|
(539 |
) |
|
(98 |
) |
|
37,553 |
|
| Interest expense, net |
|
4,773 |
|
|
— |
|
|
— |
|
|
4,773 |
|
| Loss on equity method investments |
|
149 |
|
|
— |
|
|
— |
|
|
149 |
|
| Net income (loss) before income tax expense |
|
33,268 |
|
|
(539 |
) |
|
(98 |
) |
|
32,631 |
|
| Income tax expense |
|
317 |
|
|
— |
|
|
— |
|
|
317 |
|
| Net income (loss) |
|
$ |
32,951 |
|
|
$ |
(539 |
) |
|
$ |
(98 |
) |
|
$ |
32,314 |
|
| Less: loss attributable to Predecessors |
|
— |
|
|
(539 |
) |
|
(98 |
) |
|
(637 |
) |
| Net income attributable to partners |
|
$ |
32,951 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
32,951 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The information presented is for the six months ended June 30, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
| |
|
|
| |
| Delek Logistics Partners, LP |
| Condensed Consolidated Statements of Cash Flows (Unaudited) |
| (In thousands) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Six Months Ended June |
| |
|
|
|
|
|
30, |
| |
|
|
|
|
|
2016 |
|
2015 (1) |
| |
|
|
|
|
|
|
|
|
| Cash Flow Data |
|
|
|
|
| Net cash provided by operating activities |
|
$ |
57,589 |
|
|
$ |
46,560 |
|
| Net cash used in investing activities |
|
(35,919 |
) |
|
(27,541 |
) |
| Net cash used in financing activities |
|
(21,670 |
) |
|
(20,756 |
) |
| |
Net decrease in cash and cash equivalents |
|
$ |
— |
|
|
$ |
(1,737 |
) |
| |
(1) Includes the historical cash flows of the Logistics Assets predecessor.
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
| Delek Logistics Partners, LP |
| Reconciliation of Amounts Reported Under U.S. GAAP |
| |
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, |
|
June 30, |
| ($ in thousands) |
|
2016 |
|
2015 |
|
2016 |
|
2015 (1) |
| Reconciliation of EBITDA to net income: |
|
|
|
|
|
|
|
|
| Net income |
|
$ |
18,893 |
|
|
$ |
18,311 |
|
|
$ |
34,341 |
|
|
$ |
32,314 |
|
| Add: |
|
|
|
|
|
|
|
|
| Income tax expense |
|
129 |
|
|
63 |
|
|
227 |
|
|
317 |
|
| Depreciation and amortization |
|
4,812 |
|
|
4,744 |
|
|
9,808 |
|
|
9,244 |
|
| Interest expense, net |
|
3,284 |
|
|
2,616 |
|
|
6,483 |
|
|
4,773 |
|
| EBITDA |
|
$ |
27,118 |
|
|
$ |
25,734 |
|
|
$ |
50,859 |
|
|
$ |
46,648 |
|
| |
|
|
|
|
|
|
|
|
| Reconciliation of EBITDA to net cash from operating activities: |
|
|
|
|
|
|
|
|
| Net cash provided by operating activities |
|
$ |
31,215 |
|
|
$ |
30,791 |
|
|
$ |
57,589 |
|
|
$ |
46,560 |
|
| Amortization of deferred revenue |
|
383 |
|
|
86 |
|
|
579 |
|
|
221 |
|
| Amortization of deferred financing costs |
|
(365 |
) |
|
(365 |
) |
|
(730 |
) |
|
(730 |
) |
| Accretion of asset retirement obligations |
|
(64 |
) |
|
(62 |
) |
|
(131 |
) |
|
(124 |
) |
| Deferred income taxes |
|
— |
|
|
160 |
|
|
— |
|
|
(66 |
) |
| Loss on equity method investments |
|
(206 |
) |
|
(149 |
) |
|
(435 |
) |
|
(149 |
) |
| Gain on asset disposals |
|
— |
|
|
23 |
|
|
44 |
|
|
18 |
|
| Unit-based compensation expense |
|
(125 |
) |
|
(120 |
) |
|
(233 |
) |
|
(194 |
) |
| Changes in assets and liabilities |
|
(7,133 |
) |
|
(7,309 |
) |
|
(12,534 |
) |
|
(3,978 |
) |
| Income tax expense |
|
129 |
|
|
63 |
|
|
227 |
|
|
317 |
|
| Interest expense, net |
|
3,284 |
|
|
2,616 |
|
|
6,483 |
|
|
4,773 |
|
| EBITDA |
|
$ |
27,118 |
|
|
$ |
25,734 |
|
|
$ |
50,859 |
|
|
$ |
46,648 |
|
| |
|
|
|
|
|
|
|
|
| Reconciliation of distributable cash flow to EBITDA: |
|
|
|
|
|
|
|
|
| EBITDA |
|
$ |
27,118 |
|
|
$ |
25,734 |
|
|
$ |
50,859 |
|
|
$ |
46,648 |
|
| Cash interest, net |
|
(2,920 |
) |
|
(2,251 |
) |
|
(5,754 |
) |
|
(4,043 |
) |
| Maintenance and regulatory capital expenditures |
|
(897 |
) |
|
(3,928 |
) |
|
(1,633 |
) |
|
(7,244 |
) |
| Reimbursement from Delek for capital expenditures |
|
593 |
|
|
1,417 |
|
|
802 |
|
|
2,603 |
|
| Loss on equity method investments |
|
206 |
|
|
— |
|
|
435 |
|
|
— |
|
| Income tax expense |
|
(129 |
) |
|
(63 |
) |
|
(227 |
) |
|
(317 |
) |
| Non-cash unit-based compensation expense |
|
125 |
|
|
120 |
|
|
233 |
|
|
194 |
|
| Amortization of deferred revenue |
|
(383 |
) |
|
(86 |
) |
|
(579 |
) |
|
(221 |
) |
| Distributable cash flow |
|
$ |
23,713 |
|
|
$ |
20,943 |
|
|
$ |
44,136 |
|
|
$ |
37,620 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
| |
|
|
| |
| Delek Logistics Partners, LP |
| Reconciliation of Amounts Reported Under U.S. GAAP |
| |
| |
|
Delek |
|
|
|
Six Months |
| |
|
Logistics |
|
Logistics |
|
Ended June 30, |
| |
|
Partners, LP |
|
Assets (1)
|
|
2015 |
| |
|
|
|
|
|
|
| |
|
|
|
Logistics |
|
|
| |
|
|
|
Assets |
|
|
| ($ in thousands) |
|
|
|
Predecessor |
|
|
| Reconciliation of EBITDA to net income: |
|
|
|
|
|
|
| Net income (loss) |
|
$ |
32,951 |
|
|
$ |
(637 |
) |
|
$ |
32,314 |
|
| Add: |
|
|
|
|
|
|
| Income tax expense |
|
317 |
|
|
— |
|
|
317 |
|
| Depreciation and amortization |
|
8,774 |
|
|
470 |
|
|
9,244 |
|
| Interest expense, net |
|
4,773 |
|
|
— |
|
|
4,773 |
|
| EBITDA |
|
$ |
46,815 |
|
|
$ |
(167 |
) |
|
$ |
46,648 |
|
| |
|
|
|
|
|
|
| Reconciliation of EBITDA to net cash from operating activities: |
|
|
|
|
|
|
| Net cash provided by (used in) operating activities |
|
$ |
46,727 |
|
|
$ |
(167 |
) |
|
$ |
46,560 |
|
| Amortization of deferred revenue |
|
221 |
|
|
— |
|
|
221 |
|
| Amortization of deferred financing costs |
|
(730 |
) |
|
— |
|
|
(730 |
) |
| Accretion of asset retirement obligations |
|
(124 |
) |
|
— |
|
|
(124 |
) |
| Deferred income taxes |
|
(66 |
) |
|
— |
|
|
(66 |
) |
| Loss on equity method investments |
|
(149 |
) |
|
— |
|
|
(149 |
) |
| Gain on asset disposals |
|
18 |
|
|
— |
|
|
18 |
|
| Unit-based compensation expense |
|
(194 |
) |
|
— |
|
|
(194 |
) |
| Changes in assets and liabilities |
|
(3,978 |
) |
|
— |
|
|
(3,978 |
) |
| Income tax expense |
|
317 |
|
|
— |
|
|
317 |
|
| Interest expense, net |
|
4,773 |
|
|
— |
|
|
4,773 |
|
| EBITDA |
|
$ |
46,815 |
|
|
$ |
(167 |
) |
|
$ |
46,648 |
|
| |
|
|
|
|
|
|
| Reconciliation of distributable cash flow to EBITDA: |
|
|
|
|
|
|
| EBITDA |
|
$ |
46,815 |
|
|
$ |
(167 |
) |
|
$ |
46,648 |
|
| Cash interest, net |
|
(4,043 |
) |
|
— |
|
|
(4,043 |
) |
| Maintenance and regulatory capital expenditures |
|
(7,244 |
) |
|
— |
|
|
(7,244 |
) |
| Reimbursement from Delek for capital expenditures |
|
2,603 |
|
|
— |
|
|
2,603 |
|
| Loss on equity method investments |
|
— |
|
|
— |
|
|
— |
|
| Income tax expense |
|
(317 |
) |
|
— |
|
|
(317 |
) |
| Non-cash unit-based compensation expense |
|
194 |
|
|
— |
|
|
194 |
|
| Amortization of deferred revenue |
|
(221 |
) |
|
— |
|
|
(221 |
) |
| Distributable cash flow |
|
$ |
37,787 |
|
|
$ |
(167 |
) |
|
$ |
37,620 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The information presented is for the six months ended June 30, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
| |
|
|
| |
| Delek Logistics Partners, LP |
| Distributable Coverage Ratio Calculation |
| (In thousands) |
| |
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, |
|
June 30, |
| Distributions to partners of Delek Logistics, LP |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| Limited partners' distribution on common units |
|
$ |
15,310 |
|
|
$ |
13,338 |
|
|
$ |
30,119 |
|
|
$ |
26,172 |
| General partner's distributions |
|
313 |
|
|
272 |
|
|
615 |
|
|
534 |
| General partner's incentive distribution rights |
|
2,462 |
|
|
758 |
|
|
4,446 |
|
|
1,364 |
| Total Distributions to be paid |
|
$ |
18,085 |
|
|
$ |
14,368 |
|
|
$ |
35,180 |
|
|
$ |
28,070 |
| |
|
|
|
|
|
|
|
|
| Distributable Cash Flow (1) |
|
$ |
23,713 |
|
|
$ |
20,943 |
|
|
$ |
44,136 |
|
|
37,787 |
| Distributable cash flow coverage ratio |
|
1.31x |
|
1.46x |
|
1.25x |
|
1.35x |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period. Predecessor costs is excluded from distributable cash flow for the six months ended June 30, 2015. |
| |
|
|
|
|
|
|
|
| |
| Delek Logistics Partners, LP |
| Segment Data (unaudited) |
| (In thousands) |
| |
| |
|
Three Months Ended June 30, 2016 |
| |
|
Pipelines & |
|
Wholesale Marketing |
|
|
| |
|
Transportation |
|
& Terminalling |
|
Consolidated |
| Affiliate |
|
$ |
26,136 |
|
|
$ |
10,558 |
|
|
$ |
36,694 |
| Third-Party |
|
5,874 |
|
|
69,285 |
|
|
75,159 |
| Net sales |
|
32,010 |
|
|
79,843 |
|
|
111,853 |
| Operating costs and expenses: |
|
|
|
|
|
|
| Cost of goods sold |
|
4,814 |
|
|
68,287 |
|
|
73,101 |
| Operating expenses |
|
6,899 |
|
|
1,831 |
|
|
8,730 |
| Segment contribution margin |
|
$ |
20,297 |
|
|
$ |
9,725 |
|
|
30,022 |
| General and administrative expense |
|
|
|
|
|
2,698 |
| Depreciation and amortization |
|
|
|
|
|
4,812 |
| Operating income |
|
|
|
|
|
$ |
22,512 |
| Total Assets |
|
$ |
309,678 |
|
|
$ |
72,093 |
|
|
$ |
381,771 |
| |
|
|
|
|
|
|
| Capital spending |
|
|
|
|
|
|
| Maintenance capital spending |
|
$ |
714 |
|
|
$ |
56 |
|
|
$ |
770 |
| Discretionary capital spending |
|
4 |
|
|
74 |
|
|
78 |
| Total capital spending |
|
$ |
718 |
|
|
$ |
130 |
|
|
$ |
848 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
Three Months Ended June 30, 2015 |
| |
|
Pipelines & |
|
Wholesale Marketing & |
|
|
| |
|
Transportation |
|
Terminalling |
|
Consolidated (1)
|
| Affiliate |
|
$ |
26,093 |
|
|
$ |
13,778 |
|
|
$ |
39,871 |
|
| Third-Party |
|
7,641 |
|
|
124,622 |
|
|
132,263 |
|
| Net sales |
|
33,734 |
|
|
138,400 |
|
|
172,134 |
|
| Operating costs and expenses: |
|
|
|
|
|
|
| Cost of goods sold |
|
5,102 |
|
|
127,392 |
|
|
132,494 |
|
| Operating expenses |
|
7,745 |
|
|
3,053 |
|
|
10,798 |
|
| Segment contribution margin |
|
$ |
20,887 |
|
|
$ |
7,955 |
|
|
28,842 |
|
| General and administrative expense |
|
|
|
|
|
2,982 |
|
| Depreciation and amortization |
|
|
|
|
|
4,744 |
|
| Gain on asset disposals |
|
|
|
|
|
(23 |
) |
| Operating income |
|
|
|
|
|
$ |
21,139 |
|
| Total assets |
|
$ |
285,733 |
|
|
$ |
66,263 |
|
|
$ |
351,996 |
|
| |
|
|
|
|
|
|
| Capital spending |
|
|
|
|
|
|
| Maintenance capital spending |
|
$ |
2,722 |
|
|
$ |
347 |
|
|
$ |
3,069 |
|
| Discretionary capital spending |
|
335 |
|
|
2,558 |
|
|
2,893 |
|
| Total capital spending |
|
$ |
3,057 |
|
|
$ |
2,905 |
|
|
$ |
5,962 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
| |
|
|
|
|
|
|
| |
| Delek Logistics Partners, LP |
| Segment Data (unaudited) |
| (In thousands) |
| |
| |
|
Six Months Ended June 30, 2016 |
| |
|
Pipelines & |
|
Wholesale Marketing & |
|
|
| |
|
Transportation |
|
Terminalling |
|
Consolidated |
| Affiliate |
|
$ |
52,442 |
|
|
$ |
23,012 |
|
|
$ |
75,454 |
|
| Third-Party |
|
12,351 |
|
|
128,104 |
|
|
140,455 |
|
| Net sales |
|
$ |
64,793 |
|
|
$ |
151,116 |
|
|
$ |
215,909 |
|
| Operating costs and expenses: |
|
|
|
|
|
|
| Cost of goods sold |
|
9,590 |
|
|
130,264 |
|
|
139,854 |
|
| Operating expenses |
|
14,639 |
|
|
4,555 |
|
|
19,194 |
|
| Segment contribution margin |
|
$ |
40,564 |
|
|
$ |
16,297 |
|
|
56,861 |
|
| General and administrative expense |
|
|
|
|
|
5,611 |
|
| Depreciation and amortization |
|
|
|
|
|
9,808 |
|
| Gain on asset disposals |
|
|
|
|
|
(44 |
) |
| Operating income |
|
|
|
|
|
$ |
41,486 |
|
| |
|
|
|
|
|
|
| Capital spending: |
|
|
|
|
|
|
| Maintenance capital spending |
|
$ |
1,225 |
|
|
$ |
72 |
|
|
$ |
1,297 |
|
| Discretionary capital spending |
|
199 |
|
|
436 |
|
|
635 |
|
| Total capital spending |
|
$ |
1,424 |
|
|
$ |
508 |
|
|
$ |
1,932 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Six Months Ended June 30, 2015 (1) |
| |
|
Pipelines & |
|
Wholesale Marketing & |
|
|
| |
|
Transportation |
|
Terminalling |
|
Consolidated |
| Affiliate |
|
$ |
50,078 |
|
|
$ |
22,073 |
|
|
$ |
72,151 |
|
| Third-Party |
|
14,658 |
|
|
228,837 |
|
|
243,495 |
|
| Net sales |
|
$ |
64,736 |
|
|
$ |
250,910 |
|
|
$ |
315,646 |
|
| Operating costs and expenses: |
|
|
|
|
|
|
| Cost of goods sold |
|
9,915 |
|
|
230,986 |
|
|
240,901 |
|
| Operating expenses |
|
14,663 |
|
|
6,912 |
|
|
21,575 |
|
| Segment contribution margin |
|
$ |
40,158 |
|
|
$ |
13,012 |
|
|
53,170 |
|
| General and administrative expense |
|
|
|
|
|
6,391 |
|
| Depreciation and amortization |
|
|
|
|
|
9,244 |
|
| Gain on asset disposals |
|
|
|
|
|
(18 |
) |
| Operating income |
|
|
|
|
|
$ |
37,553 |
|
| |
|
|
|
|
|
|
| Capital spending |
|
|
|
|
|
|
| Maintenance capital spending |
|
$ |
6,940 |
|
|
$ |
2,828 |
|
|
$ |
9,768 |
|
| Discretionary capital spending |
|
670 |
|
|
3,097 |
|
|
3,767 |
|
| Total capital spending (2) |
|
$ |
7,610 |
|
|
$ |
5,925 |
|
|
$ |
13,535 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
|
|
|
|
|
|
(2)
|
|
Capital spending includes expenditures of ($0.1) million incurred in connection with the Logistics Assets Predecessor. |
| |
|
|
|
|
|
|
|
| |
| Delek Logistics Partners, LP |
| Segment Data (Unaudited) |
| (In thousands) |
| |
| |
|
Six Months Ended June 30, 2015 |
| |
|
Pipelines & Transportation |
| |
|
|
|
|
|
Six Months |
| |
|
Delek Logistics |
|
Predecessor- |
|
Ended June 30, |
| |
|
Partners, LP |
|
Logistics Assets |
|
2015 |
| Net Sales |
|
$ |
64,736 |
|
|
$ |
— |
|
|
$ |
64,736 |
| Operating costs and expenses: |
|
|
|
|
|
|
| Cost of goods sold |
|
9,915 |
|
|
— |
|
|
9,915 |
| Operating expenses |
|
14,496 |
|
|
167 |
|
|
14,663 |
| Segment contribution margin |
|
$ |
40,325 |
|
|
$ |
(167 |
) |
|
$ |
40,158 |
| |
|
|
|
|
|
|
| Total capital spending |
|
$ |
7,662 |
|
|
$ |
(52 |
) |
|
$ |
7,610 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Six Months Ended June 30, 2015 |
| |
|
Wholesale Marketing & Terminalling |
| |
|
|
|
|
|
Three Months |
| |
|
Delek Logistics |
|
Predecessor- |
|
Ended June 30, |
| |
|
Partners, LP |
|
Logistics Assets |
|
2015 |
| Net Sales |
|
$ |
250,910 |
|
|
$ |
— |
|
|
$ |
250,910 |
| Operating costs and expenses: |
|
|
|
|
|
|
| Cost of goods sold |
|
230,986 |
|
|
— |
|
|
230,986 |
| Operating expenses |
|
6,912 |
|
|
— |
|
|
6,912 |
| Segment contribution margin |
|
$ |
13,012 |
|
|
$ |
— |
|
|
$ |
13,012 |
| |
|
|
|
|
|
|
| Total capital spending |
|
$ |
5,925 |
|
|
$ |
— |
|
|
$ |
5,925 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
| Delek Logistics Partners, LP |
| Segment Data (Unaudited) |
| |
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, |
|
June 30, |
| Throughputs (average bpd) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
|
|
|
|
|
|
|
|
| Pipelines and Transportation Segment: |
|
|
|
|
|
|
|
|
| Lion Pipeline System: |
|
|
|
|
|
|
|
|
| Crude pipelines (non-gathered) |
|
56,302 |
|
|
53,863 |
|
|
56,322 |
|
|
55,267 |
| Refined products pipelines |
|
53,670 |
|
|
58,572 |
|
|
53,725 |
|
|
57,258 |
| SALA Gathering System |
|
18,288 |
|
|
21,305 |
|
|
18,645 |
|
|
21,421 |
| East Texas Crude Logistics System |
|
12,909 |
|
|
28,677 |
|
|
11,127 |
|
|
23,892 |
| El Dorado Rail Offloading Rack |
|
— |
|
|
2,964 |
|
|
— |
|
|
2,964 |
| |
|
|
|
|
|
|
|
|
| Wholesale Marketing and Terminalling Segment: |
|
|
|
|
|
|
|
|
| East Texas - Tyler Refinery sales volumes (average bpd) |
|
70,188 |
|
|
66,860 |
|
|
68,301 |
|
|
47,018 |
| West Texas marketing throughputs (average bpd) |
|
12,594 |
|
|
17,490 |
|
|
13,482 |
|
|
17,070 |
| West Texas marketing margin per barrel |
|
$ |
2.13 |
|
|
$ |
1.31 |
|
|
$ |
1.00 |
|
|
$ |
1.35 |
| Terminalling throughputs (average bpd) |
|
126,476 |
|
|
113,578 |
|
|
122,645 |
|
|
90,581 |
| |
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160803006822/en/
Source: Delek Logistics Partners, LP
Delek Logistics Partners, LP
Keith Johnson, 615-435-1366
Vice President of Investor Relations