Delek Logistics Partners, LP DKL ("Delek Logistics") today announced its financial results for the first quarter 2015. For the three months ended March 31, 2015, Delek Logistics reported net income attributable to all partners of $14.6 million, or $0.56 per diluted limited partner unit. This compares to net income attributable to all partners of $14.7 million, or $0.59 per diluted limited partner unit in the first quarter 2014. Distributable cash flow was $16.8 million in the first quarter 2015, compared to $17.0 million in the prior-year period.
During the first quarter 2015, the Partnership purchased drop down assets from Delek US for approximately $62.0 million and invested in two joint ventures representing a commitment of approximately $91.0 million. Also, a $2.9 million construction project commenced to expand the capacity of the Tyler terminal to support expected higher post-expansion volumes from Delek US' Tyler refinery. However, the combination of expenses associated with these and other growth initiatives, effects from the Tyler turnaround and expansion project and $1.2 million of costs due to higher ethanol purchase prices relative to market prices, reduced earnings before interest, taxes, depreciation and amortization ("EBITDA") by approximately $3.4 million.
Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics' general partner, remarked: "Our first quarter 2015 performance benefited from our new Paline Pipeline agreement and higher volumes on the Lion Pipeline system. Also, acquisitions during the fourth quarter 2014 of the Mount Pleasant, Texas terminal and Frank Thompson Transport provided additional contribution."
Yemin continued, "With the completion of the previously identified asset drop downs from Delek US in the first quarter, our focus is transitioning toward development projects, as well as continued evaluation of strategic acquisitions to position the Partnership for long-term growth. During the quarter, we entered into our first pipeline development projects through two joint ventures with third parties that are expected to be completed in 2016. Also, we expect to continue to evaluate opportunities to partner with Delek US to provide additional growth. Furthermore, Delek US recently announced a potential investment in Alon USA, which may lead to additional opportunities for Delek Logistics. Based on continued execution of our growth strategies and our strong financial position, we believe we should have the ability to continue to increase our annual distributions by at least 15 percent going forward."
Distribution and Liquidity
On April 21, 2015, Delek Logistics declared a quarterly cash distribution for the first quarter of $0.53 per limited partner unit, which equates to $2.12 per limited partner unit on an annualized basis. This distribution is payable on May 14, 2015 to unitholders who were of record on May 4, 2015. This represents a 3.9 percent increase from the fourth quarter 2014 distribution of $0.51 per limited partner unit, or $2.04 per limited partner unit on an annualized basis, and a 24.7 percent increase over Delek Logistics' first quarter 2014 distribution of $0.425 per limited partner unit, or $1.70 per limited partner unit annualized. For the first quarter 2015, the total cash distribution declared to all partners was $13.7 million and the distributable cash flow coverage ratio was 1.2 times. Excluding the $3.4 million of costs discussed above, the adjusted distributable cash flow was $20.2 million and the adjusted distributable cash flow coverage ratio was 1.5x.
As of March 31, 2015, Delek Logistics had total debt of $316.4 million. Availability under the $700.0 million credit facility was $379.1 million.
Financial Results
Results in the first quarter 2015 compared to the prior year period benefited from the acquisition of the El Dorado tank farm and product terminal in February 2014. Also, on March 31, 2015 the Tyler crude oil storage tank and El Dorado rail offloading facility were acquired. For accounting purposes, the expenses from operations prior to the acquisition of the El Dorado tank farm and product terminal acquired in February 2014, as well as the Tyler crude oil storage tank and El Dorado rail offloading facility acquired in March 2015, are attributed to their respective predecessor periods. For purposes of comparison, results discussed in the text of this press release exclude predecessor costs during the respective periods. However, these costs are shown in the financial statements and a reconciliation is provided in the tables attached to this release.
Revenue for the first quarter 2015 was $143.5 million and contribution margin was $24.5 million, which compares to revenue of $203.5 million and a contribution margin of $22.8 million in the first quarter 2014. Total operating expenses were $10.6 million compared to $8.5 million in the first quarter 2014. Operating expenses increased year-over-year primarily due to increased maintenance expense and acquisitions completed over the past year. General and administrative expenses were $3.4 million for the first quarter 2015 compared to $2.6 million in the prior-year period. General and administrative expenses included $1.2 million of professional fees related to growth initiatives, as well as higher expenses related to assets acquired over the past year. For the first quarter 2015, EBITDA was $21.1 million compared to $20.2 million in the prior year period.
Wholesale Marketing and Terminalling Segment
Contribution margin for the Wholesale Marketing and Terminalling segment was $5.1 million in the first quarter 2015, compared to $10.0 million in the first quarter 2014.
In west Texas, throughput was 16,645 barrels per day compared to 15,999 barrels per day in the first quarter 2014. The wholesale gross margin per barrel in west Texas decreased to $1.40 and included approximately $1.7 million, or $1.13 per barrel from renewable identification numbers (RINs) generated in the quarter. During the first quarter 2014, the wholesale gross margin per barrel was $3.57 and included $1.1 million from RINs, or $0.75 per barrel. On a year-over-year basis, the gross margin per barrel was affected by more challenging market conditions. Also, a decline in the market price for ethanol relative to fixed price contracts that were in place in the quarter reduced the gross margin by approximately $1.2 million in the first quarter 2015.
During the first quarter 2015, Delek US' Tyler, Texas refinery underwent a scheduled turnaround and expansion that reduced throughputs, which was the primary factor in lower terminal and marketing volumes for the Partnership on a year-over-year basis and accounted for an approximately $1.0 million reduction in contribution margin during the quarter. The Tyler refinery began the restart process in late March. Terminalling throughput volume of 66,828 barrels per day during the quarter decreased on a year-over-year basis from 86,600 barrels per day in the first quarter 2014. During the first quarter 2015, volume under the east Texas marketing agreement with Delek US was 26,956 barrels per day, which was below our minimum volume commitments, compared to 62,432 barrels per day during the first quarter 2014.
Pipelines and Transportation Segment
The Pipeline and Transportation segment's first quarter 2015 contribution margin of $19.4 million improved from $12.8 million in the first quarter 2014. This increase is primarily attributed to a full quarter of storage fees associated with the El Dorado tank farm purchased in February 2014. In addition, a higher contribution from the Paline Pipeline due to the new agreements that became effective on January 1, 2015 and higher volume on the Lion Pipeline System improved segment performance on a year-over-year basis.
Under the new Paline Pipeline agreements, two different third parties each pay a fixed monthly fee allowing them to use their respective capacities on this pipeline, which account for a combined 35,000 barrels per day. The initial term of these agreements is for 18 months beginning January 1, 2015. As a result, the effective incremental revenue per barrel should be increased by approximately $1.00 compared to 2014.
Volumes on the Lion Pipeline System were higher on a year-over-year basis as Delek US' El Dorado refinery increased throughput following the turnaround that was completed during the first quarter 2014. Crude oil (non-gathered) transported on the Lion Pipeline system increased to 56,687 barrels per day in the first quarter 2015 from 26,644 barrels per day in the prior-year period.
Asset Drop Down Update
On March 31, 2015, subsidiaries of Delek Logistics purchased the following assets from subsidiaries of Delek US for a combined total purchase price of $61.9 million. This purchase was financed through available cash and borrowings on its revolving credit facility. The combined expected annual EBITDA is approximately $6.7 million.
El Dorado Rail Offloading Facility - These assets consist of two crude oil unloading racks that allow Delek US' El Dorado refinery to receive up to 25,000 barrels per day of light crude or up to 12,000 barrels per day of heavy crude or any combination of the two.
Tyler Crude Oil Storage Tank - This tank has approximately 350,000 barrels of shell capacity that supports Delek US' Tyler refinery.
Project Development Update
On March 23, 2015, Delek Logistics announced that through wholly owned subsidiaries it had entered into two joint ventures that will construct logistics assets to serve third parties and subsidiaries of Delek US. Delek Logistics' total projected investment for the two joint ventures is approximately $91 million and will be financed through a combination of cash from operations and borrowings under its revolving credit facility. The following highlights each joint venture.
Caddo Pipeline - This pipeline project will be a 50/50 joint venture with a subsidiary of Plains All American Pipeline, L.P. PAA ("Plains"). It will consist of a 12-inch, 80-mile crude oil pipeline originating in Longview, Texas with destinations in the Shreveport, Louisiana area, and will have a capacity of approximately 80,000 barrels per day of light sweet crude oil. Total estimated construction cost of this project is approximately $100 million and completion is expected in mid-2016. Upon successful completion of this project, Delek US has announced it expects to be an anchor shipper on this pipeline. This pipeline will be able to supply crude to refineries in the Shreveport area and through additional connections to Delek US' refinery in El Dorado, Arkansas. Plains will build and operate this pipeline on behalf of the joint venture.
RIO Pipeline (Delaware Basin to Midland Pipeline Project) - This project will be developed with Rangeland Energy ("Rangeland"), and Delek Logistics will be a 33 percent participant. It has an estimated construction cost of approximately $125 million, and consists of a 12-inch, 107-mile pipeline originating in north Loving County, Texas near the Texas-New Mexico border and terminating in Midland, Texas. This pipeline will have an initial capacity of 55,000 barrels per day, with the capability to expand to 85,000 barrels per day or more with additional capital investments. Also included in this project are terminals at each end of the pipeline, injection points and storage tanks to support this pipeline. Upon successful completion of this project, Delek US has announced it expects to be an anchor shipper. Through connections in Midland, Texas, this project will deliver crude to take-away pipelines located in the Midland area. This project is expected to be completed in the first half of 2016. Rangeland will build and operate these assets on behalf of the joint venture.
First Quarter 2015 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its first quarter 2015 results on May 6, 2015 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 August 4, 2015 by dialing (855) 859-2056, passcode 29411000. 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' DK first quarter 2015 earnings conference call on May 6, 2015 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. 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 relating to the age of our assets and operational hazards of our assets including, without limitation, 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 business of Delek Logistics; 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 three months ended March 31, 2015 and 2014. On February 10, 2014, Delek Logistics acquired substantially all of the active storage tanks and product terminal located at Delek US' El Dorado refinery (the "El Dorado Assets"). 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 all periods presented through February 10, 2014, the acquisition date of the El Dorado Assets, and March 31, 2015, the acquisition date of the Logistics Assets, the retrospective adjustments were made to the financial statements. The historical results of the El Dorado Assets and Logistics Assets, prior to the acquisition dates, are referred to as the "El Dorado Asset Predecessor" and "Logistics Assets Predecessor" in the respective periods.
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 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, thereby diminishing their utility. 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.
| Delek Logistics Partners, LP | ||||||||
| Reconciliation of Amounts Reported Under U.S. GAAP | ||||||||
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Three Months Ended |
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| ($ in thousands) | 2015 (1) | 2014(2) | ||||||
| Reconciliation of EBITDA to net income: | ||||||||
| Net income | $ | 14,003 | $ | 13,552 | ||||
| Add: | ||||||||
| Income tax expense | 254 | 147 | ||||||
| Depreciation and amortization | 4,500 | 3,477 | ||||||
| Interest expense, net | 2,157 | 1,983 | ||||||
| EBITDA | $ | 20,914 | $ | 19,159 | ||||
| Reconciliation of EBITDA to net cash from operating activities: | ||||||||
| Net cash provided by operating activities | $ | 15,769 | $ | 13,412 | ||||
| Amortization of unfavorable contract liability to revenue | — | 667 | ||||||
| Amortization of deferred financing costs | (365 | ) | (317 | ) | ||||
| Accretion of asset retirement obligations | (62 | ) | (120 | ) | ||||
| Deferred taxes | (226 | ) | 5 | |||||
| Loss on asset disposals | (5 | ) | — | |||||
| Unit-based compensation expense | (74 | ) | (58 | ) | ||||
| Changes in assets and liabilities | 3,466 | 3,440 | ||||||
| Income tax expense | 254 | 147 | ||||||
| Interest expense, net | 2,157 | 1,983 | ||||||
| EBITDA | $ | 20,914 | $ | 19,159 | ||||
| Reconciliation of distributable cash flow to EBITDA: | ||||||||
| EBITDA | $ | 20,914 | $ | 19,159 | ||||
| Less: Cash interest, net | 1,792 | 1,666 | ||||||
| Less: Maintenance and regulatory capital expenditures | 3,316 | 783 | ||||||
| Less: Capital improvement expenditures | — | 182 | ||||||
| Add: Reimbursement from Delek for capital expenditures | 1,186 | — | ||||||
| Less: Income tax expense | 254 | 147 | ||||||
| Add: Non-cash unit-based compensation expense | 74 | 58 | ||||||
| Less: Amortization of deferred revenue | 135 | — | ||||||
| Less: Amortization of unfavorable contract liability | — | 667 | ||||||
| Distributable cash flow | $ | 16,677 | $ | 15,772 | ||||
| Reconciliation of distributable cash flow to adjusted distributable cash flow: | ||||||||
| Distributable cash flow | $ | 16,677 | $ | 15,772 | ||||
| Higher ethanol costs in west Texas wholesale business | 1,200 | — | ||||||
| Professional fees related to growth initiatives | 1,200 | — | ||||||
| Effect of lower volumes related to Delek US' Tyler, Texas refinery | 1,000 | — | ||||||
| Adjusted distributable cash flow | $ | 20,077 | $ | 15,772 | ||||
|
(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 throughout and storage services. |
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(2) The information presented includes the results of operations of the El Dorado Predecessor and Logistics Assets Predecessor. Prior to the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. Prior to the Logistics Assets Predecessor on March 31, 2015, revenues for intercompany throughout and storage services were not recorded. |
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| Delek Logistics Partners, LP | ||||||||||||
| Reconciliation of Amounts Reported Under U.S. GAAP | ||||||||||||
| ($ in thousands) |
Delek Logistics |
Logistics Assets (1) |
Three Months |
|||||||||
|
Logistics Assets |
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| Reconciliation of EBITDA to net income: | ||||||||||||
| Net income (loss) | $ | 14,640 | $ | (637 | ) | $ | 14,003 | |||||
| Add: | ||||||||||||
| Income tax expense | 254 | — | 254 | |||||||||
| Depreciation and amortization | 4,030 | 470 | 4,500 | |||||||||
| Interest expense, net | 2,157 | — | 2,157 | |||||||||
| EBITDA | $ | 21,081 | $ | (167 | ) | $ | 20,914 | |||||
| Reconciliation of EBITDA to net cash from operating activities: | ||||||||||||
| Net cash provided by (used in) operating activities | $ | 15,936 | $ | (167 | ) | $ | 15,769 | |||||
| Amortization of deferred financing costs | (365 | ) | — | (365 | ) | |||||||
| Accretion of asset retirement obligations | (62 | ) | — | (62 | ) | |||||||
| Deferred taxes | (226 | ) | — | (226 | ) | |||||||
| Loss on asset disposals | (5 | ) | — | (5 | ) | |||||||
| Unit-based compensation expense | (74 | ) | — | (74 | ) | |||||||
| Changes in assets and liabilities | 3,466 | — | 3,466 | |||||||||
| Income tax expense | 254 | — | 254 | |||||||||
| Interest expense, net | 2,157 | — | 2,157 | |||||||||
| EBITDA | $ | 21,081 | $ | (167 | ) | $ | 20,914 | |||||
| Reconciliation of distributable cash flow to EBITDA: | ||||||||||||
| EBITDA | $ | 21,081 | $ | (167 | ) | $ | 20,914 | |||||
| Less: Cash interest, net | 1,792 | — | 1,792 | |||||||||
| Less: Maintenance and regulatory capital expenditures | 3,316 | — | 3,316 | |||||||||
| Add: Reimbursement from Delek for capital expenditures | 1,186 | — | 1,186 | |||||||||
| Less: Income tax expense | 254 | — | 254 | |||||||||
| Add: Non-cash unit-based compensation expense | 74 | — | 74 | |||||||||
| Less: Amortization of deferred revenue | 135 | — | 135 | |||||||||
| Distributable cash flow | $ | 16,844 | $ | (167 | ) | $ | 16,677 | |||||
| Reconciliation of distributable cash flow to adjusted distributable cash flow: | ||||||||||||
| Distributable cash flow | $ | 16,844 | $ | (167 | ) | $ | 16,677 | |||||
| Higher ethanol costs in west Texas wholesale business | 1,200 | — | 1,200 | |||||||||
| Professional fees related to growth initiatives | 1,200 | — | 1,200 | |||||||||
| Effect of lower volumes related to Delek US' Tyler, Texas refinery | 1,000 | — | 1,000 | |||||||||
| Adjusted distributable cash flow | $ | 20,244 | $ | (167 | ) | $ | 20,077 | |||||
|
(1) The information presented is for the three months ended March 31, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Asset Predecessor. Prior to the completion of the Logistics Assets acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
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| Delek Logistics Partners, LP | ||||||||||||||||
| Reconciliation of Amounts Reported Under U.S. GAAP | ||||||||||||||||
|
Delek |
Logistics |
El Dorado |
Three Months |
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| ($ in thousands) | Logistics Assets Predecessor | El Dorado Predecessor | ||||||||||||||
| Reconciliation of EBITDA to net income: | ||||||||||||||||
| Net income (loss) | $ | 14,672 | $ | (177 | ) | $ | (943 | ) | $ | 13,552 | ||||||
| Add: | ||||||||||||||||
| Income tax expense | 147 | — | — | 147 | ||||||||||||
| Depreciation and amortization | 3,363 | — | 114 | 3,477 | ||||||||||||
| Interest expense, net | 1,983 | — | — | 1,983 | ||||||||||||
| EBITDA | $ | 20,165 | $ | (177 | ) | $ | (829 | ) | $ | 19,159 | ||||||
| Reconciliation of EBITDA to net cash from operating activities: | ||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 14,418 | $ | (177 | ) | $ | (829 | ) | $ | 13,412 | ||||||
| Amortization of unfavorable contract liability to revenue | 667 | — | — | 667 | ||||||||||||
| Amortization of deferred financing costs | (317 | ) | — | — | (317 | ) | ||||||||||
| Accretion of asset retirement obligations | (126 | ) | — | 6 | (120 | ) | ||||||||||
| Deferred taxes | 5 | — | — | 5 | ||||||||||||
| Unit-based compensation expense | (58 | ) | — | — | (58 | ) | ||||||||||
| Changes in assets and liabilities | 3,446 | — | (6 | ) | 3,440 | |||||||||||
| Income tax expense | 147 | — | — | 147 | ||||||||||||
| Interest expense, net | 1,983 | — | — | 1,983 | ||||||||||||
| EBITDA | $ | 20,165 | $ | (177 | ) | $ | (829 | ) | $ | 19,159 | ||||||
| Reconciliation of distributable cash flow to EBITDA: | ||||||||||||||||
| EBITDA | $ | 20,165 | $ | (177 | ) | $ | (829 | ) | $ | 19,159 | ||||||
| Less: Cash interest, net | 1,666 | — | — | 1,666 | ||||||||||||
| Less: Maintenance and regulatory capital expenditures | 699 | — | 84 | 783 | ||||||||||||
| Less: Capital improvement expenditures | 89 | — | 93 | 182 | ||||||||||||
| Less: Income tax expense | 147 | — | — | 147 | ||||||||||||
| Add: Non-cash unit-based compensation expense | 58 | — | — | 58 | ||||||||||||
| Less: Amortization of unfavorable contract liability | 667 | — | — | 667 | ||||||||||||
| Distributable cash flow | $ | 16,955 | $ | (177 | ) | $ | (1,006 | ) | $ | 15,772 | ||||||
|
(1) The information presented is for the three months ended March 31, 2014, disaggregated to present the results of operations of the Partnership and the Logistics Asset Predecessor. Prior to the completion of the Logistics Assets acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
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(2) The information presented is for the three months ended March 31, 2014, disaggregated to present the results of operations of the Partnership and the El Dorado Predecessor. Prior to the completion of the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. |
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| Delek Logistics Partners, LP | ||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
|
2015 |
2014 (1) |
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| (In thousands) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | — | $ | 1,861 | ||||
| Accounts receivable | 30,317 | 27,956 | ||||||
| Accounts receivable from related parties | 2,786 | — | ||||||
| Inventory | 4,476 | 10,316 | ||||||
| Deferred tax assets | 28 | 28 | ||||||
| Other current assets | 364 | 768 | ||||||
| Total current assets | 37,971 | 40,929 | ||||||
| Property, plant and equipment: | ||||||||
| Property, plant and equipment | 311,215 | 308,397 | ||||||
| Less: accumulated depreciation | (57,547 | ) | (53,309 | ) | ||||
| Property, plant and equipment, net | 253,668 | 255,088 | ||||||
| Equity method investments | 6,018 | — | ||||||
| Goodwill | 11,654 | 11,654 | ||||||
| Intangible assets, net | 16,255 | 16,520 | ||||||
| Other non-current assets | 6,990 | 7,374 | ||||||
| Total assets | $ | 332,556 | $ | 331,565 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 14,218 | $ | 18,208 | ||||
| Accounts payable to related parties | — | 628 | ||||||
| Excise and other taxes payable | 5,542 | 5,443 | ||||||
| Accrued expenses and other current liabilities | 1,760 | 1,588 | ||||||
| Tank inspection liabilities | 2.907 | 2.829 | ||||||
| Pipeline release liabilities | 1.756 | 1.899 | ||||||
| Total current liabilities | 26,183 | 30,595 | ||||||
| Non-current liabilities: | ||||||||
| Revolving credit facility | 316,364 | 251,750 | ||||||
| Asset retirement obligations | 3,381 | 3,319 | ||||||
| Deferred tax liabilities | 457 | 231 | ||||||
| Other non-current liabilities | 6,790 | 5,889 | ||||||
| Total non-current liabilities | 326,992 | 261,189 | ||||||
| Equity: | ||||||||
| Predecessor division equity | — | 19,726 | ||||||
| Common unitholders - public; 9,417,189 units issued and outstanding at March 31, 2015 (9,417,189 at December 31, 2014) | 195,077 | 194,737 | ||||||
| Common unitholders - Delek; 2,799,258 units issued and outstanding at March 31, 2015 (2,799,258 at December 31, 2014) | (282,496 | ) | (241,112 | ) | ||||
| Subordinated unitholders - Delek; 11,999,258 units issued and outstanding at March 31, 2015 (11,999,258 at December 31, 2014) | 73,947 | 73,515 | ||||||
| General partner - Delek; 494,197 units issued and outstanding at March 31, 2015 (494,197 at December 31, 2014) | (7,147 | ) | (7,085 | ) | ||||
| Total equity | (20,619 | ) | 39,781 | |||||
| Total liabilities and equity | $ | 332,556 | $ | 331,565 | ||||
|
(1) Adjusted to include the historical balances of the Tyler crude oil storage tank and El Dorado rail offloading facility. |
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| Delek Logistics Partners, LP | ||||||||
| Condensed Consolidated Statements of Income (Unaudited) | ||||||||
|
Three Months Ended |
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| 2015 (1) | 2014(2) | |||||||
|
(In thousands, except unit |
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| Net sales: | ||||||||
| Affiliate | $ | 32,280 | $ | 25,282 | ||||
| Third Party | 111,232 | 178,245 | ||||||
| Net sales | 143,512 | 203,527 | ||||||
| Operating costs and expenses: | ||||||||
| Cost of goods sold | 108,407 | 172,209 | ||||||
| Operating expenses | 10,777 | 9,496 | ||||||
| General and administrative expenses | 3,409 | 2,663 | ||||||
| Depreciation and amortization | 4,500 | 3,477 | ||||||
| Loss on asset disposals | 5 | — | ||||||
| Total operating costs and expenses | 127,098 | 187,845 | ||||||
| Operating income | 16,414 | 15,682 | ||||||
| Interest expense, net | 2,157 | 1,983 | ||||||
| Income before income tax expense | 14,257 | 13,699 | ||||||
| Income tax expense | 254 | 147 | ||||||
| Net income | $ | 14,003 | $ | 13,552 | ||||
| Less: loss attributable to Predecessors | (637 | ) | (1,120 | ) | ||||
| Net income attributable to partners | 14,640 | 14,672 | ||||||
| Comprehensive income attributable to partners | $ | 14,640 | $ | 14,672 | ||||
| Less: General partner's interest in net income, including incentive distribution rights | (887 | ) | (293 | ) | ||||
| Limited partners' interest in net income | $ | 13,753 | $ | 14,379 | ||||
| Net income per limited partner unit: | ||||||||
| Common units - (basic) | $ | 0.57 | $ | 0.60 | ||||
| Common units - (diluted) | $ | 0.56 | $ | 0.59 | ||||
| Subordinated units - Delek (basic and diluted) | $ | 0.57 | $ | 0.60 | ||||
| Weighted average limited partner units outstanding: | ||||||||
| Common units - basic | 12,216,447 | 12,152,498 | ||||||
| Common units - diluted | 12,356,331 | 12,281,344 | ||||||
| Subordinated units - Delek (basic and diluted) | 11,999,258 | 11,999,258 | ||||||
| Cash distribution per limited partner unit | $ | 0.530 | $ | 0.425 | ||||
|
(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 throughout and storage services. |
||||||||
|
(2) The information presented includes the results of operations of the El Dorado Predecessor and Logistics Assets Predecessor. Prior to the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. Prior to the Logistics Assets Predecessor on March 31, 2015, revenues for intercompany throughout and storage services were not recorded. |
||||||||
| Delek Logistics Partners, LP | ||||||||||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||||||||||
| Reconciliation of Partnership to Predecessor | ||||||||||||||||
|
Delek Logistics |
El Dorado Rail |
Tyler Crude |
Three Months |
|||||||||||||
|
El Dorado Assets |
Tyler Assets |
|||||||||||||||
| (In thousands) | ||||||||||||||||
| Net Sales | $ | 143,512 | $ | — | $ | — | $ | 143,512 | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of goods sold | 108,407 | — | — | 108,407 | ||||||||||||
| Operating expenses | 10,610 | 167 | — | 10,777 | ||||||||||||
| General and administrative expenses | 3,409 | — | — | 3,409 | ||||||||||||
| Depreciation and amortization | 4,030 | 372 | 98 | 4,500 | ||||||||||||
| Loss on asset disposals | 5 | — | — | 5 | ||||||||||||
| Total operating costs and expenses | 126,461 | 539 | 98 | 127,098 | ||||||||||||
| Operating income (loss) | 17,051 | (539 | ) | (98 | ) | 16,414 | ||||||||||
| Interest expense, net | 2,157 | — | — | 2,157 | ||||||||||||
| Net income (loss) before taxes | 14,894 | (539 | ) | (98 | ) | 14,257 | ||||||||||
| Income tax expense | 254 | — | — | 254 | ||||||||||||
| Net income (loss) | $ | 14,640 | $ | (539 | ) | $ | (98 | ) | $ | 14,003 | ||||||
| Less: Loss attributable to Predecessors | — | (539 | ) | (98 | ) | (637 | ) | |||||||||
| Net income attributable to partners | $ | 14,640 | $ | — | $ | — | $ | 14,640 | ||||||||
|
(1) The information presented is for the three months ended March 31, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Asset Predecessor. Prior to the completion of the Logistics Assets acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
||||||||||||||||
| Delek Logistics Partners, LP | ||||||||||||||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||||||||||||||
| Reconciliation of Partnership to Predecessor | ||||||||||||||||||||
|
Delek |
El Dorado |
Tyler Crude |
El Dorado |
Three Months |
||||||||||||||||
|
El Dorado Assets |
Tyler Assets |
El Dorado |
||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Net Sales | $ | 203,527 | $ | — | $ | — | $ | — | $ | 203,527 | ||||||||||
| Operating costs and expenses: | ||||||||||||||||||||
| Cost of goods sold | 172,209 | — | — | — | 172,209 | |||||||||||||||
| Operating expenses | 8,536 | 177 | — | 783 | 9,496 | |||||||||||||||
| General and administrative expenses | 2,617 | — | — | 46 | 2,663 | |||||||||||||||
| Depreciation and amortization | 3,363 | — | — | 114 | 3,477 | |||||||||||||||
| Total operating costs and expenses | 186,725 | 177 | — | 943 | 187,845 | |||||||||||||||
| Operating income (loss) | 16,802 | (177 | ) | — | (943 | ) | 15,682 | |||||||||||||
| Interest expense, net | 1,983 | — | — | — | 1,983 | |||||||||||||||
| Net income (loss) before taxes | 14,819 | (177 | ) | — | (943 | ) | 13,699 | |||||||||||||
| Income tax expense | 147 | — | — | — | 147 | |||||||||||||||
| Net income (loss) | $ | 14,672 | $ | (177 | ) | $ | — | $ | (943 | ) | $ | 13,552 | ||||||||
| Less: Loss attributable to Predecessors | — | (177 | ) | — | (943 | ) | (1,120 | ) | ||||||||||||
| Net income attributable to partners | $ | 14,672 | $ | — | $ | — | $ | — | $ | 14,672 | ||||||||||
|
(1) The information presented is for the three months ended March 31, 2014, disaggregated to present the results of operations of the Partnership and the Logistics Asset Predecessor. Prior to the completion of the Logistics Assets acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. |
||||||||||||||||||||
|
(2) The information presented is for the three months ended March 31, 2014, disaggregated to present the results of operations of the Partnership and the El Dorado Predecessor. Prior to the completion of the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. |
||||||||||||||||||||
| Delek Logistics Partners, LP | ||||||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
|
Three Months Ended |
||||||||||||
| 2015 (1) | 2014 (2) | |||||||||||
| Cash Flow Data | ||||||||||||
| Net cash provided by operating activities | $ | 15,769 | $ | 13,412 | ||||||||
| Net cash used in investing activities | (8,599 | ) | (2,316 | ) | ||||||||
| Net cash used in financing activities | (9,031 | ) | (7,894 | ) | ||||||||
| Net (decrease) increase in cash and cash equivalents | $ | (1,861 | ) | $ | 3,202 | |||||||
|
(1) Includes the historical balances of the Tyler crude oil storage tank and El Dorado rail offloading facility. |
||||||||||||
|
(2) Includes the historical balances of the El Dorado Terminal and Tank Assets, Tyler crude oil storage tank and El Dorado rail offloading facility. |
||||||||||||
| Delek Logistics Partners, LP | |||||||||||
| Segment Data (unaudited) | |||||||||||
| (In thousands) | |||||||||||
| Three Months Ended March 31, 2015 | |||||||||||
|
Pipelines & |
Wholesale Marketing |
Consolidated (1) | |||||||||
| Affiliate | $ | 23,985 | $ | 8,295 | $ | 32,280 | |||||
| Third Party | 7,017 | 104,215 | 111,232 | ||||||||
| Net sales | 31,002 | 112,510 | 143,512 | ||||||||
| Operating costs and expenses: | |||||||||||
| Cost of goods sold | 4,813 | 103,594 | 108,407 | ||||||||
| Operating expenses | 6,918 | 3,859 | 10,777 | ||||||||
| Segment contribution margin | $ | 19,271 | $ | 5,057 | 24,328 | ||||||
| General and administrative expense | 3,409 | ||||||||||
| Depreciation and amortization | 4,500 | ||||||||||
| Loss on asset disposals | 5 | ||||||||||
| Operating income | $ | 16,414 | |||||||||
| Total Assets | $ | 287,104 | $ | 45,452 | $ | 332,556 | |||||
| Capital spending | |||||||||||
| Regulatory and maintenance capital spending | $ | 386 | $ | 2,481 | $ | 2,867 | |||||
| Discretionary capital spending | 4,167 | 539 | 4,706 | ||||||||
| Total capital spending | $ | 4,553 | $ | 3,020 | $ | 7,573 | |||||
| Three Months Ended March 31, 2014 | |||||||||||
|
Pipelines & |
Wholesale Marketing |
Consolidated (2) | |||||||||
| Affiliate | $ | 17,501 | $ | 7,781 | $ | 25,282 | |||||
| Third Party | 2,767 | 175,478 | 178,245 | ||||||||
| Net sales | 20,268 | 183,259 | 203,527 | ||||||||
| Operating costs and expenses: | |||||||||||
| Cost of goods sold | 1,126 | 171,083 | 172,209 | ||||||||
| Operating expenses | 7,176 | 2,320 | 9,496 | ||||||||
| Segment contribution margin | $ | 11,966 | $ | 9,856 | 21,822 | ||||||
| General and administrative expense | 2,663 | ||||||||||
| Depreciation and amortization | 3,477 | ||||||||||
| Operating income | $ | 15,682 | |||||||||
| Total assets | $ | 255,917 | $ | 64,754 | $ | 320,671 | |||||
| Capital spending | |||||||||||
| Regulatory and maintenance capital spending | $ | 2,100 | $ | 14 | $ | 2,114 | |||||
| Discretionary capital spending | 188 | 14 | 202 | ||||||||
| Total capital spending (3) | $ | 2,288 | $ | 28 | $ | 2,316 | |||||
|
(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 throughout and storage services. |
|||||||||||
|
(2) The information presented includes the results of operations of the El Dorado Predecessor and Logistics Assets Predecessor. Prior to the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. Prior to the Logistics Assets Predecessor on March 31, 2015, revenues for intercompany throughout and storage services were not recorded. |
|||||||||||
|
(3) Capital spending includes expenditures of $0.2 million incurred in connection with the assets acquired in the El Dorado acquisitions and $1.4 million spent in connection with the Logistics Assets. |
|||||||||||
| Delek Logistics Partners, LP | ||||||||||||
| Segment Data (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended March 31, 2015 | ||||||||||||
| Pipelines & Transportation | ||||||||||||
|
Delek Logistics |
Predecessor - |
Three Months |
||||||||||
| Net Sales | $ | 31,002 | $ | — | $ | 31,002 | ||||||
| Operating costs and expenses: | ||||||||||||
| Cost of goods sold | 4,813 | — | 4,813 | |||||||||
| Operating expenses | 6,751 | 167 | 6,918 | |||||||||
| Segment contribution margin | $ | 19,438 | $ | (167 | ) | $ | 19,271 | |||||
| Total capital spending | $ | 4,605 | $ | (52 | ) | $ | 4,553 | |||||
| Three Months Ended March 31, 2015 | ||||||||||||
|
Wholesale Marketing & Terminalling |
||||||||||||
|
Delek Logistics |
Predecessor - |
Three Months |
||||||||||
| Net Sales | $ | 112,510 | $ | — | $ | 112,510 | ||||||
| Operating costs and expenses: | ||||||||||||
| Cost of goods sold | 103,594 | — | 103,594 | |||||||||
| Operating expenses | 3,859 | — | 3,859 | |||||||||
| Segment contribution margin | $ | 5,057 | $ | — | $ | 5,057 | ||||||
| Total capital spending | $ | 3,020 | $ | — | $ | 3,020 | ||||||
| Delek Logistics Partners, LP | |||||||||||||||||
| Segment Data (Unaudited) | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| Three Months Ended March 31, 2014 | |||||||||||||||||
| Pipelines & Transportation | |||||||||||||||||
|
Delek Logistics |
Predecessor - |
Predecessor - |
Three Months |
||||||||||||||
| Net Sales | $ | 20,268 | $ | — | $ | — | $ | 20,268 | |||||||||
| Operating costs and expenses: | |||||||||||||||||
| Cost of goods sold | 1,126 | — | — | 1,126 | |||||||||||||
| Operating expenses | 6,318 | 177 | 681 | 7,176 | |||||||||||||
| Segment contribution margin | $ | 12,824 | $ | (177 | ) | $ | (681 | ) | $ | 11,966 | |||||||
| Total capital spending | $ | 724 | $ | 1,351 | $ | 213 | $ | 2,288 | |||||||||
| Three Months Ended March 31, 2014 | |||||||||||||||||
|
Wholesale Marketing & Terminalling |
|||||||||||||||||
|
Delek Logistics |
Predecessor - |
Predecessor - |
Three Months |
||||||||||||||
| Net Sales | $ | 183,259 | $ | — | $ | — | $ | 183,259 | |||||||||
| Operating costs and expenses: | |||||||||||||||||
| Cost of goods sold | 171,083 | — | — | 171,083 | |||||||||||||
| Operating expenses | 2,218 | — | 102 | 2,320 | |||||||||||||
| Segment contribution margin | $ | 9,958 | $ | — | $ | (102 | ) | $ | 9,856 | ||||||||
| Total capital spending | $ | 64 | $ | — | $ | (36 | ) | $ | 28 | ||||||||
| Delek Logistics Partners, LP | |||||||
| Segment Data (Unaudited) | |||||||
|
Three Months Ended |
|||||||
| Throughputs (average bpd) | 2015 | 2014 (1) | |||||
| Pipelines and Transportation Segment: | |||||||
| Lion Pipeline System: | |||||||
| Crude pipelines (non-gathered) | 56,687 | 26,644 | |||||
| Refined products pipelines to Enterprise Systems | 55,929 | 31,773 | |||||
| SALA Gathering System | 21,538 | 23,113 | |||||
| East Texas Crude Logistics System | 19,054 | 11,031 | |||||
| Wholesale Marketing and Terminalling Segment: | |||||||
| East Texas - Tyler Refinery sales volumes (average bpd) | 26,956 | 62,432 | |||||
| West Texas marketing throughputs (average bpd) | 16,645 | 15,999 | |||||
| West Texas marketing margin per barrel | $ | 1.40 | $ | 3.57 | |||
| Terminalling throughputs (average bpd) | 66,828 | 86,600 | |||||
|
(1) The information presented excludes the throughput from operations of the El Dorado Predecessor. |
|||||||
| Delek Logistics Partners, LP | |||||||||||
| Segment Data (Unaudited) | |||||||||||
|
Delek |
El Dorado |
Three Months |
|||||||||
| Throughputs (average bpd) |
El Dorado |
||||||||||
| Pipelines and Transportation Segment: | |||||||||||
| Lion Pipeline System: | |||||||||||
| Crude pipelines (non-gathered) | 26,644 | — | 26,644 | ||||||||
| Refined products pipelines to Enterprise Systems | 31,773 | — | 31,773 | ||||||||
| SALA Gathering System | 23,113 | — | 23,113 | ||||||||
| East Texas Crude Logistics System | 11,031 | — | 11,031 | ||||||||
| Wholesale Marketing and Terminalling Segment: | |||||||||||
| East Texas - Tyler Refinery sales volumes (average bpd) | 62,432 | — | 62,432 | ||||||||
| West Texas marketing throughputs (average bpd) | 15,999 | — | 15,999 | ||||||||
| West Texas marketing margin per barrel | $ | 3.57 | $ | — | $ | 3.57 | |||||
| Terminalling throughputs (average bpd) | 86,600 | 7,298 | 89,924 | ||||||||
|
(1) The information presented includes the throughput from operations for the three months ended March 31, 2014, disaggregated to present the results of the El Dorado Terminal and Tank Assets through February 10, 2014. |
|||||||||||
Delek Logistics Partners, LP
Keith Johnson, 615-435-1366
Vice
President of Investor Relations
or
Alpha IR Group
Chris
Hodges, 312-445-2870
Founder & CEO
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