- Invested approximately $153 million
in growth projects during the quarter
- Entered two strategic joint venture
pipeline development projects
- Acquired crude oil storage tank and
rail offloading facility from Delek US
- First quarter adjusted distributable
cash flow coverage of 1.5x
Delek Logistics Partners, LP (NYSE: 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. (NYSE: 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’ (NYSE: 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. (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
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
Three Months Ended March
31,
($ 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.
(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 Reconciliation of
Amounts Reported Under U.S. GAAP ($ in thousands)
Delek Logistics Partners,
LP
Logistics Assets (1)
Three Months Ended March
31, 2015
Logistics Assets
Predecessor
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.
Delek Logistics Partners, LP Reconciliation
of Amounts Reported Under U.S. GAAP
Delek Logistics Partners,
LP
Logistics Assets
(1)
El Dorado Terminal and
Tank Assets (2)
Three Months Ended March
31, 2014
($ 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.
(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 Balance Sheets (Unaudited)
March
31, December 31,
2015
2014 (1)
(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.
Delek Logistics Partners, LP Condensed
Consolidated Statements of Income (Unaudited)
Three Months Ended March
31,
2015 (1) 2014(2)
(In thousands, except unit and
per unit data)
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 Partners,
LP
El Dorado Rail Offloading
Racks (1)
Tyler Crude Oil Storage
Tank (1)
Three Months Ended March
31, 2015
El Dorado Assets
Predecessor
Tyler Assets Predecessor
(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 Logistics Partners,
LP
El Dorado Rail
Offloading Racks (1)
Tyler Crude Oil Storage
Tank (1)
El Dorado Terminal and
Tank Assets (2)
Three Months Ended March
31, 2014
El Dorado Assets
Predecessor
Tyler Assets Predecessor
El Dorado Predecessor
(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 March
31,
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 &
Transportation
Wholesale Marketing &
Terminalling
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 &
Transportation
Wholesale Marketing &
Terminalling
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 Partners,
LP
Predecessor -Logistics
Assets
Three Months Ended March
31, 2015
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 Partners,
LP
Predecessor -Logistics
Assets
Three Months Ended March
31, 2015
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 Partners,
LP
Predecessor -Logistics
Assets
Predecessor - El Dorado
Storage Tank Assets
Three Months Ended March
31, 2014
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 Partners,
LP
Predecessor -Logistics
Assets
Predecessor - El Dorado
Terminal Assets
Three Months Ended March
31, 2014
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 March
31,
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 Logistics Partners,
LP
El Dorado Terminal and
Tank Assets (1) 1/1/14-2/10/2014
Three Months Ended March
31, 2014
Throughputs (average bpd)
El Dorado Predecessor
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, LPKeith Johnson, 615-435-1366Vice
President of Investor RelationsorAlpha IR GroupChris Hodges,
312-445-2870Founder & CEO
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