- Second quarter distributable cash
flow coverage ratio of 1.5x
- Growth initiatives enhanced
fee-based profile of the business
Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics")
today announced its financial results for the second quarter 2015.
For the three months ended June 30, 2015, Delek Logistics
reported net income attributable to all partners of $18.3 million,
or $0.70 per diluted limited partner unit. This compares to net
income attributable to all partners of $21.8 million, or $0.87 per
diluted limited partner unit in the second quarter 2014.
Distributable cash flow was $20.9 million in the second quarter
2015, compared to $24.0 million in the prior-year period. On a
year-over-year basis, improved performance related to acquisitions
and the Paline Pipeline was more than offset by a lower gross
margin in the west Texas wholesale operations.
In the second quarter 2015, the pipeline and transportation
segment, which consists of primarily stable fee-based business,
accounted for approximately 72 percent of the contribution margin.
This is an improvement compared to the second quarter 2014 when the
pipeline and transportation segment accounted for 45 percent of
contribution margin.
Uzi Yemin, Chairman and Chief Executive Officer of Delek
Logistics' general partner, remarked: “Our second quarter 2015
performance benefited from our growth over the past year. The
combination of acquisitions, including assets purchased from Delek
US in March 2015, increased contribution from the Paline Pipeline,
and higher volumes in our East Texas assets has increased the
portion of our business that is fee based. While we did experience
a year-over-year decline in our west Texas wholesale gross margin,
the increased size of our business partially offset that effect on
our performance."
Yemin concluded, "We remain focused on future growth
opportunities as work progresses on our pipeline development
projects through two joint ventures with unaffiliated third parties
that are expected to be completed in mid-2016. In addition,
third-party acquisitions continue to be explored, and the recent
change in market conditions and commodity prices are beginning to
create a more attractive environment. We continue to evaluate
opportunities to partner with Delek US to provide additional
growth, which may be enhanced through Delek US' recent investment
in Alon USA. We ended the quarter with a strong financial position
that supports our ability to execute our growth strategies and
expect to continue to increase our annual distributions by at least
15 percent going forward."
Distribution and
Liquidity
On July 27, 2015, Delek Logistics declared a quarterly cash
distribution for the second quarter of $0.55 per limited partner
unit, which equates to $2.20 per limited partner unit on an
annualized basis. This distribution is payable on August 14, 2015
to unitholders who are of record on August 6, 2015. This represents
a 3.8 percent increase from the first quarter 2015 distribution of
$0.53 per limited partner unit, or $2.12 per limited partner unit
on an annualized basis, and a 15.8 percent increase over Delek
Logistics’ second quarter 2014 distribution of $0.475 per limited
partner unit, or $1.90 per limited partner unit annualized. For the
second quarter 2015, the total cash distribution declared to all
partners was $14.4 million and the distributable cash flow coverage
ratio was 1.5 times.
As of June 30, 2015, Delek Logistics had total debt of
$316.9 million. Availability under the $700.0 million credit
facility was $377.6 million.
Financial Results
Results in the second quarter 2015 compared to the prior year
period benefited from the acquisition of the Tyler crude oil
storage tank and El Dorado rail offloading facility, which were
acquired on March 31, 2015. For accounting purposes, the expenses
from operations prior to the acquisition of the Tyler crude oil
storage tank and El Dorado rail offloading facility 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 second quarter 2015 was $172.1 million and
contribution margin was $28.8 million, which compares to revenue of
$236.3 million and a contribution margin of $30.2 million in the
second quarter 2014. Total operating expenses were $10.8 million
compared to $9.5 million in the second quarter 2014, with the
increase primarily due to higher maintenance expense. General and
administrative expenses were $3.0 million for the second quarter
2015 compared to $2.2 million in the prior-year period, which was
primarily due to higher expenses related to assets acquired over
the past year. For the second quarter 2015, EBITDA was $25.7
million compared to $27.9 million in the prior year period.
Pipelines and Transportation
Segment
The Pipeline and Transportation segment's second quarter 2015
contribution margin of $20.9 million improved from $13.8 million in
the second quarter 2014. This increase can be attributed to fees
associated with the El Dorado rail offloading racks and Tyler crude
oil storage tank purchased on March 31, 2015. In addition, a higher
contribution from the Paline Pipeline due to the new agreements
that became effective on January 1, 2015 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 was increased by
approximately $1.00 compared to 2014.
Wholesale Marketing and Terminalling
Segment
Contribution margin for the Wholesale Marketing and Terminalling
segment was $8.0 million in the second quarter 2015, compared to
$16.4 million in the second quarter 2014. This change on a
year-over-year basis was due to a lower gross margin per barrel in
the west Texas wholesale business.
In the west Texas wholesale business, throughput was 17,490
barrels per day compared to 17,451 barrels per day in the second
quarter 2014. The wholesale gross margin per barrel in west Texas
decreased to $1.31 and included approximately $1.7 million, or
$1.06 per barrel from renewable identification numbers (RINs)
generated in the quarter. During the second quarter 2014, the
wholesale gross margin per barrel was $6.52 and included $1.1
million from RINs, or $0.68 per barrel. On a year-over-year basis,
declining crude oil prices have reduced drilling activity in west
Texas, lowering demand in the area and creating a more challenging
market, which resulted in a lower gross margin per barrel. In the
second quarter 2015, a decline in the market price for ethanol
relative to fixed price contracts that were in place reduced the
gross margin by approximately $0.8 million in the period. In the
second quarter 2014, downtime at refineries in the region created a
favorable supply/demand environment, which improved the gross
margin per barrel.
Both terminalling and the east Texas marketing throughputs
benefited from higher volume at Delek US' Tyler, Texas refinery
following the completion of a 15,000 barrel per day expansion
project in March 2015. Terminalling throughput volume of 113,578
barrels per day during the quarter increased on a year-over-year
basis from 98,962 barrels per day in the second quarter 2014
primarily due to higher throughput at the Tyler, Texas terminal.
During the second quarter 2015, volume under the east Texas
marketing agreement with Delek US was 66,860 barrels per day
compared to 61,231 barrels per day during the second quarter
2014.
Project Development
Update
In March 2015, Delek Logistics announced that, through wholly
owned subsidiaries, it had entered into two joint ventures (Caddo
Pipeline and RIO Pipeline) that will construct logistics assets
that are expected to serve unaffiliated third parties and
subsidiaries of Delek US. Delek Logistics’ total projected
investment for the two joint ventures is approximately $91.0
million and will be financed through a combination of cash from
operations and borrowings under its revolving credit facility.
Through June 30, 2015, approximately $18.5 million has been
invested in these projects. Both of these projects are expected to
be constructed by mid-2016.
Second Quarter 2015 Results |
Conference Call Information
Delek Logistics will hold a conference call to discuss its
second quarter 2015 results on August 4, 2015 at 7:00 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, 2015 by dialing (855) 859-2056,
passcode 69595329. 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 2015 earnings conference call on August 4, 2015 at 11:30
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 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 and six months ended June 30, 2015
and 2014. On February 10, 2014, Delek Logistics acquired
substantially all of the active storage tanks and product terminal
located adjacent to 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 June 30, Six Months Ended June
30, ($ in thousands)
2015
2014(2) 2015 (1)
2014 (2) Reconciliation of EBITDA to net
income: Net income $ 18,311 $ 21,488 $ 32,314 $ 35,040 Add:
Income tax expense 63 281 317 428 Depreciation and amortization
4,744 3,623 9,244 7,100 Interest expense, net 2,616 2,342
4,773 4,325 EBITDA $ 25,734 $ 27,734
$ 46,648 $ 46,893
Reconciliation of
EBITDA to net cash from operating activities: Net cash provided
by operating activities $ 30,791 $ 31,036 $ 46,560 $ 44,448
Amortization of unfavorable contract liability to revenue — 667 —
1,334 Amortization of deferred financing costs (365 ) (317 ) (730 )
(634 ) Accretion of asset retirement obligations (62 ) (89 ) (124 )
(209 ) Deferred taxes 160 (57 ) (66 ) (52 ) Loss on equity method
investments (149 ) — (149 ) — Gain (loss) on asset disposals 23 (74
) 18 (74 ) Unit-based compensation expense (120 ) (63 ) (194 ) (121
) Changes in assets and liabilities (7,223 ) (5,992 ) (3,757 )
(2,552 ) Income tax expense 63 281 317 428 Interest expense, net
2,616 2,342 4,773 4,325 EBITDA $ 25,734
$ 27,734 $ 46,648 $ 46,893
Reconciliation of distributable cash flow to EBITDA: EBITDA
$ 25,734 $ 27,734 $ 46,648 $ 46,893 Less: Cash interest, net 2,251
2,025 4,043 3,691 Less: Maintenance and regulatory capital
expenditures 3,928 814 7,244 1,597 Less: Capital improvement
expenditures — 154 — 336 Add: Reimbursement from Delek for capital
expenditures 1,417 — 2,603 — Less: Income tax expense 63 281 317
428 Add: Non-cash unit-based compensation expense 120 63 194 121
Less: Amortization of deferred revenue 86 — 221 — Less:
Amortization of unfavorable contract liability — 667
— 1,334 Distributable cash flow $ 20,943 $
23,856 $ 37,620 $ 39,628 (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) 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 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 ($ in thousands)
Delek LogisticsPartners,
LP
Logistics Assets (1)
Six MonthsEnded June 30,
2015
Logistics
AssetsPredecessor
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
financing costs (730 ) — (730 ) Accretion of asset retirement
obligations (124 ) — (124 ) Deferred 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 (3,757 ) — (3,757 ) 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 Less: Cash interest, net 4,043 — 4,043 Less: Maintenance
and regulatory capital expenditures 7,244 — 7,244 Add:
Reimbursement from Delek for capital expenditures 2,603 — 2,603
Less: Income tax expense 317 — 317 Add: Non-cash unit-based
compensation expense 194 — 194 Less: 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 Predecessors. 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
DelekLogisticsPartners,
LP
LogisticsAssets
(1)
Three MonthsEndedJune 30,
2014
($ in thousands)
Logistics
AssetsPredecessor
Reconciliation of EBITDA to net income: Net income (loss) $
21,754 $ (266 ) $ 21,488 Add: Income tax expense 281 — 281
Depreciation and amortization 3,532 91 3,623 Interest expense, net
2,342 — 2,342 EBITDA $ 27,909 $ (175 )
$ 27,734
Reconciliation of EBITDA to net cash from
operating activities: Net cash provided by (used in) operating
activities $ 31,211 $ (175 ) $ 31,036 Amortization of unfavorable
contract liability to revenue 667 — 667 Amortization of deferred
financing costs (317 ) — (317 ) Accretion of asset retirement
obligations (89 ) — (89 ) Deferred taxes (57 ) — (57 ) Loss on
asset disposals (74 ) — (74 ) Unit-based compensation expense (63 )
— (63 ) Changes in assets and liabilities (5,992 ) — (5,992 )
Income tax expense 281 — 281 Interest expense, net 2,342 —
2,342 EBITDA $ 27,909 $ (175 ) $ 27,734
Reconciliation of distributable cash flow to EBITDA:
EBITDA $ 27,909 $ (175 ) $ 27,734 Less: Cash interest, net 2,025 —
2,025 Less: Maintenance and regulatory capital expenditures 814 —
814 Less: Capital improvement expenditures 154 — 154 Less: Income
tax expense 281 — 281 Add: Non-cash unit-based compensation expense
63 — 63 Less: Amortization of unfavorable contract liability 667
— 667 Distributable cash flow $ 24,031
$ (175 ) $ 23,856 (1) The information
presented is for the three months ended June 30, 2014,
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
Reconciliation of Amounts Reported Under U.S. GAAP
DelekLogisticsPartners,
LP
LogisticsAssets
(1)
El DoradoTerminal andTank
Assets (2)
Six MonthsEnded June 30,
2014
($ in thousands)
Logistics
AssetsPredecessor
El DoradoPredecessor
Reconciliation of EBITDA to net income: Net income (loss) $
36,426 $ (443 ) $ (943 ) $ 35,040 Add: Income tax expense 428 — —
428 Depreciation and amortization 6,895 91 114 7,100 Interest
expense, net 4,325 — — 4,325 EBITDA $
48,074 $ (352 ) $ (829 ) $ 46,893
Reconciliation of EBITDA to net cash from operating
activities: Net cash provided by (used in) operating activities
$ 45,629 $ (352 ) $ (829 ) $ 44,448 Amortization of unfavorable
contract liability to revenue 1,334 — — 1,334 Amortization of
deferred financing costs (634 ) — — (634 ) Accretion of asset
retirement obligations (215 ) — 6 (209 ) Deferred taxes (52 ) — —
(52 ) Loss on asset disposals (74 ) — — (74 ) Unit-based
compensation expense (121 ) — — (121 ) Changes in assets and
liabilities (2,546 ) — (6 ) (2,552 ) Income tax expense 428 — — 428
Interest expense, net 4,325 — — 4,325
EBITDA $ 48,074 $ (352 ) $ (829 ) $ 46,893
Reconciliation of distributable cash flow to
EBITDA: EBITDA $ 48,074 $ (352 ) $ (829 ) $ 46,893 Less: Cash
interest, net 3,691 — — 3,691 Less: Maintenance and regulatory
capital expenditures 1,513 — 84 1,597 Less: Capital improvement
expenditures 243 — 93 336 Less: Income tax expense 428 — — 428 Add:
Non-cash unit-based compensation expense 121 — — 121 Less:
Amortization of unfavorable contract liability 1,334 —
— 1,334 Distributable cash flow $
40,986 $ (352 ) $ (1,006 ) $ 39,628 (1)
The information presented is for the six months ended June 30,
2014, 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. (2) The information presented is for the six
months ended June 30, 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)
June 30,
December 31, 2015 2014 (1)
(In thousands) ASSETS Current assets: Cash and
cash equivalents $ 124 $ 1,861 Accounts receivable 39,117 27,986
Inventory 4,308 10,316 Deferred tax assets 28 28 Other current
assets 485 768 Total current assets 44,062
40,959 Property, plant and equipment: Property, plant and
equipment 317,208 308,088 Less: accumulated depreciation (61,965 )
(53,309 ) Property, plant and equipment, net 255,243 254,779
Equity method investments 18,472 — Goodwill 11,654 11,654
Intangible assets, net 15,944 16,520 Other non-current assets 6,621
7,374 Total assets $ 351,996 $ 331,286
LIABILITIES AND EQUITY (DEFICIT) Current liabilities:
Accounts payable $ 14,754 $ 17,929 Accounts payable to related
parties 8,732 628 Excise and other taxes payable 7,186 5,443
Accrued expenses and other current liabilities 2,330 1,588 Tank
inspection liabilities
2,541
2,829
Pipeline release liabilities
3,069
1,899
Total current liabilities 38,612 30,316
Non-current liabilities: Revolving credit facility 316,900 251,750
Asset retirement obligations 3,379 3,319 Deferred tax liabilities
297 231 Other non-current liabilities 8,610 5,889
Total non-current liabilities 329,186 261,189 Equity
(Deficit): Predecessor division equity — 19,726 Common unitholders
- public; 9,451,589 units issued and outstanding at June 30, 2015
(9,417,189 at December 31, 2014) 197,052 194,737 Common unitholders
- Delek; 2,799,258 units issued and outstanding at June 30, 2015
(2,799,258 at December 31, 2014) (281,852 ) (241,112 ) Subordinated
unitholders - Delek; 11,999,258 units issued and outstanding at
June 30, 2015 (11,999,258 at December 31, 2014) 76,439 73,515
General partner - Delek; 494,900 units issued and outstanding at
June 30, 2015 (494,197 at December 31, 2014) (7,441 ) (7,085 )
Total (deficit) equity (15,802 ) 39,781 Total liabilities
and (deficit) equity $ 351,996 $ 331,286 (1)
Adjusted to include the historical balances of the Logistics Assets
Predecessor.
Delek Logistics Partners, LP
Condensed Consolidated Statements of Income (Unaudited)
Three Months EndedJune
30,
Six Months EndedJune 30,
2015 2014 (1) 2015
(1) 2014 (2) (In
thousands, except unit and per unit data) Net sales: Affiliate
$ 39,871 $ 28,893 $ 72,151 $ 54,175 Third-Party 132,263
207,450 243,495 385,695 Net sales 172,134
236,343 315,646 439,870 Operating costs and expenses: Cost of goods
sold 132,494 196,574 240,901 368,783 Operating expenses 10,798
9,719 21,575 19,215 General and administrative expenses 2,982 2,242
6,391 4,905 Depreciation and amortization 4,744 3,623 9,244 7,100
(Gain) loss on asset disposals (23 ) 74 (18 ) 74
Total operating costs and expenses 150,995 212,232
278,093 400,077 Operating income 21,139 24,111 37,553
39,793 Interest expense, net 2,616 2,342 4,773 4,325 Loss on equity
method investments 149 — 149 — Income
before income tax expense 18,374 21,769 32,631 35,468 Income tax
expense 63 281 317 428 Net income $
18,311 $ 21,488 $ 32,314 $ 35,040 Less: loss attributable to
Predecessors — (266 ) (637 ) (1,386 ) Net income
attributable to partners 18,311 21,754 32,951
36,426 Comprehensive income attributable to partners $
18,311 $ 21,754 $ 32,951 $ 36,426
Less: General partner's interest in net income, including
incentive distribution rights (1,109 ) (620 ) (1,996 ) (914 )
Limited partners' interest in net income $ 17,202 $ 21,134
$ 30,955 $ 35,512 Net income per
limited partner unit: Common units - (basic) $ 0.71 $ 0.88 $ 1.28 $
1.47 Common units - (diluted) $ 0.70 $ 0.87 $ 1.27 $ 1.46
Subordinated units - Delek (basic and diluted) $ 0.71 $ 0.87 $ 1.28
$ 1.47 Weighted average limited partner units outstanding:
Common units - basic 12,224,007 12,159,732 12,220,248 12,156,135
Common units - diluted 12,360,519 12,291,273 12,350,621 12,281,598
Subordinated units - Delek (basic and diluted) 11,999,258
11,999,258 11,999,258 11,999,258 Cash distribution per
limited partner unit $ 0.550 $ 0.475 $ 1.080 $ 0.900 (1)
Adjusted to include 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) 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 throughput and storage services
were not recorded.
Delek Logistics Partners,
LP Consolidated Statements of Income (Unaudited) Reconciliation
of Partnership to Predecessor
Delek LogisticsPartners,
LP
El Dorado
RailOffloadingRacks (1)
Tyler CrudeOil
StorageTank (1)
Six MonthsEndedJune 30,
2015
El Dorado
AssetsPredecessor
Tyler AssetsPredecessor
(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 taxes 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
Consolidated Statements of Income (Unaudited) Reconciliation of
Partnership to Predecessor
DelekLogisticsPartners,LP
El
DoradoRailOffloadingRacks (1)
Tyler CrudeOil
StorageTank (1)
Three MonthsEndedJune 30,
2014
El Dorado
AssetsPredecessor
Tyler AssetsPredecessor
(In thousands) Net Sales $ 236,343 $ — $ — $ 236,343 Operating
costs and expenses: Cost of goods sold 196,574 — — 196,574
Operating expenses 9,544 175 — 9,719 General and administrative
expenses 2,242 — — 2,242 Depreciation and amortization 3,532 91 —
3,623 Loss on asset disposals 74 — — 74
Total operating costs and expenses 211,966 266 —
212,232 Operating income (loss) 24,377 (266 ) —
24,111 Interest expense, net 2,342 — — 2,342
Net income (loss) before income tax expense 22,035 (266 ) —
21,769 Income tax expense 281 — — 281
Net income (loss) $ 21,754 $ (266 ) $ — $ 21,488 Less: loss
attributable to Predecessors — (266 ) — (266 ) Net
income attributable to partners $ 21,754 $ — $ —
$ 21,754 (1) The information presented is for
the three months ended June 30, 2014, 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 Consolidated Statements of
Income (Unaudited) Reconciliation of Partnership to Predecessor
DelekLogisticsPartners,
LP
El
DoradoRailOffloadingRacks (1)
TylerCrude
OilStorageTank (1)
El DoradoTerminaland
TankAssets (2)
Six MonthsEndedJune 30,
2014
El Dorado
AssetsPredecessor
TylerPredecessor
El DoradoPredecessor
(In thousands) Net Sales $ 439,870 $ — $ — $ — $ 439,870 Operating
costs and expenses: Cost of goods sold 368,783 — — — 368,783
Operating expenses 18,080 352 — 783 19,215 General and
administrative expenses 4,859 — — 46 4,905 Depreciation and
amortization 6,895 91 — 114 7,100 Loss on asset disposals 74
— — — 74 Total operating costs and
expenses 398,691 443 — 943 400,077
Operating income (loss) 41,179 (443 ) (943 ) 39,793 Interest
expense, net 4,325 —
—
— 4,325 Net income (loss) before income tax
expense 36,854 (443 )
—
(943 ) 35,468 Income tax expense 428 — — —
428 Net income (loss) $ 36,426 $ (443 ) $ — $ (943 )
$ 35,040 Less: loss attributable to Predecessors — (443 ) —
(943 ) (1,386 ) Net income attributable to partners $ 36,426
$ — $ — $ — $ 36,426 (1)
The information presented is for the six months ended June 30,
2014, 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 Asset Predecessor
did not record revenues for intercompany throughput and storage
services. (2) The information presented includes the results of
operations of the El Dorado 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.
Delek Logistics Partners, LP Condensed
Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Six Months EndedJune 30,
2015 (1) 2014 (2) Cash Flow
Data Net cash provided by operating activities $ 46,560 $
44,448 Net cash used in investing activities (27,541 ) (4,200 ) Net
cash used in financing activities (20,756 ) (38,755 ) Net
(decrease) increase in cash and cash equivalents $ (1,737 ) $ 1,493
(1) Includes the historical cash flows of the
Logistics Assets predecessor. (2) Adjusted to include the
historical cash flows of the Logistic Assets predecessor and El
Dorado Predecessor.
Delek Logistics Partners,
LP Segment Data (unaudited) (In thousands)
Three Months Ended June 30, 2015
Pipelines
&Transportation
Wholesale Marketing&
Terminalling
Consolidated 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
Regulatory and 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
Three Months Ended June 30, 2014
Pipelines
&Transportation
Wholesale Marketing&
Terminalling
Consolidated (1) Affiliate $ 20,245 $
8,648 $ 28,893 Third-Party 2,821 204,629 207,450 Net
sales 23,066 213,277 236,343 Operating costs and expenses: Cost of
goods sold 1,130 195,444 196,574 Operating expenses 8,308
1,411 9,719 Segment contribution margin $ 13,628 $
16,422 30,050 General and administrative expense 2,242
Depreciation and amortization 3,623 Loss on asset disposals 74
Operating income $ 24,111 Total assets $ 242,297
$ 92,324 $ 334,621 Capital spending Regulatory
and maintenance capital spending $ 1,071 $ 609 $ 1,680
Discretionary capital spending 57 147 204 Total
capital spending (2) $ 1,128 $ 756 $ 1,884 (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 $0.9 million incurred in
connection with the Logistics Assets Predecessor.
Delek Logistics Partners, LP Segment Data (Unaudited) (In
thousands)
Three Months Ended June 30,
2014 Pipelines & Transportation
Delek LogisticsPartners,
LP
Predecessor -Logistics
Assets
Three MonthsEnded June
30,2014
Net Sales $ 23,066 $ — $ 23,066 Operating costs and expenses: Cost
of goods sold 1,130 — 1,130 Operating expenses 8,133 175
8,308 Segment contribution margin $ 13,803 $ (175 ) $
13,628 Total capital spending $ 212 $ 916 $
1,128
Three Months Ended June 30, 2014
Wholesale Marketing & Terminalling
Delek Logistics
Partners, LP
Predecessor -Logistics
Assets
Three MonthsEnded June
30,2014
Net Sales $ 213,277 $ — $ 213,277 Operating costs and expenses:
Cost of goods sold 195,444 — 195,444 Operating expenses 1,411
— 1,411 Segment contribution margin $ 16,422 $
— $ 16,422 Total capital spending $ 756 $ —
$ 756
Delek Logistics Partners, LP
Segment Data (unaudited) (In thousands)
Six
Months Ended June 30, 2015 (1)
Pipelines
&Transportation
Wholesale Marketing&
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 disposal
of assets (18 ) Operating income $ 37,553 Capital
spending: Regulatory and maintenance capital spending $ 6,940 $
2,828 $ 9,768 Discretionary capital spending 670 3,097
3,767 Total capital spending $ 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.
Six Months Ended June 30, 2014 (1)
Pipelines
&Transportation
Wholesale Marketing&
Terminalling
Consolidated Affiliate $ 37,746 $ 16,429 $
54,175 Third-Party 5,588 380,107 385,695 Net sales $
43,334 $ 396,536 $ 439,870 Operating costs and expenses: Cost of
goods sold 2,256 366,527 368,783 Operating expenses 15,484
3,731 19,215 Segment contribution margin $ 25,594 $
26,278 51,872 General and administrative expense 4,905
Depreciation and amortization 7,100 Loss on disposal of assets 74
Operating income $ 39,793 Capital spending Regulatory and
maintenance capital spending $ 3,169 $ 625 $ 3,794 Discretionary
capital spending 247 159 406 Total capital spending
(2) $ 3,416 $ 784 $ 4,200 (1) 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 El Dorado offloading racks acquisition and
Tyler crude oil storage tank acquisition on March 31, 2015, the
Logistics Assets Predecessor revenues for intercompany throughput
and storage services were not recorded. (2) Capital spending
includes expenditures of $2.3 million incurred in connection with
the acquisition of the Logistics Assets Predecessor and El Dorado
asset predecessor.
Delek Logistics Partners,
LP Segment Data (Unaudited) (In thousands)
Six Months Ended June 30, 2015 Pipelines &
Transportation
Delek LogisticsPartners,
LP
Predecessor -Logistics
Assets
Six MonthsEnded June
30,2015
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
Delek LogisticsPartners,
LP
Predecessor -Logistics
Assets
Six MonthsEnded June
30,2015
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) (In thousands)
Six
Months Ended June 30, 2014 Pipelines &
Transportation
Delek LogisticsPartners,
LP
Predecessor -Logistics
Assets
Predecessor -El
DoradoStorage TankAssets
Six MonthsEnded June
30,2014
Net Sales $ 43,334 $ — $ — $ 43,334 Operating costs and
expenses: Cost of goods sold 2,256 — — 2,256 Operating expenses
14,451 352 681 15,484 Segment
contribution margin $ 26,627 $ (352 ) $ (681 ) $
25,594 Total capital spending $ 936 $ 2,267 $
213 $ 3,416
Six Months Ended June
30, 2014 Wholesale Marketing & Terminalling
Delek LogisticsPartners,
LP
Predecessor -Logistics
Assets
Predecessor - El
DoradoTerminal Assets
Six MonthsEnded June
30,2014
Net Sales $ 396,536 $ — $ — $ 396,536 Operating costs and
expenses: Cost of goods sold 366,527 — — 366,527 Operating expenses
3,629 — 102 3,731 Segment contribution
margin $ 26,380 $ — $ (102 ) $ 26,278 Total
capital spending $ 820 $ — $ (36 ) $ 784
Delek Logistics Partners, LP
Segment Data (Unaudited)
Three Months EndedJune
30,
Six Months EndedJune 30,
Throughputs (average bpd)
2015 2014
2015 2014 Pipelines and Transportation
Segment: Lion Pipeline System: Crude pipelines (non-gathered)
53,863 59,038 55,267 41,936 Refined products pipelines to
Enterprise Systems 58,572 59,888 57,258 45,908 SALA Gathering
System 21,305 21,300 21,421 22,201 East Texas Crude Logistics
System 28,677 3,223 23,892 7,105 El Dorado Rail Offloading Rack
2,964 — 2,964 —
Wholesale Marketing and Terminalling
Segment: East Texas - Tyler Refinery sales volumes (average
bpd) 66,860 61,231 47,018 61,828 West Texas marketing throughputs
(average bpd) 17,490 17,451 17,070 16,729 West Texas marketing
margin per barrel $ 1.31 $ 6.52 $ 1.35 $ 5.06 Terminalling
throughputs (average bpd) 113,578 98,962 90,581 94,468
Delek Logistics Partners, LP Segment Data (Unaudited)
DelekLogisticsPartners,
LP
Predecessor -Logistics
Assets
Six MonthsEnded June 30,
2015
Throughputs (average bpd)
Pipelines and Transportation
Segment: Lion Pipeline System: 55,267 — 55,267 Crude pipelines
(non-gathered) 57,258 — 57,258 Refined products pipelines to
Enterprise Systems 21,421 — 21,421 SALA Gathering System 27,623 —
27,623 East Texas Crude Logistics System 23,892 — 23,892 El Dorado
Rail Offloading Rack 2,964 5,151 4,051
Wholesale
Marketing and Terminalling Segment: East Texas - Tyler Refinery
sales volumes (average bpd) 47,018 — 47,018 West Texas marketing
throughputs (average bpd) 17,070 — 17,070 West Texas marketing
margin per barrel $ 1.35 $ — $ 1.35 Terminalling throughputs
(average bpd) 90,581 — 90,581
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150803006427/en/
Delek Logistics Partners, LPKeith Johnson, 615-435-1366Vice
President of Investor RelationsorAlpha IR GroupChris Hodges,
312-445-2870Founder & CEO
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