EX-99.1 2 dkl-ex991xearningsrele.htm EXHIBIT 99.1 EARNINGS RELEASE 09.30.19 Exhibit
Exhibit 99.1

deleklogisticsglobe5x5a05.jpg
Delek Logistics Partners, LP Reports Third Quarter 2019 Results
Declared third quarter distribution of $0.88 per limited partner unit; increased by 11.4% percent year-over-year
Reported third quarter net income attributable to all partners of $30.5 million; EBITDA increased 19.7% year-over-year
Third quarter net cash from operations was $34.3 million
Distributable cash flow coverage ratio of 1.11x for the third quarter 2019

BRENTWOOD, Tenn., November 4, 2019 -- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the third quarter 2019. For the three months ended September 30, 2019, Delek Logistics reported net income attributable to all partners of $30.5 million, or $0.89 per diluted common limited partner unit. This compares to net income attributable to all partners of $23.3 million, or $0.68 per diluted common limited partner unit, in the third quarter 2018. Net cash from operating activities was $34.3 million in the third quarter 2019 compared to $6.0 million in the prior year period. Distributable cash flow was $33.7 million in the third quarter 2019, compared to $32.4 million in the prior-year period. Reconciliation of net cash from operating activities as reported under U.S. GAAP to distributable cash flow is included in the financial tables attached to this release.
For the third quarter 2019, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $51.5 million compared to $43.0 million in the prior-year period. The year-over-year improvements are primarily due to a $6.5 million increase to income from equity method investments, as well as increased contribution from the Paline Pipeline and SALA Gathering. This was partially offset by lower West Texas gross margin on a year-over-year basis. Reconciliation of net income attributable to all partners as reported under U.S. GAAP to EBITDA is included in the financial tables attached to this release.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek Logistics' general partner, remarked: "During the third quarter we realized increased contributions from the recent Red River pipeline joint venture acquisition. This investment continues to bolster Delek Logistics' cash flow stream, which should further increase following the pipeline expansion, expected to be completed in the first half of 2020. Our strategy remains focused on supporting cash flow coverage and reducing leverage to better position the balance sheet, along with exploring organic growth opportunities. Simultaneously, our sponsor, Delek US Holdings, Inc. (NYSE: DK) ("Delek US"), continues building its midstream portfolio, providing potential longer-term options for Delek Logistics. We were pleased to announce an 11.4% year-over-year increase in our third quarter distribution, and we remain committed to grow our distribution per limited partner unit by at least 10% annually through 2019."
Distribution and Liquidity
On October 25, 2019, Delek Logistics declared a quarterly cash distribution of $0.88 per common limited partner unit for the third quarter, which equates to $3.52 per common limited partner unit on an annualized basis. This distribution is to be paid on November 12, 2019 to unitholders of record on November 4, 2019. This represents a 3.5 percent increase from the second quarter 2019 distribution of $0.85 per common limited partner unit, or $3.40 per common limited partner unit on an annualized basis, and an 11.4% increase over Delek Logistics’ third quarter 2018 distribution of $0.79 per common limited partner unit, or $3.16 per common limited partner unit annualized. For the third quarter 2019, the total cash distribution declared to all partners, including incentive distribution rights (IDRs), was approximately $30.4 million. Based on the distribution for the third quarter 2019, the distributable cash flow coverage ratio for the third quarter was 1.11x.
As of September 30, 2019, Delek Logistics had total debt of approximately $840.8 million and cash of $6.4 million. Additional borrowing capacity, subject to certain covenants, under the $850.0 million credit facility was $253.7 million. The total leverage ratio, calculated in accordance with the credit facility, for the third quarter 2019 was approximately 4.6x, which is within the current requirements of the maximum allowable leverage ratio of 5.25x.

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Financial Results
Revenue for the third quarter 2019 was $137.6 million compared to $164.1 million in the prior-year period. The decrease in revenue is primarily due to lower prices and volumes in the west Texas wholesale business, partially offset by improved performance from the Tyler Terminal along with the SALA Gathering System, Paline Pipeline and trucking. Total operating expenses were $18.4 million in the third quarter 2019, compared to $15.4 million in the third quarter 2018. The increase was primarily due to higher maintenance/repair, outside services and allocated employee expenses. Total contribution margin was $46.5 million in the third quarter 2019 compared to $43.1 million in the third quarter 2018. General and administrative expenses were $5.3 million for the third quarter 2019, compared to $3.1 million in the prior-year period, with such increase being primarily due to employee related expenses and expense related to a canceled capital project.
Pipelines and Transportation Segment
Contribution margin in the third quarter 2019 was $27.1 million compared to $25.2 million in the third quarter 2018. This improvement was primarily due to improved performance from the SALA Gathering System, trucking and the Paline Pipeline, partially offset by lower performance on the Lion Oil Pipeline system due to lower throughput at Delek US' El Dorado, Arkansas refinery. Operating expenses were $12.5 million in the third quarter 2019 compared to $9.5 million in the prior-year period and such increase was primarily related to employee expenses.
Wholesale Marketing and Terminalling Segment
During the third quarter 2019, contribution margin was $19.4 million, compared to $17.9 million in the third quarter 2018. This increase was primarily due to a higher gross margin in east Texas marketing and Big Spring marketing and Terminalling assets, partially offset by lower gross margin in west Texas. Operating expenses of $5.9 million in the third quarter 2019 were in line with the $5.9 million in the prior-year period.
In the west Texas wholesale business, average throughput in the third quarter 2019 was 9,535 barrels per day compared to 12,197 barrels per day in the third quarter 2018. The west Texas gross margin per barrel increased year-over-year to $4.82 per barrel and included approximately $0.3 million, or $0.38 per barrel, from renewable identification numbers (RINs) generated in the quarter. During the third quarter 2018, the west Texas gross margin per barrel was $4.65 per barrel and included $0.3 million from RINs, or $0.29 per barrel.
Average terminalling throughput volume of 170,727 barrels per day during the third quarter 2019 increased on a year-over-year basis from 167,491 barrels per day in the third quarter 2018. During the third quarter 2019, average volume under the East Texas marketing agreement with Delek US was 83,953 barrels per day compared to 79,404 barrels per day during the third quarter 2018.
Third Quarter 2019 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its third quarter 2019 results on Tuesday, November 5, 2019 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 February 5, 2020 by dialing (855) 859-2056, passcode 3489149. 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) third quarter 2019 earnings conference call on Tuesday, November 5, 2019 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 that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are “forward-looking statements,” as that term is defined under the federal securities laws. These statements contain words such as “possible,” “believe,” “should,” “could,” “would,” “predict,” “plan,” “estimate,” “intend,” “may,” “anticipate,” “will,” “if,” “expect” or similar expressions, as well as statements in the future tense, and can be impacted by numerous factors, including the fact that a substantial majority of Delek Logistics' contribution margin is derived from Delek US, thereby subjecting us to Delek US' business risks; risks relating to the securities markets generally; risks and costs relating to the age and operational hazards of our assets including, without limitation, costs, penalties, regulatory or legal actions and other effects related to releases, spills and other hazards inherent in transporting and storing crude oil and intermediate and finished petroleum products; the impact of adverse market conditions affecting the utilization of Delek Logistics' assets and business performance, including margins generated by its wholesale fuel business; an inability of Delek US to grow as expected as it relates to our potential future growth opportunities, including dropdowns, and other potential benefits; the results of our investments in joint ventures; the ability of the Red River joint venture to complete the expansion to increase the Red River pipeline capacity; 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

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and Exchange Commission. Forward looking statements include, but are not limited to, statements regarding future growth at Delek Logistics; distributions and the amounts and timing thereof; potential dropdown inventory, expected earnings or returns from joint ventures or other acquisitions; ability to create long-term value for our unit holders; financial flexibility and borrowing capacity; and distribution growth of 10% or at all. Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by, which such performance or results will be achieved.  Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements.  Delek Logistics undertakes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which Delek Logistics becomes aware of, after the date hereof, except as required by applicable law or regulation
Non-GAAP Disclosures:
Our management uses certain "non-GAAP" operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include:
Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income before net interest expense, income tax expense, depreciation and amortization expense, including amortization of customer contract intangible assets, which is included as a component of net revenues in our accompanying condensed consolidated statements of income.
Distributable cash flow - calculated as net cash flow from operating activities plus or minus changes in assets and liabilities, less maintenance capital expenditures net of reimbursements and other adjustments not expected to settle in cash. Delek Logistics believes this is an appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.
EBITDA and distributable cash flow are non-U.S. GAAP supplemental financial measures that management and external users of our condensed consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:     
Delek Logistics' operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods;
the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
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, distributable cash flow and distributable cash flow coverage ratio provide useful information to investors in assessing its financial condition, its results of operations and the cash flow its business is generating. EBITDA, distributable cash flow and distributable cash flow coverage ratio should not be considered in isolation or as alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP.
Non-GAAP measures 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. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. 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. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.

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Delek Logistics Partners, LP
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except unit and per unit data)

 
 
September 30, 2019
 
December 31, 2018
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
6,353

 
$
4,522

   Accounts receivable
 
19,998

 
21,586

Inventory
 
7,695

 
5,491

Other current assets
 
2,714

 
969

Total current assets
 
36,760

 
32,568

Property, plant and equipment:
 
 

 
 

Property, plant and equipment
 
457,716

 
452,746

Less: accumulated depreciation
 
(159,623
)
 
(140,184
)
Property, plant and equipment, net
 
298,093

 
312,562

Equity method investments
 
246,998

 
104,770

Operating lease right-of-use assets
 
18,297

 

Goodwill
 
12,203

 
12,203

Marketing Contract Intangible, net
 
132,802

 
138,210

Other non-current assets
 
22,654

 
24,280

Total assets
 
$
767,807

 
$
624,593

 
 
 
 
 
LIABILITIES AND DEFICIT
 
 

 
 

Current liabilities:
 
 

 
 

Accounts payable
 
$
12,477

 
$
14,226

Accounts payable to related parties
 
2,817

 
7,833

Excise and other taxes payable
 
1,722

 
4,069

Current portion of operating lease liabilities
 
4,836

 

Accrued expenses and other current liabilities
 
10,489

 
10,377

Total current liabilities
 
32,341

 
36,505

Non-current liabilities:
 
 
 
 
Long-term debt
 
840,765

 
700,430

Asset retirement obligations
 
5,489

 
5,191

Operating lease liabilities, net of current portion
 
13,462

 

Other non-current liabilities
 
18,240

 
17,290

Total non-current liabilities
 
877,956

 
722,911

Total liabilities
 
910,297

 
759,416

Deficit:
 


 
 
Common unitholders - public; 9,123,239 units issued and outstanding at September 30, 2019 (9,109,807 at December 31, 2018)
 
167,650

 
171,023

Common unitholders - Delek Holdings; 15,294,046 units issued and outstanding at September 30, 2019 (15,294,046 at December 31, 2018)
 
(305,152
)
 
(299,360
)
General partner - 498,312 units issued and outstanding at September 30, 2019 (498,038 at December 31, 2018)
 
(4,988
)
 
(6,486
)
Total deficit
 
(142,490
)
 
(134,823
)
Total liabilities and deficit
 
$
767,807

 
$
624,593


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Delek Logistics Partners, LP
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except unit and per unit data)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
Net revenues:
 
 
 
 
 
 
 
 
Affiliate
 
$
66,647

 
$
63,835

 
$
191,530

 
$
178,559

Third-party
 
70,909

 
100,275

 
253,852

 
319,752

Net revenues
 
137,556

 
164,110

 
445,382

 
498,311

Cost of Sales:
 
 
 
 
 
 
 
 
Cost of materials and other
 
72,594

 
105,596

 
262,713

 
330,644

Operating expenses (excluding depreciation and amortization presented below)
 
17,490

 
14,489

 
49,318

 
40,501

Depreciation and amortization
 
6,138

 
6,252

 
18,450

 
18,287

Total cost of sales
 
96,222

 
126,337

 
330,481

 
389,432

Operating expenses related to wholesale business (excluding depreciation and amortization presented below)
 
945

 
906

 
2,502

 
2,388

General and administrative expenses
 
5,280

 
3,076

 
15,046

 
9,798

Depreciation and amortization
 
450

 
450

 
1,351

 
1,434

(Gain) loss on asset disposals
 
(70
)
 
717

 
(95
)
 
648

Total operating costs and expenses
 
102,827

 
131,486

 
349,285


403,700

Operating income
 
34,729

 
32,624

 
96,097

 
94,611

Interest expense, net
 
12,509

 
11,108

 
35,164

 
30,096

Income from equity method investments
 
(8,394
)
 
(1,924
)
 
(14,860
)
 
(4,681
)
Other expense, net
 

 
8

 
461

 
8

Total non-operating expenses, net
 
4,115

 
9,192

 
20,765

 
25,423

Income before income tax expense
 
30,614

 
23,432

 
75,332

 
69,188

Income tax expense
 
84

 
106

 
220

 
285

Net income attributable to partners
 
$
30,530

 
$
23,326

 
$
75,112

 
$
68,903

Comprehensive income attributable to partners
 
$
30,530

 
$
23,326

 
$
75,112

 
$
68,903

 
 
 
 
 
 
 
 
 
Less: General partner's interest in net income, including incentive distribution rights
 
8,895

 
6,636

 
24,244

 
18,478

Limited partners' interest in net income
 
$
21,635

 
$
16,690

 
$
50,868

 
$
50,425

 
 
 
 
 
 
 
 
 
Net income per limited partner unit:
 
 
 
 
 
 
 
 
Common units - basic
 
$
0.89

 
$
0.68

 
$
2.08

 
$
2.07

Common units - diluted
 
$
0.89

 
$
0.68

 
$
2.08

 
$
2.07

 
 
 
 
 
 
 
 
 
Weighted average limited partner units outstanding:
 
 
 
 
 
 
 
 
Common units - basic
 
24,417,285

 
24,395,183

 
24,411,308

 
24,387,995

Common units - diluted
 
24,420,582

 
24,401,908

 
24,417,466

 
24,395,880

 
 
 
 
 
 
 
 
 
Cash distribution per limited partner unit
 
$
0.880

 
$
0.790

 
$
2.550

 
$
2.310




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Delek Logistics Partners, LP
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
Cash flows from operating activities
 
 
 
 
Net income
 
$
75,112

 
$
68,903

Adjustments to reconcile net income to net cash provided by operating activities:
 

 

Depreciation and amortization
 
19,801

 
19,721

Non-cash lease expense
 
2,554

 

Amortization of customer contract intangible assets
 
5,408

 
4,207

Amortization of deferred revenue
 
(1,248
)
 
(1,095
)
Amortization of deferred financing costs and debt discount
 
2,054

 
1,984

Accretion of asset retirement obligations
 
298

 
267

Deferred income taxes
 
115

 

Income from equity method investments
 
(14,860
)
 
(4,681
)
Dividends from equity method investments
 
9,188

 
5,128

(Gain) loss on asset disposals
 
(95
)
 
648

Other non-cash adjustments
 
484

 
518

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
1,588

 
1,198

Inventories and other current assets
 
(3,290
)
 
17,022

Accounts payable and other current liabilities
 
(7,613
)
 
(4,311
)
Accounts receivable/payable to related parties
 
(5,016
)
 
(50,030
)
Non-current assets and liabilities, net
 
109

 
(1,879
)
Changes in assets and liabilities
 
(14,222
)
 
(38,000
)
Net cash provided by operating activities
 
84,589

 
57,600

Cash flows from investing activities
 
 
 
 
Asset acquisitions, net of assumed asset retirement obligation liabilities
 

 
(72,222
)
Purchases of property, plant and equipment
 
(4,964
)
 
(8,674
)
Proceeds from sales of property, plant and equipment
 
144

 
465

Purchases of intangible assets
 

 
(144,219
)
Distributions from equity method investments
 
804

 
957

Equity method investment contributions
 
(137,361
)
 
(172
)
Net cash used in investing activities
 
(141,377
)
 
(223,865
)
Cash flows from financing activities
 
 
 
 
Proceeds from issuance of additional units to maintain 2% General Partner interest
 
8

 
20

Distributions to general partner
 
(22,762
)
 
(17,010
)
Distributions to common unitholders - public
 
(22,580
)
 
(20,500
)
Distributions to common unitholders - Delek Holdings
 
(37,929
)
 
(34,335
)
Distributions to Delek Holdings unitholders and general partner related to Big Spring Logistic Assets Acquisition
 

 
(98,798
)
Proceeds from revolving credit facility
 
476,400

 
678,000

Payments on revolving credit facility
 
(336,800
)
 
(324,700
)
Deferred financing costs paid
 

 
(5,264
)
Reimbursement of capital expenditures by Delek Holdings
 
2,282

 
3,183

Net cash provided by financing activities
 
58,619

 
180,596

Net increase in cash and cash equivalents
 
1,831

 
14,331

Cash and cash equivalents at the beginning of the period
 
4,522

 
4,675

Cash and cash equivalents at the end of the period
 
$
6,353

 
$
19,006

Supplemental disclosures of cash flow information:
 
 
 
 
Cash paid during the period for:
 
 
 
 
Interest
 
$
29,003

 
$
24,446

Income taxes
 
$
143

 
$
136

Non-cash investing activities:
 
 

 
 

Increase/(Decrease) in accrued capital expenditures
 
$
1,274

 
$
(1,836
)
Non-cash financing activities:
 
 
 
 
Non-cash lease liability arising from obtaining right of use assets during the period
 
$
649

 
$

 Non-cash lease liability arising from recognition of right of use assets upon adoption of ASU 2016-02
 
$
20,202

 
$


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Delek Logistics Partners, LP
Reconciliation of Amounts Reported Under U.S. GAAP
(In thousands)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
Reconciliation of Net Income to EBITDA:
 
 
 
 
 
 
 
 
Net income
 
$
30,530

 
$
23,326

 
$
75,112

 
$
68,903

Add:
 
 
 
 
 
 
 
 
Income tax expense
 
84

 
106

 
220

 
285

Depreciation and amortization
 
6,588

 
6,702

 
19,801

 
19,721

Amortization of customer contract intangible assets
 
1,803

 
1,803

 
5,408

 
4,207

Interest expense, net
 
12,509

 
11,108

 
35,164

 
30,096

EBITDA
 
$
51,514

 
$
43,045

 
$
135,705

 
$
123,212

 
 
 
 
 
 
 
 
 
Reconciliation of net cash from operating activities to distributable cash flow:
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$
34,261

 
$
5,957

 
$
84,589

 
$
57,600

Changes in assets and liabilities
 
3,237

 
28,079

 
14,222

 
38,000

Non-cash lease expense
 
(1,145
)
 

 
(2,554
)
 

Distributions from equity method investments in investing activities
 

 
297

 
804

 
957

Maintenance and regulatory capital expenditures
 
(3,728
)
 
(2,380
)
 
(5,515
)
 
(3,721
)
Reimbursement from Delek Holdings for capital expenditures 
 
1,223

 
1,292

 
2,607

 
2,179

Accretion of asset retirement obligations
 
(100
)
 
(92
)
 
(298
)
 
(267
)
Deferred income taxes
 
(118
)
 

 
(115
)
 

Gain (loss) on asset disposals
 
70

 
(717
)
 
95

 
(648
)
Distributable Cash Flow
 
$
33,700

 
$
32,436

 
$
93,835

 
$
94,100


Delek Logistics Partners, LP
Distributable Coverage Ratio Calculation
 (In thousands)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
Distributions to partners of Delek Logistics, LP
 
2019
 
2018
 
2019
 
2018
Limited partners' distribution on common units
 
$
21,487

 
$
19,272

 
$
62,256

 
$
56,343

General partner's distributions
 
439

 
393

 
1,270

 
1,149

General partner's incentive distribution rights
 
8,453

 
6,295

 
23,205

 
17,449

Total distributions to be paid
 
$
30,379

 
$
25,960

 
$
86,731

 
$
74,941

 
 
 
 
 
 
 
 
 
Distributable cash flow
 
$
33,700

 
$
32,436

 
$
93,835

 
$
94,100

Distributable cash flow coverage ratio (1)
 
1.11x

 
1.25x

 
1.08x

 
1.26x

(1) Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period.



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Delek Logistics Partners, LP
Segment Data (unaudited)
(In thousands)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
Pipelines and Transportation
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
Affiliate
 
$
39,304

 
$
36,132

 
$
112,694

 
$
99,624

Third party
 
5,281

 
3,653

 
16,733

 
11,618

Total pipelines and transportation
 
44,585

 
39,785

 
129,427

 
111,242

     Cost of sales:
 
 
 
 
 
 
 
 
Cost of materials and other
 
4,947

 
5,055

 
17,871

 
14,691

Operating expenses (excluding depreciation and amortization)
 
12,547

 
9,499

 
36,109

 
29,054

Segment contribution margin
 
$
27,091

 
$
25,231

 
$
75,447

 
$
67,497

Total Assets
 
$
529,219

 
$
431,173

 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale Marketing and Terminalling
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
     Affiliates (1)
 
$
27,343

 
$
27,703

 
$
78,836

 
$
78,935

Third party
 
65,628

 
96,622

 
237,119

 
308,134

Total wholesale marketing and terminalling
 
92,971

 
124,325

 
315,955

 
387,069

     Cost of sales:
 
 
 
 
 
 
 
 
Cost of materials and other
 
67,647

 
100,541

 
244,842

 
315,953

Operating expenses (excluding depreciation and amortization)
 
5,888

 
5,896

 
15,711

 
13,835

Segment contribution margin
 
$
19,436

 
$
17,888

 
$
55,402

 
$
57,281

Total Assets
 
$
238,588

 
$
262,396

 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
     Affiliates
 
$
66,647

 
$
63,835

 
$
191,530

 
$
178,559

     Third party
 
70,909

 
100,275

 
253,852

 
319,752

          Total consolidated
 
137,556

 
164,110

 
445,382

 
498,311

     Cost of sales:
 
 
 
 
 
 
 
 
     Cost of materials and other
 
72,594

 
105,596

 
262,713

 
330,644

     Operating expenses (excluding depreciation and amortization presented below)
 
18,435

 
15,395

 
51,820

 
42,889

     Contribution margin
 
46,527

 
43,119

 
130,849

 
124,778

     General and administrative expenses
 
5,280

 
3,076

 
15,046

 
9,798

     Depreciation and amortization
 
6,588

 
6,702

 
19,801

 
19,721

     Loss (gain) on asset disposals
 
(70
)
 
717

 
(95
)
 
648

     Operating income
 
$
34,729

 
$
32,624

 
$
96,097

 
$
94,611

Total Assets
 
$
767,807

 
$
693,569

 
 
 
 
(1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the marketing contract intangible we acquired in connection with the Big Spring acquisition.




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Delek Logistics Partners, LP
Segment Capital Spending
 (In thousands)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
Pipelines and Transportation
 
2019
 
2018
 
2019
 
2018
Maintenance capital spending
 
$
2,731

 
$
1,528

 
$
3,959

 
$
2,585

Discretionary capital spending
 
372

 
558

 
386

 
1,735

Segment capital spending
 
$
3,103

 
$
2,086

 
$
4,345

 
$
4,320

Wholesale Marketing and Terminalling
 

 

 
 
 
 
Maintenance capital spending
 
$
980

 
$
877

 
1,389

 
$
1,451

Discretionary capital spending
 
(91
)
 
28

 
504

 
1,669

Segment capital spending
 
$
889

 
$
905

 
$
1,893

 
$
3,120

Consolidated
 
 
 
 
 
 
 
 
Maintenance capital spending
 
$
3,711

 
$
2,405

 
$
5,348

 
$
4,036

Discretionary capital spending
 
281

 
586

 
890

 
3,404

Total capital spending
 
$
3,992

 
$
2,991

 
$
6,238

 
$
7,440


Delek Logistics Partners, LP
 
 
 
 
Segment Data (Unaudited)
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
Pipelines and Transportation Segment:
 
 
 
 
 
 
 
 
Throughputs (average bpd)
 
 
 
 
 
 
 
 
Lion Pipeline System:
 
 
 
 
 
 
 
 
    Crude pipelines (non-gathered)
 
49,477

 
59,150

 
43,446

 
56,672

    Refined products pipelines to Enterprise Systems
 
43,518

 
43,762

 
32,242

 
47,154

SALA Gathering System
 
21,632

 
16,704

 
21,143

 
16,705

East Texas Crude Logistics System
 
25,391

 
14,284

 
21,045

 
16,402

 
 
 
 
 
 
 
 
 
Wholesale Marketing and Terminalling Segment:
 
 
 
 
 
 
 
 
East Texas - Tyler Refinery sales volumes (average bpd) (1)
 
83,953

 
79,404

 
74,607

 
77,349

Big Spring marketing throughputs (average bpd) (2)
 
80,203

 
80,687

 
83,608

 
79,819

West Texas marketing throughputs (average bpd)
 
9,535

 
12,197

 
11,446

 
13,453

West Texas gross margin per barrel
 
$
4.82

 
$
4.65

 
$
4.83

 
$
5.88

Terminalling throughputs (average bpd) (3)
 
170,727

 
167,491

 
160,621

 
159,457

(1) Excludes jet fuel and petroleum coke.
(2) Throughputs for the nine months ended September 30, 2018 are for the 214 days we marketed certain finished products produced at or sold from the Big Spring Refinery following the execution of the Big Spring Marketing Agreement, effective March 31, 2018.
(3) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, our El Dorado and North Little Rock, Arkansas and our Memphis and Nashville, Tennessee terminals. Throughputs for the Big Spring terminal for nine months ended September 30, 2018 are for the 214 days we operated the terminal following its acquisition effective March 1, 2018. Barrels per day are calculated for only the days we operated each terminal. Total throughput for the three and nine months ended September 30, 2018 was 41.4 million barrels, which averaged 151,646 bpd for the period.









9 |
 


Investor/Media Relations Contacts:
Blake Fernandez, Senior Vice President of Investor Relations and Market Intelligence, 615-224-1312
Jeb Bachmann, Manager of Investor Relations and Market Intelligence, 615-224-1118
Lenny Raymond, Manager of Investor Relations and Market Intelligence, 615-224-0828

Keith Johnson, Vice President of Investor Relations, 615-435-1366

Media/Public Affairs Contact:
Michael P. Ralsky, Vice President - Government Affairs, Public Affairs & Communications, 615-435-1407



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