Delek Logistics Partners, LP 8-K/A, filed Jul 13, 2022

Delek Logistics Partners, LP (DKL)

8-K/A 2022-07-13 For: 2022-05-26

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Added on April 09, 2026

About this 8-K/A

Delek Logistics Partners, LP filed this 8-K/A on July 13, 2022, reporting on events of May 26, 2022.

Items reported

Item 9.01: Financial statements and exhibits

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Delaware	001-35721		45-5379027
(State or other jurisdiction of incorporation)	(Commission File Number)		(IRS Employer Identification No.)


7102 Commerce Way	Brentwood	Tennessee	37027
(Address of Principal Executive)			(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units Representing Limited Partner Interests	DKL	New York Stock Exchange


(d)						Exhibits.

23.1						Consent of BDO USA, LLP.

99.1						Audited consolidated financial statements of 3 Bear as of December 31, 2021 (Successor) and December 31, 2020 (Predecessor) and for the periods from March 23, 2021 to December 31, 2021 (Successor) and January 1, 2021 to March 22, 2021 (Predecessor) and for the year ended December 31, 2020 (Predecessor).

99.2						Unaudited consolidated financial statements of 3 Bear as of March 31, 2022 (Successor) and for the three months ended March 31, 2022 (Successor) and for the periods from March 23, 2021 through March 31, 2021 (Successor) and January 1, 2021 through March 22, 2021 (Predecessor).
						Pro Forma
99.3						Unaudited pro forma condensed consolidated combined financial information of the Partnership and 3 Bear as of March 31, 2022 and for the year ended December 31, 2021 and for the three months ended March 31, 2022.

104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.


Dated: July 12, 2022			DELEK LOGISTICS PARTNERS, LP
			By: Delek Logistics GP, LLC
			its general partner

			/s/ Reuven Spiegel
			Name: Reuven Spiegel
			Title: Executive Vice President and Chief Financial Officer (Principal Financial Officer)


	Delek Logistics Partners, LP		3 Bear As Adjusted - Note 2		Transaction Accounting Adjustments - Note 3			Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$	2,726	$	834	$	(624,450)	(a)	$	325
					621,215		(b)
Accounts receivable	20,350		19,645		—			39,995
Inventory	1,779		2,202		—			3,981
Other current assets	1,466		663		—			2,129
Total current assets	26,321		23,344		(3,235)			46,430

Property, plant and equipment	724,921		354,764		20,418		(a)	1,100,103
Less: accumulated depreciation	(276,587)		(12,729)		12,729		(a)	(276,587)
Property, plant and equipment, net	448,334		342,035		33,147			823,516
Equity method investments	249,893		—		—			249,893
Operating lease right-of-use assets	19,135		—		7,335		(a)	26,470
Goodwill	12,203		—		26,842		(a)	39,045
Marketing and customer relationship intangibles, net(1)	114,774		42,302		167,698		(a)	324,774
Rights-of-way	39,705		—		13,640		(a)	53,345
Other non-current assets	24,901		500		631		(c)	26,032
Total assets	$	935,266	$	408,181	$	246,058		$	1,589,505

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	12,627	$	5,711	$	—		$	18,338
Accounts payable to related parties	50,282		—		—			50,282
Interest payable	16,317		115		(115)		(a)	16,317
Excise and other taxes payable	4,023		—		—			4,023
Current portion of operating lease liabilities	6,327		—		1,008		(a)	7,335
Accrued expenses and other current liabilities	6,688		22,010		631		(c)	37,330
					4,578		(d)
					3,423		(e)
Total current liabilities	96,264		27,836		9,525			133,625

Long-term debt	905,536		68,882		(68,882)		(a)	1,526,751
					621,215		(b)
Asset retirement obligations	6,600		2,233		—			8,833
Operating lease liabilities, net of current portion	12,401		—		1,431		(a)	13,832
Other non-current liabilities	20,987		290		(290)		(a)	20,987
Total non-current liabilities	945,524		71,405		553,474			1,570,403

Equity (deficit)(2)	(106,522)		308,940		(308,940)		(a)	(114,523)
					(4,578)		(d)
					(3,423)		(e)
Total liabilities and deficit	$	935,266	$	408,181	$	246,058		$	1,589,505


(1)			The financial statement line item, “Marketing and customer relationship intangibles, net” has been modified from the Delek Logistics Partners, LP March 31, 2022 unaudited condensed consolidated combined balance sheet (as previously reported) description of “Marketing contract intangible, net” to reflect the inclusion of the 3 Bear customer relationship intangibles in the pro forma combined balance, as presented in the unaudited pro forma condensed consolidated combined financial information.
(2)			The financial statement line item, “Equity (deficit)” has been modified from the Delek Logistics Partners, LP March 31, 2022 unaudited condensed consolidated combined balance sheet presentation which included both “Common unitholders – public” and “Common unitholders – Delek Holdings” for simplicity of presentation in the unaudited pro forma condensed consolidated combined financial information.


3 Bear Caption	Delek Logistics Partners, LP Caption	3 Bear Historical (1)		Reclassification Adjustments		Ref.	3 Bear As Adjusted
Current assets
Cash and cash equivalents	Cash and cash equivalents	$	834	$	—		$	834
Trade accounts receivable and accrued revenues	Accounts receivable, net	19,645		—			19,645
Inventory	Inventory	2,202		—			2,202
Prepaid and other current assets	Other current assets	663		—			663
Total current assets		23,344		—			23,344

Property, plant and equipment, net	Property, plant and equipment	342,035		(342,035)		(i)	—
Property, plant and equipment, net	Property, plant and equipment	—		354,764		(i)	354,764
Property, plant and equipment, net	Less: accumulated depreciation	—		(12,729)		(i)	(12,729)
Property, plant and equipment, net	Property, plant and equipment, net	—		342,035		(i)	342,035
Intangible assets, net	Marketing and customer relationship intangibles, net	42,302		—			42,302
Other long-term assets	Other assets	500		—			500
Total assets		$	408,181	$	—		$	408,181

Current liabilities
Accounts payable - trade	Accounts payable	$	5,228	$	483	(ii)	$	5,711
Accounts payable - affiliates	Accounts payable to related parties	483		(483)		(ii)	—
Interest payable		—		115		(iii)	115
Accrued liabilities	Accrued expenses and other current liabilities	22,097		(87)		(iii), (iv)	22,010
Total current liabilities		27,808		28			27,836

Long-term debt, net	Long-term debt	68,910		(28)		(iv)	68,882
Asset retirement obligations	Asset retirement obligations	2,233		—			2,233
Other long-term liabilities	Other non-current liabilities	290		—			290
Total liabilities		99,241		—			99,241

Equity
Member's capital	Equity (deficit)	288,766		—			288,766
Accumulated earnings	Equity (deficit)	20,174		—			20,174
Total equity		308,940		—			308,940
Total liabilities and equity		$	408,181	$	—		$	408,181


(1)			Represents the historical unaudited balance sheet of 3 Bear as of March 31, 2022, as presented on Exhibit 99.2 to the Partnership’s Form 8-K/A.

i.			Represents the reclassification of “Property, plant and equipment, net” on 3 Bear’s historical unaudited consolidated balance sheet into “Property, plant and equipment” and “accumulated depreciation” to conform to the Partnership’s presentation.
ii.			Represents the reclassification of “Accounts payable – affiliates” on 3 Bear’s historical unaudited consolidated balance sheet into “Accounts payable - trade” to reflect the fact that such balances will no longer be affiliate balances post-close.
iii.			Represents the reclassification of certain balances contained in “Accrued liabilities” on 3 Bear’s historical unaudited consolidated balance sheet into “Interest payable” to conform to the Partnership’s presentation.
iv.			Represents the reclassification of a capital lease liability contained in “Long-term debt, net” on 3 Bear’s historical unaudited consolidated balance sheet into “Accrued expenses and other current liabilities” to conform to the Partnership’s presentation.


(1)			Represents the historical unaudited consolidated statement of operations of 3 Bear for the three months ended March 31, 2022, as presented on Exhibit 99.2 to the Partnership’s Form 8-K/A.

i.			Represents the reclassification of “Gas purchases and other cost of product sales” on 3 Bear’s historical unaudited consolidated statement of operations into “Cost of materials and other” to conform to the Partnership’s presentation.
ii.			Represents the reclassification of operating expenses contained in “Operations and maintenance” on 3 Bear’s historical unaudited consolidated statement of operations into “Operating expense (excluding depreciation and amortization)” to conform to the Partnership’s presentation.
iii.			Represents the reclassification of certain operating expenses contained in “Depreciation, amortization, and accretion” on 3 Bear’s historical unaudited consolidated statement of operations into cost of sales “Depreciation and amortization” to conform to the Partnership’s presentation.


3 Bear Caption	Delek Logistics Partners, LP Caption	For the Period from March 23 through December 31, 2021 (Successor) (1)		For the Period from January 1 through March 22, 2021 (Predecessor) (1)		Reclassification Adjustments		Ref.	3 Bear As Adjusted (2)
Operating revenues
Product sales	Third party	$	90,671	$	19,524	$	—		$	110,195
Gathering services	Third party	33,531		7,287		—			40,818
Fuel revenue	Third party	2,021		596		—			2,617
Total operating revenues	Net revenues	126,223		27,407		—			153,630

	Cost of sales:
	Cost of materials and other	—		—		91,106		(i)	91,106
	Operating expense (excluding depreciation and amortization presented below)	—		—		21,473		(ii)	21,473
	Depreciation and amortization	—		—		12,167		(iii)	12,167
	Total cost of sales	—		—		124,746			124,746

Operating expenses
Gas purchases and other cost of product sales		73,380		17,726		(91,106)		(i)	—
Operations and maintenance		16,948		4,525		(21,473)		(ii)	—
General and administrative	General and administrative expenses	6,043		558		—			6,601
Depreciation, amortization, and accretion	Depreciation and amortization	10,162		3,540		(12,167)		(iii)	1,535
Loss on disposal of assets	Other operating (income) expense, net	1,105		—		—			1,105
Total operating expenses	Total operating costs and expenses	107,638		26,349		—			133,987
Income from operations	Operating income	18,585		1,058		—			19,643

Other income
Interest expense	Interest expense, net	(1,899)		(432)		—			(2,331)
Net income		$	16,686	$	626	$	—		$	17,312


(1)			Collectively, represents the historical audited consolidated statement of operations of 3 Bear for the year ended December 31, 2021, inclusive of both the predecessor and successor, as presented on Exhibit 99.1 to the Partnership’s Form 8-K/A.
(2)			For purposes of presenting the 3 Bear statement of income, as adjusted, for the year ended December 31, 2021, the predecessor and successor periods from 3 Bear’s historical audited consolidated statement of operations for the year ended December 31, 2021 have been combined and reflect reclassification adjustments applied on a combined basis.

i.			Represents the reclassification of “Gas purchases and other cost of product sales” on 3 Bear’s historical audited consolidated statement of operations into “Cost of materials and other” to conform to the Partnership’s presentation.
ii.			Represents the reclassification of operating expenses contained in “Operations and maintenance” on 3 Bear’s historical audited consolidated statement of operations into “Operating expense (excluding depreciation and amortization)” to conform to the Partnership’s presentation.
iii.			Represents the reclassification of certain operating expenses contained in “Depreciation, amortization, and accretion” on 3 Bear’s historical audited consolidated statement of operations into cost of sales “Depreciation and amortization” to conform to the Partnership’s presentation.


	Estimated Purchase Price (in thousands)
Base purchase price	$	624,700
Plus: estimated closing net working capital (as defined in the 3 Bear Purchase Agreement)	(250)
Less: estimated closing indebtedness (as defined in the 3 Bear Purchase Agreement)	(80,408)
Cash paid for the adjusted purchase price	544,042
Cash paid to payoff 3 Bear credit agreement	80,408
Estimated purchase price	$	624,450


	Preliminary Purchase Price Allocation (in thousands)
Assets acquired
Cash	$	834
Accounts receivable	19,645
Inventory	2,202
Other current assets	663
Property, plant and equipment(1)	375,182
Operating lease right-of-use assets(1)	7,335
Goodwill	26,842
Marketing and customer relationship intangibles	210,000
Rights-of-way(1)	13,640
Other non-current assets	500
Total assets acquired	$	656,843

Liabilities assumed
Accounts payable	$	5,711
Accrued expenses and other current liabilities	22,010
Current portion of operating lease liabilities(1)	1,008
Asset retirement obligations	2,233
Operating lease liabilities, net of current portion(1)	1,431
Total liabilities assumed	$	32,393
Net assets acquired	$	624,450


(1)			These line items include the balance-sheet adjustments associated with 3 Bear’s lease and rights-of-way arrangements to conform to the Partnership’s policy for the accounting of such arrangements under ASC 842. These ASC 842 adjustments are preliminary estimates that remain subject to change.


	Three Months Ended March 31, 2022
	(in thousands)
Reversal of 3 Bear’s historical property, plant and equipment depreciation and amortization	$	(4,387)
Depreciation of acquired property, plant and equipment assets	4,156
Amortization of acquired identifiable intangible assets	4,646
Total net transaction accounting adjustments to depreciation and amortization	$	4,415


	Three Months Ended March 31, 2022
	(in thousands)
Elimination of interest expense, commitment fees and amortization of debt issuance costs related to the 3 Bear credit agreement	$	(592)
Amortization of incremental deferred financing costs related to the amendments on the Partnership’s revolving credit facility	58
Incremental interest expense on the revolving credit facility	5,253
Total net transaction accounting adjustments to interest expense	$	4,719


	Year Ended December 31, 2021
	(in thousands)
Reversal of 3 Bear’s historical property, plant and equipment depreciation and amortization	$	(13,528)
Depreciation of acquired property, plant and equipment assets	15,379
Amortization of acquired identifiable intangible assets	18,584
Total net transaction accounting adjustments to depreciation and amortization	$	20,435