8-K
Delek Logistics Partners, LP (DKL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 7, 2023
Date of Report (Date of earliest event reported)
DELEK LOGISTICS PARTNERS, LP
(Exact name of registrant as specified in its charter)
| Delaware | 001-35721 | 45-5379027 | |
|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
| 310 Seven Springs Way, Suite 500 | Brentwood | Tennessee | 37027 |
| (Address of Principal Executive) | (Zip Code) |
(615) 771-6701
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| 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 |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02 Results of Operations and Financial Condition
On November 7, 2023, Delek Logistics Partners, LP (the “Partnership”) announced its financial results for the quarter ended September 30, 2023. The full text of the press release is furnished as Exhibit 99.1 hereto.
The information in the attached Exhibit is being furnished pursuant to Item 2.02 “Results of Operations and Financial Condition” on Form 8-K. The information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. |
|---|---|
| 99.1 | Press Release of Delek Logistics Partners issued on November 7, 2023. |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 7, 2023 | 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<br><br>(Principal Financial Officer) |
Document
Exhibit 99.1
Delek Logistics Reports Third Quarter 2023 Results
•Net income attributable to all partners of $34.8 million
•Record quarterly EBITDA of $98.2 million
•Record throughput in Midland Gathering
•Distributable cash flow of $61.4 million
•Distributable cash flow coverage ratio of 1.35x
•Delivered 43 consecutive quarters of distribution growth with recent increase to $1.045/unit
BRENTWOOD, Tenn., November 7, 2023 -- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the third quarter 2023, with reported net income attributable to all partners of $34.8 million, or $0.80 per diluted common limited partner unit. This compares to net income attributable to all partners of $44.7 million, or $1.03 per diluted common limited partner unit, in the third quarter 2022. The decrease in net income attributable to all partners was driven by higher interest expense, partially offset by lower general and administrative expenses. Net cash provided in operating activities was $46.8 million in the third quarter 2023 compared to net cash provided by operating activities of $164.4 million in the third quarter 2022. Distributable cash flow was $61.4 million in the third quarter 2023, compared to $65.6 million in the third quarter 2022.
For the third quarter 2023, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $98.2 million compared to $89.0 million in the third quarter 2022.
“Delek Logistics delivered another record quarter,” said Avigal Soreq, President of Delek Logistics' general partner. “We see significant value in gathering and processing in the Permian and are investing in the continued growth of our business. With its premier Permian location and by consistently delivering safe, reliable operations and stable cash flows, Delek Logistics is a great value opportunity."
“In October, the Board approved the 43rd consecutive increase in the quarterly distribution to $1.045 per unit. Given its portfolio, Delek Logistics is well positioned to exceed $100 million quarterly run-rate EBITDA and support on-going distributions," Mr. Soreq concluded.
Distribution and Liquidity
On October 25, 2023, Delek Logistics declared a quarterly cash distribution of $1.045 per common limited partner unit for the third quarter 2023. This distribution will be paid on November 13, 2023 to unitholders of record on November 6, 2023. This represents a 1.0% increase from the second quarter 2023 distribution of $1.035 per common limited partner unit, and a 5.6% increase over Delek Logistics’ third quarter 2022 distribution of $0.990 per common limited partner unit. For the third quarter 2023, the total cash distribution declared to all partners was approximately $45.6 million, resulting in a distributable cash flow coverage ratio of 1.35x.
As of September 30, 2023, Delek Logistics had total debt of approximately $1.74 billion and cash of $4.2 million. Additional borrowing capacity, subject to certain covenants, under the $900.0 million revolving credit facility was $89.0 million. The total leverage ratio as of September 30, 2023 of approximately 4.55x was within the requirements of the maximum allowable leverage ratio under the credit facility.
Consolidated Operating Results
Third quarter 2023 EBITDA of $98.2 million benefited from increased contribution from the Delek Permian Gathering system, Delaware Gathering system, terminalling and marketing rate increases and continued strong throughput on joint venture pipelines, partially offset by increased operating expenses as compared to EBITDA of $89.0 million in the third quarter 2022. Net income attributable to all partners for the third quarter 2023 of $34.8 million reflected a decrease of $9.8 million compared to the third quarter 2022.
Gathering and Processing Segment
EBITDA in the third quarter 2023 was $52.9 million compared with $56.6 million in the third quarter 2022. The decrease was primarily driven by a one-time credit received in the third quarter of 2022. Excluding this, third quarter 2023 results were higher than last year, due to increased throughput from our Permian assets.
Wholesale Marketing and Terminalling Segment
EBITDA in the third quarter 2023 was $28.1 million, approximately in line with third quarter 2022 EBITDA of $20.3 million. The increase was primarily due to higher terminalling utilization and improved wholesale margins.
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Storage and Transportation Segment
EBITDA in the third quarter 2023 was $17.9 million compared with $14.6 million in the third quarter 2022. The increase was primarily due to increased storage and transportation rates.
Investments in Pipeline Joint Ventures Segment
During the third quarter 2023, income from equity method investments was $9.3 million compared to $8.6 million in the third quarter 2022.
Corporate
EBITDA in the third quarter 2023 was a loss of $10.0 million million compared to a loss of $11.0 million in the third quarter 2022.
Third Quarter 2023 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its third quarter 2023 results on Tuesday, November 7, 2023 at 11:30 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. An archived version of the replay will also be available at www.DelekLogistics.com for 90 days.
About Delek Logistics Partners, LP
Delek Logistics is a midstream energy master limited partnership headquartered in Brentwood, Tennessee. Through its owned assets and joint ventures located primarily in and around the Permian Basin, the Delaware Basin and other select areas in the Gulf Coast region. Delek Logistics provides gathering, pipeline and other transportation services primarily for crude oil and natural gas customers, storage, wholesale marketing and terminalling services primarily for intermediate and refined product customers, and water disposal and recycling services. Delek US Holdings, Inc. ("Delek US") owns the general partner interest as well as a majority limited partner interest in Delek Logistics, and is also a significant customer.
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; risks and uncertainties related to the integration of the 3 Bear business following the recent acquisition; uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; an inability of Delek US to grow as expected as it relates to our potential future growth opportunities, including dropdowns, and other potential benefits; scheduled turnaround activity; the results of our investments in joint ventures; 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. 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; projected benefits of the 3 Bear acquisition; expected earnings or returns from joint ventures or other acquisitions; expansion projects; ability to create long-term value for our unit holders; financial flexibility and borrowing capacity; and distribution growth of 5% 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
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appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.
•Distributable cash flow, as adjusted for transaction costs, or Distributable cash flow, as adjusted - distributable cash flow adjusted to exclude significant, infrequently occurring transaction costs.
Our EBITDA and distributable cash flow measures are non 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 on a current and on-going basis;
•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.
We believe that the presentation of EBITDA and distributable cash flow measures provide information useful to investors in assessing our financial condition and results of operations and assists in evaluating our ongoing operating performance for current and comparative periods. EBITDA and distributable cash flow should not be considered 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. 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 our industry, our definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships, thereby diminishing their utility. 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, please refer to "Results of Operations" below. 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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| Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||
| (In thousands, except unit and per unit data) | ||||||||||||||||||
| September 30, 2023 | December 31, 2022 | |||||||||||||||||
| ASSETS | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 4,182 | $ | 7,970 | ||||||||||||||
| Accounts receivable | 41,271 | 53,314 | ||||||||||||||||
| Accounts receivable from related parties | 67,089 | — | ||||||||||||||||
| Inventory | 4,137 | 1,483 | ||||||||||||||||
| Other current assets | 962 | 2,463 | ||||||||||||||||
| Total current assets | 117,641 | 65,230 | ||||||||||||||||
| Property, plant and equipment: | ||||||||||||||||||
| Property, plant and equipment | 1,306,172 | 1,240,684 | ||||||||||||||||
| Less: accumulated depreciation | (369,476) | (316,680) | ||||||||||||||||
| Property, plant and equipment, net | 936,696 | 924,004 | ||||||||||||||||
| Equity method investments | 241,937 | 257,022 | ||||||||||||||||
| Customer relationship intangible, net | 185,862 | 199,440 | ||||||||||||||||
| Marketing contract intangible, net | 103,958 | 109,366 | ||||||||||||||||
| Rights-of-way, net | 58,047 | 55,990 | ||||||||||||||||
| Goodwill | 27,051 | 27,051 | ||||||||||||||||
| Operating lease right-of-use assets | 20,983 | 24,788 | ||||||||||||||||
| Other non-current assets | 17,289 | 16,408 | ||||||||||||||||
| Total assets | $ | 1,709,464 | $ | 1,679,299 | ||||||||||||||
| LIABILITIES AND DEFICIT | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable | $ | 27,989 | $ | 57,403 | ||||||||||||||
| Accounts payable to related parties | — | 6,055 | ||||||||||||||||
| Current portion of long-term debt | 15,000 | 15,000 | ||||||||||||||||
| Interest payable | 16,889 | 5,308 | ||||||||||||||||
| Excise and other taxes payable | 11,951 | 8,230 | ||||||||||||||||
| Current portion of operating lease liabilities | 8,052 | 8,020 | ||||||||||||||||
| Accrued expenses and other current liabilities | 5,483 | 6,202 | ||||||||||||||||
| Total current liabilities | 85,364 | 106,218 | ||||||||||||||||
| Non-current liabilities: | ||||||||||||||||||
| Long-term debt, net of current portion | 1,726,429 | 1,646,567 | ||||||||||||||||
| Operating lease liabilities, net of current portion | 9,228 | 12,114 | ||||||||||||||||
| Asset retirement obligations | 9,862 | 9,333 | ||||||||||||||||
| Other non-current liabilities | 17,733 | 15,767 | ||||||||||||||||
| Total non-current liabilities | 1,763,252 | 1,683,781 | ||||||||||||||||
| Total liabilities | 1,848,616 | 1,789,999 | ||||||||||||||||
| Equity (Deficit): | ||||||||||||||||||
| Common unitholders - public; 9,284,741 units issued and outstanding at September 30, 2023 (9,257,305 at December 31, 2022) | 165,472 | 172,119 | ||||||||||||||||
| Common unitholders - Delek Holdings; 34,311,278 units issued and outstanding at September 30, 2023 (34,311,278 at December 31, 2022) | (304,624) | (282,819) | ||||||||||||||||
| Total deficit | (139,152) | (110,700) | ||||||||||||||||
| Total liabilities and deficit | $ | 1,709,464 | $ | 1,679,299 | 4 | |||||||||||||
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| Consolidated Statement of Income and Comprehensive Income (Unaudited) | ||||||||||||||||||
| (In thousands, except unit and per unit data) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Net revenues: | ||||||||||||||||||
| Affiliate | $ | 156,411 | $ | 127,150 | $ | 414,403 | $ | 375,270 | ||||||||||
| Third-party | 119,413 | 166,875 | 351,857 | 392,086 | ||||||||||||||
| Net revenues | 275,824 | 294,025 | 766,260 | 767,356 | ||||||||||||||
| Cost of sales: | ||||||||||||||||||
| Cost of materials and other - affiliate | 115,149 | 124,714 | 298,262 | 374,329 | ||||||||||||||
| Cost of materials and other - third party | 35,479 | 53,026 | 106,587 | 105,966 | ||||||||||||||
| Operating expenses (excluding depreciation and amortization presented below) | 32,611 | 25,065 | 85,302 | 62,892 | ||||||||||||||
| Depreciation and amortization | 23,261 | 19,067 | 65,494 | 41,876 | ||||||||||||||
| Total cost of sales | 206,500 | 221,872 | 555,645 | 585,063 | ||||||||||||||
| Operating expenses related to wholesale business (excluding depreciation and amortization presented below) | 392 | 836 | 1,397 | 2,105 | ||||||||||||||
| General and administrative expenses | 5,545 | 11,959 | 19,666 | 30,826 | ||||||||||||||
| Depreciation and amortization | 1,324 | 473 | 3,923 | 1,421 | ||||||||||||||
| Gain on disposal of assets | (491) | (132) | (804) | (120) | ||||||||||||||
| Total operating costs and expenses | 213,270 | 235,008 | 579,827 | 619,295 | ||||||||||||||
| Operating income | 62,554 | 59,017 | 186,433 | 148,061 | ||||||||||||||
| Interest expense, net | 36,901 | 22,559 | 104,581 | 53,621 | ||||||||||||||
| Income from equity method investments | (9,296) | (8,567) | (22,897) | (22,666) | ||||||||||||||
| Other income, net | (3) | (36) | (24) | (39) | ||||||||||||||
| Total non-operating expenses, net | 27,602 | 13,956 | 81,660 | 30,916 | ||||||||||||||
| Income before income tax expense | 34,952 | 45,061 | 104,773 | 117,145 | ||||||||||||||
| Income tax expense | 127 | 387 | 685 | 793 | ||||||||||||||
| Net income attributable to partners | $ | 34,825 | $ | 44,674 | $ | 104,088 | $ | 116,352 | ||||||||||
| Comprehensive income attributable to partners | $ | 34,825 | $ | 44,674 | $ | 104,088 | $ | 116,352 | ||||||||||
| Net income per limited partner unit: | ||||||||||||||||||
| Basic | $ | 0.80 | $ | 1.03 | $ | 2.39 | $ | 2.68 | ||||||||||
| Diluted | $ | 0.80 | $ | 1.03 | $ | 2.39 | $ | 2.67 | ||||||||||
| Weighted average limited partner units outstanding: | ||||||||||||||||||
| Basic | 43,588,316 | 43,485,779 | 43,578,636 | 43,477,801 | ||||||||||||||
| Diluted | 43,604,791 | 43,515,960 | 43,598,547 | 43,499,837 | ||||||||||||||
| Cash distribution per common limited partner unit | $ | 1.045 | $ | 0.990 | $ | 3.105 | $ | 2.955 | Delek Logistics Partners, LP | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| Condensed Consolidated Statements of Cash Flows (In thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (Unaudited) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||
| Net cash provided by operating activities | $ | 46,828 | $ | 164,425 | $ | 110,630 | $ | 297,482 | ||||||||||
| Cash flows from investing activities | ||||||||||||||||||
| Net cash used in investing activities | (741) | (45,760) | (55,634) | (705,087) | ||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||
| Net cash (used in) provided by financing activities | (49,620) | (117,530) | (58,784) | 418,258 | ||||||||||||||
| Net (decrease) increase in cash and cash equivalents | (3,533) | 1,135 | (3,788) | 10,653 | ||||||||||||||
| Cash and cash equivalents at the beginning of the period | 7,715 | 13,810 | 7,970 | 4,292 | ||||||||||||||
| Cash and cash equivalents at the end of the period | $ | 4,182 | $ | 14,945 | $ | 4,182 | $ | 14,945 | 5 | |||||||||
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| Reconciliation of Amounts Reported Under U.S. GAAP | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Reconciliation of Net Income to EBITDA: | ||||||||||||||||||
| Net income | $ | 34,825 | $ | 44,674 | $ | 104,088 | $ | 116,352 | ||||||||||
| Add: | ||||||||||||||||||
| Income tax expense | 127 | 387 | 685 | 793 | ||||||||||||||
| Depreciation and amortization | 24,585 | 19,540 | 69,417 | 43,297 | ||||||||||||||
| Amortization of marketing contract intangible asset | 1,803 | 1,802 | 5,408 | 5,408 | ||||||||||||||
| Interest expense, net | 36,901 | 22,559 | 104,581 | 53,621 | ||||||||||||||
| EBITDA | $ | 98,241 | $ | 88,962 | $ | 284,179 | $ | 219,471 | ||||||||||
| Reconciliation of net cash from operating activities to distributable cash flow: | ||||||||||||||||||
| Net cash provided by operating activities | $ | 46,828 | $ | 164,425 | $ | 110,630 | $ | 297,482 | ||||||||||
| Changes in assets and liabilities | 16,439 | (94,450) | 81,368 | (115,358) | ||||||||||||||
| Non-cash lease expense | (2,960) | (2,100) | (7,407) | (13,584) | ||||||||||||||
| Distributions from equity method investments in investing activities | 3,037 | — | 4,477 | 1,737 | ||||||||||||||
| Regulatory capital expenditures not distributable | (2,069) | (2,143) | (5,924) | (3,183) | ||||||||||||||
| (Refund to) reimbursement from Delek Holdings for capital expenditures | (69) | 19 | 942 | 5 | ||||||||||||||
| Accretion of asset retirement obligations | (177) | (168) | (529) | (415) | ||||||||||||||
| Deferred income taxes | (124) | (76) | (753) | (76) | ||||||||||||||
| Gain on disposal of assets | 491 | 132 | 804 | 120 | ||||||||||||||
| Distributable Cash Flow | $ | 61,396 | $ | 65,639 | $ | 183,608 | $ | 166,728 | ||||||||||
| Transaction costs | — | 4,211 | — | 10,604 | ||||||||||||||
| Distributable Cash Flow, as adjusted | $ | 61,396 | $ | 69,850 | $ | 183,608 | $ | 177,332 | Delek Logistics Partners, LP | |||||||||
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| Distributable Coverage Ratio Calculation | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Distributions to partners of Delek Logistics, LP | $ | 45,558 | $ | 43,057 | $ | 135,334 | $ | 128,493 | ||||||||||
| Distributable cash flow | $ | 61,396 | $ | 65,639 | $ | 183,608 | $ | 166,728 | ||||||||||
| Distributable cash flow coverage ratio (1) | 1.35x | 1.52x | 1.36x | 1.30x | ||||||||||||||
| Distributable cash flow, as adjusted (2) | 61,396 | 69,850 | 183,608 | 177,332 | ||||||||||||||
| Distributable cash flow coverage ratio, as adjusted (3) | 1.35x | 1.62x | 1.36x | 1.38x |
(1) Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period.
(2) Distributable cash flow adjusted to exclude transaction costs associated with the Delaware Gathering Acquisition (formerly 3 Bear).
(3) Distributable cash flow coverage ratio, as adjusted is calculated by dividing distributable cash flow, as adjusted for transaction costs by distributions to be paid in each respective period.
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| Segment Data (Unaudited) | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| Three Months Ended September 30, 2023 | ||||||||||||||||||
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| Gathering and Processing | Wholesale Marketing and Terminalling | Storage and Transportation | Investments in Pipeline Joint Ventures | Corporate and Other | Consolidated | |||||||||||||
| Net revenues: | ||||||||||||||||||
| Affiliate | $ | 55,419 | $ | 70,610 | $ | 30,382 | $ | — | $ | — | $ | 156,411 | ||||||
| Third party | 39,406 | 76,500 | 3,507 | — | — | 119,413 | ||||||||||||
| Total revenue | $ | 94,825 | $ | 147,110 | $ | 33,889 | $ | — | $ | — | $ | 275,824 | ||||||
| Segment EBITDA | $ | 52,906 | $ | 28,135 | $ | 17,914 | $ | 9,288 | $ | (10,002) | $ | 98,241 | ||||||
| Depreciation and amortization | 19,263 | 1,769 | 2,704 | — | 849 | 24,585 | ||||||||||||
| Amortization of customer contract intangible | — | 1,803 | — | — | — | 1,803 | ||||||||||||
| Interest expense, net | — | — | — | — | 36,901 | 36,901 | ||||||||||||
| Income tax benefit | 127 | |||||||||||||||||
| Net income | $ | 34,825 | ||||||||||||||||
| Capital spending | $ | 12,002 | $ | 2,123 | $ | 522 | $ | — | $ | — | $ | 14,647 | ||||||
| Three Months Ended September 30, 2022 | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| Gathering and Processing | Wholesale Marketing and Terminalling | Storage and Transportation | Investments in Pipeline Joint Ventures | Corporate and Other | Consolidated | |||||||||||||
| Net revenues: | ||||||||||||||||||
| Affiliate | $ | 48,377 | $ | 45,162 | $ | 33,611 | $ | 127,150 | ||||||||||
| Third party | 60,233 | 102,703 | 3,939 | — | — | 166,875 | ||||||||||||
| Total revenue | $ | 108,610 | $ | 147,865 | $ | 37,550 | $ | — | $ | — | $ | 294,025 | ||||||
| Segment EBITDA | $ | 56,551 | $ | 20,272 | $ | 14,575 | $ | 8,567 | $ | (11,003) | $ | 88,962 | ||||||
| Depreciation and amortization | 17,779 | 1,628 | 2,087 | — | (1,954) | 19,540 | ||||||||||||
| Amortization of customer contract intangible | — | 1,802 | — | — | — | 1,802 | ||||||||||||
| Interest expense, net | — | — | — | — | 22,559 | 22,559 | ||||||||||||
| Income tax benefit | 387 | |||||||||||||||||
| Net income | $ | 44,674 | ||||||||||||||||
| Capital spending | $ | 30,895 | $ | 1,065 | $ | — | $ | — | $ | — | $ | 31,960 | ||||||
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| --- | ||||||||||||||||||
| Nine Months Ended September 30, 2023 | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| Gathering and Processing | Wholesale Marketing and Terminalling | Storage and Transportation | Investments in Pipeline Joint Ventures | Corporate and Other | Consolidated | |||||||||||||
| Net revenues: | ||||||||||||||||||
| Affiliate | $ | 157,362 | $ | 156,437 | $ | 100,604 | $ | — | $ | — | $ | 414,403 | ||||||
| Third party | 123,132 | 221,809 | 6,916 | — | — | 351,857 | ||||||||||||
| Total revenue | $ | 280,494 | $ | 378,246 | $ | 107,520 | $ | — | $ | — | $ | 766,260 | ||||||
| Segment EBITDA | $ | 161,014 | $ | 78,071 | $ | 46,316 | $ | 22,889 | $ | (24,111) | $ | 284,179 | ||||||
| Depreciation and amortization | 54,511 | 5,338 | 7,109 | — | 2,459 | 69,417 | ||||||||||||
| Amortization of customer contract intangible | — | 5,408 | — | — | — | 5,408 | ||||||||||||
| Interest expense, net | — | — | — | — | 104,581 | 104,581 | ||||||||||||
| Income tax expense | 685 | |||||||||||||||||
| Net income | $ | 104,088 | ||||||||||||||||
| Capital spending | $ | 62,168 | $ | 2,527 | $ | 3,933 | $ | — | $ | — | $ | 68,628 | ||||||
| Nine Months Ended September 30, 2022 | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| Gathering and Processing | Wholesale Marketing and Terminalling | Storage and Transportation | Investments in Pipeline Joint Ventures | Corporate and Other | Consolidated | |||||||||||||
| Net revenues: | ||||||||||||||||||
| Affiliate | $ | 134,315 | $ | 144,004 | $ | 96,951 | $ | — | $ | — | $ | 375,270 | ||||||
| Third party | 81,165 | 300,177 | 10,744 | — | — | 392,086 | ||||||||||||
| Total revenue | $ | 215,480 | $ | 444,181 | $ | 107,695 | $ | — | $ | — | $ | 767,356 | ||||||
| Segment EBITDA | $ | 127,129 | $ | 59,813 | $ | 40,212 | $ | 22,666 | $ | (30,349) | $ | 219,471 | ||||||
| Depreciation and amortization | 32,260 | 4,674 | 6,363 | — | — | 43,297 | ||||||||||||
| Amortization of customer contract intangible | — | 5,408 | — | — | — | 5,408 | ||||||||||||
| Interest expense, net | — | — | — | — | 53,621 | 53,621 | ||||||||||||
| Income tax expense | 793 | |||||||||||||||||
| Net income | $ | 116,352 | ||||||||||||||||
| Capital spending | $ | 66,388 | $ | 1,384 | $ | — | $ | — | $ | — | $ | 67,772 | ||||||
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| Delek Logistics Partners, LP | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| Segment Capital Spending | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| Gathering and Processing | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Regulatory capital spending | $ | 31 | $ | 485 | $ | 31 | $ | 2,692 | ||||||||||
| Sustaining capital spending | 980 | 222 | 980 | 351 | ||||||||||||||
| Growth capital spending | 10,991 | 30,188 | 61,157 | 63,345 | ||||||||||||||
| Segment capital spending | $ | 12,002 | $ | 30,895 | $ | 62,168 | $ | 66,388 | ||||||||||
| Wholesale Marketing and Terminalling | ||||||||||||||||||
| Regulatory capital spending | $ | 292 | $ | — | 371 | 156 | ||||||||||||
| Sustaining capital spending | 1,679 | — | 754 | 12 | ||||||||||||||
| Growth capital spending | 152 | 1,065 | 1,402 | 1,216 | ||||||||||||||
| Segment capital spending | $ | 2,123 | $ | 1,065 | $ | 2,527 | $ | 1,384 | ||||||||||
| Storage and Transportation | ||||||||||||||||||
| Regulatory capital spending | $ | 522 | $ | — | $ | 1,670 | $ | — | ||||||||||
| Sustaining capital spending | — | — | 2,263 | — | ||||||||||||||
| Growth capital spending | — | — | $ | — | $ | — | ||||||||||||
| Segment capital spending | $ | 522 | $ | — | $ | 3,933 | $ | — | ||||||||||
| Consolidated | ||||||||||||||||||
| Regulatory capital spending | $ | 845 | $ | 485 | $ | 2,072 | $ | 2,848 | ||||||||||
| Sustaining capital spending | 2,659 | 222 | 3,997 | 363 | ||||||||||||||
| Growth capital spending | 11,143 | 31,253 | 62,559 | 64,561 | ||||||||||||||
| Total capital spending | $ | 14,647 | $ | 31,960 | $ | 68,628 | $ | 67,772 | Delek Logistics Partners, LP | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| Segment Operating Data (Unaudited) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Gathering and Processing Segment: | ||||||||||||||||||
| Throughputs (average bpd) | ||||||||||||||||||
| El Dorado Assets: | ||||||||||||||||||
| Crude pipelines (non-gathered) | 70,153 | 87,653 | 64,835 | 81,795 | ||||||||||||||
| Refined products pipelines to Enterprise Systems | 63,991 | 65,761 | 54,686 | 63,391 | ||||||||||||||
| El Dorado Gathering System | 14,774 | 14,354 | 13,935 | 16,150 | ||||||||||||||
| East Texas Crude Logistics System | 36,298 | 23,960 | 29,928 | 20,015 | ||||||||||||||
| Midland Gathering System (1): | 248,443 | 121,304 | 230,907 | 107,699 | ||||||||||||||
| Plains Connection System | 250,550 | 184,254 | 248,763 | 166,864 | ||||||||||||||
| Delaware Gathering Assets (2): | ||||||||||||||||||
| Natural Gas Gathering and Processing (Mcfd(3)) | 69,737 | 64,429 | 72,569 | 61,198 | ||||||||||||||
| Crude Oil Gathering (average bpd) | 111,973 | 86,483 | 110,935 | 84,497 | ||||||||||||||
| Water Disposal and Recycling (average bpd) | 99,158 | 69,411 | 104,920 | 66,043 | ||||||||||||||
| Wholesale Marketing and Terminalling Segment: | ||||||||||||||||||
| East Texas - Tyler Refinery sales volumes (average bpd) (4) | 69,178 | 65,396 | 57,894 | 66,473 | ||||||||||||||
| Big Spring marketing throughputs (average bpd) | 81,617 | 74,238 | 78,399 | 76,135 | ||||||||||||||
| West Texas marketing throughputs (average bpd) | 10,692 | 10,082 | 9,871 | 10,023 | ||||||||||||||
| West Texas gross margin per barrel | $ | 4.56 | $ | 4.23 | $ | 5.43 | $ | 3.84 | ||||||||||
| Terminalling throughputs (average bpd) (5) | 121,430 | 142,003 | 116,455 | 138,558 |
(1) Formerly known as the Permian Gathering Assets.
(2) Volumes for the nine months ended September 30, 2022 are for period from June 1 through September 30, 2022 we owned Delaware Gathering Assets.
(3) Mcfd - average thousand cubic feet per day.
(4) Excludes jet fuel and petroleum coke.
(5) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, El Dorado and North Little Rock, Arkansas and Memphis and Nashville, Tennessee terminals.
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Investor Relations and Media/Public Affairs Contact:
Rosy Zuklic, Vice President of Investor Relations and Market Intelligence
investor.relations@delekus.com; rosy.zuklic@delekus.com; 615-767-4344
Information about Delek Logistics Partners, LP can be found on its website (www.deleklogistics.com), investor relations webpage (https://www.deleklogistics.com/investor-relations), news webpage (https://www.deleklogistics.com/news-releases) and its Twitter account (@DelekLogistics).
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