Attached files
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| 8-K - 8-K - Delek Logistics Partners, LP | dkl-20210223.htm |
Exhibit 99.1
Delek Logistics Partners, LP Reports Fourth Quarter 2020 Results
•Reported fourth quarter net income attributable to all partners of $40.7 million; represents an 88% increase y/y
•EBITDA of $64.0 million represented an increase of 48% y/y
•Zero recordable incidents for the full-year 2020
•Fourth quarter distributable cash flow coverage ratio of 1.41x and total leverage ratio of 3.8x
•Declared fourth quarter distribution of $0.910 per limited partner unit; reflects 2.8% percent increase y/y
•Achieved full-year distribution growth target of 5% in 2020; expect another 5% increase in 2021
•Delivered on year-end distribution coverage and leverage ratio targets earlier than expected
•Announced Sherri A. Brillon to the Board of Directors on February 1, 2021, bringing deep industry experience, diversity and fresh perspective
BRENTWOOD, Tenn., February 23, 2021 -- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the fourth quarter 2020. For the three months ended December 31, 2020, Delek Logistics reported net income attributable to all partners of $40.7 million, or $0.94 per diluted common limited partner unit. This compares to net income attributable to all partners of $21.6 million, or $0.52 per diluted common limited partner unit, in the fourth quarter 2019. Net cash from operating activities was $58.4 million in the fourth quarter 2020 compared to $45.8 million in the fourth quarter 2019. Distributable cash flow was $55.9 million in the fourth quarter 2020, compared to $33.0 million in the fourth quarter 2019. 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 fourth quarter 2020, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $64.0 million compared to $43.3 million in the fourth quarter 2019. Results improved on a year-over-year basis primarily due to the drop down of the Big Spring Gathering System and Trucking Assets and a reduction in operating expenses by $7.5 million, partially due to a decrease in contract services. 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: "I'm pleased to announce zero recordable incidents for the year, which is a true testament to our employees and our core values. Our fourth quarter results rounded out a stellar year for our company, as we delivered strong relative stock performance, despite macro headwinds for the industry. Net income and EBITDA in the fourth quarter increased approximately 88% and 48%, respectively, versus last year. Distribution growth in the quarter was 2.8% on a year-over-year basis and we delivered on our commitment of 5% distribution growth on a full-year basis. We expect another 5% increase in distributions in 2021, underpinned by our outlook for continued strong operational performance."
Mr. Yemin continued, "Eliminating the incentive distribution rights (IDRs) last year helped lower our cost of capital and positions our company for the next phase of growth. We exceeded our year-end distribution coverage and leverage ratio targets earlier than expected, creating tremendous flexibility as we progress into 2021."
Distribution and Liquidity
On January 22, 2021, Delek Logistics declared a quarterly cash distribution of $0.910 per common limited partner unit for the fourth quarter 2020, which equates to $3.640 per common limited partner unit on an annualized basis. This distribution was paid on February 9, 2021 to unitholders of record on February 2, 2021. This represents a 0.6% increase from the third quarter 2020 distribution of $0.905 per common limited partner unit, or $3.620 per common limited partner unit on an annualized basis, and a 2.8% increase over Delek Logistics’ fourth quarter 2019 distribution of $0.885 per common limited partner unit, or $3.540 per common limited partner unit annualized. For the fourth quarter 2020, the total cash distribution declared to all partners was approximately $39.5 million, resulting in a distributable cash flow coverage ratio of 1.41x.
As of December 31, 2020, Delek Logistics had total debt of approximately $992.3 million and cash of $4.2 million. Additional borrowing capacity, subject to certain covenants, under the $850.0 million credit facility was $103.4 million. The total leverage ratio was within the requirements of the maximum allowable leverage ratio under the credit facility.
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Financial Results
Revenue for the fourth quarter 2020 was $140.1 million compared to $138.6 million in the prior-year period. The increase in revenue is primarily attributable to the drop downs of the Big Spring Gathering System and Trucking Assets but this was largely offset by lower revenue in the West Texas wholesale business. Total operating expenses were $14.9 million in the fourth quarter 2020, compared to $22.3 million in the fourth quarter 2019. The decrease was primarily due to cost control measures put in place at the end of the first quarter 2020 and a lack of spill related expenses that were included in fourth quarter 2019 results. Total contribution margin was $62.0 million in the fourth quarter 2020 compared to $42.5 million in the fourth quarter 2019, mainly driven by the aforementioned contribution from new assets and lower expenses. General and administrative expenses were $5.6 million for the fourth quarter 2020, compared to $5.8 million in the prior-year period.
Pipelines and Transportation Segment
Contribution margin in the fourth quarter 2020 was $44.0 million compared to $25.2 million in the fourth quarter 2019. The drop downs of the Big Spring Gathering System and the Trucking Assets in the first half of 2020 were the primary drivers behind the year-over-year growth. Operating expenses were $10.3 million in the fourth quarter 2020 compared to $18.7 million in the prior-year period largely driven by a lack of environmental remediation costs that were incurred in the fourth quarter of 2019.
Wholesale Marketing and Terminalling Segment
During the fourth quarter 2020, contribution margin was $18.1 million, compared to $17.3 million in the fourth quarter 2019. The increase in contribution margin was primarily due to higher volumes associated with assets and agreements that support the Delek Big Spring refinery in the fourth quarter of 2020, which was partially offset by lower West Texas wholesale margins.
Average terminalling throughput volume of 153,243 barrels per day during the fourth quarter 2020 decreased on a year-over-year basis from 160,298 barrels per day in the fourth quarter 2019. During the fourth quarter 2020, average volume under the East Texas marketing agreement with Delek US was 73,584 barrels per day compared to 73,016 barrels per day during the fourth quarter 2019.
Fourth Quarter 2020 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its fourth quarter 2020 results on Wednesday, February 24, 2021 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. 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) fourth quarter 2020 earnings conference call on Wednesday, February 24, 2021 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; the impact of the COVID-19 outbreak on the demand for crude oil, refined products and transportation and storage services; 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; 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; 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
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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 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) | ||||||||||||||
| December 31, 2020 | December 31, 2019 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 4,243 | $ | 5,545 | ||||||||||
| Accounts receivable | 15,676 | 13,204 | ||||||||||||
| Accounts receivable from related parties | 5,932 | — | ||||||||||||
| Inventory | 3,127 | 12,617 | ||||||||||||
| Other current assets | 331 | 2,204 | ||||||||||||
| Total current assets | 29,309 | 33,570 | ||||||||||||
| Property, plant and equipment: | ||||||||||||||
| Property, plant and equipment | 692,282 | 461,325 | ||||||||||||
| Less: accumulated depreciation | (227,470) | (166,281) | ||||||||||||
| Property, plant and equipment, net | 464,812 | 295,044 | ||||||||||||
| Equity method investments | 253,675 | 246,984 | ||||||||||||
| Operating lease right-of-use assets | 24,199 | 3,745 | ||||||||||||
| Goodwill | 12,203 | 12,203 | ||||||||||||
| Marketing Contract Intangible, net | 123,788 | 130,999 | ||||||||||||
| Rights-of-way | 36,316 | 15,597 | ||||||||||||
| Other non-current assets | 12,115 | 6,305 | ||||||||||||
| Total assets | $ | 956,417 | $ | 744,447 | ||||||||||
| LIABILITIES AND DEFICIT | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 6,659 | $ | 12,471 | ||||||||||
| Accounts payable to related parties | — | 8,898 | ||||||||||||
| Interest payable | 2,452 | 2,572 | ||||||||||||
| Excise and other taxes payable | 4,969 | 3,941 | ||||||||||||
| Current portion of operating lease liabilities | 8,691 | 1,435 | ||||||||||||
| Accrued expenses and other current liabilities | 5,529 | 5,765 | ||||||||||||
| Total current liabilities | 28,300 | 35,082 | ||||||||||||
| Non-current liabilities: | ||||||||||||||
| Long-term debt | 992,291 | 833,110 | ||||||||||||
| Asset retirement obligations | 6,015 | 5,588 | ||||||||||||
| Deferred tax liabilities | 616 | 215 | ||||||||||||
| Operating lease liabilities, net of current portion | 15,418 | 2,310 | ||||||||||||
| Other non-current liabilities | 22,078 | 19,261 | ||||||||||||
| Total non-current liabilities | 1,036,418 | 860,484 | ||||||||||||
| Total liabilities | 1,064,718 | 895,566 | ||||||||||||
| Equity (Deficit): | ||||||||||||||
| Common unitholders - public; 8,697,468 units issued and outstanding at December 31, 2020 (9,131,579 at December 31, 2019) | 164,614 | 164,436 | ||||||||||||
| Common unitholders - Delek Holdings; 34,745,868 units issued and outstanding at December 31, 2020 (15,294,046 at December 31, 2019) | (272,915) | (310,513) | ||||||||||||
| General partner - 0 units issued and outstanding at December 31, 2020 (498,482 at December 31, 2019) | — | (5,042) | ||||||||||||
| Total deficit | (108,301) | (151,119) | ||||||||||||
| Total liabilities and deficit | $ | 956,417 | $ | 744,447 | ||||||||||
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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 December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Affiliate | $ | 92,927 | $ | 69,484 | $ | 382,666 | $ | 261,014 | |||||||||||||||
| Third-party | 47,185 | 69,126 | 180,752 | 322,978 | |||||||||||||||||||
| Net revenues | 140,112 | 138,610 | 563,418 | 583,992 | |||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of materials and other | 63,217 | 73,760 | 269,094 | 336,473 | |||||||||||||||||||
| Operating expenses (excluding depreciation and amortization presented below) | 14,575 | 22,023 | 53,846 | 71,341 | |||||||||||||||||||
| Depreciation and amortization | 10,780 | 6,443 | 33,737 | 24,893 | |||||||||||||||||||
| Total cost of sales | 88,572 | 102,226 | 356,677 | 432,707 | |||||||||||||||||||
| Operating expenses related to wholesale business (excluding depreciation and amortization presented below) | 281 | 314 | 2,433 | 2,816 | |||||||||||||||||||
| General and administrative expenses | 5,614 | 5,769 | 22,587 | 20,815 | |||||||||||||||||||
| Depreciation and amortization | 499 | 457 | 1,994 | 1,808 | |||||||||||||||||||
| Other operating expense (income), net | 41 | 129 | (66) | 34 | |||||||||||||||||||
| Total operating costs and expenses | 95,007 | 108,895 | 383,625 | 458,180 | |||||||||||||||||||
| Operating income | 45,105 | 29,715 | 179,793 | 125,812 | |||||||||||||||||||
| Interest expense, net | 10,020 | 12,164 | 42,874 | 47,328 | |||||||||||||||||||
| Income from equity method investments | (5,818) | (4,972) | (22,693) | (19,832) | |||||||||||||||||||
| Other expense, net | 30 | 139 | 133 | 600 | |||||||||||||||||||
| Total non-operating expenses, net | 4,232 | 7,331 | 20,314 | 28,096 | |||||||||||||||||||
| Income before income tax expense | 40,873 | 22,384 | 159,479 | 97,716 | |||||||||||||||||||
| Income tax expense | 156 | 746 | 223 | 967 | |||||||||||||||||||
| Net income attributable to partners | $ | 40,717 | $ | 21,638 | $ | 159,256 | $ | 96,749 | |||||||||||||||
| Comprehensive income attributable to partners | $ | 40,717 | $ | 21,638 | $ | 159,256 | $ | 96,749 | |||||||||||||||
| Less: General partner's interest in net income, including incentive distribution rights | — | 8,834 | 18,724 | 33,080 | |||||||||||||||||||
| Limited partners' interest in net income | $ | 40,717 | $ | 12,804 | $ | 140,532 | $ | 63,669 | |||||||||||||||
| Net income per limited partner unit: | |||||||||||||||||||||||
| Common units - basic | $ | 0.94 | $ | 0.52 | $ | 4.18 | $ | 2.61 | |||||||||||||||
| Common units - diluted | $ | 0.94 | $ | 0.52 | $ | 4.18 | $ | 2.61 | |||||||||||||||
| Weighted average limited partner units outstanding: | |||||||||||||||||||||||
| Common units - basic | 43,435,153 | 24,419,189 | 33,594,284 | 24,413,294 | |||||||||||||||||||
| Common units - diluted | 43,441,693 | 24,424,715 | 33,597,418 | 24,418,641 | |||||||||||||||||||
| Cash distribution per limited partner unit | $ | 0.910 | $ | 0.885 | $ | 3.605 | $ | 3.440 | |||||||||||||||
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| Delek Logistics Partners, LP | ||||||||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) | ||||||||||||||
| Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net income | $ | 159,256 | $ | 96,749 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | 35,731 | 26,701 | ||||||||||||
| Non-cash lease expense | 6,075 | 193 | ||||||||||||
| Amortization of customer contract intangible assets | 7,211 | 7,211 | ||||||||||||
| Amortization of deferred revenue | (1,888) | (1,688) | ||||||||||||
| Amortization of deferred financing costs and debt discount | 2,412 | 2,629 | ||||||||||||
| Accretion of asset retirement obligations | 427 | 397 | ||||||||||||
| Income from equity method investments | (22,693) | (19,832) | ||||||||||||
| Dividends from equity method investments | 25,436 | 16,108 | ||||||||||||
| Gain on disposal of assets | (66) | (197) | ||||||||||||
| Deferred income taxes | 401 | 496 | ||||||||||||
| Other non-cash adjustments | 491 | 1,061 | ||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Accounts receivable | (2,472) | 8,382 | ||||||||||||
| Inventories and other current assets | 11,363 | (7,702) | ||||||||||||
| Accounts payable and other current liabilities | (13,479) | (4,836) | ||||||||||||
| Accounts receivable/payable to related parties | (14,628) | 1,065 | ||||||||||||
| Non-current assets and liabilities, net | (561) | 3,662 | ||||||||||||
| Changes in assets and liabilities | (19,777) | 571 | ||||||||||||
| Net cash provided by operating activities | 193,016 | 130,399 | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Asset acquisitions from Delek Holdings, net of assumed liabilities | (100,527) | — | ||||||||||||
| Purchases of property, plant and equipment | (13,271) | (9,070) | ||||||||||||
| Proceeds from sales of property, plant and equipment | 107 | 144 | ||||||||||||
| Purchases of intangible assets | (13) | — | ||||||||||||
| Distributions from equity method investments | 2,741 | 804 | ||||||||||||
| Equity method investment contributions | (12,175) | (139,294) | ||||||||||||
| Net cash used in investing activities | (123,138) | (147,416) | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from issuance of additional units to maintain 2% General Partner interest | 10 | 8 | ||||||||||||
| Distributions to general partner | (27,635) | (31,654) | ||||||||||||
| Distributions to common unitholders - public | (31,532) | (30,626) | ||||||||||||
| Distributions to common unitholders - Delek Holdings | (77,665) | (51,388) | ||||||||||||
| Distributions to Delek Holdings unitholders and general partner related to Trucking Assets Acquisition | (47,558) | — | ||||||||||||
| Distribution to general partner for conversion of its interest and IDR elimination | (45,000) | — | ||||||||||||
| Proceeds from revolving credit facility | 599,600 | 564,700 | ||||||||||||
| Payments on revolving credit facility | (441,400) | (433,000) | ||||||||||||
| Net cash (used in) provided by financing activities | (71,180) | 18,040 | ||||||||||||
| Net (decrease) increase in cash and cash equivalents | (1,302) | 1,023 | ||||||||||||
| Cash and cash equivalents at the beginning of the period | 5,545 | 4,522 | ||||||||||||
| Cash and cash equivalents at the end of the period | $ | 4,243 | $ | 5,545 | ||||||||||
| Supplemental disclosures of cash flow information: | ||||||||||||||
| Cash paid during the period for: | ||||||||||||||
| Interest | $ | 40,582 | $ | 44,791 | ||||||||||
| Income taxes | $ | 98 | $ | 144 | ||||||||||
| Non-cash investing activities: | ||||||||||||||
| Increase (decrease) in accrued capital expenditures | $ | 198 | $ | 917 | ||||||||||
| Equity issuance to Delek Holdings unitholders in connection with Big Spring Gathering Assets Acquisition | $ | 109,513 | $ | — | ||||||||||
| Non-cash financing activities: | ||||||||||||||
| Sponsor contribution of property, plant and equipment | $ | 2,938 | $ | — | ||||||||||
| Non-cash lease liability arising from obtaining right of use assets during the period | $ | 32,090 | $ | 1,285 | ||||||||||
| Non-cash lease liability arising from recognition of right of use assets upon adoption of ASU 2016-02 | $ | — | $ | 2,654 | ||||||||||
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Reconciliation of Amounts Reported Under U.S. GAAP | |||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Reconciliation of Net Income to EBITDA: | |||||||||||||||||||||||
| Net income | $ | 40,717 | $ | 21,638 | $ | 159,256 | $ | 96,749 | |||||||||||||||
| Add: | |||||||||||||||||||||||
| Income tax expense | 156 | 746 | 223 | 967 | |||||||||||||||||||
| Depreciation and amortization | 11,279 | 6,900 | 35,731 | 26,701 | |||||||||||||||||||
| Amortization of customer contract intangible assets | 1,803 | 1,803 | 7,211 | 7,211 | |||||||||||||||||||
| Interest expense, net | 10,020 | 12,164 | 42,874 | 47,328 | |||||||||||||||||||
| EBITDA | $ | 63,975 | $ | 43,251 | $ | 245,295 | $ | 178,956 | |||||||||||||||
| Reconciliation of net cash from operating activities to distributable cash flow: | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 58,362 | $ | 45,809 | $ | 193,016 | $ | 130,399 | |||||||||||||||
| Changes in assets and liabilities | 1,236 | (14,793) | 19,777 | (571) | |||||||||||||||||||
| Non-cash lease expense | (3,839) | 2,361 | (6,075) | (193) | |||||||||||||||||||
| Distributions from equity method investments in investing activities | 18 | — | 2,741 | 804 | |||||||||||||||||||
| Maintenance and regulatory capital expenditures | (536) | (2,947) | (1,296) | (8,569) | |||||||||||||||||||
Reimbursement from Delek Holdings for capital expenditures | 182 | 3,221 | 263 | 5,828 | |||||||||||||||||||
| Accretion of asset retirement obligations | (107) | (99) | (427) | (397) | |||||||||||||||||||
| Deferred income taxes | 589 | (611) | (401) | (496) | |||||||||||||||||||
| Other operating (expense) income, net | (41) | 102 | 66 | 197 | |||||||||||||||||||
| Distributable Cash Flow | $ | 55,864 | $ | 33,043 | $ | 207,664 | $ | 127,002 | |||||||||||||||
Delek Logistics Partners, LP | |||||||||||||||||||||||
Distributable Coverage Ratio Calculation | |||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| Distributions to partners of Delek Logistics, LP | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
| Limited partners' distribution on common units | $ | 39,533 | $ | 21,616 | $ | 127,070 | $ | 83,873 | |||||||||||||||
| General partner's distributions | — | 444 | 986 | 1,711 | |||||||||||||||||||
| General partner's incentive distribution rights | — | 8,573 | 17,632 | 31,781 | |||||||||||||||||||
Total distributions to be paid (1) | $ | 39,533 | $ | 30,633 | $ | 145,688 | $ | 117,365 | |||||||||||||||
| Distributable cash flow | $ | 55,864 | $ | 33,043 | $ | 207,664 | $ | 127,002 | |||||||||||||||
Distributable cash flow coverage ratio (2) | 1.41x | 1.08x | 1.43x | 1.08x | |||||||||||||||||||
(1) The distributions for the three months ended and year ended December 31, 2020 reflect the impact of the distribution waiver that waived all of the distributions for the first quarter of 2020 on the 5.0 million Additional Units, related to the Big Spring Gathering Assets transaction, with respect to base distributions and the IDRs. In addition, the distributions for the three months ended and year ended December 31, 2020 reflect the waiver of distributions in respect of the IDRs associated with the Additional Units for at least two years. Subsequently, the IDRs were eliminated in the Restructuring Transaction on August 13, 2020.
(2) 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 December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Pipelines and Transportation | |||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Affiliate | $ | 65,588 | $ | 42,517 | $ | 233,873 | $ | 155,211 | |||||||||||||||
| Third party | 3,009 | 6,374 | 17,596 | 23,107 | |||||||||||||||||||
| Total pipelines and transportation | 68,597 | 48,891 | 251,469 | 178,318 | |||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of materials and other | 14,312 | 4,955 | 45,934 | 22,826 | |||||||||||||||||||
| Operating expenses (excluding depreciation and amortization) | 10,331 | 18,718 | 42,267 | 54,827 | |||||||||||||||||||
| Segment contribution margin | $ | 43,954 | $ | 25,218 | $ | 163,268 | $ | 100,665 | |||||||||||||||
| Total Assets | $ | 723,317 | $ | 509,666 | |||||||||||||||||||
| Wholesale Marketing and Terminalling | |||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
Affiliates (1) | $ | 27,339 | $ | 26,967 | $ | 148,793 | $ | 105,803 | |||||||||||||||
| Third party | 44,176 | 62,752 | 163,156 | 299,871 | |||||||||||||||||||
| Total wholesale marketing and terminalling | 71,515 | 89,719 | 311,949 | 405,674 | |||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of materials and other | 48,905 | 68,805 | 223,160 | 313,647 | |||||||||||||||||||
| Operating expenses (excluding depreciation and amortization) | 4,525 | 3,619 | 14,012 | 19,330 | |||||||||||||||||||
| Segment contribution margin | $ | 18,085 | $ | 17,295 | $ | 74,777 | $ | 72,697 | |||||||||||||||
| Total Assets | $ | 206,918 | 214,259 | ||||||||||||||||||||
| Consolidated | |||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Affiliates | $ | 92,927 | $ | 69,484 | $ | 382,666 | $ | 261,014 | |||||||||||||||
| Third party | 47,185 | 69,126 | 180,752 | 322,978 | |||||||||||||||||||
| Total consolidated | 140,112 | 138,610 | 563,418 | 583,992 | |||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of materials and other | 63,217 | 73,760 | 269,094 | 336,473 | |||||||||||||||||||
| Operating expenses (excluding depreciation and amortization presented below) | 14,856 | 22,337 | 56,279 | 74,157 | |||||||||||||||||||
| Contribution margin | 62,039 | 42,513 | 238,045 | 173,362 | |||||||||||||||||||
| General and administrative expenses | 5,614 | 5,769 | 22,587 | 20,815 | |||||||||||||||||||
| Depreciation and amortization | 11,279 | 6,900 | 35,731 | 26,701 | |||||||||||||||||||
| Other operating expense (income), net | 41 | 129 | (66) | 34 | |||||||||||||||||||
| Operating income | $ | 45,105 | $ | 29,715 | $ | 179,793 | $ | 125,812 | |||||||||||||||
| Other Assets | $ | 26,182 | $ | 20,522 | |||||||||||||||||||
| Total Assets | $ | 956,417 | $ | 744,447 | |||||||||||||||||||
(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 December 31, | Year Ended December 31, | ||||||||||||||||||||||
| Pipelines and Transportation | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
| Maintenance capital spending | $ | 1,265 | $ | 2,434 | $ | 1,732 | $ | 6,435 | |||||||||||||||
| Discretionary capital spending | 2,942 | 40 | 5,899 | 165 | |||||||||||||||||||
| Segment capital spending | $ | 4,207 | $ | 2,474 | 7,631 | 6,600 | |||||||||||||||||
| Wholesale Marketing and Terminalling | |||||||||||||||||||||||
Maintenance capital spending | $ | 232 | $ | 1,199 | 1,712 | 2,588 | |||||||||||||||||
| Discretionary capital spending | 4,092 | 295 | 6,106 | 799 | |||||||||||||||||||
| Segment capital spending | $ | 4,324 | $ | 1,494 | 7,818 | 3,387 | |||||||||||||||||
| Consolidated | |||||||||||||||||||||||
| Maintenance capital spending | $ | 1,497 | $ | 3,633 | 3,444 | 9,023 | |||||||||||||||||
| Discretionary capital spending | 7,034 | 335 | 12,005 | 964 | |||||||||||||||||||
| Total capital spending | $ | 8,531 | $ | 3,968 | $ | 15,449 | $ | 9,987 | |||||||||||||||
Delek Logistics Partners, LP | |||||||||||||||||||||||
Segment Data (Unaudited) | |||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Pipelines and Transportation Segment: | |||||||||||||||||||||||
| Throughputs (average bpd) | |||||||||||||||||||||||
| El Dorado Assets: | |||||||||||||||||||||||
| Crude pipelines (non-gathered) | 66,521 | 69,910 | 74,179 | 49,485 | |||||||||||||||||||
| Refined products pipelines to Enterprise Systems | 48,900 | 53,960 | 53,702 | 37,716 | |||||||||||||||||||
| El Dorado Gathering System | 13,308 | 15,919 | 13,466 | 15,325 | |||||||||||||||||||
| East Texas Crude Logistics System | 16,719 | 16,612 | 15,960 | 19,927 | |||||||||||||||||||
Big Spring Gathering System (1) | 76,795 | — | 82,817 | — | |||||||||||||||||||
Plains Connection System (1) | 120,304 | — | 104,770 | — | |||||||||||||||||||
| Wholesale Marketing and Terminalling Segment: | |||||||||||||||||||||||
East Texas - Tyler Refinery sales volumes (average bpd) (2) | 73,584 | 73,016 | 71,182 | 74,206 | |||||||||||||||||||
| Big Spring marketing throughputs (average bpd) | 84,219 | 79,985 | 76,345 | 82,695 | |||||||||||||||||||
| West Texas marketing throughputs (average bpd) | 9,915 | 9,972 | 11,264 | 11,075 | |||||||||||||||||||
| West Texas gross margin per barrel | $ | 2.36 | $ | 3.12 | $ | 2.37 | $ | 4.44 | |||||||||||||||
| Terminalling throughputs (average bpd) | 153,243 | 160,298 | 147,251 | 160,075 | |||||||||||||||||||
(1) Throughput for the Big Spring Gathering System and the Plains Connection System are for 275 days we owned the assets following the Big Spring Gathering Assets Acquisition effective March 31, 2020.
(2) Excludes jet fuel and petroleum coke.
Investor/Media Relations Contacts:
Blake Fernandez, Senior Vice President of Investor Relations and Market Intelligence, 615-224-1312
Media/Public Affairs Contact:
Michael P. Ralsky, Vice President - Government Affairs, Public Affairs & Communications, 615-435-1407
Information about Delek Logistics Partners, LP can be found on its website (www.deleklogistics.com), investor relations webpage (ir.deleklogistics.com), news webpage (www.deleklogistics.com/news) and its Twitter account (@DelekLogistics).
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