dkl-202205030001552797false00015527972022-05-032022-05-03
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
May 3, 2022
Date of Report (Date of earliest event reported)
DELEK LOGISTICS PARTNERS, LP
(Exact name of registrant as specified in its charter)
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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) |
(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:
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| 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 May 3, 2022, Delek Logistics Partners, LP (the “Partnership”) announced its financial results for the quarter ended March 31, 2022. 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.
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| (d) | | Exhibits. |
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| 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.
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Date: May 3, 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) |
Document
Delek Logistics Partners, LP Reports First Quarter 2022 Results
•Reported first quarter net income attributable to all partners of $39.5 million
•EBITDA of $66.0 million represented an increase of 12% y/y
•First quarter distributable cash flow coverage ratio of 1.21x and total leverage ratio of approximately 3.3x
•Declared first quarter distribution of $0.98 per limited partner unit; reflects 6.5% increase y/y
•Planned acquisition of 3Bear builds size and scale, offers geographic and product mix diversity and increases 3rd party revenue
•Permian Gathering business witnessing strong producer activity
•Delivered 37 consecutive quarters of distribution growth with recent quarterly increase to $0.98/unit
•DKL volumes expected to benefit from a lack of major planned turnaround activity in Delek US system in 2022
BRENTWOOD, Tenn., May 3, 2022 -- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the first quarter 2022. For the three months ended March 31, 2022, Delek Logistics reported net income attributable to all partners of $39.5 million, or $0.91 per diluted common limited partner unit. This compares to net income attributable to all partners of $36.3 million, or $0.83 per diluted common limited partner unit, in the first quarter 2021. Net cash from operating activities was $47.9 million in the first quarter 2022 compared to $61.7 million in the first quarter 2021. Distributable cash flow was $51.7 million in the first quarter 2022, compared to $52.5 million in the first quarter 2021.
For the first quarter 2022, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $66.0 million compared to $58.7 million in the first quarter 2021.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek Logistics' general partner, remarked: "Strong producer demand is prompting significant volume growth in our Permian Gathering System and we expect momentum to continue throughout the year. Complementing our existing gathering business is the planned acquisition of 3Bear Delaware Holding – NM, LLC. This transaction improves size and scale, increases third party revenue, diversifies geographic footprint within the Permian Basin, expands the product mix and is expected to be immediately accretive to distributable cash flow ratios."
Mr. Yemin continued, “With ongoing consolidation in the MLP space, DKL should screen more attractively to investors as a larger, more diversified company with increasing third-party revenue and a long track record of increasing shareholder returns. The recent announcement to increase the quarterly distribution to $0.98/unit marks the 37th consecutive increase in the quarterly distribution. The outlook for the company is bright with both organic and inorganic growth opportunities underway and a lack of major turnaround activity planned at Delek US in 2022, should translate into strong volumes throughout our system this year."
Distribution and Liquidity
On April 25, 2022, Delek Logistics declared a quarterly cash distribution of $0.98 per common limited partner unit for the first quarter 2022, which equates to $3.92 per common limited partner unit on an annualized basis. This distribution will be paid on May 12, 2022 to unitholders of record on May 5, 2022. This represents a 0.5% increase from the fourth quarter 2021 distribution of $0.975 per common limited partner unit, or $3.90 per common limited partner unit on an annualized basis, and a 6.5% increase over Delek Logistics’ first quarter 2021 distribution of $0.92 per common limited partner unit, or $3.68 per common limited partner unit annualized. For the first quarter 2022, the total cash distribution declared to all partners was approximately $42.6 million, resulting in a distributable cash flow coverage ratio of 1.21x.
As of March 31, 2022, Delek Logistics had total debt of approximately $905.5 million and cash of $2.7 million. Additional borrowing capacity, subject to certain covenants, under the $850.0 million credit facility was $585.9 million. The total leverage ratio was well within the requirements of the maximum allowable leverage ratio under the credit facility.
Financial Results
Contribution margin in the first quarter 2022 was $62.3 million compared to $56.9 million in the first quarter 2021. Overall performance benefited from an increase in utilization on assets supporting the Big Spring Refinery and increased throughput on joint venture pipelines.
Pipelines and Transportation Segment
Contribution margin in the first quarter 2022 was $43.2 million which is broadly in line compared to $41.7 million in the first quarter 2021.
Wholesale Marketing and Terminalling Segment
During the first quarter 2022, contribution margin was $19.0 million compared to $15.2 million in the first quarter 2021. The increase was primarily driven by strong volumes at the Big Spring marketing and terminalling facilities.
Investments in Pipeline Joint Ventures Segment
During the first quarter 2022, income from equity method investments was $7.0 million compared to $4.0 million in the first quarter 2021, primarily driven by increased volumes at both Caddo and Red River.
First Quarter 2022 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its first quarter 2022 results on Tuesday, May 3, 2022 at 9:30 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 Holdings, Inc.'s (NYSE: DK) ("Delek US") first quarter 2022 earnings conference call on Tuesday, May 3, 2022 at 11:00 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 and owns, operates, acquires and constructs crude oil, natural gas 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; 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; 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 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) |
| | March 31, 2022 | | December 31, 2021 |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 2,726 | | | $ | 4,292 | |
| Accounts receivable | | 20,350 | | | 15,384 | |
| | | | |
| Inventory | | 1,779 | | | 2,406 | |
| Other current assets | | 1,466 | | | 951 | |
| Total current assets | | 26,321 | | | 23,033 | |
| Property, plant and equipment: | | | | |
| Property, plant and equipment | | 724,921 | | | 715,870 | |
| Less: accumulated depreciation | | (276,587) | | | (266,482) | |
| Property, plant and equipment, net | | 448,334 | | | 449,388 | |
| Equity method investments | | 249,893 | | | 250,030 | |
| Operating lease right-of-use assets | | 19,135 | | | 20,933 | |
| Goodwill | | 12,203 | | | 12,203 | |
| Marketing contract intangible, net | | 114,774 | | | 116,577 | |
| Rights-of-way | | 39,705 | | | 37,280 | |
| Other non-current assets | | 24,901 | | | 25,627 | |
| Total assets | | $ | 935,266 | | | $ | 935,071 | |
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| LIABILITIES AND DEFICIT | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 12,627 | | | $ | 8,160 | |
| Accounts payable to related parties | | 50,282 | | | 64,423 | |
| Interest payable | | 16,317 | | | 5,024 | |
| Excise and other taxes payable | | 4,023 | | | 5,280 | |
| Current portion of operating lease liabilities | | 6,688 | | | 6,811 | |
| Accrued expenses and other current liabilities | | 6,327 | | | 7,117 | |
| Total current liabilities | | 96,264 | | | 96,815 | |
| Non-current liabilities: | | | | |
| Long-term debt | | 905,536 | | | 898,970 | |
| Asset retirement obligations | | 6,600 | | | 6,476 | |
| | | | |
| Operating lease liabilities, net of current portion | | 12,401 | | | 14,071 | |
| Other non-current liabilities | | 20,987 | | | 22,731 | |
| Total non-current liabilities | | 945,524 | | | 942,248 | |
| Total liabilities | | 1,041,788 | | | 1,039,063 | |
| Equity (Deficit): | | | | |
| Common unitholders - public; 9,162,504 units issued and outstanding at March 31, 2022 (8,774,053 at December 31, 2021) | | 170,696 | | | 166,067 | |
| Common unitholders - Delek Holdings; 34,311,278 units issued and outstanding at March 31, 2022 (34,696,800 at December 31, 2021) | | (277,218) | | | (270,059) | |
| Total deficit | | (106,522) | | | (103,992) | |
| Total liabilities and deficit | | $ | 935,266 | | | $ | 935,071 | |
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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 March 31, |
| | | | | | 2022 | | 2021 |
| Net revenues: | | | | | | | |
| Affiliate | | | | | $ | 123,754 | | | $ | 96,194 | |
| Third-party | | | | | 82,827 | | | 56,719 | |
| Net revenues | | | | | 206,581 | | | 152,913 | |
| Cost of sales: | | | | | | | |
| Cost of materials and other | | | | | 126,194 | | | 81,171 | |
| Operating expenses (excluding depreciation and amortization presented below) | | | | | 17,543 | | | 14,250 | |
| Depreciation and amortization | | | | | 9,861 | | | 10,247 | |
| Total cost of sales | | | | | 153,598 | | | 105,668 | |
| Operating expenses related to wholesale business (excluding depreciation and amortization presented below) | | | | | 564 | | | 561 | |
| General and administrative expenses | | | | | 5,095 | | | 4,105 | |
| Depreciation and amortization | | | | | 474 | | | 492 | |
| Other operating expense (income), net | | | | | 12 | | | (83) | |
| Total operating costs and expenses | | | | | 159,743 | | | 110,743 | |
| Operating income | | | | | 46,838 | | | 42,170 | |
| Interest expense, net | | | | | 14,250 | | | 9,737 | |
| Income from equity method investments | | | | | (7,026) | | | (4,049) | |
| Other (income) expense, net | | | | | (1) | | | 31 | |
| Total non-operating expenses, net | | | | | 7,223 | | | 5,719 | |
| Income before income tax expense | | | | | 39,615 | | | 36,451 | |
| Income tax expense | | | | | 101 | | | 184 | |
| Net income attributable to partners | | | | | $ | 39,514 | | | $ | 36,267 | |
| Comprehensive income attributable to partners | | | | | $ | 39,514 | | | $ | 36,267 | |
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| Net income per limited partner unit: | | | | | | | |
| Common units - basic | | | | | $ | 0.91 | | | $ | 0.83 | |
| Common units - diluted | | | | | $ | 0.91 | | | $ | 0.83 | |
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| Weighted average limited partner units outstanding: | | | | | | | |
| Common units - basic | | | | | 43,471,536 | | | 43,443,336 | |
| Common units - diluted | | | | | 43,481,572 | | | 43,449,059 | |
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| Cash distribution per limited partner unit | | | | | $ | 0.98 | | | $ | 0.92 | |
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| Delek Logistics Partners, LP |
| Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
| | Three Months Ended March 31, |
| | | 2022 | | 2021 |
| Cash flows from operating activities | | | | |
| Net income | | $ | 39,514 | | | $ | 36,267 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| Depreciation and amortization | | 10,335 | | | 10,739 | |
| Non-cash lease expense | | 1,798 | | | 2,018 | |
| Amortization of customer contract intangible assets | | 1,803 | | | 1,803 | |
| Amortization of deferred revenue | | (444) | | | (538) | |
| Amortization of deferred financing costs and debt discount | | 847 | | | 625 | |
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| Income from equity method investments | | (7,026) | | | (4,049) | |
| Dividends from equity method investments | | 6,613 | | | 3,730 | |
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| Other non-cash adjustments | | 492 | | | 274 | |
| Changes in assets and liabilities: | | | | |
| Accounts receivable | | (4,966) | | | 3,354 | |
| Inventories and other current assets | | 112 | | | 1,020 | |
| Accounts payable and other current liabilities | | 14,157 | | | (390) | |
| Accounts receivable/payable to related parties | | (14,141) | | | 7,359 | |
| Non-current assets and liabilities, net | | (1,174) | | | (480) | |
| Changes in assets and liabilities | | (6,012) | | | 10,863 | |
| Net cash provided by operating activities | | 47,920 | | | 61,732 | |
| Cash flows from investing activities | | | | |
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| Purchases of property, plant and equipment | | (10,613) | | | (6,119) | |
| Proceeds from sales of property, plant and equipment | | 12 | | | 83 | |
| Purchases of intangible assets | | (2,425) | | | (474) | |
| Distributions from equity method investments | | 550 | | | 3,924 | |
| Equity method investment contributions | | — | | | (1,379) | |
| Net cash used in investing activities | | (12,476) | | | (3,965) | |
| Cash flows from financing activities | | | | |
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| Distributions to common unitholders - public | | (8,570) | | | (7,914) | |
| Distributions to common unitholders - Delek Holdings | | (33,830) | | | (31,619) | |
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| Proceeds from revolving credit facility | | 113,600 | | | 77,500 | |
| Payments on revolving credit facility | | (107,500) | | | (86,600) | |
| | | | |
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| Payments on finance lease | | (710) | | | — | |
| Net cash used in financing activities | | (37,010) | | | (48,633) | |
| Net (decrease) increase in cash and cash equivalents | | (1,566) | | | 9,134 | |
| Cash and cash equivalents at the beginning of the period | | 4,292 | | | 4,243 | |
| Cash and cash equivalents at the end of the period | | $ | 2,726 | | | $ | 13,377 | |
| Supplemental disclosures of cash flow information: | | | | |
| Cash paid during the period for: | | | | |
| Interest | | $ | 2,110 | | | $ | 4,937 | |
| | | | |
| Non-cash investing activities: | | | | |
| Increase in accrued capital expenditures in accounts payable/receivable related parties | | $ | — | | | $ | 3,119 | |
| Decrease in accrued capital expenditures and other | | $ | (1,527) | | | $ | (1,439) | |
| | | | |
| Non-cash financing activities: | | | | |
| | | | |
| Non-cash lease liability arising from obtaining right of use assets during the period | | $ | — | | | $ | 2,623 | |
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Delek Logistics Partners, LP |
Reconciliation of Amounts Reported Under U.S. GAAP |
| (In thousands) |
| | | Three Months Ended March 31, |
| | | | | 2022 | | 2021 |
| Reconciliation of Net Income to EBITDA: | | | | | | | |
| Net income | | | | | $ | 39,514 | | | $ | 36,267 | |
| Add: | | | | | | | |
| Income tax expense | | | | | 101 | | | 184 | |
| Depreciation and amortization | | | | | 10,335 | | | 10,739 | |
| Amortization of customer contract intangible assets | | | | | 1,803 | | | 1,803 | |
| Interest expense, net | | | | | 14,250 | | | 9,737 | |
| EBITDA | | | | | $ | 66,003 | | | $ | 58,730 | |
| | | | | | | |
| Reconciliation of net cash from operating activities to distributable cash flow: | | | | | | | |
| Net cash provided by operating activities | | | | | $ | 47,920 | | | $ | 61,732 | |
| Changes in assets and liabilities | | | | | 6,012 | | | (10,863) | |
| Non-cash lease expense | | | | | (1,798) | | | (2,018) | |
| Distributions from equity method investments in investing activities | | | | | 550 | | | 3,924 | |
| Maintenance and regulatory capital expenditures | | | | | (807) | | | (515) | |
(Refund to) reimbursement from Delek Holdings for capital expenditures | | | | | (15) | | | 359 | |
| Accretion of asset retirement obligations | | | | | (124) | | | (115) | |
| Deferred income taxes | | | | | — | | | (65) | |
| Other operating (expense) income, net | | | | | (12) | | | 83 | |
| Distributable Cash Flow | | | | | $ | 51,726 | | | $ | 52,522 | |
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Delek Logistics Partners, LP |
Distributable Coverage Ratio Calculation |
| (In thousands) |
| | | | Three Months Ended March 31, |
| Distributions to partners of Delek Logistics, LP | | | | | 2022 | | 2021 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Total distributions to be paid | | | | | $ | 42,604 | | | $ | 39,968 | |
| | | | | | | |
| Distributable cash flow | | | | | $ | 51,726 | | | $ | 52,522 | |
Distributable cash flow coverage ratio (1) | | | | | 1.21x | | 1.31x |
(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 March 31, |
| | | | | 2022 | | 2021 |
| Pipelines and Transportation | | | | | | | |
| Net revenues: | | | | | | | |
| Affiliate | | | | | $ | 71,023 | | | $ | 63,048 | |
| Third party | | | | | 4,782 | | | 1,927 | |
| Total pipelines and transportation | | | | | 75,805 | | | 64,975 | |
| Cost of sales: | | | | | | | |
| Cost of materials and other | | | | | 19,602 | | | 13,079 | |
| Operating expenses (excluding depreciation and amortization) | | | | | 12,958 | | | 10,172 | |
| Segment contribution margin | | | | | $ | 43,245 | | | $ | 41,724 | |
Capital spending (1) | | | | | $ | 8,149 | | | $ | 5,845 | |
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| Wholesale Marketing and Terminalling | | | | | | | |
| Net revenues: | | | | | | | |
Affiliates (2) | | | | | $ | 52,731 | | | $ | 33,146 | |
| Third party | | | | | 78,045 | | | 54,792 | |
| Total wholesale marketing and terminalling | | | | | 130,776 | | | 87,938 | |
| Cost of sales: | | | | | | | |
| Cost of materials and other | | | | | 106,592 | | | 68,092 | |
| Operating expenses (excluding depreciation and amortization) | | | | | 5,149 | | | 4,639 | |
| Segment contribution margin | | | | | $ | 19,035 | | | $ | 15,207 | |
Capital spending (1) | | | | | $ | 937 | | | $ | 1,954 | |
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| Investments in Pipeline Joint Ventures | | | | | | | |
| Income from equity method investments | | | | | $ | (7,026) | | | $ | (4,049) | |
| Equity method investments contributions | | | | | $ | — | | | $ | (1,379) | |
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| Consolidated | | | | | | | |
| Net revenues: | | | | | | | |
| Affiliates | | | | | $ | 123,754 | | | $ | 96,194 | |
| Third party | | | | | 82,827 | | | 56,719 | |
| Total consolidated | | | | | 206,581 | | | 152,913 | |
| Cost of sales: | | | | | | | |
| Cost of materials and other | | | | | 126,194 | | | 81,171 | |
| Operating expenses (excluding depreciation and amortization presented below) | | | | | 18,107 | | | 14,811 | |
| Contribution margin | | | | | 62,280 | | | 56,931 | |
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| General and administrative expenses | | | | | 5,095 | | | 4,105 | |
| Depreciation and amortization | | | | | 10,335 | | | 10,739 | |
| Other operating expense (income), net | | | | | 12 | | | (83) | |
| Operating income | | | | | 46,838 | | | 42,170 | |
| Interest expense, net | | | | | 14,250 | | | 9,737 | |
| Income from equity method investments | | | | | (7,026) | | | (4,049) | |
| Other (income) expense, net | | | | | (1) | | | 31 | |
| Total non-operating expenses, net | | | | | 7,223 | | | 5,719 | |
| Income before income tax expense | | | | | 39,615 | | | 36,451 | |
| Income tax expense | | | | | 101 | | | 184 | |
| Net income attributable to partners | | | | | $ | 39,514 | | | $ | 36,267 | |
Capital spending (1) | | | | | $ | 9,086 | | | $ | 7,799 | |
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(1) There were no capital contributions to equity method investments for the three months ended March 31, 2022. Capital spending for the three months ended March 31, 2021 excludes contributions to equity method investments in the amount of $1.4 million.
(2) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the Marketing Contract Intangible Acquisition.
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Delek Logistics Partners, LP |
Segment Capital Spending (1) |
| (In thousands) |
| | | | Three Months Ended March 31, |
| Pipelines and Transportation | | | | | 2022 | | 2021 |
| Maintenance capital spending | | | | | $ | 1,280 | | | $ | 477 | |
| Discretionary capital spending | | | | | 6,869 | | | 5,368 | |
| Segment capital spending | | | | | 8,149 | | | 5,845 | |
| Wholesale Marketing and Terminalling | | | | | | | |
Maintenance capital spending | | | | | 792 | | | 39 | |
| Discretionary capital spending | | | | | 145 | | | 1,915 | |
| Segment capital spending | | | | | 937 | | | 1,954 | |
| Consolidated | | | | | | | |
| Maintenance capital spending | | | | | 2,072 | | | 516 | |
| Discretionary capital spending | | | | | 7,014 | | | 7,283 | |
| Total capital spending | | | | | $ | 9,086 | | | $ | 7,799 | |
(1) Capital spending excludes the capital contributions to our equity method investments. There were no equity method investments capital contributions for the three months ended March 31, 2022. The equity method investments capital contributions were $1.4 million for the three months ended March 31, 2021.
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Delek Logistics Partners, LP | | | | |
Segment Data (Unaudited) | | | | |
| | | Three Months Ended March 31, |
| | | | | 2022 | | 2021 |
| Pipelines and Transportation Segment: | | | | | | | |
| Throughputs (average bpd) | | | | | | | |
| El Dorado Assets: | | | | | | | |
| Crude pipelines (non-gathered) | | | | | 72,872 | | | 44,118 | |
| Refined products pipelines to Enterprise Systems | | | | | 59,522 | | | 26,349 | |
| El Dorado Gathering System | | | | | 16,156 | | | 11,880 | |
| East Texas Crude Logistics System | | | | | 16,056 | | | 26,075 | |
Permian Gathering System (1) | | | | | 100,325 | | | 73,724 | |
| Plains Connection System | | | | | 162,007 | | | 108,361 | |
| Trucking Assets | | | | | 9,306 | | | 10,187 | |
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| Wholesale Marketing and Terminalling Segment: | | | | | | | |
East Texas - Tyler Refinery sales volumes (average bpd) (2) | | | | | 70,578 | | | 71,963 | |
| Big Spring marketing throughputs (average bpd) | | | | | 75,549 | | | 72,927 | |
| West Texas marketing throughputs (average bpd) | | | | | 9,913 | | | 10,138 | |
| West Texas gross margin per barrel | | | | | $ | 3.04 | | | $ | 3.42 | |
Terminalling throughputs (average bpd) (3) | | | | | 137,622 | | | 144,539 | |
(1) Formerly known as the Big Spring Gathering System. Excludes volumes that are being temporarily transported via trucks while connectors are under construction.
(2) Excludes jet fuel and petroleum coke.
(3) 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.
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 - Public Affairs & ESG, 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).
