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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Delek Logistics Partners LP | NYSE:DKL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.32 | -0.80% | 39.76 | 40.32 | 39.33 | 40.20 | 127,407 | 01:00:00 |
Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the second quarter 2015. For the three months ended June 30, 2015, Delek Logistics reported net income attributable to all partners of $18.3 million, or $0.70 per diluted limited partner unit. This compares to net income attributable to all partners of $21.8 million, or $0.87 per diluted limited partner unit in the second quarter 2014. Distributable cash flow was $20.9 million in the second quarter 2015, compared to $24.0 million in the prior-year period. On a year-over-year basis, improved performance related to acquisitions and the Paline Pipeline was more than offset by a lower gross margin in the west Texas wholesale operations.
In the second quarter 2015, the pipeline and transportation segment, which consists of primarily stable fee-based business, accounted for approximately 72 percent of the contribution margin. This is an improvement compared to the second quarter 2014 when the pipeline and transportation segment accounted for 45 percent of contribution margin.
Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics' general partner, remarked: “Our second quarter 2015 performance benefited from our growth over the past year. The combination of acquisitions, including assets purchased from Delek US in March 2015, increased contribution from the Paline Pipeline, and higher volumes in our East Texas assets has increased the portion of our business that is fee based. While we did experience a year-over-year decline in our west Texas wholesale gross margin, the increased size of our business partially offset that effect on our performance."
Yemin concluded, "We remain focused on future growth opportunities as work progresses on our pipeline development projects through two joint ventures with unaffiliated third parties that are expected to be completed in mid-2016. In addition, third-party acquisitions continue to be explored, and the recent change in market conditions and commodity prices are beginning to create a more attractive environment. We continue to evaluate opportunities to partner with Delek US to provide additional growth, which may be enhanced through Delek US' recent investment in Alon USA. We ended the quarter with a strong financial position that supports our ability to execute our growth strategies and expect to continue to increase our annual distributions by at least 15 percent going forward."
Distribution and Liquidity
On July 27, 2015, Delek Logistics declared a quarterly cash distribution for the second quarter of $0.55 per limited partner unit, which equates to $2.20 per limited partner unit on an annualized basis. This distribution is payable on August 14, 2015 to unitholders who are of record on August 6, 2015. This represents a 3.8 percent increase from the first quarter 2015 distribution of $0.53 per limited partner unit, or $2.12 per limited partner unit on an annualized basis, and a 15.8 percent increase over Delek Logistics’ second quarter 2014 distribution of $0.475 per limited partner unit, or $1.90 per limited partner unit annualized. For the second quarter 2015, the total cash distribution declared to all partners was $14.4 million and the distributable cash flow coverage ratio was 1.5 times.
As of June 30, 2015, Delek Logistics had total debt of $316.9 million. Availability under the $700.0 million credit facility was $377.6 million.
Financial Results
Results in the second quarter 2015 compared to the prior year period benefited from the acquisition of the Tyler crude oil storage tank and El Dorado rail offloading facility, which were acquired on March 31, 2015. For accounting purposes, the expenses from operations prior to the acquisition of the Tyler crude oil storage tank and El Dorado rail offloading facility are attributed to their respective predecessor periods. For purposes of comparison, results discussed in the text of this press release exclude predecessor costs during the respective periods. However, these costs are shown in the financial statements and a reconciliation is provided in the tables attached to this release.
Revenue for the second quarter 2015 was $172.1 million and contribution margin was $28.8 million, which compares to revenue of $236.3 million and a contribution margin of $30.2 million in the second quarter 2014. Total operating expenses were $10.8 million compared to $9.5 million in the second quarter 2014, with the increase primarily due to higher maintenance expense. General and administrative expenses were $3.0 million for the second quarter 2015 compared to $2.2 million in the prior-year period, which was primarily due to higher expenses related to assets acquired over the past year. For the second quarter 2015, EBITDA was $25.7 million compared to $27.9 million in the prior year period.
Pipelines and Transportation Segment
The Pipeline and Transportation segment's second quarter 2015 contribution margin of $20.9 million improved from $13.8 million in the second quarter 2014. This increase can be attributed to fees associated with the El Dorado rail offloading racks and Tyler crude oil storage tank purchased on March 31, 2015. In addition, a higher contribution from the Paline Pipeline due to the new agreements that became effective on January 1, 2015 improved segment performance on a year-over-year basis.
Under the new Paline Pipeline agreements, two different third parties each pay a fixed monthly fee allowing them to use their respective capacities on this pipeline, which account for a combined 35,000 barrels per day. The initial term of these agreements is for 18 months beginning January 1, 2015. As a result, the effective incremental revenue per barrel was increased by approximately $1.00 compared to 2014.
Wholesale Marketing and Terminalling Segment
Contribution margin for the Wholesale Marketing and Terminalling segment was $8.0 million in the second quarter 2015, compared to $16.4 million in the second quarter 2014. This change on a year-over-year basis was due to a lower gross margin per barrel in the west Texas wholesale business.
In the west Texas wholesale business, throughput was 17,490 barrels per day compared to 17,451 barrels per day in the second quarter 2014. The wholesale gross margin per barrel in west Texas decreased to $1.31 and included approximately $1.7 million, or $1.06 per barrel from renewable identification numbers (RINs) generated in the quarter. During the second quarter 2014, the wholesale gross margin per barrel was $6.52 and included $1.1 million from RINs, or $0.68 per barrel. On a year-over-year basis, declining crude oil prices have reduced drilling activity in west Texas, lowering demand in the area and creating a more challenging market, which resulted in a lower gross margin per barrel. In the second quarter 2015, a decline in the market price for ethanol relative to fixed price contracts that were in place reduced the gross margin by approximately $0.8 million in the period. In the second quarter 2014, downtime at refineries in the region created a favorable supply/demand environment, which improved the gross margin per barrel.
Both terminalling and the east Texas marketing throughputs benefited from higher volume at Delek US' Tyler, Texas refinery following the completion of a 15,000 barrel per day expansion project in March 2015. Terminalling throughput volume of 113,578 barrels per day during the quarter increased on a year-over-year basis from 98,962 barrels per day in the second quarter 2014 primarily due to higher throughput at the Tyler, Texas terminal. During the second quarter 2015, volume under the east Texas marketing agreement with Delek US was 66,860 barrels per day compared to 61,231 barrels per day during the second quarter 2014.
Project Development Update
In March 2015, Delek Logistics announced that, through wholly owned subsidiaries, it had entered into two joint ventures (Caddo Pipeline and RIO Pipeline) that will construct logistics assets that are expected to serve unaffiliated third parties and subsidiaries of Delek US. Delek Logistics’ total projected investment for the two joint ventures is approximately $91.0 million and will be financed through a combination of cash from operations and borrowings under its revolving credit facility. Through June 30, 2015, approximately $18.5 million has been invested in these projects. Both of these projects are expected to be constructed by mid-2016.
Second Quarter 2015 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its second quarter 2015 results on August 4, 2015 at 7:00 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekLogistics.com. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. For those who cannot listen to the live broadcast, a telephonic replay will be available through November 4, 2015 by dialing (855) 859-2056, passcode 69595329. 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) second quarter 2015 earnings conference call on August 4, 2015 at 11:30 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 within the meaning of 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 Holdings, thereby subjecting us to Delek US Holdings' 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 affects 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 business of Delek Logistics; 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. There can be no assurance that actual results will not differ from those expected by management or described in forward-looking statements of Delek Logistics. Delek Logistics undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which Delek Logistics becomes aware of, after the date hereof.
Factors Affecting Comparability:
The following tables present financial and operational information for the three months and six months ended June 30, 2015 and 2014. On February 10, 2014, Delek Logistics acquired substantially all of the active storage tanks and product terminal located adjacent to Delek US' El Dorado refinery (the "El Dorado Assets"). On March 31, 2015 Delek Logistics acquired the Tyler crude oil storage tank and the El Dorado rail offloading facility (the "Logistics Assets") from Delek US. These assets were accounted for as transfers between entities under common control. Accordingly, the accompanying financial statements of the Partnership have been retrospectively adjusted to include the historical results of these assets. For all periods presented through February 10, 2014, the acquisition date of the El Dorado Assets, and March 31, 2015, the acquisition date of the Logistics Assets, the retrospective adjustments were made to the financial statements. The historical results of the El Dorado Assets and Logistics Assets, prior to the acquisition dates, are referred to as the "El Dorado Asset Predecessor" and "Logistics Assets Predecessor" in the respective periods.
Non-GAAP Disclosures:
EBITDA and distributable cash flow are non-U.S. GAAP supplemental financial measures that management and external users of our combined financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:
Delek Logistics believes that the presentation of EBITDA and distributable cash flow provide useful information to investors in assessing its financial condition, its results of operations and cash flow its business is generating. EBITDA and distributable cash flow should not be considered as alternatives to net income, operating income, cash from operations 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 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. Please see the tables below 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.
Delek Logistics Partners, LP Reconciliation of Amounts Reported Under U.S. GAAP Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2015 2014(2) 2015 (1) 2014 (2) Reconciliation of EBITDA to net income: Net income $ 18,311 $ 21,488 $ 32,314 $ 35,040 Add: Income tax expense 63 281 317 428 Depreciation and amortization 4,744 3,623 9,244 7,100 Interest expense, net 2,616 2,342 4,773 4,325 EBITDA $ 25,734 $ 27,734 $ 46,648 $ 46,893 Reconciliation of EBITDA to net cash from operating activities: Net cash provided by operating activities $ 30,791 $ 31,036 $ 46,560 $ 44,448 Amortization of unfavorable contract liability to revenue — 667 — 1,334 Amortization of deferred financing costs (365 ) (317 ) (730 ) (634 ) Accretion of asset retirement obligations (62 ) (89 ) (124 ) (209 ) Deferred taxes 160 (57 ) (66 ) (52 ) Loss on equity method investments (149 ) — (149 ) — Gain (loss) on asset disposals 23 (74 ) 18 (74 ) Unit-based compensation expense (120 ) (63 ) (194 ) (121 ) Changes in assets and liabilities (7,223 ) (5,992 ) (3,757 ) (2,552 ) Income tax expense 63 281 317 428 Interest expense, net 2,616 2,342 4,773 4,325 EBITDA $ 25,734 $ 27,734 $ 46,648 $ 46,893 Reconciliation of distributable cash flow to EBITDA: EBITDA $ 25,734 $ 27,734 $ 46,648 $ 46,893 Less: Cash interest, net 2,251 2,025 4,043 3,691 Less: Maintenance and regulatory capital expenditures 3,928 814 7,244 1,597 Less: Capital improvement expenditures — 154 — 336 Add: Reimbursement from Delek for capital expenditures 1,417 — 2,603 — Less: Income tax expense 63 281 317 428 Add: Non-cash unit-based compensation expense 120 63 194 121 Less: Amortization of deferred revenue 86 — 221 — Less: Amortization of unfavorable contract liability — 667 — 1,334 Distributable cash flow $ 20,943 $ 23,856 $ 37,620 $ 39,628 (1) The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. (2) The information presented includes the results of operations of the El Dorado Predecessor and Logistics Assets Predecessor. Prior to the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.Delek Logistics Partners, LP Reconciliation of Amounts Reported Under U.S. GAAP ($ in thousands)
Delek LogisticsPartners, LP
Logistics Assets (1)
Six MonthsEnded June 30, 2015
Logistics AssetsPredecessor
Reconciliation of EBITDA to net income: Net income (loss) $ 32,951 $ (637 ) $ 32,314 Add: Income tax expense 317 — 317 Depreciation and amortization 8,774 470 9,244 Interest expense, net 4,773 — 4,773 EBITDA $ 46,815 $ (167 ) $ 46,648 Reconciliation of EBITDA to net cash from operating activities: Net cash provided by (used in) operating activities $ 46,727 $ (167 ) $ 46,560 Amortization of deferred financing costs (730 ) — (730 ) Accretion of asset retirement obligations (124 ) — (124 ) Deferred taxes (66 ) — (66 ) Loss on equity method investments (149 ) — (149 ) Gain on asset disposals 18 — 18 Unit-based compensation expense (194 ) — (194 ) Changes in assets and liabilities (3,757 ) — (3,757 ) Income tax expense 317 — 317 Interest expense, net 4,773 — 4,773 EBITDA $ 46,815 $ (167 ) $ 46,648 Reconciliation of distributable cash flow to EBITDA: EBITDA $ 46,815 $ (167 ) $ 46,648 Less: Cash interest, net 4,043 — 4,043 Less: Maintenance and regulatory capital expenditures 7,244 — 7,244 Add: Reimbursement from Delek for capital expenditures 2,603 — 2,603 Less: Income tax expense 317 — 317 Add: Non-cash unit-based compensation expense 194 — 194 Less: Amortization of deferred revenue 221 — 221 Distributable cash flow $ 37,787 $ (167 ) $ 37,620 (1) The information presented is for the six months ended June 30, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessors. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.Delek Logistics Partners, LP Reconciliation of Amounts Reported Under U.S. GAAP
DelekLogisticsPartners, LP
LogisticsAssets (1)
Three MonthsEndedJune 30, 2014
($ in thousands)Logistics AssetsPredecessor
Reconciliation of EBITDA to net income: Net income (loss) $ 21,754 $ (266 ) $ 21,488 Add: Income tax expense 281 — 281 Depreciation and amortization 3,532 91 3,623 Interest expense, net 2,342 — 2,342 EBITDA $ 27,909 $ (175 ) $ 27,734 Reconciliation of EBITDA to net cash from operating activities: Net cash provided by (used in) operating activities $ 31,211 $ (175 ) $ 31,036 Amortization of unfavorable contract liability to revenue 667 — 667 Amortization of deferred financing costs (317 ) — (317 ) Accretion of asset retirement obligations (89 ) — (89 ) Deferred taxes (57 ) — (57 ) Loss on asset disposals (74 ) — (74 ) Unit-based compensation expense (63 ) — (63 ) Changes in assets and liabilities (5,992 ) — (5,992 ) Income tax expense 281 — 281 Interest expense, net 2,342 — 2,342 EBITDA $ 27,909 $ (175 ) $ 27,734 Reconciliation of distributable cash flow to EBITDA: EBITDA $ 27,909 $ (175 ) $ 27,734 Less: Cash interest, net 2,025 — 2,025 Less: Maintenance and regulatory capital expenditures 814 — 814 Less: Capital improvement expenditures 154 — 154 Less: Income tax expense 281 — 281 Add: Non-cash unit-based compensation expense 63 — 63 Less: Amortization of unfavorable contract liability 667 — 667 Distributable cash flow $ 24,031 $ (175 ) $ 23,856 (1) The information presented is for the three months ended June 30, 2014, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.Delek Logistics Partners, LP Reconciliation of Amounts Reported Under U.S. GAAP
DelekLogisticsPartners, LP
LogisticsAssets (1)
El DoradoTerminal andTank Assets (2)
Six MonthsEnded June 30, 2014
($ in thousands)Logistics AssetsPredecessor
El DoradoPredecessor
Reconciliation of EBITDA to net income: Net income (loss) $ 36,426 $ (443 ) $ (943 ) $ 35,040 Add: Income tax expense 428 — — 428 Depreciation and amortization 6,895 91 114 7,100 Interest expense, net 4,325 — — 4,325 EBITDA $ 48,074 $ (352 ) $ (829 ) $ 46,893 Reconciliation of EBITDA to net cash from operating activities: Net cash provided by (used in) operating activities $ 45,629 $ (352 ) $ (829 ) $ 44,448 Amortization of unfavorable contract liability to revenue 1,334 — — 1,334 Amortization of deferred financing costs (634 ) — — (634 ) Accretion of asset retirement obligations (215 ) — 6 (209 ) Deferred taxes (52 ) — — (52 ) Loss on asset disposals (74 ) — — (74 ) Unit-based compensation expense (121 ) — — (121 ) Changes in assets and liabilities (2,546 ) — (6 ) (2,552 ) Income tax expense 428 — — 428 Interest expense, net 4,325 — — 4,325 EBITDA $ 48,074 $ (352 ) $ (829 ) $ 46,893 Reconciliation of distributable cash flow to EBITDA: EBITDA $ 48,074 $ (352 ) $ (829 ) $ 46,893 Less: Cash interest, net 3,691 — — 3,691 Less: Maintenance and regulatory capital expenditures 1,513 — 84 1,597 Less: Capital improvement expenditures 243 — 93 336 Less: Income tax expense 428 — — 428 Add: Non-cash unit-based compensation expense 121 — — 121 Less: Amortization of unfavorable contract liability 1,334 — — 1,334 Distributable cash flow $ 40,986 $ (352 ) $ (1,006 ) $ 39,628 (1) The information presented is for the six months ended June 30, 2014, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. (2) The information presented is for the six months ended June 30, 2014, disaggregated to present the results of operations of the Partnership and the El Dorado Predecessor. Prior to the completion of the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services.Delek Logistics Partners, LP Condensed Consolidated Balance Sheets (Unaudited) June 30, December 31, 2015 2014 (1) (In thousands) ASSETS Current assets: Cash and cash equivalents $ 124 $ 1,861 Accounts receivable 39,117 27,986 Inventory 4,308 10,316 Deferred tax assets 28 28 Other current assets 485 768 Total current assets 44,062 40,959 Property, plant and equipment: Property, plant and equipment 317,208 308,088 Less: accumulated depreciation (61,965 ) (53,309 ) Property, plant and equipment, net 255,243 254,779 Equity method investments 18,472 — Goodwill 11,654 11,654 Intangible assets, net 15,944 16,520 Other non-current assets 6,621 7,374 Total assets $ 351,996 $ 331,286 LIABILITIES AND EQUITY (DEFICIT) Current liabilities: Accounts payable $ 14,754 $ 17,929 Accounts payable to related parties 8,732 628 Excise and other taxes payable 7,186 5,443 Accrued expenses and other current liabilities 2,330 1,588 Tank inspection liabilities
2,541
2,829
Pipeline release liabilities3,069
1,899
Total current liabilities 38,612 30,316 Non-current liabilities: Revolving credit facility 316,900 251,750 Asset retirement obligations 3,379 3,319 Deferred tax liabilities 297 231 Other non-current liabilities 8,610 5,889 Total non-current liabilities 329,186 261,189 Equity (Deficit): Predecessor division equity — 19,726 Common unitholders - public; 9,451,589 units issued and outstanding at June 30, 2015 (9,417,189 at December 31, 2014) 197,052 194,737 Common unitholders - Delek; 2,799,258 units issued and outstanding at June 30, 2015 (2,799,258 at December 31, 2014) (281,852 ) (241,112 ) Subordinated unitholders - Delek; 11,999,258 units issued and outstanding at June 30, 2015 (11,999,258 at December 31, 2014) 76,439 73,515 General partner - Delek; 494,900 units issued and outstanding at June 30, 2015 (494,197 at December 31, 2014) (7,441 ) (7,085 ) Total (deficit) equity (15,802 ) 39,781 Total liabilities and (deficit) equity $ 351,996 $ 331,286 (1) Adjusted to include the historical balances of the Logistics Assets Predecessor.Delek Logistics Partners, LP Condensed Consolidated Statements of Income (Unaudited)
Three Months EndedJune 30,
Six Months EndedJune 30,
2015 2014 (1) 2015 (1) 2014 (2) (In thousands, except unit and per unit data) Net sales: Affiliate $ 39,871 $ 28,893 $ 72,151 $ 54,175 Third-Party 132,263 207,450 243,495 385,695 Net sales 172,134 236,343 315,646 439,870 Operating costs and expenses: Cost of goods sold 132,494 196,574 240,901 368,783 Operating expenses 10,798 9,719 21,575 19,215 General and administrative expenses 2,982 2,242 6,391 4,905 Depreciation and amortization 4,744 3,623 9,244 7,100 (Gain) loss on asset disposals (23 ) 74 (18 ) 74 Total operating costs and expenses 150,995 212,232 278,093 400,077 Operating income 21,139 24,111 37,553 39,793 Interest expense, net 2,616 2,342 4,773 4,325 Loss on equity method investments 149 — 149 — Income before income tax expense 18,374 21,769 32,631 35,468 Income tax expense 63 281 317 428 Net income $ 18,311 $ 21,488 $ 32,314 $ 35,040 Less: loss attributable to Predecessors — (266 ) (637 ) (1,386 ) Net income attributable to partners 18,311 21,754 32,951 36,426 Comprehensive income attributable to partners $ 18,311 $ 21,754 $ 32,951 $ 36,426 Less: General partner's interest in net income, including incentive distribution rights (1,109 ) (620 ) (1,996 ) (914 ) Limited partners' interest in net income $ 17,202 $ 21,134 $ 30,955 $ 35,512 Net income per limited partner unit: Common units - (basic) $ 0.71 $ 0.88 $ 1.28 $ 1.47 Common units - (diluted) $ 0.70 $ 0.87 $ 1.27 $ 1.46 Subordinated units - Delek (basic and diluted) $ 0.71 $ 0.87 $ 1.28 $ 1.47 Weighted average limited partner units outstanding: Common units - basic 12,224,007 12,159,732 12,220,248 12,156,135 Common units - diluted 12,360,519 12,291,273 12,350,621 12,281,598 Subordinated units - Delek (basic and diluted) 11,999,258 11,999,258 11,999,258 11,999,258 Cash distribution per limited partner unit $ 0.550 $ 0.475 $ 1.080 $ 0.900 (1) Adjusted to include the historical results of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. (2) The information presented includes the results of operations of the El Dorado Predecessor and Logistics Assets Predecessor. Prior to the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. Prior to the Logistics Assets Predecessor on March 31, 2015, revenues for intercompany throughput and storage services were not recorded. Delek Logistics Partners, LP Consolidated Statements of Income (Unaudited) Reconciliation of Partnership to PredecessorDelek LogisticsPartners, LP
El Dorado RailOffloadingRacks (1)
Tyler CrudeOil StorageTank (1)
Six MonthsEndedJune 30, 2015
El Dorado AssetsPredecessor
Tyler AssetsPredecessor
(In thousands) Net Sales $ 315,646 $ — $ — $ 315,646 Operating costs and expenses: Cost of goods sold 240,901 — — 240,901 Operating expenses 21,408 167 — 21,575 General and administrative expenses 6,391 — — 6,391 Depreciation and amortization 8,774 372 98 9,244 Gain on asset disposals (18 ) — — (18 ) Total operating costs and expenses 277,456 539 98 278,093 Operating income (loss) 38,190 (539 ) (98 ) 37,553 Interest expense, net 4,773 — — 4,773 Loss on equity method investments 149 — — 149 Net income (loss) before taxes 33,268 (539 ) (98 ) 32,631 Income tax expense 317 — — 317 Net income (loss) $ 32,951 $ (539 ) $ (98 ) $ 32,314 Less: Loss attributable to Predecessors — (539 ) (98 ) (637 ) Net income attributable to partners $ 32,951 $ — $ — $ 32,951 (1) The information presented is for the six months ended June 30, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.Delek Logistics Partners, LP Consolidated Statements of Income (Unaudited) Reconciliation of Partnership to Predecessor
DelekLogisticsPartners,LP
El DoradoRailOffloadingRacks (1)
Tyler CrudeOil StorageTank (1)
Three MonthsEndedJune 30, 2014
El Dorado AssetsPredecessor
Tyler AssetsPredecessor
(In thousands) Net Sales $ 236,343 $ — $ — $ 236,343 Operating costs and expenses: Cost of goods sold 196,574 — — 196,574 Operating expenses 9,544 175 — 9,719 General and administrative expenses 2,242 — — 2,242 Depreciation and amortization 3,532 91 — 3,623 Loss on asset disposals 74 — — 74 Total operating costs and expenses 211,966 266 — 212,232 Operating income (loss) 24,377 (266 ) — 24,111 Interest expense, net 2,342 — — 2,342 Net income (loss) before income tax expense 22,035 (266 ) — 21,769 Income tax expense 281 — — 281 Net income (loss) $ 21,754 $ (266 ) $ — $ 21,488 Less: loss attributable to Predecessors — (266 ) — (266 ) Net income attributable to partners $ 21,754 $ — $ — $ 21,754 (1) The information presented is for the three months ended June 30, 2014, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.Delek Logistics Partners, LP Consolidated Statements of Income (Unaudited) Reconciliation of Partnership to Predecessor
DelekLogisticsPartners, LP
El DoradoRailOffloadingRacks (1)
TylerCrude OilStorageTank (1)
El DoradoTerminaland TankAssets (2)
Six MonthsEndedJune 30, 2014
El Dorado AssetsPredecessor
TylerPredecessor
El DoradoPredecessor
(In thousands) Net Sales $ 439,870 $ — $ — $ — $ 439,870 Operating costs and expenses: Cost of goods sold 368,783 — — — 368,783 Operating expenses 18,080 352 — 783 19,215 General and administrative expenses 4,859 — — 46 4,905 Depreciation and amortization 6,895 91 — 114 7,100 Loss on asset disposals 74 — — — 74 Total operating costs and expenses 398,691 443 — 943 400,077 Operating income (loss) 41,179 (443 ) (943 ) 39,793 Interest expense, net 4,325 ——
— 4,325 Net income (loss) before income tax expense 36,854 (443 )—
(943 ) 35,468 Income tax expense 428 — — — 428 Net income (loss) $ 36,426 $ (443 ) $ — $ (943 ) $ 35,040 Less: loss attributable to Predecessors — (443 ) — (943 ) (1,386 ) Net income attributable to partners $ 36,426 $ — $ — $ — $ 36,426 (1) The information presented is for the six months ended June 30, 2014, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Asset Predecessor did not record revenues for intercompany throughput and storage services. (2) The information presented includes the results of operations of the El Dorado Predecessor. Prior to the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services.Delek Logistics Partners, LP Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Six Months EndedJune 30,
2015 (1) 2014 (2) Cash Flow Data Net cash provided by operating activities $ 46,560 $ 44,448 Net cash used in investing activities (27,541 ) (4,200 ) Net cash used in financing activities (20,756 ) (38,755 ) Net (decrease) increase in cash and cash equivalents $ (1,737 ) $ 1,493 (1) Includes the historical cash flows of the Logistics Assets predecessor. (2) Adjusted to include the historical cash flows of the Logistic Assets predecessor and El Dorado Predecessor. Delek Logistics Partners, LP Segment Data (unaudited) (In thousands) Three Months Ended June 30, 2015Pipelines &Transportation
Wholesale Marketing& Terminalling
Consolidated Affiliate $ 26,093 $ 13,778 $ 39,871 Third-Party 7,641 124,622 132,263 Net sales 33,734 138,400 172,134 Operating costs and expenses: Cost of goods sold 5,102 127,392 132,494 Operating expenses 7,745 3,053 10,798 Segment contribution margin $ 20,887 $ 7,955 28,842 General and administrative expense 2,982 Depreciation and amortization 4,744 Gain on asset disposals (23 ) Operating income $ 21,139 Total Assets $ 285,733 $ 66,263 $ 351,996 Capital spending Regulatory and maintenance capital spending $ 2,722 $ 347 $ 3,069 Discretionary capital spending 335 2,558 2,893 Total capital spending $ 3,057 $ 2,905 $ 5,962 Three Months Ended June 30, 2014Pipelines &Transportation
Wholesale Marketing& Terminalling
Consolidated (1) Affiliate $ 20,245 $ 8,648 $ 28,893 Third-Party 2,821 204,629 207,450 Net sales 23,066 213,277 236,343 Operating costs and expenses: Cost of goods sold 1,130 195,444 196,574 Operating expenses 8,308 1,411 9,719 Segment contribution margin $ 13,628 $ 16,422 30,050 General and administrative expense 2,242 Depreciation and amortization 3,623 Loss on asset disposals 74 Operating income $ 24,111 Total assets $ 242,297 $ 92,324 $ 334,621 Capital spending Regulatory and maintenance capital spending $ 1,071 $ 609 $ 1,680 Discretionary capital spending 57 147 204 Total capital spending (2) $ 1,128 $ 756 $ 1,884 (1) The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. (2) Capital spending includes expenditures of $0.9 million incurred in connection with the Logistics Assets Predecessor.Delek Logistics Partners, LP Segment Data (Unaudited) (In thousands) Three Months Ended June 30, 2014 Pipelines & Transportation
Delek LogisticsPartners, LP
Predecessor -Logistics Assets
Three MonthsEnded June 30,2014
Net Sales $ 23,066 $ — $ 23,066 Operating costs and expenses: Cost of goods sold 1,130 — 1,130 Operating expenses 8,133 175 8,308 Segment contribution margin $ 13,803 $ (175 ) $ 13,628 Total capital spending $ 212 $ 916 $ 1,128 Three Months Ended June 30, 2014 Wholesale Marketing & TerminallingDelek Logistics
Partners, LP
Predecessor -Logistics Assets
Three MonthsEnded June 30,2014
Net Sales $ 213,277 $ — $ 213,277 Operating costs and expenses: Cost of goods sold 195,444 — 195,444 Operating expenses 1,411 — 1,411 Segment contribution margin $ 16,422 $ — $ 16,422 Total capital spending $ 756 $ — $ 756 Delek Logistics Partners, LP Segment Data (unaudited) (In thousands) Six Months Ended June 30, 2015 (1)Pipelines &Transportation
Wholesale Marketing& Terminalling
Consolidated Affiliate $ 50,078 $ 22,073 $ 72,151 Third-Party 14,658 228,837 243,495 Net sales $ 64,736 $ 250,910 $ 315,646 Operating costs and expenses: Cost of goods sold 9,915 230,986 240,901 Operating expenses 14,663 6,912 21,575 Segment contribution margin $ 40,158 $ 13,012 53,170 General and administrative expense 6,391 Depreciation and amortization 9,244 Gain on disposal of assets (18 ) Operating income $ 37,553 Capital spending: Regulatory and maintenance capital spending $ 6,940 $ 2,828 $ 9,768 Discretionary capital spending 670 3,097 3,767 Total capital spending $ 7,610 $ 5,925 $ 13,535 (1) The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services. Six Months Ended June 30, 2014 (1)Pipelines &Transportation
Wholesale Marketing& Terminalling
Consolidated Affiliate $ 37,746 $ 16,429 $ 54,175 Third-Party 5,588 380,107 385,695 Net sales $ 43,334 $ 396,536 $ 439,870 Operating costs and expenses: Cost of goods sold 2,256 366,527 368,783 Operating expenses 15,484 3,731 19,215 Segment contribution margin $ 25,594 $ 26,278 51,872 General and administrative expense 4,905 Depreciation and amortization 7,100 Loss on disposal of assets 74 Operating income $ 39,793 Capital spending Regulatory and maintenance capital spending $ 3,169 $ 625 $ 3,794 Discretionary capital spending 247 159 406 Total capital spending (2) $ 3,416 $ 784 $ 4,200 (1) The information presented includes the results of operations of the El Dorado Predecessor and Logistics Assets Predecessor. Prior to the El Dorado acquisition on February 10, 2014, the El Dorado Predecessor did not record revenues for intercompany terminalling and storage services. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor revenues for intercompany throughput and storage services were not recorded. (2) Capital spending includes expenditures of $2.3 million incurred in connection with the acquisition of the Logistics Assets Predecessor and El Dorado asset predecessor. Delek Logistics Partners, LP Segment Data (Unaudited) (In thousands) Six Months Ended June 30, 2015 Pipelines & TransportationDelek LogisticsPartners, LP
Predecessor -Logistics Assets
Six MonthsEnded June 30,2015
Net Sales $ 64,736 $ — $ 64,736 Operating costs and expenses: Cost of goods sold 9,915 — 9,915 Operating expenses 14,496 167 14,663 Segment contribution margin $ 40,325 $ (167 ) $ 40,158 Total capital spending $ 7,662 $ (52 ) $ 7,610 Six Months Ended June 30, 2015 Wholesale Marketing & TerminallingDelek LogisticsPartners, LP
Predecessor -Logistics Assets
Six MonthsEnded June 30,2015
Net Sales $ 250,910 $ — $ 250,910 Operating costs and expenses: Cost of goods sold 230,986 — 230,986 Operating expenses 6,912 — 6,912 Segment contribution margin $ 13,012 $ — $ 13,012 Total capital spending $ 5,925 $ — $ 5,925 Delek Logistics Partners, LP Segment Data (Unaudited) (In thousands) Six Months Ended June 30, 2014 Pipelines & TransportationDelek LogisticsPartners, LP
Predecessor -Logistics Assets
Predecessor -El DoradoStorage TankAssets
Six MonthsEnded June 30,2014
Net Sales $ 43,334 $ — $ — $ 43,334 Operating costs and expenses: Cost of goods sold 2,256 — — 2,256 Operating expenses 14,451 352 681 15,484 Segment contribution margin $ 26,627 $ (352 ) $ (681 ) $ 25,594 Total capital spending $ 936 $ 2,267 $ 213 $ 3,416 Six Months Ended June 30, 2014 Wholesale Marketing & TerminallingDelek LogisticsPartners, LP
Predecessor -Logistics Assets
Predecessor - El DoradoTerminal Assets
Six MonthsEnded June 30,2014
Net Sales $ 396,536 $ — $ — $ 396,536 Operating costs and expenses: Cost of goods sold 366,527 — — 366,527 Operating expenses 3,629 — 102 3,731 Segment contribution margin $ 26,380 $ — $ (102 ) $ 26,278 Total capital spending $ 820 $ — $ (36 ) $ 784 Delek Logistics Partners, LP Segment Data (Unaudited)Three Months EndedJune 30,
Six Months EndedJune 30,
Throughputs (average bpd) 2015 2014 2015 2014 Pipelines and Transportation Segment: Lion Pipeline System: Crude pipelines (non-gathered) 53,863 59,038 55,267 41,936 Refined products pipelines to Enterprise Systems 58,572 59,888 57,258 45,908 SALA Gathering System 21,305 21,300 21,421 22,201 East Texas Crude Logistics System 28,677 3,223 23,892 7,105 El Dorado Rail Offloading Rack 2,964 — 2,964 — Wholesale Marketing and Terminalling Segment: East Texas - Tyler Refinery sales volumes (average bpd) 66,860 61,231 47,018 61,828 West Texas marketing throughputs (average bpd) 17,490 17,451 17,070 16,729 West Texas marketing margin per barrel $ 1.31 $ 6.52 $ 1.35 $ 5.06 Terminalling throughputs (average bpd) 113,578 98,962 90,581 94,468 Delek Logistics Partners, LP Segment Data (Unaudited)DelekLogisticsPartners, LP
Predecessor -Logistics Assets
Six MonthsEnded June 30, 2015
Throughputs (average bpd) Pipelines and Transportation Segment: Lion Pipeline System: 55,267 — 55,267 Crude pipelines (non-gathered) 57,258 — 57,258 Refined products pipelines to Enterprise Systems 21,421 — 21,421 SALA Gathering System 27,623 — 27,623 East Texas Crude Logistics System 23,892 — 23,892 El Dorado Rail Offloading Rack 2,964 5,151 4,051 Wholesale Marketing and Terminalling Segment: East Texas - Tyler Refinery sales volumes (average bpd) 47,018 — 47,018 West Texas marketing throughputs (average bpd) 17,070 — 17,070 West Texas marketing margin per barrel $ 1.35 $ — $ 1.35 Terminalling throughputs (average bpd) 90,581 — 90,581
View source version on businesswire.com: http://www.businesswire.com/news/home/20150803006427/en/
Delek Logistics Partners, LPKeith Johnson, 615-435-1366Vice President of Investor RelationsorAlpha IR GroupChris Hodges, 312-445-2870Founder & CEO
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