Delek Logistics Partners, LP Reports Fourth Quarter 2020 Results

BRENTWOOD, Tenn., Feb. 23, 2021 /PRNewswire/ -- 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.

1

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.

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 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.

2

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.

3



     
              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

4



     
                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

5



     
                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

6



     
                Delek Logistics Partners, LP



     
                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.

7



     
                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.

8



     
                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.

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-releases) and its Twitter account (@DelekLogistics).

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SOURCE Delek Logistics