Delek logistics partners, lp reports first quarter 2013 results
Brentwood, tenn.--(business wire)--delek logistics partners, lp (nyse: dkl) ("delek logistics"), a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure, today announced financial results for the quarter ended march 31, 2013. for the first quarter 2013, delek logistics reported net income of $12.2 million, or $0.50 per limited partner unit. distributable cash flow of $13.2 million was 23 percent better than the forecast provided in the prospectus filed with the securities and exchange commission on november 1, 2012 (the “prospectus”). earnings before interest, taxes, depreciation and amortization (“ebitda”) was $15.5 million for this period. distribution update delek logistics declared a regular cash distribution of approximately $9.4 million, or $0.385 per unit payable on may 15, 2013, which equates to $1.54 per unit on an annualized basis. this will be the first full quarter distribution for delek logistics unitholders and represents a 2.7 percent increase from delek logistics' minimum quarterly distribution of $0.375 per unit, or $1.50 per unit on an annualized basis. management of the general partner of delek logistics intends to recommend to its board of directors that the quarterly distribution increase to $0.395 per unit for the quarter ending june 30, 2013. if approved, this would represent a 5.3 percent increase from the partnership's minimum quarterly distribution of $0.375 per unit and a 2.6 percent increase from the most recently declared distribution of $0.385 per unit. uzi yemin, chairman and chief executive officer of delek logistics' general partner, remarked: “our operations performed well during the first quarter 2013. delek logistics' ebitda and distributable cash flow exceeded our expectations, driven by strong performance in our west texas marketing business and higher volumes in our sala gathering system. our wholesale gross profit also benefited from the sharp increase in the value of rins associated with our ongoing ethanol blending activity in our operations. going forward, if the value of rins remains elevated we should continue to benefit in our wholesale operations. we increased our quarterly distribution and remain focused on delivering both growth and value as we explore opportunities to expand. during the second half of 2013, we expect our agreements with our sponsor, delek us, will give us the opportunity to purchase logistics assets from delek us, which should provide a solid foundation for growth.” financial results delek logistics commenced operations on november 7, 2012 upon the completion of its initial public offering (the “offering”) and the concurrent contribution of certain assets from its sponsor, delek us holdings, inc. (nyse: dk). for accounting purposes, the results from operations prior to the offering from the assets and entities that were contributed to us concurrent with the offering, were attributed to delek logistics partners, lp predecessor (our “predecessor”). therefore, results from operations for the three months ended march 31, 2012 show the results of the predecessor. because management believes results presented from this prior year period are not directly comparable, this earnings release focuses on results from operations during the first quarter 2013. revenues for the first quarter 2013 were $210.9 million and contribution margin was $17.2 million. results from the wholesale marketing and terminalling segment were better than previously forecast in the prospectus primarily due to performance in west texas. demand for refined products in west texas benefited from continued economic growth in the region as oil drilling activity increased. both the margin per barrel of $3.69 and volume of 16,555 barrels per day in west texas were higher than previously forecast. the margin per barrel included approximately $1.8 million of revenue, or $1.18 per barrel, from the sale of renewable identification numbers (rins) related to ongoing ethanol blending activities. the pipeline and transportation segment's performance during this period primarily benefited from throughput of 22,130 barrels per day in the sala gathering system, which exceeded the forecast provided in the prospectus. total operating expenses of $5.9 million were higher than expected primarily due to $1.0 million of expenses associated with the crude oil release at the partnership's magnolia station in march 2013. pursuant to the omnibus agreement with delek us, the partnership's costs related to this crude oil release are not expected to exceed the $1.0 million incurred during the first quarter. general and administrative expenses of $1.7 million were below expectations. as of march 31, 2013, delek logistics had a cash balance of $19.0 million and total debt was $90.0 million. first quarter 2013 results | conference call information delek logistics will hold a conference call to discuss its first quarter 2013 results on may 8, 2013 at 9:00 a.m. central time. investors will have the opportunity to listen to the conference call live over the internet by going to www.deleklogistics.com and clicking on the investor relations tab, at least 15 minutes early to register, download and install any necessary software. for those who cannot listen to the live broadcast, a telephonic replay will be available through august 8, 2013 by dialing (855) 859-2056, passcode 41638349. an archived version of the replay will also be available at www.deleklogistics.com for 90 days. about delek logistic 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. delek logistics' assets and operating results are reported in two segments: pipelines and transportation: approximately 200 miles of transportation pipelines and a 600 mile crude oil gathering system, in addition to associated storage facilities with 1.7 million barrels of active shell capacity supporting delek us' el dorado and tyler refineries. additionally, this segment includes the paline pipeline, a 185 mile crude oil pipeline from longview to nederland, texas. wholesale marketing and terminalling: includes a wholesale marketing business in texas and light product terminals, located in abilene, big sandy and san angelo, texas, and in nashville and memphis, tennessee. 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, 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 ended march 31, 2013 and 2012. delek logistics commenced operations on november 7, 2012 upon successful completion of its initial public offering (the "offering") and the concurrent contribution of certain assets from its sponsor, delek us. for accounting purposes, the results from operations prior to november 7, 2012 from the assets and entities that were contributed to us concurrent with the offering, were attributed to delek logistics partners, lp predecessor (our “predecessor”). because many of these assets were historically a part of the integrated operations of delek us, the predecessor generally recognized the costs and most revenue associated with the gathering, pipeline, transportation, terminalling and storage services provided to delek us on an intercompany basis or charged low or no throughput or storage fees for transportation. non-gaap disclosures: ebitda and distributable cash flow. delek logistics defines ebitda as net income (loss) before net interest expense, income tax expense, depreciation and amortization expense. distributable cash flow is defined as ebitda less net cash paid for interest, maintenance capital expenditures and income taxes. distributable cash flow will not reflect changes in working capital balances. 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: our 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; our 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 and distributable cash flow provide useful information to investors in assessing our financial condition, our results of operations and cash flow our 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 companies in our industry, delek logistics' definitions of ebitda and distributable cash flow may not be comparable to similarly titled measures of other companies, 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. three months ended three months ended $ 2,511 1,920 2,134 488 — (47 (25 (1,734 (5 (16 (65 1,920 488 65,711 general partner unitholders - delek (489,766 units issued and outstanding at march 31, 2013 and december 31, 2012, respectively) march 31, pipelines & transportation wholesale marketing & terminalling 187,860 1,241 5 predecessor pipelines & transportation wholesale marketing & terminalling $ 232,404 225,409 932 475 march 31,
