Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35721 | |
Entity Registrant Name | DELEK LOGISTICS PARTNERS, LP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-5379027 | |
Entity Address, Address Line One | 7102 Commerce Way | |
Entity Address, City or Town | Brentwood | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37027 | |
City Area Code | 615 | |
Local Phone Number | 771-6701 | |
Title of 12(b) Security | Common Units Representing Limited Partnership Interests | |
Trading Symbol | DKL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Partnership Units Outstanding | 43,433,239 | |
Entity Central Index Key | 0001552797 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 6,024 | $ 5,545 |
Accounts receivable | 17,472 | 13,204 |
Accounts receivable from related parties | 10,002 | 0 |
Inventory | 1,696 | 12,617 |
Other current assets | 410 | 2,204 |
Total current assets | 35,604 | 33,570 |
Property, plant and equipment: | ||
Property, plant and equipment | 684,199 | 461,325 |
Less: accumulated depreciation | (216,698) | (166,281) |
Property, plant and equipment, net | 467,501 | 295,044 |
Equity method investments | 255,368 | 246,984 |
Operating lease right-of-use assets | 18,153 | 3,745 |
Goodwill | 12,203 | 12,203 |
Marketing Contract Intangible, net | 125,591 | 130,999 |
Right-of-way | 36,178 | 15,597 |
Other non-current assets | 6,988 | 6,305 |
Total assets | 957,586 | 744,447 |
Current liabilities: | ||
Accounts payable | 4,740 | 12,471 |
Accounts payable to related parties | 0 | 8,898 |
Interest Payable | 6,745 | 2,572 |
Excise and other taxes payable | 3,433 | 3,941 |
Current portion of operating lease liabilities | 5,546 | 1,435 |
Accrued expenses and other current liabilities | 3,482 | 5,765 |
Total current liabilities | 23,946 | 35,082 |
Non-current liabilities: | ||
Long-term debt | 1,006,145 | 833,110 |
Asset retirement obligations | 5,908 | 5,588 |
Deferred tax liabilities | 1,205 | 215 |
Operating lease liabilities, net of current portion | 12,607 | 2,310 |
Other non-current liabilities | 19,229 | 19,261 |
Total non-current liabilities | 1,045,094 | 860,484 |
Equity (Deficit): | ||
Total equity (deficit) | (111,454) | (151,119) |
Total liabilities and deficit | 957,586 | 744,447 |
Common unitholders | Common- Public [Member] | ||
Equity (Deficit): | ||
Total equity (deficit) | 164,313 | 164,436 |
Common unitholders | Common- Delek [Member] | ||
Equity (Deficit): | ||
Total equity (deficit) | (275,767) | (310,513) |
General Partner [Member] | ||
Equity (Deficit): | ||
Total equity (deficit) | $ 0 | $ (5,042) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - shares | Sep. 30, 2020 | Dec. 31, 2019 |
General Partners' Capital Account, Units Issued | 0 | 498,482 |
General partner - Delek, units outstanding | 0 | 498,482 |
Common unitholders - public | ||
Common unitholders, units issued | 8,687,371 | 9,131,579 |
Common unitholders, units outstanding | 8,687,371 | 9,131,579 |
Common unitholders - Delek | ||
Common unitholders, units issued | 34,745,868 | 15,294,046 |
Common unitholders, units outstanding | 34,745,868 | 15,294,046 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Net revenues: | |||||
Affiliates (1) | [1] | $ 95,410 | $ 66,647 | $ 289,739 | $ 191,530 |
Third party | 46,858 | 70,909 | 133,567 | 253,852 | |
Net revenues | 142,268 | 137,556 | 423,306 | 445,382 | |
Cost of sales: | |||||
Cost of materials and other | 60,692 | 72,594 | 205,877 | 262,713 | |
Operating expenses (excluding depreciation and amortization presented below) | 13,694 | 17,490 | 39,271 | 49,318 | |
Depreciation and amortization | 8,931 | 6,138 | 22,957 | 18,450 | |
Total cost of sales | 83,317 | 96,222 | 268,105 | 330,481 | |
Operating expenses (excluding depreciation and amortization presented below) | 536 | 945 | 2,152 | 2,502 | |
General and administrative expenses | 6,122 | 5,280 | 16,973 | 15,046 | |
Depreciation and amortization | 528 | 450 | 1,495 | 1,351 | |
Other operating income, net | 0 | (70) | (107) | (95) | |
Total operating costs and expenses | 90,503 | 102,827 | 288,618 | 349,285 | |
Operating income | 51,765 | 34,729 | 134,688 | 96,097 | |
Interest expense, net | 10,360 | 12,509 | 32,854 | 35,164 | |
Income from equity method investments | (4,860) | (8,394) | (16,875) | (14,860) | |
Other expense, net | 105 | 0 | 103 | 461 | |
Total non-operating expenses, net | 5,605 | 4,115 | 16,082 | 20,765 | |
Income before income tax expense | 46,160 | 30,614 | 118,606 | 75,332 | |
Income tax (benefit) expense | (168) | 84 | 67 | 220 | |
Net income attributable to partners | 46,328 | 30,530 | 118,539 | 75,112 | |
Comprehensive income attributable to partners | 46,328 | 30,530 | 118,539 | 75,112 | |
Less: General partner's interest in net income, including incentive distribution rights | [2] | 0 | 8,895 | 18,724 | 24,244 |
Limited partners' interest in net income | $ 46,328 | $ 21,635 | $ 99,815 | $ 50,868 | |
Weighted average limited partner units outstanding: | |||||
Cash distributions per limited partner unit (in dollars per share) | $ 0.905 | $ 0.880 | $ 2.695 | $ 2.550 | |
Common Units | |||||
Net income per limited partner unit: | |||||
Common units - (basic) (in dollars per share) | 1.26 | 0.89 | 3.30 | 2.08 | |
Common units - (diluted) (in dollars per share) | $ 1.26 | $ 0.89 | $ 3.30 | $ 2.08 | |
Weighted average limited partner units outstanding: | |||||
Common units - (basic) (in shares) | 36,889,761 | 24,417,285 | 30,290,051 | 24,411,308 | |
Common units - (diluted) (in shares) | 36,894,043 | 24,420,582 | 30,292,261 | 24,417,466 | |
[1] | See Note 3 for a description of our material affiliate revenue transactions. | ||||
[2] | See Note 3 for a description of the IDR Restructuring Transaction. |
Consolidated Statement of Partn
Consolidated Statement of Partners Equity (Deficit) Statement - USD ($) $ in Thousands | Total | General Partner | Common unitholders - publicLimited Partner | Common unitholders - DelekLimited Partner | General Partnership | |
Beginning balance at Dec. 31, 2018 | $ (134,823) | $ (6,486) | $ 171,023 | $ (299,360) | ||
Cash distributions | [1] | (83,271) | 22,762 | 22,580 | 37,929 | |
General partner units issued to maintain 2% interest | 8 | 8 | ||||
Net income attributable to partners | 75,112 | 24,244 | 19,027 | 31,841 | ||
Other | 484 | 8 | 180 | 296 | ||
Ending balance at Sep. 30, 2019 | (142,490) | (4,988) | 167,650 | (305,152) | ||
General partner's ownership interest (as percent) | 2.00% | |||||
Beginning balance at Jun. 30, 2019 | (144,300) | (5,727) | 167,254 | (305,827) | ||
Cash distributions | (28,914) | (8,159) | (7,755) | (13,000) | ||
Net income attributable to partners | 30,530 | 8,895 | 8,084 | 13,551 | ||
Other | 194 | 3 | 67 | 124 | ||
Ending balance at Sep. 30, 2019 | (142,490) | (4,988) | 167,650 | (305,152) | ||
General partner's ownership interest (as percent) | 2.00% | |||||
Beginning balance at Dec. 31, 2019 | (151,119) | (5,042) | 164,436 | (310,513) | ||
Cash distributions | [1] | (97,508) | (27,635) | (23,653) | (46,220) | |
General partner units issued to maintain 2% interest | 10 | 10 | ||||
Net income attributable to partners | 118,539 | 18,725 | 28,172 | 71,642 | ||
Delek Holdings Unit purchases | (4,979) | 4,979 | ||||
Issuance of units in connection with the Big Spring Gathering Assets Acquisition | 109,513 | 2,190 | 107,323 | |||
Cash distribution to Delek Holdings for Trucking Assets Acquisition | (47,558) | (951) | (46,607) | |||
Cash distribution to general partner for conversion of its economic interest and IDR elimination | (45,000) | (45,000) | ||||
Non-cash Conversion Of Economic Interest and IDR Elimination, Partners Equity | 57,702 | (57,702) | ||||
Sponsor contribution of fixed assets | 1,378 | 1,378 | ||||
Other | 291 | 1 | 337 | (47) | ||
Ending balance at Sep. 30, 2020 | (111,454) | 0 | 164,313 | (275,767) | ||
General partner's ownership interest (as percent) | 2.00% | |||||
Beginning balance at Jun. 30, 2020 | (78,315) | (3,224) | 160,870 | (235,961) | ||
Cash distributions | (35,968) | (9,478) | (7,819) | (18,671) | ||
Net income attributable to partners | 46,328 | 11,258 | 35,070 | |||
Cash distribution to general partner for conversion of its economic interest and IDR elimination | (45,000) | (45,000) | ||||
Non-cash Conversion Of Economic Interest and IDR Elimination, Partners Equity | 57,702 | (57,702) | ||||
Sponsor contribution of fixed assets | 1,378 | 1,378 | ||||
Other | 123 | 4 | 119 | |||
Ending balance at Sep. 30, 2020 | $ (111,454) | $ 0 | $ 164,313 | $ (275,767) | ||
General partner's ownership interest (as percent) | 0.00% | |||||
[1] | Cash distributions include a nominal amount related to distribution equivalents on vested phantom units for the nine months ended September 30, 2020 and 2019. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows ( Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 118,539 | $ 75,112 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 24,452 | 19,801 |
Non-cash lease expense | 2,236 | 2,554 |
Amortization of customer contract intangible assets | 5,408 | 5,408 |
Amortization of deferred revenue | (1,418) | (1,248) |
Amortization of deferred financing costs and debt discount | 1,786 | 2,054 |
Accretion of asset retirement obligations | 320 | 298 |
Income from equity method investments | (16,875) | (14,860) |
Dividends from equity method investments | 17,572 | 9,188 |
Gain on asset disposals | (107) | (95) |
Deferred income taxes | 990 | 115 |
Other non-cash adjustments | 292 | 484 |
Changes in assets and liabilities: | ||
Accounts receivable | (4,268) | 1,588 |
Inventories and other current assets | 12,714 | (3,290) |
Accounts payable and other current liabilities | (7,638) | (7,613) |
Accounts receivable/payable to related parties | (19,002) | (5,016) |
Non-current assets and liabilities, net | (347) | 2,391 |
Net cash provided by operating activities | 134,654 | 86,871 |
Cash flows from investing activities: | ||
Asset acquisitions from Delek Holdings, net of assumed liabilities | 100,527 | 0 |
Purchases of property, plant and equipment | (6,918) | (4,964) |
Proceeds from sales of property, plant and equipment | 107 | 144 |
Distributions from equity method investments | 2,723 | 804 |
Equity method investment contributions | (11,804) | (137,361) |
Net cash used in investing activities | (116,419) | (141,377) |
Cash flows from financing activities: | ||
Proceeds from Issuance of Common Limited Partners Units | 10 | 8 |
Distributions to general partner | (27,635) | (22,762) |
Distributions to common unitholders - public | (23,653) | (22,580) |
Distributions to common unitholders - Delek Holdings | (46,220) | (37,929) |
Distribution to Delek Holdings for Trucking Assets Acquisition | (47,558) | 0 |
Distributions to general partner for conversion of its interest and IDR elimination | (45,000) | 0 |
Proceeds from revolving credit facility | 515,900 | 476,400 |
Payments on revolving credit facility | (343,600) | (336,800) |
Net cash (used in) provided by financing activities | (17,756) | 56,337 |
Net increase in cash and cash equivalents | 479 | 1,831 |
Cash and cash equivalents at the beginning of the period | 5,545 | 4,522 |
Cash and cash equivalents at the end of the period | 6,024 | 6,353 |
Cash paid during the period for: | ||
Interest | 26,895 | 29,003 |
Income taxes | 141 | 143 |
Non-cash investing activities: | ||
(Decrease) increase in accrued capital expenditures | (948) | 1,274 |
Equity issuance to Delek Holdings unitholders in connection with Big Spring Gathering Assets Acquisition | 109,513 | |
Non-cash financing activities: | ||
Leased assets obtained in exchange for new operating lease liabilities | 16,644 | 649 |
Non-cash lease liability arising from recognition of right of use assets upon adoption of ASU 2016-02 | 0 | 20,202 |
Sponsor contribution of property, plant and equipment | $ 1,378 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
General Partnership | ||||
General partner's ownership interest (as percent) | 0.00% | 2.00% | 2.00% | 2.00% |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation As used in this report, the terms "Delek Logistics Partners, LP," the "Partnership," "we," "us," or "our" may refer to Delek Logistics Partners, LP, one or more of its consolidated subsidiaries or all of them taken as a whole. The Partnership is a Delaware limited partnership formed in April 2012 by Delek US Holdings, Inc. ("Delek Holdings") and its subsidiary Delek Logistics GP, LLC, our general partner (our "general partner"). Effective August 13, 2020, the Partnership closed the transaction contemplated by a definitive exchange agreement with the general partner to eliminate all of the incentive distribution rights ("IDRs") held by the general partner and convert the 2% general partner interest into a non-economic general partner interest, all in exchange for 14.0 million newly issued common limited partner units and $45.0 million in cash ("IDR Restructuring Transaction"). Refer to Note 3 - Related Party Transactions for further information, Note 5 - Net Income per Unit for more information on how these transactions impact our earnings per unit calculations, and Note 8 - Equity for additional information on the impact to our equity accounts. Effective May 1, 2020, the Partnership, through its wholly-owned subsidiary DKL Transportation, LLC, acquired Delek Trucking, LLC consisting of certain leased and owned tractors and trailers and related assets (the "Trucking Assets") from Delek Holdings, such transaction the "Trucking Assets Acquisition." See Note 2 for further information. In addition, effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired from Delek Holdings a crude oil gathering system located in Howard, Borden and Martin Counties, Texas (the "Big Spring Gathering System"), and certain related assets, such transaction the "Big Spring Gathering Assets Acquisition." See Note 2 for further information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading. Our unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP applied on a consistent basis with those of the annual audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (our "Annual Report on Form 10-K"), filed with the Securities and Exchange Commission (the "SEC") on February 27, 2020 and in accordance with the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included in our Annual Report on Form 10-K. All adjustments necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been included. All intercompany accounts and transactions have been eliminated. Such intercompany transactions do not include those with Delek Holdings or our general partner, which are presented as related parties in these accompanying condensed consolidated financial statements. All adjustments are of a normal, recurring nature. Operating results for the interim period should not be viewed as representative of results that may be expected for any future interim period or for the full year. Reclassifications Certain immaterial reclassifications have been made to prior period presentation in order to conform to the current period presentation. Risks and Uncertainties Arising from the COVID-19 Pandemic The outbreak of COVID-19 and its development into a pandemic in March 2020 (the "COVID-19 Pandemic") has resulted in significant economic disruption globally, including in the U.S. and specific geographic areas where we operate. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe. This has in turn significantly reduced global economic activity and resulted in airlines dramatically cutting back on flights and a decrease in motor vehicle use at a time when seasonal driving patterns typically result in an increase of consumer demand for gasoline. As a result, there has also been a decline in the demand for, and thus also the market prices of, crude oil and certain products, particularly refined petroleum products that we receive revenue for the transportation and storage services we provide. In addition, the decline in demand impacted the sales volumes in our wholesale marketing business. There is continued uncertainty about the duration of the COVID-19 Pandemic which caused depressed consumer demand for gasoline and other hydrocarbons during 2020 in the United States. Therefore, downward pressure on commodity prices has remained and could continue for the foreseeable future. Uncertainties related to the impact of the COVID-19 Pandemic and other events exist that could impact our future results of operations and financial position, the nature of which and the extent to which are currently unknown. To the extent these uncertainties have been identified and are believed to have an impact on our current period results of operations or financial position based on the requirements for assessing such financial statement impact under GAAP, we have considered them in the preparation of our unaudited financial statements as of and for the three and nine months ended September 30, 2020. The application of accounting policies impacted by such considerations include (but are not necessarily limited to) the following: • The interim evaluation of indefinite-lived intangibles and goodwill for potential impairment, where indicators exist, as defined by GAAP; • The interim evaluation of long-lived assets for potential impairment, where indicators exist, as defined by GAAP; • The interim evaluation of joint ventures for potential impairment, where indicators exist, as defined by GAAP; • The evaluation of inventory valuation allowances that may be warranted under the lower of cost or net realizable value analysis, pursuant to GAAP; • The consideration of debt modifications and or covenant requirements, as applicable; • The evaluation of commitments and contingencies, including changes in concentrations, as applicable; • The interim evaluation of the risk of credit losses and the determination of our allowance for credit losses, pursuant to GAAP; and • The interim evaluation of our ability to continue as a going concern. New Accounting Pronouncements Adopted During 2020 ASU 2018-13, Fair Value Measurement - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the Financial Accounting Standards Board (the "FASB") issued guidance related to disclosure requirements for fair value measurements. The pronouncement eliminates, modifies and adds disclosure requirements for fair value measurements. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. We adopted this guidance on January 1, 2020 and the adoption did not have a material impact on our business, financial condition or results of operations. ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance requiring the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Organizations will now use forward-looking information to better inform their credit loss estimates. This guidance is effective for interim and annual periods beginning after December 15, 2019. We adopted this guidance on January 1, 2020 using the modified retrospective approach as of the adoption date. The adoption did not have a material impact on the Partnership’s operating results, financial position or disclosures. ASU 2018-15, Intangible - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued guidance related to customers' accounting for implementation costs incurred in a cloud computing arrangement that is considered a service contract. This pronouncement aligns the requirements for capitalizing implementation costs in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Entities can choose to adopt the new guidance prospectively or retrospectively. We adopted this guidance on January 1, 2020 and elected the prospective method. The adoption did not have a material impact on the Partnership's financial condition or results of operations. Accounting Pronouncements Not Yet Adopted ASU 2019-12, Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within Accounting Standards Codification ("ASC") 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 2020, with early adoption permitted. We expect to adopt this guidance on the effective date and are currently evaluating the impact that adopting this new guidance may have on our business, financial condition and results of operations. ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In January 2020, the FASB issued ASU 2020-01 which is intended to clarify interactions between the guidance to account for certain equity securities under Topics 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting. The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and early adoption is permitted. We do not expect that the adoption of this ASU on its effective date will have a material impact on our business, financial condition or results of operations. ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank rates. This guidance is effective for all entities any time beginning on March 12, 2020 through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of the ASU. The Partnership is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Acquisitions | Acquisitions Trucking Assets Acquisition Effective May 1, 2020, the Partnership, through its wholly-owned subsidiary DKL Transportation, LLC, acquired Delek Trucking, LLC consisting of certain leased and owned tractors and trailers and related assets from Delek Holdings. The total consideration is subject to certain post-closing adjustments and was approximately $48.0 million in cash. We financed this acquisition with a combination of cash on hand and borrowings under the DKL Credit Facility (as defined in Note 7). The Trucking Assets are recorded in our pipelines and transportation segment and include approximately 150 trucks and trailers, which are primarily leased or owned, respectively. In connection with the closing of the transaction, Delek Holdings, the Partnership and various of their respective subsidiaries entered into a Transportation Services Agreement (the “Trucking Assets TSA Agreement”). Under the Trucking Assets TSA Agreement, the Partnership will gather, coordinate pickup of, transport and deliver petroleum products for Delek Holdings, as well as provide ancillary services as requested. The transaction and related agreements were approved by the Conflicts Committee of the Partnership's general partner, which is comprised solely of independent directors. See Note 3 for more detailed descriptions of these agreements. The Trucking Assets Acquisition was considered a transaction between entities under common control. Accordingly, the Trucking Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date. The carrying value of the Trucking Assets as of the acquisition date was $13.3 million, consisting of $0.5 million of owned assets and $12.8 million Right of Use asset for leased assets. The Right of Use assets offsets with an equivalent operating lease liability. Prior periods have not been recast as these assets do not constitute a business in accordance with Accounting Standard Update 2017-01, Clarifying the Definition of a Business ("ASU 2017-01"). We incurred approximately $0.3 million of acquisition costs related to the Trucking Assets Acquisition. Big Spring Gathering Assets Acquisition Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Big Spring Gathering Assets from Delek Holdings, located in Howard, Borden and Martin Counties, Texas. The total consideration was subject to certain post-closing adjustments and was comprised of $100.0 million in cash and 5.0 million common units representing limited partner interest in us. We financed the cash component of this acquisition with borrowings from the DKL Credit Facility. The Big Spring Gathering Assets are recorded in our pipelines and transportation segment and include: • Crude oil pipelines; • Approximately 200 miles of gathering systems; • Approximately 65 Tank battery connections; • Terminals (total storage of approximately 650,000 bbls); and • Applicable rights-of-way. In connection with the closing of the transaction, Delek Holdings, the Partnership and various of their respective subsidiaries entered into a Throughput and Deficiency Agreement (the “Big Spring T&D Agreement”). Under the Big Spring T&D Agreement, the Partnership will operate and maintain the Big Spring Gathering Assets connecting Delek Holdings' interests in and to certain crude oil with the Partnership's Big Spring, Texas terminal and provide gathering, transportation and other related services with respect to any and all crude produced from shipper’s and certain other producers’ respective interests for delivery at the Big Spring Terminal. The transaction and related agreements were approved by the Conflicts Committee of the Partnership's general partner, which is comprised solely of independent directors. See Note 3 for more detailed descriptions of these agreements. The Big Spring Gathering Assets Acquisition was considered a transaction between entities under common control. Accordingly, the Big Spring Gathering Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date. The carrying value of the Big Spring Gathering Assets as of the acquisition date was $209.5 million. Pursuant to the common control guidance, the 5.0 million units issued (which had a closing market price of $9.10 per unit on the transaction date) were recorded in equity at $109.5 million, representing the net carrying value of the Big Spring Gathering Assets purchased of $209.5 million less the $100.0 million cash |
Revenues (Notes)
Revenues (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | RevenuesWe generate revenue by charging fees for gathering, transporting, offloading and storing crude oil; for storing intermediate products and feed stocks; for distributing, transporting and storing refined products; for marketing refined products output of Delek Holdings' Tyler and Big Spring refineries; and for wholesale marketing in the West Texas area. A significant portion of our revenue is derived from long-term commercial agreements with Delek Holdings, which provide for annual fee adjustments for increases or decreases in the CPI, PPI or FERC index (refer to Note 3 for a more detailed description of these agreements). In addition to the services we provide to Delek Holdings, we also generate substantial revenue from crude oil, intermediate and refined products transportation services for, and terminalling and marketing services to, third parties primarily in Texas, New Mexico, Tennessee and Arkansas. Certain of these services are provided pursuant to contractual agreements with third parties. Payment terms require customers to pay shortly after delivery and do not contain significant financing components. The majority of our commercial agreements with Delek Holdings meet the definition of a lease because: (1) performance of the contracts is dependent on specified property, plant or equipment and (2) it is remote that one or more parties other than Delek Holdings will take more than a minor amount of the output associated with the specified property, plant or equipment. As part of our adoption of ASC 842, Leases ("ASC 842"), we applied the permitted practical expedient to not separate lease and non-lease components under the predominance principle to designated asset classes associated with the provision of logistics services. We have determined that the predominant component of the related agreements currently in effect is the lease component. Therefore, the combined component is accounted for under the applicable lease accounting guidance. Of our $467.5 million net property, plant, and equipment balance as of September 30, 2020, $394.6 million is subject to operating leases under our commercial agreements. These agreements do not include options for the lessee to purchase our leasing equipment, nor do they include any material residual value guarantees or material restrictive covenants. The following table represents a disaggregation of revenue for each reportable segment for the periods indicated (in thousands): Three Months Ended September 30, 2020 Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Service Revenue - Third Party $ 3,035 $ 163 $ 3,198 Service Revenue - Affiliate 5,633 8,708 14,341 Product Revenue - Third Party — 43,660 43,660 Product Revenue - Affiliate — 5,844 5,844 Lease Revenue - Affiliate (1) 62,811 12,414 75,225 Total Revenue $ 71,479 $ 70,789 $ 142,268 (1) Net of $1.8 million of amortization expense for the three months ended September 30, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. Three Months Ended September 30, 2019 Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Service Revenue - Third Party $ 5,281 $ 221 $ 5,502 Service Revenue - Affiliate 2,856 9,578 12,434 Product Revenue - Third Party — 65,407 65,407 Product Revenue - Affiliate — 6,505 6,505 Lease Revenue - Affiliate (1) 36,448 11,260 47,708 Total Revenue $ 44,585 $ 92,971 $ 137,556 (1) Net of $1.8 million of amortization expense for the three months ended September 30, 2019, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. Nine Months Ended September 30, 2020 Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Service Revenue - Third Party $ 14,587 $ 502 $ 15,089 Service Revenue - Affiliate 13,848 $ 24,500 38,348 Product Revenue - Third Party — 118,478 118,478 Product Revenue - Affiliate — 64,067 64,067 Lease Revenue - Affiliate (1) 154,437 32,887 187,324 Total Revenue $ 182,872 $ 240,434 $ 423,306 (1) Net of $5.4 million of amortization expense for the nine months ended September 30, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. Nine Months Ended September 30, 2019 Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Service Revenue - Third Party $ 16,733 $ 525 $ 17,258 Service Revenue - Affiliate 8,171 26,438 34,609 Product Revenue - Third Party — 236,594 236,594 Product Revenue - Affiliate — 23,078 23,078 Lease Revenue - Affiliate (1) 104,523 29,320 133,843 Total Revenue $ 129,427 $ 315,955 $ 445,382 (1) Net of $5.4 million of amortization expense for the nine months ended September 30, 2019, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. As of September 30, 2020, we expect to recognize $1.6 billion in lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings. Most of these agreements have an initial term ranging from five to ten years, which may be extended for various renewal terms. We disclose information about remaining performance obligations that have original expected durations of greater than one year. Our unfulfilled performance obligations as of September 30, 2020 were as follows (in thousands): Remainder of 2020 67,022 2021 267,990 2022 249,850 2023 240,489 2024 and thereafter $ 751,847 Total expected revenue on remaining performance obligations $ 1,577,198 |
Net Income Per Unit
Net Income Per Unit | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Unit | Net Income Per Unit Basic net income per unit applicable to limited partners is computed by dividing limited partners' interest in net income by the weighted-average number of outstanding common units. Prior to August 13, 2020, we had more than one class of participating securities and used the two class method to calculate the net income per unit applicable to the limited partners. The classes of participating units prior to August 13, 2020 consisted of limited partner units, general partner units and IDRs. Pursuant to the IDR Restructuring Transaction, the IDRs were eliminated and the 2% general partner economic interest was converted to a non-economic general partner interest. Effective August 13, 2020, the common limited partner units are the only participating security for cash distributions. Refer to Note 8 - Equity for a discussion of the elimination of the IDRs and conversion of the 2% general partner economic interest effective August 13, 2020. The two-class method was based on the weighted-average number of common units outstanding during the period. Basic net income per unit applicable to limited partners was computed by dividing limited partners’ interest in net income, after deducting our general partner’s 2% interest and IDRs, by the weighted-average number of outstanding common units. Our net income was allocated to our general partner and limited partners in accordance with their respective partnership percentages after giving effect to priority income allocations for IDRs, which are held by our general partner pursuant to our Partnership Agreement. Earnings in excess of distributions were allocated to our general partner and limited partners based on their respective ownership interests. The IDRs were paid following the close of each quarter. As discussed in Note 3 - Related Party Transactions, pursuant to Amendment No. 2 to the Partnership Agreement, an agreement was reached for a waiver of distributions in respect of the IDRs for the GP Additional Units associated with the 5.0 million Additional Units issued in connection with the Big Spring Gathering Assets Acquisition for at least two years, through at least the distribution for the quarter ending March 31, 2022. The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the GP Additional Units. An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs. Refer to Note 3 for additional details. The IDRs were eliminated in the IDR Restructuring Transaction on August 13, 2020. Diluted net income per unit applicable to common limited partners includes the effects of potentially dilutive units on our common units. As of September 30, 2020, the only potentially dilutive units outstanding consist of unvested phantom units. Our distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below represents total cash distributions applicable to the period in which the distributions are earned. The expected date of distribution for the distributions earned during the period ended September 30, 2020 is November 12, 2020. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit. The calculation of net income per unit is as follows (dollars in thousands, except units and per unit amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income attributable to partners $ 46,328 $ 30,530 $ 118,539 $ 75,112 Less: General partner's distribution (including IDRs) (1) — 8,892 18,618 24,475 Less: Limited partners' distribution 39,307 21,487 87,536 62,256 Earnings in excess (deficit) of distributions $ 7,021 $ 151 $ 12,385 $ (11,619) General partner's earnings: Distributions (including IDRs) (1) $ — $ 8,892 $ 18,618 $ 24,475 Allocation of earnings in excess (deficit) of distributions — 3 106 (231) Total general partner's earnings $ — $ 8,895 $ 18,724 $ 24,244 Limited partners' earnings on common units: Distributions $ 39,307 $ 21,487 $ 87,536 $ 62,256 Allocation of earnings in excess (deficit) of distributions 7,021 148 12,279 (11,388) Total limited partners' earnings on common units $ 46,328 $ 21,635 $ 99,815 $ 50,868 Weighted average limited partner units outstanding: Common units - basic 36,889,761 24,417,285 30,290,051 24,411,308 Common units - diluted 36,894,043 24,420,582 30,292,261 24,417,466 Net income per limited partner unit: Common units - basic $ 1.26 $ 0.89 $ 3.30 $ 2.08 Common units - diluted (2) $ 1.26 $ 0.89 $ 3.30 $ 2.08 (1) Prior to August 13, 2020, general partner distributions (including IDRs) consisted of the 2.0% general partner interest and IDRs, which represented the right of the general partner to receive increasing percentages of quarterly distributions of available cash from operating surplus in excess of 0.43125 per unit per quarter. In connection with the IDR Restructuring Transaction on August 13, 2020, the IDRs were eliminated and the general partner interest became a non-economic general partner interest. See Note 8 for further discussion related to IDRs. (2) There were no outstanding common units excluded from the diluted earnings per unit calculation for the three and nine months ended September 30, 2020 and 2019. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | InventoryInventories consisted of $1.7 million and $12.6 million of refined petroleum products as of September 30, 2020 and December 31, 2019, each of which are net of lower of cost or net realizable value reserve of a nominal amount. Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We recognize lower of cost or net realizable value charges as a component of cost of materials and other in the consolidated statements of income and comprehensive income. |
Long-Term Obligations
Long-Term Obligations | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations | Long-Term Obligations DKL Credit Facility On September 28, 2018, the Partnership entered into a third amended and restated senior secured revolving credit agreement (hereafter, the "DKL Credit Facility") with Fifth Third Bank ("Fifth Third"), as administrative agent, and a syndicate of lenders with total lender commitments of $850.0 million. The DKL Credit Facility contains a dual currency borrowing tranche that permits draw downs in U.S. or Canadian dollars. The DKL Credit Facility also contains an accordion feature whereby the Partnership can increase the size of the credit facility to an aggregate of $1.0 billion, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions precedent. The obligations under the DKL Credit Facility remain secured by first priority liens on substantially all of the Partnership's and its subsidiaries' tangible and intangible assets. Additionally, Delek Marketing, a subsidiary of Delek Holdings, had provided a limited guaranty of the Partnership's obligations under the DKL Credit Facility. Delek Marketing's guaranty was (i) limited to an amount equal to the principal amount, plus unpaid and accrued interest, of a promissory note made by Delek Holdings in favor of Delek Marketing (the "Holdings Note") and (ii) secured by Delek Marketing's pledge of the Holdings Note to the lenders under the DKL Credit Facility. Effective March 30, 2020, Delek Marketing's limited guaranty and pledge of the Holdings Note was terminated pursuant to a guaranty and pledge release approved by the required lenders under the DKL Credit Facility. In connection with the IDR Restructuring Transaction, the Partnership entered into a First Amendment to the DKL Credit Facility (the "First Amendment") which, among other things, permitted the exchange of the IDRs and the general partner interest in the Partnership for the non-economic general partner interest, the newly issued limited partner interests in the Partnership, plus $45.0 million in cash. The First Amendment also modified the total leverage and senior leverage ratios (as defined in the DKL Credit Facility) calculations to reduce the total funded debt (as defined in the DKL Credit Facility) component thereof by the total amount of unrestricted consolidated cash and cash equivalents on the balance sheet of the Partnership and its subsidiaries up to $20.0 million. The DKL Credit Facility has a maturity date of September 28, 2023. Borrowings denominated in U.S. dollars bear interest at either a U.S. dollar prime rate, plus an applicable margin, or the London Interbank Offered Rate ("LIBOR"), plus an applicable margin, at the election of the borrowers. Borrowings denominated in Canadian dollars bear interest at either a Canadian dollar prime rate, plus an applicable margin, or the Canadian Dealer Offered Rate, plus an applicable margin, at the election of the borrowers. The applicable margin in each case and the fee payable for any unused revolving commitments vary based upon the Partnership's most recent total leverage ratio calculation delivered to the lenders, as called for and defined under the terms of the DKL Credit Facility. At September 30, 2020, the weighted average interest rate for our borrowings under the facility was approximately 2.69%. Additionally, the DKL Credit Facility requires us to pay a leverage ratio dependent quarterly fee on the average unused revolving commitment. As of September 30, 2020, this fee was 0.40% per year. As of September 30, 2020, we had $760.7 million of outstanding borrowings under the DKL Credit Facility, with no letters of credit in place. Unused credit commitments under the DKL Credit Facility as of September 30, 2020, were $89.3 million. 6.750% Senior Notes Due 2025 On May 23, 2017, the Partnership and Delek Logistics Finance Corp., a Delaware corporation and a wholly-owned subsidiary of the Partnership (“Finance Corp.” and together with the Partnership, the “Issuers”), issued $250.0 million in aggregate principal amount of 6.75% senior notes due 2025 (the “2025 Notes”) at a discount. The 2025 Notes are general unsecured senior obligations of the Issuers. The 2025 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Finance Corp., the "Guarantors") and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries. The 2025 Notes rank equal in right of payme nt with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers. Interest on the 2025 Notes is payable semi-annually in arrears on each May 15 and November 15, commencing November 15, 2017. Beginning on May 15, 2020, th e Issuers may, subject to certain conditions and limitations, redeem all or part of the 2025 Notes at a redemption price of 105.063% of the redeemed principal for the twelve-month period beginning on May 15, 2020, 103.375% for the twelve-month period beginning on May 15, 2021, 101.688% for the twelve-month period beginning on May 15, 2022 and 100.00% beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any. In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2025 Notes from holders at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. On April 25, 2018, we made an offer to exchange the 2025 Notes and the related guarantees that were validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradeable, as required under the terms of the original indenture. The terms of the exchange notes that were issued in May 2018 as a result of the exchange (also referred to as the "2025 Notes") are substantially identical to the terms of the original 2025 Notes. As of September 30, 2020, we had $250.0 million in outstanding principal amount of the 2025 Notes. As of September 30, 2020, the effective interest rate related to the 2025 Notes was approximately 7.22%. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity We had approximately 8,687,371 common limited partner units held by the public outstanding as of September 30, 2020. Additionally, as of September 30, 2020, Delek Holdings owned an approximately 80.0% interest in us, consisting of 34,745,868 common limited partner units. Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction, contemporaneous with this transaction, Delek Holdings purchased a 5.2% ownership interest in our general partner from certain affiliates, who were also members of our general partner's management and board of directors, at fair market value. Delek Holdings now owns 100% of the outstanding ownership interest in our general partner. As part of this transaction, we expensed approximately $1.1 million of transaction costs. In August 2020, we filed a shelf registration statement, which subsequently became effective, with the U.S. Securities and Exchange Commission for the proposed re-sale or other disposition from time to time by Delek Holdings of up to 14.0 million common limited partner units representing limited partner interests in the Partnership. We will not sell any securities under this shelf registration statement and we will not receive any proceeds from the sale of securities by Delek Holdings. Equity Activity The table below summarizes the changes in the number of units outstanding from December 31, 2019 through September 30, 2020. Common - Public Common - Delek Holdings General Partner Total Balance at December 31, 2019 9,131,579 15,294,046 498,482 24,924,107 General partner units issued to maintain 2% interest — — 102,196 102,196 Unit-based compensation awards (1) 7,614 — — 7,614 Big Spring Gathering Assets Acquisition equity issuance — 5,000,000 — 5,000,000 Delek Holdings unit purchases from public (451,822) 451,822 — — General Partner units converted to non-economic general partner interest — — (600,678) (600,678) Common limited partner units issued in IDR Restructuring Transaction — 14,000,000 — 14,000,000 Balance at September 30, 2020 8,687,371 34,745,868 — 43,433,239 (1) Unit-based compensation awards are presented net of 481 units withheld for taxes as of September 30, 2020. Issuance of Additional Securities Our Partnership Agreement authorizes us to issue an unlimited number of additional partnership securities for the consideration and on the terms and conditions determined by our general partner without the approval of the unitholders. Costs associated with the issuance of securities are allocated to all unitholders' capital accounts based on their ownership interest at the time of issuance. Allocations of Net Income Our Partnership Agreement contains provisions for the allocation of net income and loss to the unitholders. For purposes of maintaining partner capital accounts, the Partnership Agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Prior to August 13, 2020, normal allocations were made according to percentage interests after giving effect to priority income allocations in an amount equal to incentive cash distributions allocated 100% to our general partner. Effective August 13, 2020, the IDRs were eliminated and the 2% general partner economic interest was converted to a non-economic general partner interest that no longer receives cash distributions. The following table presents the allocation of the general partner's interest in net income (in thousands, except percentage of ownership interest): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income attributable to partners $ 46,328 $ 30,530 $ 118,539 $ 75,112 Less: General partner's IDRs — (8,453) (17,632) (23,206) Net income available to partners $ 46,328 $ 22,077 $ 100,907 $ 51,906 General partner's ownership interest — % 2.0 % 2.0 % 2.0 % General partner's allocated interest in net income $ — $ 442 1,092 $ 1,038 General partner's IDRs — 8,453 17,632 23,206 Total general partner's interest in net income $ — $ 8,895 $ 18,724 $ 24,244 Incentive Distribution Rights ("IDRs") Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction and the general partner no longer receives any cash distributions. Prior to August 13, 2020, our general partner was entitled to 2.0% of all quarterly distributions that we make prior to our liquidation. Our general partner had the right, but not the obligation, to contribute up to a proportionate amount of capital to us to maintain its current general partner interest. Our general partner held IDRs that entitled it to receive increasing percentages, up to a maximum of 48.0%, of the cash we distributed from operating surplus (as defined in our Partnership Agreement) in excess of 0.43125 per unit per quarter. The maximum distribution was 48.0% and did not include any distributions that our general partner or its affiliates may have received on common or general partner units that it owns. As of August 12, 2020, the IDRs held by our general partner were entitled to receive the maximum distribution. Pursuant to Amendment No. 2 to the Partnership Agreement, prior to the IDR Restructuring Transaction, an agreement was reached for a waiver of distributions in respect of the IDRs associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 (the "IDR Waiver"). The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the Additional Units. An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs. Refer to Note 3 for additional details. Cash Distributions Our Partnership Agreement sets forth the calculation to be used to determine the amount and priority of available cash distributions that our limited partner unitholders will receive. The cash distributions for periods before August 13, 2020 include distributions to the 2% general partner interest which was converted to non-economic general partner interest and IDRs which were permanently eliminated. Our distributions earned with respect to a given period are declared subsequent to quarter end. The table below summarizes the quarterly distributions related to our quarterly financial results: Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Quarterly Distribution Per Limited Partner Unit, Annualized Total Cash Distribution, (in thousands) Date of Distribution Unitholders Record Date September 30, 2019 $ 0.880 $ 3.52 $ 30,379 November 12, 2019 November 4, 2019 December 31, 2019 $ 0.885 $ 3.54 $ 30,634 February 12, 2020 February 4, 2020 March 31, 2020 $ 0.890 $ 3.56 $ 30,878 May 12, 2020 May 5, 2020 June 30, 2020 $ 0.900 $ 3.60 $ 35,969 August 12, 2020 August 7, 2020 September 30, 2020 $ 0.905 $ 3.62 $ 39,308 November 12, 2020 (1) November 6, 2020 (1) Expected date of distribution. The allocations of total quarterly cash distributions made to limited partners for the three and nine months ended September 30, 2020 and 2019 are set forth in the table below. Distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below presents total cash distributions applicable to the period in which the distributions are earned (in thousands, except per unit amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 General partner's distributions: General partner's distributions $ — $ 439 $ 986 $ 1,269 General partner's IDRs — 8,453 17,632 23,206 Total general partner's distributions — 8,892 18,618 24,475 Limited partners' distributions: Common limited partners' distributions 39,307 21,487 87,536 62,256 Total cash distributions $ 39,307 $ 30,379 $ 106,154 $ 86,731 Cash distributions per limited partner unit $ 0.905 $ 0.880 $ 2.695 $ 2.550 |
Equity Based Compensation
Equity Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Equity Based Compensation | Equity Based CompensationThe Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (the "LTIP") was adopted by the Delek Logistics GP, LLC board of directors in connection with the completion of our initial public offering in November 2012. The LTIP is administered by the Conflicts Committee of the board of directors. Equity-based compensation expense is included in general and administrative expenses in the accompanying condensed consolidated statements of income and comprehensive income and is immaterial for the three and nine months ended September 30, 2020 and 2019. |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments In May 2019, the Partnership, through its wholly owned indirect subsidiary DKL Pipeline, LLC (“DKL Pipeline”), entered into a Contribution and Subscription Agreement (the “Contribution Agreement”) with Plains Pipeline, L.P. (“Plains”) and Red River Pipeline Company LLC (“Red River”). Pursuant to the Contribution Agreement, DKL Pipeline contributed $124.7 million, substantially all of which was financed by borrowings under the DKL Credit Facility, to Red River in exchange for a 33% membership interest in Red River and DKL Pipeline’s admission as a member of Red River. In addition, we contributed $0.4 million of startup capital pursuant to the Amended and Restated Limited Liability Company Agreement. During the third quarter of 2020, Red River, which owns a crude oil pipeline running from Cushing, Oklahoma to Longview, Texas, completed a planned expansion project to increase the pipeline capacity and commenced operations on the completed expansion project on October 1, 2020. We contributed $3.5 million related to such expansion project in May 2019. During the nine months ended September 30, 2020, we made additional capital contributions totaling $11.8 million based on capital calls received. Summarized unaudited financial information for Red River on a 100% basis is shown below (in thousands): September 30, 2020 December 31, 2019 Current Assets $ 16,738 $ 9,278 Non-current Assets $ 413,879 $ 381,778 Current liabilities $ 9,556 $ 8,291 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues $ 13,919 $ 19,195 $ 35,888 $ 45,212 Gross profit $ 8,189 $ 14,469 $ 21,251 $ 28,935 Operating income $ 8,020 $ 14,318 $ 20,717 $ 21,461 Net income $ 8,022 $ 14,342 $ 20,768 $ 27,994 We have two joint ventures that have constructed separate crude oil pipeline systems and related ancillary assets, which are serving third parties and subsidiaries of Delek Holdings. We own a 50% membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P. ("CP LLC") to operate one of these pipeline systems (the "Caddo Pipeline") and a 33% membership interest in the entity formed with Rangeland Energy II, LLC ("Rangeland Energy") to operate the other pipeline system (the "Rio Pipeline"). During 2018, Rangeland Energy was acquired by Andeavor and the legal entity in which we have an equity investment became Andeavor Logistics Rio Pipeline LLC ("Andeavor Logistics"). Combined summarized unaudited financial information for these two equity method investees on a 100% basis is shown below (in thousands): September 30, 2020 December 31, 2019 Current assets $ 20,897 $ 29,476 Non-current assets $ 256,420 $ 262,300 Current liabilities $ 2,660 $ 6,391 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues $ 14,227 $ 14,602 $ 42,412 $ 33,793 Gross profit $ 9,634 $ 9,965 $ 28,468 $ 20,549 Operating income $ 9,135 $ 9,428 $ 26,999 $ 19,052 Net Income $ 9,136 $ 9,458 $ 27,023 $ 19,124 The Partnership's investments in these three entities were financed through a combination of cash from operations and borrowings under the DKL Credit Facility. As of September 30, 2020 and December 31, 2019, the Partnership's investment balance in these joint ventures was $255.4 million and $247.0 million, respectively. We do not consolidate any part of the assets or liabilities or operating results of our equity method investees. Our share of net income or loss of the investees will increase or decrease, as applicable, the carrying value of our investments in unconsolidated affiliates. With respect to our equity method investments, we determined that these entities do not represent variable interest entities and consolidation is not required. We have the ability to exercise significant influence over each of these joint ventures through our participation in the management committees, which make all significant decisions. However, since all significant decisions require the consent of the other investor(s) without regard to economic interest, we have determined that we have joint control and have applied the equity method of accounting. Our investment in these joint ventures is reflected in our pipelines and transportation segment. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Data | Segment Data We aggregate our operating segments into two reportable segments: (i) pipelines and transportation and (ii) wholesale marketing and terminalling: • The assets and investments reported in the pipelines and transportation segment provide crude oil gathering and crude oil, intermediate and refined products transportation and storage services to Delek Holdings' refining operations and independent third parties. • The wholesale marketing and terminalling segment provides wholesale marketing and terminalling services to Delek Holdings' refining operations and independent third parties. Our operating segments adhere to the accounting policies used for our consolidated financial statements. Our operating segments are managed separately because each segment requires different industry knowledge, technology and marketing strategies. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on segment contribution margin. Segment contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization. The following is a summary of business segment operating performance as measured by contribution margin for the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Pipelines and Transportation Net revenues: Affiliate $ 68,444 $ 39,304 $ 168,285 $ 112,694 Third party 3,035 5,281 14,587 16,733 Total pipelines and transportation 71,479 44,585 182,872 129,427 Cost of materials and other 14,342 4,947 31,622 17,871 Operating expenses (excluding depreciation and amortization) 10,749 12,547 31,936 36,109 Segment contribution margin $ 46,388 $ 27,091 $ 119,314 $ 75,447 Capital spending $ 2,552 $ 3,103 $ 3,424 $ 4,345 Wholesale Marketing and Terminalling Net revenues: Affiliate (1) $ 26,966 $ 27,343 $ 121,454 $ 78,836 Third party 43,823 65,628 118,980 237,119 Total wholesale marketing and terminalling 70,789 92,971 240,434 315,955 Cost of materials and other 46,350 67,647 174,255 244,842 Operating expenses (excluding depreciation and amortization) 3,481 5,888 9,487 15,711 Segment contribution margin $ 20,958 $ 19,436 $ 56,692 $ 55,402 Capital spending $ 676 $ 889 $ 3,494 $ 1,893 Consolidated Net revenues: Affiliate $ 95,410 $ 66,647 $ 289,739 $ 191,530 Third party 46,858 70,909 133,567 253,852 Total Consolidated 142,268 137,556 423,306 445,382 Cost of materials and other 60,692 72,594 205,877 262,713 Operating expenses (excluding depreciation and amortization presented below) 14,230 18,435 41,423 51,820 Contribution margin $ 67,346 $ 46,527 176,006 130,849 General and administrative expenses 6,122 5,280 16,973 15,046 Depreciation and amortization 9,459 6,588 24,452 19,801 Other operating income, net — (70) (107) (95) Operating income $ 51,765 $ 34,729 $ 134,688 $ 96,097 Capital spending $ 3,228 $ 3,992 $ 6,918 $ 6,238 (1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the Marketing Contract Intangible Acquisition. See Note 3 for additional information. The following table summarizes the total assets for each segment as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Pipelines and transportation $ 804,118 $ 537,580 Wholesale marketing and terminalling 153,468 206,867 Total assets $ 957,586 $ 744,447 Property, plant and equipment and accumulated depreciation as of September 30, 2020 and depreciation expense by reporting segment for the three and nine months ended September 30, 2020 were as follows (in thousands): Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Property, plant and equipment $ 569,320 $ 114,879 $ 684,199 Less: accumulated depreciation (167,079) (49,619) (216,698) Property, plant and equipment, net (1) $ 402,241 $ 65,260 $ 467,501 Depreciation expense for the three months ended September 30, 2020 $ 7,738 $ 1,721 $ 9,459 Depreciation expense for the nine months ended September 30, 2020 $ 19,364 $ 5,088 $ 24,452 (1) Segment assets data as of September 30, 2020 includes $118.2 million adjustment to re-classify property, plant and equipment between Wholesale Marketing and Terminalling segment and Pipelines and Transportation segment to record a correction that was not reflected in the November 4, 2020 Earnings Release. Such amounts are not considered material to the financial statements and had no impact to the consolidated assets, operating income, segment contribution or net income. In accordance with ASC 360, Property, Plant & Equipment |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesFor tax purposes, each partner of the Partnership is required to take into account its share of income, gain, loss and deduction in computing its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. The taxable income reportable to each partner takes into account differences between the tax basis and fair market value of our assets, financial reporting bases of assets and liabilities, the acquisition price of such partner's units and the taxable income allocation requirements under our Partnership Agreement. The Partnership is not a taxable entity for federal income tax purposes. While most states do not impose an entity level tax on partnership income, the Partnership is subject to entity level tax in both Tennessee and Texas. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our financial statements. See "Crude Oil and Other Releases" below for discussion of an enforcement action. Environmental, Health and Safety We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the Environmental Protection Agency (the "EPA"), the United States Department of Transportation, the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies. These laws and regulations govern the discharge of materials into the environment, waste management practices and pollution prevention measures, as well as the safe operation of our pipelines and the safety of our workers and the public. Numerous permits or other authorizations are required under these laws and regulations for the operation of our terminals, pipelines, saltwells, trucks and related operations, and may be subject to revocation, modification and renewal. These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters, which could include soil and water contamination, air pollution, personal injury and property damage allegedly caused by substances which we handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we have assumed responsibility. We believe that our current operations are in substantial compliance with existing environmental and safety requirements. However, there have been and we expect that there will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures. While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations. Releases of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, or is not a reimbursable event under the Omnibus Agreement, subject us to substantial expenses, including costs to respond to, contain and remediate a release, to comply with applicable laws and regulations and to resolve claims by third parties for personal injury, property damage or natural resources damages. Crude Oil and Other Releases We have experienced several crude oil and other releases involving our assets. There were no material releases that occurred during the nine months ended September 30, 2020, and there were five releases that occurred throughout the year 2019. Cleanup operations and site maintenance and remediation efforts on these and other releases are at various stages of completion. The majority of the remediation efforts for these releases are substantially completed or have received regulatory closure. With the exception of the Sulphur Springs release defined below, we expect regulatory closure in 2020 for the release sites that have not yet received it. Many of the releases have occurred on our system of common carrier pipelines which gather crude in southern Arkansas and northern Louisiana, and which are primarily located within 60 miles of Delek Holdings’ El Dorado refinery ("El Dorado Gathering System"). During the year ended December 31, 2019, we decommissioned certain sections of the El Dorado Gathering System in an effort to improve the safety and integrity of the system. The decommissioning of these sections was completed in August 2019. The project did not have a material effect on our financial results. Regulatory authorities could require additional remediation based on the results of our remediation efforts. We may incur additional expenses as a result of further scrutiny by regulatory authorities and continued compliance with laws and regulations to which our assets are subject. As of September 30, 2020, we have accrued $0.3 million for remediation and other such matters related to these releases. On October 3, 2019, a release of diesel fuel involving one of our pipelines occurred near Sulphur Springs, Texas (the "Sulphur Springs Release"). Cleanup operations and site maintenance and remediation on this release have been substantially completed where such costs incurred totaled $7.1 million during 2019. During the three and nine months ended September 30, 2020, we incurred approximately $0.1 million and $0.4 million of additional costs related to final clean-up of this release, respectively. The release is currently in boom maintenance. Ground water monitoring wells were installed in the third quarter of 2020. We expect to conduct quarterly ground water monitoring for at least one year. Additionally, during the third quarter ended September 30, 2020 we conducted creek bed sediment sampling and the results indicated no issues with the groundwater. We filed suit in January 2020 against a third party contractor, seeking damages related to this release. We have not received notification that any legal action with respect to fines and penalties will be pursued by the regulatory agencies. Expenses incurred for the remediation of these crude oil and other releases are included in operating expenses in our condensed consolidated statements of income and comprehensive income. The majority of our releases have been subsequently reimbursed by Delek Holdings pursuant to the terms of the Omnibus Agreement, with the exception of the Sulphur Springs Release above as it is not covered under the Omnibus Agreement. Reimbursements are recorded as a reduction to operating expense. We do not believe the total costs associated with these events, whether alone or in the aggregate, including any fines or penalties and net of available insurance, indemnification or reimbursement, will have a material adverse effect upon our business, financial condition or results of operations. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases We lease certain pipeline and transportation equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Our leases do not have any outstanding renewal options. Certain leases also include options to purchase the leased equipment. Certain of our lease agreements include rates based on equipment usage and others include rate inflationary indices based increases. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The following table presents additional information related to our operating leases in accordance ASC 842: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Lease Cost Operating lease cost $ 2,587 $ 1,744 $ 5,113 $ 4,643 Short-term lease cost (1) 382 47 1,459 850 Variable lease costs 829 — 1,101 — Total lease cost $ 3,798 $ 1,791 $ 7,673 $ 5,493 Other Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (2,587) $ (1,744) $ (5,113) $ (4,643) Leased assets obtained in exchange for new operating lease liabilities $ 865 $ 649 $ 16,644 $ 649 September 30, 2020 Weighted-average remaining lease term (years) for operating leases 3.7 Weighted-average discount rate (2) operating leases 5.7 % (1) Includes an immaterial amount of variable lease cost. (2) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsDistribution DeclarationOn October 27, 2020, our general partner's board of directors declared a quarterly cash distribution of $0.905 per unit, payable on November 12, 2020, to unitholders of record on November 6, 2020. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading. Our unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP applied on a consistent basis with those of the annual audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (our "Annual Report on Form 10-K"), filed with the Securities and Exchange Commission (the "SEC") on February 27, 2020 and in accordance with the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included in our Annual Report on Form 10-K |
Consolidation | All adjustments necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been included. All intercompany accounts and transactions have been eliminated. Such intercompany transactions do not include those with Delek Holdings or our general partner, which are presented as related parties in these accompanying condensed consolidated financial statements. All adjustments are of a normal, recurring nature. Operating results for the interim period should not be viewed as representative of results that may be expected for any future interim period or for the full year. |
New Accounting Pronouncements | New Accounting Pronouncements Adopted During 2020 ASU 2018-13, Fair Value Measurement - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the Financial Accounting Standards Board (the "FASB") issued guidance related to disclosure requirements for fair value measurements. The pronouncement eliminates, modifies and adds disclosure requirements for fair value measurements. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. We adopted this guidance on January 1, 2020 and the adoption did not have a material impact on our business, financial condition or results of operations. ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance requiring the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Organizations will now use forward-looking information to better inform their credit loss estimates. This guidance is effective for interim and annual periods beginning after December 15, 2019. We adopted this guidance on January 1, 2020 using the modified retrospective approach as of the adoption date. The adoption did not have a material impact on the Partnership’s operating results, financial position or disclosures. ASU 2018-15, Intangible - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued guidance related to customers' accounting for implementation costs incurred in a cloud computing arrangement that is considered a service contract. This pronouncement aligns the requirements for capitalizing implementation costs in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Entities can choose to adopt the new guidance prospectively or retrospectively. We adopted this guidance on January 1, 2020 and elected the prospective method. The adoption did not have a material impact on the Partnership's financial condition or results of operations. Accounting Pronouncements Not Yet Adopted ASU 2019-12, Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within Accounting Standards Codification ("ASC") 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 2020, with early adoption permitted. We expect to adopt this guidance on the effective date and are currently evaluating the impact that adopting this new guidance may have on our business, financial condition and results of operations. ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In January 2020, the FASB issued ASU 2020-01 which is intended to clarify interactions between the guidance to account for certain equity securities under Topics 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting. The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and early adoption is permitted. We do not expect that the adoption of this ASU on its effective date will have a material impact on our business, financial condition or results of operations. ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank rates. This guidance is effective for all entities any time beginning on March 12, 2020 through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of the ASU. The Partnership is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. |
Inventory | Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. |
Net Income Per Unit | The two-class method was based on the weighted-average number of common units outstanding during the period. Basic net income per unit applicable to limited partners was computed by dividing limited partners’ interest in net income, after deducting our general partner’s 2% interest and IDRs, by the weighted-average number of outstanding common units. Our net income was allocated to our general partner and limited partners in accordance with their respective partnership percentages after giving effect to priority income allocations for IDRs, which are held by our general partner pursuant to our Partnership Agreement. Earnings in excess of distributions were allocated to our general partner and limited partners based on their respective ownership interests. The IDRs were paid following the close of each quarter.As discussed in Note 3 - Related Party Transactions, pursuant to Amendment No. 2 to the Partnership Agreement, an agreement was reached for a waiver of distributions in respect of the IDRs for the GP Additional Units associated with the 5.0 million Additional Units issued in connection with the Big Spring Gathering Assets Acquisition for at least two years, through at least the distribution for the quarter ending March 31, 2022. The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the GP Additional Units. An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs. Refer to Note 3 for additional details. The IDRs were eliminated in the IDR Restructuring Transaction on August 13, 2020. |
Segment Data | Our operating segments adhere to the accounting policies used for our consolidated financial statements. Our operating segments are managed separately because each segment requires different industry knowledge, technology and marketing strategies. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on segment contribution margin. Segment contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization. |
Property, Plant and Equipment, Impairment | In accordance with ASC 360, Property, Plant & Equipment |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | A summary of revenue, purchases from affiliates and expense transactions with Delek Holdings and its affiliates are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues $ 95,410 $ 66,647 $ 289,739 $ 191,530 Purchases from Affiliates $ 45,186 $ 66,578 $ 155,679 $ 219,225 Operating and maintenance expenses $ 10,330 $ 18,336 $ 33,397 $ 38,851 General and administrative expenses $ 3,250 $ 4,317 $ 9,322 $ 7,430 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table represents a disaggregation of revenue for each reportable segment for the periods indicated (in thousands): Three Months Ended September 30, 2020 Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Service Revenue - Third Party $ 3,035 $ 163 $ 3,198 Service Revenue - Affiliate 5,633 8,708 14,341 Product Revenue - Third Party — 43,660 43,660 Product Revenue - Affiliate — 5,844 5,844 Lease Revenue - Affiliate (1) 62,811 12,414 75,225 Total Revenue $ 71,479 $ 70,789 $ 142,268 (1) Net of $1.8 million of amortization expense for the three months ended September 30, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. Three Months Ended September 30, 2019 Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Service Revenue - Third Party $ 5,281 $ 221 $ 5,502 Service Revenue - Affiliate 2,856 9,578 12,434 Product Revenue - Third Party — 65,407 65,407 Product Revenue - Affiliate — 6,505 6,505 Lease Revenue - Affiliate (1) 36,448 11,260 47,708 Total Revenue $ 44,585 $ 92,971 $ 137,556 (1) Net of $1.8 million of amortization expense for the three months ended September 30, 2019, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | As of September 30, 2020, we expect to recognize $1.6 billion in lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings. Most of these agreements have an initial term ranging from five to ten years, which may be extended for various renewal terms. We disclose information about remaining performance obligations that have original expected durations of greater than one year. Our unfulfilled performance obligations as of September 30, 2020 were as follows (in thousands): Remainder of 2020 67,022 2021 267,990 2022 249,850 2023 240,489 2024 and thereafter $ 751,847 Total expected revenue on remaining performance obligations $ 1,577,198 |
Net Income Per Unit (Tables)
Net Income Per Unit (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Cash Distributions | Our distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below represents total cash distributions applicable to the period in which the distributions are earned. The expected date of distribution for the distributions earned during the period ended September 30, 2020 is November 12, 2020. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit. The calculation of net income per unit is as follows (dollars in thousands, except units and per unit amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income attributable to partners $ 46,328 $ 30,530 $ 118,539 $ 75,112 Less: General partner's distribution (including IDRs) (1) — 8,892 18,618 24,475 Less: Limited partners' distribution 39,307 21,487 87,536 62,256 Earnings in excess (deficit) of distributions $ 7,021 $ 151 $ 12,385 $ (11,619) General partner's earnings: Distributions (including IDRs) (1) $ — $ 8,892 $ 18,618 $ 24,475 Allocation of earnings in excess (deficit) of distributions — 3 106 (231) Total general partner's earnings $ — $ 8,895 $ 18,724 $ 24,244 Limited partners' earnings on common units: Distributions $ 39,307 $ 21,487 $ 87,536 $ 62,256 Allocation of earnings in excess (deficit) of distributions 7,021 148 12,279 (11,388) Total limited partners' earnings on common units $ 46,328 $ 21,635 $ 99,815 $ 50,868 Weighted average limited partner units outstanding: Common units - basic 36,889,761 24,417,285 30,290,051 24,411,308 Common units - diluted 36,894,043 24,420,582 30,292,261 24,417,466 Net income per limited partner unit: Common units - basic $ 1.26 $ 0.89 $ 3.30 $ 2.08 Common units - diluted (2) $ 1.26 $ 0.89 $ 3.30 $ 2.08 (1) Prior to August 13, 2020, general partner distributions (including IDRs) consisted of the 2.0% general partner interest and IDRs, which represented the right of the general partner to receive increasing percentages of quarterly distributions of available cash from operating surplus in excess of 0.43125 per unit per quarter. In connection with the IDR Restructuring Transaction on August 13, 2020, the IDRs were eliminated and the general partner interest became a non-economic general partner interest. See Note 8 for further discussion related to IDRs. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Limited Partners' Capital Account by Class [Table Text Block] | The table below summarizes the changes in the number of units outstanding from December 31, 2019 through September 30, 2020. Common - Public Common - Delek Holdings General Partner Total Balance at December 31, 2019 9,131,579 15,294,046 498,482 24,924,107 General partner units issued to maintain 2% interest — — 102,196 102,196 Unit-based compensation awards (1) 7,614 — — 7,614 Big Spring Gathering Assets Acquisition equity issuance — 5,000,000 — 5,000,000 Delek Holdings unit purchases from public (451,822) 451,822 — — General Partner units converted to non-economic general partner interest — — (600,678) (600,678) Common limited partner units issued in IDR Restructuring Transaction — 14,000,000 — 14,000,000 Balance at September 30, 2020 8,687,371 34,745,868 — 43,433,239 (1) Unit-based compensation awards are presented net of 481 units withheld for taxes as of September 30, 2020. |
Summary of Allocation of General Partner's Interest in Net Income | The following table presents the allocation of the general partner's interest in net income (in thousands, except percentage of ownership interest): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income attributable to partners $ 46,328 $ 30,530 $ 118,539 $ 75,112 Less: General partner's IDRs — (8,453) (17,632) (23,206) Net income available to partners $ 46,328 $ 22,077 $ 100,907 $ 51,906 General partner's ownership interest — % 2.0 % 2.0 % 2.0 % General partner's allocated interest in net income $ — $ 442 1,092 $ 1,038 General partner's IDRs — 8,453 17,632 23,206 Total general partner's interest in net income $ — $ 8,895 $ 18,724 $ 24,244 |
Summary of Distributions | The table below summarizes the quarterly distributions related to our quarterly financial results: Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Quarterly Distribution Per Limited Partner Unit, Annualized Total Cash Distribution, (in thousands) Date of Distribution Unitholders Record Date September 30, 2019 $ 0.880 $ 3.52 $ 30,379 November 12, 2019 November 4, 2019 December 31, 2019 $ 0.885 $ 3.54 $ 30,634 February 12, 2020 February 4, 2020 March 31, 2020 $ 0.890 $ 3.56 $ 30,878 May 12, 2020 May 5, 2020 June 30, 2020 $ 0.900 $ 3.60 $ 35,969 August 12, 2020 August 7, 2020 September 30, 2020 $ 0.905 $ 3.62 $ 39,308 November 12, 2020 (1) November 6, 2020 (1) Expected date of distribution. The allocations of total quarterly cash distributions made to limited partners for the three and nine months ended September 30, 2020 and 2019 are set forth in the table below. Distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below presents total cash distributions applicable to the period in which the distributions are earned (in thousands, except per unit amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 General partner's distributions: General partner's distributions $ — $ 439 $ 986 $ 1,269 General partner's IDRs — 8,453 17,632 23,206 Total general partner's distributions — 8,892 18,618 24,475 Limited partners' distributions: Common limited partners' distributions 39,307 21,487 87,536 62,256 Total cash distributions $ 39,307 $ 30,379 $ 106,154 $ 86,731 Cash distributions per limited partner unit $ 0.905 $ 0.880 $ 2.695 $ 2.550 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Financial Information for Equity Method Investees | Summarized unaudited financial information for Red River on a 100% basis is shown below (in thousands): September 30, 2020 December 31, 2019 Current Assets $ 16,738 $ 9,278 Non-current Assets $ 413,879 $ 381,778 Current liabilities $ 9,556 $ 8,291 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues $ 13,919 $ 19,195 $ 35,888 $ 45,212 Gross profit $ 8,189 $ 14,469 $ 21,251 $ 28,935 Operating income $ 8,020 $ 14,318 $ 20,717 $ 21,461 Net income $ 8,022 $ 14,342 $ 20,768 $ 27,994 Combined summarized unaudited financial information for these two equity method investees on a 100% basis is shown below (in thousands): September 30, 2020 December 31, 2019 Current assets $ 20,897 $ 29,476 Non-current assets $ 256,420 $ 262,300 Current liabilities $ 2,660 $ 6,391 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues $ 14,227 $ 14,602 $ 42,412 $ 33,793 Gross profit $ 9,634 $ 9,965 $ 28,468 $ 20,549 Operating income $ 9,135 $ 9,428 $ 26,999 $ 19,052 Net Income $ 9,136 $ 9,458 $ 27,023 $ 19,124 |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary Segment Data | The following is a summary of business segment operating performance as measured by contribution margin for the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Pipelines and Transportation Net revenues: Affiliate $ 68,444 $ 39,304 $ 168,285 $ 112,694 Third party 3,035 5,281 14,587 16,733 Total pipelines and transportation 71,479 44,585 182,872 129,427 Cost of materials and other 14,342 4,947 31,622 17,871 Operating expenses (excluding depreciation and amortization) 10,749 12,547 31,936 36,109 Segment contribution margin $ 46,388 $ 27,091 $ 119,314 $ 75,447 Capital spending $ 2,552 $ 3,103 $ 3,424 $ 4,345 Wholesale Marketing and Terminalling Net revenues: Affiliate (1) $ 26,966 $ 27,343 $ 121,454 $ 78,836 Third party 43,823 65,628 118,980 237,119 Total wholesale marketing and terminalling 70,789 92,971 240,434 315,955 Cost of materials and other 46,350 67,647 174,255 244,842 Operating expenses (excluding depreciation and amortization) 3,481 5,888 9,487 15,711 Segment contribution margin $ 20,958 $ 19,436 $ 56,692 $ 55,402 Capital spending $ 676 $ 889 $ 3,494 $ 1,893 Consolidated Net revenues: Affiliate $ 95,410 $ 66,647 $ 289,739 $ 191,530 Third party 46,858 70,909 133,567 253,852 Total Consolidated 142,268 137,556 423,306 445,382 Cost of materials and other 60,692 72,594 205,877 262,713 Operating expenses (excluding depreciation and amortization presented below) 14,230 18,435 41,423 51,820 Contribution margin $ 67,346 $ 46,527 176,006 130,849 General and administrative expenses 6,122 5,280 16,973 15,046 Depreciation and amortization 9,459 6,588 24,452 19,801 Other operating income, net — (70) (107) (95) Operating income $ 51,765 $ 34,729 $ 134,688 $ 96,097 Capital spending $ 3,228 $ 3,992 $ 6,918 $ 6,238 (1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the Marketing Contract Intangible Acquisition. See Note 3 for additional information. The following table summarizes the total assets for each segment as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Pipelines and transportation $ 804,118 $ 537,580 Wholesale marketing and terminalling 153,468 206,867 Total assets $ 957,586 $ 744,447 Property, plant and equipment and accumulated depreciation as of September 30, 2020 and depreciation expense by reporting segment for the three and nine months ended September 30, 2020 were as follows (in thousands): Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Property, plant and equipment $ 569,320 $ 114,879 $ 684,199 Less: accumulated depreciation (167,079) (49,619) (216,698) Property, plant and equipment, net (1) $ 402,241 $ 65,260 $ 467,501 Depreciation expense for the three months ended September 30, 2020 $ 7,738 $ 1,721 $ 9,459 Depreciation expense for the nine months ended September 30, 2020 $ 19,364 $ 5,088 $ 24,452 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease, Cost | The following table presents additional information related to our operating leases in accordance ASC 842: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Lease Cost Operating lease cost $ 2,587 $ 1,744 $ 5,113 $ 4,643 Short-term lease cost (1) 382 47 1,459 850 Variable lease costs 829 — 1,101 — Total lease cost $ 3,798 $ 1,791 $ 7,673 $ 5,493 Other Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (2,587) $ (1,744) $ (5,113) $ (4,643) Leased assets obtained in exchange for new operating lease liabilities $ 865 $ 649 $ 16,644 $ 649 September 30, 2020 Weighted-average remaining lease term (years) for operating leases 3.7 Weighted-average discount rate (2) operating leases 5.7 % (1) Includes an immaterial amount of variable lease cost. (2) |
Organization and Basis of Pre_3
Organization and Basis of Presentation Organization and Basis of Presentation (Details) shares in Millions, $ in Millions | Aug. 13, 2020USD ($)shares |
Revolving Credit Facility | DKL Revolver | Fifth Third Bank | Line of Credit | |
Distribution Made to Limited Partner [Line Items] | |
Cash Consideration Received | $ | $ 45 |
Delek Logistics [Member] | Delek US Holdings, Inc. | |
Distribution Made to Limited Partner [Line Items] | |
Business Combination, Consideration Transferred Equity Interests Issued And Issuable, Shares | shares | 14 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ / shares in Units, $ in Millions | May 01, 2020USD ($)Truck_Trailer | Mar. 31, 2020USD ($)storage_tankmibbl$ / sharesshares | Sep. 30, 2020shares | Jun. 30, 2020USD ($) |
Schedule of Asset Acquisitions, by Acquisition [Line Items] | ||||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | shares | 5,000,000 | |||
Delek Trucking [Member] | ||||
Schedule of Asset Acquisitions, by Acquisition [Line Items] | ||||
Consideration transferred | $ 48 | |||
Number Of Trucks and Trailers | Truck_Trailer | 150 | |||
Asset Acquisition, Carry Value Of Assets Acquired | $ 13.3 | |||
Asset Acquisition, Carry Value Of Assets Acquired, Owned Assets | 0.5 | |||
Asset Acquisition, Carry Value Of Assets Acquired, Right-Of-Use Assets | 12.8 | |||
Asset Acquisition, Transaction Cost | $ 0.3 | |||
Big Spring Gathering Asset | ||||
Schedule of Asset Acquisitions, by Acquisition [Line Items] | ||||
Consideration transferred | $ 100 | |||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | shares | 5,000,000 | |||
Asset Acquisition, Equity Interest Transfered As Consideration, Market Price | $ / shares | $ 9.10 | |||
Asset Acquisition, Equity Interest Transfered As Consideration, Value | $ 109.5 | |||
Number Of Miles Of Gathering Systems | mi | 200 | |||
Number of storage tanks | storage_tank | 65 | |||
Total Storage Of Terminals | bbl | 650,000 | |||
Asset Acquisition, Carry Value Of Assets Acquired | $ 209.5 | |||
Asset Acquisition, Transaction Cost | $ 0.7 |
Related Party Transactions - Co
Related Party Transactions - Commercial Agreements (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Minimum [Member] | |
Related Party Transaction [Line Items] | |
Commercial Agreements, Initial Term | 5 years |
Maximum | |
Related Party Transaction [Line Items] | |
Commercial Agreements, Initial Term | 10 years |
Related Party Transactions - Th
Related Party Transactions - Throughput and Deficiency Agreement (Details) | Aug. 12, 2020USD ($) | May 12, 2020USD ($) | May 01, 2020USD ($) | Mar. 31, 2020USD ($)bbl / d | Feb. 12, 2020USD ($) | Nov. 12, 2019USD ($) | Aug. 13, 2019USD ($) | May 14, 2019USD ($) | Feb. 12, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Related Party Transaction [Line Items] | ||||||||||||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 35,969,000 | $ 30,878,000 | $ 30,634,000 | $ 30,379,000 | $ 28,900,000 | $ 27,400,000 | $ 26,900,000 | $ 47,558,000 | ||||
Delek US and affiliates | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 28,100,000 | $ 23,200,000 | $ 22,600,000 | $ 21,200,000 | $ 20,000,000 | $ 19,600,000 | ||||||
Throughput and Deficiency Agreement | Delek US and affiliates | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Commitment To Minimum Revenue | $ 39,000,000 | |||||||||||
Shipments Committed On The Gathering System (in Bbd) | bbl / d | 120,000 | |||||||||||
Shipments Committed To Redelivery Point (in Bbd) | bbl / d | 50,000 | |||||||||||
Commitment To Connect Additional Receipt Points | $ 33,800,000 | |||||||||||
Return On The Actual Costs (in percent) | 12.50% | |||||||||||
Collaborative Arrangement, Term | 10 years | 10 years | ||||||||||
Delek US | Other long term liabilities | Omnibus Agreement | Delek US and affiliates | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Reimbursement of capital expenditures by Sponsor | $ 800,000 | $ 600,000 | $ 2,300,000 |
Related Party Transactions - Om
Related Party Transactions - Omnibus Agreement (Details) - Delek US and affiliates - USD ($) $ in Thousands | Mar. 01, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Operating and maintenance expense | |||||
Related Party Transaction [Line Items] | |||||
Expenses | $ 10,330 | $ 18,336 | $ 33,397 | $ 38,851 | |
Omnibus Agreement | |||||
Related Party Transaction [Line Items] | |||||
Related Party Annual Service Fee | $ 4,100 | ||||
Omnibus Agreement | Delek US | |||||
Related Party Transaction [Line Items] | |||||
Reimbursement for costs incurred for asset failures | 500 | 4,600 | |||
Omnibus Agreement | Delek US | Operating and maintenance expense | |||||
Related Party Transaction [Line Items] | |||||
Reimbursement for costs incurred for asset failures | 0 | 300 | 100 | 6,000 | |
Omnibus Agreement | Delek US | Other long term liabilities | |||||
Related Party Transaction [Line Items] | |||||
Reimbursement of capital expenditures by Delek Holdings | 800 | 600 | 2,300 | ||
DPG Management Agreement, Operating Service And Construction Fee Paid To Partnership | |||||
Related Party Transaction [Line Items] | |||||
Expenses | $ 400 | $ 800 | $ 1,600 | $ 3,600 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | Aug. 13, 2020 | Mar. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 01, 2020 | Feb. 29, 2020 |
Related Party Transaction [Line Items] | |||||||||
Stock Repurchased During Period, Shares | 0 | ||||||||
Stock Repurchased During Period, Value | $ 5 | ||||||||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | 5,000,000 | ||||||||
Revolving Credit Facility | DKL Revolver | Fifth Third Bank | Line of Credit | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cash Consideration Received | $ 45 | ||||||||
Delek US Holdings, Inc. | |||||||||
Related Party Transaction [Line Items] | |||||||||
Delek's limited partner ownership interest (as percent) | 80.00% | ||||||||
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest, Shares | 34,700,000 | ||||||||
Delek Logistics GP [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
General Partner Economic Interest, Pecent | 2.00% | ||||||||
Common unitholders - Delek | Limited Partner | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock Repurchased During Period, Shares | 451,822 | ||||||||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | 5,000,000 | ||||||||
Delek US Holdings, Inc. | Delek Logistics [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Business Combination, Consideration Transferred Equity Interests Issued And Issuable, Shares | 14,000,000 | ||||||||
Delek US Holdings, Inc. | General Partnership | |||||||||
Related Party Transaction [Line Items] | |||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 5.20% | ||||||||
Ownership Interest in General Partner (as percent) | 100.00% | ||||||||
Delek US and affiliates | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related Party. Ownership Percentage In Company | 70.50% | 70.50% | 62.60% | 64.50% | |||||
Delek US and affiliates | DPG Management Agreement, Operating Service And Construction Fee Paid To Partnership | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0.4 | $ 0.8 | $ 1.6 | $ 3.6 | |||||
Big Spring Gathering Asset | |||||||||
Related Party Transaction [Line Items] | |||||||||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | 5,000,000 |
Related Party Transactions - Su
Related Party Transactions - Summary of Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Related Party Transaction [Line Items] | |||||
Revenue from Related Parties | [1] | $ 95,410 | $ 66,647 | $ 289,739 | $ 191,530 |
Delek US and affiliates | |||||
Related Party Transaction [Line Items] | |||||
Revenue from Related Parties | 95,410 | 66,647 | 289,739 | 191,530 | |
General and administrative expenses | 3,250 | 4,317 | 9,322 | 7,430 | |
Cost of Sales [Member] | Delek US and affiliates | |||||
Related Party Transaction [Line Items] | |||||
Expenses | 45,186 | 66,578 | |||
Purchases from Affiliates [Member] | Delek US and affiliates | |||||
Related Party Transaction [Line Items] | |||||
Expenses | 155,679 | 219,225 | |||
Operating and maintenance expense | Delek US and affiliates | |||||
Related Party Transaction [Line Items] | |||||
Expenses | $ 10,330 | $ 18,336 | $ 33,397 | $ 38,851 | |
[1] | See Note 3 for a description of our material affiliate revenue transactions. |
Related Party Transactions - Qu
Related Party Transactions - Quarterly Cash Distributions (Details) - USD ($) $ in Thousands | Nov. 12, 2020 | Aug. 12, 2020 | May 12, 2020 | Feb. 12, 2020 | Nov. 12, 2019 | Aug. 13, 2019 | May 14, 2019 | Feb. 12, 2019 | Sep. 30, 2020 |
Related Party Transaction [Line Items] | |||||||||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 35,969 | $ 30,878 | $ 30,634 | $ 30,379 | $ 28,900 | $ 27,400 | $ 26,900 | $ 47,558 | |
Subsequent Event | |||||||||
Related Party Transaction [Line Items] | |||||||||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 39,308 | ||||||||
Delek US and affiliates | |||||||||
Related Party Transaction [Line Items] | |||||||||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 28,100 | $ 23,200 | $ 22,600 | $ 21,200 | $ 20,000 | $ 19,600 | |||
Delek US and affiliates | Subsequent Event | |||||||||
Related Party Transaction [Line Items] | |||||||||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 31,400 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||
Property, plant and equipment | $ 467,501 | $ 467,501 | $ 295,044 | ||
Total revenue | 142,268 | $ 137,556 | 423,306 | $ 445,382 | |
Amortization of customer contract intangible assets | 1,800 | 1,800 | 5,408 | 5,408 | |
Revenue, remaining performance obligation | 1,577,198 | 1,577,198 | |||
Service Revenue - Third Party | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 3,198 | 5,502 | 15,089 | 17,258 | |
Product Revenue - Third Party | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 43,660 | 65,407 | 118,478 | 236,594 | |
Product Revenue - Affiliate | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 5,844 | 6,505 | 64,067 | 23,078 | |
Lease Revenue - Affiliate (1) | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 75,225 | 47,708 | 187,324 | 133,843 | |
Service Revenue - Affiliate | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 14,341 | 12,434 | 38,348 | 34,609 | |
Pipelines and transportation | |||||
Disaggregation of Revenue [Line Items] | |||||
Property, plant and equipment | 402,241 | 402,241 | |||
Total revenue | 71,479 | 44,585 | 182,872 | 129,427 | |
Pipelines and transportation | Service Revenue - Third Party | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 3,035 | 5,281 | 14,587 | 16,733 | |
Pipelines and transportation | Product Revenue - Third Party | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 0 | 0 | 0 | 0 | |
Pipelines and transportation | Product Revenue - Affiliate | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 0 | 0 | 0 | 0 | |
Pipelines and transportation | Lease Revenue - Affiliate (1) | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 62,811 | 36,448 | 154,437 | 104,523 | |
Pipelines and transportation | Service Revenue - Affiliate | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 5,633 | 2,856 | 13,848 | 8,171 | |
Wholesale marketing and terminalling | |||||
Disaggregation of Revenue [Line Items] | |||||
Property, plant and equipment | 65,260 | 65,260 | |||
Total revenue | 70,789 | 92,971 | 240,434 | 315,955 | |
Wholesale marketing and terminalling | Service Revenue - Third Party | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 163 | 221 | 502 | 525 | |
Wholesale marketing and terminalling | Product Revenue - Third Party | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 43,660 | 65,407 | 118,478 | 236,594 | |
Wholesale marketing and terminalling | Product Revenue - Affiliate | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 5,844 | 6,505 | 64,067 | 23,078 | |
Wholesale marketing and terminalling | Lease Revenue - Affiliate (1) | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 12,414 | 11,260 | 32,887 | 29,320 | |
Wholesale marketing and terminalling | Service Revenue - Affiliate | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 8,708 | $ 9,578 | 24,500 | $ 26,438 | |
Assets Leased to Others [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Property, plant and equipment | $ 394,600 | $ 394,600 | |||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Commercial Agreements, Initial Term | 10 years | ||||
Minimum [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Commercial Agreements, Initial Term | 5 years |
Revenues - Remaining Performanc
Revenues - Remaining Performance Obligation Expected Timing of Satisfaction - Period (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1,577,198 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 67,022 |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 267,990 |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 249,850 |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 240,489 |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 751,847 |
Revenue, remaining performance obligation, expected timing of satisfaction |
Net Income Per Unit - Narrative
Net Income Per Unit - Narrative (Details) - shares | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | 5,000,000 | ||||
General Partnership | |||||
General partner's ownership interest (as percent) | 0.00% | 2.00% | 2.00% | 2.00% | |
Big Spring Gathering Asset | |||||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | 5,000,000 |
Net Income Per Unit (Details)
Net Income Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net Income Per Unit [Line Items] | ||||
Net income attributable to partners | $ 46,328 | $ 30,530 | $ 118,539 | $ 75,112 |
Less: Partners' distribution | 39,307 | 21,487 | 87,536 | 62,256 |
Allocation of earnings in excess (deficit) of distributions | $ 7,021 | $ 151 | $ 12,385 | $ (11,619) |
Common Units Excluded From Computation Of Earnings Per Unit, Units | 0 | 0 | 0 | 0 |
Footnote [Abstract] | ||||
Common Units Excluded From Computation Of Earnings Per Unit, Units | 0 | 0 | 0 | 0 |
Common Units | ||||
Net Income Per Unit [Line Items] | ||||
Common units - (basic) (in shares) | 36,889,761 | 24,417,285 | 30,290,051 | 24,411,308 |
Common units - (diluted) (in shares) | 36,894,043 | 24,420,582 | 30,292,261 | 24,417,466 |
Common units - (basic) (in dollars per share) | $ 1.26 | $ 0.89 | $ 3.30 | $ 2.08 |
Common units - (diluted) (in dollars per share) | $ 1.26 | $ 0.89 | $ 3.30 | $ 2.08 |
General Partner | ||||
Net Income Per Unit [Line Items] | ||||
Net income attributable to partners | $ 8,895 | $ 18,725 | $ 24,244 | |
Less: General partner's distribution (including IDRs) | $ 0 | 8,892 | 18,618 | 24,475 |
Allocation of earnings in excess (deficit) of distributions | 0 | 3 | 106 | (231) |
Total partner's earnings | 0 | 8,895 | 18,724 | 24,244 |
Common unitholders | ||||
Net Income Per Unit [Line Items] | ||||
Less: Partners' distribution | 87,536 | 62,256 | ||
Allocation of earnings in excess (deficit) of distributions | $ 12,279 | $ (11,388) | ||
Common units - (basic) (in shares) | 30,290,051 | 24,411,308 | ||
Common units - (diluted) (in shares) | 30,292,261 | 24,417,466 | ||
Common units - (basic) (in dollars per share) | $ 3.30 | $ 2.08 | ||
Common units - (diluted) (in dollars per share) | $ 3.30 | $ 2.08 | ||
Common unitholders | Common Units | ||||
Net Income Per Unit [Line Items] | ||||
Less: Partners' distribution | 39,307 | 21,487 | ||
Allocation of earnings in excess (deficit) of distributions | 7,021 | 148 | ||
Total partner's earnings | $ 46,328 | $ 21,635 | $ 99,815 | $ 50,868 |
Common units - (basic) (in shares) | 36,889,761 | 24,417,285 | ||
Common units - (diluted) (in shares) | 36,894,043 | 24,420,582 | ||
Common units - (basic) (in dollars per share) | $ 1.26 | $ 0.89 | ||
Common units - (diluted) (in dollars per share) | 1.26 | $ 0.89 | ||
Maximum | ||||
Footnote [Abstract] | ||||
Distribution Payment Targets | $ 0.43125 | |||
General Partnership | ||||
Footnote [Abstract] | ||||
General partner's ownership interest (as percent) | 0.00% | 2.00% | 2.00% | 2.00% |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Inventories | $ 1,696 | $ 12,617 |
Long-Term Obligations - Second
Long-Term Obligations - Second Amended and Restated Credit Agreement (Details) - Line of Credit - Revolving Credit Facility - Fifth Third Bank - USD ($) | Aug. 13, 2020 | Dec. 30, 2014 | Sep. 30, 2020 | Sep. 28, 2018 |
Line of Credit Facility [Line Items] | ||||
Weighted average interest rate (as percent) | 2.69% | |||
Prime Rate | United States of America, Dollars | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate description | U.S. dollar prime rate | |||
London Interbank Offered Rate (LIBOR) | United States of America, Dollars | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate description | LIBOR | |||
Canadian prime rate | Canada, Dollars | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate description | Canadian dollar prime rate | |||
Canadian Dealer Offered Rate (CDOR) | Canada, Dollars | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate description | Canadian Dealer Offered Rate | |||
DKL Revolver | ||||
Line of Credit Facility [Line Items] | ||||
Maximum lender commitment | $ 850,000,000 | |||
Maximum amount under accordion feature | $ 1,000,000,000 | |||
Cash Consideration Received | $ 45,000,000 | |||
Increase (Decrease) in Restricted Cash | $ 20,000,000 | |||
Second Amended and Restated Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee (as percent) | 0.40% | |||
Outstanding borrowings | $ 760,700,000 | |||
Letters of credit outstanding | 0 | |||
Unused credit commitment | $ 89,300,000 |
Long-Term Obligations - 6.75% S
Long-Term Obligations - 6.75% Senior Notes Due 2025 (Details) - Senior Notes - Senior 2025 Notes - USD ($) | May 23, 2017 | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Face amount of debt | $ 250,000,000 | ||
Interest rate (as percent) | 6.75% | ||
Purchase price (as percent) | 101.00% | ||
Long-term Line of Credit | $ 250,000,000 | ||
Debt Instrument, Interest Rate, Effective Percentage | 7.22% | ||
Deferred financing costs | $ 3,500,000 | $ 4,000,000 | |
Debt discount | $ 1,100,000 | $ 1,300,000 | |
Twelve-month period beginning on May 15, 2020 | |||
Debt Instrument [Line Items] | |||
Redemption price (as percent) | 105.063% | ||
Twelve-month period beginning on May 15, 2021 | |||
Debt Instrument [Line Items] | |||
Redemption price (as percent) | 103.375% | ||
Twelve-month period beginning on May 15, 2022 | |||
Debt Instrument [Line Items] | |||
Redemption price (as percent) | 101.688% | ||
Beginning on May 15, 2023 and thereafter | |||
Debt Instrument [Line Items] | |||
Redemption price (as percent) | 100.00% |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ in Millions | Aug. 13, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Aug. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||||||
General partner units outstanding (units) | 0 | 0 | 498,482 | ||||
Common unitholders - public | |||||||
Class of Stock [Line Items] | |||||||
Common units outstanding (in shares) | 8,687,371 | 8,687,371 | 9,131,579 | ||||
Common unitholders - Delek | |||||||
Class of Stock [Line Items] | |||||||
Common units outstanding (in shares) | 34,745,868 | 34,745,868 | 15,294,046 | ||||
Limited Partner | Delek US | |||||||
Class of Stock [Line Items] | |||||||
Limited Partners Interest In Partnership, Shares | 14,000,000 | ||||||
Limited Partner | Common unitholders - public | |||||||
Class of Stock [Line Items] | |||||||
Common units outstanding (in shares) | 8,687,371 | 8,687,371 | |||||
Limited Partner | Common unitholders - Delek | |||||||
Class of Stock [Line Items] | |||||||
Common units outstanding (in shares) | 34,745,868 | 34,745,868 | |||||
Delek US Holdings, Inc. | |||||||
Class of Stock [Line Items] | |||||||
Delek's limited partner ownership interest (as percent) | 80.00% | ||||||
General Partnership | |||||||
Class of Stock [Line Items] | |||||||
General partner's ownership interest (as percent) | 0.00% | 2.00% | 2.00% | 2.00% | |||
Delek US Holdings, Inc. | General Partnership | |||||||
Class of Stock [Line Items] | |||||||
Ownership Interest in General Partner (as percent) | 100.00% | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 5.20% | ||||||
Business Combination, Acquisition Related Costs | $ 1.1 |
Equity - Equity Activity (Detai
Equity - Equity Activity (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Increase (Decrease) in Partners' Capital (Roll Forward) | ||||
Beginning Balance | 24,924,107 | |||
Ending Balance | 43,433,239 | 43,433,239 | ||
General partner units issued to maintain 2% interest | 102,196 | |||
Unit-based compensation awards | 7,614 | |||
Big Spring Gathering Assets Acquisition equity issuance | 5,000,000 | |||
Delek Holdings unit purchases from public | 0 | |||
General Partner units converted to non-economic general partner interest | (600,678) | |||
Common limited partner units issued in IDR Restructuring Transaction | 14,000,000 | |||
Units withheld for taxes | 481 | |||
Limited Partner | Common unitholders - public | ||||
Increase (Decrease) in Partners' Capital (Roll Forward) | ||||
Beginning Balance | 9,131,579 | |||
Ending Balance | 8,687,371 | 8,687,371 | ||
General partner units issued to maintain 2% interest | 0 | |||
Unit-based compensation awards | 7,614 | |||
Big Spring Gathering Assets Acquisition equity issuance | 0 | |||
Delek Holdings unit purchases from public | (451,822) | |||
General Partner units converted to non-economic general partner interest | 0 | |||
Common limited partner units issued in IDR Restructuring Transaction | 0 | |||
Limited Partner | Common unitholders - Delek | ||||
Increase (Decrease) in Partners' Capital (Roll Forward) | ||||
Beginning Balance | 15,294,046 | |||
Ending Balance | 34,745,868 | 34,745,868 | ||
General partner units issued to maintain 2% interest | 0 | |||
Unit-based compensation awards | 0 | |||
Big Spring Gathering Assets Acquisition equity issuance | 5,000,000 | |||
Delek Holdings unit purchases from public | 451,822 | |||
General Partner units converted to non-economic general partner interest | 0 | |||
Common limited partner units issued in IDR Restructuring Transaction | 14,000,000 | |||
General Partner | ||||
Increase (Decrease) in Partners' Capital (Roll Forward) | ||||
Beginning Balance | 498,482 | |||
Ending Balance | 0 | 0 | ||
General partner units issued to maintain 2% interest | 102,196 | |||
Unit-based compensation awards | 0 | |||
Big Spring Gathering Assets Acquisition equity issuance | 0 | |||
Delek Holdings unit purchases from public | 0 | |||
General Partner units converted to non-economic general partner interest | (600,678) | |||
Common limited partner units issued in IDR Restructuring Transaction | 0 | |||
General Partnership | ||||
General partner's ownership interest (as percent) | 0.00% | 2.00% | 2.00% | 2.00% |
Equity - Allocations of Net Inc
Equity - Allocations of Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Net income attributable to partners | $ 46,328 | $ 30,530 | $ 118,539 | $ 75,112 | |
Less: General partner's IDRs | 0 | (8,453) | (17,632) | (23,206) | |
Net income available to partners | 46,328 | 22,077 | 100,907 | 51,906 | |
General partner's allocated interest in net income | 0 | 442 | 1,092 | 1,038 | |
General partner's IDRs | 0 | 8,453 | 17,632 | 23,206 | |
Total general partner's interest in net income | [1] | $ 0 | $ 8,895 | $ 18,724 | $ 24,244 |
General Partnership | |||||
General partner's ownership interest (as percent) | 0.00% | 2.00% | 2.00% | 2.00% | |
[1] | See Note 3 for a description of the IDR Restructuring Transaction. |
Equity - Incentive Distribution
Equity - Incentive Distribution Rights (Details) - $ / shares | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest, Increasing Percentage, Maximum | 48.00% | ||||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | 5,000,000 | ||||
Maximum | |||||
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||
Distribution Payment Targets | $ 0.43125 | ||||
General Partnership | |||||
Equity [Abstract] | |||||
General partner's ownership interest (as percent) | 0.00% | 2.00% | 2.00% | 2.00% | |
Big Spring Gathering Asset | |||||
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||
Asset Acquisition, Equity Interest Transfered As Consideration, Shares | 5,000,000 |
Equity - Cash Distributions (De
Equity - Cash Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 12, 2020 | Aug. 12, 2020 | May 12, 2020 | Feb. 12, 2020 | Nov. 12, 2019 | Aug. 13, 2019 | May 14, 2019 | Feb. 12, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Distribution Made to Limited Partner [Line Items] | ||||||||||||
Total Quarterly Distribution Per Limited Partner Unit - Paid (in dollars per share) | $ 0.900 | $ 0.890 | $ 0.885 | $ 0.880 | ||||||||
Total Quarterly Distribution Per Limited Partner Unit, Annualized - Paid (in dollars per share) | $ 3.60 | $ 3.56 | $ 3.54 | $ 3.52 | ||||||||
Total Cash Distribution, including general partner interest and IDRs | $ 35,969 | $ 30,878 | $ 30,634 | $ 30,379 | $ 28,900 | $ 27,400 | $ 26,900 | $ 47,558 | ||||
Total Quarterly Distribution Per Limited Partner Unit - Declared (in dollars per share) | $ 0.905 | $ 0.880 | $ 2.695 | $ 2.550 | ||||||||
Subsequent Event | ||||||||||||
Distribution Made to Limited Partner [Line Items] | ||||||||||||
Total Quarterly Distribution Per Limited Partner Unit - Paid (in dollars per share) | $ 0.905 | |||||||||||
Total Quarterly Distribution Per Limited Partner Unit, Annualized - Paid (in dollars per share) | $ 3.62 | |||||||||||
Total Cash Distribution, including general partner interest and IDRs | $ 39,308 |
Equity - Distributions Earned (
Equity - Distributions Earned (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Equity [Abstract] | ||||
General partner's distributions | $ 0 | $ 439 | $ 986 | $ 1,269 |
General partner's IDRs | 0 | 8,453 | 17,632 | 23,206 |
Total general partner's distributions | 0 | 8,892 | 18,618 | 24,475 |
Common limited partners' distributions | 39,307 | 21,487 | 87,536 | 62,256 |
Total cash distributions | $ 39,307 | $ 30,379 | $ 106,154 | $ 86,731 |
Cash distributions per limited partner unit (in dollars per share) | $ 0.905 | $ 0.880 | $ 2.695 | $ 2.550 |
Equity Method Investments (Deta
Equity Method Investments (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
May 31, 2019USD ($) | Sep. 30, 2020USD ($)joint_venture | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments, number of joint ventures | joint_venture | 3 | |||
Investment in joint ventures | $ 255,368 | $ 246,984 | ||
Payments to Acquire Equity Method Investments | $ 11,804 | $ 137,361 | ||
Red River | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest (as percent) | 33.00% | |||
Investment in joint ventures | $ 124,700 | |||
CP LLC And Rangeland Energy | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments, number of joint ventures | joint_venture | 2 | |||
CP LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest (as percent) | 50.00% | |||
Rangeland Rio | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest (as percent) | 33.00% | |||
Red River Start Up Capital | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Payments to Acquire Equity Method Investments | 400 | |||
Red River Expansion | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Payments to Acquire Equity Method Investments | $ 3,500 | $ 11,800 |
Equity Method Investments - Sum
Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||
Current Assets | $ 35,604 | $ 35,604 | $ 33,570 | ||
Current liabilities | 23,946 | 23,946 | 35,082 | ||
Revenues | 142,268 | $ 137,556 | 423,306 | $ 445,382 | |
Operating income | 51,765 | 34,729 | 134,688 | 96,097 | |
Net Income | 46,328 | 30,530 | 118,539 | 75,112 | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Red River | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current Assets | 16,738 | 16,738 | 9,278 | ||
Non-current Assets | 413,879 | 413,879 | 381,778 | ||
Current liabilities | 9,556 | 9,556 | 8,291 | ||
Revenues | 13,919 | 19,195 | 35,888 | 45,212 | |
Gross Profit | 8,189 | 14,469 | 21,251 | 28,935 | |
Operating income | 8,020 | 14,318 | 20,717 | 21,461 | |
Net Income | 8,022 | 14,342 | 20,768 | 27,994 | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Joint Ventures [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current Assets | 20,897 | 20,897 | 29,476 | ||
Non-current Assets | 256,420 | 256,420 | 262,300 | ||
Current liabilities | 2,660 | 2,660 | $ 6,391 | ||
Revenues | 14,227 | 14,602 | 42,412 | 33,793 | |
Gross Profit | 9,634 | 9,965 | 28,468 | 20,549 | |
Operating income | 9,135 | 9,428 | 26,999 | 19,052 | |
Net Income | $ 9,136 | $ 9,458 | $ 27,023 | $ 19,124 |
Segment Data - Narrative (Detai
Segment Data - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Data (Details)
Segment Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | ||
Segment Reporting Information [Line Items] | ||||||
Affiliates (1) | [1] | $ 95,410 | $ 66,647 | $ 289,739 | $ 191,530 | |
Third party | 46,858 | 70,909 | 133,567 | 253,852 | ||
Net revenues | 142,268 | 137,556 | 423,306 | 445,382 | ||
Cost of materials and other | 60,692 | 72,594 | 205,877 | 262,713 | ||
Operating expenses (excluding depreciation and amortization presented below) | 14,230 | 18,435 | 41,423 | 51,820 | ||
Segment contribution margin | 67,346 | 46,527 | 176,006 | 130,849 | ||
General and administrative expenses | 6,122 | 5,280 | 16,973 | 15,046 | ||
Depreciation and amortization | 9,459 | 6,588 | 24,452 | 19,801 | ||
Gain on asset disposals | 0 | (70) | (107) | (95) | ||
Other Operating Income (Expense), Net | 0 | 70 | 107 | 95 | ||
Operating income | 51,765 | 34,729 | 134,688 | 96,097 | ||
Capital spending | 3,228 | 3,992 | 6,918 | 6,238 | ||
Total assets | 957,586 | 957,586 | $ 744,447 | |||
Pipelines and transportation | ||||||
Segment Reporting Information [Line Items] | ||||||
Affiliates (1) | 68,444 | 39,304 | 168,285 | 112,694 | ||
Third party | 3,035 | 5,281 | 14,587 | 16,733 | ||
Net revenues | 71,479 | 44,585 | 182,872 | 129,427 | ||
Operating expenses (excluding depreciation and amortization presented below) | 10,749 | 12,547 | 31,936 | 36,109 | ||
Segment contribution margin | 46,388 | 27,091 | 119,314 | 75,447 | ||
Capital spending | 2,552 | 3,103 | 3,424 | 4,345 | ||
Total assets | 804,118 | 804,118 | 537,580 | |||
Wholesale marketing and terminalling | ||||||
Segment Reporting Information [Line Items] | ||||||
Affiliates (1) | 26,966 | 27,343 | 121,454 | 78,836 | ||
Third party | 43,823 | 65,628 | 118,980 | 237,119 | ||
Net revenues | 70,789 | 92,971 | 240,434 | 315,955 | ||
Operating expenses (excluding depreciation and amortization presented below) | 3,481 | 5,888 | 9,487 | 15,711 | ||
Segment contribution margin | 20,958 | 19,436 | 56,692 | 55,402 | ||
Capital spending | 676 | 889 | 3,494 | 1,893 | ||
Total assets | 153,468 | 153,468 | $ 206,867 | |||
Service | ||||||
Segment Reporting Information [Line Items] | ||||||
Cost of materials and other | 60,692 | 72,594 | 205,877 | 262,713 | ||
Service | Pipelines and transportation | ||||||
Segment Reporting Information [Line Items] | ||||||
Cost of materials and other | 14,342 | 4,947 | 31,622 | 17,871 | ||
Service | Wholesale marketing and terminalling | ||||||
Segment Reporting Information [Line Items] | ||||||
Cost of materials and other | $ 46,350 | $ 67,647 | $ 174,255 | $ 244,842 | ||
[1] | See Note 3 for a description of our material affiliate revenue transactions. |
Segment Data - PP&E (Details)
Segment Data - PP&E (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Property, plant and equipment | $ 684,199 | $ 684,199 | $ 461,325 |
Less: accumulated depreciation | (216,698) | (216,698) | (166,281) |
Property, plant and equipment, net | 467,501 | 467,501 | $ 295,044 |
Depreciation expense | 9,459 | 24,452 | |
Pipelines and transportation | |||
Segment Reporting Information [Line Items] | |||
Property, plant and equipment | 569,320 | 569,320 | |
Less: accumulated depreciation | (167,079) | (167,079) | |
Property, plant and equipment, net | 402,241 | 402,241 | |
Depreciation expense | 7,738 | 19,364 | |
Property, Plant and Equipment, Adjustment, Reclassification | 118,200 | ||
Wholesale marketing and terminalling | |||
Segment Reporting Information [Line Items] | |||
Property, plant and equipment | 114,879 | 114,879 | |
Less: accumulated depreciation | (49,619) | (49,619) | |
Property, plant and equipment, net | 65,260 | 65,260 | |
Depreciation expense | 1,721 | $ 5,088 | |
Property, Plant and Equipment, Adjustment, Reclassification | $ (118,200) |
Commitments and Contingencies -
Commitments and Contingencies - Crude Oil Releases (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($)oil_releases | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)oil_releases | Sep. 30, 2019USD ($) | |
Loss Contingencies [Line Items] | |||||
Number Of Crude Oil Releases | oil_releases | 5 | 0 | |||
Accrual for environmental loss contingencies, period increase (decrease) | $ 0.3 | ||||
Accrual for Environmental Loss Contingencies, Charges to Expense for New Losses | $ 0.1 | $ 7.1 | $ 0.4 | ||
Operating Expense [Member] | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | 0.3 | 0.3 | |||
Delek US | Omnibus Agreement | Delek US and affiliates | |||||
Loss Contingencies [Line Items] | |||||
Reimbursement for costs incurred for asset failures | $ 0.5 | 4.6 | |||
Delek US | Omnibus Agreement | Operating Expense [Member] | Delek US and affiliates | |||||
Loss Contingencies [Line Items] | |||||
Reimbursement for costs incurred for asset failures | $ 0 | $ 0.3 | $ 0.1 | $ 6 |
Commitments and Contingencies_2
Commitments and Contingencies - Letters of Credit (Details) | Sep. 30, 2020USD ($) |
Second Amended and Restated Credit Agreement | Line of Credit | Revolving Credit Facility | Fifth Third Bank | |
Debt Instrument [Line Items] | |
Letters of credit outstanding | $ 0 |
Leases - Lease Cost and Other I
Leases - Lease Cost and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,587 | $ 1,744 | $ 5,113 | $ 4,643 |
Short-term lease cost | 382 | 47 | 1,459 | 850 |
Variable lease costs | 829 | 0 | 1,101 | 0 |
Total lease cost | 3,798 | 1,791 | 7,673 | 5,493 |
Cash paid for amounts included in the measurement of lease liabilities | ||||
Operating cash flows from operating leases | (2,587) | $ (1,744) | (5,113) | (4,643) |
Leased assets obtained in exchange for new operating lease liabilities | $ 865 | $ 16,644 | $ 649 | |
Weighted-average remaining lease term (years) for operating leases | 3 years 8 months 12 days | 3 years 8 months 12 days | ||
Weighted-average discount rate (2) operating leases | 5.70% | 5.70% |
Subsequent Events - Distributio
Subsequent Events - Distribution Declaration (Details) - $ / shares | Nov. 12, 2020 | Aug. 12, 2020 | May 12, 2020 | Feb. 12, 2020 | Nov. 12, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Subsequent Event [Line Items] | |||||||||
Distribution Made to Limited Partner, Distributions Paid, Per Unit | $ 0.900 | $ 0.890 | $ 0.885 | $ 0.880 | |||||
Cash distributions per limited partner unit (in dollars per share) | $ 0.905 | $ 0.880 | $ 2.695 | $ 2.550 | |||||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Distribution Made to Limited Partner, Distributions Paid, Per Unit | $ 0.905 |