DKL - Earnings call transcript Q1 2018 | Delek Logistics Partners, LP

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Beth, and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek Logistics Partners First Quarter Earnings Call. [Operator Instructions] Thank you. Keith Johnson, you may begin your conference.

Keith Johnson

Beth. you, Thank Good morning. for first discuss quarter everyone us this thank on joining XXXX to to DKL’s webcast like I’d financial results.

today’s and CFO; on General team. members me call Uzi management be Joining Yemin, of Partner’s our Chairman well CEO; as Kremke, Kevin as other will our

term reminder, a that call under federal forward-looking statements may As defined contain securities conference as this is laws.

the made may foregoing, are not statements. historical fact be For plans, to similar that Without words expects this statements. statements expressions to the call limiting purpose, believes, anticipates, are during this any identify forward-looking deemed statements be and of forward-looking intended

release. You forth may in are be and statements with set filings press factors Securities the important in cautioned our and these Exchange affected that Commission by latest our

results publicly update of forward-looking a As materially forward-looking new events operations differ information, the in as otherwise. result, from any to We discussed actual undertake obligation future result statements. or may statement, whether no results a or

over accordance accepted reconciliation the of financial results results, non-GAAP encouraged be GAAP on the the reporting review strategic to remarks. we can or website. financial measures With to non-GAAP results. found Investors the the release, that is certain begin Kevin. offer accounting few closing with Relations results these addition overview, report will GAAP, comparable principles, are to a call which in In today’s in and section that, of to generally financial press turn non-GAAP the call, a Investor posted On with will Kevin then the Uzi I’ll

Kevin Kremke

Thanks, Keith.

of of Pipeline assets West increase from from during Basin-related Texas a strong in the logistics margin Spring improved. one-month XXXX. and benefited and had Permian performance Our performance performance Paline our We operating the our first quarter year-over-year Big operations

quarter compared of year. of Our million distributable $XX.X the the of quarter flow $XX.X to last XXXX first million was first in approximately cash

Big increased EBITDA to record increased the quarter on quarterly ended per X.X% from improved per increase our million as than X May of prior unit paid for Based which XXst to to our period. to increase our compared unitholders first to fourth quarterly on XX, we year-over-year XXXX. XXXX acquisition XX quarter March be and $XX.X per consecutive limited $XXX our million partner X.X% ratio, May million our approximately basis XXXX, available capacity is times XXXX This $XX.X the distribution million of X.XX $X.XX performance, a in distribution on XXXX. $XXX At of of Spring the and unit. sequential the quarter quarter DKL basis, is coverage unit. is March This $XXX distribution assets was our logistics in facility, of million following XX, a on had March. for distributable the Our credit first and higher distribution year

debt was million times Our our total within approximately under well total leverage at credit the X.X and currently was $XXX facility. is X.X times, allowable

in interest diluted diluted net or million in partner’s million, For quarter income partner prior limited all prior Logistics to or the $XX.X Delek $XX unit common $XX.X $X.XX common to the of partner per $X.XX of million partners was $XX.X million the period. net year reported income which unit limited compared per in first attributable to XXXX, year compares period. Limited

due first prior of to in the increased performance first year the the in year, to the segment, million from of XXXX first contribution primarily prior to and $X.X to the the variable This acquisition, increase was and which in million this contribution margin the year our and period. primarily compared $XX.X segment, Terminalling million from In Paline margin $XX.X quarter review improvement in our the in Transportation $XX.X and which Operating million acquisition. quarter the and West margin quarter period, was Now costs. the this Marketing lower the by was offset was Wholesale Pipeline SALA due Big acquisition Gathering System. of Spring of partly year. an East increased Operating quarter last Texas prior performance increase was $X.X the period, was million the XXXX the $X.X million segments. agreement. year to $XX.X to on an in Texas the quarter $X our due in from gross from million our I first million in expenses improved first Pipelines expenses primarily marketing will primarily In This to operating attributable of the increase year

wholesale of $X.XX Texas in per in first West Throughput of per prior the year. West last XX,XXX Texas the in compared in barrel just the to to day was to quarter $X.XX per barrel gross Our under year. increased per quarter compared barrels barrels day XX,XXX margin year this first

strong in see to continued second West Texas margins have We into the quarter.

and barrel barrels the approximately margin April, XX,XXX West During averaged day. volumes approximately Texas gross per $X.XX averaged per in

quarter included joint our first first income from our $X.X spending XXXX and in venture $X.X XXXX, of of During million period. million the from approximately the income compared maintenance. crude ventures million $X.X the quarter million. in first of the were approximately quarter of year XXXX $XXX prior received $XXX,XXX of of joint We our Capital approximately in expenditures was and pipelines distribution $XXX of oil to equity million a discretionary

XXXX, $XXX,XXX quarter the was approximately During reimbursed Delek by of first US.

total million of For and forecast maintenance $XX.X $X.X reimbursement which gross Delek US. of by CapEx $XX.X includes XXXX, our million discretionary is before capital million,

call Uzi $X.X capital to approximately closing turn his to of maintenance expect comments. million in that, With reimbursed be for XXXX. the will We I over

Uzi Yemin

you, Thank Kevin.

Spring we the basis. assets of annual on an $XX logistics purchase first should provide additional an Big the million of our from EBITDA the completed that sponsor During quarter,

Paline us per In quarter quarterly addition, first was Those a the capacity build barrels from steps XX,XXX should per record EBITDA XX,XXX allow in barrels XXXX. Pipeline. from increased the day to day on of the to

the with to announced announcement related product joint terminals purchase venture light American HSR through from an ventures the Midstream. two process of – the and we continue the joint addition, affiliate of In Partners Plains to work Green

the continue acquisition annual distributing value unit creating partner questions? advocate continue limited growth venture, We believe that, Big at while on and distribution the per our and joint should the that least growth unitholders Beth, support to of With coverage. initiatives for XXXX call XX% maintaining you focus Spring to long-term through for would open

Operator

Instructions] Justin Your [Operator of comes first the line Raymond question from Jenkins, James.

Justin Jenkins

in existing I’ll be differentials, level morning, any leverage the curious, Thanks, that lately I a a guess, side. refining DK here to growth given the But on Great. good incremental at interest and given infrastructure looking upon you’re of I’m lot will guys. to guessing on and Obviously, topic footprint build Permian shortly. the there’s if here? at, base projects the call DKL start

Uzi Yemin

a that’s obviously, We Permian. in the a We great Well, question. joint the that’s were preparing ourselves growth – all see for first, that.

our side, other in a our is with we continue the DKL. that projects, but I on want to You specific DKL, this focus – looking to we – growing we look Permian will something together into on are XXXX-XXXX gathering growth see going DK is in continue on. of don’t that the the assets be cornerstone in for the growth the be expect and absolutely with any that we into gathering, to the area and are

Justin Jenkins

I’m know again? Uzi. full. the today, Paline it expand on expanded diff, Pipeline a you Appreciate with and it’s there Perfect. is, And diff, But the sure that maybe then, – the just with is push where that, once probably I to where it is

Uzi Yemin

there’s opportunity Yes, probably we’re looking at an few will But months. And that over over the we yes, speak. next we as notify you there.

Justin Jenkins

Understood. Last Permian me, the RIO one the on in for Pipeline.

the for that your some Any has last I big been thoughts additional pretty JV said given from a on think and your direction strategic changes XX,XXX that partner the barrels coming expanded maybe that at financial that to pipe pipeline? night partner contribution on day.

Uzi Yemin

be, think partner. is always that That asset. as all And that know, is well. we Marathon, great of Endeavor great we which And – we will obviously, in partner part that believed a as a

the we of And will is grow. So the that. that expanding distribution pipeline should continue the obviously, full as that with idea RIO from we – arrangement, the enjoy DKL from think on speak, as well. to Pipeline, enjoy It running that

Justin Jenkins

Appreciate guys. Perfect, the I’ll it there. leave color,

Operator

turn [Operator back questions. call Instructions] I’ll our presenters. There are no the to further

Uzi Yemin

time. to of it I’d like like us. you, my I’d mainly, I’d But to you, like and Board for Beth. to our a trust We’ll is. say table. colleagues Directors you I’d thank great the thank the company to thank around like what employees to next unitholders, this in day. thank talk for your making Have

Operator

conference today’s call. concludes This

may disconnect. you. Thank You now

Delek Logistics Partners (DKL) 8 May 182018 Q1 Earnings call transcript