DKL - Earnings call transcript Q4 2018 | Delek Logistics Partners, LP

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Operator

Good morning. My name is Mary and I will be your conference operator for today. At this time, I would like to welcome everyone to the Q4 Earnings Call for Delek Logistics Partners, LP. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank turn now over Keith to I the Johnson. will call is Sir, yours. floor the

Keith Johnson

Thank like DKL's I for morning. you, Good Mary. would and financial on webcast XXXX joining this to to quarter discuss fourth year-end results. us everyone thank

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

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

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

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

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

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

Kevin Kremke

Keith. Thanks,

acquired improvement XXXX drove from the year compared benefitted the quarter fourth assets fourth performance Big X, XXXX the that period. Spring to prior quarter March Our effective logistics

of increased flow $XX.X compared to quarter quarter in XXXX distributable $XX.X Our fourth of by the XX% XXXX. fourth in million approximately the million to cash

record XX.X% to we our X.XXx in $X.XX year increase the $XX.X to year. and X.X% of $XX.X February our million per an quarterly XX, by million ratio February DKL was This from Based unit. credit unit XX XXXX our for XX.X% as distribution higher quarter, fourth million fourth available XX. quarter the is partner is approximately of and coverage performance, ended consecutive At the quarter unit. a of capacity December XXXX distribution prior increase paid on third DCF quarterly $XXX X is unitholders to This $XXX from EBITDA increased X.XXx in for our our XXth than to facility. was our million compared quarter increased on per Our increase distribution distribution had limited the on prior December which is per period.

leverage our was debt $XXX and of facility. X.Xx X.Xx currently is the credit the ratio within approximately well allowable total million under Our total

prior attributable quarter $X.XX Delek was $XX.X fourth the the to period. or period. compared million unit For income $XX.X income net Logistics per million prior net all the of reported in million partners million unit to year to Limited of $XX.X XXXX, interest per in $X.XX compares in Partners' or $XX.X year which

again, million This Pipelines year XXXX increase Big from the give million period, year year million an increase was quarter Operating fourth $XX.X million In the increase Now primarily the will attributable in XXXX compared was Marketing period, in acquisition. margin from $XX.X and quarter of again, in segments. to Wholesale the the in I of and fourth prior increased the contribution which prior primarily the primarily due In prior period. an the in fourth in million the primarily contribution acquisition. $XX.X million margin $XX.X $X to to acquisition. of the the Terminalling to due this year, segment, Big million Operating increased was $X.X expenses due the Spring was Spring to of from operating Spring our quarter expenses $XX of to to the XXXX quarter This segment, million quarter our fourth our overview XXXX. in acquisition. fourth Big $X.X was Transportation

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

$X.XX West barrel barrels in XX,XXX volumes around and January, just day. Texas averaged During per the under averaged per margin gross right

approximately income of During was XXXX year. venture crude $X.X of approximately quarter equity $X.X million expenditures joint the and to discretionary $X.X Capital the in fourth of XXXX, compared quarter in million were $X.X prior and included income million spending $X.X maintenance. of from of oil our fourth million million pipelines our the

During the of was $X.X CapEx XXXX, total million $XX.X was US. quarter In by fourth XXXX, approximately reimbursed Delek million.

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

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

Ezra Yemin

the and wholesale the Texas million our Spring Pipeline. Paline our from In logistics Basin to supported in million Thank morning, Big and West EBITDA everybody. you, $XXX business $XXX Permian XXXX. was This by the Kevin, good XXXX, assets, increased platform that growth we consist

next Delek growth plan. We in be of We allowing Krotz continue annual $XX the drop EBITDA. step opportunities our assets fund $XX and to supported to to generate to us our million the can These believe of by growth ability next use debt to sheet US. balance transaction the potential this million the the have down assets is for logistics Springs explore from step

grow Basin US. as with opportunities the as to Permian and We’re well third-party through partnering Delek in exploring organic opportunities

can our believe per limited Spring our we that growth the strategy, Delek be US open at should grow with to With that, create partner inventory Delek should interest continues to system. value support supporting long-haul of at We’re pipeline operation and the of managing we distribution while call the maintaining to you unit the XXXX, distribution Delek’s by coverage. long-term potential XX% system pipeline. questions through This for proposed please? combined in construction Mary, PGC for US Gathering our drop-down able this continue least annual annual With unitholders. appropriate This Big

Operator

[Operator Instructions].

of Jenkins question the is James. from Raymond first from Justin line Your

Your line now open. is

Justin Jenkins

Great. curious your last Thanks. one you was IDRs? of morning, here? a updated Good any a everyone. Uzi, updated pretty have terms potential the thoughts to could well that thoughts for in want I received with saw buying on peers and of seemingly any We transaction week maybe your on with simplification here start

Ezra Yemin

Great.

why Assaf, that don’t you take one?

Assaf Ginzburg

drop-down great LP. to even the that earlier the about DKL that will aware GP over of distribution we be returns we disruption. any said equity the need, about touching as without do and We in few being which continue last a question. be reduce next Sure. will the looking of long-term the GP grow the we’ll on believe we decision probably could by without been the equity months therefore year the make really said, the this structure and by if of to end structure and It’s the issue LP a XX% done and need that the able is to the We’ve the shareholders. we XX% income are With take

Justin Jenkins

previously? would comfortable thought sheet the that mid-XXXX on the question Perfect. be certainly here of you or things. Thanks XQ. guys down upper Balance leverage Kevin, in for leads the like And in towards drop-down have that maybe complete the you target improved guys. into drop I the side stretching Xs mid-Xs guess to here

Kevin Kremke

feel $XXX Yes, leverage And context plan. the X but thing whole it million. leverage and of it will X.XX, up the in that’s time. the We’ve for and short given revolver to upsized plenty under current a our capacity period comfortable And spike term of we leverage revolver. easily long the down targets, drop to of around on a got the with can we just we fund

Justin Jenkins

then and last the you XQ details run is any step to can XXXX for And reconciles if is seemingly that in the cost revenue Gathering from perspective? project, share up terms rate, the of related Spring Perfect. more a terms me Big how in of on through G&A in I could one how but

Kevin Kremke

Yes.

consider than related DK to and the the would $X.X gathering revenue DKL G&A to between a reclass operations for construction from system. in higher to rate So I million the agreement QX due services G&A of was what run and

$X.X periods essentially prior that we But a showed in up G&A increased that of reduction had So that million million. in G&A. increase QX revenue as it to $X.X in a corresponding by reclassed

million run should $X.X that be lower. So rate

Justin Jenkins

Perfect. I’ll leave guys. there. Thanks, it

Operator

Baramov is next the Your line Wells from from of question Ned Fargo.

is Your open. line now

Ned Baramov

XXXX. Hi. and on it Good taking distribution one I question. just for Thanks to thoughts your relates after the morning. growth had

about think the We current have just the but distribution years. in wondering you a Thanks. outer objective year growth for how XX%

Ezra Yemin

a question. great That’s

is that me development be all, need going on to the we to That Spring believe of continue First decision Big how grow to of based is the Gathering system let progress. the We clear. distribution.

see pleased I we initiative. timing We’re clear. down that want with very at impact that magnitude the be the deal of the and and of DK what drop growth level will to

reason their their won’t grow. cut it cut and year. see usually the on of continue why people the We need do Some to towards or dividend growth. end just magnitude the we decide people We we to don’t distribution, any some

Ned Baramov

Thank you.

Operator

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

Ezra Yemin

to like support my the and like talk I’d to thank thank of Have this great to like their investors you our Directors great Mary. employees you Thank table. trust. is. to I’d Board But the what for for making with company you We’ll colleagues a Thank soon. it day. your you, company. for mainly I’d thank around our

Operator

concludes conference for today’s Thank all you call. This joining.

disconnect. may now You

Delek Logistics Partners (DKL) 20 Feb 192018 Q4 Earnings call transcript