DKL - Earnings call transcript Q1 2019 | Delek Logistics Partners, LP

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Operator

Good morning. We would like to welcome everyone to the Delek Logistics’ First Quarter Earnings Call. I would now like to turn the call over to Mr. Keith Johnson. Please go ahead.

Keith Johnson

Charlie. you, Thank Good morning. everyone DKL's to first thank joining on to us for quarter webcast like discuss this would I XXXX results.

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

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

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

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

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

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

Assaf Ginzburg

Thanks, Keith.

drove to first March Big period. Spring prior quarter X, benefited XXXX performance XXXX, assets logistics quarter compared from acquired first year improvement effective the which Our

approximately XXXX. quarter $XX in Our quarter million $XX compared XXXX, in DCF the first first to the was million

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

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

to call Now, over to discuss I will Danny turn results. the the

Danny Norris

Thanks, Assi.

quarter XXXX to unit, all primarily income to partners $XX.X of to that turnaround income want partners' our Transportation Big to in approximately which first by to of $XX.X on year El in and lower the was Big basis. year, unit $XX.X $X.XX Marketing partially primarily per due do to million Dorado throughput our in $X.XX Pipeline This the year contribution or to first $X.X at million due reported year-over-year the performance U.S.'s El gross primarily For to our segment, Big from $XX.X operating which the million XXXX, Spring quarter this I was period. million Springs a million $XX.X Texas million acquisition. XXXX or decrease $XX.X margin in the to Logistics prior Wholesale expenses at the which was Spring year to attributable reduced the in of and lower which prior million quarter $X.X last in segment, net In prior to million from margin, Delek the the quarter related compared due System offset increase reduced period. was quarter in to Delek $XX.X In year. the Dorado net first the XXXX per attributable million Delek oil refinery the margin on Terminalling the This first acquisition, contribution the the compares assets $X.X Lion primarily the our acquisition. in this note period, million of a compared of period, in U.S.'s was quarter Pipelines first the of period. $XX Limited of interest prior the million, in first partially benefit was $X year in rates acquisition. Operating due by from increased $XX.X year million West first offset million lower by to expenses was refinery. throughput was in increased prior quarter Operating the decrease from year

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

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

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

Delek quarter first of by $X.X During approximately total were U.S. reimbursed XXXX, the XXXX, $XXX,XXX In capital expenditures quarter first was of the million.

includes $XX.X million maintenance Delek U.S. capital reimbursement $XX.X by before gross XXXX, capital For of expenditure the and is full-year which our discretionary forecast $XXX,XXX of million, total

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

Ezra Yemin

morning. generated million. first Thank the of LTM have year-over-year and increased We EBITDA our EBITDA and approximately you, good Danny quarter an in $XXX

continue Our Permian Basin. operations to from the benefit

in XXXX. prices first crude through Pipeline. the support of Paline recovered have market benefiting the Our demand as for differentials West oil Texas quarter wholesale business oil crude is the The

this should a tariff to growth our We addition, use add February. at after financial end the of our will $XXX,XXX, EBITDA. a in fund from the expired higher should to debt us In This believe step next flexibility plan. the incentive allow approximately benefit increased pipeline tariff of that rate month

We are organic grow through to exploring opportunities and options. third-party

continue and In have Basin generate to includes pipeline These from ability addition, With the Permian continue midstream $XX while EBITDA. gathering believe support additional this annual of distribution coverage. Krotz able potential partnering system investment. long-term to is annual be $XX maintaining This of unitholders. limited logistics we the strategy, with Big million to our create please million per growth U.S. in we partner you annual to Also, open being assets This through Springs distribution may should growth we questions? of offer could appropriate assets. should Spring With long-haul potential for evaluate that as for Delek to assets the XXXX, at develop that, unit the drop-down XX% developed, our to value U.S. continue a call Charlie, that least we Delek the the

Operator

James. of comes Instructions] Your problem, Justin sir. with the line from question [Operator No Jenkins Raymond first Sure.

Your now open. is line

Justin Jenkins

start going to what that? capacity the to remind here system? max like of Good I XXXX. a thanks. with we related plan want things Pipeline. for Can that Great, growth is lot on everyone. us the Are in It with good Uzi, morning, at Paline that pipe seems you

Ezra Yemin

the Paline of in to memory, for on and line. we change XX,XXX, capacity materially – We is but while the $XXX,XXX other now barrels directly Pipeline, running that the bottom side shouldn't to first XX,XXX opportunities ramped we dropped a XX,XXX. very at now, I'm think terminalling by look expect close for expand at depending the mentioned But the to the is we Paline capacity on do I other it. going quarter

Justin Jenkins

Okay, questions thanks I for growth strategy. And guess the that. on follow-up

Krotz And Springs third-party you number But versus maybe of here? most better is the or growth for us mentioned growth points drop-down visible. here. pursuing give drop-down You in can organic items of M&A the XXXX a sense the a debate seemingly,

Ezra Yemin

talk about here. Well, two let's the aspects

of U.S. at year built two we is quicker is And maybe in under The the to next organic. idea the Delek that thought. first the side. of into that that system or increase as we we years is Also acreage look come long-haul and there announced next of The on as opportunity an maturing we gathering look being may one obviously the That's umbrella other the at one producers use. number pipelines. number play couple dedicated than over the

side. organic So two areas look that on we are these materially the

are acquisition On more one. pay that our assets day feel opportunities. any maintain for Xx than We side, Xx there a couple to EBITDA commitment the to not we of

to want or Let's and synergies. we want pay we be clear, XXx XXx, don't create some to also,

months. the that come into for may play next few So

Justin Jenkins

there. it leave I'll Uzi. Thanks, Perfect.

Ezra Yemin

you. Thank

Operator

management [Operator back question the I Instructions] the now turn We have no this for closing time. at further call remarks. will to

Ezra Yemin

another soon. table I'd like company continue to mainly, make to I'd Board Charlie. thank I'd great in you, Thank you. for for Company. our all like of But you, employees that great the Directors you employees in the thank this quarter. like colleagues talk to believe us. like – the that I'd trust to to and my to Thank your investors, We'll analysts our the thank thank it around Company is.

Operator

participating. this concludes gentlemen, and for Thank you conference today. for Ladies our

disconnect. You may now

Keith Johnson	Vice President of Investor Relations
Assaf Ginzburg	Executive Vice President and Chief Financial Officer
Danny Norris	Chief Administrative Officer
Ezra Yemin	Chief Executive Officer
Justin Jenkins	Raymond James & Associates, Inc.

Delek Logistics Partners (DKL) 6 May 192019 Q1 Earnings call transcript