DKL - Earnings call transcript Q3 2020 | Delek Logistics Partners, LP

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Operator

Good day, and welcome to the Delek Logistics Third Quarter 2020 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Blake Fernandez, Senior Vice President of Investor Relations. Please go ahead.

Blake Fernandez

morning. Good to Delek joining XXXX Logistics like webcast on financial everyone discuss to Partners' thank would us for this results. I third quarter

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

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

our results. Accepted Investors to the In can encouraged financial certain results Accounting Generally Principles on press the website. financial with report non-GAAP or found which reporting be the addition non-GAAP comparable review is the accordance financial are to these of which reconciliation posted we GAAP, Relations in Investor in release, GAAP of results, to measures section

are release. earnings reviewed the Reuven that remarks today's prepared closing Reuven. will that release less and offer assuming strategic press made the a we few will and with review incorporated overview, With market being quarter On call Uzi been is third segment I'll over I and information covering remarks. will are financial results, call, turn begin to the has into Our

Reuven Spiegel

Blake. you, Thank

from downs relatively asset quarter year-over-year recent third a operations, basis the along optimization. drop contribution benefited baseline Our asset with on business business and from performance stable initiatives

increased in partners flow third all quarter $XX distributable quarter Net period. XX% million million attributable approximately to prior was year to $XX the Our XXXX of cash in over the compared third income the XXXX. approximately

EBITDA distribution has is prior X.X% X.X% we on performance Based million, consecutive credit represents per September represents XX, outlook, second XXXX, DCF and XXXX. quarter unit our our increased quarter year third times quarter for available our the limited quarterly partner the increase XXXX higher $X.XXX This facility. $XX At third is XXth on September ratio $XX the and will a our our ended be November XXXX. distribution compared which and times period. XXXX, million X.X X.X increase XXXX over This million distribution. in approximately on year a of of quarterly DKL from for $XXX increase paid Our to to prior XX% XX, than quarter period. coverage was XX, capacity was

debt $X total leverage approximately ratio under our X.X times total allowable within Our which was the was is and billion currently facility. credit times X.X

exchange newly quarter, sponsor by X% elimination the the held million the during issued incentive rights interest a General we Finally, distribution DK units announced our the and and cash. DKL million conversion for Partner XX interest in $XX into of non-economic of in

Blake we'll results. the Now the to turn call discuss over to

Blake Fernandez

attributable Reuven. primarily segment, $XX in In trucking to assets. third was pipelines margin of million was quarter XXXX. recent to the million spring asset drop quarter This our the the transportation downs, including increase $XX in and compared third contribution the big XXXX Thanks, gathering

quarter of the Additionally, same segment, decreased to marketing lower compared XXXX in was in the the the from million prior this XXXX. contribution million third expenses $XX wholesale year, the margin $XX million quarter Operating third operating $X in year and Expenses our in prior $XX period. came In period terminalling $XX million than in million year. of to of

sustaining $X.X year $X.X maintenance. of quarter, of consisted third were our quarter, venture crude $X $XXX,XXX $X period. from approximately the income compared equity million expenditures approximately in million discretionary During to in from spending Capital the million in third income oil joint prior and was million the which

over will capital. for the With total that, turn $XX our For remarks. forecast of call capital to $XX.X includes which expenditure full-year and million, $X.X million XXXX, gross million his discretionary I Uzi is of closing maintenance

Uzi Yemin

a difficult good X% and operational macro year, to consecutive XX consistent both in a guidance growth deliver increase distribution leverage track value DKL continue distribution our optimization remain distribution drive on We despite deliver performance business the initiatives should announced and to Blake, continue level The quarterly this shareholders. the energy. morning, to everybody. you, ratio. environment year-end Thank during for achieving and coverage develop while and expansion Red and internal quarter, for cost we for came longer that River online term pipeline

the Additionally, and us simplification of growth cost ideas positions pursue opportunities. lowered of the capital our better to

can published encourage will call questions? open the sustainability our September, report With to that, I Lastly, includes in debt for review operator, new DKL. you which you please

Operator

We [Operator first Please Instructions] Today's Suisse. Dounis go comes Credit will now ahead, session. question-and-answer the with sir. begin question from Spiro

Spiro Dounis

you going I'd guys. forward? behind Texas and walk like year. West this aggressively highest last quarter since how morning, XQ think about the through I It good much of came out start driving seen margins. since Can marketing with first came to is factors Hey, quarter, back you pretty it back beyond then do why so just some think sustainable levels, that we've

Uzi Yemin

it, Uzi. put into needed. is This color Avigal will sure I'm Spiro, And more if good morning.

You market probably Texas thrive actually up. RINs the go that when remember West

space As where with we the to RINs. we have get select market market is a and the that

know sustainable long RINs as RINs, that. in elevated, the from don't is how as stay I it we should but So the terms benefit of

I to you think add do Avigal, anything? want

Avigal Soreq

Thank you question for the really.

Spiro Dounis

no. no, Yeah,

Okay, perfect, that makes sense.

a in stuff been challenges. growth lot refining thinking pretty kind amongst about just the term, of Second your a here standout and longer general of has for question, DKL obviously,

of thinking that those thinking challenges about to pushed about, EBITDA around the over just been Krotz there? how thinking still about Just that million you're brings years, over they Have right, are $XXX maturing three you your Are the that And two and, goal that next curious opportunities more Springs to given trajectory all to here? get specifically in to opportunities to you goal. how EBITDA the broadly? those $XXX - million

Uzi Yemin

we have great question same answer. question, That's good I think and a we we're the because ourselves a asking are,

the two all, of or logistics the to three the first of WXW. over is portion So years big next

will we some the benefit agreements commercial not And has with just and is with first yet. have DKL the magnitude that, It's you that we through that's to started. WXW DKL producers a not we the fruition DK, portion at through up already As of show at know, of portion. big million around around $XX But to but the million. see DK WXW, of $XX coming

Springs $XXX we're offset just is big at announce second do project The at tankage called have, looking But We and we're of of million probably that I If then we million that and mentioned, the what you sooner in portion thinking two, to portion we Krotz down back. looking Krotz were refinery. Krotz three ready activities Springs market drop that which we million We're comes not another than evolve $XXX that the that mentioned, some helps. the we're other back, may into a products, at doesn't $XXX to not yet. - Springs. or come the market hope if years are

Spiro Dounis

exactly a I color for. Yeah, no, was looking no, was what that great

me, So it for guys. I That's Thanks. it. appreciate

Uzi Yemin

you. Thank

Operator

Next question Please with comes from Wells Ned proceed. Fargo. Baramov

Ned Baramov

Hey, part for also units thoughts taking you potential of units DKL strategy? latest on transaction. the about roll good MLP have the considered morning. Thanks by sponsor, talked and up the previously a share monetization as the as question. You you have Could received specifically, of the IDR alternative, your one

you current strategies, leaning are given towards environment? these more the As of one today, of two

Uzi Yemin

macro every that These themselves I'm Ned. same questions morning, are ask sure company Good the question.

one it - one. go take by let's So let's

in you comments. your I had the in two questions three think - or

then a know, as is I know, market, much may regardless own MLP you macro more So But the of do, - change because as the up, code go a result its in environment cover you and you of there first if has come the favor. back tax one, challenges, MLPs MLP the it is, pandemic. as than the in taxes

So comment. one that's

Because out units a not DK decision three we that DKL wants get units this were a that we its it's sure we which just are up, you is can getting years selling - DK we all made cash before very is $XXX And comfortable DK we be a I'm remember it ago, or more projects But for company. DK DK and that don't get. decision. the should MLP what strategic would an there - had. will any priority units. a The - on the are units, annual reason or million second - that. get one, Rolling started obviously, we logistics to do less, only because rolling it assets two, all doubts return here with basis it's $XXX we because position to I decision, of million EBITDA. we sell almost XX% for ago, why see year growing $XX. and is a selling more are with our

So strategies margin. change don't over

has performed continue other changed, current to to others. continue to grow DKL. ideas. better our a think cost the to of than Obviously, because capital that we we should and we environment, our in little at benefit, look should honestly So we which the In

point. at So I answered don't this all the I question. up, aspects of see your hope us rolling it I

Ned Baramov

did. you had the color. That's for Yes, today. I all Thanks

Uzi Yemin

Thanks, Ned.

Avigal Soreq

Thanks, Ned.

Operator

this At conference time, remarks. Yemin the queue. no Uzi our to back closing questions in further like this At session. to there I this time, are question-and-answer And Instructions] the concludes for turn [Operator would over any

Uzi Yemin

this We're like my thank couldn't holders Board the without of and strategy Well, table. employees great very We'll Directors. our actually we what DKL, work great of it like a in my to unit friends the colleagues. tough you. to again, works. around environment. and Thank soon. Have the to happen you thank for I'd another support our And day. I'd great talk It's our obviously Thanks - you. achieved the thank proud of

Operator

and has conference presentation disconnect. The you concluded. attending now now for today's may you Thank

Delek Logistics Partners (DKL) 5 Nov 202020 Q3 Earnings call transcript