þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
|
|
|
|
|
|
For the Fiscal Year Ended December 31, 2018
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
For the transition period from to
|
Delaware
|
|
45-5379027
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
||
|
|
||
Title of each class
|
Name of each exchange on which registered
|
Common Units Representing Limited Partner Interests
|
New York Stock Exchange
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
|
|
|
•
|
the Magnolia Pipeline system;
|
•
|
the Magnolia Station located west of the El Dorado Refinery;
|
•
|
the El Dorado Pipeline system;
|
•
|
multiple short crude oil pipelines located at the El Dorado Refinery and our Sandhill Station;
|
•
|
the Refined Products Pipeline system; and
|
•
|
certain related crude oil pipelines.
|
|
|
Average Daily Throughput (bpd)
|
||||
|
|
Year Ended
|
||||
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
|
2016
|
Lion Pipeline System:
|
|
|
|
|
|
|
Crude pipelines (Non-gathered) (1)
|
|
51,992
|
|
59,362
|
|
56,555
|
Refined Products Pipelines to Enterprise System
|
|
45,728
|
|
51,927
|
|
52,071
|
SALA Gathering System
|
|
16,571
|
|
15,871
|
|
17,756
|
|
|
Average Daily Throughput (bpd)
|
|||||||
|
|
Year Ended
|
|||||||
|
|
|
|
December 31,
|
|
|
|||
|
|
2018
|
|
2017
|
|
2016
|
|||
East Texas Crude Logistics System (average bpd)
|
|
15,696
|
|
|
15,780
|
|
|
12,735
|
|
•
|
five tanks with an aggregate shell capacity of approximately 180,000 barrels at a terminal in North Little Rock, Arkansas;
|
•
|
125 tractors and 166 trailers, which are owned or leased, and used to haul primarily crude oil and other products for related and third parties;
|
•
|
an approximately 60-mile pipeline that transports crude oil from the Exxon Talco field to the ETP/ExxonMobil LOLA pipeline injection point in the East Texas Longview Station; and
|
•
|
an 85-mile pipeline, connecting the Greenville Storage Facility and the Mount Pleasant Terminal, which storage facility has four tanks with an aggregate shell capacity of approximately 230,000 barrels and is connected to the Explorer Pipeline System. In addition to the active shell capacity, the Greenville Storage Facility includes approximately 100,000 barrels of shell capacity that is currently not in service.
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
2018
|
|
2017
|
|
2016
|
Sales volumes (average bpd):
|
77,487
|
|
73,655
|
|
68,131
|
Terminal Location
|
Number of Tanks
|
Active Aggregate Shell Capacity (bbls)
|
Number of Truck Loading Lanes
|
Maximum Daily Available Truck Loading Capacity (bpd)
|
||||
Abilene, TX (1)
|
9
|
|
368,000
|
|
2
|
|
15,000
|
|
San Angelo, TX
|
5
|
|
93,000
|
|
2
|
|
15,000
|
|
Total
|
14
|
|
461,000
|
|
4
|
|
30,000
|
|
|
Year Ended
|
||||||||||
|
|
|
December 31,
|
|
|
||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Throughput (average bpd)
|
13,323
|
|
|
13,817
|
|
|
13,257
|
|
|||
Gross margin (in thousands)
|
$
|
27,082
|
|
|
$
|
20,320
|
|
|
$
|
6,929
|
|
Gross margin per barrel
|
$
|
5.57
|
|
|
$
|
4.03
|
|
|
$
|
1.43
|
|
|
|
|
|
Maximum
|
||||
|
|
|
|
Daily
|
||||
|
|
Active
|
|
Available
|
||||
|
|
Aggregate
|
Number of
|
Truck
|
||||
|
|
Shell
|
Truck
|
Loading
|
||||
|
Number
|
Capacity
|
Loading
|
Capacity
|
||||
Terminal Location
|
of Tanks
|
(bbls)
|
Lanes
|
(bpd)
|
||||
Big Sandy, TX (1)
|
|
|
3
|
|
25,000
|
|
||
El Dorado, AR (1)
|
|
|
3
|
|
35,000
|
|
||
Memphis, TN
|
12
|
|
126,000
|
|
3
|
|
20,000
|
|
Mount Pleasant, TX (2)
|
6
|
|
155,000
|
|
3
|
|
10,000
|
|
Nashville, TN (3)
|
10
|
|
128,000
|
|
2
|
|
15,000
|
|
Duncan, OK (4)
|
7
|
|
180,250
|
|
—
|
|
—
|
|
North Little Rock, AR (1)
|
|
|
2
|
|
17,100
|
|
||
Tyler, TX (1)
|
|
|
11
|
|
91,000
|
|
||
Total
|
35
|
|
589,250
|
|
27
|
|
213,100
|
|
|
|
Year Ended
|
|||||||
|
|
December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Throughput (average bpd):
|
|
|
|
|
|
|
|||
Big Sandy, TX
|
|
3,080
|
|
|
6,878
|
|
|
7,025
|
|
El Dorado, AR
|
|
12,086
|
|
|
14,149
|
|
|
17,040
|
|
Memphis, TN
|
|
6,996
|
|
|
7,112
|
|
|
7,982
|
|
Mount Pleasant, TX
|
|
7,623
|
|
|
5,202
|
|
|
2,746
|
|
Nashville, TN
|
|
8,040
|
|
|
7,292
|
|
|
6,939
|
|
Duncan, OK
|
|
37,679
|
|
|
—
|
|
|
—
|
|
North Little Rock, AR
|
|
7,437
|
|
|
8,848
|
|
|
10,174
|
|
Tyler, TX
|
|
78,343
|
|
|
75,007
|
|
|
70,444
|
|
Total (average bpd)
|
|
161,284
|
|
|
124,488
|
|
|
122,350
|
|
•
|
the timing and extent of changes in the costs and availability of crude oil and other refinery feedstocks (including prolonged periods of low crude oil prices that could impact production of inland crude oil and reduce the amount of cost advantaged crude oil available and/or the discount of such crude oil as compared to other crude oil) and in the price and demand for Delek Holdings' refined products;
|
•
|
the risk of contract cancellation, non-renewal or failure to perform by Delek Holdings’ suppliers or customers, and Delek Holdings’ inability to replace such suppliers, contracts, customers and/or revenues;
|
•
|
disruptions due to equipment interruption or failure or other events at Delek Holdings’ facilities, or at third-party facilities on which Delek Holdings’ business is dependent;
|
•
|
the effects of economic downturns on Delek Holdings’ business and the business of its suppliers, customers, business partners and lenders;
|
•
|
Delek Holdings’ ability to remain in compliance with its contracts;
|
•
|
Delek Holdings’ ability to remain in compliance with the terms of its outstanding and any future indebtedness;
|
•
|
changes in the cost or availability of third-party pipelines, terminals and other means of delivering and transporting crude oil, feedstocks and refined products;
|
•
|
state and federal environmental, economic, health and safety, energy and other policies and regulations, and any changes in those policies and regulations;
|
•
|
environmental incidents and violations and related remediation costs, fines and other liabilities; and
|
•
|
changes in crude oil and refined product inventory levels and carrying costs.
|
•
|
business interruption due to maintenance and repairs or mechanical or structural failures with respect to our assets, or our facilities or with respect to third-party assets or facilities on which our operations are dependent, including Delek Holdings’ assets or facilities;
|
•
|
operational errors that result in a loss of physical integrity or performance in our pipelines and facilities;
|
•
|
deterioration of the condition of our pipelines and facilities through age, use and disuse;
|
•
|
damages to our assets and surrounding properties caused by earthquakes, floods, fires, severe weather, explosions and other natural disasters and acts of terrorism;
|
•
|
damages to and loss of availability of interconnecting third-party pipelines, terminals and other means of delivering crude oil, feedstocks and refined petroleum products;
|
•
|
the inability of third-party facilities on which our operations are dependent, including Delek Holdings’ facilities, to complete capital projects and to restart timely refining operations following a shutdown;
|
•
|
curtailments of operations as a result of severe seasonal weather;
|
•
|
inadvertent damage to pipelines from construction, farm and utility equipment;
|
•
|
constrained pipeline and storage infrastructure;
|
•
|
disruption or failure of information technology systems and network infrastructure due to various causes, including unauthorized access or attacks; and
|
•
|
other hazards.
|
•
|
perform ongoing assessments of pipeline integrity;
|
•
|
identify and characterize applicable threats to pipeline segments that could impact a high consequence area;
|
•
|
maintain processes for data collection, integration and analysis;
|
•
|
repair and remediate pipelines as necessary; and
|
•
|
implement preventive and mitigating actions.
|
•
|
acts of God;
|
•
|
strikes, lockouts or other industrial disturbances;
|
•
|
acts of the public enemy, wars, blockades, insurrections, riots or civil disturbances;
|
•
|
storms, floods or washouts;
|
•
|
arrests or the order of any court or governmental authority having jurisdiction while the same is in force and effect;
|
•
|
explosions, breakage or accident to machinery, storage tanks or lines of pipe;
|
•
|
any inability to obtain, or unavoidable delay in obtaining, material or equipment;
|
•
|
any inability to deliver crude oil or refined products because of a failure of third-party pipelines; and
|
•
|
any other causes not reasonably within the control of the party claiming suspension and which by the exercise of due diligence such party is unable to prevent or overcome.
|
•
|
the volatility and uncertainty of regional pricing differentials for crude oil and refined products;
|
•
|
the action by the members of the Organization of the Petroleum Exporting Countries, or OPEC, individually or in the aggregate, regarding production levels and prices;
|
•
|
the nature and extent of governmental regulation and taxation; and
|
•
|
the anticipated future prices of crude oil and refined products in markets served by Delek Holdings’ refineries.
|
•
|
incur or guarantee additional debt;
|
•
|
incur certain liens on assets;
|
•
|
dispose of assets;
|
•
|
make certain cash distributions or redeem or repurchase units;
|
•
|
change the nature of our business;
|
•
|
engage in certain mergers or acquisitions or make certain investments (including joint ventures); and
|
•
|
enter into certain transactions with affiliates.
|
•
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may not be available on favorable terms;
|
•
|
our funds available for operations, future business opportunities and distributions to unitholders will be reduced by that portion of our cash flows required to make payments on our debt and any interest thereon;
|
•
|
we may be more vulnerable to competitive pressures or a downturn in our business or the economy generally; and
|
•
|
our flexibility in responding to changing business and economic conditions may be limited.
|
•
|
mistaken assumptions about revenues and costs, including synergies;
|
•
|
the assumption of known or unknown liabilities;
|
•
|
limitations on rights to indemnity from the seller;
|
•
|
mistaken assumptions about the overall costs of equity or debt;
|
•
|
the diversion of management’s attention from other business concerns;
|
•
|
ineffective or poor integration of such acquisitions;
|
•
|
unforeseen difficulties operating multi-customer and product assets in new product areas or new markets; and
|
•
|
customer or key employee losses at the acquired businesses.
|
•
|
Our Partnership Agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limits our general partner’s liabilities and restricts the remedies available to our unitholders for actions that, without such limitations, might constitute breaches of fiduciary duty.
|
•
|
Neither our Partnership Agreement nor any other agreement requires Delek Holdings to pursue a business strategy that favors us or utilizes our assets, including whether to increase or decrease refinery production, whether to shut down or reconfigure a refinery or what markets to pursue or grow. The directors and officers of Delek Holdings have a fiduciary duty to make these decisions in the best interests of the stockholders of Delek Holdings, which may be contrary to our interests. Delek Holdings may choose to shift the focus of its investment and growth to areas not served by our assets.
|
•
|
Delek Holdings, as our primary customer, has an economic incentive to cause us not to seek higher service fees, even if such higher fees could be obtained in arm’s-length, third-party transactions. Furthermore, under many of our commercial agreements with them, Delek Holdings' consent is required before we may enter into an agreement with any third party with respect to certain of our assets, including those that serve the El Dorado, Tyler and Big Spring Refineries, and Delek Holdings has an incentive to cause us not to pursue such third-party contracts in certain circumstances.
|
•
|
Our general partner is allowed to take into account the interests of parties other than us, such as Delek Holdings, in resolving conflicts of interest.
|
•
|
All of the officers and three of the directors of our general partner (who are also the three Individual GP Owners) are also officers and/or directors of Delek Holdings and owe fiduciary duties to Delek Holdings. These officers will also devote significant time to the business of Delek Holdings and will be compensated by Delek Holdings accordingly.
|
•
|
Delek Holdings may be constrained by the terms of its debt instruments from taking actions, or refraining from taking actions, that may be in our best interests.
|
•
|
Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval.
|
•
|
Disputes may arise under our commercial agreements with Delek Holdings.
|
•
|
Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership units and the creation, reduction or increase of cash reserves, each of which can affect the amount of cash available for distribution to our unitholders.
|
•
|
Our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion or investment capital expenditure, which does not reduce operating surplus. This determination can affect the amount of cash that is distributed to our unitholders.
|
•
|
Our general partner determines which costs incurred by it are reimbursable by us.
|
•
|
Our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on their common units or to make incentive distributions.
|
•
|
Our Partnership Agreement permits us to classify up to $25.0 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions on our general partner units or to our general partner in respect of the incentive distribution rights.
|
•
|
Our Partnership Agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf.
|
•
|
Our general partner intends to limit its liability regarding our contractual and other obligations.
|
•
|
Our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if they own more than 80% of the common units.
|
•
|
Our general partner controls the enforcement of the obligations that it and its affiliates owe to us, including Delek Holdings’ obligations under the Omnibus Agreement and its commercial agreements with us.
|
•
|
Our general partner decides whether to retain separate counsel, accountants or other advisers to perform services for us.
|
•
|
Our general partner may transfer its incentive distribution rights without unitholder approval.
|
•
|
Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our incentive distribution rights without the approval of the conflicts committee of the board of directors of our general partner or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.
|
•
|
how to allocate corporate opportunities among us and its other affiliates;
|
•
|
whether to exercise its limited call right;
|
•
|
whether to seek approval of the resolution of a conflict of interest by the conflicts committee of the board of directors of our general partner;
|
•
|
how to exercise its voting rights with respect to the units it owns;
|
•
|
whether to exercise its registration rights;
|
•
|
whether to elect to reset target distribution levels;
|
•
|
whether to transfer the incentive distribution rights to a third party; and
|
•
|
whether or not to consent to any merger or consolidation of the Partnership or amendment to the Partnership Agreement.
|
•
|
any assets that were owned by Delek Holdings upon the completion of our initial public offering (including replacements or expansions of those assets);
|
•
|
any asset or business that Delek Holdings acquires or constructs that has a fair market value of less than $5.0 million; and
|
•
|
any asset or business that Delek Holdings acquires or constructs that has a fair market value of $5.0 million or more if we have been offered the opportunity to purchase the asset or business for fair market value not later than six months after completion of such acquisition or construction, and we decline to do so.
|
•
|
whenever our general partner, the board of directors of our general partner or any committee thereof (including the conflicts committee) makes a determination or takes, or declines to take, any other action in their respective capacities, our general partner, the board of directors of our general partner and any committee thereof (including the conflicts committee), as applicable, is required to make such determination, or take or decline to take such other action, in good faith, meaning that it subjectively believed that the decision was in the best interests of the Partnership, and, except as specifically provided by our Partnership Agreement, will not be subject to any other or different standard imposed by our Partnership Agreement, Delaware law, or any other law, rule or regulation, or at equity;
|
•
|
our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as such decisions are made in good faith;
|
•
|
our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission, unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and
|
•
|
our general partner will not be in breach of its obligations under the Partnership Agreement (including any duties to us or our unitholders) if a transaction with an affiliate or the resolution of a conflict of interest is:
|
◦
|
approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligated to seek such approval;
|
◦
|
approved by the vote of a majority of the outstanding common limited partner units, excluding any common units owned by our general partner and its affiliates;
|
◦
|
determined by the board of directors of our general partner to be on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
|
◦
|
determined by the board of directors of our general partner to be fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to us.
|
•
|
our existing unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of cash available for distribution on each unit may decrease;
|
•
|
because the amount payable to holders of incentive distribution rights is based on a percentage of the total cash available for distribution, the distributions to holders of incentive distribution rights will increase even if the per-unit distribution on common limited partner units remains the same;
|
•
|
the ratio of taxable income to distributions may increase;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of the common limited partner units may decline.
|
•
|
we were conducting business in a state but had not complied with that particular state’s partnership statute; or
|
•
|
our unitholders' right to act with other unitholders to remove or replace our general partner, to approve some amendments to our Partnership Agreement or to take other actions under our Partnership Agreement constitute “control” of our business.
|
•
|
less the amount of cash reserves established by our general partner to:
|
◦
|
provide for the proper conduct of our business (including cash reserves for our future capital expenditures and anticipated future debt service requirements and refunds of collected rates reasonably likely to be refunded as a result of a settlement or hearing related to FERC rate proceedings or rate proceedings under applicable law subsequent to that quarter);
|
◦
|
comply with applicable law, any of our debt instruments or other agreements; or
|
◦
|
provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters (provided that our general partner may not establish cash reserves for distributions if the effect of the establishment of such reserves will prevent us from distributing the minimum quarterly distribution on all common units for the current quarter);
|
•
|
plus, if our general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made subsequent to the end of such quarter. Under our Partnership Agreement, working capital borrowings are generally borrowings that are made under a credit facility, commercial paper facility or similar financing arrangement, and in all cases are used solely for working capital purposes or to pay distributions to partners, and with the intent of the borrower to repay such borrowings within 12 months with funds other than from additional working capital borrowings.
|
Date of Sale
|
|
Number of General Partner Units Sold
|
|
Price per General Partner Unit
|
|
Consideration Paid to the Partnership
|
December 10, 2018
|
|
177
|
|
$31.51
|
|
$5,575.34
|
•
|
two crude oil rail offloading racks, which are designed to receive up to 25,000 barrels per day (“bpd”) of light crude oil or 12,000 bpd of heavy crude oil, or any combination of the two, delivered by rail to Delek Holdings' El Dorado Refinery (the "El Dorado Refinery")and related ancillary assets (the “El Dorado Assets”) effective March 31, 2015 (such transaction, the "El Dorado Rail Offloading Racks Acquisition");
|
•
|
a crude oil storage tank (the "Tyler Crude Tank") with a shell capacity of approximately 350,000 barrels located adjacent to Delek Holdings' Tyler Refinery (the "Tyler Refinery") and certain ancillary assets (collectively, with the Tyler Crude Tank, the "Tyler Assets") effective March 31, 2015 (such transaction, the "Tyler Crude Tank Acquisition"); the Tyler Assets, together with the El Dorado Assets, are hereinafter collectively referred to as the "Logistics Assets"; and
|
•
|
a refined products terminal (the “El Dorado Terminal”) located at the El Dorado Refinery and 158 storage tanks and certain ancillary assets (the "El Dorado Tank Assets" and, together with the El Dorado Terminal, the “El Dorado Terminal and Tank Assets”) at and adjacent to the El Dorado Refinery effective February 4, 2014 (such transaction, the “El Dorado Acquisition”).
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statements of Income and Other Comprehensive Income Data:
|
|
|
|
(In thousands, except units and per unit data)
|
|
|
||||||||||||||
Net revenues
|
|
$
|
657,609
|
|
|
$
|
538,075
|
|
|
$
|
448,059
|
|
|
$
|
589,669
|
|
|
$
|
841,253
|
|
Operating costs and expenses
|
|
531,852
|
|
|
449,898
|
|
|
370,409
|
|
|
512,407
|
|
|
762,407
|
|
|||||
Operating income
|
|
125,757
|
|
|
88,177
|
|
|
77,650
|
|
|
77,262
|
|
|
78,846
|
|
|||||
Non-operating costs and expenses
|
|
35,041
|
|
|
18,990
|
|
|
14,765
|
|
|
11,246
|
|
|
8,656
|
|
|||||
Income before income tax expense (benefit)
|
|
90,716
|
|
|
69,187
|
|
|
62,885
|
|
|
66,016
|
|
|
70,190
|
|
|||||
Income tax expense (benefit)
|
|
534
|
|
|
(222
|
)
|
|
81
|
|
|
(195
|
)
|
|
132
|
|
|||||
Net income
|
|
90,182
|
|
|
69,409
|
|
|
62,804
|
|
|
66,211
|
|
|
70,058
|
|
|||||
Less: (Loss) income attributable to Predecessors
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(637
|
)
|
|
(1,939
|
)
|
|||||
Net income attributable to partners
|
|
$
|
90,182
|
|
|
$
|
69,409
|
|
|
$
|
62,804
|
|
|
$
|
66,848
|
|
|
$
|
71,997
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Less: General partners' interest in net income, including incentive distribution rights
|
|
25,543
|
|
|
18,429
|
|
|
12,193
|
|
|
5,163
|
|
|
2,366
|
|
|||||
Limited partners' interest in net income
|
|
$
|
64,639
|
|
|
$
|
50,980
|
|
|
$
|
50,611
|
|
|
$
|
61,685
|
|
|
$
|
69,631
|
|
Net income per limited partner unit:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - (basic)
|
|
$
|
2.65
|
|
|
$
|
2.09
|
|
|
$
|
2.08
|
|
|
$
|
2.55
|
|
|
$
|
2.88
|
|
Common - (diluted)
|
|
$
|
2.65
|
|
|
$
|
2.09
|
|
|
$
|
2.07
|
|
|
$
|
2.52
|
|
|
$
|
2.85
|
|
Subordinated - Delek Holdings (basic and diluted)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.19
|
|
|
$
|
2.54
|
|
|
$
|
2.88
|
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common units - (basic)
|
|
24,390,286
|
|
|
24,348,063
|
|
|
22,490,264
|
|
|
12,237,154
|
|
|
12,171,548
|
|
|||||
Common units - (diluted)
|
|
24,396,881
|
|
|
24,376,972
|
|
|
22,558,717
|
|
|
12,356,914
|
|
|
12,302,629
|
|
|||||
Subordinated units - Delek Holdings (basic and diluted)
|
|
—
|
|
|
—
|
|
|
1,803,167
|
|
|
11,999,258
|
|
|
11,999,258
|
|
|||||
Cash distributions per limited partner unit
|
|
$
|
3.120
|
|
|
$
|
2.835
|
|
|
$
|
2.575
|
|
|
$
|
2.240
|
|
|
$
|
1.900
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
(In thousands)
|
|
|
||||||||||||||
Property, plant and equipment, net
|
|
$
|
312,562
|
|
|
$
|
255,068
|
|
|
$
|
251,029
|
|
|
$
|
253,848
|
|
|
$
|
254,779
|
|
Total assets
|
|
624,593
|
|
|
443,530
|
|
|
415,547
|
|
|
375,288
|
|
|
331,286
|
|
|||||
Total debt, including current maturities
|
|
700,430
|
|
|
422,649
|
|
|
392,600
|
|
|
351,600
|
|
|
251,750
|
|
|||||
Total liabilities
|
|
759,416
|
|
|
472,755
|
|
|
428,831
|
|
|
386,306
|
|
|
291,505
|
|
|||||
Total (deficit) equity
|
|
(134,823
|
)
|
|
(29,225
|
)
|
|
(13,284
|
)
|
|
(11,018
|
)
|
|
39,781
|
|
•
|
our substantial dependence on Delek Holdings or its assignees and their support of and respective ability to pay us under our commercial agreements;
|
•
|
our future coverage, leverage, financial flexibility and growth, and our ability to improve performance and achieve distribution growth at any level or at all;
|
•
|
Delek Holdings’ future growth, financial performance, share repurchases, crude oil supply pricing and flexibility and product distribution;
|
•
|
positive industry dynamics, including Permian Basin growth, efficiencies and takeaway capacity;
|
•
|
the age and condition of our assets and operating hazards and other risks incidental to transporting, storing and gathering crude oil, intermediate and refined products, including, but not limited to, costs, penalties, regulatory or legal actions and other effects related to spills, releases and tank failures;
|
•
|
changes in insurance markets impacting costs and the level and types of coverage available;
|
•
|
the timing and extent of changes in commodity prices and demand for refined products;
|
•
|
the wholesale marketing margins we are able to obtain and the number of barrels of product we are able to purchase and sell in our west Texas wholesale business;
|
•
|
the suspension, reduction or termination of Delek Holdings' or its assignees' or third-party's obligations under our commercial agreements including the duration, fees or terms thereof;
|
•
|
the results of our investments in joint ventures;
|
•
|
the ability to secure commercial agreements with Delek Holdings or third parties upon expiration of existing agreements;
|
•
|
disruptions due to acts of God, equipment interruption or failure at our facilities, Delek Holdings’ facilities or third-party facilities on which our business is dependent;
|
•
|
changes in the availability and cost of capital of debt and equity financing;
|
•
|
our reliance on information technology systems in our day-to-day operations;
|
•
|
changes in general economic conditions;
|
•
|
the effects of existing and future laws and governmental regulations, including, but not limited to, the rules and regulations promulgated by the Federal Energy Regulatory Commission ("FERC") and those relating to environmental protection, pipeline integrity and safety;
|
•
|
competitive conditions in our industry;
|
•
|
actions taken by our customers and competitors;
|
•
|
the demand for crude oil, refined products and transportation and storage services;
|
•
|
our ability to successfully implement our business plan;
|
•
|
an inability to have growth projects completed on time and on budget;
|
•
|
an inability of Delek Holdings to grow as expected and realize the synergies and the other expected benefits of its merger with Alon USA, which became effective as of July 1, 2017, and Delek Holdings' acquisition of the remaining interest in Alon USA Partners, LP that Delek Holdings did not already own, which became effective as of February 7, 2018;
|
•
|
as it relates to our potential future growth opportunities, including dropdowns, and other potential benefits, the ability to successfully integrate the businesses of Delek Holdings and Alon USA;
|
•
|
our ability to successfully integrate acquired businesses;
|
•
|
natural disasters, weather-related delays, casualty losses and other matters beyond our control;
|
•
|
changes or volatility in interest and inflation rates;
|
•
|
labor relations;
|
•
|
large customer defaults;
|
•
|
changes in tax status and regulations;
|
•
|
the effects of future litigation; and
|
•
|
other factors discussed elsewhere in this Annual Report on Form 10-K.
|
•
|
Generate Stable Cash Flow. We will continue to pursue opportunities to provide logistics, marketing and other services to Delek Holdings and third parties pursuant to long-term, fee-based contracts. In new service contracts, we will endeavor to include minimum volume throughput, or other commitments, similar to those included in our current commercial agreements with Delek Holdings.
|
•
|
Focus on Growing Our Business. We intend to evaluate and pursue opportunities to grow our business through both strategic acquisitions and expansion and construction projects, both internally funded or in combination with potential external partners. We believe that our strong relationship with Delek Holdings will enhance our opportunities to grow our business.
|
◦
|
Pursue Acquisitions. We plan to pursue strategic acquisitions that both complement our existing assets and provide attractive returns for our unitholders. As we continue to grow through acquisitions, we believe we will be able to increase our third party business.
|
•
|
Additionally, Delek Holdings has granted us a right of first offer on certain logistics assets. We intend to review our right to purchase any such assets as they are offered to us under the terms of the right of first offer, from time to time. Delek Holdings is also required, under certain circumstances, to offer us the opportunity to purchase additional logistics assets that Delek Holdings may acquire or construct in the future. We anticipate additional growth opportunities through subsequent dropdowns of logistics assets acquired or developed by Delek Holdings. In addition to those opportunities to acquire assets from Delek Holdings, we believe that our current asset base, and our knowledge of the regional markets in which we operate, will enable us to target and complete attractive third-party acquisitions.
|
◦
|
Pursue Attractive Expansion and Construction Opportunities. We intend to pursue organic growth opportunities that complement our existing businesses or that provide attractive returns within or outside our current geographic footprint. We plan to evaluate potential opportunities to make capital investments that will be used to expand our existing asset base through the expansion and construction of new logistics assets to support growth of any of our customers', including Delek Holdings', businesses and from increased third-party activity. These construction projects may be developed either through joint venture relationships or by us acting independently, depending on size and scale.
|
•
|
Optimize Our Existing Assets and Expand Our Customer Base. We seek to enhance the profitability of our existing assets by adding incremental throughput volumes, improving operating efficiencies and increasing system-wide utilization. We also expect to further diversify our customer base by increasing third-party throughput volumes running through certain of our existing systems and expanding our existing asset portfolio to service more third-party customers.
|
•
|
Delek Holdings’ utilization of our assets in excess of its minimum volume commitments;
|
•
|
our ability to identify and execute acquisitions and organic expansion projects and capture incremental volume increases from Delek Holdings or third parties;
|
•
|
our ability to increase throughput volumes at our refined products terminals and provide additional ancillary services at those terminals;
|
•
|
our ability to identify and serve new customers in our marketing and trucking operations; and
|
•
|
our ability to make connections to third-party facilities and pipelines.
|
•
|
Earnings before interest, taxes , depreciation and amortization ("EBITDA") - calculated as net income (loss) before net interest expense, income tax expense, depreciation and amortization expense, including amortization of customer contract intangible assets, which is included as a component of net revenues in our accompanying consolidated statements of income.
|
•
|
Distributable cash flow - calculated as net cash flow from operating activities plus or minus changes in assets and liabilities, less maintenance capital expenditures net of reimbursements and other adjustments not expected to settle in cash. Delek Logistics believes this is an appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.
|
•
|
our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods;
|
•
|
the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016 (2)
|
||||||
Reconciliation of net income to EBITDA:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
90,182
|
|
|
$
|
69,409
|
|
|
$
|
62,804
|
|
Add:
|
|
|
|
|
|
|
||||||
Income tax expense (benefit)
|
|
534
|
|
|
(222
|
)
|
|
81
|
|
|||
Depreciation and amortization
|
|
25,990
|
|
|
21,914
|
|
|
20,813
|
|
|||
Amortization of customer contract intangible assets
|
|
6,009
|
|
|
—
|
|
|
—
|
|
|||
Interest expense, net
|
|
41,263
|
|
|
23,944
|
|
|
13,587
|
|
|||
EBITDA (1)
|
|
$
|
163,978
|
|
|
$
|
115,045
|
|
|
$
|
97,285
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of net cash from operating activities to distributable cash flow:
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
|
$
|
147,953
|
|
|
$
|
86,950
|
|
|
$
|
100,707
|
|
Changes in assets and liabilities
|
|
(21,910
|
)
|
|
3,462
|
|
|
(14,861
|
)
|
|||
Distributions from equity method investments in investing activities
|
|
1,162
|
|
|
753
|
|
|
—
|
|
|||
Maintenance and regulatory capital expenditures (3)
|
|
(7,326
|
)
|
|
(9,444
|
)
|
|
(5,920
|
)
|
|||
Reimbursement from Delek Holdings for capital expenditures (4)
|
|
3,115
|
|
|
3,453
|
|
|
3,251
|
|
|||
Accretion of asset retirement obligations
|
|
(359
|
)
|
|
(292
|
)
|
|
(266
|
)
|
|||
Deferred income taxes
|
|
(152
|
)
|
|
111
|
|
|
173
|
|
|||
Loss (gain) on asset disposals
|
|
(891
|
)
|
|
20
|
|
|
16
|
|
|||
Distributable cash flow (1)
|
|
$
|
121,592
|
|
|
$
|
85,013
|
|
|
$
|
83,100
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Pipelines and Transportation
|
|
|
|
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Affiliate
|
|
138,418
|
|
|
$
|
109,298
|
|
|
103,749
|
|
||
Third-Party
|
|
15,149
|
|
|
12,431
|
|
|
18,423
|
|
|||
Total Pipelines and Transportation
|
|
153,567
|
|
|
121,729
|
|
|
122,172
|
|
|||
Cost of materials and other
|
|
19,878
|
|
|
18,210
|
|
|
19,425
|
|
|||
Operating expenses (excluding depreciation and amortization presented below)
|
|
39,934
|
|
|
33,240
|
|
|
29,235
|
|
|||
Segment contribution margin
|
|
$
|
93,755
|
|
|
$
|
70,279
|
|
|
$
|
73,512
|
|
|
|
|
|
|
|
|
||||||
Wholesale Marketing and Terminalling
|
|
|
|
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Affiliate
|
|
102,391
|
|
|
46,982
|
|
|
45,815
|
|
|||
Third-Party
|
|
401,651
|
|
|
369,364
|
|
|
280,072
|
|
|||
Total Wholesale Marketing and Terminalling
|
|
504,042
|
|
|
416,346
|
|
|
325,887
|
|
|||
Cost of materials and other
|
|
409,183
|
|
|
354,680
|
|
|
282,733
|
|
|||
Operating expenses (excluding depreciation and amortization presented below)
|
|
18,810
|
|
|
10,034
|
|
|
7,963
|
|
|||
Segment contribution margin
|
|
$
|
76,049
|
|
|
$
|
51,632
|
|
|
$
|
35,191
|
|
|
|
|
|
|
|
|
||||||
Consolidated
|
|
|
|
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Affiliate
|
|
$
|
240,809
|
|
|
$
|
156,280
|
|
|
$
|
149,564
|
|
Third-Party
|
|
416,800
|
|
|
381,795
|
|
|
298,495
|
|
|||
Total Consolidated
|
|
657,609
|
|
|
538,075
|
|
|
448,059
|
|
|||
Cost of materials and other
|
|
429,061
|
|
|
372,890
|
|
|
302,158
|
|
|||
Operating expenses (excluding depreciation and amortization presented below)
|
|
58,744
|
|
|
43,274
|
|
|
37,198
|
|
|||
Contribution margin
|
|
169,804
|
|
|
121,911
|
|
|
108,703
|
|
|||
General and administrative expenses
|
|
17,166
|
|
|
11,840
|
|
|
10,256
|
|
|||
Depreciation and amortization
|
|
25,990
|
|
|
21,914
|
|
|
20,813
|
|
|||
(Loss) gain on asset disposals
|
|
891
|
|
|
(20
|
)
|
|
(16
|
)
|
|||
Operating income
|
|
$
|
125,757
|
|
|
$
|
88,177
|
|
|
$
|
77,650
|
|
•
|
increases in the average sales prices per gallon of gasoline and diesel sold in our west Texas marketing operations. The average sales prices per gallon of gasoline and diesel sold increased $0.29 per gallon and $0.45 per gallon, respectively, during the year ended December 31, 2018 compared to the year ended December 31, 2017, amounting to an increase of $78.7 million of the $119.5 million increase in net revenues; and
|
•
|
net revenues generated under the agreements executed in connection with the Big Spring Logistic Assets Acquisition, which were effective March 1, 2018 and accounted for the majority of the remaining increase in net revenues. Refer to Note 4 to our accompanying consolidated financial statements for additional information about the agreements executed in connection with the Big Spring Logistic Assets Acquisition.
|
•
|
increases in the average sales prices per gallon of gasoline and diesel sold in our west Texas marketing operations. The average sales prices per gallon of gasoline and diesel sold increased $0.32 per gallon and $0.39 per gallon, respectively, amounting to an increase of $73.6 million of the $90.0 million increase in net revenues;
|
•
|
a net increase of 8.0 million gallons in the volume of gasoline and diesel sold in west Texas during the year ended December 31, 2017 compared to gallons sold during the year ended December 31, 2016;
|
•
|
increased fees under our marketing agreement with Delek Holdings as a result of increased throughput due to higher demand following product supply disruptions associated with Hurricane Harvey, partially offset by a decline in fees on our Paline Pipeline System; and
|
•
|
decreases in revenues on our Paline Pipeline System. During the year ended December 31, 2017, the Paline Pipeline System was a FERC regulated pipeline with a tariff established for potential shippers, compared to the year ended December 31, 2016, when the pipeline capacity was under contract with two third parties for a monthly fee.
|
•
|
increases in the average cost per gallon of gasoline and diesel purchased in our west Texas marketing operations. The average cost per gallon of gasoline and diesel purchased increased $0.23 per gallon and $0.45 per gallon, respectively, which amounted to an increase of $72.6 million in cost of materials and other. The increase in the average cost per gallon of gasoline and diesel was partially offset by a decrease in volumes sold during the year ended December 31, 2018 compared to the year ended December 31, 2017, which amounted to a $13.5 million decrease in cost of materials and other and hedging gains of $4.8 million.
|
•
|
increases in the average cost per gallon of gasoline and diesel purchased in our west Texas marketing operations. The average cost per gallon of gasoline and diesel increased $0.27 per gallon and $0.31 per gallon, respectively; and
|
•
|
a net increase of 8.0 million gallons in the volume of gasoline and diesel purchased in west Texas during the year ended December 31, 2017 compared to gallons purchased during the year ended December 31, 2016.
|
•
|
higher operating costs associated with the logistics assets acquired in the Big Spring Logistic Assets Acquisition, including maintenance expenses, allocated employee costs, variable expenses such as utilities, and professional services fees incurred in connection with the transaction, which accounted for the majority of the increase in operating increases;
|
•
|
higher employee costs, primarily payroll expense, allocated to us as a result of increases in allocated employee headcount and employee incentive costs;
|
•
|
higher costs associated with operating certain of our terminals as a result of volume increases at such terminals; and
|
•
|
increases in outside services expenses related to maintenance projects on certain of our pipelines and tanks.
|
•
|
increases in labor and utilities costs associated with certain of our pipelines as a result of increased usage;
|
•
|
higher maintenance costs associated with certain of our tanks at our tank farms; and
|
•
|
employee incentive costs incurred during the year ended December 31, 2017, with no comparable costs incurred during the year ended December 31, 2016.
|
•
|
reduction in operating expenses for one of our terminal locations at which we incurred increased costs related to internal tank contamination during the year ended December 31, 2016 that were not incurred during the year ended December 31, 2017.
|
•
|
higher professional services fees incurred in connection with the management of various transactions and projects, including the Big Spring Logistic Assets and our joint ventures, and higher direct employee costs allocated to us.
|
•
|
increases in certain direct employee costs allocated to us as a result of an increase in the employee headcount in connection with operating and maintaining our assets and in employee incentive costs incurred during the year ended December 31, 2017, with no comparable costs incurred during the year ended December 31, 2016.
|
•
|
the addition of assets to our asset base as a result of the Big Spring Logistic Assets Acquisition.
|
•
|
the addition of assets to our asset base as a result of the completion of capital projects that were placed into service during the year ended December 31, 2017 compared to the year ended December 31, 2016.
|
•
|
higher interest costs associated with increased borrowings under the DKL Credit Facility as a result of the Big Spring Logistic Assets Acquisition during Q1 2018.
|
•
|
higher total debt balances and higher average interest rates on our debt outstanding under 2025 Notes and our revolving credit facility.
|
•
|
refined product pipeline capacity leased from Enterprise TE Products Pipeline Company ("Enterprise") that runs from El Dorado, Arkansas to our Memphis terminal and the Big Spring Pipeline
|
•
|
Effective March 1, 2018, this segment also includes the pipelines and storage assets acquired in the Big Spring Logistic Assets Acquisition
|
|
|
Year Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Throughputs (average bpd)
|
|
|
|
|
|
|
|||
Lion Pipeline System:
|
|
|
|
|
|
|
|||
Crude pipelines (non-gathered)
|
|
51,992
|
|
|
59,362
|
|
|
56,555
|
|
Refined products pipelines to Enterprise Systems
|
|
45,728
|
|
|
51,927
|
|
|
52,071
|
|
SALA Gathering System
|
|
16,571
|
|
|
15,871
|
|
|
17,756
|
|
East Texas Crude Logistics System
|
|
15,696
|
|
|
15,780
|
|
|
12,735
|
|
•
|
increased revenues generated by the pipelines and storage assets acquired in the Big Spring Logistic Assets Acquisition, which accounted for the majority of the increase in net revenues; and
|
•
|
increased revenues on our Paline Pipeline System. On March 1, 2018, we entered into two agreements pursuant to which the capacity of the Paline Pipeline was contracted to separate parties for a monthly fee, compared to the year ended December 31, 2017 when the Paline Pipeline was a FERC regulated pipeline with a tariff established for potential shippers.
|
•
|
declines in fees on our Paline Pipeline System; and
|
•
|
decreased revenues on our Paline Pipeline System. During the year ended December 31, 2017, the Paline Pipeline System was FERC regulated pipeline with a tariff established for potential shippers, compared to the year ended December 31, 2016, when the pipeline capacity was under contract with two third parties for a monthly fee.
|
•
|
increases in pipeline fees associated with our Greenville-Mount Pleasant Pipeline and a related pipeline connection.
|
•
|
increases in transportation costs related to our trucking assets, which accounted for a majority of the increase; and
|
•
|
increased costs associated with our leased refined product pipeline capacity pursuant to the provisions of a new agreement for the capacity that was effective June 1, 2018.
|
•
|
lower pipeline allowance losses on our Paline Pipeline System;
|
•
|
reduced costs associated with our leased refined product pipeline capacity as a result of lower volumes on the pipeline; and
|
•
|
decreases in transportation costs related to our trucking assets.
|
•
|
operating costs associated with the pipelines and storage assets acquired in the Big Spring Logistic Assets Acquisition, including maintenance expenses, allocated employee costs, variable expenses such as utilities, and professional service fees incurred in connection with the transaction, which accounted for the majority of the increase in operating expenses;
|
•
|
higher employee costs, primarily payroll expense, allocated to us as a result of an increase in allocated employee headcount; and
|
•
|
increases in outside services expenses related to maintenance projects on certain of our pipelines and tanks.
|
•
|
increases in labor and utilities costs associated with certain of our pipelines as a result of increased usage; and
|
•
|
higher maintenance costs associated with certain of our tanks at our tank farms.
|
•
|
increases in net revenues generated under the agreements executed in connection with the Big Spring Logistic Assets Acquisition, which accounted for the majority of the increase in contribution margin; and
|
•
|
increased revenues on our Paline Pipeline as described above.
|
•
|
decreases in net sales related to our Paline Pipeline System as described above.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Information:
|
|
|
|
|
|
|
||||||
East Texas - Tyler Refinery sales volumes (average bpd) (1)
|
|
77,487
|
|
|
73,655
|
|
|
68,131
|
|
|||
Big Spring marketing throughputs (average bpd) (2)
|
|
81,117
|
|
|
—
|
|
|
—
|
|
|||
West Texas marketing throughputs (average bpd)
|
|
13,323
|
|
|
13,817
|
|
|
13,257
|
|
|||
West Texas marketing gross margin per barrel
|
|
$
|
5.57
|
|
|
$
|
4.03
|
|
|
$
|
1.43
|
|
Terminalling throughputs (average bpd) (3)
|
|
161,284
|
|
|
124,488
|
|
|
122,350
|
|
•
|
increases in the average sales prices per gallon of gasoline and diesel sold in our west Texas marketing operations, which amounted to an increase of $78.7 million. The increase in the average sales prices of gasoline and diesel were partially offset by a decrease in volumes sold during the year ended December 31, 2018 compared to the year ended December 31, 2017, amounting to $14.3 million; and
|
•
|
revenue generated under the agreements executed in connection with the Big Spring Logistic Assets Acquisition, which accounted for the majority of the remaining increase in net revenues in our marketing and terminalling segment.
|
•
|
increases in the average sales prices per gallon of gasoline and diesel in our west Texas marketing operations;
|
•
|
increase in volumes sold in our west Texas marketing operations; and
|
•
|
increased fees associated with our marketing agreement with Delek Holdings as a result of increased throughput due to higher demand following product supply disruptions associated with Hurricane Harvey.
|
•
|
increases in the average cost per gallon of gasoline and diesel purchased in our west Texas marketing operations, which amounted to $72.6 million. The increase in the average cost per gallon of gasoline and diesel was partially offset by a decrease in volumes sold during the year ended December 31, 2018 compared to the year ended December 31, 2017, which amounted to a decrease of $13.5 million in cost of materials and other and hedging gains of $4.8 million.
|
•
|
increases in the average cost per gallon of gasoline and diesel in our west Texas marketing operations; and
|
•
|
increase in the volumes purchased in our west Texas marketing operations.
|
•
|
operating costs associated with the wholesale marketing and terminalling assets acquired in the Big Spring Logistic Assets Acquisition including maintenance expenses, allocated employee costs, and variable expenses such as utilities, which accounted for the majority of the increase in operating expenses;
|
•
|
higher employee costs, primarily payroll expense, allocated to us as a result of increases in allocated employee headcount and employee incentive costs; and
|
•
|
higher costs associated with operating certain of our terminals as a result of volume increases at such terminals;
|
•
|
increases in employee costs allocated to us as a result of an increase in employee headcount in connection with the operating and maintaining of our assets; and
|
•
|
employee incentive costs incurred during the year ended December 31, 2017, with no comparable costs incurred during the year, December 31, 2016.
|
•
|
a reduction in operating expenses for one of our terminal locations at which we incurred increased costs related to internal tank contamination during the year ended December 31, 2016, that were not incurred during the year ended December 31, 2017.
|
•
|
improved contribution margin in our west Texas operations as a result of continued increased drilling activity in the region and favorable
|
•
|
increases in revenue generated under the agreements executed in connection with the Big Spring Logistic Assets Acquisition as described above.
|
•
|
improved contribution margin in our west Texas operations as a result of increased drilling activity in the region, which improved market conditions and increased demand;
|
•
|
higher margins during a period of product supply disruptions associated with Hurricane Harvey, during which west Texas operations contribution margin benefited;
|
•
|
increased fees associated with our marketing agreement with Delek Holdings as described above; and
|
•
|
a reduction in operating expenses for one of our terminal locations at which we incurred increased costs related to internal tank contamination during the year ended December 31, 2016, that were not incurred during the year ended December 31, 2017.
|
Quarter Ended
|
|
Total Quarterly Distribution Per Limited Partner Unit
|
|
Total Quarterly Distribution Per Limited Partner Unit, Annualized
|
|
Total Cash Distribution, including general partner interest and IDRs (in thousands)
|
|
Date of Distribution
|
Unitholders Record Date
|
March 31, 2018
|
|
$0.750
|
|
$3.00
|
|
$23,997
|
|
May 15, 2018
|
May 7, 2018
|
June 30, 2018
|
|
$0.770
|
|
$3.08
|
|
$24,984
|
|
August 13, 2018
|
August 3, 2018
|
September 30, 2018
|
|
$0.790
|
|
$3.16
|
|
$25,960
|
|
November 9, 2018
|
November 2, 2018
|
December 31, 2018
|
|
$0.810
|
|
$3.24
|
|
$26,949
|
|
February 12, 2019
|
February 4, 2019
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flow Data:
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
|
$
|
147,953
|
|
|
$
|
86,950
|
|
|
$
|
100,707
|
|
Net cash used in investing activities
|
|
(228,039
|
)
|
|
(29,919
|
)
|
|
(72,692
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
79,933
|
|
|
(52,415
|
)
|
|
(27,956
|
)
|
|||
Net increase in cash and cash equivalents
|
|
$
|
(153
|
)
|
|
$
|
4,616
|
|
|
$
|
59
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019 Forecast
|
|
2018 Actual
|
||||
Pipelines and Transportation:
|
|
|
|
|
||||
Regulatory (2)
|
|
$
|
2,506
|
|
|
$
|
556
|
|
Maintenance (1) (2)
|
|
5,383
|
|
|
3,113
|
|
||
Discretionary
|
|
110
|
|
|
3,171
|
|
||
Pipelines and transportation segment total
|
|
$
|
7,999
|
|
|
$
|
6,840
|
|
|
|
|
|
|
||||
Wholesale Marketing and Terminalling:
|
|
|
|
|
||||
Regulatory (3)
|
|
$
|
5,500
|
|
|
$
|
737
|
|
Maintenance (1) (3)
|
|
3,342
|
|
|
2,143
|
|
||
Discretionary
|
|
458
|
|
|
1,845
|
|
||
Wholesale marketing and terminalling segment total
|
|
$
|
9,300
|
|
|
$
|
4,725
|
|
|
|
|
|
|
||||
Total capital spending (4)
|
|
$
|
17,299
|
|
|
$
|
11,565
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
|
2017
|
|
2016
|
||||
Capital spending (excluding business combinations)
|
|
|
|
|
|
||||
Pipelines and Transportation
|
|
|
$
|
14,262
|
|
|
$
|
8,478
|
|
Wholesale Marketing and Terminalling
|
|
|
4,141
|
|
|
3,289
|
|
||
Total capital spending
|
|
|
$
|
18,403
|
|
|
$
|
11,767
|
|
|
|
<1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
>5 Years
|
|
Total
|
||||||||||
Long term debt and notes payable
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
456,700
|
|
|
$
|
250,000
|
|
|
$
|
706,700
|
|
Capital lease obligations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest (1)
|
|
41,950
|
|
|
83,969
|
|
|
77,442
|
|
|
25,313
|
|
|
228,674
|
|
|||||
Operating lease commitments (2)
|
|
5,755
|
|
|
10,996
|
|
|
7,460
|
|
|
8
|
|
|
24,219
|
|
|||||
Total
|
|
$
|
47,705
|
|
|
$
|
94,965
|
|
|
$
|
541,602
|
|
|
$
|
275,321
|
|
|
$
|
959,593
|
|
i.
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
ii.
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and Board of Directors; and
|
iii.
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
Name
|
Age
|
Position With Delek Logistics GP, LLC
|
Ezra Uzi Yemin
|
50
|
Chairman of the Board of Directors and Chief Executive Officer
|
Charles J. Brown, III
|
71
|
Director, Chairman of Conflicts Committee and Member of Audit and EHS Committees
|
Francis C. D'Andrea
|
65
|
Director, Chairman of Audit Committee and Member of Conflicts and EHS Committees
|
Eric D. Gadd
|
63
|
Director, Chairman of EHS Committee and Member of Audit and Conflicts Committees
|
Assi Ginzburg
|
43
|
Director and Executive Vice President
|
Frederec Green
|
53
|
Director and Executive Vice President
|
Ron W. Haddock
|
78
|
Director and Member of Conflicts and EHS Committees
|
Reuven Spiegel
|
62
|
Director and Member of Audit, EHS and Conflicts Committees
|
Alan P. Moret
|
64
|
President
|
Kevin L. Kremke
|
46
|
Executive Vice President and Chief Financial Officer
|
Regina B. Jones
|
48
|
Executive Vice President, General Counsel and Secretary
|
Daniel L. Gordon
|
41
|
Executive Vice President
|
Avigal Soreq
|
41
|
Executive Vice President
|
•
|
On September 14, 2018, Mr. Ron Haddock filed a Form 4 reporting the acquisition of 1,776 common units that occurred on September 10, 2018.
|
•
|
On January 17, 2019, Mr. Ezra Uzi Yemin filed a Form 4 reporting the acquisition of 2,452.13 common units that occurred on November 7, 2018.
|
•
|
to motivate and retain our general partner's key executives;
|
•
|
to align the long-term economic interests of our general partner's executives with those of our unitholders; and
|
•
|
to reward excellence and performance by our general partner's executives that increases the value of our units.
|
|
Option Awards
|
Unit Awards
|
||||
Name
|
Number of Securities Underlying Unexercised Options Exercisable
|
Number of Securities Underlying Unexercised Options Unexercisable
|
Option Exercise Price
|
Option Expiration Date
|
Number of Units That Have Not Vested
|
Market Value of Units That Have Not Vested
|
Ezra Uzi Yemin
|
—
|
—
|
n/a
|
n/a
|
—
|
$—
|
Kevin Kremke
|
—
|
—
|
n/a
|
n/a
|
—
|
$—
|
|
Option Awards
|
Stock Awards
|
||
Name
|
Number of Shares Acquired on Exercise
|
Value Realized on Exercise
|
Number of Shares Acquired on Vesting
|
Value Realized on Vesting
|
Ezra Uzi Yemin
|
—
|
n/a
|
—
|
$—
|
Kevin Kremke
|
—
|
n/a
|
—
|
$—
|
Name
|
Termination of Employment
|
Change-In-Control
|
Ezra Uzi Yemin
|
—
|
$—
|
Kevin Kremke
|
—
|
$—
|
Board of Directors Retainer (Per Year)
|
$72,000
|
||
Lead Director Fee (Per Year)
|
$12,000
|
||
Committee Retainers (Per Year):
|
Chairman
|
Others
|
|
Audit Committee
|
$12,000
|
$5,600
|
|
Conflicts Committee
|
$5,000
|
$2,500
|
|
EHS Committee
|
$8,000
|
$4,400
|
|
Target Value for Equity Awards (Per Year)
|
$100,000
|
Director Compensation
|
|||||
Name (1)
|
Fees Earned or Paid in Cash ($)(2)
|
Stock Awards ($)(3)
|
Option Awards ($)
|
All Other Compensation ($)
|
Total ($)
|
Charles J. Brown, III
|
87,000
|
99,989
|
—
|
—
|
186,989
|
Mark Baker Cox (4)
|
15,840
|
—
|
—
|
—
|
15,840
|
Francis C. D'Andrea
|
90,900
|
99,989
|
—
|
—
|
190,889
|
Eric D. Gadd
|
88,100
|
99,989
|
—
|
—
|
188,089
|
Ron W. Haddock
|
78,900
|
158,242(5)
|
—
|
—
|
237,142
|
Reuven Spiegel
|
96,500
|
99,989
|
—
|
—
|
196,489
|
Name of Beneficial Owner (1)
|
Amount, Nature and Percentage of Beneficial Ownership of Common Units (2)
|
Amount, Nature and Percentage of Beneficial Ownership of Subordinated Units (2)
|
Amount, Nature and Percentage of Beneficial Ownership of General Partner Units (2)
|
Amount and Nature of Beneficial Ownership of Common Stock (2)
|
|||||||
Delek Logistics Partners, LP
|
Delek US Holdings, Inc.
|
||||||||||
(#)
|
(%)
|
(#)
|
(%)
|
(#)
|
(%)
|
(#) (3)
|
(%)
|
||||
Beneficial Owners of More Than 5% of Units:
|
|
|
|
|
|
|
|
|
|||
Delek US Holdings, Inc. (4)
|
15,294,046
|
62.7
|
—
|
n/a
|
497,604
|
|
100.0
|
n/a
|
n/a
|
||
Advisory Research Inc. (5)
|
1,260,728
|
5.2
|
—
|
n/a
|
—
|
n/a
|
n/a
|
n/a
|
|||
Directors, Director Nominees and NEOs:
|
|
|
|
|
|
|
|
|
|||
Ezra Uzi Yemin (6)
|
267,522 (12)
|
|
1.1
|
—
|
n/a
|
—
|
n/a
|
627,058
|
*
|
||
Charles Brown
|
11,702
|
|
*
|
—
|
n/a
|
—
|
n/a
|
—
|
n/a
|
||
Francis C. D'Andrea
|
7,259
|
|
*
|
—
|
n/a
|
—
|
n/a
|
—
|
n/a
|
||
Eric Gadd
|
12,527
|
|
*
|
—
|
n/a
|
—
|
n/a
|
—
|
n/a
|
||
Assi Ginzburg (7)
|
16,510
|
|
*
|
—
|
n/a
|
—
|
n/a
|
105,829
|
*
|
||
Frederec Green (8)
|
68,552
|
|
*
|
—
|
n/a
|
—
|
n/a
|
127,058
|
|
*
|
|
Ron W. Haddock
|
3,552
|
|
*
|
—
|
n/a
|
—
|
n/a
|
992
|
*
|
||
Reuven Spiegel
|
10,027
|
|
*
|
—
|
n/a
|
—
|
n/a
|
—
|
n/a
|
||
Kevin Kremke (9)
|
—
|
|
n/a
|
—
|
n/a
|
—
|
n/a
|
13,752
|
*
|
||
Regina Jones (10)
|
—
|
|
n/a
|
—
|
n/a
|
—
|
n/a
|
600
|
*
|
||
Alan P. Moret
|
—
|
|
n/a
|
—
|
n/a
|
—
|
n/a
|
—
|
n/a
|
||
Dan Gordon (11)
|
2,521
|
|
*
|
—
|
n/a
|
—
|
n/a
|
12,292
|
*
|
||
Avigal Soreq (12)
|
—
|
|
n/a
|
—
|
n/a
|
—
|
n/a
|
15,432
|
*
|
||
All directors, all director nominees, all NEOs and all executive officers as a group (13 persons)
|
400,172
|
1.6
|
|
|
|
|
903,013
|
1.2
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|
(a)
|
(b)
|
(c)
|
Equity compensation plans approved by security holders
|
566,320
|
N/A
|
103,495
|
Equity compensation plans not approved by security holders
|
—
|
N/A
|
—
|
TOTAL
|
566,320
|
N/A
|
103,495
|
•
|
Delek Holdings, directly or indirectly, paid us approximately $2.1 million pursuant to the Memphis terminalling agreement and $1.1 million for terminalling services at our Nashville, Tennessee terminal;
|
•
|
Delek Holdings paid us approximately $9.5 million pursuant to the East Texas Crude Logistics System pipeline and tankage agreement;
|
•
|
Delek Holdings paid us approximately $21.8 million pursuant to the East Texas marketing agreement;
|
•
|
Delek Holdings paid us approximately $2.9 million pursuant to the amended and restated services agreement for the Big Sandy terminal and pipeline;
|
•
|
Delek Holdings paid us approximately $21.2 million pursuant to the Tyler Terminal and Tank Assets Throughput and Tankage Agreement;
|
•
|
Delek Holdings, directly or indirectly, paid us approximately $2.4 million pursuant to the North Little Rock terminalling services agreement;
|
•
|
Delek Holdings, directly or indirectly, paid us approximately $18.5 million pursuant to the El Dorado Terminal and Tank Assets Throughput and Tankage Agreement;
|
•
|
Delek Holdings paid us approximately $4.5 million related to revenue earned on our Greenville-Mount Pleasant Assets;
|
•
|
Delek Holdings paid us approximately $11.9 million related to revenue earned on trucking services;
|
•
|
Delek Holdings paid us approximately $6.1 million related to the El Dorado Rail Offloading Racks; and
|
•
|
Delek Holdings paid us approximately $2.3 million related to the Tyler Crude Tank.
|
•
|
Delek Holdings paid us approximately $79.0 million related to the Big Spring Assets acquired in March 2018, of which $60.6 million related to the Big Spring Pipelines, Storage and Throughput Facilities Agreement, $11.2 million related to the Big Spring Marketing Agreement and $7.2 million related to the Big Spring Asphalt Services Agreement.
|
•
|
an agreement whereby Delek Holdings will not compete with us under certain circumstances;
|
•
|
our right of first offer to acquire certain of Delek Holdings' logistics assets, including certain terminals, storage facilities and other related assets located at the Tyler and El Dorado Refineries and, under specified circumstances, logistics and marketing assets that Delek may acquire or construct in the future;
|
•
|
Delek Holdings' right of first refusal to purchase our assets that serve its refineries;
|
•
|
our obligation to pay an annual fee to Delek Holdings, currently in the amount of $3.9 million, for Delek Holdings' provision of centralized corporate services, including executive management services of Delek Holdings employees who devote less than 50% of their time to our business, financial and administrative services, information technology services, legal services, health, safety and environmental services, human resource services, and insurance administration;
|
•
|
Delek Holdings' reimbursement to us for certain operating expenses and certain maintenance capital expenditures and Delek Holdings' indemnification of us for certain matters, including environmental, title and tax matters;
|
•
|
reimbursement to us for certain designated periods of time related to the date of acquisition of the relevant asset for any operating expenses in excess of certain thresholds per year that we incur for inspections, maintenance and repairs to any of the storage tanks contributed to us by Delek Holdings that are necessary to comply with the DOT pipeline integrity rules and certain API storage tank standards; and
|
•
|
reimbursement to us for certain designated periods of time related to the date of acquisition of the relevant asset for all non-discretionary maintenance capital expenditures, other than those required to comply with applicable environmental laws and regulations, in excess of certain thresholds for such 12-month period and per year that we make with respect to the assets contributed to us by Delek Holdings for which we have not been reimbursed as described above.
|
1.
|
Financial Statements. The accompanying Index to Financial Statements and Schedule on page F-1 of this Annual Report on Form 10-K is provided in response to this item.
|
2.
|
List of Financial Statement Schedules. All schedules are omitted because the required information is either not present, not present in material amounts or included within the Consolidated Financial Statements.
|
3.
|
Exhibits - See below.
|
Exhibit No.
|
|
Description
|
|
1.1
|
|
|
|
3.1
|
|
|
|
3.2(a)
|
|
|
|
3.2(b)
|
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
10.1
|
*
|
|
|
10.2
|
*
|
|
|
10.3
|
*
|
|
|
10.4
|
*
|
|
|
10.5
|
++
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
10.9
|
|
|
|
10.10
|
#
|
|
|
10.11
|
*
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
10.15
|
|
|
|
10.16
|
*
|
|
|
10.17
|
*
|
|
|
10.18
|
|
|
|
10.19
|
#
|
|
|
10.20
|
|
|
|
10.21
|
#
|
|
|
10.22
|
|
|
|
10.23
|
#
|
|
|
10.24
|
*
|
|
|
10.25
|
*
|
|
|
10.26
|
*
|
|
|
10.27
|
|
|
|
10.28
|
|
|
|
10.29
|
#
|
|
|
10.30
|
|
|
|
10.31
|
|
|
|
10.32
|
|
|
|
10.33
|
|
|
|
10.34
|
|
|
|
10.35
|
++
|
|
|
10.36
|
++
|
|
|
10.37
|
|
|
|
10.38
|
|
|
|
10.39
|
|
|
|
10.40
|
|
|
|
10.41
|
|
|
|
10.42
|
|
|
|
21.1
|
#
|
|
|
23.1
|
#
|
|
|
31.1
|
#
|
|
|
31.2
|
#
|
|
|
32.1
|
##
|
|
|
32.2
|
##
|
|
|
101
|
<
|
|
The following materials from Delek Logistics Partners, LP's Annual Report on Form 10-K for the annual period ended December 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2018 and 2017; (ii) Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2018, 2017 and 2016; (iii) Consolidated Statements of Changes in Partners’ Equity for the years ended December 31, 2018, 2017 and 2016; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016; and (v) Notes to Consolidated Financial Statements.
|
|
|
|
|
*
|
|
|
Management contract or compensatory plan or arrangement.
|
#
|
|
|
Filed herewith.
|
##
|
|
|
Furnished herewith.
|
++
|
|
|
Confidential treatment has been requested and granted with respect to certain portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Omitted portions have been filed separately with the Securities and Exchange Commission.
|
<
|
|
|
Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
Audited Financial Statements:
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
4,522
|
|
|
$
|
4,675
|
|
Accounts receivable
|
|
21,586
|
|
|
23,013
|
|
||
Accounts receivable from related parties
|
|
—
|
|
|
1,124
|
|
||
Inventory
|
|
5,491
|
|
|
20,855
|
|
||
Other current assets
|
|
969
|
|
|
783
|
|
||
Total current assets
|
|
32,568
|
|
|
50,450
|
|
||
Property, plant and equipment:
|
|
|
|
|
||||
Property, plant and equipment
|
|
452,746
|
|
|
367,179
|
|
||
Less: accumulated depreciation
|
|
(140,184
|
)
|
|
(112,111
|
)
|
||
Property, plant and equipment, net
|
|
312,562
|
|
|
255,068
|
|
||
Equity method investments
|
|
104,770
|
|
|
106,465
|
|
||
Goodwill
|
|
12,203
|
|
|
12,203
|
|
||
Intangible assets, net
|
|
154,038
|
|
|
15,917
|
|
||
Other non-current assets
|
|
8,452
|
|
|
3,427
|
|
||
Total assets
|
|
$
|
624,593
|
|
|
$
|
443,530
|
|
LIABILITIES AND DEFICIT
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
14,226
|
|
|
$
|
19,147
|
|
Accounts payable to related parties
|
|
7,833
|
|
|
—
|
|
||
Excise and other taxes payable
|
|
4,069
|
|
|
4,700
|
|
||
Tank inspection liabilities
|
|
902
|
|
|
902
|
|
||
Pipeline release liabilities
|
|
4,419
|
|
|
1,000
|
|
||
Accrued expenses and other current liabilities
|
|
5,056
|
|
|
6,033
|
|
||
Total current liabilities
|
|
36,505
|
|
|
31,782
|
|
||
Non-current liabilities:
|
|
|
|
|
||||
Long-term debt
|
|
700,430
|
|
|
422,649
|
|
||
Asset retirement obligations
|
|
5,191
|
|
|
4,064
|
|
||
Other non-current liabilities
|
|
17,290
|
|
|
14,260
|
|
||
Total non-current liabilities
|
|
722,911
|
|
|
440,973
|
|
||
Deficit:
|
|
|
|
|
||||
Common unitholders - public; 9,109,807 units issued and outstanding at December 31, 2018 (9,088,587 at December 31, 2017)
|
|
171,023
|
|
|
174,378
|
|
||
Common unitholders - Delek Holdings; 15,294,046 units issued and outstanding at December 31, 2018 (15,294,046 at December 31, 2017)
|
|
(299,360
|
)
|
|
(197,206
|
)
|
||
General partner - 498,038 units issued and outstanding at December 31, 2018 (497,604 at December 31, 2017)
|
|
(6,486
|
)
|
|
(6,397
|
)
|
||
Total deficit
|
|
(134,823
|
)
|
|
(29,225
|
)
|
||
Total liabilities and deficit
|
|
$
|
624,593
|
|
|
$
|
443,530
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Affiliate (1)
|
|
$
|
240,809
|
|
|
$
|
156,280
|
|
|
$
|
149,564
|
|
Third party
|
|
416,800
|
|
|
381,795
|
|
|
298,495
|
|
|||
Net revenues
|
|
657,609
|
|
|
538,075
|
|
|
448,059
|
|
|||
|
|
|
|
|
|
|
||||||
Cost of sales:
|
|
|
|
|
|
|
||||||
Cost of materials and other
|
|
429,061
|
|
|
372,890
|
|
|
302,158
|
|
|||
Operating expenses (excluding depreciation and amortization presented below)
|
|
55,924
|
|
|
40,154
|
|
|
34,896
|
|
|||
Depreciation and amortization
|
|
24,108
|
|
|
19,026
|
|
|
17,897
|
|
|||
Total cost of sales
|
|
509,093
|
|
|
432,070
|
|
|
354,951
|
|
|||
Operating expenses related to wholesale business (excluding depreciation and amortization presented below)
|
|
2,820
|
|
|
3,120
|
|
|
2,302
|
|
|||
General and administrative expenses
|
|
17,166
|
|
|
11,840
|
|
|
10,256
|
|
|||
Depreciation and amortization
|
|
1,882
|
|
|
2,888
|
|
|
2,916
|
|
|||
Loss (gain) on asset disposals
|
|
891
|
|
|
(20
|
)
|
|
(16
|
)
|
|||
Total operating costs and expenses
|
|
531,852
|
|
|
449,898
|
|
|
370,409
|
|
|||
Operating income
|
|
125,757
|
|
|
88,177
|
|
|
77,650
|
|
|||
Interest expense, net
|
|
41,263
|
|
|
23,944
|
|
|
13,587
|
|
|||
(Income) loss from equity method investments
|
|
(6,230
|
)
|
|
(4,953
|
)
|
|
1,178
|
|
|||
Other expense (income), net
|
|
8
|
|
|
(1
|
)
|
|
—
|
|
|||
Total non-operating expenses, net
|
|
35,041
|
|
|
18,990
|
|
|
14,765
|
|
|||
Income before income tax expense (benefit)
|
|
90,716
|
|
|
69,187
|
|
|
62,885
|
|
|||
Income tax expense (benefit)
|
|
534
|
|
|
(222
|
)
|
|
81
|
|
|||
Net income
|
|
90,182
|
|
|
69,409
|
|
|
62,804
|
|
|||
Net income attributable to partners
|
|
90,182
|
|
|
$
|
69,409
|
|
|
$
|
62,804
|
|
|
Comprehensive income attributable to partners
|
|
$
|
90,182
|
|
|
$
|
69,409
|
|
|
$
|
62,804
|
|
|
|
|
|
|
|
|
||||||
Less: General partner's interest in net income, including incentive distribution rights
|
|
25,543
|
|
|
18,429
|
|
|
12,193
|
|
|||
Limited partners' interest in net income
|
|
$
|
64,639
|
|
|
$
|
50,980
|
|
|
$
|
50,611
|
|
|
|
|
|
|
|
|
||||||
Net income per limited partner unit:
|
|
|
|
|
|
|
||||||
Common units - (basic)
|
|
$
|
2.65
|
|
|
$
|
2.09
|
|
|
$
|
2.08
|
|
Common units - (diluted)
|
|
$
|
2.65
|
|
|
$
|
2.09
|
|
|
$
|
2.07
|
|
Subordinated units - Delek Holdings (basic and diluted)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.19
|
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding (2):
|
|
|
|
|
|
|
||||||
Common units - (basic)
|
|
24,390,286
|
|
|
24,348,063
|
|
|
22,490,264
|
|
|||
Common units - (diluted)
|
|
24,396,881
|
|
|
24,376,972
|
|
|
22,558,717
|
|
|||
Subordinated units - Delek Holdings (basic and diluted)
|
|
—
|
|
|
—
|
|
|
1,803,167
|
|
|||
|
|
|
|
|
|
|
||||||
Cash distributions per limited partner unit
|
|
$
|
3.120
|
|
|
$
|
2.835
|
|
|
$
|
2.575
|
|
|
|
|
Partnership
|
|
|
||||||||||||||||
|
|
|
Common - Public
|
|
Common - Delek Holdings
|
|
Subordinated - Delek Holdings
|
|
General Partner - Delek Holdings
|
|
Total
|
||||||||||
|
|
(In thousands)
|
|||||||||||||||||||
Balance at December 31, 2015
|
|
$
|
198,401
|
|
|
$
|
(280,828
|
)
|
|
$
|
78,601
|
|
|
$
|
(7,192
|
)
|
|
$
|
(11,018
|
)
|
|
Cash distributions (1)
|
|
(23,847
|
)
|
|
(25,271
|
)
|
|
(11,503
|
)
|
|
(10,244
|
)
|
|
(70,865
|
)
|
||||||
Sponsorship contribution of fixed assets
|
|
—
|
|
|
5,063
|
|
|
—
|
|
|
104
|
|
|
5,167
|
|
||||||
Net income attributable to partners
|
|
19,667
|
|
|
27,002
|
|
|
3,942
|
|
|
12,193
|
|
|
62,804
|
|
||||||
Unit-based compensation
|
|
664
|
|
|
1,046
|
|
|
—
|
|
|
(1,111
|
)
|
|
599
|
|
||||||
Subordinated unit conversion
|
|
—
|
|
|
71,040
|
|
|
(71,040
|
)
|
|
—
|
|
|
—
|
|
||||||
Delek Holdings unit repurchases from public
|
|
(6,872
|
)
|
|
6,872
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
||||||
Balance at December 31, 2016
|
|
188,013
|
|
|
(195,076
|
)
|
|
—
|
|
|
(6,221
|
)
|
|
(13,284
|
)
|
||||||
Cash distributions (2)
|
|
(25,978
|
)
|
|
(42,490
|
)
|
|
—
|
|
|
(17,691
|
)
|
|
(86,159
|
)
|
||||||
Sponsorship contribution of fixed assets
|
|
—
|
|
|
65
|
|
|
—
|
|
|
2
|
|
|
67
|
|
||||||
Net income attributable to partners
|
|
19,015
|
|
|
31,965
|
|
|
—
|
|
|
18,429
|
|
|
69,409
|
|
||||||
Unit-based compensation
|
|
619
|
|
|
1,039
|
|
|
—
|
|
|
(937
|
)
|
|
721
|
|
||||||
Delek Holdings unit repurchases from public
|
|
(7,291
|
)
|
|
7,291
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
||||||
Balance at December 31, 2017
|
|
174,378
|
|
|
(197,206
|
)
|
|
—
|
|
|
(6,397
|
)
|
|
(29,225
|
)
|
||||||
Distributions to Delek Holdings for Big Spring Asset Acquisition
|
|
—
|
|
|
(96,822
|
)
|
|
—
|
|
|
(1,976
|
)
|
|
(98,798
|
)
|
||||||
Cash distributions (3)
|
|
(27,721
|
)
|
|
(46,417
|
)
|
|
—
|
|
|
(23,698
|
)
|
|
(97,836
|
)
|
||||||
GP Units Issued to maintain 2% interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
26
|
|
||||||
Sponsor contribution of fixed assets
|
|
—
|
|
|
151
|
|
|
—
|
|
|
3
|
|
|
154
|
|
||||||
Net income attributable to partners
|
|
24,119
|
|
|
40,520
|
|
|
—
|
|
|
25,543
|
|
|
90,182
|
|
||||||
Unit-based compensation
|
|
247
|
|
|
414
|
|
|
—
|
|
|
13
|
|
|
674
|
|
||||||
Balance at December 31, 2018
|
|
171,023
|
|
|
(299,360
|
)
|
|
—
|
|
|
(6,486
|
)
|
|
(134,823
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
90,182
|
|
|
$
|
69,409
|
|
|
$
|
62,804
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
25,990
|
|
|
21,914
|
|
|
20,813
|
|
|||
Amortization of customer contract intangible assets
|
|
6,009
|
|
|
—
|
|
|
—
|
|
|||
Amortization of deferred revenue
|
|
(1,497
|
)
|
|
(1,234
|
)
|
|
(1,085
|
)
|
|||
Amortization of deferred financing costs and debt discount
|
|
2,577
|
|
|
2,048
|
|
|
1,460
|
|
|||
Accretion of asset retirement obligations
|
|
359
|
|
|
292
|
|
|
266
|
|
|||
Loss (gain) on asset disposals
|
|
891
|
|
|
(20
|
)
|
|
(16
|
)
|
|||
Deferred income taxes
|
|
152
|
|
|
(111
|
)
|
|
(173
|
)
|
|||
Income from equity method investments
|
|
(6,230
|
)
|
|
(4,953
|
)
|
|
1,178
|
|
|||
Dividends from equity method investments
|
|
6,936
|
|
|
2,346
|
|
|
—
|
|
|||
Unit-based compensation expense
|
|
674
|
|
|
721
|
|
|
599
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
1,427
|
|
|
(3,811
|
)
|
|
15,847
|
|
|||
Inventories and other current assets
|
|
15,178
|
|
|
(11,692
|
)
|
|
2,045
|
|
|||
Accounts payable and other current liabilities
|
|
(1,747
|
)
|
|
10,859
|
|
|
3,551
|
|
|||
Accounts receivable/payable to related parties
|
|
9,038
|
|
|
1,682
|
|
|
(6,983
|
)
|
|||
Non-current assets and liabilities, net
|
|
(1,986
|
)
|
|
(500
|
)
|
|
401
|
|
|||
Net cash provided by operating activities
|
|
147,953
|
|
|
86,950
|
|
|
100,707
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Asset acquisitions, net of assumed ARO liabilities
|
|
(72,380
|
)
|
|
(6,443
|
)
|
|
—
|
|
|||
Purchases of property, plant and equipment
|
|
(12,931
|
)
|
|
(18,184
|
)
|
|
(11,287
|
)
|
|||
Proceeds from sales of property, plant and equipment
|
|
502
|
|
|
46
|
|
|
175
|
|
|||
Purchases of intangible assets
|
|
(144,219
|
)
|
|
(2,560
|
)
|
|
—
|
|
|||
Distributions from equity method investments
|
|
1,162
|
|
|
753
|
|
|
—
|
|
|||
Equity method investment contributions
|
|
(173
|
)
|
|
(3,531
|
)
|
|
(61,580
|
)
|
|||
Net cash used in investing activities
|
|
(228,039
|
)
|
|
(29,919
|
)
|
|
(72,692
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from issuance of additional units to maintain 2% General Partner interest
|
|
26
|
|
|
21
|
|
|
29
|
|
|||
Distributions to general partner
|
|
(23,698
|
)
|
|
(17,691
|
)
|
|
(10,244
|
)
|
|||
Distributions to common unitholders - public
|
|
(27,721
|
)
|
|
(25,978
|
)
|
|
(23,847
|
)
|
|||
Distributions to common unitholders - Delek Holdings
|
|
(46,417
|
)
|
|
(42,490
|
)
|
|
(25,271
|
)
|
|||
Distributions to subordinated unitholders - Delek Holdings
|
|
—
|
|
|
—
|
|
|
(11,503
|
)
|
|||
Distributions to Delek Holdings unitholders and general partner related to Big Spring Logistic Assets Acquisition
|
|
(98,798
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from revolving credit facility
|
|
735,000
|
|
|
277,100
|
|
|
314,750
|
|
|||
Payments of revolving credit facility
|
|
(458,200
|
)
|
|
(489,800
|
)
|
|
(273,750
|
)
|
|||
Proceeds from issuance of senior notes
|
|
—
|
|
|
248,112
|
|
|
—
|
|
|||
Deferred financing costs paid
|
|
(5,264
|
)
|
|
(5,951
|
)
|
|
—
|
|
|||
Reimbursement of capital expenditures by Delek Holdings
|
|
5,005
|
|
|
4,262
|
|
|
1,880
|
|
|||
Net cash provided by (used in) financing activities
|
|
79,933
|
|
|
(52,415
|
)
|
|
(27,956
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(153
|
)
|
|
4,616
|
|
|
59
|
|
|||
Cash and cash equivalents at the beginning of the period
|
|
4,675
|
|
|
59
|
|
|
—
|
|
|||
Cash and cash equivalents at the end of the period
|
|
$
|
4,522
|
|
|
$
|
4,675
|
|
|
$
|
59
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest
|
|
$
|
38,959
|
|
|
$
|
19,441
|
|
|
$
|
12,206
|
|
Income taxes
|
|
$
|
137
|
|
|
$
|
60
|
|
|
$
|
224
|
|
Non-cash investing activities:
|
|
|
|
|
|
|
|
|
||||
(Increase)/Decrease in accrued capital expenditures
|
|
$
|
(1,363
|
)
|
|
$
|
194
|
|
|
$
|
480
|
|
Non-cash financing activities:
|
|
|
|
|
|
|
||||||
Sponsor contribution of fixed assets
|
|
$
|
154
|
|
|
$
|
67
|
|
|
$
|
5,167
|
|
|
Years
|
Buildings and building improvements
|
15-40
|
Pipelines, tanks and terminals
|
15-40
|
Asset retirement obligation assets
|
15-50
|
Other equipment
|
3-15
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Beginning balance
|
|
$
|
4,064
|
|
|
$
|
3,772
|
|
Liabilities acquired
|
|
768
|
|
|
—
|
|
||
Accretion expense
|
|
359
|
|
|
292
|
|
||
Ending balance
|
|
$
|
5,191
|
|
|
$
|
4,064
|
|
•
|
Approximately 75 storage tanks and certain ancillary assets (such as tank pumps and piping) primarily located adjacent to the Big Spring Refinery;
|
•
|
An asphalt terminal and a light products terminal;
|
•
|
Certain crude oil and refined product pipelines; and
|
•
|
Other logistics assets, such as four underground saltwells used for natural gas liquids storage.
|
Asset/Operation
|
|
Initiation Date
|
|
Initial/Maximum Term (years) (1)
|
|
Service
|
|
Minimum Throughput Commitment (bpd)
|
|
Fee (/bbl)
|
Lion Pipeline System and SALA Gathering System (2):
|
|
|
|
|
|
|
|
|
|
|
Crude Oil Pipelines (non-gathered)
|
|
November 2012
|
|
5 / 15
|
|
Crude oil and refined products transportation
|
|
46,000 (3)
|
|
$0.99 (4)
|
Refined Products Pipelines
|
|
November 2012
|
|
5 / 15
|
|
|
|
40,000
|
|
$0.12
|
SALA Gathering System
|
|
November 2012
|
|
5 / 15
|
|
Crude oil gathering
|
|
14,000
|
|
$2.66 (4)
|
East Texas Crude Logistics System (2):
|
|
|
|
|
|
|
|
|
|
|
Crude Oil Pipelines
|
|
November 2012
|
|
5 / 15
|
|
Crude oil transportation and storage
|
|
35,000
|
|
$0.47 (5)
|
Storage
|
|
November 2012
|
|
5 / 15
|
|
|
|
N/A
|
|
$291,220/month
|
East Texas Marketing
|
|
November 2012
|
|
10 (6)
|
|
Marketing products for Tyler Refinery
|
|
50,000
|
|
$0.80 (6)
|
Big Sandy Terminal: (2) (7)
|
|
|
|
|
|
|
|
|
|
|
Refined Products Transportation
|
|
November 2012
|
|
5 / 15
|
|
Refined products transportation, dedicated terminalling services and storage for the Tyler Refinery
|
|
5,000
|
|
$0.58
|
Terminalling
|
|
November 2012
|
|
5 / 15
|
|
|
|
5,000
|
|
$0.58
|
Storage
|
|
November 2012
|
|
5 / 15
|
|
|
|
N/A
|
|
$58,192/month
|
Tyler Throughput and Tankage (2):
|
|
|
|
|
|
|
|
|
|
|
Refined Products Throughput
|
|
July 2013
|
|
8/ 16
|
|
Dedicated Terminalling and storage
|
|
50,000
|
|
$0.37
|
Storage
|
|
July 2013
|
|
8/ 16
|
|
|
|
N/A
|
|
$871,336/month
|
Memphis Pipeline
|
|
October 2013
|
|
5
|
|
Refined Products Transportation
|
|
10,959
|
|
$1.41
|
El Dorado Throughput and Tankage (2):
|
|
|
|
|
|
|
|
|
|
|
Refined Products Throughput
|
|
February 2014
|
|
8/ 16
|
|
Dedicated terminalling and storage
|
|
11,000
|
|
$0.53
|
Storage
|
|
February 2014
|
|
8/ 16
|
|
|
|
N/A
|
|
$1,363,985/month
|
El Dorado Assets Throughput:
|
|
|
|
|
|
|
|
|
|
|
Light Crude Throughput
|
|
March 2015
|
|
9/15
|
|
Dedicated Offloading Services
|
|
N/A (8)
|
|
$1.05
|
Heavy Crude Throughput
|
|
March 2015
|
|
9/15
|
|
Dedicated Offloading Services
|
|
N/A (8)
|
|
$2.36
|
|
|
|
|
|
|
|
|
|
|
|
Pipelines, Storage and Throughput Facilities Agreement (Big Spring):
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Refined Products Throughput
|
|
March 1, 2018
|
|
10/15
|
|
Pipeline throughput
|
|
104,300
|
|
0.05
|
Rail Offloading
|
|
March 1, 2018
|
|
10/15
|
|
Offloading services
|
|
4,500
|
|
0.4
|
Terminalling
|
|
March 1, 2018
|
|
10/15
|
|
Dedicated Terminalling
|
|
29,250
|
|
0.66
|
Storage
|
|
March 1, 2018
|
|
10/15
|
|
Storage
|
|
NA
|
|
$1,374,630/month
|
|
|
|
|
|
|
|
|
|
|
|
Asset/Operation
|
|
Initiation Date
|
|
Initial/Maximum Term (years) (1)
|
|
Service
|
|
Minimum Throughput Commitment (bpd)
|
|
Fee (/bbl)
|
Asphalt Services Agreement (Big Spring):
|
|
|
|
|
|
|
|
|
|
|
Terminalling
|
|
March 1, 2018
|
|
10/15
|
|
Dedicated Asphalt Terminalling and Storage
|
|
1,020 to 2,380 based on seasonality
|
|
8.3
|
Storage
|
|
March 1, 2018
|
|
10/15
|
|
|
N/A
|
|
$456,490/month
|
|
Marketing Agreement (Big Spring):
|
|
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
March 1, 2018
|
|
10/15
|
|
Dedicated Marketing and Selling
|
|
65,000
|
|
$0.50 - $0.71
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
|
$
|
240,809
|
|
|
$
|
156,280
|
|
|
$
|
149,564
|
|
Purchases from Affiliates
|
|
$
|
349,089
|
|
|
$
|
54,982
|
|
|
$
|
32,514
|
|
Operating and maintenance expenses
|
|
$
|
36,182
|
|
|
$
|
29,483
|
|
|
$
|
27,668
|
|
General and administrative expenses
|
|
$
|
8,250
|
|
|
$
|
7,492
|
|
|
$
|
6,254
|
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
|
Pipelines and Transportation
|
|
Wholesale Marketing and Terminalling
|
|
Consolidated
|
||||||
Service Revenue - Third Party
|
|
$
|
15,149
|
|
|
$
|
870
|
|
|
$
|
16,019
|
|
Service Revenue - Affiliate (1)
|
|
93,300
|
|
|
53,750
|
|
|
147,050
|
|
|||
Product Revenue - Third Party
|
|
—
|
|
|
400,781
|
|
|
400,781
|
|
|||
Product Revenue - Affiliate
|
|
—
|
|
|
35,252
|
|
|
35,252
|
|
|||
Lease Revenue - Affiliate
|
|
45,118
|
|
|
13,389
|
|
|
58,507
|
|
|||
Total Revenue
|
|
$
|
153,567
|
|
|
$
|
504,042
|
|
|
$
|
657,609
|
|
2019
|
|
|
|
168,315
|
|
|
2020
|
|
|
|
167,965
|
|
|
2021
|
|
|
|
167,620
|
|
|
2022
|
|
|
|
166,587
|
|
|
2023 and thereafter
|
|
|
|
474,200
|
|
|
Total expected revenue on remaining performance obligations
|
|
|
|
$
|
1,144,687
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income attributable to partners
|
|
$
|
90,182
|
|
|
$
|
69,409
|
|
|
$
|
62,804
|
|
Less: General partner's distribution (including IDRs) (1)
|
|
25,777
|
|
|
18,797
|
|
|
12,437
|
|
|||
Less: Limited partners' distribution
|
|
76,113
|
|
|
69,057
|
|
|
58,158
|
|
|||
Less: Subordinated partner's distribution
|
|
—
|
|
|
—
|
|
|
4,424
|
|
|||
Distributions in excess of earnings
|
|
$
|
(11,708
|
)
|
|
$
|
(18,445
|
)
|
|
$
|
(12,215
|
)
|
|
|
|
|
|
|
|
||||||
General partner's earnings:
|
|
|
|
|
|
|
||||||
Distributions (including IDRs) (1)
|
|
$
|
25,777
|
|
|
$
|
18,797
|
|
|
$
|
12,437
|
|
Allocation of distributions in excess of earnings
|
|
(234
|
)
|
|
(368
|
)
|
|
(244
|
)
|
|||
Total general partner's earnings
|
|
$
|
25,543
|
|
|
$
|
18,429
|
|
|
$
|
12,193
|
|
|
|
|
|
|
|
|
||||||
Limited partners' earnings on common units:
|
|
|
|
|
|
|
||||||
Distributions
|
|
$
|
76,113
|
|
|
$
|
69,057
|
|
|
$
|
58,158
|
|
Allocation of distributions in excess of earnings
|
|
(11,474
|
)
|
|
(18,077
|
)
|
|
(11,489
|
)
|
|||
Total limited partners' earnings on common units
|
|
$
|
64,639
|
|
|
$
|
50,980
|
|
|
$
|
46,669
|
|
|
|
|
|
|
|
|
||||||
Limited partners' earnings on subordinated units:
|
|
|
|
|
|
|
||||||
Distributions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,424
|
|
Allocation of (distributions) earnings excess
|
|
—
|
|
|
—
|
|
|
(482
|
)
|
|||
Total limited partner's earnings on subordinated units
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,942
|
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding (2):
|
|
|
|
|
|
|
||||||
Common units - (basic)
|
|
24,390,286
|
|
|
24,348,063
|
|
|
22,490,264
|
|
|||
Common units - (diluted)
|
|
24,396,881
|
|
|
24,376,972
|
|
|
22,558,717
|
|
|||
Subordinated units - Delek Holdings (basic and diluted) (3)
|
|
—
|
|
|
—
|
|
|
1,803,167
|
|
|||
|
|
|
|
|
|
|
||||||
Net income per limited partner unit (2):
|
|
|
|
|
|
|
||||||
Common - (basic)
|
|
$
|
2.65
|
|
|
$
|
2.09
|
|
|
$
|
2.08
|
|
Common - (diluted) (4)
|
|
$
|
2.65
|
|
|
$
|
2.09
|
|
|
$
|
2.07
|
|
Subordinated - (basic and diluted)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.19
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
Land
|
|
$
|
4,458
|
|
|
$
|
4,440
|
|
Building and building improvements
|
|
3,695
|
|
|
2,804
|
|
||
Pipelines, tanks and terminals
|
|
410,154
|
|
|
314,251
|
|
||
Asset retirement obligation assets
|
|
2,073
|
|
|
2,073
|
|
||
Other equipment
|
|
15,838
|
|
|
14,650
|
|
||
Construction in process
|
|
16,528
|
|
|
28,961
|
|
||
|
|
452,746
|
|
|
367,179
|
|
||
Less: accumulated depreciation
|
|
(140,184
|
)
|
|
(112,111
|
)
|
||
|
|
$
|
312,562
|
|
|
$
|
255,068
|
|
|
|
As of and For the Year Ended December 31, 2018
|
||||||||||
|
|
Pipelines and Transportation
|
|
Wholesale Marketing and Terminalling
|
|
Consolidated
|
||||||
Property, plant and equipment
|
|
$
|
361,702
|
|
|
$
|
91,044
|
|
|
$
|
452,746
|
|
Less: accumulated depreciation
|
|
(106,971
|
)
|
|
(33,213
|
)
|
|
(140,184
|
)
|
|||
Property, plant and equipment, net
|
|
$
|
254,731
|
|
|
$
|
57,831
|
|
|
$
|
312,562
|
|
Depreciation expense
|
|
$
|
21,115
|
|
|
$
|
4,786
|
|
|
$
|
25,901
|
|
|
|
As of and For the Year Ended December 31, 2017
|
||||||||||
|
|
Pipelines and Transportation
|
|
Wholesale Marketing and Terminalling
|
|
Consolidated
|
||||||
Property, plant and equipment
|
|
$
|
300,134
|
|
|
$
|
67,045
|
|
|
$
|
367,179
|
|
Less: Accumulated depreciation
|
|
(84,435
|
)
|
|
(27,676
|
)
|
|
(112,111
|
)
|
|||
Property, plant and equipment, net
|
|
$
|
215,699
|
|
|
$
|
39,369
|
|
|
$
|
255,068
|
|
Depreciation expense
|
|
$
|
17,268
|
|
|
$
|
3,583
|
|
|
$
|
20,851
|
|
|
|
Useful
|
|
|
|
Accumulated
|
|
|
||||||
As of December 31, 2018
|
|
Life
|
|
Gross
|
|
Amortization
|
|
Net
|
||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
||||||
Supply contract
|
|
11.5
|
|
$
|
12,227
|
|
|
$
|
(12,227
|
)
|
|
$
|
—
|
|
Marketing contract
|
|
20
|
|
$
|
144,219
|
|
|
$
|
(6,009
|
)
|
|
138,210
|
|
|
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
||||||
Rights-of-way assets
|
|
Indefinite
|
|
15,828
|
|
|
|
|
15,828
|
|
||||
Total
|
|
|
|
$
|
172,274
|
|
|
$
|
(18,236
|
)
|
|
$
|
154,038
|
|
|
|
Useful
|
|
|
|
Accumulated
|
|
|
||||||
As of December 31, 2017
|
|
Life
|
|
Gross
|
|
Amortization
|
|
Net
|
||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
||||||
Supply contract
|
|
11.5
|
|
$
|
12,227
|
|
|
$
|
(12,138
|
)
|
|
$
|
89
|
|
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
||||||
Rights-of-way assets
|
|
Indefinite
|
|
15,828
|
|
|
|
|
15,828
|
|
||||
Total
|
|
|
|
$
|
28,055
|
|
|
$
|
(12,138
|
)
|
|
$
|
15,917
|
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
DKL Credit Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
456,700
|
|
|
$
|
—
|
|
|
$
|
456,700
|
|
2025 Notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
|
|
Common - Public
|
|
Common - Delek Holdings
|
|
Subordinated
|
|
General Partner
|
|
Total
|
|||||
Balance at December 31, 2015
|
|
9,478,273
|
|
|
2,799,258
|
|
|
11,999,258
|
|
|
495,445
|
|
|
24,772,234
|
|
GP units issued to maintain 2% interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,057
|
|
|
1,057
|
|
Unit-based compensation awards (1)
|
|
51,818
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,818
|
|
Delek Holdings unit repurchases from public
|
|
(266,676
|
)
|
|
266,676
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Subordinated unit conversion
|
|
—
|
|
|
11,999,258
|
|
|
(11,999,258
|
)
|
|
—
|
|
|
—
|
|
Balance at December 31, 2016
|
|
9,263,415
|
|
|
15,065,192
|
|
|
—
|
|
|
496,502
|
|
|
24,825,109
|
|
GP units issued to maintain 2% interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,102
|
|
|
1,102
|
|
Unit-based compensation awards (1)
|
|
54,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,026
|
|
Delek Holdings unit repurchases from public
|
|
(228,854
|
)
|
|
228,854
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Balance at December 31, 2017
|
|
9,088,587
|
|
|
15,294,046
|
|
|
—
|
|
|
497,604
|
|
|
24,880,237
|
|
GP units issued to maintain 2% interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
434
|
|
|
434
|
|
Unit-based compensation awards (1)
|
|
21,220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,220
|
|
Balance at December 31, 2018
|
|
9,109,807
|
|
|
15,294,046
|
|
|
—
|
|
|
498,038
|
|
|
24,901,891
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income attributable to partners
|
|
$
|
90,182
|
|
|
$
|
69,409
|
|
|
$
|
62,804
|
|
Less: General partner's IDRs
|
|
(24,224
|
)
|
|
(17,389
|
)
|
|
(11,160
|
)
|
|||
Net income available to partners
|
|
$
|
65,958
|
|
|
$
|
52,020
|
|
|
$
|
51,644
|
|
General partner's ownership interest
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|||
General partner's allocated interest in net income
|
|
1,319
|
|
|
1,040
|
|
|
1,033
|
|
|||
General partner's IDRs
|
|
24,224
|
|
|
17,389
|
|
|
11,160
|
|
|||
Total general partner's interest in net income
|
|
$
|
25,543
|
|
|
$
|
18,429
|
|
|
$
|
12,193
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Total Quarterly Distribution Per Limited Partner Unit
|
|
Total Quarterly Distribution Per Limited Partner Unit, Annualized
|
|
Total Cash Distribution, including general partner interest and IDRs (in thousands)
|
|
Date of Distribution
|
|
Unitholders Record Date
|
||||||
December 31, 2016
|
|
$
|
0.680
|
|
|
$
|
2.72
|
|
|
$
|
20,537
|
|
|
February 14, 2017
|
|
February 3, 2017
|
March 31, 2017
|
|
$
|
0.690
|
|
|
$
|
2.76
|
|
|
$
|
21,024
|
|
|
May 12, 2017
|
|
May 5, 2017
|
June 30, 2017
|
|
$
|
0.705
|
|
|
$
|
2.82
|
|
|
$
|
21,783
|
|
|
August 11, 2017
|
|
August 4, 2017
|
September 30, 2017
|
|
$
|
0.715
|
|
|
$
|
2.86
|
|
|
$
|
22,270
|
|
|
November 14, 2017
|
|
November 7, 2017
|
December 31, 2017
|
|
$
|
0.725
|
|
|
$
|
2.90
|
|
|
$
|
22,777
|
|
|
February 12, 2018
|
|
February 2, 2018
|
March 31, 2018
|
|
$
|
0.750
|
|
|
$
|
3.00
|
|
|
$
|
23,997
|
|
|
May 15, 2018
|
|
May 7, 2018
|
June 30, 2018
|
|
$
|
0.770
|
|
|
$
|
3.08
|
|
|
$
|
24,984
|
|
|
August 13, 2018
|
|
August 3, 2018
|
September 31, 2018
|
|
$
|
0.790
|
|
|
$
|
3.16
|
|
|
$
|
25,960
|
|
|
November 9, 2018
|
|
November 2, 2018
|
December 31, 2018
|
|
$
|
0.810
|
|
|
$
|
3.24
|
|
|
$
|
26,949
|
|
|
February 12, 2019
|
|
February 4, 2019
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
General partner's distributions:
|
|
|
|
|
|
|
||||||
General partner's distributions
|
|
$
|
1,553
|
|
|
$
|
1,408
|
|
|
$
|
1,277
|
|
General partner's IDRs
|
|
24,224
|
|
|
17,389
|
|
|
11,160
|
|
|||
Total general partner's distributions
|
|
25,777
|
|
|
18,797
|
|
|
12,437
|
|
|||
|
|
|
|
|
|
|
||||||
Limited partners' distributions:
|
|
|
|
|
|
|
||||||
Common
|
|
76,113
|
|
|
69,057
|
|
|
58,158
|
|
|||
Subordinated
|
|
—
|
|
|
—
|
|
|
4,424
|
|
|||
Total limited partners' distributions
|
|
76,113
|
|
|
69,057
|
|
|
62,582
|
|
|||
Total cash distributions
|
|
$
|
101,890
|
|
|
$
|
87,854
|
|
|
$
|
75,019
|
|
|
|
|
|
|
|
|
||||||
Cash distributions per limited partner unit
|
|
$
|
3.120
|
|
|
$
|
2.835
|
|
|
$
|
2.575
|
|
|
|
Number of Phantom Units
|
|
Weighted-Average Grant Price
|
|||
Non-vested
|
December 31, 2015
|
145,072
|
|
|
$
|
24.76
|
|
Granted
|
|
12,475
|
|
|
$
|
26.05
|
|
Vested
|
|
(69,094
|
)
|
|
$
|
24.66
|
|
Forfeited
|
|
(14,500
|
)
|
|
$
|
22.65
|
|
Non-vested
|
December 31, 2016
|
73,953
|
|
|
$
|
25.49
|
|
Granted
|
|
10,090
|
|
|
$
|
32.2
|
|
Vested
|
|
(68,079
|
)
|
|
$
|
24.6
|
|
Forfeited
|
|
—
|
|
|
$
|
—
|
|
Non-vested
|
December 31, 2017
|
15,964
|
|
|
$
|
33.54
|
|
Granted
|
|
19,536
|
|
|
$
|
28.57
|
|
Vested
|
|
(21,818
|
)
|
|
$
|
31.76
|
|
Non-vested
|
December 31, 2018
|
13,682
|
|
|
$
|
29.29
|
|
|
|
Year Ended
|
|
Year Ended
|
||||
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Current assets
|
|
$
|
15,450
|
|
|
$
|
12,671
|
|
Non-current assets
|
|
$
|
240,852
|
|
|
$
|
244,329
|
|
Current liabilities
|
|
$
|
4,362
|
|
|
$
|
1,798
|
|
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
Revenues
|
|
$
|
35,050
|
|
|
$
|
28,805
|
|
|
$
|
2,217
|
|
Gross profit
|
|
$
|
17,690
|
|
|
$
|
13,344
|
|
|
$
|
(2,048
|
)
|
Net Income/loss
|
|
$
|
15,701
|
|
|
$
|
10,714
|
|
|
$
|
(3,641
|
)
|
•
|
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.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Pipelines and Transportation
|
|
|
|
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Affiliate
|
|
138,418
|
|
|
$
|
109,298
|
|
|
103,749
|
|
||
Third party
|
|
15,149
|
|
|
12,431
|
|
|
18,423
|
|
|||
Total pipelines and transportation
|
|
153,567
|
|
|
121,729
|
|
|
122,172
|
|
|||
Cost of materials and other
|
|
19,878
|
|
|
18,210
|
|
|
19,425
|
|
|||
Operating expenses (excluding depreciation and amortization)
|
|
39,934
|
|
|
33,240
|
|
|
29,235
|
|
|||
Segment contribution margin
|
|
$
|
93,755
|
|
|
$
|
70,279
|
|
|
$
|
73,512
|
|
Capital spending (1)
|
|
$
|
6,840
|
|
|
$
|
14,262
|
|
|
$
|
8,478
|
|
|
|
|
|
|
|
|
||||||
Wholesale Marketing and Terminalling
|
|
|
|
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Affiliate (2)
|
|
102,391
|
|
|
46,982
|
|
|
45,815
|
|
|||
Third party
|
|
401,651
|
|
|
369,364
|
|
|
280,072
|
|
|||
Total wholesale marketing and terminalling
|
|
504,042
|
|
|
416,346
|
|
|
325,887
|
|
|||
Cost of materials and other
|
|
409,183
|
|
|
354,680
|
|
|
282,733
|
|
|||
Operating expenses (excluding depreciation and amortization)
|
|
18,810
|
|
|
10,034
|
|
|
7,963
|
|
|||
Segment contribution margin
|
|
$
|
76,049
|
|
|
$
|
51,632
|
|
|
$
|
35,191
|
|
Capital spending (1)
|
|
$
|
4,725
|
|
|
$
|
4,141
|
|
|
$
|
3,289
|
|
|
|
|
|
|
|
|
||||||
Consolidated
|
|
|
|
|
|
|
||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Affiliate
|
|
$
|
240,809
|
|
|
$
|
156,280
|
|
|
$
|
149,564
|
|
Third party
|
|
416,800
|
|
|
381,795
|
|
|
298,495
|
|
|||
Total Consolidated
|
|
657,609
|
|
|
538,075
|
|
|
448,059
|
|
|||
Cost of materials and other
|
|
429,061
|
|
|
372,890
|
|
|
302,158
|
|
|||
Operating expenses (excluding depreciation and amortization presented below)
|
|
58,744
|
|
|
43,274
|
|
|
37,198
|
|
|||
Contribution margin
|
|
169,804
|
|
|
121,911
|
|
|
108,703
|
|
|||
General and administrative expenses
|
|
17,166
|
|
|
11,840
|
|
|
10,256
|
|
|||
Depreciation and amortization
|
|
25,990
|
|
|
21,914
|
|
|
20,813
|
|
|||
Loss (gain) on asset disposals
|
|
891
|
|
|
(20
|
)
|
|
(16
|
)
|
|||
Operating income
|
|
$
|
125,757
|
|
|
$
|
88,177
|
|
|
$
|
77,650
|
|
Capital spending (1)
|
|
$
|
11,565
|
|
|
$
|
18,403
|
|
|
$
|
11,767
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Pipelines and transportation
|
|
$
|
387,333
|
|
|
$
|
349,351
|
|
Wholesale marketing and terminalling
|
|
237,260
|
|
|
94,179
|
|
||
Total assets
|
|
$
|
624,593
|
|
|
$
|
443,530
|
|
|
|
As of December 31, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
186
|
|
Total assets
|
|
—
|
|
|
186
|
|
|
—
|
|
|
186
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Net liabilities
|
|
$
|
—
|
|
|
$
|
184
|
|
|
$
|
—
|
|
|
$
|
184
|
|
|
|
As of December 31, 2017
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
|
—
|
|
|
(1,087
|
)
|
|
—
|
|
|
(1,087
|
)
|
||||
Net liabilities
|
|
$
|
—
|
|
|
$
|
(1,087
|
)
|
|
$
|
—
|
|
|
$
|
(1,087
|
)
|
(in thousands)
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
Derivative Type
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|||||||||
Commodity derivatives (1)
|
Other current assets
|
|
$
|
186
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(1,087
|
)
|
Total gross fair value of derivatives
|
|
186
|
|
|
(2
|
)
|
|
—
|
|
|
(1,087
|
)
|
|||||
Less: Counterparty netting and cash deficit (collateral) (2)
|
|
|
(404
|
)
|
|
(2
|
)
|
|
—
|
|
|
(290
|
)
|
||||
Total net fair value of derivatives
|
|
|
$
|
590
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(797
|
)
|
|
|
|
Year Ended December 31,
|
|||||||
Derivative Type
|
Income Statement Location
|
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
|
|
|
|
|
|||
Commodity derivatives
|
Cost of materials and other
|
|
3,325
|
|
|
(1,550
|
)
|
|
(2,122
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
State income taxes
|
|
$
|
534
|
|
|
(222
|
)
|
|
121
|
|
||
Other items
|
|
$
|
—
|
|
|
—
|
|
|
(40
|
)
|
||
Income tax expense (benefit)
|
|
$
|
534
|
|
|
$
|
(222
|
)
|
|
$
|
81
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
$
|
382
|
|
|
$
|
(111
|
)
|
|
$
|
254
|
|
Deferred
|
|
$
|
152
|
|
|
(111
|
)
|
|
(173
|
)
|
||
Total
|
|
$
|
534
|
|
|
$
|
(222
|
)
|
|
$
|
81
|
|
•
|
On December 25, 2018 a release of an undetermined quantity of crude oil occurred on one of our gathering lines near Norphlet, Arkansas (the "Norphlet Release");
|
•
|
On December 13, 2018 a release of an undetermined quantity of crude oil occurred on one of our gathering lines near Smackover, Arkansas (the "Smackover-Langley Release");
|
•
|
In November 2018, a release of approximately 20 barrels of crude oil occurred near Smackover, Arkansas;
|
•
|
On March 15, 2018 a release of approximately 10 barrels of crude oil occurred on one of our gathering lines located on property owned by Clean Harbors, Inc. in El Dorado, Arkansas;
|
•
|
In February 2018, a release of approximately 50 barrels of crude oil occurred from a line near one of our storage facilities located south of El Dorado, Arkansas;
|
•
|
In February 2018, a release of approximately 250 barrels of crude oil, occurred from our SALA Gathering System near Urbana, Arkansas Station; and
|
•
|
In March 2013, a release of approximately 5,900 barrels of crude oil, the majority of which was contained on-site, occurred from a pumping facility at our Magnolia Station located west of the El Dorado Refinery (the "Magnolia Release").
|
2019
|
|
$
|
5,755
|
|
2020
|
|
5,659
|
|
|
2021
|
|
5,337
|
|
|
2022
|
|
5,031
|
|
|
2023
|
|
2,429
|
|
|
Thereafter
|
|
8
|
|
|
Total future minimum rentals
|
|
$
|
24,219
|
|
|
|
For the Three Month Periods Ended
|
||||||||||||||
|
|
March 31, 2018
|
|
June 30, 2018
|
|
September 30, 2018
|
|
December 31, 2018
|
||||||||
Net revenues
|
|
$
|
167,921
|
|
|
$
|
166,280
|
|
|
$
|
164,110
|
|
|
$
|
159,298
|
|
Operating income
|
|
$
|
27,277
|
|
|
$
|
34,710
|
|
|
$
|
32,624
|
|
|
$
|
31,147
|
|
Net income
|
|
$
|
19,995
|
|
|
$
|
25,582
|
|
|
$
|
23,326
|
|
|
$
|
21,280
|
|
Limited partners' interest in net income
|
|
$
|
14,365
|
|
|
$
|
19,370
|
|
|
$
|
16,690
|
|
|
$
|
14,215
|
|
Net income per limited partner unit:
|
|
|
|
|
|
|
|
|
|
|||||||
Common (basic)
|
|
$
|
0.59
|
|
|
$
|
0.79
|
|
|
$
|
0.68
|
|
|
$
|
0.58
|
|
Common (diluted)
|
|
$
|
0.59
|
|
|
$
|
0.79
|
|
|
$
|
0.68
|
|
|
$
|
0.58
|
|
|
|
For the Three Month Periods Ended
|
||||||||||||||
|
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
||||||||
Net revenues
|
|
$
|
129,473
|
|
|
$
|
126,769
|
|
|
$
|
130,626
|
|
|
$
|
151,207
|
|
Operating income
|
|
$
|
18,472
|
|
|
$
|
23,371
|
|
|
$
|
22,636
|
|
|
$
|
23,698
|
|
Net income
|
|
$
|
14,595
|
|
|
$
|
18,977
|
|
|
$
|
16,923
|
|
|
$
|
18,914
|
|
Limited partners' interest in net income
|
|
$
|
10,486
|
|
|
$
|
14,425
|
|
|
$
|
12,178
|
|
|
$
|
13,891
|
|
Net income per limited partner unit:
|
|
|
|
|
|
|
|
|
||||||||
Common (basic)
|
|
$
|
0.43
|
|
|
$
|
0.59
|
|
|
$
|
0.50
|
|
|
$
|
0.57
|
|
Common (diluted)
|
|
$
|
0.43
|
|
|
$
|
0.59
|
|
|
$
|
0.50
|
|
|
$
|
0.57
|
|
A.
|
This Amendment contains the entire agreement of the parties and supersedes any other discussions or agreements relating to the subject of this Amendment.
|
B.
|
This Amendment does not constitute a waiver of any default under the Agreement, whether or not either Party is aware of any such default.
|
C.
|
The headings in this Amendment and the usage herein of defined terms are for convenience of reference only, and shall not be construed as amplifying, limiting or otherwise affecting the substantive provisions hereof.
|
D.
|
All references herein to the preamble, the recitals or sections, paragraphs, subparagraphs, annexes or exhibits are to the preamble, recitals, sections, paragraphs, subparagraphs, annexes and exhibits of or to this Amendment unless otherwise specified. The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Amendment, refer to this Amendment as a whole and not to any particular provision of this Amendment.
|
E.
|
Any reference herein to any instrument, document or agreement, by whatever terminology used, shall be deemed to include any and all amendments, modifications, supplements, extensions, renewals, substitutions and/or replacements thereof as the context may require.
|
F.
|
When used herein, (1) the singular shall include the plural, and vice versa, and the use of the masculine, feminine or neuter gender shall include all other genders, as appropriate, (2) “include”, “includes” and “including” shall be deemed to be followed by “without limitation” regardless of whether such words or words of like import in fact follow same, and (3) unless the context clearly indicates otherwise, the disjunctive “or” shall include the conjunctive “and”.
|
A.
|
This Amendment contains the entire agreement of the parties and supersedes any other discussions or agreements relating to the subject of this Amendment.
|
B.
|
This Amendment does not constitute a waiver of any default under the Agreement, whether or not either Party is aware of any such default.
|
C.
|
The headings in this Amendment and the usage herein of defined terms are for convenience of reference only, and shall not be construed as amplifying, limiting or otherwise affecting the substantive provisions hereof.
|
D.
|
All references herein to the preamble, the recitals or sections, paragraphs, subparagraphs, annexes or exhibits are to the preamble, recitals, sections, paragraphs, subparagraphs, annexes and exhibits of or to this Amendment unless otherwise specified. The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Amendment, refer to this Amendment as a whole and not to any particular provision of this Amendment.
|
E.
|
Any reference herein to any instrument, document or agreement, by whatever terminology used, shall be deemed to include any and all amendments, modifications, supplements, extensions, renewals, substitutions and/or replacements thereof as the context may require.
|
F.
|
When used herein, (1) the singular shall include the plural, and vice versa, and the use of the masculine, feminine or neuter gender shall include all other genders, as appropriate, (2) “include”, “includes” and “including” shall be deemed to be followed by “without limitation” regardless of whether such words or words of like import in fact follow same, and (3) unless the context clearly indicates otherwise, the disjunctive “or” shall include the conjunctive “and”.
|
Title:
|
Executive Vice President and Chief Operating Officer
|
Name:
|
Kevin Kremke
|
Title:
|
Executive Vice President and Chief Financial Officer
|
Title:
|
President
|
Name:
|
Regina Jones
|
Title:
|
Executive Vice President, General Counsel & Corporate Secretary
|
A.
|
This Amendment contains the entire agreement of the parties and supersedes any other discussions or agreements relating to the subject of this Amendment.
|
B.
|
This Amendment does not constitute a waiver of any default under the Agreement, whether or not either Party is aware of any such default.
|
C.
|
The headings in this Amendment and the usage herein of defined terms are for convenience of reference only, and shall not be construed as amplifying, limiting or otherwise affecting the substantive provisions hereof.
|
D.
|
All references herein to the preamble, the recitals or sections, paragraphs, subparagraphs, annexes or exhibits are to the preamble, recitals, sections, paragraphs, subparagraphs, annexes and exhibits of or to this Amendment unless otherwise specified. The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Amendment, refer to this Amendment as a whole and not to any particular provision of this Amendment.
|
E.
|
Any reference herein to any instrument, document or agreement, by whatever terminology used, shall be deemed to include any and all amendments, modifications, supplements, extensions, renewals, substitutions and/or replacements thereof as the context may require.
|
F.
|
When used herein, (1) the singular shall include the plural, and vice versa, and the use of the masculine, feminine or neuter gender shall include all other genders, as appropriate, (2) “include”, “includes” and “including” shall be deemed to be followed by “without limitation” regardless of whether such words or words of like import in fact follow same, and (3) unless the context clearly indicates otherwise, the disjunctive “or” shall include the conjunctive “and”.
|
Title:
|
Executive Vice President and Chief Operating Officer
|
Name:
|
Kevin Kremke
|
Title:
|
Executive Vice President and Chief Financial Officer
|
Title:
|
President
|
Name:
|
Regina Jones
|
Title:
|
Executive Vice President, General Counsel & Corporate Secretary
|
A.
|
This Amendment contains the entire agreement of the parties and supersedes any other discussions or agreements relating to the subject of this Amendment.
|
B.
|
This Amendment does not constitute a waiver of any default under the Agreement, whether or not either Party is aware of any such default.
|
C.
|
The headings in this Amendment and the usage herein of defined terms are for convenience of reference only, and shall not be construed as amplifying, limiting or otherwise affecting the substantive provisions hereof.
|
D.
|
All references herein to the preamble, the recitals or sections, paragraphs, subparagraphs, annexes or exhibits are to the preamble, recitals, sections, paragraphs, subparagraphs, annexes and exhibits of or to this Amendment unless otherwise specified. The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Amendment, refer to this Amendment as a whole and not to any particular provision of this Amendment.
|
E.
|
Any reference herein to any instrument, document or agreement, by whatever terminology used, shall be deemed to include any and all amendments, modifications, supplements, extensions, renewals, substitutions and/or replacements thereof as the context may require.
|
F.
|
When used herein, (1) the singular shall include the plural, and vice versa, and the use of the masculine, feminine or neuter gender shall include all other genders, as appropriate, (2) “include”, “includes” and “including” shall be deemed to be followed by “without limitation” regardless of whether such words or words of like import in fact follow same, and (3) unless the context clearly indicates otherwise, the disjunctive “or” shall include the conjunctive “and”.
|
Title:
|
Executive Vice President and Chief Operating Officer
|
Name:
|
Kevin Kremke
|
Title:
|
Executive Vice President and Chief Financial Officer
|
Title:
|
President
|
Name:
|
Regina Jones
|
Title:
|
Executive Vice President, General Counsel & Corporate Secretary
|
A.
|
This Amendment contains the entire agreement of the parties and supersedes any other discussions or agreements relating to the subject of this Amendment.
|
B.
|
This Amendment does not constitute a waiver of any default under the Agreement, whether or not either Party is aware of any such default.
|
C.
|
The headings in this Amendment and the usage herein of defined terms are for convenience of reference only, and shall not be construed as amplifying, limiting or otherwise affecting the substantive provisions hereof.
|
D.
|
All references herein to the preamble, the recitals or sections, paragraphs, subparagraphs, annexes or exhibits are to the preamble, recitals, sections, paragraphs, subparagraphs, annexes and exhibits of or to this Amendment unless otherwise specified. The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Amendment, refer to this Amendment as a whole and not to any particular provision of this Amendment.
|
E.
|
Any reference herein to any instrument, document or agreement, by whatever terminology used, shall be deemed to include any and all amendments, modifications, supplements, extensions, renewals, substitutions and/or replacements thereof as the context may require.
|
F.
|
When used herein, (1) the singular shall include the plural, and vice versa, and the use of the masculine, feminine or neuter gender shall include all other genders, as appropriate, (2) “include”, “includes” and “including” shall be deemed to be followed by “without limitation” regardless of whether such words or words of like import in fact follow same, and (3) unless the context clearly indicates otherwise, the disjunctive “or” shall include the conjunctive “and”.
|
Title:
|
Executive Vice President and Chief Operating Officer
|
Name:
|
Kevin Kremke
|
Title:
|
Executive Vice President and Chief Financial Officer
|
Title:
|
President
|
Name:
|
Regina Jones
|
Title:
|
Executive Vice President, General Counsel & Corporate Secretary
|
Title:
|
President
|
Name:
|
Regina Jones
|
Title:
|
Executive Vice President, General Counsel & Corporate Secretary
|
Title:
|
President
|
Name:
|
Regina Jones
|
Title:
|
Executive Vice President, General Counsel & Corporate Secretary
|
Title:
|
President
|
Name:
|
Regina Jones
|
Title:
|
Executive Vice President, General Counsel & Corporate Secretary
|
Company Name:
|
State of
Incorporation:
|
Delek Logistics Operating, LLC
|
DE
|
Delek Marketing & Supply, LP
|
DE
|
Delek Marketing GP, LLC
|
DE
|
Delek Crude Logistics, LLC
|
TX
|
Delek Marketing-Big Sandy, LLC
|
TX
|
Paline Pipeline Company, LLC
|
TX
|
Magnolia Pipeline Company, LLC
|
DE
|
SALA Gathering Systems, LLC
|
TX
|
El Dorado Pipeline Company, LLC
|
DE
|
DKL Transportation, LLC
|
DE
|
DKL Caddo, LLC
|
DE
|
DKL RIO, LLC
|
DE
|
DKL Big Spring, LLC
|
DE
|
Delek Logistics Finance Corp
|
DE
|
DKGP Energy Terminals, LLC
|
DE
|
DKL Big Spring, LLC
|
DE
|
By:
|
/s/ Ezra Uzi Yemin
|
|
Ezra Uzi Yemin,
|
|
Chairman and Chief Executive Officer
(Principal Executive Officer) of Delek Logistics GP, LLC (the general partner of Delek Logistics Partners, LP)
|
By:
|
/s/ Kevin Kremke
|
|
Kevin Kremke,
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) of Delek Logistics GP, LLC (the general partner of Delek Logistics Partners, LP)
|
By:
|
/s/ Ezra Uzi Yemin
|
|
Ezra Uzi Yemin,
|
|
Chairman and Chief Executive Officer
(Principal Executive Officer) of Delek Logistics GP, LLC (the general partner of Delek Logistics Partners, LP)
|
By:
|
/s/ Kevin Kremke
|
|
Kevin Kremke,
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) of Delek Logistics GP, LLC (the general partner of Delek Logistics Partners, LP)
|