Delek Logistics Partners, LP Reports Fourth Quarter and Full Year 2017 Results


  • Declared quarterly distribution of $0.725 per limited partner unit; increased by 6.6 percent year-over-year
  • Reported fourth quarter 2017 net cash from operating activities of $9.8 million and distributable cash flow of $21.9 million
  • Announces agreement to acquire Big Spring logistics assets with approximately $40 million of forecasted annual EBITDA from Delek US
  • Announced formation of 50/50 joint venture with Green Plains Partners LP to acquire two light products terminals for $138.5 million

BRENTWOOD, Tenn., Feb. 26, 2018 (GLOBE NEWSWIRE) -- Delek Logistics Partners, LP (NYSE:DKL) ("Delek Logistics") today announced its financial results for the fourth quarter 2017. For the three months ended December 31, 2017, Delek Logistics reported net income attributable to all partners of $18.9 million, or $0.57 per diluted common limited partner unit. This compares to net income attributable to all partners of $15.3 million, or $0.47 per diluted common limited partner unit, in the fourth quarter 2016. Distributable cash flow was $21.9 million in the fourth quarter 2017, compared to $20.5 million in the prior-year period.  

For the fourth quarter 2017, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $31.2 million compared to $24.4 million in the prior-year period. The combination of a higher gross margin per barrel in west Texas, improved performance from the Paline Pipeline and the east Texas marketing agreement were the primary factors in the year-over-year increase.

For 2017, net income attributable to all partners was $69.4 million, or $2.09 per diluted common limited partner unit. This compares to net income attributable to all partners of $62.8 million, or $2.07 per diluted common limited partner unit for 2016. Net cash from operations was $87.7 million and distributable cash flow was $85.0 million in 2017 compared to net cash from operations of $100.7 million and distributable cash flow of $83.1 million in 2016. EBITDA was $115.0 million in 2017, compared to $97.3 million in 2016.

Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics' general partner, remarked: "Our operations performed well in the fourth quarter resulting in our highest quarterly EBITDA to date.  At December 31, 2017, we had approximately $511 million of capacity on our credit facility and a total leverage ratio of approximately 3.8 times. This financial position supported the 6.6 percent year-over-year increase in our declared fourth quarter distribution. For 2017, our annual distribution declared per limited partner unit was 10.1 percent above 2016."

Yemin concluded, "I am excited about the future growth at Delek Logistics. We expect to close on the drop down of logistics assets from Delek US' Big Spring, Texas refinery in March with an effective date of March 1. These assets are expected to provide approximately $40.0 million of EBITDA on an annualized basis and will be financed with our existing borrowing capacity on the credit facility. Through our new joint venture with Green Plains Partners, we announced an agreement to acquire two third party terminals, which fits with our strategy to grow in our existing market areas. This joint venture should benefit from synergies between complementary assets and be better positioned to support Delek US' Tyler, Texas and El Dorado, Arkansas refineries and third party customers. The expansion of the Paline Pipeline capacity to 42,000 barrels per day is expected to be completed in early March and this should provide incremental growth from this asset as crude oil differentials support future shipments on this pipeline. We anticipate that the financial flexibility provided by our balance sheet and our focus on growth initiatives should support a distribution per limited partner unit increase of at least 10% annually through 2019."

Big Spring Logistics Asset Dropdown
On February 26, 2018, a definitive agreement was entered into with Delek US to acquire the Big Spring logistics assets, subject to customary closing conditions. These assets consist of storage tanks, terminals and a new marketing agreement associated with Delek US' Big Spring, Texas refinery. The expected annual EBITDA is $40.2 million and the purchase price is $315.0 million, which equates to a 7.8x EBITDA multiple. This dropdown will be financed through a combination of cash on hand and borrowings on the revolving credit facility.

This acquisition consists of the following assets and agreements:

         Storage tanks and salt wells - Approximately 2.9 million barrels of aggregate shell capacity, consisting of 62 tanks, 4 salt wells and ancillary assets, including piping and pumps located at the refinery and at Duncan, Oklahoma.

Products terminals - An asphalt terminal that operated at 3,900 barrels per day during the second half of 2017 and a light products terminal with 54,000 barrels per day throughput capacity, which operated at 28,000 barrels per day during the second half of 2017.

Marketing agreement - As part of this transaction, Delek US will enter into a new wholesale marketing agreement whereby Delek Logistics will provide services necessary to market various refinery products produced at the Big Spring refinery. During the second half of 2017, total sales volume for products to be covered by this agreement was approximately 74,700 barrels per day.
  

In connection with the closing of the transaction, Delek US, Delek Logistics and various of their subsidiaries would enter into various long-term agreements for these assets. The transaction and related agreements were approved by the Conflicts Committee of Delek Logistics’ general partner, which is comprised solely of independent directors. The Conflicts Committee engaged Duff & Phelps to act as its financial advisor and Orrick, Herrington & Sutcliffe LLP to act as its legal counsel.

Joint Venture Formation and Terminal Acquisition
On February 20, 2018, Delek Logistics and Green Plains Partners LP (NASDAQ:GPP) announced the formation of a 50/50 joint venture, DKGP Energy Terminals LLC ("DKGP"). DKGP signed a membership interest purchase agreement to acquire two light products terminals from an affiliate of American Midstream Partners, LP (NYSE:AMID). These light products terminals are located in Caddo Mills, Texas and North Little Rock, Arkansas. The total purchase price for these assets is $138.5 million in cash. Subject to customary closing conditions and regulatory approvals, this transaction is expected to close in the first half of 2018.

If completed, DKGP is expected to consist of the assets purchased from an affiliate of American Midstream and assets contributed by Delek Logistics, with a total value of approximately $162.5 million. Taking into consideration the combination of the assets, synergies and future growth, the joint venture is currently forecasted to generate annualized EBITDA of approximately $19.2 million in 2019. Delek Logistics is expected to contribute to the joint venture its North Little Rock, Arkansas terminal with throughput capacity of 17,100 barrels per day and its Greenville tank farm located in Caddo Mills, Texas with approximately 330,000 barrels of aggregate shell capacity, which together will be valued at $24.0 million, along with $57.25 million in cash. Green Plains Partners will contribute $81.25 million in cash to DKGP. The DKGP board will oversee the newly formed joint venture and will appoint Delek Logistics as the operator with day-to-day operational responsibilities of the four terminals.

Distribution and Liquidity
On January 23, 2018, Delek Logistics declared a quarterly cash distribution for the fourth quarter of $0.725 per limited partner unit, which equates to $2.90 per limited partner unit on an annualized basis. This distribution was paid on February 12, 2018 to unitholders of record on February 2, 2018. This represents a 1.4 percent increase from the third quarter 2017 distribution of $0.715 per limited partner unit, or $2.86 per limited partner unit on an annualized basis, and a 6.6 percent increase over Delek Logistics’ fourth quarter 2016 distribution of $0.680 per limited partner unit, or $2.72 per limited partner unit annualized. For the fourth quarter 2017, the total cash distribution declared to all partners, including IDRs, was approximately $22.8 million. Based on the declared distribution for the fourth quarter 2017, the distributable cash flow coverage ratio for the fourth quarter was 0.96x. For 2017, the annual distributable coverage ratio was 0.97x.

As of December 31, 2017, Delek Logistics had total debt of approximately $422.6 million and cash of $4.7 million. Additional borrowing capacity, subject to certain covenants, under the $700.0 million credit facility was $511.1 million.

Financial Results
Revenue for the fourth quarter 2017 was $151.2 million compared to $124.7 million in the prior year period. The increase in revenue is primarily due to higher sales prices in the west Texas wholesale business. Total operating expenses were $12.3 million in the fourth quarter 2017, compared to $8.8 million in the fourth quarter 2016. This increase was primarily due to outside services, maintenance, variable expenses and employee expenses.  Total segment contribution margin was $32.8 million in the fourth quarter 2017 compared to $27.2 million in the fourth quarter 2016. General and administrative expenses were $3.6 million for the fourth quarter 2017, compared to $2.3 million in the prior year period primarily due to professional services and employee expenses.

Pipelines and Transportation Segment
Contribution margin in the fourth quarter 2017 was $18.7 million compared to $16.8 million in the fourth quarter 2016. This change was primarily due to improved performance on the Paline Pipeline and Lion Pipeline system, partially offset by lower volume on the SALA system.  During the fourth quarter 2017, the Paline Pipeline was a FERC regulated pipeline with a tariff established for potential shippers, compared to the prior year period when 10,000 barrels per day of the pipeline capacity was under contract with a third-party for a monthly fee. Operating expenses were $8.6 million in the fourth quarter 2017 compared to $6.9 million in the prior year period primarily due to outside services and variable costs.

Wholesale Marketing and Terminalling Segment
During the fourth quarter 2017, contribution margin was $14.0 million, compared to $10.3 million in the fourth quarter 2016. This increase was primarily due to improved performance in the west Texas wholesale operations and east Texas marketing agreement on a year-over-year basis. Operating expenses increased to $3.7 million in the fourth quarter 2017, compared to $1.8 million in the prior year period primarily due to outside services.

In the west Texas wholesale business, average throughput in the fourth quarter 2017 was 14,322 barrels per day compared to 13,906 barrels per day in the fourth quarter 2016. The wholesale gross margin in west Texas increased year-over-year to $5.18 per barrel and included approximately $1.7 million, or $1.26 per barrel, from renewable identification numbers (RINs) generated in the quarter.  During the fourth quarter 2016, the wholesale gross margin was $1.96 per barrel and included $1.9 million from RINs, or $1.51 per barrel.  On a year-over-year basis, continued growth in drilling activity in the Permian Basin increased fuel demand and improved the supply/demand balance, which led to improved performance in the west Texas wholesale business.

Average terminalling throughput volume of 130,547 barrels per day during the quarter increased on a year-over-year basis from 119,934 barrels per day in the fourth quarter 2016 primarily due to higher throughput at the Tyler, Texas terminal. During the fourth quarter 2017, average volume under the east Texas marketing agreement with Delek US was 78,810 barrels per day compared to 68,114 barrels per day during the fourth quarter 2016.

Fourth Quarter 2017 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its fourth quarter 2017 results on Tuesday, February 27, 2018 at 7:30 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekLogistics.com. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. For those who cannot listen to the live broadcast, a telephonic replay will be available through May 27, 2018 by dialing (855) 859-2056, passcode 2677645. An archived version of the replay will also be available at www.DelekLogistics.com for 90 days.    

Investors may also wish to listen to Delek US’ (NYSE:DK) fourth quarter 2017 earnings conference call on Tuesday, February 27, 2018 at 8:30 a.m. Central Time and review Delek US’ earnings press release. Market trends and information disclosed by Delek US may be relevant to Delek Logistics, as it is a consolidated subsidiary of Delek US. Investors can find information related to Delek US and the timing of its earnings release online by going to www.DelekUS.com.

About Delek Logistics Partners, LP
Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, was formed by Delek US Holdings, Inc. (NYSE:DK) to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.

Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of the federal securities laws. These statements contain words such as “possible,” “believe,” “should,” “could,” “would,” “predict,” “plan,” “estimate,” “intend,” “may,” “anticipate,” “will,” “if,”  “expect” or similar expressions, as well as statements in the future tense, and can be impacted by numerous factors, including the fact that a substantial majority of Delek Logistics' contribution margin is derived from Delek US Holdings, thereby subjecting us to Delek US Holdings' business risks; risks relating to the securities markets generally; risks and costs relating to the age and operational hazards of our assets including, without limitation, costs, penalties, regulatory or legal actions and other effects related to releases, spills and other hazards inherent in transporting and storing crude oil and intermediate and finished petroleum products; the impact of adverse market conditions affecting the utilization of Delek Logistics' assets and business performance, including margins generated by its wholesale fuel business; an inability of Delek to successfully integrate the businesses of Delek and Alon USA Energy, Inc., to grow as expected and realize the synergies and the other anticipated benefits of its merger with Alon, which became effective as of July 1, 2017, as it relates to our potential future growth opportunities, including dropdowns, and other potential benefits; the results of our investments in joint ventures; adverse changes in laws including with respect to tax and regulatory matters and other risks as disclosed in our annual report on Form 10-K, quarterly reports on Form 10-Q and other reports and filings with the United States Securities and Exchange Commission. Forward looking statements include, but are not limited to, statements regarding future growth at Delek Logistics; the ability to close the acquisition of Big Spring logistics assets and the proposed timing and projected results thereof; the ability of the newly formed joint venture with Green Plains Partners LP to acquire additional assets, the amount of such acquisition, and the potential benefits therefrom; the ability to complete the expansion of the Paline Pipeline and the timing for and potential results of such expansion; future distributions and the amounts thereof; a new marketing agreement and the terms and benefits thereof; the availability of borrowing capacity. There can be no assurance that actual results will not differ from those expected by management or described in forward-looking statements of Delek Logistics. Delek Logistics undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which Delek Logistics becomes aware of, after the date hereof.

Non-GAAP Disclosures:
EBITDA, distributable cash flow and distributable cash flow coverage ratio are non-U.S. GAAP supplemental financial measures that management and external users of our combined financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

  • Delek Logistics' 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 Delek Logistics' unitholders;
     
  • Delek Logistics' 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.

Delek Logistics believes that the presentation of EBITDA, distributable cash flow and distributable cash flow coverage ratio provide useful information to investors in assessing its financial condition, its results of operations and the cash flow its business is generating. EBITDA, distributable cash flow and distributable cash flow coverage ratio should not be considered in isolation or as alternatives to net income, operating income, cash from operations or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP.  EBITDA, distributable cash flow and distributable cash flow coverage ratio have important limitations as analytical tools because they exclude some, but not all items that affect net income and net cash provided by operating activities. Additionally, because EBITDA and distributable cash flow may be defined differently by other partnerships in its industry, Delek Logistics' definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships. Please see the tables below for a reconciliation of EBITDA and distributable cash flow to their most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.  Also, please see the accompanying table providing the calculation of distributable cash flow coverage ratio.

Delek Logistics Partners, LP
Condensed Consolidated Balance Sheets (Unaudited)
  December 31, December 31,
  2017 2016
     
  (In thousands)
ASSETS    
Current assets:    
Cash and cash equivalents $4,675  $59 
Accounts receivable 23,013  19,202 
Accounts receivable from related parties 1,124  2,834 
Inventory 20,855  8,875 
Other current assets 783  1,071 
Total current assets 50,450  32,041 
Property, plant and equipment:    
Property, plant and equipment 367,179  342,407 
Less: accumulated depreciation (112,111) (91,378)
Property, plant and equipment, net 255,068  251,029 
Equity method investments 106,465  101,080 
Goodwill 12,203  12,203 
Intangible assets, net 15,917  14,420 
Other non-current assets 3,427  4,774 
Total assets $443,530  $415,547 
LIABILITIES AND DEFICIT    
Current liabilities:    
Accounts payable $19,147  $10,853 
Excise and other taxes payable 4,700  4,841 
Tank inspection liabilities 902  1,013 
Pipeline release liabilities 1,000  1,097 
Accrued expenses and other current liabilities 6,033  2,925 
Total current liabilities 31,782  20,729 
Non-current liabilities:    
Long-term debt 422,649  392,600 
Asset retirement obligations 4,064  3,772 
Other non-current liabilities 14,260  11,730 
Total non-current liabilities 440,973  408,102 
Total liabilities 472,755  428,831 
Deficit:    
Common unitholders - public; 9,088,587 units issued and outstanding at December 31, 2017 (9,263,415 at December 31, 2016) 174,378  188,013 
Common unitholders - Delek; 15,294,046 units issued and outstanding at December 31, 2017 (15,065,192 at December 31, 2016) (197,206) (195,076)
General partner - 497,604 units issued and outstanding at December 31, 2017 (496,502 at December 31, 2016) (6,397) (6,221)
Total deficit (29,225) (13,284)
Total liabilities and deficit $443,530  $415,547 
         


Delek Logistics Partners, LP
Condensed Consolidated Statements of Income (Unaudited)
  Three Months Ended December 31, Year Ended December 31,
   
  2017 2016 2017 2016
         
  (In thousands, except unit and per unit data)
Net sales:        
Affiliate $39,706  $37,750  $156,280  $149,564 
Third-party 111,501  86,930  381,795  298,495 
Net sales 151,207  124,680  538,075  448,059 
Operating costs and expenses:        
Cost of goods sold 106,141  88,777  372,890  302,158 
Operating expenses 12,288  8,753  43,274  37,198 
General and administrative expenses 3,585  2,338  11,840  10,256 
Depreciation and amortization 5,517  5,649  21,914  20,813 
(Gain) on asset disposals (22)   (20) (16)
Total operating costs and expenses 127,509  105,517  449,898  370,409 
Operating income 23,698  19,163  88,177  77,650 
Interest expense, net 7,287  3,695  23,944  13,587 
(Income) loss from equity method investments (1,948) 435  (4,953) 1,178 
Other income, net     (1)  
Income before income tax (benefit) expense 18,359  15,033  69,187  62,885 
Income tax (benefit) expense (555) (279) (222) 81 
Net income attributable to partners 18,914  15,312  69,409  62,804 
Comprehensive income attributable to partners $18,914  $15,312  $69,409  $62,804 
         
Less: General partner's interest in net income, including incentive distribution rights 5,023  3,890  18,429  12,193 
Limited partners' interest in net income $13,891  $11,422  $50,980  $50,611 
         
Net income per limited partner unit:        
Common units - (basic) $0.57  $0.47  $2.09  $2.08 
Common units - (diluted) $0.57  $0.47  $2.09  $2.07 
Subordinated units - Delek (basic and diluted) $  $  $  $2.19 
         
Weighted average limited partner units outstanding:        
Common units - basic 24,366,291  24,310,962  24,348,063  22,490,264 
Common units - diluted 24,382,560  24,366,999  24,376,972  22,558,717 
Subordinated units - Delek (basic and diluted)       1,803,167 
         
Cash distribution per limited partner unit $0.725  $0.680  $2.835  $2.575 
                 


Delek Logistics Partners, LP
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
       
   Year Ended December 31, 
   2017 2016 
       
Cash Flow Data     
Operating activities $87,703  $100,707  
Investing activities (30,672) (72,692) 
Financing activities (52,415) (27,956) 
 Net increase $4,616  $59  
           


Delek Logistics Partners, LP
Reconciliation of  Amounts Reported Under U.S. GAAP
  Three Months Ended December 31, Year Ended December 31,
($ in thousands) 2017 2016 2017 2016
Reconciliation of net income to EBITDA:        
Net income $18,914  $15,312  $69,409  $62,804 
Add:        
Income tax (benefit) expense (555) (279) (222) 81 
Depreciation and amortization 5,517  5,649  21,914  20,813 
Interest expense, net 7,287  3,695  23,944  13,587 
EBITDA $31,163  $24,377  $115,045  $97,285 
         
Reconciliation of net cash from operating activities to distributable cash flow:        
Net cash provided by operating activities $9,799  $13,946  $87,703  $100,707 
Changes in assets and liabilities 14,603  7,652  3,462  (14,861)
Maintenance and regulatory capital expenditures (4,433) (3,569) (9,444) (5,920)
Reimbursement from Delek for capital expenditures (1) 1,723  2,403  3,453  3,251 
Accretion of asset retirement obligations (73) (67) (292) (266)
Deferred income taxes 269  173  111  173 
Gain on asset disposals 22    20  16 
Distributable Cash Flow $21,910  $20,538  $85,013  $83,100 
         
  1. In the current year, the reimbursed capital expenditure amounts in the determination of distributable cash flow were revised to reflect the accrual of reimbursed capital expenditures from Delek rather than the cash amounts received for reimbursed capital expenditures during the years ended December 31, 2017 and 2016.  This resulted in an increase to the distributable cash flow of $2.0 million and $1.4 million during the three months and year ended December 31, 2016, respectively. 
Delek Logistics Partners, LP
Distributable Coverage Ratio Calculation
 (In thousands)
  Three Months Ended December 31, Year Ended December 31,
Distributions to partners of Delek Logistics, LP 2017 2016 2017 2016
Limited partners' distribution on common units $17,677  $16,543  $69,057  $62,582 
General partner's distributions 361  338  1,408  1,278 
General partner's incentive distribution rights 4,739  3,656  17,389  11,159 
Total Distributions to be paid $22,777  $20,537  $87,854  $75,019 
         
Distributable Cash Flow $21,910  $20,538  $85,013  $83,100 
Distributable cash flow coverage ratio (1)  0.96x   1.00x   0.97x   1.11x 
(1) Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period.    
     


Delek Logistics Partners, LP
Segment Data (unaudited)
   
 (In thousands) Three Months Ended Year Ended
  December 31, December 31,
  2017 2016 2017 2016
Pipelines and Transportation        
Net sales:        
  Affiliate $27,327  $26,069  $109,298  $103,749 
  Third party 4,520  2,684  12,431  18,423 
  Total pipelines and transportation 31,847  28,753  121,729  122,172 
  Operating costs and expenses:        
  Cost of goods sold 4,519  5,024  18,210  19,425 
  Operating expenses 8,579  6,918  33,240  29,235 
  Segment contribution margin $18,749  $16,811  $70,279  $73,512 
Total Assets $349,351  $337,349     
         
Wholesale Marketing and Terminalling        
Net sales:        
  Affiliate $12,379  $11,681  $46,982  $45,815 
  Third party 106,981  84,246  369,364  280,072 
  Total wholesale marketing and terminalling 119,360  95,927  416,346  325,887 
  Operating costs and expenses:        
  Cost of goods sold 101,622  83,753  354,680  282,733 
  Operating expenses 3,709  1,835  10,034  7,963 
  Segment contribution margin $14,029  $10,339  $51,632  $35,191 
Total Assets $94,179  $78,198     
         
Consolidated        
Net sales:        
  Affiliate $39,706  $37,750  $156,280  $149,564 
  Third party 111,501  86,930  381,795  298,495 
  Total consolidated 151,207  124,680  538,075  448,059 
  Operating costs and expenses:        
  Cost of goods sold 106,141  88,777  372,890  302,158 
  Operating expenses 12,288  8,753  43,274  37,198 
  Contribution margin 32,778  27,150  121,911  108,703 
  General and administrative expenses 3,585  2,338  11,840  10,256 
  Depreciation and amortization 5,517  5,649  21,914  20,813 
  (Gain) on asset disposals (22)   (20) (16)
  Operating income $23,698  $19,163  $88,177  $77,650 
Total Assets $443,530  $415,547     
             


Delek Logistics Partners, LP
Segment Capital Spending
 (In thousands)
  Three Months Ended December 31, Year Ended December 31,
Pipelines and Transportation 2017 2016 2017 2016
Maintenance capital spending $4,079  $3,758  $8,643  $7,386 
Discretionary capital spending 3,468  683  5,619  1,092 
Segment capital spending $7,547  $4,441  $14,262  $8,478 
Wholesale Marketing and Terminalling        
Maintenance capital spending $1,693  $1,144  $2,461  $1,317 
Discretionary capital spending 467  1,173  1,680  1,972 
Segment capital spending $2,160  $2,317  $4,141  $3,289 
Consolidated        
Maintenance capital spending $5,772  $4,902  $11,104  $8,703 
Discretionary capital spending 3,935  1,856  7,299  3,064 
Total capital spending $9,707  $6,758  $18,403  $11,767 
         


Delek Logistics Partners, LP
Segment Data (Unaudited)
     
  Three Months Ended December 31, Year Ended December 31,
  2017 2016 2017 2016
Pipelines and Transportation Segment:        
Throughputs (average bpd)        
Lion Pipeline System:        
  Crude pipelines (non-gathered) 58,497  58,353  59,362  56,555 
  Refined products pipelines 54,874  52,895  51,927  52,071 
SALA Gathering System 15,013  16,518  15,871  17,756 
East Texas Crude Logistics System 18,078  11,624  15,780  12,735 
El Dorado Rail Offloading Rack        
         
Wholesale Marketing and Terminalling Segment:        
East Texas - Tyler Refinery sales volumes (average bpd) 78,810  68,114  73,655  68,131 
West Texas marketing throughputs (average bpd) 14,322  13,906  13,817  13,257 
West Texas marketing margin per barrel $5.18  $1.96  $4.03  $1.43 
Terminalling throughputs (average bpd) 130,547  119,934  124,488  122,350 
             


Big Spring Logistics Drop Down and Marketing Agreement
Reconciliation of Forecasted Annualized EBITDA to Forecasted Net Income
   
($ in thousands) Tanks, Terminals and Marketing Agreement 
    
Forecasted Net income $20,500  
Add:   
  Income tax expense   
  Depreciation and amortization 5,100  
  Interest expense, net 14,600  
Forecasted EBITDA $40,200  
    


DKGP Energy Terminals LLC
Reconciliation of Forecasted 2019 EBITDA to Forecasted Net Income
($ in thousands) DKGP Joint Venture (1)
 
    
Forecasted Net income $11,000  
Add:   
  Income tax expense   
  Depreciation and amortization 8,200  
  Interest expense, net   
Forecasted EBITDA $19,200  
    
  1. This amount represents the forecasted 2019 performance for the total joint venture. Each partner will record performance based on their respective percentage ownership in the joint venture.

Investor / Media Relations Contact:
Keith Johnson
Vice President of Investor Relations                       
615-435-1366