Delek Logistics Announces Purchase of Third Party Logistics Assets
Delek Logistics Partners, LP (NYSE:DKL) (“Delek Logistics”) today announced that one of its subsidiaries has purchased a set of logistics assets from an affiliate of Magellan Midstream Partners, L.P. for $10.0 million in cash. These assets include a light products terminal in Mount Pleasant, Texas, a light products storage facility in Greenville, Texas and a pipeline connecting the locations. The transaction, which closed on October 1, 2014, was financed by cash on hand and borrowings under Delek Logistics’ revolving credit facility.
Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics’ general partner, remarked: “This acquisition extends our logistics presence in east Texas and increases our terminal locations to three in the area. It also improves our ability to support Delek US’ Tyler, Texas refinery, which Delek US has announced it expects to expand in early 2015. Our financial flexibility remains solid and we continue to look for opportunities for future growth.”
The Mount Pleasant terminal consists of approximately 180,000 barrels of light product storage capacity, three truck loading lanes and ethanol blending capability. The Greenville facility has approximately 325,000 barrels of storage capacity and is connected to the Mount Pleasant terminal by a 76 mile pipeline. By the end of 2015, these assets are expected to achieve annualized earnings before interest, taxes, depreciation and amortization (“EBITDA”) of approximately $1.4 million.
| Delek Logistics Partners, LP Reconciliation of Forecasted EBITDA to Amounts under US GAAP
(unaudited, in millions)
|Reconciliation of Forecasted EBITDA to Forecasted Net Income:||Mt. Pleasant/Greenville Acquisition|
|Net Income:||$ 0.6|
|Add: Depreciation and amortization expenses||0.4|
|Add: Interest and financing costs, net||0.4|
|Forecasted EBITDA (1)||$ 1.4|
(1) Delek Logistics defines EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization expense. EBITDA is a non-U.S. GAAP supplemental financial measure that management and external users of our combined financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess performance of a business.
About Delek Logistics Partners, LP
Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, is a growth-oriented master limited partnership 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 relating to the age of our assets and operational hazards of our assets including, without limitation, 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 business of Delek Logistics; 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. 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.
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