Delek Logistics Partners, LP (DKL) Bundle
A Brief History of DKL
Overview
DKL, publicly traded as Delek Logistics Partners, LP, has established itself as a significant player in the logistics and transportation of crude oil and refined products in the United States. The company operates through various segments, including gathering and processing, wholesale marketing and terminalling, storage and transportation, and investments in pipeline joint ventures.
Financial Performance
As of September 30, 2024, DKL reported net revenues of $730.773 million for the nine months ended, a decrease from $766.260 million for the same period in 2023. The third quarter of 2024 saw net revenues drop to $275.824 million from $361.808 million in Q3 2023, reflecting a decrease of 22.4% year-over-year.
Segment Analysis
DKL’s operations are segmented into four primary areas:
- Gathering and Processing: For the nine months ended September 30, 2024, this segment generated net revenues of $270.053 million, down from $280.494 million in the previous year. The EBITDA for this segment was $154.819 million, compared to $161.014 million in 2023.
- Wholesale Marketing and Terminalling: This segment reported net revenues of $361.808 million for the nine months ended September 30, 2024, a slight decline from $378.246 million in 2023. The EBITDA for this segment decreased to $75.724 million from $78.071 million.
- Storage and Transportation: This segment saw net revenues of $98.912 million, down from $107.520 million in the prior year. The EBITDA for storage and transportation was $42.405 million, compared to $46.316 million in 2023.
- Investments in Pipeline Joint Ventures: This segment's performance is closely tied to strategic partnerships, which help cushion revenue fluctuations during periods of low activity.
Cost and Expenses
Cost of materials and other expenses decreased across various segments due to lower natural gas costs and reduced trucking activity. For example, in the gathering and processing segment, costs fell to $57.590 million from $65.557 million year-over-year. Overall operating expenses for the third quarter of 2024 decreased by $5.1 million, or 15.4%, compared to Q3 2023.
Cash Flow and Distributions
Net cash provided by operating activities for the nine months ended September 30, 2024, was $156.441 million, up from $110.630 million in 2023. Distributions to common unitholders increased to $147.794 million from $134.216 million year-over-year.
Debt and Financial Obligations
As of September 30, 2024, DKL had total long-term debt of $1.904 billion, which includes $1.050 billion from the 2029 Notes issued in March 2024. The DKL Revolving Facility had an outstanding balance of $454.900 million.
| Segment | Net Revenues (2024) | Net Revenues (2023) | EBITDA (2024) | EBITDA (2023) |
|---|---|---|---|---|
| Gathering and Processing | $270.053 million | $280.494 million | $154.819 million | $161.014 million |
| Wholesale Marketing and Terminalling | $361.808 million | $378.246 million | $75.724 million | $78.071 million |
| Storage and Transportation | $98.912 million | $107.520 million | $42.405 million | $46.316 million |
| Investments in Pipeline Joint Ventures | N/A | N/A | N/A | N/A |
Market Environment
The market environment for DKL in 2024 has been characterized by fluctuations in crude oil prices, regulatory changes, and evolving competitive dynamics. The company continues to adapt its strategies to address these market challenges while aiming to maintain a robust distribution growth profile.
Future Outlook
Looking forward, DKL is expected to leverage its operational efficiencies and strategic partnerships to enhance its market position. The company anticipates recognizing approximately $1.1 billion in service revenues related to unfulfilled performance obligations under its agreements.
A Who Owns Delek Logistics Partners, LP (DKL)
Ownership Structure
As of September 30, 2024, Delek Logistics Partners, LP (DKL) has a significant ownership interest held by Delek Holdings, Inc., which owns approximately 70.4% of the partnership on an as-converted basis.
Common Units Outstanding
The total number of common units outstanding as of September 30, 2024, is 47,043,589 units, which includes:
- 12,932,311 common units held by the public
- 34,111,278 common units held by Delek Holdings
| Type of Unit | Number of Units | Ownership Percentage |
|---|---|---|
| Public Holdings | 12,932,311 | 29.6% |
| Delek Holdings | 34,111,278 | 70.4% |
| Total | 47,043,589 | 100% |
Financial Performance and Distributions
In Q4 2024, the board declared a distribution of $1.100 per common unit, amounting to approximately $51.5 million for the quarter, which is a 5.3% increase over the third quarter of 2023.
Recent Equity Offerings
Recent public offerings include:
- On October 10, 2024, DKL sold 4,423,075 common units at a price of $39.00 per unit, raising approximately $165.3 million.
- On March 12, 2024, DKL sold 3,584,416 common units at a price of $38.50 per unit, raising approximately $132.2 million.
Debt and Financial Obligations
As of September 30, 2024, DKL has total indebtedness of $1,904.9 million, which includes:
- $454.9 million under the DKL Revolving Facility
- $1,050 million in 2029 Notes
- $400 million in 2028 Notes
| Debt Type | Amount (in millions) | Maturity Date |
|---|---|---|
| DKL Revolving Facility | $454.9 | October 13, 2027 |
| 2029 Notes | $1,050.0 | March 15, 2029 |
| 2028 Notes | $400.0 | June 1, 2028 |
| 2025 Notes | $0.0 | Redeemed |
Cash Flow Summary
For the nine months ended September 30, 2024, the cash flow summary is as follows (in thousands):
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Net cash provided by operating activities | $156,441 | $110,630 |
| Net cash used in investing activities | ($314,528) | ($55,634) |
| Net cash provided by (used in) financing activities | $161,649 | ($58,784) |
Delek Logistics Partners, LP (DKL) Mission Statement
Overview of Mission Statement
The mission statement of Delek Logistics Partners, LP emphasizes the commitment to providing high-quality logistics services in the energy sector while ensuring operational excellence and sustainability. The company aims to enhance customer satisfaction through reliable and efficient services, focusing on long-term growth and profitability.
Core Values
- Safety: Prioritizing the safety of employees and stakeholders in all operations.
- Integrity: Conducting business with transparency and accountability.
- Excellence: Striving for continuous improvement in operational performance.
- Innovation: Embracing new technologies and practices to enhance service delivery.
- Sustainability: Committing to environmentally responsible practices in logistics and operations.
Financial Performance Indicators
As of September 30, 2024, Delek Logistics Partners reported the following financial metrics:
| Metric | Value (in thousands) |
|---|---|
| Total Revenue | $766,260 |
| Net Income | $107,380 |
| EBITDA | $273,074 |
| Cash Flow from Operating Activities | $156,441 |
| Net Cash Used in Investing Activities | ($314,528) |
| Net Cash Provided by Financing Activities | $161,649 |
| Weighted Average Limited Partner Units Outstanding | 47,109,008 |
| Basic Net Income per Limited Partner Unit | $2.32 |
| Diluted Net Income per Limited Partner Unit | $2.32 |
Strategic Objectives
Delek Logistics Partners aims to achieve several strategic objectives:
- Expand logistics capacity to meet growing demand in the energy sector.
- Enhance operational efficiency through technological advancements and process improvements.
- Maintain strong relationships with key partners, including Delek Holdings.
- Focus on sustainable practices to reduce environmental impact.
- Increase shareholder value through consistent cash distributions and revenue growth.
Recent Developments
In 2024, Delek Logistics Partners has undertaken significant initiatives, including:
- Public offerings of common units generating net proceeds of $165.3 million in October and $132.2 million in March.
- Investment in a new natural gas processing plant in the Permian Basin with an expected EBITDA of approximately $40 million.
- Commitment to improving safety and environmental standards across all operations.
Distribution Growth
Delek Logistics Partners has consistently increased its distributions to unitholders, reflecting its commitment to return value to investors:
| Quarter Ended | Distribution per Unit | Total Cash Distribution (in thousands) |
|---|---|---|
| March 31, 2024 | $1.070 | $50,521 |
| June 30, 2024 | $1.090 | $51,263 |
| September 30, 2024 | $1.100 | $51,513 |
Long-term Financial Obligations
As of September 30, 2024, Delek Logistics Partners had the following long-term debt obligations:
| Debt Instrument | Principal Amount (in thousands) |
|---|---|
| DKL Revolving Facility | $454,900 |
| 2029 Notes | $1,050,000 |
| 2028 Notes | $400,000 |
| Principal Amount of Long-term Debt | $1,904,900 |
Conclusion on Future Outlook
Delek Logistics Partners, LP is positioned for future growth through strategic investments, increased operational efficiency, and a commitment to sustainable practices. The company's strong financial performance and focus on shareholder returns reinforce its mission in the logistics sector.
How Delek Logistics Partners, LP (DKL) Works
Overview of Operations
Delek Logistics Partners, LP (DKL) operates primarily in the logistics and transportation sectors, focusing on the gathering, processing, storage, and transportation of crude oil and refined products. The company segments its operations into four main categories:
- Gathering and Processing
- Wholesale Marketing and Terminalling
- Storage and Transportation
- Investments in Pipeline Joint Ventures
Financial Performance
As of September 30, 2024, DKL reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Revenues | $214.1 million | $275.8 million | $730.8 million | $766.3 million |
| Net Income | $33.7 million | $34.8 million | $107.4 million | $104.1 million |
| EBITDA | $69.2 million | $98.2 million | $273.1 million | $284.2 million |
| Net Cash Provided by Operating Activities | $24.9 million | $46.8 million | $156.4 million | $110.6 million |
Quarterly Distributions
DKL declared a quarterly distribution of $1.100 per common unit on October 29, 2024, which translates to an estimated total cash distribution of approximately $51.5 million for the quarter. This represents a 5.3% increase compared to the previous year's distribution.
| Quarter Ended | Total Quarterly Distribution Per Unit | Total Cash Distribution (in thousands) |
|---|---|---|
| March 31, 2024 | $1.070 | $50,521 |
| June 30, 2024 | $1.090 | $51,263 |
| September 30, 2024 | $1.100 | $51,513 |
Debt Structure
As of September 30, 2024, DKL's long-term debt consisted of the following:
| Debt Instrument | Principal Amount | Effective Interest Rate | Maturity |
|---|---|---|---|
| DKL Revolving Facility | $454.9 million | 7.70% | October 13, 2027 |
| 2029 Notes | $1,050.0 million | 8.90% | March 15, 2029 |
| 2028 Notes | $400.0 million | 7.13% | June 1, 2028 |
| 2025 Notes | $0.0 million | N/A | — |
Cash Flow Summary
Here is a summary of DKL's cash flows for the nine months ended September 30:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $156,441 | $110,630 |
| Net Cash Used in Investing Activities | ($314,528) | ($55,634) |
| Net Cash Provided by Financing Activities | $161,649 | ($58,784) |
| Net Increase in Cash and Cash Equivalents | $3,562 | ($3,788) |
Segment Performance
The performance of DKL's segments for the nine months ended September 30, 2024, is summarized below:
| Segment | Net Revenues (in thousands) | Segment EBITDA (in thousands) |
|---|---|---|
| Gathering and Processing | $270,053 | $154,819 |
| Wholesale Marketing and Terminalling | $361,808 | $78,071 |
| Storage and Transportation | $98,912 | $46,316 |
Investments in Joint Ventures
DKL's investments in pipeline joint ventures contribute to its operational strategy, providing essential connections to pipeline infrastructure and enhancing the logistics capabilities of Delek Holdings.
Future Revenue Expectations
As of September 30, 2024, DKL expects to recognize approximately $1.1 billion in service revenues related to unfulfilled performance obligations under commercial agreements with Delek Holdings, with terms ranging from five to ten years.
How Delek Logistics Partners, LP (DKL) Makes Money
Revenue Sources
Delek Logistics Partners, LP generates revenue through several key segments:
- Gathering and Processing
- Wholesale Marketing and Terminalling
- Storage and Transportation
- Investments in Pipeline Joint Ventures
Financial Performance Overview
For the nine months ended September 30, 2024, Delek Logistics reported total revenues of $730.8 million, a decrease from $766.3 million in the same period of 2023. The breakdown of revenue by segment is as follows:
| Segment | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) |
|---|---|---|
| Gathering and Processing | $270,053 | $280,494 |
| Wholesale Marketing and Terminalling | $361,808 | $378,246 |
| Storage and Transportation | $98,912 | $107,520 |
| Total Revenue | $730,773 | $766,260 |
Segment Details
The Gathering and Processing segment reported a revenue of $270.1 million for the first nine months of 2024, down from $280.5 million in 2023. This decrease was primarily due to reduced throughput fees recorded as interest income under sales-type lease accounting.
In the Wholesale Marketing and Terminalling segment, revenue decreased from $378.2 million in 2023 to $361.8 million in 2024, influenced by lower average sales prices for gasoline and diesel.
Storage and Transportation revenue also declined from $107.5 million in 2023 to $98.9 million in 2024, impacted by decreased trucking activity.
Operational Metrics
Volume metrics for the company show fluctuations in throughput and sales:
| Metric | 2024 (Average) | 2023 (Average) |
|---|---|---|
| Crude Pipelines Throughput (bpd) | 68,430 | 70,153 |
| Refined Products Pipelines Throughput (bpd) | 55,283 | 63,991 |
| Natural Gas Gathering and Processing (Mcfd) | 75,719 | 69,737 |
Cost Structure
For the nine months ended September 30, 2024, Delek Logistics reported costs of materials and other totaling $57.6 million, a decrease from $65.6 million in 2023. The cost of materials was significantly affected by lower volumes and prices for gasoline and diesel.
Operating expenses increased slightly by 3.2% year-over-year, reaching $57.6 million in 2024 compared to $55.6 million in 2023.
Cash Distributions
On October 29, 2024, Delek Logistics declared a distribution of $1.100 per common unit, which equates to approximately $51.5 million per quarter, or around $206.1 million annually. This represents a 5.3% increase over the prior year's distribution levels.
| Quarter Ended | Total Quarterly Distribution (in thousands) | Distribution Per Unit |
|---|---|---|
| March 31, 2024 | $50,521 | $1.070 |
| June 30, 2024 | $51,263 | $1.090 |
| September 30, 2024 | $51,513 | $1.100 |
Debt and Financing Activities
As of September 30, 2024, the total indebtedness of Delek Logistics Partners stood at $1.905 billion. This included:
| Debt Type | Amount (in thousands) |
|---|---|
| DKL Revolving Facility | $454,900 |
| 2029 Notes | $1,050,000 |
| 2028 Notes | $400,000 |
| 2025 Notes | $0 |
Net cash provided by operating activities increased significantly to $156.4 million for the nine months ended September 30, 2024, compared to $110.6 million for the same period in 2023.
Delek Logistics Partners, LP (DKL) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Delek Logistics Partners, LP (DKL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Delek Logistics Partners, LP (DKL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Delek Logistics Partners, LP (DKL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.