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Delek Logistics Partners, LP Reports Fourth Quarter and Full Year 2016 Results

  • Caddo joint venture crude oil pipeline began operations in January 2017
  • Declared quarterly distribution of $0.68 per limited partner unit; increased by 15.3 percent year-over-year
  • Reported fourth quarter net cash from operating activities of $13.9 million and distributable cash flow of $18.5 million
  • Potential for increased dropdown assets at our sponsor should support annual distribution growth per limited partner unit of at least 10% through 2019

BRENTWOOD, Tenn., Feb. 27, 2017 (GLOBE NEWSWIRE) -- Delek Logistics Partners, LP (NYSE:DKL) ("Delek Logistics") today announced its financial results for the fourth quarter 2016. For the three months ended December 31, 2016, Delek Logistics reported net income attributable to all partners of $15.3 million, or $0.47 per diluted common limited partner unit. This compares to net income attributable to all partners of $15.3 million, or $0.55 per diluted common limited partner unit, in the fourth quarter 2015. Distributable cash flow ("DCF") was $18.5 million in the fourth quarter 2016, compared to $18.9 million in the prior-year period.

For the fourth quarter 2016, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $24.4 million compared to $23.6 million in the prior-year period. This improvement was driven by a combination of higher volume and gross margin per barrel in west Texas as demand benefited from increased drilling activity in the Permian Basin and lower operating expenses, which was partially offset by lower volume in SALA Gathering System and on the Paline pipeline.

For 2016, net income attributable to all partners was $62.8 million, or $2.07 per diluted common limited partner unit. This compares to net income attributable to all partners of $66.8 million, or $2.52 per diluted common limited partner unit for 2015. Net cash from operations was $100.7 million and distributable cash flow was $81.7 million in 2016 compared to net cash from operations of $68.0 million and distributable cash flow of $81.3 million in 2015. EBITDA was $97.3 million in 2016, compared to $96.5 million in 2015.

Based on the declared distribution for the fourth quarter 2016, the distributable cash flow coverage ratio for the fourth quarter was 0.90x, which was reduced by spending for maintenance and regulatory capital expenditures that shifted into the fourth quarter. On an annual basis for 2016, the distributable cash flow coverage ratio was 1.09x.

Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics' general partner, remarked: "During the fourth quarter, our focus on cost savings initiatives played a role in the 25 percent year-over-year decline in operating expenses. Also the improvement in west Texas activity in the Permian Basin that benefited our wholesale business during the fourth quarter has continued into 2017. We maintained financial flexibility, ending the quarter with approximately $300 million of capacity on our credit facility and a leverage ratio of 3.85 times. This financial position supported the 15.3 percent year-over-year increase in our declared fourth quarter distribution."

Yemin concluded, "In January, the Caddo joint venture crude oil pipeline began operating and we expect utilization to increase through 2017. With a continued increase in drilling activity in the Permian Basin, our RIO joint venture pipeline, which began operating in September, is well positioned in the Delaware Basin to benefit from increased crude oil production in the future.  As we benefit from our joint venture investments in 2017, we remain focused on creating long term value for our unitholders as we continue to evaluate potential third party acquisition opportunities and explore options to partner with Delek US in the future. Delek US' recent announcement of a definitive agreement to acquire the remaining outstanding common stock of Alon USA Energy, Inc. should create future potential drop down opportunities after closing that can support additional growth at Delek Logistics. It will also create a refining system with significant access to the Permian Basin, which should provide a platform for future potential logistics projects to support these operations. The combination of the financial flexibility provided by our balance sheet, potential for increased dropdown assets at our sponsor and continued focus on growth initiatives, gives us confidence that we can increase our distribution per limited partner unit by at least 10% annually through 2019."

Distribution and Liquidity
On January 25, 2017, Delek Logistics declared a quarterly cash distribution for the fourth quarter of $0.68 per limited partner unit, which equates to $2.72 per limited partner unit on an annualized basis. This distribution was paid on February 14, 2017 to unitholders of record on February 7, 2017. This represents a 3.8 percent increase from the third quarter 2016 distribution of $0.655 per limited partner unit, or $2.62 per limited partner unit on an annualized basis, and a 15.3 percent increase over Delek Logistics’ fourth quarter 2015 distribution of $0.59 per limited partner unit, or $2.36 per limited partner unit annualized. For the fourth quarter 2016, the total cash distribution declared to all partners, including IDRs, was $20.5 million.

As of December 31, 2016, Delek Logistics had total debt of approximately $392.6 million. Additional borrowing capacity, subject to certain covenants, under the $700.0 million credit facility was approximately $301.4 million.

Financial Results
Revenue for the fourth quarter 2016 was $124.7 million compared to $108.9 million in the prior year period. The increase in revenue is primarily due to higher volume and prices in the west Texas wholesale business. Total operating expenses were $8.8 million compared to $11.7 million in the fourth quarter 2015. This reduction in operating expenses was primarily due to lower outside services and maintenance costs on a year-over-year basis, partly as a result of a higher level of maintenance projects that were completed in the prior year period and cost savings initiatives. Total segment contribution margin increased to $27.2 million in the fourth quarter of 2016 compared to $26.2 million in the fourth quarter 2015. General and administrative expenses were $2.3 million for the fourth quarter 2016, in line with $2.3 million in the prior-year period.

Pipelines and Transportation Segment
The contribution margin in the fourth quarter 2016 was $16.8 million compared to $17.5 million in the fourth quarter 2015. This change was primarily due to reduced performance in the Paline Pipeline as a result of a reduction in both the amount of capacity that is leased and the lease fee on a year-over-year basis.  Also, lower volume on the SALA gathering system on a year-over-year basis was a factor in the change in contribution margin. This was partially offset by a decline in operating expenses to $6.9 million in the fourth quarter 2016 compared to $10.7 million in the prior year period.

Wholesale Marketing and Terminalling Segment
During the fourth quarter 2016, contribution margin was $10.3 million, compared to $8.7 million in the fourth quarter 2015. This increase was primarily due to improved performance in the west Texas wholesale operations, at the El Dorado terminal and under the east Texas marketing agreement on a year-over-year basis. Operating expenses were $1.8 million in the fourth quarter 2016, compared to $1.0 million in the fourth quarter of 2015.

In the west Texas wholesale business, average throughput in the fourth quarter 2016 was 13,906 barrels per day compared to 12,488 barrels per day in the fourth quarter 2015. The wholesale gross margin in west Texas increased year-over-year to $1.96 per barrel and included approximately $1.9 million, or $1.51 per barrel, from renewable identification numbers (RINs) generated in the quarter.  During the fourth quarter 2015, the wholesale gross margin was $1.05 per barrel and included $0.9 million from RINs, or $0.79 per barrel.

Average terminalling throughput volume of 119,934 barrels per day during the quarter increased on a year-over-year basis from 114,136 barrels per day in the fourth quarter 2015 primarily due to higher throughput at the El Dorado, Arkansas and Mount Pleasant, Texas terminals. During the fourth quarter 2016, average volume under the east Texas marketing agreement with Delek US was 68,114 barrels per day compared to 66,950 barrels per day during the fourth quarter 2015.

Project Development Update
In March 2015, Delek Logistics, through wholly owned subsidiaries, entered into two joint ventures (Caddo Pipeline and RIO Pipeline). Delek Logistics’ total investment for the construction of the two joint venture pipelines was financed through a combination of cash from operations and borrowings under its revolving credit facility. Through December 31, 2016, approximately $102.7 million has been invested in these projects. The RIO Pipeline began operating in September 2016 and the Caddo Pipeline was operational in January 2017. 

Fourth Quarter 2016 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its fourth quarter 2016 results on Tuesday, February 28, 2017 at 7:00 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 29, 2017 by dialing (855) 859-2056, passcode 49469876. 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 2016 earnings conference call on Tuesday, February 28, 2017 at 8:00 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; uncertainty regarding the outcome of Delek US' agreement to acquire the remaining outstanding common stock of Alon USA Energy, Inc.; 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. 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.

Factors Affecting Comparability:
On March 31, 2015, Delek Logistics acquired the Tyler crude oil storage tank and the El Dorado rail offloading facility (the "Logistics Assets") from Delek US. These assets were accounted for as transfers between entities under common control. Accordingly, the accompanying financial statements of the Partnership have been retrospectively adjusted to include the historical results of these assets in accordance with U.S. GAAP. For the period ended March 31, 2015, the acquisition date of the Logistics Assets, the retrospective adjustments were made to the financial statements. The historical results of the Logistics Assets, prior to the acquisition date, are referred to as the "Logistics Assets Predecessor".

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 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.

We also include the results of our operations excluding the results of our Logistics Assets Predecessor. We believe that the presentation of our results of operations excluding results of our Logistics Assets Predecessor will provide useful information to investors in assessing our results of operations by allowing them to analyze operations of our business under our current commercial agreements with Delek US.

 
Delek Logistics Partners, LP
Condensed Consolidated Balance Sheets (Unaudited)
    December 31,   December 31,
    2016   2015
         
    (In thousands)
ASSETS        
Current assets:        
Cash and cash equivalents   $ 59     $  
Accounts receivable   19,202     35,049  
Accounts receivable from related parties   2,834      
Inventory   8,875     10,451  
Other current assets   1,071     1,540  
Total current assets   32,041     47,040  
Property, plant and equipment:        
Property, plant and equipment   342,407     325,647  
Less: accumulated depreciation   (91,378 )   (71,799 )
Property, plant and equipment, net   251,029     253,848  
Equity method investments   101,080     40,678  
Goodwill   12,203     12,203  
Intangible assets, net   14,420     15,482  
Other non-current assets   4,774     6,037  
Total assets   $ 415,547     $ 375,288  
LIABILITIES AND DEFICIT        
Current liabilities:        
Accounts payable   $ 10,853     $ 6,850  
Accounts payable to related parties       3,992  
Excise and other taxes payable   4,841     4,871  
Tank inspection liabilities   1,013     1,890  
Pipeline release liabilities   1,097     1,393  
Accrued expenses and other current liabilities   2,925     1,694  
Total current liabilities   20,729     20,690  
Non-current liabilities:        
Revolving credit facility   392,600     351,600  
Asset retirement obligations   3,772     3,506  
Other non-current liabilities   11,730     10,510  
Total non-current liabilities   408,102     365,616  
Total liabilities   428,831     386,306  
Deficit:        
Common unitholders - public; 9,263,415 units issued and outstanding at December 31, 2016 (9,478,273 at December 31, 2015)   188,013     198,401  
Common unitholders - Delek; 15,065,192 units issued and outstanding at December 31, 2016 (2,799,258 at December 31, 2015)   (195,076 )   (280,828 )
Subordinated unitholders - Delek; 0 units issued and outstanding at December 31, 2016 (11,999,258 at December 31, 2015)       78,601  
General partner - 496,502 units issued and outstanding at December 31, 2016 (495,445 at December 31, 2015)   (6,221 )   (7,192 )
Total deficit   (13,284 )   (11,018 )
Total liabilities and deficit   $ 415,547     $ 375,288  

/EIN News/ --

 
Delek Logistics Partners, LP
Condensed Consolidated Statements of Income (Unaudited)
    Three Months Ended
December 31,
  Year Ended
   December 31,
     
    2016   2015   2016   2015 (1)
                 
    (In thousands, except unit and per unit data)
Net sales:                
Affiliate   $ 37,750     $ 38,589     $ 149,564     $ 152,564  
Third-Party   86,930     70,342     298,495     437,105  
Net sales   124,680     108,931     448,059     589,669  
Operating costs and expenses:                
Cost of goods sold   88,777     71,018     302,158     436,304  
Operating expenses   8,753     11,732     37,198     44,923  
General and administrative expenses   2,338     2,290     10,256     11,384  
Depreciation and amortization   5,649     5,907     20,813     19,692  
Loss (gain) on asset disposals       122     (16 )   104  
Total operating costs and expenses   105,517     91,069     370,409     512,407  
Operating income   19,163     17,862     77,650     77,262  
Interest expense, net   3,695     3,042     13,587     10,658  
Loss on equity method investments   435     146     1,178     588  
Income before income tax (benefit) expense   15,033     14,674     62,885     66,016  
Income tax (benefit) expense   (279 )   (621 )   81     (195 )
Net income   15,312     15,295     62,804     66,211  
Less: loss attributable to the Logistics Assets Predecessor               (637 )
Net income attributable to partners   15,312     15,295     62,804     66,848  
Comprehensive income attributable to partners   $ 15,312     $ 15,295     $ 62,804     $ 66,848  
                 
Less: General partner's interest in net income, including incentive distribution rights   3,890     1,784     12,193     5,163  
Limited partners' interest in net income   $ 11,422     $ 13,511     $ 50,611     $ 61,685  
                 
Net income per limited partner unit:                
Common units - (basic)   $ 0.47     $ 0.56     $ 2.08     $ 2.55  
Common units - (diluted)   $ 0.47     $ 0.55     $ 2.07     $ 2.52  
Subordinated units - Delek (basic and diluted)   $     $ 0.56     $ 2.19     $ 2.54  
                 
Weighted average limited partner units outstanding: (2)                
Common units - basic   24,310,962     12,256,721     22,490,264     12,237,154  
Common units - diluted   24,366,999     12,360,179     22,558,717     12,356,914  
Subordinated units - Delek (basic and diluted)       11,999,258     1,803,167     11,999,258  
                 
Cash distribution per limited partner unit   $ 0.680     $ 0.590     $ 2.575     $ 2.240  

(1) Includes the historical results of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.
(2) In February 2016, the requirements under the partnership agreement for the conversion of all subordinated units into common units were satisfied and the subordination period ended. This affected the weighted average units outstanding during the year ended December 31, 2016.

 
Delek Logistics Partners, LP
Consolidated Statements of Income (Unaudited)
Reconciliation of Partnership to Predecessor
                 
    Delek
Logistics
Partners, LP
  El Dorado Rail
Offloading
Racks (1)
  Tyler Crude
Oil Storage
Tank (1)
  Year Ended
December 31,
2015
        El Dorado
Assets
Predecessor
  Tyler Assets
Predecessor
   
    (In thousands)
Net Sales   $ 589,669     $     $     $ 589,669  
Operating costs and expenses:                
  Cost of goods sold   436,304             436,304  
  Operating expenses   44,756     167         44,923  
  General and administrative expenses   11,384             11,384  
  Depreciation and amortization   19,222     372     98     19,692  
  Loss on asset disposals   104             104  
    Total operating costs and expenses   511,770     539     98     512,407  
  Operating income (loss)   77,899     (539 )   (98 )   77,262  
Interest expense, net   10,658             10,658  
Loss on equity method investments   588             588  
Net income (loss) before income tax benefit   66,653     (539 )   (98 )   66,016  
Income tax benefit   (195 )           (195 )
Net income (loss)   66,848     (539 )   (98 )   66,211  
  Less: loss attributable to Predecessors       (539 )   (98 )   (637 )
Net income attributable to partners   $ 66,848     $     $     $ 66,848  
                 

(1) The information presented is for the year months ended December 31, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.

 
Delek Logistics Partners, LP
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
                   
            Year Ended December 31,  
            2016   2015 (1)  
                   
Cash Flow Data          
Net cash provided by operating activities   $ 100,707     $ 68,024    
Net cash used in investing activities   (72,692 )   (56,592 )  
Net cash used in financing activities   (27,956 )   (13,293 )  
  Net increase (decrease) in cash and cash equivalents   $ 59     $ (1,861 )  

(1) Includes the historical cash flows of the Logistics Assets predecessor.

 
Delek Logistics Partners, LP
Reconciliation of  Amounts Reported Under U.S. GAAP
    Three Months Ended
December 31,
  Year Ended
December 31,
($ in thousands)   2016   2015   2016   2015 (1)
Reconciliation of net income to EBITDA:                
Net income   $ 15,312     $ 15,295     $ 62,804     $ 66,211  
Add:                
Income tax (benefit) expense   (279 )   (621 )   81     (195 )
Depreciation and amortization   5,649     5,907     20,813     19,692  
Interest expense, net   3,695     3,042     13,587     10,658  
EBITDA   $ 24,377     $ 23,623     $ 97,285     $ 96,366  
                 
Reconciliation of net cash from operating activities to distributable cash flow:                
Net cash provided by operating activities   $ 13,946     $ 1,262     $ 100,707     $ 68,024  
Changes in assets and liabilities   7,652     20,476     (14,861 )   20,106  
Maintenance and regulatory capital expenditures   (3,569 )   (2,674 )   (5,920 )   (11,841 )
Reimbursement from Delek for capital expenditures   352     14     1,880     5,220  
Accretion of asset retirement obligations   (67 )   (64 )   (266 )   (251 )
Deferred income taxes   173     9     173     (14 )
(Loss) gain on asset disposals       (122 )   16     (104 )
                 
Distributable Cash Flow   $ 18,487     $ 18,901     $ 81,729     $ 81,140  
                 

(1) The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.

 
Delek Logistics Partners, LP
Reconciliation of  Amounts Reported Under U.S. GAAP
    Delek
Logistics
Partners, LP
  Logistics
Assets (1)
  Year Ended
December 31,
2015
             
($ in thousands)       Logistics
Assets
Predecessor
   
Reconciliation of net income to EBITDA:            
Net income (loss)   $ 66,848     $ (637 )   $ 66,211  
Add:            
Income tax benefit   (195 )       (195 )
Depreciation and amortization   19,222     470     19,692  
Interest expense, net   10,658         10,658  
EBITDA   $ 96,533     $ (167 )   $ 96,366  
             
Reconciliation of net cash from operating activities to distributable cash flow:            
Net cash provided by (used in) operating activities   $ 68,191     $ (167 )   $ 68,024  
Changes in assets and liabilities   20,106         20,106  
Maintenance and regulatory capital expenditures   5,220         5,220  
Reimbursement from Delek for capital expenditures   (11,841 )       (11,841 )
Accretion of asset retirement obligations   (251 )       (251 )
Deferred income taxes   (14 )       (14 )
Loss on asset disposals   (104 )       (104 )
             
Distributable Cash Flow   $ 81,307     $ (167 )   $ 81,140  
             

(1) The information presented is for the year ended December 31, 2015, disaggregated to present the results of operations of the Partnership and the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.

 
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   2016   2015   2016   2015
Limited partners' distribution on common units   $ 16,543     $ 14,324     $ 62,582     $ 54,318  
General partner's distributions   338     292     1,278     1,108  
General partner's incentive distribution rights   3,656     1,508     11,159     3,904  
Total Distributions to be paid   $ 20,537     $ 16,124     $ 75,019     $ 59,330  
                 
Distributable Cash Flow   $ 18,487     $ 18,901     $ 81,729     $ 81,307  
Distributable cash flow coverage ratio (1)   0.90x   1.17x   1.09x   1.37x
(1) Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period.
Predecessor costs are excluded from distributable cash flow for the year ended December 31, 2015.


 
Delek Logistics Partners, LP
Segment Data (unaudited)
 (In thousands)
    Three Months Ended December 31, 2016
    Pipelines &
Transportation
  Wholesale Marketing
& Terminalling
  Consolidated
Affiliate   $ 26,069     $ 11,681     $ 37,750  
Third-Party   2,684     84,246     86,930  
Net sales   28,753     95,927     124,680  
Operating costs and expenses:            
Cost of goods sold   5,024     83,753     88,777  
Operating expenses   6,918     1,835     8,753  
Segment contribution margin   $ 16,811     $ 10,339     27,150  
General and administrative expense           2,338  
Depreciation and amortization           5,649  
Operating income           $ 19,163  
Total Assets   $ 337,349     $ 78,198     $ 415,547  
             
Capital spending            
Maintenance capital spending   $ 3,758     $ 1,144     $ 4,902  
Discretionary capital spending   683     1,173     1,856  
Total capital spending   $ 4,441     $ 2,317     $ 6,758  


    Three Months Ended December 31, 2015
    Pipelines &
Transportation
  Wholesale Marketing
& Terminalling
  Consolidated
Affiliate   $ 26,115     $ 12,474     $ 38,589  
Third-Party   6,589     63,753     70,342  
Net sales   32,704     76,227     108,931  
Operating costs and expenses:            
Cost of goods sold   4,481     66,537     71,018  
Operating expenses   10,720     1,012     11,732  
Segment contribution margin   $ 17,503     $ 8,678     26,181  
General and administrative expense           2,290  
Depreciation and amortization           5,907  
Loss on asset disposals           122  
Operating income           $ 17,862  
Total assets   $ 283,553     $ 91,735     $ 375,288  
             
Capital spending            
Maintenance capital spending   $ 1,200     $ 808     $ 2,008  
Discretionary capital spending   2,403     486     2,889  
Total capital spending   $ 3,603     $ 1,294     $ 4,897  


 
Delek Logistics Partners, LP
Segment Data (unaudited)
 (In thousands)
    Year Ended December 31, 2016
    Pipelines &
Transportation
  Wholesale Marketing
&Terminalling
  Consolidated
Affiliate   $ 103,749     $ 45,815     $ 149,564  
Third-Party   18,423     280,072     298,495  
Net sales   $ 122,172     $ 325,887     $ 448,059  
Operating costs and expenses:            
Cost of goods sold   19,425     282,733     302,158  
Operating expenses   29,235     7,963     37,198  
Segment contribution margin   $ 73,512     $ 35,191     108,703  
General and administrative expense           10,256  
Depreciation and amortization           20,813  
Gain on asset disposals           (16 )
Operating income           $ 77,650  
             
Capital spending:            
Maintenance capital spending   $ 7,386     $ 1,317     $ 8,703  
Discretionary capital spending   1,092     1,972     3,064  
Total capital spending   $ 8,478     $ 3,289     $ 11,767  


    Year Ended December 31, 2015 (1) 
    Pipelines &
Transportation
  Wholesale Marketing
& Terminalling
  Consolidated
Affiliate   $ 102,551     $ 50,013     $ 152,564  
Third-Party   28,828     408,277     437,105  
Net sales   $ 131,379     $ 458,290     $ 589,669  
Operating costs and expenses:            
Cost of goods sold   19,607     416,697     436,304  
Operating expenses   33,751     11,172     44,923  
Segment contribution margin   $ 78,021     $ 30,421     108,442  
General and administrative expense           11,384  
Depreciation and amortization           19,692  
Loss on asset disposals           104  
Operating income           $ 77,262  
             
Capital spending            
Maintenance capital spending   $ 12,965     $ 1,944     $ 14,909  
Discretionary capital spending   3,065     4,453     7,518  
Total capital spending (2)   $ 16,030     $ 6,397     $ 22,427  

(1) The information presented includes the results of operations of the Logistics Assets Predecessor. Prior to the El Dorado offloading racks acquisition and Tyler crude oil storage tank acquisition on March 31, 2015, the Logistics Assets Predecessor did not record revenues for intercompany throughput and storage services.
(2) Capital spending includes expenditures of ($0.1) million incurred in connection with the Logistics Assets Predecessor.

 
Delek Logistics Partners, LP
Segment Data (Unaudited)
 (In thousands)
    Year Ended December 31, 2015
    Pipelines & Transportation
    Delek Logistics
Partners, LP
  Predecessor -
Logistics Assets
  Year Ended
December 31,
2015
Net Sales   $ 131,379     $     $ 131,379  
Operating costs and expenses:            
  Cost of goods sold   19,607         19,607  
  Operating expenses   33,584     167     33,751  
Segment contribution margin   $ 78,188     $ (167 )   $ 78,021  
             
Total capital spending   $ 16,082     $ (52 )   $ 16,030  


    Year Ended December 31, 2015
    Wholesale Marketing & Terminalling
    Delek Logistics
Partners, LP
  Predecessor -
Logistics Assets
  Year Ended
December 31,
2015
Net Sales   $ 458,290     $     $ 458,290  
Operating costs and expenses:            
  Cost of goods sold   416,697         416,697  
  Operating expenses   11,172         11,172  
Segment contribution margin   $ 30,421     $     $ 30,421  
             
Total capital spending   $ 6,397     $     $ 6,397  


 
Delek Logistics Partners, LP
Segment Data (Unaudited)
         
    Three Months Ended
December 31,
  Year Ended
December 31,
Throughputs (average bpd)   2016   2015   2016   2015
                 
Pipelines and Transportation Segment:                
Lion Pipeline System:                
  Crude pipelines (non-gathered)   58,353     54,342     56,555     54,960  
  Refined products pipelines   52,895     60,549     52,071     57,366  
SALA Gathering System   16,518     19,741     17,756     20,673  
East Texas Crude Logistics System   11,624     8,613     12,735     18,828  
El Dorado Rail Offloading Rack               981  
                 
Wholesale Marketing and Terminalling Segment:                
East Texas - Tyler Refinery sales volumes (average bpd)   68,114     66,950     68,131     59,174  
West Texas marketing throughputs (average bpd)   13,906     12,488     13,257     16,357  
West Texas marketing margin per barrel   $ 1.96     $ 1.05     $ 1.43     $ 1.35  
Terminalling throughputs (average bpd)   119,934     114,136     122,350     106,514  
                         


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

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