On November 7, 2012, Delek Logistics Partners, LP (NYSE: DKL) completed its initial public offering. Through this transaction, Delek Logistics Partners, LP sold 9.2 million common units and received $176.2 million of proceeds net of estimated transaction costs from offering 37.6 percent of the limited partner interest in the partnership to the public. This includes underwriters fully exercising their option to purchase 1.2 million additional common units. Delek US, through certain affiliates, will own a two percent general partner interest and the remaining limited partner interest in Delek Logistics Partners, LP.
Yemin concluded, “During the third quarter, we executed on our strategic initiatives, improved our financial position and returned value to our shareholders. Strong cash flow generation allowed us to reduce net debt again and declare our fourth special dividend in the last twelve months. We are also pleased to have successfully completed the initial public offering of Delek Logistics, which priced at the high end of its range. Following this transaction, our financial position has been further enhanced and our Board of Directors decided to increase our ongoing regular quarterly dividend by over 160 percent to $0.10 per share. Finally, we remain focused on strategic steps to improve our crude and feedstock flexibility as we expand our rail capability at El Dorado and increase access to WTI-linked crude in our refining system. In early 2013, this will allow us to benefit from our refineries' connectivity to increasing supplies of WTI Midland sourced crude oil that is trading today at more than $6 per barrel below WTI at Cushing. We remain positive about our future and look forward to creating additional value for our shareholders.”
Refining segment contribution margin increased to $189.4 million in the third quarter 2012, versus $164.3 million in third quarter 2011. By utilizing its crude sourcing flexibility, the El Dorado refinery reported a significant improvement in contribution margin to $94.0 million, compared to $64.4 million in the third quarter 2011.
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