Delek Logistics financed the purchase price of $94.8 million for these assets through a combination of cash on-hand and new borrowings on its revolving credit facility.In connection with the closing of the transaction, Delek US and Delek Logistics entered into, among other agreements, a throughput and tankage agreement for the terminal assets, storage tanks and related assets. This agreement includes minimum throughput commitments, an annual storage fee, annual inflation based price escalations and an eight year initial contract term.
|Delek Logistics Partners, LP Reconciliation of Forecasted EBITDA to Amounts under US GAAP (unaudited, in millions)|
|Reconciliation of Forecasted EBITDA to Forecasted Net Income:||Tyler Storage and Product Terminal|
|Add: Depreciation and amortization expenses||1.3|
|Add: Interest and financing costs, net||1.5|
|Forecasted EBITDA (a)||$10.5|
EBITDA is a non-U.S. GAAP supplemental financial measure that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess, among other things:
- Delek Logistics’ operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
- the ability of Delek Logistics’ assets to generate sufficient cash flow to make distributions to our 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.
Safe Harbor Provisions Regarding Forward-Looking StatementsThis 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 commercial arrangements with Delek US, thereby subjecting Delek Logistics to Delek US’s business risks, in addition to risks relating to the securities markets generally, 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 the annual reports on Form 10-K, quarterly reports on Form 10-Q and other reports and filings with the United States Securities and Exchange Commission for both Delek US and Delek Logistics. 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 or Delek US. Neither Delek Logistics nor Delek US undertake any obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or of which Delek Logistics or Delek US become aware, after the date hereof.