These assets and services are projected to generate incremental annual earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately
"This acquisition will complement
Asset and other information to consider:
- The trucking assets are comprised of approximately 150 tractors and 150 trailers, which are primarily leased and owned, respectively. The Assets currently transport crude oil, asphalt and other refined products.
- Prior to the dropdown,
Delek Logisticsowned or leased 123 tractors and 174 trailers
- Prior to the dropdown,
- Minimum Revenue Commitment: Delek US, through a 10-year services agreement, will provide a trucking services agreement to
Delek Logisticson the trucking assets.
In connection with the closing of the transaction, Delek Logistics and various of their subsidiaries entered into various long-term agreements for these assets. The transaction and related agreements were approved by the Conflicts Committee of Delek Logistics’ general partner, which is comprised solely of independent directors. The Conflicts Committee engaged Baird to act as its financial advisor and Gibson Dunn & Crutcher L.L.P. to act as its legal counsel.
|Reconciliation of Forecasted Incremental Annualized Net Income to Forecasted Incremental Annualized EBITDA for the Trucking Assets|
|($ in millions)|
|Forecasted Incremental Annualized Net Income|
|Add Forecasted Incremental Amounts for:|
|Depreciation and amortization|
|Interest expense, net|
|Forecasted Incremental EBITDA||$8.0||$9.0|
The logistics operations consist of
The convenience store retail business operates approximately 252 convenience stores in central and west
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, expenses, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are “forward-looking statements,” as that term is defined under the federal securities laws. Forward looking statements include, but are not limited to, statements regarding forecasted incremental annualized EBITDA, forecasted incremental annualized net income, projected distribution coverage and leverage ratios, and distribution growth. Investors are cautioned that the following important factors, among others, may affect these forward-looking statements: risks and uncertainties with respect to the quantities and costs of crude oil we are able to obtain and the price of the refined petroleum products we ultimately sell, including uncertainties regarding future decisions by
Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. Neither
Our management uses certain "non-GAAP" operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include:
- Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income before net interest expense, income tax expense, depreciation and amortization expense, including amortization of customer contract intangible assets, which is included as a component of net revenues in our accompanying condensed consolidated statements of income.
EBITDA is a non-U.S. GAAP supplemental financial measure that management and external users of our condensed consolidated 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; 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 provides useful information to investors in assessing its financial condition, its results of operations and the cash flow its business is generating. EBITDA should not be considered in isolation or as an alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP.
Non-GAAP measures 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. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because EBITDA may be defined differently by other partnerships in its industry, Delek Logistics' definitions of EBITDA may not be comparable to similarly titled measures of other partnerships, thereby diminishing its utility. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.
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