These assets and services are projected to generate incremental annual earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately
"This adds the next step in growth for Delek Logistics,” said
Asset and other information to consider:
- The Big Spring Gathering System is an approximately 200-mile crude oil gathering system with approximately 350,000 barrels per day throughput capacity located in
Howard, Bordenand MartinCounties, Texasand connecting to the Delek US terminal located near Big Spring, Texasand to a third party pipeline system.
- Minimum Volume Commitments: 120,000 barrels per day for the Big Spring Gathering System in addition to 50,000 barrels per day connection to a third party pipeline system.
- Limited IDR Waiver:
Delek USwill waive the incentive distribution rights (“IDRs”) associated with the equity consideration. This IDR waiver will automatically and permanently expire following the payment of distributions in respect of any period of four consecutive quarters ending on or after March 31, 2022, in which Delek Logisticshas generated distributable cash flow resulting in total distribution coverage (on a pro forma basis without giving effect to the IDR wavier) of at least 1.1x over such period. In addition, in any sale or exchange of the IDRs to or with Delek Logistics(for example, an IDR simplification), the valuation of the IDRs in such transaction shall treat the IDR waiver as though it remained in effect in perpetuity even after the expiration.
- Future Capital Expenditures:
Delek Logisticsagrees to make up to $33.8 millionof additional capital expenditures, if requested by Delek US. In connection with any such request by Delek US, upon completion of any such capital project, the minimum volume commitments in the Throughput and Deficiency Agreement (the “T&D Agreement”) will be increased in order to provide Delek Logisticsa 12.5% return on the associated capital expenditures.
In connection with the closing of the transaction, Delek US, Delek Logistics and various of their subsidiaries entered into various long-term agreements for these assets. The transaction and related agreements were approved by the Conflicts Committee of Delek Logistics’ general partner, which is comprised solely of independent directors. The Conflicts Committee engaged Baird to act as its financial advisor and Gibson Dunn & Crutcher L.L.P. to act as its legal counsel.
|Reconciliation of Forecasted Incremental Annualized Net Income to Forecasted
Incremental Annualized EBITDA for the Big Spring Gathering System
|($ in millions)|
|Forecasted Incremental Annualized Net Income|
|Add Forecasted Incremental Amounts for:|
|Depreciation and amortization|
|Interest expense, net|
|Forecasted Incremental EBITDA||$30.0||$32.0|
The logistics operations consist of
The convenience store retail business operates approximately 258 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. Projected distributable cash flow, forecasted annualized EBITDA, forecasted annualized net income and other statements concerning current estimates, expectations and projections about future results, performance, 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. 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; risks related to exposure to
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
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Source: Delek US Holdings, Inc
Source: Delek Logistics Partners, L.P.