Delek Logistics Partners LP (DKL) 2023 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Delek Logistics Partners fourth quarter 2023 conference call. At this time, all lines are in a listen-only mode. Following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for operator. This call is being recorded on Tuesday, February 27th, 2024.

早安，女士們、先生們，歡迎參加德勒物流合作夥伴 2023 年第四季電話會議。此時，所有線路都處於只聽模式。演講結束後，我們將進行問答環節。如果在通話過程中的任何時間您需要立即協助，請按接線員的星號零。此電話錄音於 2024 年 2 月 27 日星期二進行。

I will now like turn the conference over to Rosy, like VP of Investor Relations. Please go ahead.

我現在將會議交給投資者關係副總裁羅西 (Rosy)。請繼續。

Good day and welcome to the Delek Logistics Partners fourth-quarter earnings conference call. Participants on today's call will include Avoca direct President, Joseph Israel, EVP Operations, proving Spiegel, EVP and Chief Financial Officer, and DAILIES Takashi SVP, Delek Logistics. As a reminder, this conference call will contain forward-looking statements as defined under the federal securities laws, including without limitation, statements regarding guidance and future business outlook. These statements involve risks and uncertainties that may cause actual results to differ from our forecast. For more information, please refer to the risk factors discussed in the Partnership's most recently filed annual report on Form 10 K and quarterly report on Form 10 Q filed with the SEC. Along with the press release associated with this call. The Partnership assumes no obligation to update any forward-looking statements or information which speak as of their respective day.

美好的一天，歡迎參加德勒物流合作夥伴第四季財報電話會議。今天電話會議的參與者包括 Avoca 直接總裁、營運執行副總裁 Joseph Israel、執行副總裁兼財務長 Proproving Spiegel，以及 Delek Logistics DAILIES Takashi 高級副總裁。提醒一下，本次電話會議將包含聯邦證券法定義的前瞻性聲明，包括但不限於有關指導和未來業務前景的聲明。這些陳述涉及風險和不確定性，可能導致實際結果與我們的預測不同。欲了解更多信息，請參閱合夥企業最近向 SEC 提交的 10 K 表年度報告和 10 Q 表季度報告中討論的風險因素。以及與此通話相關的新聞稿。合夥企業不承擔更新任何前瞻性陳述或資訊的義務。

I'll now turn the call over to Abigail for opening remarks.

現在我將把電話轉給阿比蓋爾致開幕詞。

Thank you, all. Those logistics partners finished 2020 strong. We delivered another record quarter and achieved a record year. Dkl exceeded $100 million in adjusted EBITDA this quarter. We saw a substantial growth form a new connection in our Midland gathering operations validated validating our strong position in the Permian Basin. I'm very proud of our employees who are dedicated to making Delek Logistics succeed. His dedication to safe and reliable operation that makes our results possible. The team has gone without a lost time injury for the years in a row and counting. We are also focused on growing third party revenues, allocating capital in a disciplined manner and exploring natural gas opportunities in the Delaware Basin where we see significant growth. In January, the Board approved the 44th consecutive increase in the quarterly distribution to $1.055per unit. Delek Logistics has shown a strong track record of delivering value to unit holders. We feel confident in our ability to maintain competitive distribution to our investors.

謝謝你們。這些物流合作夥伴 2020 年表現強勁。我們再次創下了季度紀錄，並實現了創紀錄的一年。Dkl 本季調整後 EBITDA 超過 1 億美元。我們看到米德蘭集油業務的新連結實現了大幅成長，驗證了我們在二疊紀盆地的強勢地位。我為我們的員工感到非常自豪，他們致力於使德勒物流成功。他致力於安全可靠的運營，使我們的成果成為可能。球隊已經連續多年沒有失時傷病，而且這種情況還在持續。我們也專注於增加第三方收入，以嚴格的方式分配資本，並探索特拉華盆地的天然氣機會，我們看到特拉華盆地的天然氣成長顯著。一月份，董事會批准連續 44 次將季度分配增加至每單位 1.055 美元。Delek Logistics 在為單位持有人提供價值方面擁有良好的記錄。我們對維持對投資者的競爭性分配的能力充滿信心。

I will now hand it over to David.

現在我將把它交給大衛。

Thank you, Abigail. Fourth quarter of 2023 adjusted EBITDA was $100.9 million compared with $92.5 million in the same period of 2022. The fourth quarter, EBITDA was $86.1 million, which included a $14.8 million goodwill impairment related to some of our Delaware gathering and processing assets. The impairment was primarily driven by a significant increase in interest rates. Our long-term outlook of the Delaware gathering system remains unchanged. Distributable cash flow was $65 million and the DCF coverage ratio was 1.4.

謝謝你，阿比蓋爾。2023 年第四季調整後 EBITDA 為 1.009 億美元，而 2022 年同期為 9,250 萬美元。第四季 EBITDA 為 8,610 萬美元，其中包括與我們特拉華州的一些收集和加工資產相關的 1,480 萬美元商譽減損。減損主要是由於利率大幅上升所致。我們對特拉華州收集系統的長期前景保持不變。可分配現金流量為 6,500 萬美元，折現現金流量覆蓋率為 1.4。

For the gathering and processing segment. Adjusted EBITDA for the quarter was $53.3 million compared with $48.1 million in the fourth quarter of 22. The increase was primarily due to higher throughput from Delek Logistics, Permian Basin assets, Wholesale Marketing and Terminalling. Adjusted EBITDA in the fourth quarter 2023 was $28.4 million compared with $23.3 million in prior year. The increase was primarily from higher terminalling utilization, storage and transportation.

用於收集和處理部分。該季度調整後 EBITDA 為 5,330 萬美元，而 22 年第四季為 4,810 萬美元。這一成長主要是由於德勒物流、二疊紀盆地資產、批發行銷和碼頭吞吐量的增加。2023 年第四季調整後 EBITDA 為 2,840 萬美元，去年同期為 2,330 萬美元。這一增長主要是由於碼頭利用率、儲存和運輸的提高。

Adjusted EBITDA in the quarter was $17.5 million compared to $16.1 million in the fourth quarter of 22. The increase was mainly driven by higher storage and transportation rates. And lastly, the investment in pipeline joint venture segment contributed $8.5 million this quarter compared with $9 million in the fourth quarter of 22.

本季調整後 EBITDA 為 1,750 萬美元，而 22 日第四季為 1,610 萬美元。這一增長主要是由於倉儲和運輸費率上升所致。最後，本季管道合資企業部門的投資貢獻了 850 萬美元，而 22 年第四季為 900 萬美元。

Moving on to capital expenditures, the capital program for '23 was $74 million. This includes $7 million of proceeds from producers to partially fund growth projects. Most of the spend throughout the year was for growth projects, namely advancing new connections in the Midland and Delaware gathering systems for 2020 for Delek logistics partner expects the capital program to be about $70 million. This includes approximately $20 million of sustaining and regulatory capital and $50 million of growth capital. We will continue to advance new connection in our gathering system for the volume growth at the partnership.

說到資本支出，23 年的資本計畫為 7,400 萬美元。其中包括生產商提供的 700 萬美元收益，用於部分資助成長項目。全年大部分支出用於成長項目，即 2020 年推進米德蘭和特拉華州收集系統的新連接，Delek 物流合作夥伴預計資本計劃約為 7000 萬美元。這包括約 2000 萬美元的維持和監管資本以及 5000 萬美元的成長資本。我們將繼續在我們的收集系統中推進新的連接，以實現合作夥伴關係的數量成長。

With that, we can open the call for questions.

這樣，我們就可以開始提問了。

(Operator Instructions) Doug Irwin, Citi.

（操作員指示）Doug Irwin，花旗銀行。

Thanks for the question. I just want to start with the Delaware gathering and processing assets, understanding though the long-term outlook is still on tax, can you maybe just talk about how the three bear assets are trending today? Just first, the initial expectations when you acquired them. I think the initial target for these assets from their acquired was $100 million of annual EBITDA is that's still a good number to work with here near term.

謝謝你的提問。我只想從特拉華州的收集和加工資產開始，儘管長期前景仍然取決於稅收，但您能否談談這三種熊市資產今天的趨勢如何？首先，是您獲得它們時的最初期望。我認為收購這些資產的最初目標是每年 EBITDA 1 億美元，短期內這仍然是一個不錯的數字。

Hey, Doug, it's a big guns morning. Thank you for joining and joining our call. Generally speaking here, I the three bills now the DDG. is meeting our expectation and we are also being over there in that area, give us insight for more opportunities we see in the in the region. And as you probably picked up on my prepared remark, there is the additional opportunity mainly on the natural gas. So that was a very good position to get into and we are happy on that.

嘿，道格，這是一個大槍的早晨。感謝您加入並加入我們的電話會議。總的來說，我現在的三項法案是副總幹事。正在滿足我們的期望，我們也在該地區，讓我們深入了解我們在該地區看到的更多機會。正如您可能注意到我準備好的言論一樣，還有主要與天然氣有關的額外機會。所以這是一個非常好的位置，我們對此感到高興。

Okay. Yes, thanks. And then just a second question, just on the broader 24 outlook. And you gave last quarter, you talked about exiting 23 at $100 million quarterly EBITDA run rate, which you achieved this quarter. Are there any similar targets you can point to moving forward, whether that's on EBITDA volume growth or some other metric? Just to kind of help frame the growth outlook for 24?

好的。對了謝謝。接下來是第二個問題，關於 24 小時更廣的前景。您在上個季度提到，您談到以 1 億美元的季度 EBITDA 運行率退出 23 家公司，這是您本季實現的。您是否有任何類似的目標可以指出，無論是 EBITDA 數量增長還是其他指標？只是為了幫助建立 24 小時的成長前景嗎？

Yes. So we are focusing to have there could be some improvement, and we are committed to keep improving our business in some way. We are very optimistic about what we see in the business on the opportunity. We have seen a nice significant CapEx plan into the business that will enhance additional sale opportunities, but we are very optimistic and we see consistent consistent and constant improvement in the business. So that said, that's going to be a once we can provide a distant second Got it.

是的。因此，我們專注於可能會有一些改進，並且我們致力於以某種方式不斷改進我們的業務。我們對在業務中看到的機會非常樂觀。我們已經看到了一項非常重要的業務資本支出計劃，這將增加額外的銷售機會，但我們非常樂觀，我們看到業務持續不斷的改善。也就是說，這將是我們能夠提供遙遠的第二次的一次，明白了。

(Operator Instructions) There are no further questions at this time, I will turn -- We do have one more question. Paul Langlois, Lord Abbett.

（操作員說明） 目前沒有其他問題，我將轉向 -- 我們還有一個問題。保羅·朗格魯瓦，阿貝特勳爵。

Yes, hi. I was curious, it looked like the Midland volumes were down a little bit sequentially and some of the gas and the water and the Delaware volumes were down a little bit sequentially. Forgive me if I missed that. What was why is that? And should we expect that trend to continue?

是的，嗨。我很好奇，看起來米德蘭的產量連續下降了一點，一些天然氣和水以及特拉華州的產量連續下降了一點。如果我錯過了，請原諒我。這是為什麼呢？我們是否應該預期這種趨勢會持續下去？

Yeah. So thank you very much for joining us today. Countering the downward volume are pretty much in line quarter-over-quarter. What we see in the Permian Basin is a touch lower and you can expect that after producer adding a new production, you probably know this as good as anyone that the new production, the beginning a goes a way to a very high and then stabilize over time. So that's what we see as you probably picked up. We have a significant capital budget. It will enhance additional volume and connection in the AMDPG., the Midland area. And we will see volume picked up along the way. Again, if you want to add anything to that.

是的。非常感謝您今天加入我們。與季度相比，成交量下降的情況基本一致。我們在二疊紀盆地看到的是一個較低的水平，您可以預期，在生產商添加新產量後，您可能和任何人一樣知道新產量，開始時會達到非常高的水平，然後穩定下來時間。這就是我們所看到的，您可能已經了解到了。我們有大量的資本預算。它將增強米德蘭地區 AMDPG 的額外交通量和連接。我們將看到成交量一路上升。再說一遍，如果你想添加任何內容。

Hi, Paul, and good morning. I'll just give a little bit more coloring familiar on our side, as I think I mentioned in Q4, we expedite expedite some of our our maintenance work that we plan to do in Q1 and decided to do it in Q4 that actually help us to continue improving volumes. And this is why you see, yes, slightly lower compared to Q2 between Q4 and Q3 of this year. But if you look both at ZPG. and also in DDG in both sides. I mean, if you compare year over year, we obviously continue to improve our associate performance.

嗨，保羅，早安。我只會提供更多我們這邊熟悉的顏色，正如我在第四季度提到的那樣，我們加快了計劃在第一季度進行的一些維護工作，並決定在第四季度進行，這實際上對我們有幫助繼續提高銷量。這就是為什麼你會看到，是的，今年第四季和第三季相比第二季略有下降。但如果你看看 ZPG。以及雙方的D​​DG。我的意思是，如果逐年比較，我們顯然會繼續提高員工的績效。

So for Q4, primarily we had that work that was done that we expedited was plan working on the most even the plan that is looking right now, Q1 numbers already are improving comparable to Q3 and also Q4, oh, and that improvement is for both Midland and Delaware, primarily in the Delaware and Midland. As I think I mentioned, we do see the natural decline in business compared to the peak we've seen or compared to the volumes in Q3.

因此，對於第四季度，我們加快完成的工作主要是製定最甚至目前正在考慮的計劃，第一季度的數字已經比第三季度和第四季度有所改善，哦，這種改善是針對兩者的米德蘭和特拉華州，主要分佈在德拉瓦州和米德蘭州。正如我所提到的，與我們看到的峰值或與第三季度的交易量相比，我們確實看到業務自然下降。

With that said, we do have a capital program, as I think I mentioned also Louis mentioned in his remark of $50 million on connection. So we should start to see an increase from in the second half of the year as we implement this project.

話雖如此，我們確實有一個資本計劃，我想我也提到了路易斯在他關於 5000 萬美元連接的評論中提到的。因此，隨著我們實施這個項目，我們應該會從下半年開始看到成長。

Okay, great. And then yes, I noticed corporate expenses were down a little bit sequentially. Could you talk about that a little bit?

好的，太好了。然後，是的，我注意到公司開支連續下降了一點。你能談談這個嗎？

Yes, I would say it's a little bit. It's an what we are doing it because the companies to streamline expenses where the big initiative in the Company to reduce expenses recorded a zero-based budget with a target of $100 million, some of that went all the way to DKL. So you see to our partnerships, so you'll see the fruits of that. And so we didn't put it on the billboard here, but we were able to enjoy it.

是的，我會說有一點。這是我們正在做的事情，因為公司為了精簡開支，公司削減開支的重大舉措記錄了零基預算，目標是 1 億美元，其中一些一直到 DKL。因此，您關注我們的合作夥伴關係，這樣您就會看到其成果。所以我們沒有把它放在這裡的廣告看板上，但我們能夠欣賞它。

Okay, great. So we should expect that the rate expenses to kind of stabilize or maybe even continue to improve going forward?

好的，太好了。因此，我們應該預期利率支出會趨於穩定，甚至可能繼續改善？

I don't think we're giving guidance, but there's no reason as we go back.

我不認為我們正在提供指導，但我們沒有理由回去。

Okay. And then you have a few debt maturities coming up in 25. Any thoughts on those at this point in time

好的。還有一些債務將在 25 年後到期。此時此刻對這些的任何想法

Yes, absolutely. Maybe Reuven will see probably answer.

是的，一點沒錯。也許魯文會看到可能的答案。

Yeah, we are actively examining various instruments. So we will probably be in the market in the next few months to refinance some of the debt, especially the one that is coming current between the Term Loan A. and the [250 million]. So some form of refinancing will happen this year.

是的，我們正在積極檢查各種儀器。因此，我們可能會在接下來的幾個月內進入市場，為部分債務進行再融資，尤其是定期貸款 A 和[2.5億]。因此，今年將會發生某種形式的再融資。

Okay, great. And then my last question, you probably won't be able to say too much on it. But you know, as you look at the sum of the parts and the strategic gains. Are there ways I have what is your thoughts on leverage here at DKL? And are there ways that that could be improved as part of that? Anything you can kind of say on that subject.

好的，太好了。然後我的最後一個問題，你可能無法說太多。但你知道，當你看看各個部分的總和和策略效益。我可以透過什麼方式了解您對 DKL 槓桿作用的看法嗎？作為其中的一部分，是否有可以改進的方法？關於這個話題你可以說任何話。

So you can probably see the trend that we have seen with the leverage ratio was improving quarter-over-quarter. We will continue this trend. That's our plan and obviously, there are more ideas on the table, but once we get into a more a higher level of resolution will communicate with the market. But as I think that if you connect the dots that you have seen in the last year or so, you can be very pleased with the improvement in liberalization doing that consistently called out of the of the gold.

因此，您可能會看到我們所看到的槓桿率逐季改善的趨勢。我們將繼續這一趨勢。這就是我們的計劃，顯然，還有更多的想法可供討論，但一旦我們達成更高水準的決議，我們將與市場進行溝通。但我認為，如果你把過去一年左右所看到的點連起來，你會對自由化的改善感到非常高興，這一直是黃金所呼籲的。

Great. And you think we should we think of your goal is four times or any thoughts on that?

偉大的。你認為我們應該考慮你的目標是四倍還是對此有何想法？

Yeah. We started we have that we have of the market because we want to be below fall and there we're eventually going to get them.

是的。我們一開始就擁有市場，因為我們希望價格低於下跌，最終我們會得到它們。

There are no further questions at this time, I will turn the call back over to Avigal from for closing remarks.

目前沒有其他問題，我會將電話轉回 Avigal 進行結束語。

Yes, thank you. I would like to thank my colleagues around the table to both direct to investor and mostly to our employees that they are making. This is a great company. It is and we'll talk again next quarter. Thank you so much, sir.

是的，謝謝。我要感謝我在座的同事們，感謝他們直接向投資者以及主要是他們所培養的我們的員工。這是一家很棒的公司。是的，我們將在下個季度再次討論。非常感謝您，先生。

Ladies and gentlemen, this concludes your conference call for today. Thank you for joining, and you may now disconnect your lines. Thank you.

女士們、先生們，今天的電話會議到此結束。感謝您的加入，您現在可以斷開線路了。謝謝。