Group 1 - The company, Henriot Capital, emphasizes a quant-driven investment approach that prioritizes simplicity and common sense for success [1] - The investment strategy is characterized by a motto of "invest first, investigate later," indicating a reliance on model recommendations without human bias [1] - The firm aims to build a hedge fund with a clear purpose and disciplined focus, seeking consistent alpha through data-driven decisions [1]

Core Insights - Tomas Riba is an economist and former CFO focused on investing in high-quality companies that can compound cash flow over the long term [1] - His investment strategy emphasizes companies with strong competitive advantages, operating in growing industries, expanding margins, low debt, and aligned management [1] Background and Experience - Tomas Riba began his journey in financial markets at a young age and has been investing since 2007 [1] - He has a background in accounting and has served as CFO for a holding company involved in various sectors including pharma, medical devices, textiles, food, and real estate [1] - Currently, he teaches courses on "Derivatives for risk management" and "Investment analysis" at a Master's Degree program in Financial Management [1]

One stock that might be an intriguing choice for investors right now is Delek Logistics Partners, LP (DKL) . This is because this security in the Oil and Gas - Production Pipeline - MLB space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective. This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arg ...

For those looking to find strong Oils-Energy stocks, it is prudent to search for companies in the group that are outperforming their peers. Delek Logistics Partners, L.P. (DKL) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Oils-Energy peers, we might be able to answer that question.Delek Logistics Partners, L.P. is a member of our Oils-Ener ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35721 DELEK LOGISTICS PARTNERS, LP (Exact name of registrant as specified in its charter) Delaware 45-5379027 (State or other jurisdi ...

Financial Data and Key Metrics Changes - In Q4 2024, the company reported a net loss of $414 million, equating to a negative $6.55 per share, with an adjusted net loss of $161 million or negative $2.54 per share [30] - Adjusted EBITDA for the quarter was a loss of $23 million, primarily due to a decrease in refining contributions, which fell by $80 million compared to Q3 2024 [31][32] - Cash flow from operations was a use of $164 million, influenced by a net loss and a $71 million outflow related to working capital movements [33] Business Line Data and Key Metrics Changes - The logistics segment delivered $107 million in adjusted EBITDA, continuing its strong performance despite challenges in the refining segment [32] - Total throughput in Tyler for Q4 was approximately 66,000 barrels per day, with a production margin of $6.66 per barrel [19] - In El Dorado, total throughput was approximately 77,000 barrels per day, with a production margin of $0.56 per barrel [20] Market Data and Key Metrics Changes - The refining margin environment was reported to be around $6 below mid-cycle in Q4 2024, indicating a challenging market [3] - The company noted that supply and marketing contributed a loss of $34.6 million in Q4, driven by seasonal low demand trends [27] Company Strategy and Development Direction - The company is focused on improving operational performance and profitability through initiatives like the zero-based budget program, which saved around $100 million [12] - A significant part of the strategy includes the economic separation from Delek Logistics, with plans to deconsolidate and enhance shareholder value [11][49] - The company is also pursuing growth in the Permian Basin and expanding its midstream capabilities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the successful turnaround at KSR and improved reliability at Big Spring [5][6] - The company anticipates no major turnarounds in 2025, expecting continued operational improvements [6] - Management is optimistic about the potential for regulatory relief regarding small refinery exemptions following a recent court ruling [15][16] Other Important Information - The company completed a major asset sale for $1.49 billion, which has allowed it to progress in a tough refining environment [7] - The company is committed to a disciplined approach to capital allocation, having paid $16 million in dividends and repurchased $22 million of its shares during the quarter [14] Q&A Session Summary Question: What more can be done to make El Dorado a competitive asset? - Management highlighted that El Dorado is a focus area, with efforts to improve product mix and process efficiency, aiming for better performance [42][44] Question: Is the strategy to look for smaller deals while growing DKL EBITDA? - Management confirmed that deconsolidation is ongoing, with a focus on growing third-party EBITDA and enhancing value for both DK and DKL [46][49] Question: Can you explain the supply and marketing dynamics in Q4? - Management noted that seasonal demand weakness impacted performance, but there was an improvement compared to the previous quarter [60][62] Question: What factors are influencing the OpEx guidance for Q1? - Management identified several factors, including the acquisition of Gravity Water Midstream and planned maintenance, affecting the OpEx guidance [72][74] Question: What is the timeline for the DKL unit repurchase program? - Management indicated that the buyback program is set until 2026, aimed at benefiting both companies and enhancing free cash flow [95][96]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported a net loss of $414 million, equating to a negative $6.55 per share, with an adjusted net loss of $161 million or negative $2.54 per share [30] - Adjusted EBITDA for the quarter was a loss of $23 million, primarily due to an $80 million decrease in refining contributions attributed to a lower margin environment [31][32] - Cash flow from operations was a use of $164 million, influenced by a net loss and a $71 million outflow related to working capital movements [33] Business Line Data and Key Metrics Changes - The logistics segment delivered $107 million in adjusted EBITDA, continuing to perform strongly despite challenges in the refining segment [32] - Total throughput in Tyler for Q4 was approximately 66,000 barrels per day, with a production margin of $6.66 per barrel [19] - In El Dorado, total throughput was approximately 77,000 barrels per day, with a production margin of $0.56 per barrel [20] Market Data and Key Metrics Changes - The refining margin environment was reported to be around $6 below mid-cycle in Q4 2024, indicating a challenging market [3] - Supply and marketing contributed a loss of $34.6 million in Q4, driven by seasonal low demand trends [27] - Diesel prices weakened by 14 cents per gallon year-on-year, impacting overall market conditions [62] Company Strategy and Development Direction - The company is focused on improving operational performance and profitability through initiatives like zero-based budgeting, which saved around $100 million [12] - The sum of the parts strategy is being emphasized, with significant progress made in unlocking asset value and enhancing the independence of Delek Logistics [7][11] - The company aims to maintain a disciplined approach to capital allocation while being shareholder-friendly, including share buybacks and dividends [14][96] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for 2025, highlighting improvements in operational performance and cash generation capabilities [17] - The company is confident in completing the deconsolidation of DKL in a methodical manner, which is expected to create value for both shareholders and unit holders [11][49] - Management acknowledged the challenges posed by the refining margin environment but remains committed to enhancing cash flow and operational efficiency [12][86] Other Important Information - The company completed a major turnaround at KSR in Q4, leading to improved operational performance [5] - A significant asset swap between DK and DKL was executed, expected to enhance profitability and cash flow certainty [8] - The company is progressing with capacity expansion in the LiviGas processing complex, expected to be completed in the first half of 2025 [10] Q&A Session Summary Question: Focus on El Dorado's competitiveness - Management highlighted El Dorado as a key focus area, with efforts to improve product mix and operational efficiency [42][44] Question: DKL's growth strategy amidst divestitures - Management clarified that the strategy involves growing DKL's EBITDA while reducing ownership, emphasizing the importance of deconsolidation [46][48] Question: Supply and marketing dynamics in Q4 - Management noted that seasonal demand weakness impacted performance, but there was an improvement compared to the previous quarter [60][62] Question: OpEx guidance for Q1 - Management explained that the increase in OpEx guidance is due to several factors, including higher throughput and planned maintenance [70][74] Question: DKL EBITDA guidance details - Management provided insights into the moving pieces contributing to the DKL EBITDA guidance, emphasizing the growth story and economic separation [75][78] Question: DKL unit repurchase program - Management discussed the timeline for deploying buyback cash and its benefits for both companies, highlighting a balanced capital allocation approach [94][96]

Financial Data and Key Metrics Changes - The company reported approximately $107 million in quarterly adjusted EBITDA for Q4 2024, an increase from $100.9 million in the same period of 2023, representing a growth of about 1.1% [4][11] - Distributable cash flow (DCF) as adjusted was $69.5 million, with a DCF coverage ratio of approximately 1.2 times, expected to return to a long-term objective of 1.3 times in the second half of 2025 [11] - The company initiated a strong 2025 EBITDA guidance of $480 million to $520 million, indicating around 20% growth over 2024 adjusted EBITDA [8] Business Line Data and Key Metrics Changes - Gathering and Processing segment adjusted EBITDA for Q4 was $66 million, up from $53.3 million in Q4 2023, primarily due to higher throughput from Permian Basin assets and contributions from H2O Midstream [11][12] - Wholesale marketing and tourmaline adjusted EBITDA decreased to $21.2 million from $28.4 million in the prior year, attributed to lower wholesale margins and intercompany transaction impacts [12] - Storage and transportation adjusted EBITDA increased slightly to $17.8 million from $17.5 million in Q4 2023, driven by higher storage and transportation rates [12] - Investments in Pipeline Joint Ventures contributed $11.3 million this quarter, compared to $8.5 million in Q4 2023, mainly due to contributions from the Wink to Webster drop down [13] Market Data and Key Metrics Changes - The company is focusing on becoming a premier full-service provider in the Pearland Basin and has made significant acquisitions in the Midland Basin, enhancing its competitive position [4][6] - The expansion of the processing plant in the Delaware Basin is on track to complete on time and on budget in the first half of 2025, indicating strong market demand [6][7] Company Strategy and Development Direction - The company aims to enhance its economic separation from its sponsor, DK, and has authorized a $150 million buyback program to increase value for DKL unitholders [8][9] - The company is committed to prudent management of leverage and coverage while pursuing organic growth projects [10][11] - The strategic focus includes expanding offerings in crude, natural gas, and water services, which has proven beneficial in the Delaware Basin [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the guidance provided, highlighting the importance of economic separation from DK to fulfill DKL's potential [18][21] - The management noted strong demand for assets in the Delaware area and emphasized the comprehensive offering of services as a competitive advantage [32][33] Other Important Information - The capital program for Q4 was $49.4 million, with $42.1 million allocated to the new gas processing plant and the remainder for growth projects [13][14] - The company expects to spend approximately $75 million on completing the Libby processing plant expansion and $160 million on growth and maintenance projects in 2025 [14] Q&A Session Summary Question: Inquiry about EBITDA guidance and factors influencing high and low ends - Management acknowledged the conservative nature of the guidance and emphasized the company's growth trajectory and economic separation efforts [17][18] Question: Follow-up on the buyback program execution and funding - Management indicated that the buyback program is a two-year initiative, with funding potentially coming from free cash flow or debt, depending on market conditions [20][23] Question: Request for additional drivers behind EBITDA upside potential - Management highlighted several completed transactions and synergies from recent acquisitions as key drivers for the expected EBITDA growth [29][30] Question: Inquiry about demand and utilization of key assets - Management confirmed strong demand in the Delaware area and the strategic decision to expand assets based on this demand [32][33]

Financial Performance - Delek Logistics reported fourth quarter 2024 net income of $35.3 million, an increase from $22.1 million in the fourth quarter 2023, with net income per diluted common limited partner unit rising to $0.68 from $0.51[4]. - Adjusted EBITDA for the fourth quarter 2024 was $107.2 million, reflecting a 6% year-over-year increase from $100.9 million in the fourth quarter 2023[5][10]. - Total net revenues for Q4 2024 were $209.9 million, a decrease of 17.4% compared to $254.1 million in Q4 2023[24]. - Net income for Q4 2024 was $35.3 million, up 59.4% from $22.1 million in Q4 2023[24]. - Adjusted EBITDA for Q4 2024 was $107.2 million, an increase of 6.4% from $100.9 million in Q4 2023[27]. - Total revenue for the year ended December 31, 2024, reached $940,636,000, a decrease of 7.8% compared to $1,020,409,000 in 2023[31]. - Adjusted EBITDA for the year ended December 31, 2024, was $417,964,000, down from $385,128,000 in 2023, reflecting an 8.5% increase[31]. - Net income for Q4 2024 was $35,305,000, compared to $22,148,000 in Q4 2023, marking a 59.2% increase[30]. Cash Flow and Distributions - The company reported a net cash provided by operating activities of $49.9 million for Q4 2024, down from $114.7 million in Q4 2023[25]. - Distributions to partners increased to $59,303,000 for Q4 2024, up from $46,010,000 in Q4 2023, representing a 28.8% increase[28]. - Distributable cash flow for Q4 2024 was $66,721,000, slightly up from $64,569,000 in Q4 2023, indicating a 3.3% growth[28]. - The distributable cash flow coverage ratio for Q4 2024 was 1.13x, down from 1.40x in Q4 2023[28]. Debt and Capital Expenditures - Total debt as of December 31, 2024, was approximately $1.88 billion, with a leverage ratio of approximately 4.06x[7]. - Long-term debt increased to $1.88 billion in Q4 2024, compared to $1.67 billion in Q4 2023, marking a rise of 12.5%[23]. - Capital spending for the year ended December 31, 2024, totaled $139,986,000, up from $81,342,000 in 2023, indicating a 71.9% increase[31]. - Total capital spending for 2024 is projected to be $139.986 million, which includes $95.5 million for a new gas processing plant[33]. - Growth capital spending in the Gathering and Processing segment increased significantly to $127.328 million in 2024 from $72.636 million in 2023, representing a 75% increase[33]. - Total segment capital spending for the Gathering and Processing segment was $128.927 million in 2024, up from $74.683 million in 2023, reflecting a 72.5% increase[33]. - The total regulatory capital spending for 2024 is $1.946 million, down from $2.960 million in 2023, a decrease of about 34%[33]. Operational Performance - Adjusted EBITDA in the Gathering and Processing Segment for the fourth quarter 2024 was $66.0 million, up from $53.3 million in the fourth quarter 2023, driven by higher throughput from Permian Basin assets[11]. - The Wholesale Marketing and Terminalling Segment reported Adjusted EBITDA of $21.2 million for the fourth quarter 2024, down from $28.4 million in the fourth quarter 2023 due to declining wholesale margins[12]. - Average throughput for crude pipelines (non-gathered) decreased to 64,920 bpd in 2024 from 73,438 bpd in 2023, a decline of approximately 11%[34]. - Average throughput for refined products pipelines to Enterprise Systems decreased to 57,513 bpd in 2024 from 68,552 bpd in 2023, a decline of about 16%[34]. - Average water disposal and recycling throughput in the Midland Water Gathering System was 274,361 bpd in 2024, compared to no recorded throughput in 2023[34]. - The average gross margin per barrel for West Texas marketing decreased to $4.35 in 2024 from $4.73 in 2023, a decline of approximately 8%[34]. - The El Dorado Gathering System's average throughput increased to 13,883 bpd in 2024 from 13,329 bpd in 2023, an increase of about 4%[34]. - The average crude oil gathering throughput in the Delaware Gathering Assets increased to 123,346 bpd in 2024 from 112,522 bpd in 2023, a rise of approximately 10%[34]. Strategic Acquisitions - The acquisition of Gravity Water Midstream in January 2025 is expected to increase third-party cash flow contribution to approximately 70%[3]. - The company completed the acquisition of Delek US' interest in the Wink to Webster pipeline and closed the acquisition of H2O Midstream in 2024, enhancing its operational capabilities[9].

Financial Performance - The Partnership's net income increased by $3.3 million for the nine months ended September 30, 2024, compared to the prior year[108]. - EBITDA decreased by $11.1 million in 2024 compared to 2023, primarily due to a change in classification of certain commercial agreements with Delek[108]. - Net revenues for Q3 2024 were $214.07 million, a decrease of 22.4% compared to $275.82 million in Q3 2023[142]. - EBITDA for Q3 2024 was $69.18 million, down 29.6% from $98.24 million in Q3 2023[142]. - Net income attributable to partners for Q3 2024 was $33.67 million, a slight decrease of 0.4% from $34.83 million in Q3 2023[142]. - Distributable cash flow for Q3 2024 was $53.28 million, compared to $61.40 million in Q3 2023, reflecting a decrease of 13.5%[139]. - Operating income for Q3 2024 was $31.81 million, a decline of 49% compared to $62.55 million in Q3 2023[142]. - Interest expense for Q3 2024 was $37.02 million, slightly up from $36.90 million in Q3 2023[142]. - Net revenues decreased by $61.8 million, or 22.4%, in Q3 2024 compared to Q3 2023, primarily due to decreased revenue in West Texas marketing operations and lower RINs revenue[144]. - Year-to-date (YTD) net revenues decreased by $35.5 million, or 4.6%, in the nine months ended September 30, 2024, driven by lower average sales prices and RINs revenue, despite increased volumes sold[144]. Segment Performance - The gathering and processing segment experienced a $6.2 million decrease in segment EBITDA, while the wholesale marketing and terminalling segment saw a $2.3 million increase[108]. - The Gathering and Processing segment reported revenues of $81.53 million in Q3 2024, down 14% from $94.83 million in Q3 2023[142]. - The Wholesale Marketing and Terminalling segment generated $106.94 million in Q3 2024, a decrease of 27.2% from $147.11 million in Q3 2023[142]. - The Storage and Transportation segment's revenues fell to $25.61 million in Q3 2024, down 24.4% from $33.89 million in Q3 2023[142]. - The gathering and processing segment's net revenues decreased by $13.3 million, or 14.0%, in Q3 2024, primarily due to changes in revenue recognition[162]. - Net revenues for the wholesale marketing and terminalling segment decreased by $40.2 million, or 27.3%, in Q3 2024 compared to Q3 2023, driven by decreased revenue in West Texas marketing operations[170]. - Net revenues for the storage and transportation segment decreased by $8.3 million, or 24.4%, in Q3 2024 compared to Q3 2023[181]. Acquisitions and Investments - The H2O Midstream Acquisition was completed on September 11, 2024, for a total consideration of $229.5 million, consisting of $159.5 million in cash and $70.0 million in preferred equity[109]. - The Wink to Webster Pipeline Investment was acquired for $83.9 million in cash and the forgiveness of a $60.0 million receivable from Delek Holdings[110]. - The Partnership's investments in pipeline joint ventures increased segment EBITDA by $9.1 million following the acquisition of the W2W Investment[108]. - The Partnership made a final investment decision to build a new natural gas processing plant with a capacity of approximately 110 MMcf/d, projected to generate an EBITDA of around $40 million[111]. Financial Position and Liquidity - Total liquidity as of September 30, 2024, amounted to $702.4 million, consisting of $695.1 million in unused credit commitments and $7.3 million in cash[190]. - The DKL Revolving Credit Facility was increased by $100 million, resulting in total commitments of $1,150 million, with a maturity date of October 13, 2027[113]. - Total indebtedness as of September 30, 2024, was $1,904.9 million, reflecting an increase of $193.2 million from December 31, 2023, due to the issuance of 2029 Notes[201]. - The company expects future funding sources to be sustainable and profitable, although market conditions and crude oil prices may affect cash flows and liquidity[190]. Strategic Initiatives - The Partnership aims to position itself as a premier midstream provider in the Permian Basin through strategic initiatives and environmental stewardship[108]. - The 2024 strategic focus areas include generating stable cash flow, pursuing acquisitions, and expanding ESG consciousness to lower the carbon footprint[124]. - The Partnership's long-term strategic objectives focus on maintaining stable cash flows and growing quarterly distributions through acquisitions and project development[123]. Market Conditions and Economic Factors - Concerns about inflation and economic downturns have softened forward demand expectations for hydrocarbons, but liquid transportation fuels are expected to remain in high demand[108]. - Tariffs on certain FERC regulated pipelines increased by approximately 1.3% on July 1, 2024, while fees adjusted using the consumer price index rose by 3.3% and those using the producer price index increased by approximately 0.8%[112]. Cash Flow and Expenses - Net cash provided by operating activities increased by $45.8 million to $156.4 million for the nine months ended September 30, 2024, compared to $110.6 million in 2023[195][196]. - Net cash used in investing activities increased by $258.9 million, primarily due to acquisitions totaling $243.4 million and increased capital expenditures[197]. - Total capital spending for the nine months ended September 30, 2024, was $69.8 million, with $37.2 million spent in the current period[205]. - Operating expenses decreased by $5.1 million, or 15.4%, in Q3 2024 compared to Q3 2023, while YTD operating expenses increased by $2.8 million, or 3.2%[147]. - General and administrative expenses increased by $10.2 million, or 183.9%, in Q3 2024, primarily due to transaction costs related to acquisitions[148].