Delek Logistics(DKL) - 2025 Q2 - Quarterly Report

Financial Performance - Total net revenues for Q2 2025 were $246.35 million, a decrease of 6.8% from $264.63 million in Q2 2024[15] - Operating income for Q2 2025 was $52.44 million, down 23.4% from $68.46 million in Q2 2024[15] - The company reported a basic net income per unit of $0.83 for Q2 2025, compared to $0.87 in Q2 2024[15] - Net income for the three months ended June 30, 2025, was $44.57 million, compared to $41.06 million in 2024, indicating an increase of 12.1%[77] - Total revenue for the three months ended June 30, 2025, was $246.350 million, down from $264.628 million in the same period of 2024[104] - Net income for the six months ended June 30, 2025, was $83.61 million, up 13.0% from $73.71 million in the same period of 2024[15] - Total revenue for the six months ended June 30, 2025, was $496.280 million, a slight decrease from $516.703 million in the same period of 2024, representing a 3.3% decline[106] Assets and Liabilities - Total current assets increased to $409.85 million as of June 30, 2025, compared to $145.89 million at the end of 2024[13] - Long-term debt rose to $2.21 billion as of June 30, 2025, from $1.88 billion at the end of 2024, reflecting a significant increase in leverage[13] - Total assets reached $2.75 billion as of June 30, 2025, up from $2.04 billion at the end of 2024[13] - The company’s total equity was $31.99 million as of June 30, 2025, down from $35.53 million at the end of 2024[13] - As of June 30, 2025, total long-term debt was $2.23 billion, an increase from $1.89 billion as of December 31, 2024[78] Cash Flow and Investments - Cash flows from operating activities provided $139.0 million, up from $131.5 million in the same period last year[19] - The company reported a net cash used in investing activities of $347.7 million, compared to $15.4 million in the prior year[19] - Cash paid for interest during the period was $81.1 million, significantly higher than $49.6 million in 2024[20] - Cash and cash equivalents decreased to $1.44 million as of June 30, 2025, from $5.38 million at the end of 2024[13] Acquisitions - The Gravity Acquisition was completed for a preliminary purchase price of $300.8 million, including $209.3 million in cash and 2,175,209 common units[30] - Revenue from the Gravity Acquisition operations was $46.8 million for the period from January 2, 2025, through June 30, 2025[32] - The H2O Midstream Acquisition was completed for a total consideration of $229.7 million, consisting of $159.7 million in cash and $70.0 million in preferred units[44] - The Partnership acquired 100% of Gravity Water Intermediate Holdings LLC for water disposal and recycling operations in the Permian Basin and Bakken on January 2, 2025[123] Segment Performance - Segment EBITDA for the three months ended June 30, 2025, was $100.449 million, a decrease from $109.519 million for the same period in 2024[104] - The gathering and processing segment saw a $19.4 million increase in segment EBITDA, largely due to the H2O Midstream and Gravity acquisitions[137] - Net revenues for the gathering and processing segment increased by $25.1 million, or 27.1%, in Q2 2025 and by $47.8 million, or 25.4%, YTD 2025[193][195] - Net revenues for the wholesale marketing and terminalling segment decreased by $31.0 million, or 22.9%, in Q2 2025 and by $43.6 million, or 17.1%, YTD 2025[202][203] Costs and Expenses - The company reported a total cost of materials and other for the six months ended June 30, 2025, of $248.358 million, compared to $261.697 million in the same period of 2024, a decrease of 5.1%[106] - Operating expenses increased by $8.4 million, or 28.5%, in Q2 2025 compared to Q2 2024, driven by higher costs associated with acquisitions[180] - General and administrative expenses increased by $2.9 million, or 48.7%, in Q2 2025 compared to Q2 2024, primarily due to transaction costs related to acquisitions[181] - Cost of materials and other for the gathering and processing segment increased by $2.1 million, or 10.6%, in Q2 2025 and by $8.6 million, or 22.8%, YTD 2025[195][196] Distributions and Shareholder Returns - The company declared quarterly cash distributions totaling $113.05 million for the year ending June 30, 2025[72] - The company declared a quarterly cash distribution of $1.115 per unit on July 29, 2025, payable on August 14, 2025[119] - Total cash distributions per limited partner unit increased from $1.055 in Q4 2023 to $1.115 in Q2 2025, with total cash distribution reaching $59,612,000[95] Strategic Objectives and Outlook - The company aims to increase third-party revenue streams and expand its footprint in the Midland and Bakken basins through the acquisitions of Gravity and H2O Midstream[55] - The Partnership's long-term strategic objectives focus on providing competitive yields and growing distributions while maintaining healthy coverage and leverage ratios[157] - The economic outlook remains uncertain due to geopolitical instability and commodity market volatility, but the Partnership is positioned to manage through potential downturns[138] - The Partnership is focused on reducing its leverage ratio to enhance financial flexibility and pursue growth opportunities[160]