Delek Logistics Partners, LP Reports Third Quarter 2018 Results
Source: Nasdaq GlobeNewswire / 06 Nov 2018 20:00:00 America/New_York
- Declared quarterly distribution of $0.79 per limited partner unit; increased by 10.5% percent year-over-year
- Distributable cash flow up 50% year over year in the third quarter
- Distributable cash flow coverage ratio for the third quarter 2018 was 1.25x
- Balance sheet positioned to support future growth
BRENTWOOD, Tenn., Nov. 06, 2018 (GLOBE NEWSWIRE) -- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the third quarter 2018. For the three months ended September 30, 2018, Delek Logistics reported net income attributable to all partners of $23.3 million, or $0.68 per diluted common limited partner unit. This compares to net income attributable to all partners of $16.9 million, or $0.50 per diluted common limited partner unit, in the third quarter 2017. Net cash from operating activities was $6.0 million in the third quarter 2018 compared to $30.2 million in the prior year period. Distributable cash flow was $32.4 million in the third quarter 2018, compared to $21.6 million in the prior-year period.
For the third quarter 2018, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $43.0 million compared to $29.7 million in the prior-year period. This increase was primarily due to the contribution from the Big Spring logistics assets acquired from Delek US Holdings, Inc. (“Delek US”) effective March 1, 2018, improved performance from the Paline Pipeline and higher gross margin per barrel in west Texas that benefited from increased crude oil drilling activity in the Permian Basin.
Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics' general partner, remarked: "Our operations performed well during the quarter with a 45 percent increase in EBITDA and 50 percent increase in distributable cash flow on a year-over-year basis that was driven by the completion of the Big Spring acquisition and the Paline Pipeline expansion. This performance supported a distributable cash flow coverage ratio of 1.25x, which improved on a year-over-year basis. On a year to date basis through the third quarter 2018, our distributable coverage ratio is 1.26x. We were pleased to announce the 10.5 percent year-over-year increase in our declared third quarter distribution."
Yemin concluded, "We continue to explore opportunities to build on our Permian Basin position to create long-term value for our unitholders. These include ways to partner with Delek US to support its Permian Basin crude oil supply needs for its refining system, as well as third party growth options. Delek US has recently announced additional growth in its midstream assets through construction of its Big Spring crude oil gathering system in the Permian Basin and proposed participation in a long haul crude oil pipeline project. This should increase the drop down inventory beyond the Krotz Springs logistic assets. We increased our borrowing capacity on our revolver and expect that our leverage ratio should continue to improve to a range of 4.1x to 4.3x by year end, which should better prepare us to support future growth. The combination of our financial flexibility provided by our balance sheet and our focus on growth initiatives should support a distribution per limited partner unit increase of at least 10% annually through 2019."
Distribution and Liquidity
On October 23, 2018, Delek Logistics declared a quarterly cash distribution of $0.79 per common limited partner unit for the third quarter, which equates to $3.16 per common limited partner unit on an annualized basis. This distribution will be paid on November 9, 2018 to unitholders of record on November 2, 2018. This represents a 2.6 percent increase from the second quarter 2018 distribution of $0.77 per common limited partner unit, or $3.08 per common limited partner unit on an annualized basis, and a 10.5 percent increase over Delek Logistics’ third quarter 2017 distribution of $0.715 per common limited partner unit, or $2.86 per common limited partner unit annualized. For the third quarter 2018, the total cash distribution declared to all partners, including IDRs, was approximately $26.0 million. Based on the declared distribution for the third quarter 2018, the distributable cash flow coverage ratio for the third quarter was 1.25x.
As of September 30, 2018, Delek Logistics had total debt of approximately $776.7 million and cash of $19.0 million. Additional borrowing capacity, subject to certain covenants, under the $850.0 million credit facility was $316.8 million. The total leverage ratio for the third quarter 2018 was approximately 4.53x, which is within the current requirements of the maximum allowable leverage of 5.50x. At the end of September 2018, the credit facility commitments were increased from $700.0 million to $850.0 million and the maturity was extended to September 2023 from the previous maturity of December 2019.
Revenue for the third quarter 2018 was $164.1 million compared to $130.6 million in the prior-year period. The increase in revenue is primarily due to higher sales prices in the west Texas wholesale business, combined with the Big Spring acquisition that was effective March 1, 2018. Total operating expenses were $15.4 million in the third quarter 2018, compared to $10.7 million in the third quarter 2017. This increase was primarily due to the contribution from the acquired Big Spring assets and employee-related expenses. Total segment contribution margin was $43.1 million in the third quarter 2018 compared to $30.8 million in the third quarter 2017. General and administrative expenses were $3.1 million for the third quarter 2018, compared to $2.8 million in the prior-year period.
Pipelines and Transportation Segment
Contribution margin in the third quarter 2018 was $25.2 million compared to $17.5 million in the third quarter 2017. This increase was primarily due to the contribution from the Big Spring acquisition in March 2018 and improved performance from the Paline Pipeline. Operating expenses were $9.5 million in the third quarter 2018 compared to $8.6 million in the prior-year period, primarily due to the Big Spring acquisition.
Wholesale Marketing and Terminalling Segment
During the third quarter 2018, contribution margin was $17.9 million, compared to $13.3 million in the third quarter 2017. This increase was primarily due to the contribution from the Big Spring acquisition in March 2018 and improved margin performance in the west Texas wholesale operations. Operating expenses increased to $5.9 million in the third quarter 2018, compared to $2.1 million in the prior-year period primarily due to the Big Spring acquisition.
In the west Texas wholesale business, average throughput in the third quarter 2018 was 12,197 barrels per day compared to 12,929 barrels per day in the third quarter 2017. The west Texas gross margin per barrel increased year-over-year to $4.65 per barrel and included approximately $0.3 million, or $0.29 per barrel, from renewable identification numbers (RINs) generated in the quarter. During the third quarter 2017, the west Texas gross margin per barrel was $4.00 per barrel and included $1.6 million from RINs, or $1.32 per barrel. On a year-over-year basis, continued growth in crude oil drilling activity in the Permian Basin increased fuel demand and improved the supply/demand balance, which led to improved performance in the west Texas wholesale business.
Average terminalling throughput volume of 167,491 barrels per day during the third quarter 2018 increased on a year-over-year basis from 127,229 barrels per day in the third quarter 2017 primarily due to the addition of the Big Spring terminal. During the third quarter 2018, average volume under the East Texas marketing agreement with Delek US was 79,404 barrels per day compared to 74,357 barrels per day during the third quarter 2017. During the third quarter 2018, average volume under the Big Spring marketing agreement with Delek US was 80,687 barrels per day.
Third Quarter 2018 Results | Conference Call Information
Delek Logistics will hold a conference call to discuss its third quarter 2018 results on Wednesday, November 7, 2018 at 7:30 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekLogistics.com. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. For those who cannot listen to the live broadcast, a telephonic replay will be available through February 7, 2019 by dialing (866) 326-3086, passcode 7994276. An archived version of the replay will also be available at www.DelekLogistics.com for 90 days.
Investors may also wish to listen to Delek US’ (NYSE: DK) third quarter 2018 earnings conference call on Wednesday, November 7, 2018 at 8:30 a.m. Central Time and review Delek US’ earnings press release. Market trends and information disclosed by Delek US may be relevant to Delek Logistics, as it is a consolidated subsidiary of Delek US. Investors can find information related to Delek US and the timing of its earnings release online by going to www.DelekUS.com.
About Delek Logistics Partners, LP
Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, was formed by Delek US Holdings, Inc. (NYSE: DK) to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of the federal securities laws. These statements contain words such as “possible,” “believe,” “should,” “could,” “would,” “predict,” “plan,” “estimate,” “intend,” “may,” “anticipate,” “will,” “if,” “expect” or similar expressions, as well as statements in the future tense, and can be impacted by numerous factors, including the fact that a substantial majority of Delek Logistics' contribution margin is derived from Delek US, thereby subjecting us to Delek US ' business risks; risks relating to the securities markets generally; risks and costs relating to the age and operational hazards of our assets including, without limitation, costs, penalties, regulatory or legal actions and other effects related to releases, spills and other hazards inherent in transporting and storing crude oil and intermediate and finished petroleum products; the impact of adverse market conditions affecting the utilization of Delek Logistics' assets and business performance, including margins generated by its wholesale fuel business; an inability of Delek US to successfully integrate the businesses of Delek US and Alon USA Energy, Inc., to grow as expected and realize the synergies and the other anticipated benefits of its merger with Alon, which became effective as of July 1, 2017, as it relates to our potential future growth opportunities, including dropdowns, and other potential benefits; the results of our investments in joint ventures; adverse changes in laws including with respect to tax and regulatory matters and other risks as disclosed in our annual report on Form 10-K, quarterly reports on Form 10-Q and other reports and filings with the United States Securities and Exchange Commission. Forward looking statements include, but are not limited to, statements regarding future growth at Delek Logistics; expansion of the Paline Pipeline and potential benefits therefrom; distributions and the amounts and timing thereof; potential dropdown inventory; ability to create long-term value for our unit holders; financial flexibility and borrowing capacity; and distribution growth of 10% or at all. There can be no assurance that actual results will not differ from those expected by management or described in forward-looking statements of Delek Logistics. Delek Logistics undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which Delek Logistics becomes aware of, after the date hereof.
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 (loss) before net interest expense, income tax expense, depreciation and amortization expense, and adjusted to include amortization of customer contract intangible assets which is included as a component of net revenues in our accompanying condensed consolidated statements of income.
- Distributable cash flow - calculated as net cash flow from operating activities plus or minus changes in assets and liabilities, less maintenance capital expenditures net of reimbursements and other adjustments not expected to settle in cash. Delek Logistics believes this revision is a more appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.
EBITDA and distributable cash flow are non-U.S. GAAP supplemental financial measures 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;
- the ability of our assets to generate sufficient cash flow to make distributions to Delek Logistics' unitholders;
- 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, distributable cash flow and distributable cash flow coverage ratio provide useful information to investors in assessing its financial condition, its results of operations and the cash flow its business is generating. EBITDA, distributable cash flow and distributable cash flow coverage ratio should not be considered in isolation or as alternatives to net income, operating income, cash from operations 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 and distributable cash flow may be defined differently by other partnerships in its industry, Delek Logistics' definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.
Delek Logistics Partners, LP
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except unit and per unit data)
ASSETS September 30,
Current assets: Cash and cash equivalents $ 19,006 $ 4,675 Accounts receivable 21,815 23,013 Accounts receivable from related parties 51,235 1,124 Inventory 4,198 20,855 Other current assets 418 783 Total current assets 96,672 50,450 Property, plant and equipment: Property, plant and equipment 448,722 367,179 Less: accumulated depreciation (134,052 ) (112,111 ) Property, plant and equipment, net 314,670 255,068 Equity method investments 105,233 106,465 Goodwill 12,203 12,203 Intangible assets, net 155,840 15,917 Other non-current assets 8,951 3,427 Total assets $ 693,569 $ 443,530 LIABILITIES AND DEFICIT Current liabilities: Accounts payable $ 11,513 $ 19,147 Excise and other taxes payable 2,849 4,700 Tank inspection liabilities 902 902 Pipeline release liabilities 1,019 1,000 Accrued expenses and other current liabilities 9,953 6,033 Total current liabilities 26,236 31,782 Non-current liabilities: Long-term debt 776,684 422,649 Asset retirement obligations 5,099 4,064 Other non-current liabilities 15,977 14,260 Total non-current liabilities 797,760 440,973 Deficit: Common unitholders - public; 9,101,137 units issued and outstanding at September 30, 2018 (9,088,587 at December 31, 2017) 172,875 174,378 Common unitholders - Delek; 15,294,046 units issued and outstanding at September 30, 2018 (15,294,046 at December 31, 2017) (296,427 ) (197,206 ) General partner - 497,861 units issued and outstanding at September 30, 2018 (497,604 at December 31, 2017) (6,875 ) (6,397 ) Total deficit (130,427 ) (29,225 ) Total liabilities and deficit $ 693,569 $ 443,530
Delek Logistics Partners, LP
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except unit and per unit data)
Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net revenues: Affiliate $ 63,835 $ 40,131 $ 178,559 $ 116,574 Third-party 100,275 90,495 319,752 270,294 Net revenues 164,110 130,626 498,311 386,868 Operating costs and expenses: Cost of materials and other 105,596 89,120 330,644 266,749 Operating expenses (excluding depreciation and amortization presented below) 14,489 9,940 40,501 28,789 Depreciation and amortization 6,252 4,744 18,287 14,227 Total cost of sales 126,337 103,804 389,432 309,765 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 906 722 2,388 2,197 General and administrative expenses 3,076 2,751 9,798 8,255 Depreciation and amortization 450 718 1,434 2,170 Loss (gain) on asset disposals 717 (5 ) 648 2 Total operating costs and expenses 131,486 107,990 403,700 322,389 Operating income 32,624 22,636 94,611 64,479 Interest expense, net 11,108 7,124 30,096 16,657 Income from equity method investments (1,924 ) (1,584 ) (4,681 ) (3,005 ) Other expense (income), net 8 (1 ) 8 (1 ) Income before income tax expense 23,432 17,097 69,188 50,828 Income tax expense 106 174 285 333 Net income attributable to partners $ 23,326 $ 16,923 68,903 50,495 Comprehensive income attributable to partners $ 23,326 $ 16,923 $ 68,903 $ 50,495 Less: General partner's interest in net income, including incentive distribution rights 6,636 4,745 18,478 13,406 Limited partners' interest in net income $ 16,690 $ 12,178 $ 50,425 $ 37,089 Net income per limited partner unit: Common units - (basic) $ 0.68 $ 0.50 $ 2.07 $ 1.52 Common units - (diluted) $ 0.68 $ 0.50 $ 2.07 $ 1.52 Weighted average limited partner units outstanding: Common units - basic 24,395,183 24,361,457 24,387,995 24,341,921 Common units - diluted 24,401,908 24,389,582 24,395,880 24,382,426 Cash distribution per limited partner unit $ 0.790 $ 0.715 $ 2.310 $ 2.110
Delek Logistics Partners, LP
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2018 2017 Cash flows from operating activities Net income $ 68,903 $ 50,495 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,721 16,397 Amortization of customer contract intangible assets 4,207 — Amortization of deferred revenue (1,095 ) (1,004 ) Amortization of deferred financing costs and debt discount 1,984 1,438 Accretion of asset retirement obligations 267 219 Deferred income taxes — 158 Income from equity method investments (4,681 ) (3,005 ) Dividends from equity method investments 5,128 765 Loss on asset disposals 648 2 Unit-based compensation expense 518 545 Changes in assets and liabilities: Accounts receivable 1,198 (1,115 ) Inventories and other current assets 17,022 2,028 Accounts payable and other current liabilities (4,311 ) 8,501 Accounts receivable/payable to related parties (50,030 ) 2,092 Non-current assets and liabilities, net (1,879 ) (365 ) Net cash provided by operating activities 57,600 77,151 Cash flows from investing activities Asset acquisitions, net of assumed ARO liabilities (72,222 ) (6,443 ) Purchases of property, plant and equipment (8,674 ) (9,187 ) Proceeds from sales of property, plant and equipment 465 — Purchases of intangible assets (144,219 ) (2,560 ) Distributions from equity method investments 957 753 Equity method investment contributions (172 ) (3,531 ) Net cash provided by (used in) financing activities (223,865 ) (20,968 ) Cash flows from financing activities Proceeds from issuance of additional units to maintain 2% General Partner interest 20 21 Distributions to general partner (17,010 ) (12,839 ) Distributions to common unitholders - public (20,500 ) (19,208 ) Distributions to common unitholders - Delek (34,335 ) (31,555 ) Distributions to Delek unitholders and general partner related to Big Spring Logistic Assets Acquisition (98,798 ) — Proceeds from revolving credit facility 678,000 205,700 Payments of revolving credit facility (324,700 ) (439,500 ) Proceeds from issuance of senior notes — 248,112 Deferred financing costs paid (5,264 ) (5,937 ) Reimbursement of capital expenditures by Delek 3,183 4,254 Net cash provided by (used in) financing activities 180,596 (50,952 ) Net increase in cash and cash equivalents 14,331 5,231 Cash and cash equivalents at the beginning of the period 4,675 59 Cash and cash equivalents at the end of the period $ 19,006 $ 5,290 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 24,446 $ 9,288 Income taxes $ 136 $ 60 Non-cash investing activities: Decrease in accrued capital expenditures $ (1,836 ) $ (491 ) Non-cash financing activities: Sponsor contribution of fixed assets $ — $ 67
Delek Logistics Partners, LP
Reconciliation of Amounts Reported Under U.S. GAAP
Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Reconciliation of net income to EBITDA: Net income $ 23,326 $ 16,923 $ 68,903 $ 50,495 Add: Income tax expense 106 174 285 333 Depreciation and amortization 6,702 5,462 19,721 16,397 Amortization of customer contract intangible assets 1,803 — 4,207 — Interest expense, net 11,108 7,124 30,096 16,657 EBITDA $ 43,045 $ 29,683 $ 123,212 $ 83,882 Reconciliation of net cash from operating activities to distributable cash flow: Net cash provided by operating activities $ 5,957 $ 30,241 $ 57,600 $ 77,151 Changes in assets and liabilities 28,079 (8,460 ) 38,000 (11,141 ) Distributions from equity method investments in investing activities 297 252 957 753 Maintenance and regulatory capital expenditures (2,380 ) (698 ) (3,721 ) (5,011 ) Reimbursement from Delek for capital expenditures (1) 1,292 392 2,179 1,730 Accretion of asset retirement obligations (92 ) (73 ) (267 ) (219 ) Deferred income taxes — (39 ) — (158 ) Gain (loss) on asset disposals (717 ) 5 (648 ) (2 ) Distributable Cash Flow $ 32,436 $ 21,620 $ 94,100 $ 63,103
(1) During the year ended December 31, 2017, the reimbursed capital expenditure amounts in the determination of distributable cash flow were revised to reflect the accrual of reimbursable capital expenditures from Delek US rather than the cash amounts received for reimbursed capital expenditures during the three and nine months period ended September 30, 2017. This resulted in decreases to the distributable cash flow of a nominal amount and $2.5 million from the amounts presented on our Quarterly Report on Form 10-Q for the three and nine months period ended September 30, 2017, respectively.
Delek Logistics Partners, LP
Distributable Coverage Ratio Calculation
Three Months Ended September 30, Nine Months Ended September 30, Distributions to partners of Delek Logistics, LP 2018 2017 2018 2017 Limited partners' distribution on common units $ 19,272 $ 17,418 $ 56,343 $ 51,380 General partner's distributions 393 355 1,149 1,047 General partner's incentive distribution rights 6,295 4,497 17,449 12,650 Total distributions to be paid $ 25,960 $ 22,270 $ 74,941 $ 65,077 Distributable cash flow $ 32,436 $ 21,620 $ 94,100 63,103 Distributable cash flow coverage ratio (1) 1.25x 0.97x 1.26x 0.97x
(1) Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period.
Delek Logistics Partners, LP
Segment Data (unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Pipelines and Transportation Net revenues: Affiliates $ 36,132 $ 27,805 $ 99,624 $ 81,972 Third party 3,653 3,177 11,618 7,910 Total pipelines and transportation 39,785 30,982 111,242 89,882 Cost of sales: Cost of materials and other 5,055 4,883 14,691 13,691 Operating expenses (excluding depreciation and amortization) 9,499 8,573 29,054 24,661 Segment contribution margin $ 25,231 $ 17,526 $ 66,839 $ 51,530 Total Assets $ 431,173 $ 344,260 Wholesale Marketing and Terminalling Net revenues: Affiliates (1) $ 27,703 $ 12,326 $ 78,935 $ 34,602 Third party 96,622 87,318 308,134 262,384 Total wholesale marketing and terminalling 124,325 99,644 387,069 296,986 Cost of sales: Cost of materials and other 100,541 84,237 315,953 253,058 Operating expenses (excluding depreciation and amortization) 5,896 2,089 13,835 6,325 Segment contribution margin $ 17,888 $ 13,318 $ 57,281 $ 37,603 Total Assets $ 262,396 $ 78,598 Consolidated Net revenues: Affiliates $ 63,835 $ 40,131 $ 178,559 $ 116,574 Third party 100,275 90,495 319,752 270,294 Total consolidated 164,110 130,626 498,311 386,868 Cost of sales: Cost of materials and other 105,596 89,120 330,644 266,749 Operating expenses (excluding depreciation and amortization presented below) 15,395 10,662 42,889 30,986 Contribution margin 43,119 30,844 124,778 89,133 General and administrative expenses 3,076 2,751 9,798 8,255 Depreciation and amortization 6,702 5,462 19,721 16,397 Loss (gain) on asset disposals 717 (5 ) 648 2 Operating income $ 32,624 $ 22,636 $ 94,611 $ 64,479 Total Assets $ 693,569 $ 422,858
(1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the marketing contract intangible we acquired in connection with the Big Spring acquisition.
Delek Logistics Partners, LP
Segment Capital Spending
Three Months Ended September 30, Nine Months Ended September 30, Pipelines and Transportation 2018 2017 2018 2017 Maintenance capital spending 1,528 1,521 2,585 4,564 Discretionary capital spending 558 1,397 1,735 2,151 Segment capital spending $ 2,086 $ 2,918 $ 4,320 $ 6,715 Wholesale Marketing and Terminalling Maintenance capital spending $ 877 $ 351 1,451 $ 768 Discretionary capital spending 28 517 1,669 1,213 Segment capital spending $ 905 $ 868 $ 3,120 $ 1,981 Consolidated Maintenance capital spending $ 2,405 $ 1,872 $ 4,036 $ 5,332 Discretionary capital spending 586 1,914 3,404 3,364 Total capital spending $ 2,991 $ 3,786 $ 7,440 $ 8,696
Delek Logistics Partners, LP
Segment Data (Unaudited)
Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Pipelines and Transportation Segment: Throughputs (average bpd) Lion Pipeline System: Crude pipelines (non-gathered) 59,150 60,247 56,672 59,653 Refined products pipelines 43,762 51,623 47,154 50,933 SALA Gathering System 16,704 15,997 16,705 16,160 East Texas Crude Logistics System 14,284 15,260 16,402 15,006 Wholesale Marketing and Terminalling Segment: East Texas - Tyler Refinery sales volumes (average bpd) (1) 79,404 74,357 77,349 71,917 Big Spring Marketing - Refinery sales volume (average bpd) (for period owned) (2) 80,687 — 79,819 — West Texas marketing throughputs (average bpd) 12,197 12,929 13,453 13,647 West Texas gross margin per barrel $ 4.65 $ 4.00 $ 5.88 $ 3.62 Terminalling throughputs (average bpd) (3) 167,491 127,229 159,457 123,780
(1) Excludes jet fuel and petroleum coke.
(2) Throughputs for the nine months ended September 30, 2018 are for the 214 days we marketed certain finished products produced at or sold from the Big Spring Refinery following the execution of the Big Spring Marketing Agreement, effective March 1, 2018.
(3) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, our El Dorado and North Little Rock, Arkansas and our Memphis and Nashville, Tennessee terminals. Throughputs for the Big Spring terminal are for the 214 days we operated the terminal following its acquisition effective March 1, 2018. Barrels per day are calculated for only the days we operated each terminal. Total throughput for the nine months ended September 30, 2018 was 41.4 million barrels, which averaged 151,646 bpd for the period.
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