Delek US Holdings, Inc. (NYSE:DK) Q4 2018 Earnings Conference Call - Final Transcript
Feb 20, 2019 • 09:30 am ET
Good morning. My name is Ella, and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek US Holdings Q4 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.
Mr. Keith Johnson, you may begin your conference.
Thank you, Ella. Good morning. I would like to thank everyone for joining us on today's conference call and webcast to discuss DK's fourth quarter and year-end financial results.
Joining me on today's call are Uzi Yemen, our Chairman, President, and CEO; Kevin Kremke, EVP and CFO; and Fred Greene, EVP and COO, as well as other members of our management team. The presentation materials we'll be using during today's call can be found on the Investor Relations section of Delek US' website.
As a reminder, this conference call may contain forward-looking statements as that term is defined under Federal Securities Laws. Please see slide 2 for the Safe Harbor statements.
In addition to reporting financial results in accordance with Generally Accepted Accounting Principles or GAAP, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to comparable GAAP results, which can be found in the press release, which is posted on the Investor Relations section of our website.
Our prepared remarks are being made assuming that the earnings press release has been reviewed and we are covering less segment and market information incorporated in the 4Q press release.
On today's call, Kevin will review financial performance and Fred will cover operations for the quarter, before turning it over to Uzi to offer a few closing strategic comments.
With that, I'll turn the call over to Kevin.
Kevin L. Kremke
Thanks, Keith. We had a great quarter with record results and solid cash flow generation from our operations. As you can see on slide 3, for the fourth quarter 2018, Delek US reported net income of $121.6 million or $1.48 per diluted share compared to the net income of $211.1 million or $2.56 per diluted share in the fourth quarter of 2017.
On an adjusted basis for the fourth quarter of 2018, Delek US reported net income of $129.8 million or $1.59 per diluted share compared to an adjusted net income of $47.6 million or $0.58 per diluted share in the prior year period. Our adjusted EBITDA increased by 52% to $251.4 million in the fourth quarter of 2018 compared to $165.1 million in the prior year period. Our consolidated contribution margin improved to $285.4 million in the fourth quarter compared to $214.3 million in the fourth quarter of the prior year. This was led by refining, as it benefited from a wider Midland and Cushing crude oil differential that drove a contribution margin of $235.3 million compared to contribution margin of $185.8 million in the fourth quarter of 2017.
Logistics also improved on a year-over-year basis. During the fourth quarter