Good morning, and welcome to the Delek Logistics third quarter 2021 conference call. All participants will be in listen only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Blake Fernandez. Please go ahead.
Good morning. I would like to thank everyone for joining us on this webcast to discuss Delek Logistics Partners third quarter 2021 financial results. Joining me on today's call will be Uzi Yemin, our general partner's Chairman and CEO, and Reuven Spiegel, CFO, as well as other members of our management team. As a reminder, this conference call may contain forward-looking statements as that term is defined under federal securities laws. 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 the 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 release has been reviewed and we are covering less segment and market information that is incorporated into the third quarter release. On today's call, Reuven will begin with a financial overview, I will review results, and Uzi will offer a few closing strategic remarks. With that, I will turn the call over to Reuven.
Thank you, Blake. Our distributable cash flow was approximately $56 million in the third quarter of 2021 compared to $59 million in the third quarter of 2020. Our DCF coverage ratio was 1.34 x in the third quarter compared to 1.5 x prior year period. EBITDA was $70 million, which represents a 3% increase over a prior year period. Our board approved an increase in the quarterly distribution to $0.95 per limited partner unit for the quarter ended September 30th. This distribution is to be paid on November 10, 2021 to unitholders of record on November 5th, and represents a 1.1% increase from the second quarter and a 5% increase from third quarter 2020.
At September 30th, 2021, DKL had approximately $589 million available capacity on our $850 million credit facility. Our total debt was approximately $901 million, and the total leverage ratio is 3.4 x, which is well within the 5.25 x currently allowable under our credit facility. Now, I will turn the call over to Blake to discuss the results.
Thanks, Reuven. In our Pipelines and Transportation segment, the third quarter 2021 contribution margin was $47 million compared to $46 million in the third quarter of last year. The increase was primarily attributable to higher pipeline throughput, partially offset by expenses related to pipeline integrity work. In our Wholesale Marketing and Terminalling segment, the contribution margin was $20 million in the third quarter this year compared to $21 million in the third quarter of 2020. Results were broadly in line with results a year ago. During the third quarter of 2021, equity income from our oil pipeline JVs was approximately $7 million compared to $5 million in the prior year period. Capital expenditures were approximately $4.1 million in the third quarter of 2021, which consisted of $3.2 million of growth spending, $900,000 for sustaining maintenance.
For full year 2021, our total gross capital expenditure forecast is $25 million, which includes $19.6 million of growth and $5 million of maintenance capital. With that, I will turn the call over to Uzi for his closing comments.
Thank you, Blake, and good morning, everybody. Our performance remains stable, and we expect a consistent EBITDA profile over the coming quarters. The industry backdrop has improved, driven by strong demand and inventories of oil and oil products trending below historical averages. The combination of these factors is resulting in higher commodity prices and margins, which drives the utilization rates of refining and logistics assets. We're optimistic in the outlook for DKL and the recent increase in the quarterly distribution to $0.95 per unit keeps us on pace to deliver a 5% increase this year. Our distribution coverage remains healthy, and our leverage ratio continues to decline. Finally, DKL units recently traded at all-time highs, reflecting investor confidence and resulting in a lower cost of capital for our company. With that, operator, could you please open the call for questions?
Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Our first question is from Spiro Dounis from Credit Suisse. Please go ahead.
Thanks, operator. Morning, guys.
Hey, Spiro.
Hey, Uzi. Wanted to start predictably, I guess, with the drop-down outlook. Seems like your cost of capital is sort of back in great shape, maybe normal levels here. Just curious if you could just talk through the cadence of kind of what's left to drop down, how you're thinking about the timing, and any sort of gating issues to get there.
Great question, Spiro. You know, the biggest candidate for that is the Wink to Webster. Our partners are commissioning the line very shortly. Obviously, there's a ramp-up period. As you know, the pipeline is fully subscribed, and that's a big amount. You know, we said that the investment is around $360 million, and we are exceeding our threshold of 15%. Well exceeding 15%. We need to watch for the ramp-up, and then we'll look at it very carefully.
Great. That's helpful color. Uzi, last call you had said you'd expected more M&A in the midstream space, and it looks like you sort of proven to be right. We've seen some recent activity here lately. I imagine there's more to come, but would love to get your updated thoughts on that. More specifically around DKL and your appetite for M&A. I guess, what sort of assets do you think you'd be in the market for? What do you think would fit well in the system that you don't currently have now?
Well, first of all, we work very hard, Spiro, as you know, because you challenged us 18 months ago, 24 months ago, about the cost of capital. If you look at our cost of capital now, I know that yesterday we got a little hit, but over the last month, it has been hovering around 7.5% on the equity side and on the debt side, because of our leverage going down every quarter. As you know, it's 3.4. We're around 6%, even a little bit lower than that. We feel good about the cost of capital. You know, the MLPs are all around cost of capital. We think that we're competitive.
Now, with the pickup in the Permian, and you ask M&A, but I'll answer it in the second part of my answer. In the Permian, as you know, the activity is picking up. As you well know, DPG was dropped down to DKL a year ago, a little more than a year ago, and still under MVC. We see more and more activity in the Permian. We have more dedicated acreage and more people signing in, and more people bringing rigs and wells. We see the activity of this DPG picking up and maybe hit the 120 mark over the next year or so.
If that's the case, then, you know, we overbuild that asset, or we build it to support much more than 100,000, 120,000, 150,000 barrels. And that's without much investment. If you think about that then, you say to yourself, now, the most important thing is to protect the cost of capital. We won't do any deal that will be leveraging the balance sheet, just not who we are. But at the same time, we say to ourselves, okay, the leverage is coming down, the organic projects are bringing more to the table, and maybe it's time to look at some kind of acquisition.
I want to be very careful, you know, in light of the energy transition, and in light of the fact that we don't know what the future is. Even if we touch an acquisition, it should be very accretive, not leveraging the balance sheet and making sure that there are synergies already to the assets we have, just because of the fact that we have a bright future with both DPG, Paline and other assets, as well as the drop-down of W2W, especially in light of the activity in the Permian. I answer it in a long way, but if I didn't answer directly, I can clarify it more.
No, that was good. That was a helpful framework and a way to think about it, so I appreciate that. One more if I could sneak it in, just with respect to distribution, on track for 5% growth, you know, it's great. You know, you guys have always sort of been kind of a first quartile grower, with respect to distribution. So 5% I think is probably one of the highest among peers. As you look forward to 2022 and beyond, I guess, how are you thinking about distribution growth in terms of what's sustainable? What keeps your leverage on track? What allows you to grow? Do you still expect to be one of these first quartile growing names? Just curious how you're thinking about it longer term.
Well, we think that we impacted being consistent and persistent even during the pandemic, Spiro. I remember your note from a year ago or a year and a half ago when we said we're going to continue to grow the distribution. We think investors like it. We see the returns. We see how investors and you analysts treat us. I don't see any reason to change different things for something that actually works. It's our job as management to produce the EBITDA to support the growth. Honestly, in this environment, I see us continuing doing this.
Perfect. That's all I had today, guys. Thanks for the time.
Thank you, Spiro.
There are no more questions in the queue. This concludes our question and answer session. I'd like to turn the conference back over to Uzi Yemin for any closing remarks.
Thank you, Jason. I'd like to thank my colleagues around the table here. I'd like to thank our employees for another great quarter. I think that DKL continues to show how good operator we are on the midstream side. I'd like to thank investors for the confidence in us and bring us to new highs, and also, of course, the board of directors. As I said, mainly, I'd like to thank our employees for making it the great company it is. Thank you, and have a great day.
Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.