Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (November 2015)
33 slides from Delek Logistics Partners, L.p's investor presentation, Nov 12, 2015
Slide 1: Delek Logistics Partners, LP Investor Presentation November 2015
Delek Logistics Partners, LP Investor Presentation November 2015
Slide 2: Disclaimers
Disclaimers 2 These slides and any accompanying oral and written presentations contain forward-looking statements by Delek Logistics Partners, LP (defined as “we”, “our”) that are based upon our current expectations and involve a number of risks and uncertainties. Statements concerning current estim
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of trading on November 6, 2015. (2) Annualized distribution based on quarterly distribution for quarter ended Sept. 30, 2015, expected to be paid Nov. 13, 2015. (3) For reconciliation please refer to pages 30 and 31. (4) Approximate
Slide 4: Delek US – A Growth Oriented, Financially Strong Sponsor
Delek US – A Growth Oriented, Financially Strong Sponsor • 155,000 bpd of refining capacity in Texas and Arkansas • Access to crude / product terminals, pipeline and storage assets • 355 convenience stores(1) Operational Strength (1) As of Sept. 30, 2015 financial statements in the Delek US 10Q file
Slide 5: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 6: Stable Asset Base Positioned for Growth
Stable Asset Base Positioned for Growth 6 ~525 miles of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longview to Nederland, TX ~ 600 mile crude oil gathering system in AR Storage facilities with 6.2 million barrels of active shell capacity Rail O
Slide 7: Acquisitions Provide Stable Fee Based Growth
7 Approximately $32.6 million of annualized EBITDA (Yr. 1 forecast) (1); focus on continued growth of assets Acquisitions Provide Stable Fee Based Growth 1) Annualized EBITDA estimates based on expected performance at the time of purchase. Actual results will and have changed based on among other th
Slide 8: Acquisition EBITDA multiples have been below 10x
Acquisition EBITDA multiples have been below 10x (1) 8 Growth strategy to target acquisitions with 8x-10x EBITDA multiple range with potential to improve performance 9.0x 8.1x 6.3x 9.5x 7.9x 4.8x 9.2x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x Tyler Tank Farm and Product terminal (drop
Slide 9: Improving EBITDA and Financial Flexibility to Support Growth
Improving EBITDA and Financial Flexibility to Support Growth 9 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing pro forma historical results for 2011 and forecasted performance for 12 months ending Sept. 30, 2013. Reconciliation on pg. 30 2) Reconciliation provided on page 30. Results
Slide 10: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage 10 Distribution has been increased eleven consecutive times since the IPO $0.375 $0.385 $0.395 $0.405 $0.415 $0.425 $0.475 $0.490 $0.510 $0.530 $0.550 $0.570 - 0.200 0.400 0.600 MQD (1) 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q1
Slide 11: Growth Initiatives Improved EBITDA Since 2012
Growth Initiatives Improved EBITDA Since 2012 11 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing forecasted performance for 12 months ending Sept. 30, 2013. 2) Bridge compared to the forecast provided in the prospectus based on difference in performance during the period as compared t
Slide 12: Plans in Place for Future Growth
Plans in Place for Future Growth 12 Paline Pipeline ■ New agreements effective January 1, 2015 until June 30, 2016 ■ Increased volume and capacity usage rate from 2014 level ■ Potential for utilization and/or capacity increase Continued Asset Development ■ Delek US continues to develop assets to sup
Slide 13: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects 13 Caddo Pipeline ■ DKL (50%)/Plains (50%) ■ Est. total cost: $109 million (1) ■ Capacity: 80,000 bpd ■ Length: 80 miles ■ Expected Completion: Second half 2016 Rio Pipeline ■ Rangeland (67%)/ DKL (33%) ■ Est. total cost: $125 million (1) ■ Capacity: 55,000 bpd ■ Leng
Slide 14: Potential EBITDA Growth
Potential EBITDA Growth (1) 14 (1) 3Q2015 EBITDA based on pro forma LTM information provided in this presentation (see page 9 for additional information related to adjustments). Please see public filings with the Securities and Exchange Commission for additional information and risks associated with
Slide 15: MLP Environment Changing – May Create Growth Opportunities
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Cu rr en t Yiel d Market Cap ($MM) MLP's: Sept 2014 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% $0 $2,000 $4,000 $6,000 $8,000 $10,000 Cu rr en t Yiel d Market Cap ($MM) MLP's: Nov 2, 2015 $1,000 15 Source: Wells Fargo Equi
Slide 16: Segment Overview
Segment Overview
Slide 17: Lion Pipeline System and SALA Gathering
Lion Pipeline System and SALA Gathering 17 SALA Gathering System • Provides access to local Arkansas, east Texas and north Louisiana crudes to Delek US’ El Dorado refinery. • 600 mile crude oil gathering system, primarily within a 60-mile radius of the El Dorado refinery. • Positioned to benefit fro
Slide 18: Terminalling and West Texas Wholesale Business
Terminalling and West Texas Wholesale Business 18 West Texas Wholesale and Marketing • Operates in an area around the Permian Basin • Purchases refined products from third parties for resale at owned and third party terminals in west Texas. • Includes ethanol blending activity. (1) Includes effect o
Slide 19: Paline Pipeline – EBITDA Increased in 2015
Paline Pipeline – EBITDA Increased in 2015 19 Approximately 195 mile crude oil pipeline - Mainline pipeline flows from northbound to southbound New agreements effective Jan. 1, 2015 35,000 bpd of mainline capacity usage contracted to third parties with initial term expiring Jun. 30, 2016 $13
Slide 20: Going Forward
Going Forward
Slide 21: Several Visible Pathways for Continued Growth
Several Visible Pathways for Continued Growth 21 Organic Growth Acquisitive Growth Paline Pipeline potential future utilization and/or capacity increase Increasing activity in Arkansas gathering system Potential expansion of the North Little Rock terminal to 17,500 bpd Proven ability to make
Slide 22: Peer Comparisons
Peer Comparisons (1) 22 (1) Source: Company reports; Capital IQ 11/5/15; NASDAQ OMX; MLPdata.com Current Yield as of 11/6/15 Distributable Cash Flow Coverage Ratio - LTM Q3 2015 Debt / LTM EBITDA Leverage Ratio Q3 2015 1.0x 1.1x 1.1x 1.2x 1.4x 1.4x 1.4x 1.4x 1.5x 1.5x 1.8x 1.9x 0.0x 0.5x 1.0x 1.5x 2
Slide 23: Questions and Answers
23 Questions and Answers Majority of assets support Delek US‘ strategically located inland refining system Inflation-indexed fees for most contracts Majority of all margin generated by long term, fee-based contracts with volume minimums Agreements with Delek US cap maintenance capex and limit Delek
Slide 24: Appendix
Appendix 2
Slide 25: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible 25 Inland refinery located in East Texas 75,000 bpd, 8.7 complexity Primarily processes inland light sweet crudes (100% in 2013) 94% yield of gasoline, diesel and jet fuel in 2014 El Dorado Refinery (1) Tyler Refinery (1) Inlan
Slide 26: Summary of Certain Contracts
Summary of Certain Contracts (9) 26 Initial / Maximum Term (1) Service 9 Months Ended Sep. 30, 2015 Throughput (bpd)(2) Minimum Commitment (bpd) Tariff / Fee Tariff / Fee Escalator Refinery Shutdown Force Majeure Until June 30, 2016 Crude Oil Capacity Usage Agreement N/A N/A $1,700,000/Month (6) FER
Slide 27: Summary of Certain Contracts - footnotes
Summary of Certain Contracts - footnotes 27 (1) Maximum term assumes an extension of the commercial agreement pursuant to the terms thereof. Please note some terms began as early as Nov. 7, 2012. (2) Represents average daily throughput for the period indicated. (3) Excludes volumes gathered on the S
Slide 28: Amended and Restated Omnibus Agreement Key Provisions
Amended and Restated Omnibus Agreement 28 Key Provisions Delek US will indemnify Delek Logistics for certain liabilities, including environmental and other liabilities, relating to contributed assets. Delek US has a ROFR if Delek Logistics sells any assets that serves Delek US' refineries or the
Slide 29: Summary Organization Structure
Summary Organization Structure 29 38.2% interest Limited partner-common 95.6% ownership interest (1) 2.0% interest General partner interest Incentive distribution rights Delek Logistics Partners, LP NYSE: DKL (the Partnership) 100% ownership interest Public Unitholders Operating Subsidiaries 11.3% i
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation 30 (1) Includes approximately $2.0 million of estimated annual incremental general and administrative expenses expected to incur as a result of being a separate publicly traded partnership. (2) Interest expense and cash interest both include commitment fees and interest expen
Slide 31: Cash Available for Distribution
Cash Available for Distribution 31 (1) See pg. 30 for the reconciliation to GAAP. (2) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013 and 2014 based on actual amounts distributed during the year; does not include a LTIP accrual. (3) Forecast fo
Slide 32: Non-GAAP Reconciliation - DK
Non-GAAP Reconciliation - DK 32 ($ in millions) 2008 2009 2010 2011 2012 2013 2014 YTD 3Q14 YTD 3Q15 3Q15 LTM Net sales $4,723.7 $2,666.7 $3,755.6 $7,198.2 $8,726.7 $8,706.8 $8,324.3 $6,562.6 $4,397.9 $6,159.6 Cost of goods sold 4,308.1 2,394.1 3,412.9 6,429.9 7,704.4 7,880.7 7,315.2 5,786.8 3,799.9
Slide 33: Investor Relations Contact
33 Investor Relations Contact: Assi Ginzburg Keith Johnson Executive Vice President, CFO Vice President of Investor Relations 615-435-1452 615-435-1366
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