Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (December 2016)
32 slides from Delek Us's investor presentation, Dec 5, 2016
Slide 1: Delek US Holdings Inc. Investor Presentation
December 2016 Delek US Holdings Inc. Investor Presentation
Slide 2: Disclaimers
Disclaimers 2 Delek US Holdings, Inc. (“Delek US”) and Delek Logistics Partners, LP (defined as “we”, “our”) are traded on the New York Stock Exchange in the United States under the symbols “DK” and ”DKL” respectively, and, as such, are governed by the rules and regulations of the United States Secu
Slide 3: Delek US Holdings Overview
REFINING Delek US Holdings Overview 3 Crude Sourcing/Logistics Flexibility • Pipeline Access: Midland (105,000 bpd in system) Gulf Coast and Cushing • Gathered Barrels: Local barrels in Arkansas/ North Louisiana East and West Texas • Rail Capability at El Dorado Up to 45,000 BPD of light c
Slide 4: Delek US Investment Highlights
Delek US Investment Highlights 4 • Crude nameplate capacity increased by 15 kbpd to 155 kpbd in 2015 • Turnarounds completed and FCC reactors replaced at both refineries • Declining capital expenditure needs; No scheduled turnarounds until 2019/2020 Refining Increased capacity and improved flexibili
Slide 5: 2016 Initiatives to Create Value and Improve Financial Flexibility
2016 Initiatives to Create Value and Improve Financial Flexibility 5 • Total capital expenditure expected to be $45.1 million in 2016 • Reduced from $191.0 million in 2015 and $213.6 million in 2014 • Completed large investment program in refining in 2015 • No scheduled turnarounds until 2019/2020 R
Slide 6: Retail Transaction Summary
Retail Transaction Summary MAPCO Sale Transaction On November 14, 2016 closed $535.0 million sale of the retail related assets to Compañía de Petróleos de Chile COPEC S.A. (SNSE:COPEC) Plus $16.3 million net estimated cash on hand and working capital adjustment Paid $156.0 million of debt, $13
Slide 7: Alon USA Investment
7 0 122 176 146 208 80 0 176 80 255 192 0 0 128 0 127 211 141 158 211 215 185 58 7 127 127 127 Alon USA Investment On May 14, 2015, Delek completed the acquisition of approximately 33.7 million shares, or approximately 47% of the outstanding shares, of Alon USA Energy (NYSE: ALJ) (“Alon USA”) comm
Slide 8: Limited Value Attributed to Delek US Refining Assets in Current Environment
Limited Value Attributed to Delek US Refining Assets in Current Environment 8 Creates attractive capital allocation opportunity Current DK market cap, $1,309 Investments similar to current market cap Results in limited value given to refining assets in current valuation • 155,000 bpd of crude capaci
Slide 9: Refining Segment Update
Refining Segment SEGMENT UPDATE
Slide 10: Initiatives Underway to Improve Asset Performance
Initiatives Underway to Improve Asset Performance 10 Focus on factors under our control •Next turnarounds in 2019 and 2020 •No large capital projects scheduled •Primarily maintenance focused capital spend •Procurement strategies •Manage overhead and operating expenses •Expand local footprint •Minimi
Slide 11: Tyler Refinery Overview
54% 55% 54% 53% 55% 39% 39% 40% 41% 38% 7% 6% 6% 7% 7% 0% 20% 40% 60% 80% 100% 120% 2013 2014 2015 3Q15 3Q16 Gasoline Diesel Petro/Other 62,304 65,523 60,704 70,802 78,758 Tyler Refinery Overview 11 Overview Niche market generally priced above Gulf Coast; supported by Delek Logistics' terminals
Slide 12: El Dorado Refinery Overview
80,000 bpd refinery with crude slate flexibility to process light and medium gravity crudes El Dorado Refinery Overview 12 1) COPEC is a wholly owned subsidiary of Compania de Petroleos de Chile COPEC S.A, which owns and operates convenience stores in Chile, Columbia, Panama, Ecuador, Peru and Mexic
Slide 13: Refining Capital Investment Program Improved Operations
Increased crude throughput capacity and operating flexibility Refining Capital Investment Program Improved Operations 13 Large investment cycle in refining now completed Capital expenditure needs declining from 2015 level 2016E based on maintenance and regulatory spending Projects completed
Slide 14: Refineries - Niche Markets/Wholesale Business Limits RINs Exposure
Further benefited by logistics segment that generates RINs Refineries - Niche Markets/ Wholesale Business Limits RINs Exposure 14 $(0.00) $0.05 $0.02 $0.95 $0.63 $0.78 $0.45 -$0.20 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 1Q1 5 2Q1 5 3Q1 5 4Q1 5 1Q1 6 2Q1 6 3Q1 6 S p er r ef in in g b b l sol d D
Slide 15: Access to Midland and Local Crudes
Approximately 80% of crude slate consists of Midland and local crude supply Access to Midland and Local Crudes 15 45.0 45.0 87.0 105.0 107.0 17.2 17.9 18.6 17.2 16.0 0 50 100 150 200 2012 2013 2014 2015 2016E In 0 0 0 b p d Midland Local Crude Throughput Capacity $(3.31) $(2.71) $(6.11) $(1.43) $(1.
Slide 16: Logistics Segment Update
SEGMENT UPDATE Logistics
Slide 17: Strategic Partner in Delek Logistics Partners, LP
Strategic Partner in Delek Logistics Partners, LP (NYSE: DKL) 17 Delek Logistics Partners , LP (NYSE:DKL) began operating on Nov. 7, 2012 and 100% of its performance is reported as a segment of Delek US beginning 4Q12. Delek US and its affiliates own approximately 62%, including the 2.0% general par
Slide 18: DKL: Joint Venture Pipeline Projects
DKL: Joint Venture Pipeline Projects 18 Caddo Pipeline ■ DKL (50%)/Plains (50%) ■ Est. total cost: $123 million (1) ■ Capacity: 80,000 bpd ■ Length: 80 miles ■ Expected Completion: Jan. 2017 Rio Pipeline ■ Rangeland (67%)/ DKL (33%) ■ Cost: $119 million ■ Capacity: 55,000 bpd ■ Length: 107 miles ■ C
Slide 19: Increased Distribution with Conservative Coverage and Leverage
1.39x 1.32x 1.35x 1.30x 1.61x 2.02x 1.42x 1.67x 1.23x 1.47x 1.50x 1.17x 1.19x 1.31x 0.99x 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q15 1Q16 2Q16 3Q16 Increased Distribution with Conservative Coverage and Leverage 19 Distribution per unit has been increased fifteenth consecu
Slide 20: Delek Logistics GP Incentive Distribution Rights
20 Marginal Percentage Interest in Distributions Assumed Distribution per Limited Partner Unit if Delek Logistics Meets Annual Growth Targets (1) Delek Logistics GP Incentive Distribution Rights Total Quarterly Distribution Per Unit Target Amount Unitholders General Partner Minimum Quarterly Distrib
Slide 21: Financial Update
Financial Update
Slide 22: Financial Highlights
At September 30, 2016 (1) Cash of $315.3 million; Debt of $827.7 million Includes $375.0 million of debt at Delek Logistics (DKL) Excluding DKL, Delek US’ net debt position was approximately $137.4 million Closed sale of retail related assets for $535.0 million on Nov. 14, 2016 Plus $16.
Slide 23: Declining Capital Needs
Increases potential free cash flow generation from operations $18.8 $74.9 $61.6 $82.9 $155.1 $42.3 $36.0 $46.1 $123.6 $199.1 $164.5 $27.1 $0.2 $0.3 $0.9 $0.5 $0.9 $30.3 $25.8 $9.2 $18.6 $10.6 $2.0 $0.1 $0.1 $7.6 $12.2 $7.7 $5.3 $7.9 $7.4 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 20
Slide 24: Questions and Answers
24 Complementary Logistics Systems Significant Organic Growth / Margin Improvement Opportunities Focus on Shareholder Returns Strong Balance Sheet Strategically Positioned Refining Platform Questions and Answers
Slide 25: Appendix
Appendix
Slide 26: Delek US Focused on Growth through Acquisitions
Delek US Focused on Growth through Acquisitions (1) Includes logistic assets in purchase price. Purchase price includes working capital for refineries. (2) Mt. Pleasant includes $1.1 million of inventory. 2006 Abilene & San Angelo terminals $55.1 mm 2012 Nettleton Pipeline $12.3 mm 2011 Paline Pipel
Slide 27: Summary Organization Structure
27 Summary Organization Structure (1) Currently a 4.90% interest in the Delek US ownership interest in the general partner is held by three members of senior management of Delek US. The remaining ownership interest is indirectly held by Delek. Market cap based on share prices on December 1, 2016. 95
Slide 28: -$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 F
-$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 0 F e b -1 0 M a r- 1 0 A pr -1 0 M a y -1 0 J u n -1 0 J u l- 1 0 A u g -1 0 S e p -1 0 O c t- 1 0 No v -1 0 De c -1 0 J a n -1 1 F e b -1 1 M a r- 1 1 A pr -1 1 M a y -1 1 J u n -1 1 J u l- 1 1 A u g -1 1 S e p -1 1 O c t- 1 1 No v -1 1 De c -1 1 J a
Slide 29: WTI Midland vs. WTI Cushing Crude Pricing
($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 $2.00 Ja n -1 1 Fe b -1 1 M ar -1 1 A p r- 11 M ay -1 1 Ju n -1 1 Ju l-1 1 A u g- 1 1 Se p -1 1 O ct-1 1 N o v- 1 1 De c- 1 1 Ja n -1 2 Fe b -1 2 M ar -1 2 A p r- 12 M ay -1 2 Ju n -1 2 Ju l-1 2 A u g- 1 2 Se p -1 2 O ct-1 2 N o v- 1 2
Slide 30: Reconciliation of Cash Available for Distribution
Reconciliation of Cash Available for Distribution 30 (1) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013, 2014, 2015 and year to date 2016 based on actual amounts distributed during the periods; does not include a LTIP accrual. Coverage is defi
Slide 31: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
DKL: Income Statement and Non-GAAP EBITDA Reconciliation 31 (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 c
Slide 32: Investor Relations Contact
Investor Relations Contact: Assi Ginzburg Keith Johnson Chief Financial Officer Vice President of Investor Relations 615-435-1452 615-435-1366
Delek US Holdings — Investor Presentation (December 2016) on 6ix