Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (August 2017)
31 slides from Delek Logistics Partners, L.p's investor presentation, Aug 10, 2017
Slide 1: Delek Logistics Partners, LP Investor Presentation August 2017
Delek Logistics Partners, LP Investor Presentation August 2017
Slide 2: Disclaimers
2 Disclaimers These slides and any accompanying oral and written presentations contain forward-looking statements by Delek Logistics Partners, LP (defined as “we”, “our”, or ”Delek Logistics”) that are based upon our current expectations and involve a number of risks and uncertainties. Statements co
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of close of trading on August 8, 2017. (2) Annualized distribution based on quarterly distribution for quarter ended June 30, 2017, to be paid on August 11, 2017. (3) For reconciliation please refer to pages 28 and 29. (4) Annualize
Slide 4: Delek US – A Growth Oriented, Financially Strong Sponsor
REFINING 302,000 BPD in total El Dorado, AR 80,000 BPD 10.2 complexity Tyler, TX 75,000 BPD 8.7 complexity Delek US – A Growth Oriented, Financially Strong Sponsor • 302,000 bpd of refining capacity in Texas, Arkansas, Louisiana • Access to crude / product terminals, pipeline and storage a
Slide 5: Delek Acquisition of Alon Creates Premier Permian Based Refining System
Delek Acquisition of Alon Creates Premier Permian Based Refining System DKL positioned to provide logistics support for 302,000 bpd of Crude Throughput Capacity (~69% Permian Basin Based) 5 • Created a premier Permian based refining company • 7th largest independent refiner with 302,000 barrels per
Slide 6: Delek Acquisition of Alon Creates Strong Platform for Logistics Growth
Delek Acquisition of Alon Creates Strong Platform for Logistics Growth Increases Dropdown Inventory; Growing Logistics Assets Support Larger Crude Sourcing and Product Marketing System 6 • Delek Logistics Partners provides platform to unlock logistics value • Increased access to Permian and Delaware
Slide 7: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 8: Pipelines/Transportation and Wholesale/Terminalling Segments
NY008LRP - 912119_1.wor -L r - r- rLL P 912119_1.wo San Angelo Fort Worth Dallas Waco Tyler Shreveport Monroe El Dorado Beaumont New Orleans Little Rock Memphis Brentwood Nashville Knoxville Abilene Big Spring Krotz Springs NY008LRP - 912119_1.wor - rL 1.P 912119_ SALA GATHERING SYSTEM AR LA Magnoli
Slide 9: Contract Highlights
Contract Highlights • The Lion Pipeline System and SALA Gathering System are supported by a long-term contract that includes three take-or-pay commitments • Initial term of 5 years, maximum term of 15 years (2) • Crude oil transportation throughput of 60 MBbl/d in Q2 2017, supported by a MVC of 46 M
Slide 10: Improving Performance and Financial Flexibility to Support Growth
Improving Performance and Financial Flexibility to Support Growth 10 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing pro forma results forecasted performance for 12 months ending Sept. 30, 2013. Reconciliation on pg. 28 2) Reconciliation provided on page 28. Results in 2013 and 2014 a
Slide 11: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage 11 Distribution per unit has been increased eighteen consecutive times since the IPO Distributable Cash Flow Coverage Ratio (2)(3) Leverage Ratio (4) (1) MQD = minimum quarterly distribution set pursuant to the Partnership Agreement. (2)
Slide 12: Going Forward Assets Positioned for Permian Basin Growth
Going Forward Assets Positioned for Permian Basin Growth
Slide 13: Permian Basin Crude Oil Production and Breakeven Prices
1) Deutsche Bank Research, Permian Basin: “You are still the one” 11/28/16, breakeven based on flat natural gas of $3.00/MMbtu; NGLs priced 35% of WTI; regional commodity differential and 25% royalty. 2) EIA production data through July 17, 2017, Drilling Productivity Report; Baker Hughes rig count
Slide 14: Caddo and Rio Pipeline Joint Ventures
Caddo Pipeline ■ Delek Logistics (50%)/Plains (50%) ■ Est. total cost: $123 million (1) ■ Capacity: 80,000 Bbl/d ■ Length: 80 miles ■ Completed: January 2017 ■ Provides additional logistics support to El Dorado refinery with third crude supply source Rio Pipeline (Delaware Basin) ■ Rangeland (67%)/
Slide 15: Paline Pipeline
Approximately 195 mile crude oil pipeline - Mainline pipeline flows from north to south Capacity of ~36,000 bpd Pipeline has been at capacity since March Temporary FERC tariff in place to encourage spot shippers Intend to move to base tariff as Permian activity increases and differentials
Slide 16: West Texas Wholesale Business Benefiting from Permian Activity
16 West Texas Wholesale Business Benefiting from Permian Activity West Texas Wholesale and Marketing Gross Margin 13,377 Bbl/d 14,353 Bbl/d 15,493 Bbl/d 16,523 Bbl/d 18,156 Bbl/d 16,707 Bbl/d 16,357 Bbl/d West Texas Wholesale and Marketing • Operates in an area around the Permian Basin • Purchases r
Slide 17: Several Visible Pathways for Potential Growth
Several Visible Pathways for Potential Growth 17 Distribution Acquisitive Growth Target 10% minimum distribution per LP unit annual growth through 2019 Driven by organic growth at DKL and potential increased drop down inventory at sponsor Contracts expiring in 2017 have been extended by Delek
Slide 18: Peer Comparisons
Peer Comparisons(1) 18 Current Yield as of 8/8/2017 Leverage Ratio (1) 2.5x 2.9x 3.4x 3.5x 3.8x 3.9x 4.3x 4.6x 4.6x 5.4x 6.2x - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 WNRL VLP MMP PSXP MPLX DKL EPD HEP ETP ANDX PAA 11.4% 10.8% 9.1% 8.9% 7.7% 7.6% 7.6% 6.6% 6.4% 5.3% 5.2% 4.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.
Slide 19: Questions and Answers
19 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 related to capex/opex reimbursement an
Slide 20: Appendix
Appendix etek! ED
Slide 21: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible 21 Inland refinery located in East Texas 75,000 bpd, 8.7 complexity Primarily processes inland light sweet crudes (100% in 2016) El Dorado Refinery (1) Tyler Refinery (1) Inland refinery located in southern Arkansas 80,000 bpd,
Slide 22: Asset Overview: Lion Pipeline System and SALA Gathering
Asset Overview: Lion Pipeline System and SALA Gathering 22 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. • Crude pri
Slide 23: Terminalling Assets
19 13 75 97 107 122 123 122 2011 2012 2013 2014 2015 2016 Q2 2016 YTD Q2 2017 YTD Terminalling Assets (1) • Refined products terminalling services for Delek US and/or third parties • Comprised of terminals located in: • Memphis and Nashville, TN; • Tyler, Big Sandy (1) and Mt. Pleasant, TX; • El Dor
Slide 24: Summary of Certain Contracts
Summary of Certain Contracts (8) 24 ` Initial / Maximum Term (1) Service Six Months Ended June 30, 2017 Throughput (bpd)(2) Minimum Commitment (bpd) Current Tariff / Fee Tariff / Fee Index (10) Refinery Shutdown Force Majeure N/A N/A FERC N/A N/A N/A N/A Five / Fifteen Years Crude Oil Transportation
Slide 25: Summary of Certain Contracts - footnotes
Summary of Certain Contracts - footnotes 25 (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 26: Amended and Restated Omnibus Agreement Key Provisions
Amended and Restated Omnibus Agreement 26 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 27: Summary Organization Structure
Summary Organization Structure 27 36.5% interest Limited partner-common 94.6% 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 61.5% i
Slide 28: Income Statement and Non-GAAP EBITDA Reconciliation
Income Statement and Non-GAAP EBITDA Reconciliation 28 (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 commit
Slide 29: Reconciliation of Cash Available for Distribution
Reconciliation of Cash Available for Distribution 29 (1) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013, 2014, 2015 and 2016 based on actual amounts distributed during the periods; does not include a LTIP accrual. Coverage is defined as cash a
Slide 30: Non GAAP Reconciliations of Potential Dropdown EBITDA
Non GAAP Reconciliations of Potential Dropdown EBITDA (1) 30 (1) Based on projected range of potential future logistics assets that could be dropped to Delek Logistics from Delek US in the future. Amounts of EBITDA, net income and timing will vary, which will affect the potential future EBITDA and a
Slide 31: Investor Relations Contact
31 Investor Relations Contact: Kevin Kremke Keith Johnson Executive Vice President Vice President of Investor Relations 615-224-1323 615-435-1366
Delek Logistics Partners — Investor Presentation (August 2017) on 6ix