Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Wells Fargo Energy Symposium 2013
30 slides from Delek Us's conference presentation, Dec 11, 2013
Slide 1: Wells Fargo Energy Symposium December 2013
Delek US Holdings, Inc./ Delek Logistics Partners, LP Wells Fargo Energy Symposium December 2013
Slide 2: Safe Harbor Provision
Safe Harbor Provision 2 Delek US Holdings and Delek Logistics Partners, LP 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 Securities and Exchange Commission. Th
Slide 3: Delek US Holdings Overview
Delek US Holdings Overview Integrated Downstream Energy Company Operates 140,000 BPD of combined refined production capacity in Texas and Arkansas Refining Segment ) Owned crude/product terminals and pipeline assets in Texas, Arkansas and Tennessee Logistics Segment (1) Approximately 362 convenience
Slide 4: Well Positioned Mid-Continent Refining System
WTI - Midland 94% East Texas 6% Gulf Coast 6% Inland / Local 80% Rail 14% Well Positioned Mid-Continent Refining System 4 Strategically Located Assets Provide Access to Cost-Advantaged Feedstocks Tyler Crude Source (3Q13) El Dorado Crude Source (3Q13) Permian Eagle Ford Woodford 75% of 2013 Crude Sl
Slide 5: Refining Segment Operational Update
Refining Segment Operational Update
Slide 6: U.S. Refining Environment Trends
($30.00) ($20.00) ($10.00) $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 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
Slide 7: Access to Midland Crudes Benefits Margins
WTI Midland vs. WTI Cushing Crude Pricing ($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 ` Access to Midland Crudes Benefits Margins 7 Source: Argus – January MTD as of December 8, 2013 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 87,000 bpd of Midland crude in DK sy
Slide 8: Market Fundamentals Improving Into Q4 2013
$19.83 $14.86 $14.20 $7.71 $10.02 $15.02 $14.99 $12.43 Q2 2013 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 12/9/13 Market Fundamentals Improving Into Q4 2013 (1) 8 Improving light product prices Declining crude prices improving residual margins, particularly asphalt at El Dorado Gulf Coast crack
Slide 9: Tyler Refinery Overview
35,000 52,000 25,000 8,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1Q13 2Q13 - Improved Pipeline Access WTI - Midland East Texas / Other Gasoline 52% LPGs 5% Diesel / Jet 40% Other 3% WTI-Midland 94% East Texas 6% Tyler Refinery Overview 9 Inland PADD III refinery located in East Texas
Slide 10: El Dorado Refinery Overview
Improving Niche Market Position with a Crude Slate Weighted to WTI-Linked Crude Gasoline 49% Diesel 39% Asphalt 10% Other 2% Rail 14% Gulf 6% Inland/Local 80% El Dorado Refinery Overview 10 Inland PADD III refinery located in Southern Arkansas 80,000 bpd, 9.0 complexity (configured to run medium
Slide 11: Significant Organic Growth / Margin Enhancement Opportunities
Significant Organic Growth / Margin Enhancement Opportunities 11 El Dorado: LSR/Sat Gas Project (LSR) Improve liquid recovery of Butane & Propane at El Dorado; volumes based on first half 2013 results Tyler: Vacuum Tower Bottoms Project (VTB) Convert El Dorado asphalt to light product via Coker
Slide 12: Logistics Operational Update
Logistics Operational Update 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 partner interest, of DKL.
Slide 13: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview (NYSE: DKL) 13 DKL Asset Overview ~400 miles of crude and product transportation pipelines, including the 185 mile crude oil pipeline from Longview to Nederland, TX 600 mile crude oil gathering system Storage facilities with 3.7 million barrels of crude oi
Slide 14: Delek Logistics: Well Positioned for Growth
Delek Logistics: Well Positioned for Growth 14 4.9% yield (1) Distribution increased 8.0% over MQD through 3Q13 Distribution coverage ratio of 1.36x (YTD Sept 2013) (2) Estimated initial $10.5 million annual EBITDA from first drop- down (July 2013) Estimated $15-$20 million additional EBIT
Slide 15: DKL: Strong Performance & Value Creation Since IPO
Midstream MLP with long-term contracts providing stable, growing cash flow Supports Delek US’ profitable and strategically located inland refining system Unlocks value of marketing and logistics assets Strategic vehicle for growth Visible asset dropdown opportunities Partner for future a
Slide 16: Several Visible Pathways to Growth
Several Visible Pathways to Growth 16 Dropdowns from Delek US Organic Growth Acquisitive Growth $15 - $20 Million of potential EBITDA expected to be dropped down over next 6 to 12 months in addition to recently completed Tyler asset drop down Product Terminal/Tank Farm at El Dorado refinery 25
Slide 17: Recent Acquisitions
Recent Acquisitions Approximately $12 million of annual EBITDA 17 Tyler Tank Farm and Product Terminal First drop down from Delek US since the IPO, acquired July 26, 2013 Purchase price: $94.8 million Assets Include: 72,000 bpd capacity product terminal Approximately 2.0 million barrels of
Slide 18: DKL: Strong 2013 Year to Date Performance
DKL: Strong 2013 Year to Date Performance 18 (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. 28 (2) Reconciliation provided on page 27. YTD 3Q13 reported EBITDA
Slide 19: DKL: Increased Distribution with Conservative Coverage
DKL: Increased Distribution with Conservative Coverage 19 (1) MQD = minimum quarterly distribution set pursuant to the Partnership Agreement. Actual distribution paid for 4Q12 was a pro-rated amount of the MQD of $0.375 per unit. (2) Estimated based on assumption of a $0.01/unit distribution increas
Slide 20: Retail Operational Update
Retail Operational Update
Slide 21: Strong Retail Presence
946 990 1,039 1,082 285 279 2009 2010 2011 2012 3Q12 3Q13 $840 $897 $951 $1,011 $268 $279 2009 2010 2011 2012 3Q12 3Q13 Strong Retail Presence 21 Expanding Market Footprint in Markets Capable of Being Supplied by El Dorado Fuel Gallons Sold Per Store (000’s) Merchandise Sales Per Store ($000’s) Tenn
Slide 22: Delek US Financial Update
Delek US Financial Update
Slide 23: Strong Financial Performance & Delivering Value to Shareholders
Financial Highlights $164 $151 $130 $445 $541 $494 $375 2008 2009 2010 2011 LTM 3Q13 YTD12 YTD13 Record profitability in 2011 and 2012 driven by growth in the refining segment; Strong first half 2013 performance Strong cash flow generated from operations and Delek Logistics IPO in 2012 Last 12
Slide 24: Summary and Questions and Answers
24 Large, Complementary Logistics, Marketing and Retail Systems Significant Organic Growth / Margin Improvement Opportunities Focus on Shareholder Returns Strong Balance Sheet Strategically Positioned Refining Platform Questions and Answers
Slide 25: Appendix Additional Data
Appendix Additional Data
Slide 26: Historical and Projected Capital Spending
$42.3 $36.0 $65.9 $119.7 $14.5 $45.0 $66.1 $72.3 2010A 2011A 2012A 2013E Refining Retail, Logistics, Marketing and Other Historical and Projected Capital Spending 26 $56.8mm $81.0mm $132.0mm $192.0mm Source: Company filings.
Slide 27: Delek US Non-GAAP Reconciliation
Delek US Non-GAAP Reconciliation 27 Source: Company 10-K filings. ($ in millions) 2012 LTM 3Q13 3Q12 3Q13 Net cash provided by operating activities $462.9 $225.1 $270.9 $33.1 Purchase of property, plant and equipment 132.0 169.1 80.2 117.3 Free cash flow $330.9 $56.0 $190.7 ($84.2) Delek US Free Cas
Slide 28: Delek Logistics Non-GAAP Reconciliation
Delek Logistics Non-GAAP Reconciliation 28 (1) Forecast periods Include 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 co
Slide 29: Delek Logistics Cash Available for Distribution
Delek Logistics Cash Available for Distribution 29 YTD3Q13 Actual Results and Forecast Twelve Months ending September 30, 2013 (3) (1) Non-GAAP measure. See pg. 28 for the reconciliation to GAAP. (2) Distribution for forecast period based on $1.50 per unit; Distribution for three months ended Sept.
Slide 30: Investor Relations Contact
Investor Relations Contact: Assi Ginzburg Keith Johnson Chief Financial Officer Vice President of Investor Relations 615-435-1452 615-435-1366
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