Delek Us Holdings, Inc. · NYSE:DK

Delek Us — Investor Presentation (May 2020)

43 slides from Delek Us's investor presentation, May 12, 2020

  1. Slide 1: Delek US Holdings, Inc. Investor Presentation May 2020

    Exhibit 99.1 Delek US Holdings, Inc. Investor Presentation May 2020

  2. Slide 2: Disclaimers - Forward Looking Statements

    Disclaimers Forward Looking Statements: Delek US Holdings, Inc. (“Delek US”) and Delek Logistics Partners, LP (“Delek Logistics”; and collectively with Delek US, “we” or “our”) are traded on the New York Stock Exchange in the United States under the symbols “DK” and ”DKL”, respectively. These slides

  3. Slide 3: Investment Overview (NYSE: DK)

    InvestmentInvestment OverviewOverview (NYSE:(NYSE: DK)DK) • March 31, 2020 balance sheet: Flexible Financial Position to • Delek US: approx. $785 million of cash; $2.2 billion of debt Support Midstream Growth • Includes $4.2 million cash and $940 million debt of DKL • Net debt (excl. DKL) of $496 mi

  4. Slide 4: Integrated Company with Asset Diversity and Scale

    Integrated Company with Asset Diversity and Scale Strategically located assets with growing crude oil optionality Source 207,000 bpd from Permian Basin Access to Cushing; 35,000 bpd • Growing gathering system increasing to 100,000 bpd first half • Wink to Webster JV Crude oil 2020 Pipeline CADDO RIO

  5. Slide 5: Long History of Opportunistic Acquisitions & Value Creation

    Long History of Opportunistic Acquisitions & Value Creation Being Nimble and Capturing Market Dislocations / Opportunities DKL Joint Ventures Increased Gathering RIO Pipeline East and West Texas 2011 Caddo Pipeline SALA Gathering Lion Oil acquisition 2019 2013 2014 2015 2018 2011 2012 2017 New Alban

  6. Slide 6: Distinguishing Characteristics

    Distinguishing Characteristics 1) Source: Platts and NYMEX as of May 5, 2020 6

  7. Slide 7: Environmental, Social, and Governance (ESG)

    Environmental, Social, and Governance (ESG)  We are committed to our employees, the  DK’s governance structure reflects our  DK owns 3 biodiesel facilities with ~40mm gallons of annual biodiesel production environment and communities in which we commitment to serve the best interests capacity ope

  8. Slide 8: Midstream: Big Spring Gathering System

    Midstream: Big SpringSpring Gathering Gathering System System GatheringDelek US’ GatheringHelps Control Helps Crude Control Oil Crude Quality Oil and Quality Cost andinto CostRefineries into Refineries  Getting closer to wellhead allows us to control crude quality and cost Big Spring Gathering Syst

  9. Slide 9: Midstream: Wink to Webster Crude Oil Long Haul Pipeline Joint Venture

    Midstream: Wink to Webster Crude Oil Long Haul Pipeline Joint Venture Complements Gathering – Provides Access to Gulf Coast Markets Wink to Webster Pipeline JV  650-mile 36-inch diameter crude oil pipeline  Wink to Webster Pipeline LLC – Exxon, Plains, MPLX, Delek US, Rattler Midstream, Lotus Mids

  10. Slide 10: Midstream: Red River Pipeline Joint Venture

    Midstream: Red River Pipeline Joint Venture Red River Pipeline JV  DKL purchased 33% interest in May 2019  Planned expansion from 150 kbpd to 235 kbpd . Approx. $128.0 million initial investment; Financed with revolver  Expected completion in second half of 2020 . DKL will contribute $20.0 millio

  11. Slide 11: Midstream: Utilizing Free Cash Flow & Strong Balance Sheet to Fund Growth

    Midstream: Utilizing Free Cash Flow & Strong Balance Sheet to Fund Growth Supports goal to generate approximately $370 million to $395 million of annualized midstream adjusted EBITDA by ’23 Strong Adjusted EBITDA Growth Profile from Midstream Initiatives (1) ($ in millions) Delek US announced goal t

  12. Slide 12: Transforming to More Diversified Adjusted EBITDA

    Transforming to More Diversified Adjusted EBITDA 2019 Adjusted EBITDA (1) -25%  Midstream to comprise increasing % of future adjusted EBITDA 26% . More stable revenue stream 93% . Higher multiple business 6%  Refining contribution supported by operating cost and overhead reductions Refining Retail

  13. Slide 13: Previous Organic Capital Spend Drives Future EBITDA Growth

    Previous Organic Capital Spend Drives Future EBITDA Growth Capital Diversifies EBITDA Base Divested Underperforming Assets Adjusted EBITDA ($mm)  ’18 divested Paramount, CA/AltAir Renewables, West Coast Asphalt terminals, Long Beach, CA  (collectively removed ~$35mm of annual carrying costs - base

  14. Slide 14: Retail: Diversifies Delek and Footprint

    Retail: Diversifies Delek DK Advantage and Footprint  ~80% integration with existing downstream operations offering synergies and competitive advantage  Operate approximately 253 C-stores in Central and West Texas and New Mexico Ongoing Strategy  Divesting underperforming stores  Rebrand 7-Eleve

  15. Slide 15: Renewables: Biodiesel Facilities

    Renewables: Biodiesel Facilities Estimated Carbon Saved by producing Lower Carbon Intensity Fuel (1) 3 Biodiesel Facilities: ~40mm gallons of Annual Biodiesel Production Capacity ~1 Billion Crossett, AR Miles driven by an average passenger vehicle Cleburne, TX New Albany, MS : ~86,500 ~52 billion Pa

  16. Slide 16: PADD Refining System with Crude Slate Optionality

    PADD 3 Refining System with Crude Slate Optionality Tyler, Texas 1Q20 • 75,000 bpd crude oil Tyler(1) throughput Increasing Access to Cushing Crude Oil Grades, bpd 7% • 8.7 complexity WTI 100% Crude Current • Light crude oil refinery 1st Half 2020 WTI Throughput Crude Oil ETX • Permian Basin, Cushin

  17. Slide 17: Niche Market = Margin Strength

    Niche Market = Margin Strength Permian Centric Assets Offer Advantaged Access (1) Transportation economics should set the differential Long-Term Indication of Permian/Brent Export Economics  Barrels need incentive to clear the market $10.00 ~$7-9/bbl  The “incremental barrel” must be exported  Pe

  18. Slide 18: Long-Term Capital Allocation Framework

    Long-Term Capital Allocation Framework Four pillars underpinned by a rigorous and disciplined capital allocation program to create long-term value Priorities: • Invest: Capital allocation program focuses on safety, maintenance, and reliability as top priority • Dividends: Maintain a competitive, com

  19. Slide 19: Capital Allocation – Balanced & Flexible

    Capital Allocation – Balanced & Flexible  2020 includes the following projects:  CAPEX expected to decline approximately . Big Spring Turnaround . 23% from original 2020 forecast . Completed in early March 2020 . 42% from 2019 actuals  Spent 76% of full-year budget in First Quarter  Does not inc

  20. Slide 20: Capital Allocation Discipline

    Capital Allocation Discipline Cash Balance & Net Debt (DK Ex. DKL)(1) Maintaining a Strong Balance Sheet $1,128 $1,090 $1,079 $1,013 $984 $1,000  Should support ability to invest in the business and $946 $950 return cash to shareholders $781  Provides ability to act quickly to take advantage of $4

  21. Slide 21: Capital Allocation Discipline in Practice: Cash Returned to Shareholders

    Capital Allocation Discipline in Practice Cash Returned to Shareholders Delek US Cash Returned(1) 2019 Cash Returned to Shareholders as % of Market Cap(2) 12% 11% 10% 9% 9% 8% 8% 7% $157.9 6% 6% 4% $92.1 4% $58.6 $46.2 $43.0 $30.3 $1.9 2% $21.0 $20.9 $21.0 $21.5 $21.8 $22.5 $23.1 0% PBF VLO PSX CVI

  22. Slide 22: Market Opportunities & Valuation

    Market Opportunities & Valuation

  23. Slide 23: Peer Leading Light Products Yield

    Peer Leading Light Products Yield Delek US positioned to benefit with high value product yields and crude oil slate flexibility  Refining system product yields . Middle distillate: average approx. 115,000 bpd of 1Q20 Refiners’ Middle Distillates Yield % (1) (2) (3) distillate or 42 million barrels

  24. Slide 24: Valuation Opportunity: Partial Segment Sum of Parts

    Valuation Opportunity Partial Segment Sum of Parts Midstream '23E EBITDA ($mm)* (1) (2) EBITDA Multiple  $383 8.0 x 10.0 x DK earnings stream to become more stable with midstream $3,060 $3,825 growth Retail Marketing (1) '23E EBITDA ($mm) EBITDA Multiple  DK dividend yield well above S&P 500 avera

  25. Slide 25: An Integrated and Diversified Refining, Logistics and Marketing Company

    An Integrated and Financial Flexibility to Diversified Refining, Support Strategic Logistics and Marketing Company Objectives Permian Focused Invest in the Business to Refining System with Focus on Long-Term Operate Reliably and Increasing Access to Shareholder Returns Safely Cushing Growing Midstre

  26. Slide 26: Appendix

    Appendix

  27. Slide 27: 1Q20 Cash Flows

    1Q20 Cash Flows  Strong financial position with over $785 million of cash on the balance sheet  Cash flow from operating activities of approx. $(154) million  Working capital increased cash flow by approx. $102 million  Total investing activities of approx. $147 million: . Cash capital expenditu

  28. Slide 28: 2Q20 Guidance Range

    1Q20 Guidance Range 2Q20 Guidance Range Low High Consolidated Operating Expenses, $ in millions $140.0 $150.0 Consolidated G&A, $ in millions $57.0 $63.0 Consolidated Depreciation and Amort., $ in millions $53.0 $55.0 Net interest expense, $ in millions $32.0 $34.0 Estimate Diluted Share Count (excl

  29. Slide 29: Current Delek US Corporate Structure

    Current Delek US Corporate Structure 94.6% ownership interest (1) Delek US Holdings, Inc. NYSE: DK Delek Logistics GP, LLC (the General Partner) 71.1% interest in LP units 2.0% interest General partner interest Incentive distribution rights Delek Logistics Partners, LP NYSE: DKL 1) As of March 31, 2

  30. Slide 30: Market Data

    Market Data

  31. Slide 31: Access to Midland Crude Oil Benefits Margins

    Access to Midland Crude Oil Benefits Margins WTI Midland vs. WTI Cushing Crude Oil Pricing (1) ($ per barrel) $2.00 $0.00 ($2.00) ($4.00) ($6.00) ($8.00) ($10.00) ($12.00) ($14.00) ($16.00) ($18.00) Jul-18 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-19 Jan-16 Jan-11 Jan-12 Jan-13 Jan-14 Jan

  32. Slide 32: U.S. Refining Environment Trends

    U.S Refining Environment Trends Refined Product Margins and WTI-Linked Feedstock Favor Delek US (1) (2) (2) $50 Brent-WTI Cushing Spread Per Barrel WTI 5-3-2 Gulf Coast Crack Spread Per Barrel LLS 5-3-2 Gulf Coast Crack Spread Per Barrel $40 $30 $20 $10 $0 -$10 -$20 -$30 Jul-14 Jul-10 Jul-11 Jul-12

  33. Slide 33: Reconciliations

    Reconciliations

  34. Slide 34: Non-GAAP Reconciliation of Alkylation Project EBITDA

    Non-GAAP Reconciliation of Alkylation Project EBITDA(1) Reconciliation of Forecast Incremental U.S. GAAP Net Income (Loss) to Forecast Incremental EBITDA for Alkylation Project ($ in millions) Annual Amount Forecasted Incremental Net Income $ 33.2 Add Forecasted Incremental Amounts for: Interest Exp

  35. Slide 35: Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA

    Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA(1) Krotz Springs Logistics Drop Down Reconciliation of Forecast Incremental U.S. GAAP Net Income (Loss) to Forecast Incremental EBITDA ($ in millions) Forecasted Range Forecasted Incremental Net Income $ 2.9 $ 3.3 Add Forecasted Incr

  36. Slide 36: Non-GAAP Reconciliations of Adjusted EBITDA

    Non-GAAP Reconciliations of Adjusted EBITDA 36

  37. Slide 37: Increased Distribution with Conservative Coverage and Leverage

    IncreasedIncreased Distribution withwith Conservative CoverageCoverage and and Leverage Leverage Distribution per unit has been increased twenty-nineth consecutive times since the IPO $0.385 $0.395 $0.405 $0.415 $0.425 $0.475 $0.490 $0.510 $0.530 $0.550 $0.570 $0.590 $0.610 $0.630 $0.655 $0.680 $0.6

  38. Slide 38: DKL: Reconciliation of Cash Available for Distribution

    DKL: Reconciliation of Cash Available for Distribution (dollars in millions, except coverage) 42013 (2) 1Q14 (2) 2Q14(2) 3Q14(2) 4Q14(2) 2014 (2) 1Q15(2) 2Q15 3Q15 4Q15 2015 (2)(3) 1Q16 2Q16 3Q16 4Q16 2016 (3) Reconciliation of Distributable Cash Flow to net cash from operating activities Net cash p

  39. Slide 39: DKL: Income Statement and Non-GAAP EBITDA Reconciliation

    DKL: Income Statement and Non-GAAP EBITDA Reconciliation 4 Q2013(1) 1Q14(1) 2Q14 3Q14 4Q14 2014 (1) 1Q15(2) 2Q15 3Q15 4Q15 2015(2) 1Q16 2Q16 3Q16 4Q16 2016 Net Revenue $907.4 $203.5 $236.3 $228.0 $173.3 $841.2 $143.5 $172.1 $165.1 $108.9 $589.7 $104.1 $111.9 $107.5 $124.7 $448.1 Cost of Sales (811.4

  40. Slide 40: Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA

    Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA(1) Reconciliation of Forecast Incremental U.S. GAAP Net Income (Loss) to Forecast Incremental EBITDA for Paline Pipeline Tariff Increase ($ in millions) Annual Monthly Forecasted Incremental Net Income $ 10.8 $ 0.9 Add Forecasted Inc

  41. Slide 41: Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA

    Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA(1) Delek Logistics Partners, LP Reconciliation of Forecasted Incremental Annualized Net Income to Forecasted Incremental Annualized Adjusted EBITDA for the Red River Pipeline Joint Venture ($ in millions) Pre-Expansion Range Post-Exp

  42. Slide 42: Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA

    Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA 42

  43. Slide 43: Investor Relations Contacts

    Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312

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