Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (March 2018)
34 slides from Delek Logistics Partners, L.p's investor presentation, Mar 29, 2018
Slide 1: Delek Logistics Partners, LP Investor Presentation March 2018
Delek Logistics Partners, LP Investor Presentation March 2018 Exhibit 99.1
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”, “DKL” or “Delek Logistics”) that are based upon our current expectations and involve a number of risks and uncertainties. Stateme
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of close of trading on March 27, 2018. (2) Annualized distribution based on quarterly distribution for quarter ended December 31, 2017 that was paid on February 12, 2018. (3) For reconciliation please refer to pages 30 and 31. (4) A
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 Operates Premier Permian-Based Refining System
Delek Operates Premier Permian-Based Refining System DKL positioned to provide logistics support for 302,000 bpd of Crude Throughput Capacity (~69% Permian Basin Based) 5 • Premier Permian-based refining company • 7th largest independent refiner with 302,000 barrels per day crude throughput capacity
Slide 6: Increased Drop Down Inventory Creates Platform to Support Logistics Growth
Increased Drop Down Inventory plus Organic Project Creates Platform to Support Logistics Growth 6 Potential Growth for DKL • Delek Logistics provides platform to unlock logistics value • Increased access to Permian and Delaware basin through presence of Big Spring refinery • Improves ability to deve
Slide 7: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 8: Logistics Assets Positioned to Benefit from Permian Basin Activity
8 Logistics Assets Positioned to Benefit from Permian Basin Activity Growing logistics assets support crude sourcing and product marketing for customers • ~805 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longview to Nederland, TX • ~ 600 mi
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 58 MBbl/d in Q4 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) Reconciliation provided on page 30. Results in 2013 and 2014 are as reported excluding predecessor costs related to the drop down of the tank farms and product terminals at both Tyler and El Dorado during the respective periods.
Slide 11: Distribution coverage and leverage history
11 (1) MQD = minimum quarterly distribution set pursuant to the Partnership Agreement. (2) Distribution coverage ratio based on distributable cash flow divided by distribution amount in each period. Please see page 30 for reconciliation. (3) 4Q17 based on total distributions paid on February 12, 201
Slide 12: Going Forward Assets Positioned for Permian Basin Growth
Going Forward Assets Positioned for Permian Basin Growth
Slide 13: Permian Basin Attractive Drilling Economics Support Growth
13 Production continued to grow through crude oil price volatility Permian Basin Attractive Drilling Economics Support Growth Crude Oil Production Grew Despite Rig Decline (1) • Crude oil production benefited by low breakeven costs and improved efficiencies • As crude oil prices have increased, rig
Slide 14: Big Spring Logistics Asset Dropdown
14 Big Spring Logistics Asset Dropdown 1) Reconciliation on pg. 33. • Drop down closed in March with an effective date of March 1, 2018 • Purchase price of $315.0 million which equates to a 7.8x EBITDA multiple. • Forecasted annualized EBITDA of $40.2M (1) • Financed through a combination of cash on
Slide 15: Joint Venture with Green Plains
15 Joint Venture with Green Plains 1) Reconciliation on pg. 33. • On February 20, 2018 announced a joint venture with Green Plains Partners intended to purchase third party logistics assets • Potential Acquisition • Two light products terminals – Caddo Mills, TX and North Little Rock, AR • Expected
Slide 16: Joint Venture Pipeline Projects
Caddo Pipeline ■ Delek Logistics (50%)/Plains (50%) ■ Cost: $123 million ■ Capacity: 80,000 Bbl/d ■ Length: 80 miles ■ Completed: January 2017 ■ Provides additional logistics support to El Dorado refinery with third crude supply source Rio Pipeline (Delaware Basin) ■ Andeavor (67%)/ Delek Logistics
Slide 17: Asset Overview: Paline Pipeline
Note: The previous contract that expired on June 30, 2016 had 35,000 Bbl/d of mainline capacity reserved for third parties to use exclusively during a term that began on January 1, 2015. Delek Logistics elected to extend the contract at 10,000 Bbl/d from July 1, 2016 to December 31, 2016. Following
Slide 18: West Texas Wholesale Business Benefiting from Permian Activity
18 West Texas Wholesale Business Benefiting from Permian Activity West Texas Wholesale and Marketing Gross Margin 13,377 Bbl/d 14,353 Bbl/d 15,493 Bbl/d 16,523 Bbl/d 18,156 Bbl/d 16,707 Bbl/d 16,357 Bbl/d (1) (1) (1) (1) ($ in millions) Substantial Increase in Permian Production Expected(3) 14,467 B
Slide 19: Several Visible Pathways for Potential Growth
Several Visible Pathways for Potential Growth 19 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 that expired in 2017 have been extended by De
Slide 20: Peer Comparisons
Peer Comparisons(1) 20 Current Yield as of 3/27/2018 Leverage Ratio (1) 3.2x 3.3x 3.4x 3.6x 3.8x 4.0x 4.0x 4.1x 4.4x 5.4x - 1.0 2.0 3.0 4.0 5.0 6.0 PSXP MMP VLP MPLX DKL ETP ANDX EPD HEP PAA 14.1% 10.5% 10.5% 9.7% 9.1% 7.4% 7.0% 6.4% 5.9% 5.6% 5.4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% ETP DKL
Slide 21: Questions and Answers
21 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 22: Appendix
Appendix etek! ED
Slide 23: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible 23 Inland refinery located in East Texas 75,000 bpd, 8.7 complexity Processes inland light sweet crudes El Dorado Refinery (1) Tyler Refinery (1) Inland refinery located in southern Arkansas 80,000 bpd, 10.2 complexity (configu
Slide 24: Asset Overview: Lion Pipeline System and SALA Gathering
Asset Overview: Lion Pipeline System and SALA Gathering 24 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 25: Terminalling Assets
19 13 75 97 107 122 124 2011 2012 2013 2014 2015 2016 2017 Terminalling Assets (1) • Refined products terminalling services for Delek US and/or third parties • Comprised of terminals located in: • Memphis and Nashville, TN; • Big Spring (asphalt and light products), Tyler, Big Sandy (1) and Mt. Plea
Slide 26: Summary of Certain Contracts
Summary of Certain Contracts (8) 26 ` Initial / Maximum Term (1) Service 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 59,362 46,000 (3) $0.9483
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 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 30: Reconciliation of Distributable Cash Flow
Reconciliation of Distributable Cash Flow 30 (1) Distribution based on actual amounts distributed during the periods; does not include a LTIP accrual. Distribution coverage rato is defined as distributable cash flow divided by total distribution. (2) Results in 2013, 2014 and 2015 are as reported ex
Slide 31: Income Statement and Non-GAAP EBITDA Reconciliation
Income Statement and Non-GAAP EBITDA Reconciliation 31 (1) Results in 2013 and 2014 are as reported excluding predecessor costs related to the drop down of the tank farms and product terminals at both Tyler and El Dorado during the respective periods. (2) Results for 1Q15 are as reported excluding p
Slide 32: Non-GAAP Reconciliations of Forecasted Dropdown EBITDA
Non-GAAP Reconciliations of Forecasted Dropdown EBITDA (1) 32 (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
Slide 33: Non-GAAP Reconciliations of Forecasted Dropdown EBITDA
Non-GAAP Reconciliations of Forecasted Dropdown EBITDA (1) 33 (1) Amounts of EBITDA, net income and timing will vary, which will affect the potential future EBITDA and associated deprecation and interest at DKL. Actual amounts will be based on timing, performance of the assets, DKL’s growth plans an
Slide 34: Investor Relations Contact
34 Investor Relations Contact: Kevin Kremke Keith Johnson Executive Vice President and CFO Vice President of Investor Relations 615-224-1323 615-435-1366
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