Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (May 2014)
29 slides from Delek Us's investor presentation, May 12, 2014
Slide 1: Investor Presentation – May 2014 Delek US Holdings
Investor Presentation – May 2014 Delek US Holdings
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
REFINING Delek US Holdings Overview Integrated Downstream Energy Company – Crude Gathering to Retail Locations (1) Delek Logistics Partners , LP (NYSE:DKL) began operating on Nov. 7, 2012 and, from that date, 100% of its performance has been reported as a segment of Delek US. Delek US and its affili
Slide 4: Integrated Business Model
4 Integrated Business Model Flexible Crude Sourcing and Market Driven Production Enhance Performance Flexible Crude Oil Sourcing •Pipeline access to Midland; Gulf Coast; Cushing • Increasing Gathering – Texas and Arkansas •Access to Canadian crude Crude Logistics •Crude oil pipelines supporting refi
Slide 5: Mid-Continent Refining System
Mid-Continent Refining System 5 Strategic Location Allows Access to Cost-Advantaged Feedstocks and Niche Markets Note: During 1Q14, the El Dorado refinery completed a turnaround in Jan./Feb. which lowered throughput for the quarter. Also, Midland and local crude was stored during turnaround allowing
Slide 6: Refining Segment Operational Update
Refining Segment Operational Update
Slide 7: U.S. Refining Environment Trends
U.S. Refining Environment Trends Refined Product Margins and WTI-Linked Feedstock Favor Delek US (1) Source: Platts; 2014 data is as of May 9, 2014; quarterly averages shown.; 5-3-2 crack spread based on HSD (2) Crack Spreads: (+/-) Contango/Backwardation -$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n
Slide 8: WTI Midland vs. WTI Cushing Crude Pricing
WTI Midland vs. WTI Cushing Crude Pricing ($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 ` Access to Midland Crudes Benefits Margins 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 ($ per barrel) 1Q14 87,000 bpd of Midland crude in DK system 8 2Q14 Source: Argus – June
Slide 9: Tyler Refinery Overview
Tyler Refinery Overview 9 Inland PADD III light product refinery located in East Texas Planning underway for 1Q15 turnaround Serves a niche market in the Tyler, TX area; priced above Gulf Coast markets Currently 60,000 bpd, 9.5 complexity; demonstrated 64,000 bpd ability Products shipped a
Slide 10: El Dorado Refinery Overview
Improving Niche Market Position with a Crude Slate Weighted to WTI-Linked Crude El Dorado Refinery Overview 10 Inland PADD III refinery located in Southern Arkansas 80,000 bpd, 9.0 complexity (1Q14 configured to run light and medium sour crude) Improved flexibility during 1Q14 turnaround; FCC
Slide 11: Significant Organic Growth / Margin Enhancement Opportunities
Significant Organic Growth / Margin Enhancement Opportunities 11 DHT Revamp – Phases I & II Increase ULSD production from 30,000 bpd to 35,000 bpd; (Phase 1 increased to 33,000 bpd) Completed low-cost, high-return capital projects at El Dorado and Tyler SCOPE COST TIMING $2.4 million Completed Cru
Slide 12: Logistics Operational Update
Logistics Operational Update
Slide 13: Strategic Partner in Delek Logistics Partners, LP
Strategic Partner in Delek Logistics Partners, LP (NYSE: DKL) 13 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 14: DKL: Several Visible Pathways to Growth
DKL: Several Visible Pathways to Growth 14 Dropdowns from Delek US Organic Growth Acquisitive Growth $5 - $10 Million of potential EBITDA expected to be dropped down over next 12 months in addition to recently completed Tyler and El Dorado asset drop downs 25,000 bpd (light crude) rail offloadin
Slide 15: DKL: Strong Performance & Value Creation
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: Retail Operational Update
Retail Operational Update
Slide 17: Retail Locations Creates Synergies for Product Marketing
990 1,039 1,082 1,112 264 270 2010 2011 2012 2013 1Q13 1Q14 $897 $951 $1,011 $1,037 $230 $247 2010 2011 2012 2013 1Q13 1Q14 Retail Locations Creates Synergies for Product Marketing 17 Expanding Market Footprint in Markets Capable of Being Supplied by El Dorado Fuel Gallons Sold Per Store (000’s) Mer
Slide 18: Focused on Organic Growth
Focused on Organic Growth 18 Large Format Stores are focal point Approximately 4,800 square feet Offer customers wider product selection Prepared food service offering increases traffic Avg. 3+ million gallons and $2+m inside sales once market penetrated 3 year growth trajectory for mark
Slide 19: Financial Update
Financial Update
Slide 20: Financial Highlights
Financial Highlights $164 $151 $130 $445 $659 $448 $386 2008 2009 2010 2011 2012 2013 LTM Mar. 2014 2013 cash flow supported capital program, acquisitions and cash returned to shareholders Ended 2013 with $400 million of cash Strong 2012 cash flow generated from operations and Delek Logistics
Slide 21: Going Forward
Going Forward
Slide 22: Market Fundamentals
$19.83 $14.86 $14.20 $7.71 $10.02 $15.02 $14.37 $17.28 $13.88 $13.76 $18.26 $17.29 Q2 2013 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May- 14 Market Fundamentals(1) 22 Improving light product prices 5-3-2 Gulf Coast crack spread improving Midland discount to Cushing
Slide 23: Delek US Focused on Building an Integrated Business Model
Delek US Focused on Building an Integrated Business Model 23 A core part of Delek US' strategy is to grow via prudent strategic transactions since 2001 (1) Includes logistic assets in purchase price. Purchase price includes working capital for refineries. 2006 Abilene & San Angelo terminals $55.1 mm
Slide 24: Delek US Asset Base has Grown and Diversified
Delek US Asset Base has Grown and Diversified 2010 2013 Crude Gathering Crude Logistics Refining Logistics Retail Total Pipeline Mileage Midland crude, bpd Throughput Capacities: Total Crude, bpd Light crude , bpd DHT, bpd Coker, bpd GHT/LSR, bpd Biodiesel Plants Product Terminals Large format store
Slide 25: Investment Highlights and Questions and Answers
25 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 26: Appendix Additional Data
Appendix Additional Data
Slide 27: Historical and Projected Capital Spending
$42.3 $36.0 $65.9 $144.3 $189.9 $0.9 $10.5 $5.1 $18.4 $14.4 $36.5 $29.1 $37.9 $30.3 $0.1 $7.6 $26.5 $35.0 $21.2 2010A 2011A 2012A 2013A 2014E * Refining Logistics (Marketing) Retail Other Historical and Projected Capital Spending 27 $56.8mm $81.0mm $132.0mm $222.3mm Source: Company filings. $259.8mm
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 28 Source: Company filings. ($ in millions) 2008 2009 2010 2011 2012 2013 LTM 3/2014 Net sales $4,723.7 $2,666.7 $3,755.6 $7,198.2 $8,726.7 $8,706.8 $8,312.6 Cost of goods sold 4,308.1 2,394.1 3,412.9 6,429.9 7,704.4 7,872.1 $7,540.3 Operating expenses 240.8 219.0 229.5 320.9
Slide 29: Investor Relations Contact
Investor Relations Contact: Assi Ginzburg Keith Johnson Chief Financial Officer Vice President of Investor Relations 615-435-1452 615-435-1366