Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (June 2011)
39 slides from Delek Us's investor presentation, Jun 10, 2011
Slide 1: Investor Presentation
Investor Presentation Delel<« tus)
Slide 2: Safe Harbor Provision
Safe Harbor Provision 2 Delek US Holdings is traded on the New York Stock Exchange in the United States under the symbol "DK" and, as such, is governed by the rules and regulations of the United States Securities and Exchange Commission. This presentation may contain forward-looking statements that
Slide 3: Integrated Downstream Energy Company
Integrated Downstream Energy Company(1) Breadth of Exposure Across Refining, Wholesale Marketing and Retail Distribution Operates 140,000 BPD of refined production capacity in Texas and Arkansas Refining Segment ) Owned product terminals and pipeline assets in Texas, Arkansas and Tennessee Marketing
Slide 4: Lion Oil Transaction Executive Summary
Lion Oil Transaction Executive Summary
Slide 5: Transaction Summary
Transaction Summary Asset Overview Purchase Summary 80,000 BPD refinery in El Dorado, Arkansas 80-mile Magnolia-El Dorado crude oil system (Shreveport, LA to Magnolia terminal) 28-mile El Dorado crude oil system (Magnolia terminal to El Dorado refinery) Crude oil gathering system with more than 800
Slide 6: El Dorado, Arkansas Refinery
El Dorado, Arkansas Refinery 6 Inland, PADD III Refinery With Broad Distribution Footprint Throughout the Mid-Continent Medium Sour Crude Oil Refinery Typical crude gravity - 30.5°API Typical crude sulfur - 1.75% Key Sources of Crude Local Arkansas crude gathering system (21% of crude slate) Offshor
Slide 7: El Dorado Refinery Crude Slate (Calendar 2010)
El Dorado Refinery Crude Slate (Calendar 2010) 7 El Dorado processes a combination of local Arkansas, domestic offshore and foreign crude oils Louisiana Offshore crude oil includes: Eugene Island, Louisiana Light Sweet, Mars, North Louisiana Sweet, Poseidon and Thunder Horse Blend Other crude oils i
Slide 8: Transaction Expected To Diversify Delek US' Crude Slate
Transaction Expected To Diversify Delek US' Crude Slate 8 Balanced Exposure - Less Dependence on Light, Sweet Crude Pricing Essentially 50/50 (Sour-intermediate vs. Light) Crude Slate Becomes More Balanced Crude Slate Transition - Pre/Post Transaction Tyler Refinery El Dorado Refinery Pro-Forma (Com
Slide 9: Anticipated Combined Product Slate
Anticipated Combined Product Slate(1) 9 Tyler Refinery El Dorado Refinery Pro-Forma (Combined) (1) "Other" includes LPG, Black Oil and other residual products
Slide 10: Light Product Marketing Throughout the Mid-Continent
Light Product Marketing Throughout the Mid-Continent 10 Access To The Enterprise Products Pipeline(1) Integration Opportunity Expands marketing opportunity into the Mid-Continent El Dorado expected to supply MAPCO store locations in Tennessee and Arkansas Tyler and El Dorado Expected To Ship Product
Slide 11: Lion Oil Financial Estimates
Lion Oil Financial Estimates 11 Key Financial Disclosures(1) As indicated on the first quarter 2011 results conference call held on May 5, 2011 Lion Oil accounts for product inventory under the FIFO method and for crude inventory under the LIFO method; contribution margin estimates exclude FIFO inve
Slide 12: Second Quarter 2011 El Dorado Refinery Update
Second Quarter 2011 | El Dorado Refinery Update(1) 12 As indicated in the press release and form 8-K dated May 18, 2011 Mississippi River Flooding Led to Partial Crude Supply Disruption At the El Dorado Refinery Major pipeline operator suspended crude oil shipments on their pipeline system as a prec
Slide 13: Refining Segment Operational Update
Refining Segment Operational Update
Slide 14: Refining Segment | Tyler Refinery Update
Refining Segment | Tyler Refinery Update Tyler Refinery Update 14 Refining Segment Drove Strong First Quarter Results Gulf Coast Refining Economics Remain Strong Early Into 2Q:11 WTI Discount Continues To Benefit Tyler During 2Q:11 Decline in volumetric loss following recent capital work As of June
Slide 15: Tyler Refinery Is A Niche, Inland Asset
Tyler Refinery Is A Niche, Inland Asset Tyler Refinery 60,000 barrels per day Niche, Inland Refiner In PADD III ) 9.4 complexity; equipped with a delayed coking unit High Conversion, Moderate Complexity Primarily local domestic crudes such as WTI and East Texas Crude Processes Mostly Light Sweet Cru
Slide 16: WTI Priced At A Discount To Competing Crudes
WTI Priced At A Discount To Competing Crudes Current cost to purchase WTI is significantly below competing crudes Substantial widening of crude differentials ) Cheaper crude lowers the cost of production, benefiting refining margin Wider differentials benefit refiners processing WTI 16 WTI Is More T
Slide 17: WTI Contango Market Structure Favors Tyler
WTI Contango Market Structure Favors Tyler WTI Contango Benefit Effectively Reduces Tyler's Cost of Crude Oil Tyler historically has purchased mostly WTI - an inexpensive local crude Purchase Light, Sweet, Domestic Crudes ) Serves as a reduction to our cost of goods; benefits refining margin Contang
Slide 18: Contango Benefits The "Theoretical" Benchmark
Contango Benefits The "Theoretical" Benchmark Building a Theoretical Benchmark High-Sulfur Diesel 5-3-2 Gulf Coast Crack Spread + Contango = Theoretical Margin "Theoretical" Benchmark For Tyler 18 High-Sulfur Diesel 5-3-2 Gulf Coast Crack Spread, Including Contango Benefit* *Source: WTI Backwardatio
Slide 19: Refining Benchmark Well Above Historical Levels
Refining Benchmark Well Above Historical Levels 19 Crack Spread (per bbl) Reached Multi-Year High During April-May-June 2011(1) (1) Source: Platts; references the High Sulfur Diesel 5-3-2 Gulf Coast Crack Spread; June 2011 data is as of June 9, 2011 Recent Elevated 5-3-2 Gulf Coast Crack Spread Stro
Slide 20: Recent Investments Lowered Volumetric Loss
Recent Investments Lowered Volumetric Loss(1) More gasoline yield; less conversion of liquids (naphtha) to fuel the refinery MSAT II Project Improves Liquid Yield 20 Lower Volumetric Loss Partially Due to MSAT II Project Creating More High-Value Product Helps Realizations (1) Volumetric loss calcula
Slide 21: Retail Segment Operational Update
Retail Segment Operational Update
Slide 22: Retail Segment | Operational Update
Retail Segment | Operational Update 22 Seven Consecutive Quarters of Same- Store Merchandise Sales Growth(1) Higher Crude Prices Generally Impact Demand, Retail Fuel Margins Food Service Initiative Gaining Momentum Private Label Initiative - A Key Margin Driver Store Reimaging Program Successful - R
Slide 23: Recovery In Same-Store Merchandise Sales
Recovery In Same-Store Merchandise Sales Key Factors Affecting Same-Store Sales Relevant Factors: Location, size, appeal, offering, affordability, people Same-Store Merchandise Sales ) Relevant Factors: Commodity prices, weather, supply disruptions Same-Store Gallons Sold 23 Same-Store Merchandise S
Slide 24: Retention of High-Quality Assets Improves Results
Retention of High-Quality Assets Improves Results Retaining High-Quality, Top-Performing Assets Merchandise & fuel gallons sales per average number of stores increased in 2010 Multi-Year Recovery Underway ) Divested underperforming assets in the 2008-2010 timeframe Shed Underperforming Assets 24 Mer
Slide 25: Fresh Food Service Initiative Performing Well
Fresh Food Service Initiative Performing Well Opportunity To Grow Inside Sales and Margins Redefining the utility of the neighborhood convenience store Food Service as a Destination Point ) Food service margins exceed the trailing corporate merchandise margin average Food Service as a Margin Driver
Slide 26: Private Label Initiative Making Progress
Private Label Initiative Making Progress Private Label - A Value Offering That Generates Above Average Margins Higher margin, lower-cost option for consumers Quality, Affordable Replacement Option ) Private label is an effective way of offering value to time-starved consumers Countermeasure To Chann
Slide 27: Store Reimaging & New Construction Initiatives
Store Reimaging & New Construction Initiatives Elevate MAPCO Brand Through Store Remodeling and New Construction More than 36% of store base was reimaged or newly constructed as of 3/31/11 Multi-Year Store Enhancement Initiative ) Construct 10-20 new stores per annum in the 2011-2015 timeframe(1) Fi
Slide 28: Favorable Impact From Store Reimaging
Favorable Impact From Store Reimaging Strong Economic Case Favoring Store Reimaging Investment Reshaping the retail brand identity to attract a broader demographic Newer, Cleaner Stores Draw Customers ) Atmosphere matters, especially when you are selling food and produce More Conducive To Fresh Offe
Slide 29: Marketing Segment Operational Update
Marketing Segment Operational Update
Slide 30: Marketing Segment | Operational Update
Marketing Segment | Operational Update Wholesale Marketing In West Texas Owned (San Angelo, Abilene, Tyler); Third-Party (Aledo, Odessa, Big Springs, Frost) Product Marketing Terminals ) Owned and leased pipelines transport crude to Tyler refinery Supply Synergies With Tyler 30 ) Annual CAPEX less t
Slide 31: Appendix: Additional Data
Delel« tus) Appendix Additional Data
Slide 32: Historical and Projected Capital Spending
Historical and Projected Capital Spending(1) 32 2011 estimates as indicated in the 10-Q dated May 6, 2011 excludes any impact from the Lion Oil Transaction; 2010 spending includes $0.1 million of "other" capital spending ; 2011 estimate includes $0.3 million of "other" capital spending.
Slide 33: Combined Asset Overview
Combined Asset Overview Delek US (March 31, 2011) Lion Oil Delek US (Post-Transaction) Refining Segment Marketing Segment Other 1 refinery, Tyler, TX PADD III 60,000 BPD 9.4 complexity High conversion 3 company-owned terminals 7 product pipelines Crude pipelines 404 retail company operated retail lo
Slide 34: Combined Asset Map
Combined Asset Map 34 West Texas Crude Louisiana Offshore Crude Foreign Crude Tyler Refinery El Dorado Refinery Delek US Terminals Lion Oil Terminals Crude Pipelines Product Pipelines
Slide 35: El Dorado Unit Capacities
El Dorado Unit Capacities 35 Unit Description Present Capacity (BPD)(1) (1) Per the Lion Oil transaction announcement conference call held on March 21, 2011. In 2009, Lion Oil estimated that approximately $150 million in capital spending would be required to take advantage of the 100,000 barrel a da
Slide 36: El Dorado Capacity Utilization Above 90% In 2010
El Dorado Capacity Utilization Above 90% In 2010 36 (1) 2010 assumes nameplate capacity of 80,000 BPD following major turnaround and expansions projects in 2009; nameplate capacity 2006-2009 is estimated at 71,500 BPD El Dorado Production Capabilities Improved After Turnaround in 2009(1) Turnaround
Slide 37: Major Capital Projects Have Been Completed
Major Capital Projects Have Been Completed 37 (1) Refining segment capital spending data for the Tyler refinery as indicated in the form 10-Q filed with the SEC on May 6, 2011 *Includes refining segment only; 2009 capital spending includes cost to rebuild saturated gas plant Historical/Projected Cap
Slide 38: Transaction Financing Overview
Transaction Financing Overview 38 Determined by the average closing price of Delek US' common stock as reported on the NYSE for the ten consecutive trading days immediately preceding April 29, 2011 Lion Oil entered into five-year term loan agreements with Israeli banks in the amount of $100 million,
Slide 39: NYSE: DK
DK NYSE
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