Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (December 2022)
35 slides from Delek Us's investor presentation, Dec 6, 2022
Slide 1: Delek US Holdings, Inc. Investor Presentation December 2022
December 2022 Delek US Holdings, Inc. Investor Presentation Exhibit 99.1
Slide 2: Disclaimers
Disclaimers 2 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 slid
Slide 3: Investment Overview (NYSE: DK)
3 (1) Factset as of 11/30/2022 • September 30, 2022 balance sheet: ◦ Delek US: approx. $1,154 million of cash; $1.58 billion of net debt ◦ Includes $14.9 million cash and $1,449 million long-term debt of DKL ◦ Net debt (excl. DKL) of $146 million • Three biodiesel plants with 40mmgal/year of capacit
Slide 4: CEO Transition Completed
4 CEO Transition Completed ▪ Shareholder friendly actions taken immediately ▪ Announced special dividend, reinstated regular dividend and share buyback program, increased repurchase authorization ▪ Focus on safety, reliability, and environmental responsibility ▪ Record crude throughput in 3Q at 99%
Slide 5: Evaluating Sum of the Parts Value Realization
5 Evaluating Sum of the Parts Value Realization (1) Factset as of 11/30/2022 Disconnect More Pronounced Post 3 Bear Acquisition Average 9% Disconnect Average 29% Disconnect ◦ Four refineries with 302mbbl/d of aggregate capacity ◦ Retail value supported strong valuations for retail businesses ▪ Retai
Slide 6: Asset overview: refining, logistics, renewables
6 Asphalt 5 asphalt terminals located in: ◦ El Dorado, AR ◦ Muskogee, OK ◦ Memphis, TN ◦ Big Spring, TX ◦ Henderson, TX Refining • 302,000 bpd in total • El Dorado, AR • Tyler, TX • Big Spring, TX • Krotz Springs, LA • Crude oil supply: 262,000 bpd WTI linked currently • Increasing crude oil optiona
Slide 7: Cash Return to Shareholders
7 Wink to Webster RIO CADDO Cash Return to Shareholders DK plans on returning approximately $220-$250 million in 2022 Repurchased $64 million shares from Icahn Group 5% of outstanding float Announced $0.20 per share special dividend Quarterly Dividend increased by 5% to $0.21 per share Announced int
Slide 8: Environmental, Social, and Governance (ESG)
Environmental, Social, and Governance (ESG) Published 3rd annual Sustainability Report for DK in December of 2022 2018 Delek US Refining 27 2019 Delek US Refining 28 2020 Delek US Refining 26 Carbon Intensity of Refining Business Unit(1) • Enhanced Transparency in 2021 Sustainability Report 8 THE US
Slide 9: Midstream: Permian Gathering System
9 Midstream: Permian Gathering System Gathering Helps Control Crude Oil Quality and Cost into Refineries Permian Gathering System ◦ Approximately 200-mile gathering system ▪ 350 Kbpd throughput capacity ◦ >300,000 dedicated acres expected in 2022 ▪ Points of origin: Howard, Borden, Martin and Midlan
Slide 10: 3 Bear Acquisition Asset Overview: Established Infrastructure in the Delaware Basin
Established Infrastructure in the Delaware Basin 3 Bear Acquisition Asset Overview ◦ 3 Bear Delaware Holding - NM, LLC (“3 Bear”) is a premier, three-stream midstream business located in the core of Northern Delaware Basin (Lea & Eddy County, New Mexico) ◦ Integrated crude oil, gas, and water infras
Slide 11: 3 Bear Acquisition: Diversifying Cash Flows via Third-Party Revenues
3 Bear Acquisition: Diversifying Cash Flows via Third-Party Revenues (1) Calculated based on 2021 Pipelines and Transportation Segment revenue from affiliate and third-party, as disclosed in our 2021 Annual Report on Form 10-K. (2) Estimated based on forecasted post-close 2023 revenue. (3) Estimated
Slide 12: Midstream: Wink to Webster Crude Oil Long-Haul Pipeline Joint Venture
12 ◦ Delek US’ Investment ▪ Delek US has a 50% ownership interest in a JV that owns a 30% ownership interest in Wink to Webster Pipeline LLC ▪ Expected $340 million to $380 million net investment ▪ Integrated with Big Spring gathering system to provide source of barrels and services to producers ◦ W
Slide 13: Enhancing Our Position In Midstream
13 Enhancing Our Position In Midstream DKL has a long history of stable and sustained growth through a successful drop down strategy from DK Recent 3 Bear acquisition creates a step-change: • Significantly increases third-party revenue (~40% of DKL is third-party revenue in 2023) • Expands product m
Slide 14: Enhancing Our Retail Network
Substantial value uplift potential Low build multiple 14 Enhancing Our Retail Network ◦ Serves as a natural fuel short while improving DK’s cash flow stability and reducing its Renewable Identification Number (“RIN”) obligations ◦ Four NTI stores are in the planning phase and are expected to break g
Slide 15: Retail: Diversifies Delek
Retail: Diversifies Delek 15 • ~80% integration with existing downstream operations offering synergies and competitive advantage • Operate approximately 248 C-stores in Central and West Texas and New Mexico Synergistic Retail Platform Significant Profit Growth Opportunity • Rebrand 7-Eleven stores t
Slide 16: Capital Light Approach to Renewable Diesel
16 • Delek has established a ‘capital light’ approach to Renewable Diesel • $13.3 million option for 33% indirect interest in the net cash flow from a renewable diesel facility following its conversion • The facility will be able to produce up to 220mm gallons a year of renewable fuels ◦ Estimated S
Slide 17: Positioning for Energy Transition
17 Positioning for Energy Transition Existing footprint in biodiesel and reviewing opportunities in renewable diesel and de-carbonization Operate 3 Biodiesel Facilities: ~40mm gallons of annual biodiesel production capacity (equal to 407,200 metric tons of carbon reduction)(1) Crossett, AR New Alban
Slide 18: Refining system: crude throughput and slate by refinery
Permian Cushing ETX/AR Other/GC (1) Crude oil slate based on amount received nine months-ended as of September 30, 2022 and will vary each period based on operations and purchases. Note: WTI-Brent differential realized through crack spread and capture rates and Midland-WTI differential realized in c
Slide 19: 3Q22 Refiners' Middle Distillates and Gasoline Yield
3Q22 Refiners’ Middle Distillates Yield % (1) (2) (3) 3Q22 Refiners’ Gasoline Yield % (1) (3) 19 ◦ Refining system product yields ▪ Leading middle distillate yield versus peers ▪ Strong gasoline yield versus peers ▪ Ability to switch ~10% between gasoline and distillate ◦ Crude oil slate has flexibi
Slide 20: 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 ◦ Cash Returns: Maintain a competitive c
Slide 21: Capital Allocation Discipline
21 Capital Allocation Discipline Cash Balance & Net Debt (DK Ex. DKL)(1) Capital Expenditures(1)(2) (1) Based on company filings from Q2 2020 through Q3 2022 Sustaining capex defined as regulatory & maintenance capital expenditures. Capital expenditures does not include joint venture contributions (
Slide 22: Overarching Objectives and Key Initiatives
Overarching Objectives and Key Initiatives (1) As of 3/31/2022 22
Slide 23: Appendix
Appendix
Slide 24: Third Quarter 2022
24 Third Quarter 2022 (1) Numbers may not foot due to rounding $1,245 $129 $1 $(99) $(122) $1,154 6/30/2022 Cash Balance Operating Cash Flow (excluding working capital) Working Capital Investing Activities Financing Activities 9/30/22 Cash Balance $0 $250 $500 $750 $1,000 $1,250 $1,500 • Strong fina
Slide 25: 4Q22 Guidance Range
25 4Q22 Guidance Range 4Q22 Guidance Range ($ in millions) Low High Consolidated Operating Expenses $190 $200 Consolidated G&A $82 $87 Consolidated Depreciation and Amort. $75 $80 Net Interest Expense $55 $60 Total Crude Throughput 280,000 290,000 Share Repurchases $75 $100 Debt Reduction $100 $150
Slide 26: Simplified Organizational Structure
26 Simplified Organizational Structure 21.1% interest (9.2 million Common limited partner units) 100% Delek Logistics Partners, LP NYSE: DKL (the Partnership) Public Unitholders Operating Subsidiaries 78.9% interest (34.3 million Common limited partner units) Delek Logistics GP, LLC (the General Par
Slide 27: DKL Distribution and Leverage Ratio
27 (1) MQD = minimum quarterly distribution set pursuant to the Partnership Agreement. (2) Distribution coverage based on distributable cash flow divided by distribution amount in each period. Please see reconciliations starting on page 30. (3) In 4Q17, the reimbursed capital expenditure amounts in
Slide 28: September 30, 2022 – Debt Maturity Profile
28 September 30, 2022 – Debt Maturity Profile DK and DKL Debt Profile Credit Ratings (S&P/Moody’s/Fitch)(3) (1) Delek Logistic Partners entered into an Indenture with US Bank, as Trustee, on May 24, 2021 with a due date of June 1, 2028 and a aggregate principal amount of $400M (1) (5) (1)- (2) (3) D
Slide 29: Reconciliations
Reconciliations
Slide 30: DKL: Reconciliation of Income Statement and EBITDA
30(1) Results in 2013 and 2014 are as reported excluding predecessor costs related to the dropdown 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 predecessor costs related to the 1Q15 dropdowns. Note:
Slide 31: DKL: Reconciliation of Distributable Cash Flow
31(1) Results in 2013 and 2014 are as reported excluding predecessor costs related to the dropdown 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 predecessor costs related to the 1Q15 dropdowns. Note:
Slide 32: Net Debt Reconciliation
32 Net Debt Reconciliation (1) Numbers may not foot due to rounding
Slide 33: Reconciliation of GAAP to Non-GAAP
33 Reconciliation of GAAP to Non-GAAP (1) An adjustment for the portion of the retroactive biodiesel tax credit reenacted in December 2019 but that was attributable to 2018 has been adjusted out of the year ended December 31, 2019 (1)
Slide 34: Reconciliation of GAAP to Non-GAAP (Cont'd)
34 Reconciliation of GAAP to Non-GAAP (Cont’d) (1) For the annual period ended December 31, 2016, the Pre-acquisition Alon Adjusted Retail Segment Earnings was derived from the Annual Report on Form 10-K filed by Alon and incorporated by reference into Delek’s 2016 Annual Report on Form 10-K, and fo
Slide 35: Investor Relations Contacts
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312
Delek US Holdings — Investor Presentation (December 2022) on 6ix