Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (June 2015)
36 slides from Delek Us's investor presentation, Jun 1, 2015
Slide 1: Investor Presentation Delek US Holdings June 2015
Investor Presentation Delek US Holdings June 2015
Slide 2: Safe Harbor Provision
Safe Harbor Provision 2 Delek US Holdings (defined as “we”, “our”) 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 an
Slide 3: Delek US Holdings Overview
Delek US Holdings Overview 3 (1) Rail supplied light crude capability consists of 25,000 bpd of light crude or 12,000 bpd heavy crude offloading that is available at a facility owned by Delek Logistics adjacent to the El Dorado refinery. In addition, 20,000 bpd light crude capability is currently av
Slide 4: Alon USA Transaction
4 0 122 176 146 208 80 0 176 80 255 192 0 0 128 0 127 211 141 158 211 215 185 58 7 127 127 127 Alon USA Transaction On May 14, 2015, Delek completed the acquisition of approximately 33.7 million shares, or approximately 48% of the outstanding shares, of Alon USA Energy (NYSE: ALJ) (“Alon USA”) com
Slide 5: Refining Segment Operational Update
Refining Segment Operational Update
Slide 6: Increased Access to Cost Advantaged Crude
Approximately 75% of crude slate consist of Midland and local crude supply Increased Access to Cost Advantaged Crude 6 45.0 45.0 87.0 97.0 17.2 17.9 18.6 18.0 0 50 100 150 200 2012 2013 2014 2015-1Q In 0 0 0 b p d Midland Local Crude Throughput Capacity $(3.31) $(2.71) $(6.11) $(2.64) $(2.81) $(2.48
Slide 7: Improved Operating Flexibility
Increased ability to process light crude oil and ULSD capacity Improved Operating Flexibility 7 Since 2012 increased light crude processing capability by 27% based on 2015 target ULSD capability expected to improve by 37% El Dorado has ability to process 80 kbpd medium or mostly light crude
Slide 8: Tyler Refinery Expansion and FCC Reactor Economics
Completed in March 2015; Expected annual incremental EBITDA of $75 million Tyler Refinery Expansion and FCC Reactor Economics Based on incremental 15,000 bpd of crude throughput capacity – Estimated capital cost approximately $70 million; approx. $58 million spent in total through 3/31/15 Expect
Slide 9: Refineries Serve Local Niche Markets
Supports High Refining Utilization Refineries Serve Local Niche Markets 9 75 150 150 210 150 275 325 375 450 0 50 100 150 200 250 300 350 400 450 500 1Q2 0 13 2Q2 0 13 3Q2 0 13 4Q2 0 13 1Q2 0 14 2Q2 0 14 3Q2 0 14 4Q2 0 14 1Q 2 015 Delek Logistics Partners terminals support refining system: Tyler
Slide 10: Affects of Declining Crude Oil Price Environment on Refining
Affects of Declining Crude Oil Price Environment on Refining 10 Declining crude oil price environment has ability to improve capture rate in Delek US system A $10 per barrel decline in crude oil price can increase capture rate by $0.80 per barrel (1) Lower cost of volumetric losses at refineri
Slide 11: Operating Cost per barrel
Operating Cost per barrel 11 Focus on reducing costs in operations Total operating cost per barrel flat year over year in 1Q15 despite lower volumes at Tyler Lower volumes at Tyler during 1Q15 turnaround and expansion resulted in higher operating cost per barrel Reduction in cost enhances co
Slide 12: Historical and Projected Capital Spending
Historical and Projected Capital Spending (excluding logistics) $42.3 $36.0 $65.9 $144.3 $201.1 $14.4 $36.5 $29.1 $37.9 $26.2 $0.1 $7.6 $26.5 $35.0 $22.4 Q1, $86.9 Q2, $46.0 Q3, $42.1 Q4, $31.2 $100.0 2010A 2011A 2012A 2013A 2014A 2015E 2016E Refining Retail Other Declining Capital Needs Expected af
Slide 13: Logistics Operational Update
Logistics Operational Update
Slide 14: Strategic Partner in Delek Logistics Partners, LP
Strategic Partner in Delek Logistics Partners, LP (NYSE: DKL) 14 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 15: DKL: Improving EBITDA
DKL: Improving EBITDA 15 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing forecasted performance for 12 months ending Sept. 30, 2013. 2) Information provided in Delek Logistics Partners, LP (NYSE: DKL) investor presentation available at www.deleklogistics.com for Q1 2015 LTM EBITDA bas
Slide 16: DKL: Plans in Place for Future Growth
DKL: Plans in Place for Future Growth 16 Paline Pipeline ■ New agreements effective January 1, 2015 until June 30, 2016 ■ Increased volume and capacity usage rate from 2014 level ■ Potential for utilization and/or capacity increase Continued Asset Development ■ Delek US continues to develop assets t
Slide 17: DKL: Potential EBITDA Growth
DKL: Potential EBITDA Growth (1) $99.7 $6.7 $3 to $4 Approx. $1 $8.3 $2.9 Pro Forma LTM 1Q2015 (1) Potential from Identified Drop Downs (2) Potential increase from Tyler Expansion (3) Annual Tariff Increase - 2014 FERC/Inflation adj Paline repricing (4) 3rd Party Acquisitions Pipeline Joint Ventures
Slide 18: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage 18 (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 page 28 for reconciliation. (3) B
Slide 19: Marginal Percentage Interest in Distributions
19 Marginal Percentage Interest in Distributions Assumed Distribution per Limited Partner Unit if Delek Logistics Meets 15% Annual Growth Target (2) Delek Logistics GP Incentive Distribution Rights Total Quarterly Distribution Per Unit Target Amount Unitholders General Partner Minimum Quarterly Dist
Slide 20: DKL: Peer Comparisons
DKL: Peer Comparisons (1) 20 (1) Source: Company reports; Capital IQ 5/28/15 ; NASDAQ OMX; MLPdata.com Current Yield as of 5/28/15 Distributable Cash Flow Coverage Ratio - LTM Q1 2015 Debt / LTM EBITDA Leverage Ratio Q1 2015 1.0x 1.1x 1.1x 1.2x 1.2x 1.3x 1.4x 1.4x 1.4x 1.4x 1.6x 1.6x 0.0x 0.5x 1.0x
Slide 21: Retail Operational Update
Retail Operational Update
Slide 22: Retail Locations Create Synergies for Product Marketing
Fuel Gallons Sold Per Store (000’s) 1,039 1,082 1,112 1,204 270 300 2011 2012 2013 2014 1Q14 1Q15 951 1,011 1,037 1,106 247 261 2011 2012 2013 2014 1Q14 1Q15 Retail Locations Create Synergies for Product Marketing 22 Expanding Market Footprint in Markets Capable of Being Supplied by El Dorado Mercha
Slide 23: Focused on Organic Growth
Focused on Organic Growth 23 Large Format Stores are focal point Approximately 4,800 square feet Offer customers wider product selection Prepared food service offering increases traffic Avg. approximately 4 million gallons and $2+million inside sales once market penetrated 3 year growth
Slide 24: Current Retail Valuation Comparison
Current Retail Valuation Comparison 24 Valuations moving higher than historical 6x-8x range 9.0x 8.2x 14.1x 9.3x 12.4x CASY MUSA CAPL SUN CST Enterprise Value (“EV”) / Frwd. EBITDA Average = 10.6x (1) Source: Capital IQ; May 28, 2015.
Slide 25: Financial Update
Financial Update
Slide 26: Financial Highlights
Financial Highlights $164 $151 $130 $445 $655 $439 $610 $540 2008 2009 2010 2011 2012 2013 2014 2015 LTM At March 31, 2015 Cash of $376.4 million; Debt of $674.2 million Includes $316.4 million of debt at Delek Logistics (DKL) Excluding DKL, Delek US’ net cash position was approximately $18.
Slide 27: Going Forward
Going Forward
Slide 28: Alon USA Assets Map
Key Retail Cities Asphalt Terminal Third-Party Terminal Alon USA Terminal Exchange Terminal Refinery Third-Party Pipelines ALON USA Alon Pipelines (idled) Oklahoma 638167_1.wor [NY0086JT] Texas California New Mexico Arizona Nevada Oregon Washington Arkansas Louisiana Midland/i l /d andi li li li li
Slide 29: Investment Highlights Summary
29 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 30: Appendix Additional Data
Appendix Additional Data
Slide 31: Delek US Focused on Building an Integrated Business Model
Delek US Focused on Building an Integrated Business Model 31 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. (2) Mt. Pleasant includes $1.1 million of in
Slide 32: Historical and Projected Capital Spending
$42.3 $36.0 $65.9 $144.3 $201.1 $173.1 $0.9 $10.5 $5.1 $7.2 $19.7 $14.4 $36.5 $29.1 $37.9 $26.2 $18.1 $0.1 $7.6 $26.5 $35.0 $22.4 $15.0 2010A 2011A 2012A 2013A 2014A 2015F Refining Logistics (Marketing) Retail Other Historical and Projected Capital Spending 32 $56.8mm $81.0mm $132.0mm $222.3mm Sourc
Slide 33: U.S. Refining Environment Trends
-$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 0 F e b -1 0 M a r- 1 0 A pr -1 0 M a y -1 0 J u n -1 0 J u l- 1 0 A u g -1 0 S e p -1 0 O c t- 1 0 No v -1 0 De c -1 0 J a n -1 1 F e b -1 1 M a r- 1 1 A pr -1 1 M a y -1 1 J u n -1 1 J u l- 1 1 A u g -1 1 S e p -1 1 O c t- 1 1 No v -1 1 De c -1 1 J a
Slide 34: Access to Midland Crudes Benefits Margins
($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 WTI Midland vs. WTI Cushing Crude Pricing Access to Midland Crudes Benefits Margins ($ per barrel) 97,000 bpd of Midland crude in DK system 34 Source: Argus – as of May 22, 2015
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation 35 Source: Company filings. ($ in millions) 2008 2009 2010 2011 2012 2013 2014 1Q14 1Q15 1Q15 LTM Net sales $4,723.7 $2,666.7 $3,755.6 $7,198.2 $8,726.7 $8,706.8 $8,324.3 $1,865.7 $1,150.6 $7,609.2 Cost of goods sold 4,308.1 2,394.1 3,412.9 6,429.9 7,704.4 7,880.7 7,315.2 1,6
Slide 36: Investor Relations Contact
Investor Relations Contact: Assi Ginzburg Keith Johnson Chief Financial Officer Vice President of Investor Relations 615-435-1452 615-435-1366
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