Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (December 2019)
34 slides from Delek Logistics Partners, L.p's investor presentation, Dec 10, 2019
Slide 1: Investor Presentation December 2019
Exhibit 99.1 Investor Presentation December 2019
Slide 2: Disclaimers - Forward Looking Statements
Disclaimers Forward Looking Statements: 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”) and Delek US Holdings, Inc. (“Delek US”) that are based upon our current ex
Slide 3: Investment Overview
Investment Overview • Current Distribution: $0.880/LP unit qtr.; $3.52/LP unit annualized (1) Overview (NYSE: DKL) • Distribution per LP unit growth rate target = minimum of 10% annually through 2019 • Net Income of $30.5 million, Net cash from operating activities $34.2 million • Distributable Cash
Slide 4: Delek US – A Growth Oriented, Financially Strong Partner
Delek US – A Growth Oriented, Financially Strong Partner • 302,000 bpd of refining capacity in Texas, Arkansas, Louisiana Operational Strength • Access to crude / product terminals, pipeline and storage assets Financial Strength • At Sept. 30, 2019 Delek US had $1.1 billion debt position excluding D
Slide 5: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 6: Logistics Assets Positioned to Benefit from Permian Basin Activity
Logistics Assets Positioned to Benefit from Permian Basin Activity Growing logistics assets support crude sourcing and product marketing for customers Pipelines/Transportation Segment • ~805 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longv
Slide 7: Multi-Year Contracts with Firm Commitments / MVCs
Multi-Year Contracts with Firm Commitments / MVCs Duration of Contracts as of 3Q19 (1) Contract Highlights • The Lion Pipeline System and SALA Gathering System are < 1 Year 20% 27% supported by a long-term contract that includes three take- 1 to 3 Years 3 to 5 Years 1% or-pay commitments > 5 Years •
Slide 8: Financial Flexibility and Growing Distributable Cash Flow
Financial Flexibility and Growing Distributable Cash Flow Solid Net Income and EBITDA performance (1) $180.0 $160.0 $176.5 $140.0 $164.0 $120.0 $100.0 $115.0 $80.0 $97.3 $90.2 $96.4 $60.0 $ in $ millions $69.4 $40.0 $62.8 $20.0 $0.0 2016 2017 2018 2019 LTM Net Income EBITDA DCF supports distribution
Slide 9: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage Distribution per unit has been increased twenty-six consecutive times since the IPO $0.375 $0.385 $0.395 $0.405 $0.415 $0.425 $0.475 $0.490 $0.510 $0.530 $0.550 $0.570 $0.590 $0.610 $0.630 $0.655 $0.680 $0.690 $0.705 $0.715 $0.725 $0.750
Slide 10: Assets Positioned for Permian Basin Growth
Assets Positioned for Permian Basin Growth
Slide 11: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects Create platforms for future growth; Ability to leverage Permian position RIO Pipeline (Delaware Basin) • MPLX (67%)/ Delek Logistics (33%) • Cost: $119 million • Capacity: 80,000 Bbl/d • Length: 109 miles • Completed: September 2016 • Benefiting from increased drillin
Slide 12: Asset Overview: Paline Pipeline
Asset Overview: Paline Pipeline Provides access to Gulf Coast and ability to take advantage of crude differentials • Approximately 195 mile 42 kbpd crude oil pipeline – Longview, TX south to Beaumont, TX • Allows shippers ability ship Midland or Cushing crude barrels to the Gulf Coast • Increased de
Slide 13: West Texas Wholesale Business Benefiting from Permian Basin Activity
West Texas Wholesale Business Benefiting from Permian Basin crude oil drilling activity West Texas Wholesale and Marketing Gross Margin(1) • Operates in an area around the Permian Basin; Complementary to Delek US refining/retail in region ($ in millions) • Purchases refined products from Delek US &
Slide 14: Going Forward: Growing Midstream Assets
Going Forward: Growing Midstream Assets
Slide 15: Red River Pipeline Joint Venture
Red River Pipeline Joint Venture • DKL purchased 33% interest in May 2019; closed effective May 1 • Cost: $128.0 million initial investment • Financed with borrowing under the revolver • Planned expansion to be completed in first half of 2020 • DKL will contribute $20 million to the expansion, of wh
Slide 16: Delek US Growing Midstream Asset Base
Delek US Growing Midstream Asset Base Big Spring Gathering System Wink to Webster JV Pipeline • 200-mile gathering system, 350Kbpd throughput • Wink to Webster Pipeline capacity • 650-mile 36-inch diameter crude oil pipeline • Currently more than 275,000 dedicated acres • Wink to Webster Pipeline LL
Slide 17: Midstream: Utilizing Free Cash Flow & Strong Balance Sheet to Fund Growth
Midstream: Utilizing Free Cash Flow & Strong Balance Sheet to Fund Growth Supports goal to generate approximately $370 million to $395 million of annualized midstream adjusted EBITDA by ’23 Potential Growth for DKL Strong Adjusted EBITDA Growth Profile from Midstream Initiatives (1) ($ in millions)
Slide 18: Several Visible Pathways for Growth
Several Visible Pathways for Growth Focused around developing Permian platform; Growing logistics asset base at sponsor Ability to Leverage Relationship with Delek US • Permian-based refining system with 207,000 bpd of Permian crude access (1) Midstream • Constructing Big Spring Gathering System in
Slide 19: Current Valuation Below Peer EV-to-EBITDA
Current Valuation Below Peer EV-to-EBITDA DKL’s financial flexibility and growth initiatives of strong sponsor DK positions it for growth EV/EBITDA 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x DKL HEP MPLX PBFX PSXP PAA NS MMP ET EPD 2019 2020 19 Avg 20 Avg (1) Based on Factset as of December 4, 2019.
Slide 20: Majority of assets support Primarily traditional, stable Delek US’ strategically MLP assets with limited
Majority of assets support Primarily traditional, stable Delek US’ strategically MLP assets with limited located inland refining commodity price exposure system Balance sheet positioned Inflation-indexed fees for to grow with strong most contracts sponsor DK Majority of all margin Agreements with De
Slide 21: Appendix
Appendix Delek Riscisncs J
Slide 22: Asset Overview: Lion Pipeline System and SALA Gathering
Asset Overview: Lion Pipeline System and SALA Gathering Lion Pipeline System (1) Lion Pipeline System 70,000 • Provides non-gathered crude oil to Delek US’ 60,000 El Dorado refinery and connects to Enterprise 50,000 TE Products Pipeline to move finished 40,000 products. 30,000 • Crude and light prod
Slide 23: Asset Overview: Terminalling
Asset Overview: Terminalling Terminal Count Terminalling Assets (1) 12 • Refined products terminalling services for Delek US and/or third parties • Comprised of terminals located in: 9 • Memphis and Nashville, TN; 6 • Big Spring (asphalt and light products), Tyler, Big Sandy (1) and Mt. Pleasant, TX
Slide 24: Summary of Certain Contracts
Summary of Certain Contracts (8) Termination Provision Minimum Tariff / Fee Refinery Initial / Maximum Term (1) Service 3Q19 YTD Throughput (bpd)(2) Commitment (bpd) Current Tariff / Fee Index (10) Shutdown Force Majeure Paline Pipeline N/A N/A FERC N/A N/A Crude Oil Transportation $1.6368/Bbl (6) N
Slide 25: Summary of Certain Contracts Footnotes
Summary of Certain Contracts Footnotes (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 SALA G
Slide 26: Third Amended and Restated Omnibus Agreement, as amended
Third Amended and Restated Omnibus Agreement, as amended 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' re
Slide 27: Summary Organizational Structure
Summary Organizational Structure Delek US Holdings, Inc. Delek Logistics GP, LLC Public Unitholders NYSE: DK 94.6% (the General Partner) ownership interest (1) 61.4% interest Limited partner-common 2.0% interest 36.6% interest General partner interest Limited partner-common Incentive distribution ri
Slide 28: DKL: Reconciliation of Cash Available for Distribution
DKL: Reconciliation of Cash Available for Distribution (dollars in millions, except coverage) 42013 (2) 1Q14 (2) 2Q14(2) 3Q14(2) 4Q14(2) 2014 (2) 1Q15(2) 2Q15 3Q15 4Q15 2015 (2)(3) 1Q16 2Q16 3Q16 4Q16 2016 (3) Reconciliation of Distributable Cash Flow to net cash from operating activities Net cash p
Slide 29: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
DKL: Income Statement and Non-GAAP EBITDA Reconciliation Delek Logistics Partners LP Income Statement and EBITDA Reconciliation 4 Q2013(1) 1Q14(1) 2Q14 3Q14 4Q14 2014 (1) 1Q15(2) 2Q15 3Q15 4Q15 2015(2) 1Q16 2Q16 3Q16 4Q16 2016 Net Revenue $907.4 $203.5 $236.3 $228.0 $173.3 $841.2 $143.5 $172.1 $165.
Slide 30: Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA
Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA(1) Krotz Springs Logistics Drop Down Reconciliation of Forecasted Annualized Net Income to Forecast Incremental EBITDA ($ in millions) Forecasted Range Forecasted Incremental Net Income $ 2.9 $ 3.3 Add Forecasted Incremental Amounts
Slide 31: Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA
Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA(1) Reconciliation of Forecast Incremental U.S. GAAP Net Income (Loss) to Forecast Incremental EBITDA for Paline Pipeline Tariff Increase ($ in millions) Annual Monthly Forecasted Incremental Net Income $ 10.8 $ 0.9 Add Forecasted Inc
Slide 32: Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA
Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA(1) Delek Logistics Partners, LPReconciliation of Forecasted Incremental U.S. GAAP Net Income (Loss) to Forecasted Incremental Adjusted EBITDA for the Red River Pipeline Joint Venture ($ in millions) Pre-Expansion Range Post-Expansion
Slide 33: Non-GAAP Reconciliations of Forecasted EBITDA
Non-GAAP Reconciliations of Forecasted EBITDA Reconciliation of 2020 Forecasted Incremental Annualized Net Income to Forecasted Incremental Annualized EBITDA for the Big Springs Gathering System ($ in millions) Forecasted Range Forecasted Incremental Annualized Net Income $ 5.0 $ 10.0 Add Forecasted
Slide 34: Investor Relations Contacts
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312
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