Delek Logistics Partners, L.p. · NYSE:DKL

Delek Logistics Partners, L.p — Investor Presentation (December 2020)

30 slides from Delek Logistics Partners, L.p's investor presentation, Dec 7, 2020

  1. Slide 1: Investor Presentation Delek Logistics Partners December 2020

    Investor Presentation Delek Logistics Partners December 2020 Exhibit 99.1

  2. 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

  3. Slide 3: Investment Overview

    • Current Distribution: $0.905/LP unit qtr.; $3.62/LP unit annualized (1); ~12% current yield (2) • On-track to deliver 5% distribution growth in 2020 over 2019 levels • MVC’s underpin ~64% of gross margins providing stability Overview (NYSE: DKL) • Net Income of $46.3 million, Net cash from operati

  4. Slide 4: Simplified Organizational Structure

    4 Simplified Organizational Structure 20% interest (8.7 million units) Limited partner-common 100% Non-economic ownership interest Delek Logistics Partners, LP NYSE: DKL (the Partnership) Public Unitholders Operating Subsidiaries 80% interest (34.7 million units) Limited partner-common Delek Logisti

  5. Slide 5: Delek US – A Growth Oriented, Financially Strong Partner

    5 Asphalt 6 asphalt terminals located in: 1) El Dorado, AR 2) Muskogee, OK 3) Memphis, TN 4) Big Spring, TX 5) Henderson, TX 6) Richmond Beach, WA 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  I

  6. Slide 6: DKL Relative to Peer Group

    6 DKL Relative to Peer Group Where It is and Where It is Going (1) Updated from Factset as of December 4, 2020. 3.30x 2.00x 1.77x 1.60x 1.50x 1.40x 1.10x 1.10x PAA PBFX HEP EPD DKL MPLX PSXP MMP 2.98x 3.18x 3.23x 3.51x 3.57x 3.91x 4.17x 4.82x PSXP MMP PAA PBFX EPD DKL HEP MPLX 12.2% 12.0% 11.7% 11.6

  7. Slide 7: Delek Logistics Partners, LP Overview

    Delek Logistics Partners, LP Overview

  8. Slide 8: Logistics Assets Positioned to Benefit from Permian Basin Activity

    8 Logistics Assets Positioned to Benefit from Permian Basin Activity Growing logistics assets support crude sourcing and product marketing for customers • ~805 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longview to Nederland, TX • ~ 600 mi

  9. Slide 9: Delek Permian Gathering East System

    Delek Permian Gathering East System 9 DPG East SystemEquipment Lease Automatic Custody Transfer Units (LACTS) 45 Installations Pipeline 60 miles Tanks (bbl) 2 (50M, 300M)

  10. Slide 10: Delek Permian Gathering West System

    Delek Permian Gathering West System 10 DPG West System Equipment Lease Automatic Custody Transfer Units (LACTS) 6 Installations Pipeline 70 miles Tanks (bbl) 1 (50M)

  11. Slide 11: Multi-Year Contracts with Firm Commitments / MVCs

    11 Multi-Year Contracts with Firm Commitments / MVCs Contract Highlights • The Lion Pipeline System and SALA Gathering System are supported by a long-term contract that includes three take- or-pay commitments • Initial term of 5 years, maximum term of 15 years (2) • Crude oil transportation throughp

  12. Slide 12: Financial Flexibility and Growing Distributable Cash Flow

    12 Financial Flexibility and Growing Distributable Cash Flow 1) Reconciliation of EBITDA to Net Income provided on page 24. Excluded are predecessor costs related to the crude oil storage tank and rail offloading racks acquired in March 2015. 2) Reconciliation of distributable cash flow to net cash

  13. Slide 13: Distribution Coverage History

    1.39x 1.32x 1.35x 1.30x 1.61x 2.02x 1.42x 1.67x 1.25x 1.49x 1.47x 1.18x 1.20x 1.29x 0.98x 1.00x 0.88x 1.06x 0.97x 0.96x 1.14x 1.34x 1.25x 1.03x 1.06x 1.08x 1.11x 1.08x 1.15x 1.58x 1.50x 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18

  14. Slide 14: DKL Asset & Joint Venture Detail

    DKL Asset & Joint Venture Detail

  15. Slide 15: Joint Venture Pipeline Projects

    15 Joint Venture Pipeline Projects Create platforms for future growth; Ability to leverage Permian position Caddo Pipeline • Delek Logistics (50%)/Plains Pipeline L.P. (50%) • Cost: $123 million • Capacity: 80,000 Bbl/d • Length: 80 miles • Completed: January 2017 • Provides additional logistics sup

  16. Slide 16: Midstream: Red River Pipeline Joint Venture

    16 Midstream: Red River Pipeline Joint Venture Delek US is a major shipper on pipeline; increased crude oil optionality  Increasing by 65,000 bpd to 100,000 bpd following expansion;  Incremental 24 million bbls/yr of Cushing crude oil into Longview, TX  From Longview, TX DKL access to:  Delek US

  17. Slide 17: Midstream: Big Spring Gathering System

    17 1) Please see page 27 for a reconciliation of forecasted incremental annualized net income to forecasted EBITDA for the Big Spring Gathering System. Midstream: Big Spring Gathering System Gathering Helps Control Crude Oil Quality and Cost into Refineries Big Spring Gathering System  Approximatel

  18. Slide 18: Strong Adjusted EBITDA Growth Profile from Midstream Initiatives

    Red River Joint Venture (2) •Post Expansion: Increases to $20.0 to $25.0 million annualized adjusted expected EBITDA Big Spring Gathering •$30 - $32 million expected EBITDA underpinned by MVC DK to DKL (2) •MVC 120mbbl/d for Big Spring system in addition to 50mbbl/d connection to 3rd party pipeline

  19. Slide 19: Several Visible Pathways for Growth

    19 Several Visible Pathways for Growth Focused around developing Permian platform; Growing logistics asset base at sponsor Balance Sheet Supportive • $89.3 million of availability at September 30, 2020 on $850 million revolving credit facility • Leverage ratio was 3.9x at end of 3Q20 • Focus on orga

  20. Slide 20: 2021 Valuation Below Peer EV-to-EBITDA

    20 2021 Valuation Below Peer EV-to-EBITDA DKL’s financial flexibility and growth initiatives of strong sponsor DK positions it for growth (1) Based on Factset as of December 4, 2020. 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x DKL HEP MPLX PBFX PSXP PAA NS MMP ET EPD EV/EBITDA 2020 2021 20 Avg 21 Avg

  21. Slide 21: Investment highlights

    Majority of assets support Delek US’ strategically located inland refining system Inflation-indexed fees for most contracts Majority of all margin generated by long term, fee-based contracts with volume minimums Agreements with Delek US related to capex/opex reimbursement Balance sheet positioned to

  22. Slide 22: Appendix

    Appendix oO

  23. Slide 23: DKL: Reconciliation of Distributable Cash Flow

    23 1) Distribution based on actual amounts distributed during the periods; does not include LTIP accrual. Coverage is defined as cash available for distribution divided by total distribution. 2) Results in 2013, 2014 and 2015 are as reported excluding predecessor costs related to the dropdown of the

  24. Slide 24: DKL: Income Statement and Non-GAAP EBITDA Reconciliation

    24 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: M

  25. Slide 25: Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA

    25 Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA ($ in millions) Annual Monthly Forecasted Incremental Net Income 10.8$ 0.9$ Add Forecasted Incremental Amounts for: Interest Expense, net -$ -$ Depreciation and amortization -$ -$ Forecasted Incremental EBITDA 10.8$ 0.9$ Reconcili

  26. Slide 26: Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA

    26 Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA 1) Based on projected potential future performance from the Red River joint venture. Amounts of adjusted EBITDA and net income will vary. Actual amounts will be based on market conditions and pipeline operations. ($ in millions) F

  27. Slide 27: Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA

    27 Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA

  28. Slide 28: Non-GAAP Reconciliations of Trucking Forecasted EBITDA

    28 Non-GAAP Reconciliations of Trucking Forecasted EBITDA

  29. Slide 29: Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA

    29 1) Based on projected range of potential future logistics assets that could be dropped to Delek Logistics from Delek US in the future. Amounts of EBITDA, net income and timing will vary, which will affect the potential future EBITDA and associated deprecation and interest at DKL. Actual amounts w

  30. Slide 30: Investor Relations Contacts

    Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312

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