Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (May 2022)
38 slides from Delek Us's investor presentation, May 10, 2022
Slide 1: Delek US Holdings, Inc. Investor Presentation May 2022
May 2022 Delek US Holdings, Inc. Investor Presentation
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
3 Investment Overview (NYSE: DK) (1) Factset as of 5/5/2021 • March, 31 2022 balance sheet: • Delek US: approx. $854 million of cash; $1.36 billion of net debt • Includes $2.7 million cash and $906 million long-term debt of DKL • Net debt (excl. DKL) of $456 million • Three biodiesel plants with 40m
Slide 4: Asset overview: refining, logistics, renewables
4 Asphalt 5 asphalt terminals located in: 1) El Dorado, AR 2) Muskogee, OK 3) Memphis, TN 4) Big Spring, TX 5) 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 op
Slide 5: Environmental, Social, and Governance (ESG)
Environmental, Social, and Governance (ESG) Published 2nd annual Sustainability Report for DK in November of 2021 ❑ The safety and health of our employees is a core value of the company as reflected in progressive safety improvements over time ❖ Target zero workplace accidents and injuries ❖ During
Slide 6: Midstream: Permian Gathering System
6 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 7: Midstream: Wink to Webster Crude Oil Long-Haul Pipeline Joint Venture
7 ❑ 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 ❑ We
Slide 8: Enhancing Our Position In Midstream
8 Enhancing Our Position In Midstream Krotz Springs • Logistics assets associated with Krotz Springs refinery Wink to Webster Pipeline • Long haul pipeline from Permian to Gulf Coast providing stable cash flow and connected to our Big Spring Gathering system, providing access to additional crude inp
Slide 9: Aligning Our Portfolio with the Most Attractive Opportunities
9 Aligning Our Portfolio with the Most Attractive Opportunities Divestitures Over $800 million in proceeds since 2016 from well-timed divestitures to enhance our portfolio composition Dropdowns Asset dropdowns to DKL have created substantial value at both DK and DKL Joint Ventures Joint ventures hav
Slide 10: Enhancing Our Retail Network
4.0x 9.0x 5.0x 12.0x NTI Build Multiple Retail Trading (TEV / NTM EBITDA) Multiple Substantial value uplift potential Low build multiple 10 Enhancing Our Retail Network • Serves as a natural fuel short while improving DK’s cash flow stability and reducing its Renewable Identification Number (“RIN”)
Slide 11: Retail: Diversifies Delek
Retail: Diversifies Delek 11 ❑ 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 to
Slide 12: Renewables: Renewable Diesel
Renewables: Renewable Diesel 12 ❑ 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
Slide 13: Positioning for Energy Transition
13 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 14: Refining asset overview
87% 13% Tyler(1) WTI ETX Other (1) Crude oil slate based on amount received three months-ended as of March 31, 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 crude
Slide 15: 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 16: Capital Allocation – Balanced & Flexible
Capital Allocation – Balanced & Flexible 16 $0 $100 $200 $300 $400 $500 CAPEX CAPEX 2019-2022 2019 2020 2021 2022 • 2022 spending guidance of approximately $250 to $260 million (excludes expected capital on 3Bear assets in 2H22) • Growth capital focused toward: • Permian Gathering business • Retail
Slide 17: Capital Allocation Discipline
$13.3 $1.5 $22.9 $59.5 $63.4 $23.7 $52.8 $22.4 $1.7 $3.2 $8.7 $7.5 $2.3 $5.3 $13.2 $10.5 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Sustaining Capex Discretionary Capex 17 Capital Allocation Discipline $833 $802 $784 $781 $831 $826 $853 $851 $627 $666 $573 $604 $485 $495 $467 $456 2Q20 3Q20 4Q20 1Q21 2
Slide 18: Market Opportunities & Valuation
Market Opportunities & Valuation
Slide 19: Refiners' product yields vs peers
39% 39% 37% 36% 34% 34% 33% 36% CVI DK PSX VLO MPC PBF HFC 1Q22 Refiners’ Middle Distillates Yield % (1) (2) (3) 53% 52% 50% 49% 49% 48% 45% 49% CVI MPC HFC VLO DK PBF PSX 1Q22 Refiners’ Gasoline Yield % (1) (3) 19 ❑ Refining system product yields ▪ Strong middle distillate yield versus peers ▪ Abil
Slide 20: Tangible Assets with Underlying Value
Tangible Assets with Underlying Value ❑ Four refineries with 302mbbl/d of aggregate capacity ❑ ~78.9% DKL ownership provides public marker of value ❑ DK owns 34.3mm units at $50.12 or $1.7 billion (1) ❑ Retail value supported strong valuations for retail businesses ❑ ’23E EBITDA of $50mm; retail bus
Slide 21: Overarching Objectives and Key Initiatives
Overarching Objectives and Key Initiatives 21
Slide 22: Planned 3Bear Acquisition
Planned 3Bear Acquisition
Slide 23: Investment Considerations for Planned 3Bear Acquisition
• Recently constructed asset in the most active area of the Delaware Basin (Lea and Eddy County, NM) • ~485 miles of in-ground pipeline currently • 88 MMcf/d of gas processing capacity; 140kbpd of crude gathering capacity supported by 120kbbls of storage; 200kbpd salt water disposal; offers producer
Slide 24: Established Infrastructure in the Delaware Basin
Established Infrastructure in the Delaware Basin For Planned 3Bear Acquisition Asset Overview ❑ 3Bear Delaware Holding - NM, LLC (“3Bear”) is a premier, three-stream midstream business located in the core of Northern Delaware Basin (Lea & Eddy County, New Mexico) ❑ Integrated crude, gas, and water i
Slide 25: DKL + Planned 3Bear: Integrated Company with Diversity and Scale
Rio State Line Terminal Midland Big Springs Colorado City Abilene Fort Worth Dallas Waco Hewitt Cushing Little Rock Memphis El Dorado Shreveport Longview Tyler Beaumont Monroe Krotz Spring New Orleans Nashville Knoxville Brentwood OK AR TN LA NM NM TX Permian Basin Gathering Assets East Texas Logist
Slide 26: Diversifying Cash Flows via Third-Party Revenues
Planned 3Bear Acquisition: Diversifying Cash Flows via Third-Party Revenues (1) Calculated based on 2021 Pipelines and Transportation Segment revenue from affiliate and third-party, as disclosed in our 2021 Annual Report on Form 10-K. (2) Estimated based on forecasted post-close 2023 revenue. (3) Es
Slide 27: Appendix
Appendix
Slide 28: 1Q22 Cash Flows
28 1Q22 Cash Flows (1) Numbers may not foot due to rounding
Slide 29: 2Q22 Guidance Range
2Q22 Guidance Range 2Q22 Guidance Range ($ in millions) Consolidated Operating Expenses Consolidated G&A Consolidated Depreciation and Amort. Net interest expense Total Crude Throughput
Slide 30: Simplified Organizational Structure
30 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 l imited partner units) Delek Logistics GP, LLC (the General Pa
Slide 31: Delek Logistics distribution coverage
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 1.41x 1.31x 1.32x 1.34x 1.27x 1.21x 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q
Slide 32: Debt Maturity Profile
32 March 31, 2022 – Debt Maturity Profile DK and DKL Debt Profile Delek Logistics Credit Facility Delek Logistics 2025 Notes Delek Logistics 2028 Notes Term Loan Credit Facility Hapoalim Term Loan Reliant Bank Revolver 0 250 500 750 1000 1250 1500 2022 2023 2024 2025 2026 2027 2028 Credit Ratings (S
Slide 33: Reconciliations
Reconciliations
Slide 34: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
34 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
Slide 35: Net Debt Reconciliation
35 Net Debt Reconciliation (1) Numbers may not foot due to rounding ($ in millions) 3Q-19 4Q-19 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 3Q-21 4Q-21 1Q-22 Current Portion of Long-Term Debt $65 $36 $31 $33 $33 $33 $13 $46 $63 $92 $82 Long-Term Debt $1,935 $2,031 $2,186 $2,422 $2,441 $2,315 $2,354 $2,198 $
Slide 36: Reconciliation of GAAP to Non-GAAP
36 Reconciliation of GAAP to Non-GAAP Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP (In millions) Refining Logistics (Midstream) Retail Reported segment contribution margin $777.9 $173.4 $58.5 Less: General and administrative expenses 134.1 20.8 23.8 Add: Gain (loss) on
Slide 37: Reconciliation of GAAP to Non-GAAP (Cont'd)
37 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 38: Investor Relations Contacts
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312