Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Proxy Contest (February 2022)
35 slides from Delek Us's proxy contest presentation, Feb 28, 2022
Slide 1: Delek US Holdings, Inc. proxy filing cover
DELEK US HOLDINGS, INC. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): ☒ No fee required. ☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title
Slide 2: March 2022 Delek US Holdings, Inc. Investor Presentation
March 2022 Delek US Holdings, Inc. Investor Presentation
Slide 3: 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 4: Investment Overview
3 Investment Overview (NYSE: DK) (1) Factset as of 12/31/2021 • December, 31 2021 balance sheet: • Delek US: approx. $857 million of cash; $1.36 billion of net debt • Includes $4.3 million cash and $899 million long-term debt of DKL • Net debt (excl. DKL) of $467 million • Three biodiesel plants wit
Slide 5: Integrated asset overview: refining, logistics, renewables
4 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
Slide 6: Long History of Opportunistic Acquisitions & Value Creation
5 2005 Current Long History of Opportunistic Acquisitions & Value Creation Being Nimble and Capturing Market Dislocations / Opportunities 2006 Abilene & San Angelo terminals 2012 Nettleton Pipeline 2011 Paline Pipeline Acquisition Completed 171 retail fuel & convenience stores & related assets 2013
Slide 7: Environmental, Social, and Governance (ESG)
6 Environmental, Social, and Governance (ESG) Published Sustainability Report in November 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 2019 (the last year
Slide 8: Midstream: Permian Gathering System
7 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 9: Midstream: Wink to Webster Crude Oil Long-Haul Pipeline Joint Venture
8 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 10: Enhancing Our Position In Midstream
9 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 11: Aligning Our Portfolio with the Most Attractive Opportunities
10 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 ha
Slide 12: 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 11 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 13: Retail: Diversifies Delek
Retail: Diversifies Delek 12 ~80% integration with existing downstream operations offering synergies and competitive advantage Operate approximately 250 C-stores in Central and West Texas and New Mexico Synergistic Retail Platform Significant Profit Growth Opportunity Rebrand 7-Eleven stores t
Slide 14: Renewables: Renewable Diesel
Renewables: Renewable Diesel 13 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 15: Positioning for Energy Transition
14 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 16: Refinery overview and crude slate
95% 5% Tyler(1) WTI ETX Other (1) Crude oil slate based on amount received three months-ended as of December 31, 2021 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 cru
Slide 17: 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 18: Capital Allocation – Balanced & Flexible
Capital Allocation – Balanced & Flexible 17 $0 $100 $200 $300 $400 $500 CAPEX CAPEX 2019-2022 2019 2020 2021 2022 • 2022 spending guidance of approximately $250 to $260 million • Growth capital focused toward: • Permian Gathering business • Retail new stores to industry • 2021 includes the following
Slide 19: Capital Allocation Discipline
$170.3 $13.3 $1.5 $22.9 $59.5 $63.4 $23.7 $52.8 $19.9 $1.7 $3.2 $8.7 $7.5 $2.3 $5.3 $13.2 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Sustaining Capex Discretionary Capex 18 Capital Allocation Discipline $781 $833 $802 $784 $781 $831 $826 $853 $496 $627 $666 $573 $604 $485 $495 $467 1Q20 2Q20 3Q20 4Q20
Slide 20: Market Opportunities & Valuation
Market Opportunities & Valuation
Slide 21: Refining system product yields versus peers
41% 40% 40% 38% 37% 37% 32% 38% CVI DK PSX MPC VLO HFC PBF 4Q21 Refiners’ Middle Distillates Yield % (1) (2) (3) 58% 54% 53% 53% 52% 52% 51% 53% MPC CVI DK PBF HFC PSX VLO 4Q21 Refiners’ Gasoline Yield % (1) (3) 20 Refining system product yields Strong middle distillate yield versus peers Abil
Slide 22: Tangible Assets with Underlying Value
Tangible Assets with Underlying Value Four refineries with 302mbbl/d of aggregate capacity ~79.8%(1) DKL ownership provides public marker of value DK owns 34.7mm units at $42.73 or $1.5 billion (1) Retail value supported strong valuations for retail businesses ’23E EBITDA of $50mm; retail
Slide 23: Overarching Objectives and Key Initiatives
Overarching Objectives and Key Initiatives (1) As of 12/31/2021 22
Slide 24: Appendix
Appendix
Slide 25: 4Q21 Cash Flows
4Q21 Cash Flows * Strong financial position with $857 million of cash on Total Consolidated Cash Flows the balance sheet $1,200 $110 ‘$1,000 $51 | = ($35) = * Cash flow from operating activities of approx. $161 million a ($100) * Cash flow from operating activities (excluding ‘$s working capital) of
Slide 26: 1Q22 Guidance Range
1Q22 Guidance Range 1Q22 Guidance Range ($ in millions) Consolidated Operating Expenses Consolidated G&A Consolidated Combined Operating Expenses and G&A Consolidated Depreciation and Amort. $65 Net interest expense $32 Total Crude Throughput 275,000
Slide 27: Simplified Organizational Structure
26 Simplified Organizational Structure 20.2% interest (8.8 million Common limited partner units) 100% Delek Logistics Partners, LP NYSE: DKL (the Partnership) Public Unitholders Operating Subsidiaries 79.8% interest (34.7 million Common limited partner units) Delek Logistics GP, LLC (the General Par
Slide 28: DKL distribution coverage
1.39x 1.32x 1.35x 1.30x 1.61x 2.02x 1.42x 1.67x 1.25x 1.49x 1.47x 1.18x 1.20x 1.29x 0.98x 1.00x 0.88x 1.06x 0.97x 0.96x 1.14x 1.34x 1.25x 1.03x 1.06x 1.08x 1.11x 1.08x 1.15x 1.58x 1.50x 1.41x 1.31x 1.32x 1.34x 1.27x 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q18
Slide 29: December 31, 2021 – Debt Maturity Profile
28 December 31, 2021 – Debt Maturity Profile DK and DKL Debt Profile Delek Logistics Credit Facility Delek Logistics 2025 Notes Delek Logistics 2028 Notes Term Loan Credit Facility Hapoalim Term Loan Reliant Bank Revolver 0 250 500 750 1000 1250 1500 2022 2023 2024 2025 2026 2027 2028 Credit Ratings
Slide 30: Reconciliations
Reconciliations
Slide 31: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
30 1) Results in 2013 and 2014 are as reported excluding predecessor costs related to the dropdown of the tank farms and product terminals at both Tyler and El Dorado during the respective periods. 2) Results for 1Q15 are as reported excluding predecessor costs related to the 1Q15 dropdowns. Note: M
Slide 32: Net Debt Reconciliation
31 Net Debt Reconciliation (1) Numbers may not foot due to rounding ($ in millions) 3Q-19 4Q-19 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 3Q-21 4Q-21 Current Portion of Long-Term Debt $65 $36 $31 $33 $33 $33 $13 $46 $63 $92 Long-Term Debt $1,935 $2,031 $2,186 $2,422 $2,441 $2,315 $2,354 $2,198 $2,159 $2,1
Slide 33: Reconciliation of GAAP to Non-GAAP
32 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 34: Reconciliation of GAAP to Non-GAAP (Cont’d)
33 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 and Additional Information
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312 Kaley Weinstein, Investor Relations Analyst 267-701-0111 Additional Information Delek US, its directors and certain of its executive officers and employees may be deemed to be participants in the solicitation of pr