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

Delek Logistics Partners, L.p — Investor Presentation (March 2014)

29 slides from Delek Logistics Partners, L.p's investor presentation, Mar 20, 2014

  1. Slide 1: Delek Logistics Partners, LP Investor Presentation March 2014

    Delek Logistics Partners, LP Investor Presentation March 2014

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements 2 These slides and any accompanying oral presentation contain forward-looking statements by Delek Logistics Partners, LP (defined as “we”, “our”) that are based upon our current expectations and involve a number of risks and uncertainties. Statements concerning current est

  3. Slide 3: Delek Logistics Partners, LP Overview

    Delek Logistics Partners, LP Overview: Ticker: DKL Exchange: NYSE IPO Date: November 2, 2012 Sponsor: Delek US Holdings, Inc. (NYSE: DK) IPO Price: $21.00 Current Price:(1) $32.83 Current Yield:(2) 5.0% Annualized Distribution(2) $1.66/unit Market Capitalization:(1) $793 million Ownership - Public 3

  4. Slide 4: Delek Logistics: A Compelling Investment Opportunity

    Delek Logistics: A Compelling Investment Opportunity 4  5.0% yield (1)  Distribution increased 10.7% over MQD  Avg. distribution coverage ratio of 1.35x (2013) (2)  Estimated initial $20.6 million annual EBITDA from two drop- downs  Estimated $5-$10 million additional EBITDA from potential exis

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

    Delek US – A Growth Oriented, Financially Strong Sponsor • 140,000 bpd of refining capacity in Texas and Arkansas • Access to crude / product terminals, pipeline and storage assets • 361 convenience stores(1) Operational Strength 5 (1) As of December 31, 2013. (2) As of March 17, 2014. (3) Non-GAAP

  6. Slide 6: Delek Logistics Partners, LP Overview

    Delek Logistics Partners, LP Overview

  7. Slide 7: Stable, Fee-Based Cash Flows

    7 Stable, Fee-Based Cash Flows 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 cap maintenance capex and limit

  8. Slide 8: Stable Asset Base Positioned for Growth

    Stable Asset Base Positioned for Growth 8 Pipeline/Transportation  Approximately 450 miles of crude and product transportation pipelines  600 mile crude oil gathering system  Associated storage facilities with approximately 6.6 million barrels of aggregate shell capacity Wholesale/Terminalling 

  9. Slide 9: Continued Increase in SALA Gathering System

    Continued Increase in SALA Gathering System 9 • Provides access to local Arkansas, east Texas and north Louisiana crudes to Delek US’s El Dorado refinery. • 600 mile crude oil gathering system, primarily within a 60-mile radius of the El Dorado refinery. • Positive outlook due to development in Brow

  10. Slide 10: West Texas Wholesale Business – Strong Volumes in 2013

    West Texas Wholesale Business – Strong Volumes in 2013 10 • Record volume in 2013; Benefitting from ethanol blending and capturing RINs • Operates in a growing area around the Permian Basin; benefiting from robust economic activity • Purchases refined products from third parties for resale at owned

  11. Slide 11: East Texas Marketing Volume Continues to Increase

    East Texas Marketing Volume Continues to Increase 11 (1) East Texas marketing volumes exclude jet fuel and coke, which are not part of the marketing agreement. • Volumes have been increasing as Delek US’ Tyler refinery utilization improves; Volume 29% above 2009 level • Exclusive rights to market 10

  12. Slide 12: Terminals

    Terminals 12 • Serves Delek’s retail segment and independent third parties Nashville, TN • Refined products terminalling services for Delek and/or third parties • Six terminals with over 550,000 bbls of shell capacity (1) • Terminal fee -Memphis and Big Sandy $0.52/bbl; Tyler $0.35/bbl; El Dorado $0

  13. Slide 13: Delek Logistics' Strategy

    Delek Logistics’ Strategy 13 Generate Consistent Growth Generate Stable Cash Flow Pursue Organic Expansion Optimize Existing Assets Pursue Accretive Acquisitions

  14. Slide 14: DKL: Several Visible Pathways to Growth

    DKL: Several Visible Pathways to Growth 14 Dropdowns from Delek US Organic Growth Acquisitive Growth  $5 - $10 Million of potential EBITDA expected to be dropped down over next 12 months in addition to recently completed Tyler and El Dorado asset drop downs  25,000 bpd (light crude) rail offloadin

  15. Slide 15: DKL: Recent Acquisitions

    DKL: Recent Acquisitions Approximately $22.1 million of expected annual EBITDA 15 Tyler Tank Farm and Product Terminal  First drop down from Delek US after the IPO, acquired July 26, 2013  Purchase price: $94.8 million  Assets Include:  72,000 bpd capacity product terminal  Tank farm with appro

  16. Slide 16: Paline Pipeline – Potential EBITDA Increase in 2015

    Paline Pipeline – Potential EBITDA Increase in 2015 16 (1) Fee can be pro-rated upwards if volume exceeds 30,000 bpd  185 mile crude oil pipeline - Mainline pipeline flow reversed from northbound to southbound.  100% of mainline capacity contracted to major oil company through 12/31/2014  Current

  17. Slide 17: Financial Overview

    Financial Overview

  18. Slide 18: Strong 2013 Performance

    Strong 2013 Performance 18 (1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing pro forma historical results for 2011 and forecasted performance for 12 months ending Sept. 30, 2013. Reconciliation on pg. 26 (2) Reconciliation provided on page 26. Reported 2013 EBITDA was $58.7 million whi

  19. Slide 19: Increased Distribution with Conservative Coverage

    Increased Distribution with Conservative Coverage 19 (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 27 for reconciliation. Distribution has b

  20. Slide 20: Appendix

    Appendix

  21. Slide 21: Delek US' Refineries are Strategically Positioned and Flexible

    Delek US' Refineries are Strategically Positioned and Flexible 21  Inland refinery located in East Texas  60,000 bpd, 9.5 complexity  Primarily processes inland light sweet crudes (100% in 2013)  93% yield of gasoline, diesel and jet fuel in 2013 El Dorado Refinery Tyler Refinery  Inland refine

  22. Slide 22: Summary of Certain Contracts

    Summary of Certain Contracts (10) 22 Initial / Maximum Term (1) Service Year Ended Dec. 31, 2013 Throughput (bpd)(2) Minimum Commitment (bpd) Tariff / Fee Tariff / Fee Escalator Refinery Shutdown Force Majeure Until December 2014 Crude Oil Transportation N/A N/A $535,700/Month (6) PPI-fg N/A N/A Fiv

  23. Slide 23: Summary of Certain Contracts - footnotes

    Summary of Certain Contracts - footnotes 23 (1) Maximum term gives effect to the extension of the commercial agreement pursuant to the terms thereof. (2) Represents average daily throughput for the period indicated, excluding jet fuel and petroleum coke in the East Texas marketing operations. (3) Ex

  24. Slide 24: Amended and Restated Omnibus Agreement

    Amended and Restated Omnibus Agreement 24  Under the omnibus agreement, Delek Logistics has a ROFO for 10-years post IPO if Delek US decides to sell the following assets:  Rail offloading racks in the El Dorado refinery.  Delek Logistics has the right to purchase logistics assets Delek US acquire

  25. Slide 25: Summary Organization Structure

    Summary Organization Structure 25 37.9% limited partner interest-common 96.6% ownership interest (1) 2.0% general partner interest Incentive distribution rights Delek Logistics Partners, LP NYSE: DKL (the Partnership) 100% ownership interest Public Unitholders Operating Subsidiaries 11.4% limited pa

  26. Slide 26: Non-GAAP Reconciliation

    Non-GAAP Reconciliation 26 (1) Includes approximately $2.0 million of estimated annual incremental general and administrative expenses expected to incur as a result of being a separate publicly traded partnership. (2) Interest expense and cash interest both include commitment fees and interest expen

  27. Slide 27: Cash Available for Distribution

    Cash Available for Distribution 27 2013 Actual Results and Forecast Twelve Months ending September 30, 2013 (3) (1) Non-GAAP measure. See pg. 26 for the reconciliation to GAAP. (2) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013 is based on act

  28. Slide 28: Non-GAAP Reconciliation: Delek US LTM EBITDA

    Non-GAAP Reconciliation 28 2011 2012 2013 Operating Income $286.1 $473.1 $237.7 Loss on Sale of Assets 3.6 (0.1) - Impairment of Goodwill 2.2 - - Depreciation and Amortization 74.1 82.5 89.8 EBITDA $366.0 $555.5 $327.5 Year Ended 12/31 Delek US LTM EBITDA Reconciliation

  29. Slide 29: Investor Relations Contact

    29 Investor Relations Contact: Assi Ginzburg Keith Johnson Executive Vice President, CFO Vice President of Investor Relations 615-435-1452 615-435-1366

Delek Logistics Partners — Investor Presentation (March 2014) on 6ix