Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (August 2016)
30 slides from Delek Logistics Partners, L.p's investor presentation, Aug 8, 2016
Slide 1: Delek Logistics Partners, LP Investor Presentation August 2016
Delek Logistics Partners, LP Investor Presentation August 2016
Slide 2: Disclaimers
2 Disclaimers These slides and any accompanying oral and written presentations 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 estim
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of trading on August 5, 2016. (2) Annualized distribution based on quarterly distribution for quarter ended June 30, 2016, to be paid on August 12, 2016. (3) For reconciliation please refer to pages 28 and 29. (4) Annualized EBITDA
Slide 4: Delek US – A Growth Oriented, Financially Strong Sponsor
Delek US – A Growth Oriented, Financially Strong Sponsor • 155,000 bpd of refining capacity in Texas and Arkansas • Access to crude / product terminals, pipeline and storage assets • 348 Convenience stores (1) Operational Strength (1) As of June 30, 2016 financial statements in the Delek US 10Q file
Slide 5: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 6: Stable Asset Base Positioned for Growth
Stable Asset Base Positioned for Growth 6 ~765 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longview to Nederland, TX ~ 600 mile crude oil gathering system in AR Storage facilities with 6.2 million barrels of active shell capacity Ra
Slide 7: Improving Performance and Financial Flexibility to Support Growth
Improving Performance and Financial Flexibility to Support Growth 7 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing pro forma results forecasted performance for 12 months ending Sept. 30, 2013. Reconciliation on pg. 28 2) Reconciliation provided on page 28. Results in 2013 and 2014 ar
Slide 8: Growth Initiatives Improved EBITDA Since 2012
Growth Initiatives Improved EBITDA Since 2012 8 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing forecasted performance for 12 months ending Sept. 30, 2013. 2) Bridge compared to the forecast provided in the prospectus based on difference in performance during the 12 months ending Marc
Slide 9: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage 9 Distribution per unit has been increased fourteen 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 MQD (1) 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 1
Slide 10: DKL: Potential Growth
DKL: Potential Growth (1) $68.2 $100.5 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 LTM Net Income 6/30/16 LTM EBITDA 6/30/16 Pipeline Joint Ventures (2) Potential Retail Drop (3) $ in millions * Potential Retail asset drop down from Delek US 8x to 10x EBITDA target 10 • Options for Grow
Slide 11: Acquisition EBITDA multiples have been below 10x
Acquisition EBITDA multiples have been below 10x (1) Provided stable fee based growth 11 Growth strategy to target acquisitions with 8x-10x EBITDA multiple range with potential to improve performance 9.0x 8.1x 6.3x 9.5x 7.9x 4.8x 9.2x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x Tyler Tan
Slide 12: Recent Events
Recent Events 12 Paline Pipeline ■ Increased flexibility to evaluate options following June 30, 2016 contract change ■ Potential to reverse flow to move crude from Gulf Coast to Longview, Texas ■ Evaluate ability to increase utilization and/or capacity Pipeline Development Projects ■ Caddo Pipeline
Slide 13: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects 13 Caddo Pipeline ■ DKL (50%)/Plains (50%) ■ Est. total cost: $120 million (1) ■ Capacity: 80,000 bpd ■ Length: 80 miles ■ Expected Completion: Jan. 2017 Rio Pipeline ■ Rangeland (67%)/ DKL (33%) ■ Cost: $119 million ■ Capacity: 55,000 bpd ■ Length: 107 miles ■ Expect
Slide 14: Segment Overview
Segment Overview
Slide 15: Lion Pipeline System and SALA Gathering
Lion Pipeline System and SALA Gathering 15 SALA Gathering System • Provides access to local Arkansas, east Texas and north Louisiana crudes to Delek US’ El Dorado refinery. • 600 mile crude oil gathering system, primarily within a 60-mile radius of the El Dorado refinery. 15,813 15,900 17,676 20,747
Slide 16: Terminalling and West Texas Wholesale Business
Terminalling and West Texas Wholesale Business 16 West Texas Wholesale and Marketing • Operates in an area around the Permian Basin • Purchases refined products from third parties for resale at owned and third party terminals in west Texas. • Includes ethanol blending activity. 18.5 12.6 75.4 96.8 1
Slide 17: Paline Pipeline
Paline Pipeline 17 Approximately 195 mile crude oil pipeline - Mainline pipeline flows from north to south 10,000 bpd of mainline capacity reserved for a third party to use exclusively from July 1, 2016 to December 31, 2016. 40-day hydro testing scheduled for 3Q16; required every five years
Slide 18: Going Forward
Going Forward
Slide 19: Several Visible Pathways for Potential Growth
Several Visible Pathways for Potential Growth 19 Organic Growth Acquisitive Growth Evaluate Paline Pipeline for potential future utilization and/or capacity increase Increasing activity in Arkansas gathering system Potential expansion of the North Little Rock terminal to 17,500 bpd Proven ab
Slide 20: Peer Comparisons
Peer Comparisons (1) 20 Current Yield as of 8/5/16 Distributable Cash Flow Coverage Ratio (1) Leverage Ratio (2) 1.1x 1.1x 1.1x 1.2x 1.3x 1.4x 1.4x 1.4x 1.5x 1.5x 1.5x 1.8x 0.0x 0.5x 1.0x 1.5x 2.0x HEP PAA SXL WNRL DKL TLLP EPD MPLX MMP PSXP PBFX VLP 2.5x 3.4x 3.5x 3.5x 4.0x 4.4x 4.7x 6.0x 6.0x 6.4x
Slide 21: Questions and Answers
21 Questions and Answers 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 Delek
Slide 22: Appendix
Appendix 2
Slide 23: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible 23 Inland refinery located in East Texas 75,000 bpd, 8.7 complexity Primarily processes inland light sweet crudes (100% in 2014) 94% yield of gasoline, diesel and jet fuel in 2014 El Dorado Refinery (1) Tyler Refinery (1) Inlan
Slide 24: Summary of Certain Contracts
Summary of Certain Contracts (9) 24 Initial / Maximum Term (1) Service 6 Months Ended Jun. 30, 2016 Throughput (bpd)(2) Minimum Commitment (bpd) Current Tariff / Fee Tariff / Fee Index (11) Refinery Shutdown Force Majeure July 1 to Dec. 31, 2016 N/A N/A $400,000/Month (6) FERC N/A N/A N/A N/A Five /
Slide 25: Summary of Certain Contracts - footnotes
Summary of Certain Contracts - footnotes 25 (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 S
Slide 26: Amended and Restated Omnibus Agreement Key Provisions
Amended and Restated Omnibus Agreement 26 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' refineries or the
Slide 27: Summary Organization Structure
Summary Organization Structure 27 38.3% interest Limited partner-common 95.10% ownership interest (1) 2.0% interest General partner interest Incentive distribution rights Delek Logistics Partners, LP NYSE: DKL (the Partnership) 100% ownership interest Public Unitholders Operating Subsidiaries 59.7%
Slide 28: Income Statement and Non-GAAP EBITDA Reconciliation
Income Statement and Non-GAAP EBITDA Reconciliation 28 (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 commit
Slide 29: Reconciliation of EBITDA and Cash Available for Distribution
Reconciliation of EBITDA and Cash Available for Distribution 29 (1) Forecast period for twelve month period ending 9/30/2013 EBITDA is reconciled to net income on page 28. (2) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013 , 2014 and 2015 and
Slide 30: Investor Relations Contact
30 Investor Relations Contact: Assi Ginzburg Keith Johnson Executive Vice President, CFO Vice President of Investor Relations 615-435-1452 615-435-1366
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