Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (September 2022)
38 slides from Delek Us's investor presentation, Sep 6, 2022
Slide 1: Delek US Holdings, Inc. Investor Presentation
September 2022 Delek US Holdings, Inc. Investor Presentation Exhibit 99.1
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 (NYSE: DK)
3 (1) Factset as of 08/26/2022. • June 30, 2022 balance sheet: ◦ Delek US: approx. $1,245 million of cash; $1.57 billion of net debt ◦ Includes $13.8 million cash and $1,522 million long-term debt of DKL ◦ Net debt (excl. DKL) of $65 million • Three biodiesel plants with 40mmgal/year of capacity • R
Slide 4: Asset overview: refining, logistics, renewables, asphalt
4 Asphalt 5 asphalt terminals located in: a. El Dorado, AR b. Muskogee, OK c. Memphis, TN d. Big Spring, TX e. 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: Recent shareholder-friendly actions and operational highlights
5 ▪ Shareholder friendly actions taken immediately ▪ Announced special dividend, reinstated regular dividend and share buyback program, increased repurchase authorization ▪ Focus on safety, reliability, and environmental responsibility ▪ Record crude throughput in 2Q at 98% utilization ▪ Crude throu
Slide 6: Segment Approach: Implied EV/EBITDA Multiple
6 Segment Approach (1) Implied EV/EBITDA Multiple DK Standalone • Four refineries with 302mbbl/d of aggregate capacity • Retail value supported strong valuations for retail businesses ◦ ’23E EBITDA of $50mm; retail businesses have been transacting in the low double digit area on an EBITDA multiple b
Slide 7: Cash Return to Shareholders
7 • Re-purchased $64 million shares from Icahn Group • 5% of outstanding float • $0.20 per share Quarterly Dividend • Buyback ??? • Reinstated Regular Quarterly Dividend at $0.20 per share • Announced intention to buyback $25 -$35 million in equity • Announced $0.20 per share Special Dividend $64 mi
Slide 8: Environmental, Social, and Governance (ESG)
Environmental, Social, and Governance (ESG) Will Publish 3rd annual Sustainability Report for DK in November of 2022 • We measure our environmental performance daily, review our progress with the EHS Committee quarterly, and publicly report annually Recently announced our 1st greenhouse gas (GHG) em
Slide 9: Midstream: Permian Gathering System
9 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 10: Midstream: Wink to Webster Crude Oil Long-Haul Pipeline Joint Venture
10 ◦ 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 ◦ W
Slide 11: Aligning Our Portfolio with the Most Attractive Opportunities
57% 43% 11 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 ven
Slide 12: Enhancing Our Retail Network
12 Enhancing Our Retail Network ◦ Serves as a natural fuel short while improving DK’s cash flow stability and reducing its Renewable Identification Number (“RIN”) obligations ◦ Four new-to-industry (“NTI”) stores are in the planning phase and are expected to break ground at the beginning of the year
Slide 13: Retail: Diversifies Delek
Retail: Diversifies Delek 13 • ~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 t
Slide 14: Renewables: Renewable Diesel
Renewables: Renewable Diesel 14 • Delek has established a ‘capital light’ approach to Renewable Diesel • $13.3 million option for 33% indirect interest in the net cash flow from a renewable diesel facility following its conversion • The facility will be able to produce up to 220mm gallons a year of
Slide 15: Positioning for Energy Transition
15 Positioning for Energy Transition Existing footprint in biodiesel and reviewing opportunities in renewable diesel and de-carbonization Operate 3 Biodiesel Facilities: ~40mm gallons of annual biodiesel production capacity (equal to 407,200 metric tons of carbon reduction)(1) Crossett, AR New Alban
Slide 16: Refining system: crude throughput and slate by refinery
Permian Cushing ETX/AR Other/GC (1) Crude oil slate based on amount received six months-ended as of June 30, 2022 and will vary each period based on operations and purchases. Note: WTI-Brent differential realized through crack spread and capture rates and Midland-WTI differential realized in crude s
Slide 17: Long-term Capital Allocation Framework
Long-term Capital Allocation Framework Four pillars underpinned by a rigorous and disciplined capital allocation program to create long-term value Priorities: ◦ Invest: Capital allocation program focuses on safety, maintenance, and reliability as top priority ◦ Cash Returns: Maintain a competitive c
Slide 18: Capital Allocation Discipline
18 Capital Allocation Discipline Cash Balance & Net Debt (DK Ex. DKL)(1) ($ in millions) Capital Expenditures(1)(2) ($ in millions) (1) Based on company filings from Q3 2021 through Q2 2022 Sustaining capex defined as regulatory & maintenance capital expenditures. Capital expenditures does not inclu
Slide 19: Market Opportunities & Valuation
Market Opportunities & Valuation
Slide 20: Refiners' Product Yields and Crude Slate Flexibility
2Q22 Refiners’ Middle Distillates Yield % (1) (2) (3) 2Q22 Refiners’ Gasoline Yield % (1) (3) 20 ◦ Refining system product yields ▪ Strong middle distillate yield versus peers ▪ Ability to switch ~10% between gasoline and distillate ◦ Crude oil slate has flexibility ▪ Ability to increase sour crude
Slide 21: Overarching Objectives and Key Initiatives
Overarching Objectives and Key Initiatives 21
Slide 22: 3 Bear Acquisition
3 Bear Acquisition
Slide 23: Investment Considerations for 3 Bear
• 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 120k bbls of storage; 200kbpd salt water disposal; offers produce
Slide 24: Established Infrastructure in the Delaware Basin For Bear
Established Infrastructure in the Delaware Basin For 3 Bear Asset Overview ◦ 3 Bear Delaware Holding - NM, LLC (“3 Bear”) 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 infrastructure ◦ A
Slide 25: DKL + 3 Bear: 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: 3 Bear Acquisition: Diversifying Cash Flows via Third-Party Revenues
3 Bear 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) Estimated
Slide 27: Appendix
Appendix
Slide 28: Second Quarter 2022 Consolidated Cash Flows
28 Second Quarter 2022 • Strong financial position with $1.24 billion of cash on the balance sheet • Cash flow from operating activities of approx. $559 million ◦ Cash flow from operating activities (excluding working capital) of approx. $552 million ◦ Working capital benefited cash flow by approx.
Slide 29: 3Q22 Guidance Range
3Q22 Guidance Range 3Q22 Guidance Range ($ in millions) Consolidated Operating Expenses Consolidated G&A Consolidated Depreciation and Amort. Net Interest Expense Total Crude Throughput 29
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 limited partner units) Delek Logistics GP, LLC (the General Par
Slide 31: DKL Distribution and Leverage Ratio
31 (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 reconciliations starting on page 34. (3) In 4Q17, the reimbursed capital expenditure amounts in
Slide 32: Debt Maturity Profile and Credit Ratings
32 June 30, 2022 – Debt Maturity Profile DK and DKL Debt Profile Credit Ratings (S&P/Moody’s/Fitch) Cash Interest Obligations (3) (1) Delek prepaid down $10M of the Hapoalim Term Loan for each period on 7/30/21, 1/31/22, and 6/30/21. (2) Delek Logistic Partners entered into an Indenture with US Bank
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:
Slide 35: Net Debt Reconciliation
35 Net Debt Reconciliation (1) Numbers may not foot due to rounding.
Slide 36: Reconciliation of GAAP to Non-GAAP
36 Reconciliation of GAAP to Non-GAAP (1) An adjustment for the portion of the retroactive biodiesel tax credit reenacted in December 2019 but that was attributable to 2018 has been adjusted out of the year ended December 31, 2019. (1)
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
Delek US Holdings — Investor Presentation (September 2022) on 6ix