Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (August 2014)
29 slides from Delek Logistics Partners, L.p's investor presentation, Aug 11, 2014
Slide 1: Delek Logistics Partners, LP Investor Presentation August 2014
Delek Logistics Partners, LP Investor Presentation August 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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 concernin
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of trading on August 8, 2014. (2) Annualized distribution declared as of July 28, 2014. (3) For reconciliation please refer to pages 26 and 27. (4) Approximately 3.9% of the ownership interest in the general partner is owned by thre
Slide 4: 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 • 362 convenience stores(1) Operational Strength 4 (1) As of June 30, 2014 financial statements. (2) As of August 8, 20
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 ~400 miles of crude transportation pipelines, includes the 195 mile crude oil pipeline from Longview to Nederland, TX ~ 600 mile crude oil gathering system in AR Storage facilities with 6.6 million barrels of active shell capacity Pipelines/Transportat
Slide 7: Recent Acquisitions Provided Stable Fee Based Growth
7 Approximately $22.1 million of expected annual EBITDA Recent Acquisitions Provided Stable Fee Based Growth Tyler Tank Farm and Product Terminal • July 2013 • EBITDA: $10.5 million •Price: $94.8 million •Drop down Hopewell Pipeline • July 2013 • EBITDA: $700,000 •Price: $5.7 million •3rd Party Nort
Slide 8: Improving EBITDA and Financial Flexibility to Support Growth
Improving EBITDA and Financial Flexibility to Support Growth 8 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. 28 2) Reconciliation provided on page 28. Results
Slide 9: Increased Distribution with Conservative Coverage
Increased Distribution with Conservative Coverage 9 (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 29 for reconciliation. (3) Based on distri
Slide 10: Strategy in Place to Provide Continued Growth
10 Growth strategy supports target for annual distribution increase of 15% in coming years Strategy in Place to Provide Continued Growth 1) 2Q2014 EBITDA based on pro forma LTM information provided in page 8 and annualized second quarter performance. 2Q14 performance benefited from a higher than his
Slide 11: Focus on Growth has Improved EBITDA
Focus on Growth has Improved EBITDA 11 (1) Reconciliation on pg. 28 for historical performance. Pro forma 1Q2014 includes amounts for drop down contribution based on daily EBITDA expected multiplied by days when the drop down assets were not included in operations of DKL according to purchase dates.
Slide 12: Peer Comparison
12 Source: Unit price based on August 8, 2014; declared annualized distribution based on second quarter 2014 distribution annualized. Peer Comparison Partnership Ticker Current $/unit Annualized Distribution Current Yield Y/Y Distr. Growth Phillips 66 Partners PSXP 65.06$ 1.207$ 1.9% NA Valero Logis
Slide 13: Segment Overview
Segment Overview
Slide 14: Lion Pipeline System and SALA Gathering
Lion Pipeline System and SALA Gathering 14 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. • Positioned to benefit fro
Slide 15: Terminalling and West Texas Wholesale Business
Terminalling and West Texas Wholesale Business 15 West Texas Wholes and Marketing • Operates in an area around the Permian Basin; benefiting from robust economic activity. • Purchases refined products from third parties for resale at owned and third party terminals in west Texas. • 2nd quarter 2014
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 (2) Illustrative leverage based on 30,000 bpd multiplied by 365 days equals 10,950,000 barrels annually. A $1.00 per barrel change in the fee per barrel equates to approximately $10.9
Slide 17: Going Forward
Going Forward
Slide 18: Several Visible Pathways for Continued Growth
Several Visible Pathways for Continued Growth 18 Dropdowns Organic Growth Acquisitive Growth $5-$10 million of potential EBITDA; expected drop down timing next 12 months 25,000 bpd (light crude) rail offloading facility at El Dorado refinery 300,000 bbl crude oil tank (under construction) at T
Slide 19: Questions and Answers
19 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 20: Appendix
Appendix 2
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 Expansion in 1Q15 to 75,000 bpd Primarily processes inland light sweet crudes (100% in 2013) 93% yield of gasoline, diesel and jet fuel in 2013 El Dorado Refin
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
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. (3) Excludes volumes gathered on the SALA Gathering System. (4) Volumes gathered on
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
Slide 25: Summary Organization Structure
Summary Organization Structure 25 38.0% interest Limited partner-common 96.1% 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 11.3% i
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
Slide 27: Cash Available for Distribution
Cash Available for Distribution 27 (1) Non-GAAP measure. See pg. 28 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 actual amounts distributed during year; does not include a LTIP accrual in 2013.
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 28 LTM 2011 2012 2013 2013 2014 6/30/14 Operating Income $286.1 $473.1 $237.7 $212.2 $173.7 $199.2 Loss on Sale of Assets 3.6 (0.1) - - - - Impairment of Goodwill 2.2 - - - - - Depreciation and Amortization 74.1 82.5 89.8 43.6 52.8 99.0 EBITDA $366.0 $555.5 $327.5 $255.8 $226
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
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