Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (March 2021)
42 slides from Delek Us's investor presentation, Mar 2, 2021
Slide 1: Delek US Holdings, Inc. Investor Presentation
March 2021 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
3 Investment Overview (NYSE: DK) 1) Factset as of 2/24/2021 • December 31, 2020 balance sheet: • Delek US: approx. $788 million of cash; $2.3 billion of debt • Includes $4.0 million cash and $992 million long-term debt of DKL • Net debt (excl. DKL) of $573 million • Delek has established a ‘capital
Slide 4: Integrated Company with Asset Diversity and Scale
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 5: 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 6: Environmental, Social, and Governance (ESG)
6 Environmental, Social, and Governance (ESG) Published New Sustainability Report in September 2020 Published our first demographic disclosures Total employees by gender and ethnicity Manager and above by gender Manager and above by race Disclosure of whistle blower stats E n v ir o n m e
Slide 7: DKL Relative to Peer Group
7 DKL Relative to Peer Group Where It is and Where It is Going Note: Peers include EPD, HEP, MMP, MPLX, PAA, PBFX, PSXP (1) Updated from Factset as of February 24, 2021 2.63x 2.57x 2.10x 1.70x 1.48x 1.44x 1.41x 1.10x Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 DKL Peer 7 2.82x 2.98x 3.59x 3.72x 3.75x
Slide 8: Midstream: Big Spring Gathering System
8 1) Please see page 40 for a reconciliation of forecasted incremental annualized net income to forecasted EBITDA for the Big Spring Gathering System. Midstream: Big Spring Gathering System Gathering Helps Control Crude Oil Quality and Cost into Refineries Big Spring Gathering System Approximately
Slide 9: Midstream: Wink to Webster Crude Oil Long-Haul Pipeline Joint Venture
9 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: Midstream: Red River Pipeline Joint Venture
10 Midstream: Red River Pipeline Joint Venture Delek US is a major shipper on pipeline; increased crude oil optionality Increasing by 65,000 bpd to 100,000 bpd following expansion; Incremental 24 million bbls/yr of Cushing crude oil into Longview, TX From Longview, TX DKL has access to: Dele
Slide 11: Strong Adjusted EBITDA Growth Profile from Midstream Initiatives
$256 $30 - $34 3 M o n th s E n d in g 1 2 /3 1 /2 0 2 0 A n n u a lize d K ro tz Sp rin g s M id stre a m A sse ts O th e r M id stre a m g ro w th p ro je cts T o ta l A n n u a lize d A d j. E B IT D A P o te n tia l Krotz Springs Midstream Assets •$30 to $34 million expected EBITDA / year(2) Mid
Slide 12: Transforming to More Diversified Adjusted EBITDA
Transforming to More Diversified Adjusted EBITDA Midstream to comprise increasing % of future adjusted EBITDA More stable revenue stream Higher multiple business Refining contribution supported by operating cost and overhead reductions Base adjusted EBITDA performance progressively moving
Slide 13: Previous Organic Capital Spend Drives Future EBITDA Growth
Previous Organic Capital Spend Drives Future EBITDA Growth Capital Diversifies EBITDA Base 0 200 400 600 800 1,000 2018 Actual 2019 Actual Krotz - Alky unit Big Spring Gathering Red River JV Wink to Webster JV Adjusted EBITDA ($mm) 13 (2) (2) Initiatives should create sustainable adj. EBITDA and mid
Slide 14: Retail: Diversifies Delek
Retail: Diversifies Delek 14 ~80% integration with existing downstream operations offering synergies and competitive advantage Operate approximately 253 C-stores in Central and West Texas and New Mexico Synergistic Retail Platform Significant Profit Growth Opportunity Divesting underperforming
Slide 15: Renewables: Renewable Diesel
Renewables: Renewable Diesel 15 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 16: Renewables: Biodiesel Facilities
Renewables: Biodiesel Facilities 3 Biodiesel Facilities: ~40mm gallons of Annual Biodiesel Production Capacity Crossett, AR New Albany, MS Cleburne, TX 40mm gallons of biodiesel = 407,200 metric tons of carbon reduction ~86,500 Passenger vehicles driven for one year : ~1 Billion Miles driven by an a
Slide 17: Refinery Overview and Crude Slate
92% 8% Tyler(1) WTI ETX Other 1) Crude oil slate based on amount received year-ended as of December 31, 2020 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 slate.
Slide 18: Escaping the Midland Overhang
Escaping the Midland Overhang Transforming Away from Reliance on Midland 18 1) Based on Factset estimates as of 2/23/2021 $0 $100 $200 $300 $400 $500 $600 2018/2019 2021 $ m il li o n s Theoretical Midland Benefit Potential OPEX and G&A Savings Expected CAPEX Reduction DKL Increased Contribution 2
Slide 19: Long-term Capital Allocation Framework
19 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 competitiv
Slide 20: Capital Allocation – Balanced & Flexible
Capital Allocation – Balanced & Flexible 20 2021 spending guidance of $150 to $160 million (including turnarounds) Reducing CAPEX approximately 35% Y/Y 2020 includes the Big Spring Turnaround Completed in early March 2020 2021 2020 '21 vs '20 '21 vs '20 Capital Forecast Estimated Actual Abso
Slide 21: Capital Allocation Discipline
$54.8 $54.3 $47.7 $65.8 $78.3 $170.3 $13.3 $1.5 $22.9 $52.0 $74.1 $38.2 $44.7 $25.0 $19.9 $1.7 $3.2 $8.7 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Sustaining Capex Discretionary Capex 21 Capital Allocation Discipline $984 $946 $1,000 $950 $781 $833 $802 $784 $72 $130 $159 $284 $496 $627 $666 $573
Slide 22: Market Opportunities & Valuation
Market Opportunities & Valuation
Slide 23: Refiners' Product Yields
41% 39% 36% 36% 35% 34% 28% 36% CVI DK PSX VLO HFC MPC PBF 4Q20 Refiners’ Middle Distillates Yield % (1) (2) (3) 56% 55% 54% 52% 52% 48% 46% 52% PBF CVI HFC MPC VLO DK PSX 4Q20 Refiners’ Gasoline Yield % (1) (3) 23 Refining system product yields Strong middle distillate yield versus peers Abil
Slide 24: Tangible Assets with Underlying Value
Tangible Assets with Underlying Value Four refineries with 302mbbl/d of aggregate capacity 80% DKL ownership provides public marker of value DK owns 34.7mm units at $39.48 or $1.4 billion (1) Retail value supported strong valuations for retail businesses ’23E EBITDA (2) of $45mm; retail bu
Slide 25: Integrated and Diversified Refining, Logistics and Retail Company
Growing Midstream Platform to Diversify EBITDA Stream Financial Flexibility to Support Strategic Objectives An Integrated and Diversified Refining, Logistics and Retail Company Invest in the Business to Operate Reliably and Safely Permian Focused Refining System with Increasing Access to Cushing Foc
Slide 26: Appendix
Appendix
Slide 27: 4Q20 Cash Flows
4Q20 Cash Flows * Strong financial position with $788 million of cash, Total Consolidated Cash Flows ‘on the balance sheet a —_ on so * Cash flow from operating activities of approx. $700 ($109) $117 million $600 ¢ Cash flow from operating activities _ (excluding working capital) of approx. sao0 $(1
Slide 28: 1Q21 Guidance Range
1Q21 Guidance Range 1Q21 Guidance Range ($ in millions) Consolidated Operating Expenses Consolidated G&A Consolidated Depreciation and Amort. Net interest expense Total Crude Throughput
Slide 29: Summary Organizational Structure
29 Summary Organizational Structure 20% interest (8.7 million units) Limited partner-common 100% Delek Logistics Partners, LP NYSE: DKL (the Partnership) Public Unitholders Operating Subsidiaries 80% interest (34.7 million units) Limited partner-common Delek Logistics GP, LLC (the General Partner) D
Slide 30: Reconciliations
Reconciliations
Slide 31: Non-GAAP Reconciliation of Alkylation Project EBITDA
31 1) Based on projected potential future performance from the alkylation unit project at Krotz Springs. Amounts of EBITDA, net income and timing will vary. Actual amounts will be based on performance of the project and market conditions. Non-GAAP Reconciliation of Alkylation Project EBITDA(1) ($ in
Slide 32: Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA
32 1) Based on projected range of potential future logistics assets associated with the Krotz Springs refinery that could be dropped to Delek Logistics from Delek US in the future. Amounts of EBITDA, net income and timing will vary, which will affect the potential future EBITDA and associated deprec
Slide 33: Non-GAAP Reconciliations of Adjusted EBITDA
33 Non-GAAP Reconciliations of Adjusted EBITDA
Slide 34: DKL Outperformance
34 DKL Outperformance DKL Alerian Midstream Index S&P 500 HEP MPLX PBFX PSXP 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 2 0 2 1 Y T D S to ck P e rf o rm a n ce 2020 Stock Performance Factset as of 2/24/2021
Slide 35: 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 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q1
Slide 36: DKL: Reconciliation of Distributable Cash Flow
36 1) Distribution based on actual amounts distributed during the periods; does not include LTIP accrual. Coverage is defined as cash available for distribution divided by total distribution. 2) Results in 2013, 2014 and 2015 are as reported excluding predecessor costs related to the dropdown of the
Slide 37: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
37 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 38: Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA
38 Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA(1) ($ in millions) Annual Monthly Forecasted Incremental Net Income 10.8$ 0.9$ Add Forecasted Incremental Amounts for: Interest Expense, net -$ -$ Depreciation and amortization -$ -$ Forecasted Incremental EBITDA 10.8$ 0.9$ Reconc
Slide 39: Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA
39 Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA(1) 1) Based on projected potential future performance from the Red River joint venture. Amounts of adjusted EBITDA and net income will vary. Actual amounts will be based on market conditions and pipeline operations. ($ in millions
Slide 40: Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA
40 Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA
Slide 41: Non-GAAP Reconciliations of Trucking Assets Forecasted EBITDA
41 Non-GAAP Reconciliations of Trucking Assets Forecasted EBITDA
Slide 42: Investor Relations Contacts
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312
Delek US Holdings — Investor Presentation (March 2021) on 6ix