Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (January 2015)
37 slides from Delek Us's investor presentation, Jan 6, 2015
Slide 1: Investor Presentation Delek US Holdings January 2015
Investor Presentation Delek US Holdings January 2015
Slide 2: Safe Harbor Provision
Safe Harbor Provision 2 Delek US Holdings and Delek Logistics Partners, LP are traded on the New York Stock Exchange in the United States under the symbols “DK” and ”DKL” respectively, and, as such, are governed by the rules and regulations of the United States Securities and Exchange Commission. Th
Slide 3: Integrated Business Model
3 Integrated Business Model Flexible Crude Sourcing and Market Driven Production Enhance Performance Flexible Crude Oil Sourcing •Pipeline access to Midland; Gulf Coast; Cushing • Increasing Gathering – Texas and Arkansas •Access to Canadian crude Crude Logistics •Crude oil pipelines supporting refi
Slide 4: Delek US Holdings Overview
Delek US Holdings Overview 4 (1) Rail supplied light crude capability consists of 25,000 bpd of light crude or 12,000 bpd heavy crude offloading that is available at a company owned facility at the El Dorado refinery. In addition, 20,000 bpd light crude capability is currently available via a third
Slide 5: Refining Segment Operational Update
Refining Segment Operational Update
Slide 6: Increased Access to Cost Advantaged Crude
Approximately 75% of crude slate consist of Midland and local crude supply in early 2015 Increased Access to Cost Advantaged Crude 6 45.0 45.0 87.0 97.0 17.2 17.9 18.6 18.6 0 50 100 150 200 2012 2013 2014 2015 In 0 0 0 b p d Midland Local Total Crude Throughput $(3.31) $(2.71) $(6.11) $(2.07) $(4.57
Slide 7: Improved Operating Flexibility
Increased ability to process light crude oil and ULSD capacity Improved Operating Flexibility 7 Since 2012 increased light crude processing capability by 27% based on 2015 target ULSD capability expected to improve by 37% El Dorado has ability to process 80 kbpd medium or mostly light crude
Slide 8: Tyler Refinery Expansion Economics
Tyler Refinery Expansion Economics Based on Incremental 10,000 bpd of crude throughput capacity – Estimated capital cost approximately $70 million; approx. $34 million spent YTD 3Q2014 Expected product yield +10.1 kbpd – Gasoline +5.0 kbpd – Diesel/Jet +4.3 kbpd – Other +0.8 kbpd Estimated ret
Slide 9: Refineries Serve Local Niche Markets
Supports High Refining Utilization Refineries Serve Local Niche Markets 9 75 150 150 210 150 275 325 375 0 50 100 150 200 250 300 350 400 1Q2 0 1 3 2Q2 0 1 3 3Q2 0 1 3 4Q2 0 1 3 1Q2 0 1 4 2Q2 0 1 4 3Q2 0 1 4 4Q2 0 1 4 Delek Logistics Partners terminals support refining system: Tyler refinery ser
Slide 10: Affects of Declining Crude Oil Price Environment on Refining
Affects of Declining Crude Oil Price Environment on Refining 10 Declining crude oil price environment has ability to improve capture rate in Delek US system A $10 per barrel decline in crude oil price can increase capture rate by $0.80 per barrel (1) Lower cost of volumetric losses at refineri
Slide 11: Improved Operating Cost per barrel
Improved Operating Cost per barrel 11 Focus on reducing costs in operations Total operating cost per barrel declined by 9% year over year in 3Q14 Lowered expenses per barrel at both refineries in 3Q14 Enhances competitive position $4.82 $4.71 $4.61 $4.42 $4.24 2011 2012 2013 3Q13 3Q14 Tyler
Slide 12: Historical and Projected Capital Spending (excluding logistics)
Historical and Projected Capital Spending (excluding logistics) $42.3 $36.0 $65.9 $144.3 $217.8 $14.4 $36.5 $29.1 $37.9 $28.8 $0.1 $7.6 $26.5 $35.0 $21.2 Q1, $83.3 Q2, $56.8 Q3, $26.9 Q4, $17.6 2010A 2011A 2012A 2013A 2014E 2015E 2016E Refining Retail Other Declining Capital Needs Expected after 201
Slide 13: Logistics Operational Update
Logistics Operational Update
Slide 14: Strategic Partner in Delek Logistics Partners, LP
Strategic Partner in Delek Logistics Partners, LP (NYSE: DKL) 14 Delek Logistics Partners , LP (NYSE:DKL) began operating on Nov. 7, 2012 and 100% of its performance is reported as a segment of Delek US beginning 4Q12. Delek US and its affiliates own approximately 62%, including the 2.0% general par
Slide 15: DKL: Improving EBITDA
DKL: Improving EBITDA 15 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing forecasted performance for 12 months ending Sept. 30, 2013. 2) Information provided in Delek Logistics Partners, LP (NYSE: DKL) investor presentation available at www.deleklogistics.com for 3Q2014 EBITDA based on
Slide 16: DKL: Potential EBITDA Growth
DKL: Potential EBITDA Growth (1) 16 (1) Information provided in Delek Logistics Partners, LP (NYSE: DKL) investor presentation available at www.deleklogistics.com. 3Q2014 EBITDA based on pro forma LTM information provided in that presentation. Pro forma 3Q2014 includes amounts for drop down contribu
Slide 17: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage 17 (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. As presented by Delek Logistics Partners’ sl
Slide 18: Marginal Percentage Interest in Distributions
18 Marginal Percentage Interest in Distributions Assumed Distribution per Limited Partner Unit if Delek Logistics Meets 15% Annual Growth Target (2) Delek Logistics GP Incentive Distribution Rights Total Quarterly Distribution Per Unit Target Amount Unitholders General Partner Minimum Quarterly Dist
Slide 19: Peer Comparisons
Peer Comparisons (1) 19 (1) Source: Company repots; Capital IQ ; NASDAQ OMX; (2) VLO and WNRL had no debt at 9/30/14 and PBFX had limited historical EBITDA so it was not included. Current Yield – 12/29/14 1.9% 2.2% 2.3% 3.0% 3.7% 4.1% 4.2% 4.6% 5.1% 5.7% 6.3% 7.1% -0.5% 1.5% 3.5% 5.5% 7.5% PSXP MPLX
Slide 20: Retail Operational Update
Retail Operational Update
Slide 21: Retail Locations Create Synergies for Product Marketing
Fuel Gallons Sold Per Store (000’s) 1,039 1,082 1,112 832 893 2011 2012 2013 YTD 3Q13 YTD 3Q14 $951 $1,011 $1,037 $778 $829 2011 2012 2013 YTD 3Q13YTD 3Q14 Retail Locations Create Synergies for Product Marketing 21 Expanding Market Footprint in Markets Capable of Being Supplied by El Dorado Merchand
Slide 22: Focused on Organic Growth
Focused on Organic Growth 22 Large Format Stores are focal point Approximately 4,800 square feet Offer customers wider product selection Prepared food service offering increases traffic Avg. approximately 4 million gallons and $2+million inside sales once market penetrated 3 year growth
Slide 23: Current Retail Valuation Comparison
Current Retail Valuation Comparison 23 Valuations moving higher than historical 6x-8x range 7.3x 9.1x 9.3x 9.7x 9.7x 9.9x PTRY CASY MUSA CAPL SUN CST EV/ 2015 EBITDA Average = 9.2x (1) Source: Capital IQ; Raymond James 12/17/14 industry report based on forward estimates.
Slide 24: Financial Update
Financial Update
Slide 25: Financial Highlights
Financial Highlights $164 $151 $130 $445 $659 $448 $547 2008 2009 2010 2011 2012 2013 LTM Sep. 2014 At September 30, 2014 Cash of $497.7 million; Debt of $594.2 million Includes $230.0 million of debt and $0.7 million of cash at Delek Logistics (DKL) Excluding DKL, Delek US’ net cash positio
Slide 26: Peer Balance Sheet Metrics
Peer Balance Sheet Metrics 26 -0.3x 0.2x 0.3x 0.6x 0.7x 0.8x 0.8x 0.9x 1.2x HFC DK VLO WNR PBF TSO PSX MPC ALJ (1) Source: Capital IQ 12/26/14 . 3Q14 Net Debt/ LTM EBITDA
Slide 27: Going Forward
Going Forward
Slide 28: Growing and Improving Asset Base Across all Segments
66 58 124 80 60 140 80 75 155 El Dorado Tyler Total 2013 2013 2013 3Q14 3Q14 3Q14 2015 Target 2015 Target` 2015 Target $64 $90 $150 + $25-$35 2013 LTM 3Q14 Annualized 1Q15 Incremental Target Annualized 2015 Exit Rate Target Growing and Improving Asset Base Across all Segments (1) 28 (in 000 bpd) ($
Slide 29: Peer Comparison
Peer Comparison 29 3.7x 3.9x 4.3x 4.7x 5.5x 5.9x 5.9x 6.5x 6.6x PBF VLO ALJ DK WNR HFC MPC PSX TSO (1) Source: Capital IQ; December 26, 2014.. EV/ LTM EBITDA
Slide 30: Investment highlights and Questions and Answers
30 Large, Complementary Logistics, Marketing and Retail Systems Significant Organic Growth / Margin Improvement Opportunities Focus on Shareholder Returns Strong Balance Sheet Strategically Positioned Refining Platform Questions and Answers
Slide 31: Appendix Additional Data
Appendix Additional Data
Slide 32: Delek US Focused on Building an Integrated Business Model
Delek US Focused on Building an Integrated Business Model 32 A core part of Delek US' strategy is to grow via prudent strategic transactions since 2001 (1) Includes logistic assets in purchase price. Purchase price includes working capital for refineries. (2) Mt. Pleasant includes $1.1 million of in
Slide 33: Historical and Projected Capital Spending
$42.3 $36.0 $65.9 $144.3 $217.8 $0.9 $10.5 $5.1 $9.9 $14.4 $36.5 $29.1 $37.9 $28.8 $0.1 $7.6 $26.5 $35.0 $21.2 2010A 2011A 2012A 2013A 2014E Refining Logistics (Marketing) Retail Other Historical and Projected Capital Spending 33 $56.8mm $81.0mm $132.0mm $222.3mm Source: Company filings. $277.7mm
Slide 34: U.S. Refining Environment Trends
-$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 0 F e b -1 0 M a r- 1 0 A pr -1 0 M a y -1 0 J u n -1 0 J u l- 1 0 A u g -1 0 S e p -1 0 O c t- 1 0 No v -1 0 De c -1 0 J a n -1 1 F e b -1 1 M a r- 1 1 A pr -1 1 M a y -1 1 J u n -1 1 J u l- 1 1 A u g -1 1 S e p -1 1 O c t- 1 1 No v -1 1 De c -1 1 J a
Slide 35: Access to Midland Crudes Benefits Margins
($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 WTI Midland vs. WTI Cushing Crude Pricing Access to Midland Crudes Benefits Margins ($ per barrel) 87,000 bpd of Midland crude in DK system 35 Source: Argus – as of December 31, 2014
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation 36 Source: Company filings. Note: 2013 Contribution Margin adjusted to reflect $8 million of trucking expenses moving from general & administrative expenses to cost of goods sold based on 2014 financial statement format. ($ in millions) 2012 2013 YTD 9/30/14 Net cash provided
Slide 37: Investor Relations Contact
Investor Relations Contact: Assi Ginzburg Keith Johnson Chief Financial Officer Vice President of Investor Relations 615-435-1452 615-435-1366
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