Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (August 2017)
28 slides from Delek Us's investor presentation, Aug 10, 2017
Slide 1: Delek US Holdings, Inc. Investor Presentation
August 2017 Delek US Holdings, Inc. Investor Presentation
Slide 2: Disclaimers
Disclaimers 2 Delek US Holdings, Inc. (“Delek US”) and Delek Logistics Partners, LP (“Delek Logistics”; collectively with Delek US, defined as “we”, “our”) 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
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of close of trading on August 1, 2017. (2) Annualized dividend based on quarterly distribution for quarter ended June 30, 2017. (3) Currently 5.4% of the ownership interest in the general partner is owned by three members of senior
Slide 4: Acquisition of Alon Provides Platforms to Create Additional Value
Alon transaction was completed on July 1 Acquisition of Alon Provides Platforms to Create Additional Value 4 • Integration of organizations began on July 1 • Target $95 million of annual synergies in 2018 • Combination of corporate, cost of capital, operations, commercial Opportunity to Create Syner
Slide 5: Integrated Company with Asset Diversity and Scale
Integrated Company with Asset Diversity and Scale Strategically Located Assets with Permian Basin Exposure 5 Retail • Approximately 300 stores • Southwest US locations • Largest licensee of 7- Eleven stores in the US Asphalt • 14 asphalt terminals located in TN, OK, TX, WA, CA, AZ and NV • Largest a
Slide 6: Refining System with Permian Based Crude Slate
System with Over 300,000 bpd of Crude Throughput Capacity (~69% Permian Basin Based) Refining System with Permian Based Crude Slate 6 1) Differential includes contango of $0.40/bbl (2012); contango of $0.07/bbl (2013); backwardation of $0.77/bbl (2014); contango of $0.97/bbl (2015); contango of $1.2
Slide 7: Permian Basin Breakeven Crude Oil Price and Production
1) Deutsche Bank Research, Permian Basin: “You are still the one” 11/28/16, breakeven based on flat natural gas of $3.00/MMbtu; NGLs priced 35% of WTI; regional commodity differential and 25% royalty. 2) EIA production data through July 17, 2017, Drilling Productivity Report; Baker Hughes rig count
Slide 8: Permian Basin Estimated Takeaway/Production Balance
Permian Basin Estimated Takeaway/Production Balance Current pipeline takeaway capacity adequate, but production growth may tighten balance 8 Chart Source: Simmons & Company research, May 2017. Provided for illustrative purposes to show potential balance. Based on exit rate Permian production. Actual
Slide 9: Logistics Assets Positioned for Growth
Logistics Assets Positioned for Growth
Slide 10: Increased Drop Down Inventory Creates Platform to Support Logistics Growth
Increased Drop Down Inventory Creates Platform to Support Logistics Growth 10 Ability to Partner with DKL • Delek Logistics Partners provides platform to unlock logistics value • Increased access to Permian and Delaware basin through presence of Big Spring refinery • Improves ability to develop crud
Slide 11: Logistics Assets Positioned to Benefit from Permian Basin Activity
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Slide 12: West Texas Wholesale Business Benefiting from Permian Activity
12 West Texas Wholesale Business Benefiting from Permian Activity 1) RINs gross margin benefit included in the 2013 west Texas gross margin per barrel was approximately $6.4 million, or $0.99/Bbl, 2014 gross margin included $4.6 million, or $0.75/Bbl, 2015 gross margin included $5.3 million, or $0.8
Slide 13: Future Potential Dropdowns to DKL Benefit Delek US
13 Delek US GP and IDR Ownership is in DKL in the high splits Future Potential Dropdowns to DKL Benefit Delek US Cash Flow Supports Long Term Distribution Growth at Delek Logistics Total Quarterly Distribution Per Unit Target Amount Unitholders General Partner Minimum Quarterly Distribution below $0
Slide 14: DKL: Increased Distribution with Conservative Coverage and Leverage
DKL: Increased Distribution with Conservative Coverage and Leverage 14 Distribution per unit has been increased eighteen 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 $0.655 $0.680 $0.690 $0.705 MQD (1) 1Q 13
Slide 15: Retail/Wholesale System in Southwest
Retail/ Wholesale System in Southwest Integrated wholesale marketing and retail network at Big Spring; complementary to DKL west Texas 15 Refineries Legend: Big Spring Krotz Springs Branded license agreement and payment card location Branded company-operated and distributor location Unbranded supply
Slide 16: Robust Synergy Opportunity from DK/ALJ Combination
Robust Synergy Opportunity from DK/ALJ Combination 16 Expect to achieve run-rate synergies of approximately $85 - $105 million in 2018 Commercial • Logistics, purchase and trading benefits from a larger platform • $20-$35 m Operational • Sharing of resources across the platform; improved insurance a
Slide 17: Financial Strength and Flexibility for the Combined Company
At June 30, 2017 Delek US includes $392 million of net debt at Delek Logistics (DKL) Excluding DKL, Delek US’ net cash position was approximately $141.8 million Financial Strength and Flexibility for the Combined Company At June 30 approximately $790 million of cash 17 • Balance sheet should h
Slide 18: Capital Allocation Focused on Long-Term Value Creation
Capital allocation focused on investing in the business, growth and returning cash to shareholders, while maintaining financial flexibility Ability to improve asset base through capital investment Sold retail assets in Nov. 2016 for $535m (2) Closed Alon transaction on July 1, 2017 $150 mi
Slide 19: An Integrated and Diversified Refining, Logistics and Marketing Company
19 Complementary Logistics Systems Significant Organic Growth / Margin Improvement Opportunities Focus on Long Term Shareholder Returns Financial Flexibility Permian Focused Refining System Questions and Answers An Integrated and Diversified Refining, Logistics and Marketing Company
Slide 20: Appendix
Appendix
Slide 21: Non GAAP Reconciliations of Potential Dropdown EBITDA
Non GAAP Reconciliations of Potential Dropdown EBITDA (1) 21 (1) Based on projected range of potential future logistics assets 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 a
Slide 22: Delek US Focused on Growth through Acquisitions
Delek US Focused on Growth through Acquisitions (1) Includes logistic assets in purchase price. Purchase price includes working capital for refineries. (2) Mt. Pleasant includes $1.1 million of inventory. 2006 Abilene & San Angelo terminals $55.1 mm 2012 Nettleton Pipeline $12.3 mm 2011 Paline Pipel
Slide 23: Summary Organization Structure
23 Summary Organization Structure (1) As of June 30, 2017, a 5.4% interest in the Delek US ownership interest in the general partner is held by three members of senior management of Delek US. The remaining ownership interest is indirectly held by Delek. Market cap based on share prices on August 8,
Slide 24: -$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 Fe
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Slide 25: ($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 $2.00 Ja n -1 1 Fe
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Slide 26: DKL: Reconciliation of Cash Available for Distribution
DKL: Reconciliation of Cash Available for Distribution 26 (1) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013, 2014, 2015 and 2016 based on actual amounts distributed during the periods; does not include a LTIP accrual. Coverage is defined as c
Slide 27: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
DKL: Income Statement and Non-GAAP EBITDA Reconciliation 27 (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 c
Slide 28: Investor Relations Contact
Investor Relations Contact: Kevin Kremke Keith Johnson Executive Vice President, CFO Vice President of Investor Relations 615-224-1323 615-435-1366
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