Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — MLP & Energy Infrastructure Conference May 2019
32 slides from Delek Logistics Partners, L.p's conference presentation, May 14, 2019
Slide 1: Investor Presentation: MLP & Energy Infrastructure Conference - May 2019
Exhibit 99.1 Investor Presentation Delek Logistics MLP & Energy Infrastructure Conference - May 2019
Slide 2: Disclaimers
Disclaimers Forward Looking Statements: These slides and any accompanying oral and written presentations contain forward-looking statements by Delek Logistics Partners, LP (defined as “we”, “our”, “DKL” or “Delek Logistics”) that are based upon our current expectations and involve a number of risks
Slide 3: Investment Overview
Investment Overview • Current Price: $30.50/unit (1) • Market Capitalization: $744 million (1) Overview (NYSE: DKL) • Current Distribution: $0.820/LP unit qtr.; $3.28/LP unit annualized (2) • Current Yield: 10.69% (1) (2) • Distribution per LP unit growth rate target = minimum of 10% annually throug
Slide 4: Delek US – A Growth Oriented, Financially Strong Partner
Delek US – A Growth Oriented, Financially Strong Partner • 302,000 bpd of refining capacity in Texas, Arkansas, Louisiana Operational Strength • Access to crude / product terminals, pipeline and storage assets • Current DK $2.7 billion equity market value and $3.5 billion enterprise value(1)(2) Fina
Slide 5: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 6: Logistics Assets Positioned to Benefit from Permian Basin Activity
Logistics Assets Positioned to Benefit from Permian Basin Activity Growing logistics assets support crude sourcing and product marketing for customers Pipelines/Transportation Segment • ~805 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longv
Slide 7: Multi-Year Contracts with Firm Commitments / MVCs
Multi-Year Contracts with Firm Commitments / MVCs Duration of Contracts as of 1Q19 (1) Contract Highlights • The Lion Pipeline System and SALA Gathering System are < 1 Year 20% 27% supported by a long-term contract that includes three take- 1 to 3 Years or-pay commitments 3 to 5 Years 1% > 5 Years •
Slide 8: Financial Flexibility and Growing Distributable Cash Flow
Financial Flexibility and Growing Distributable Cash Flow Solid Net Income and EBITDA performance since IPO in Nov. 2012 (1) $180.0 $164.0 $168.7 $160.0 $140.0 $115.0 $120.0 $97.3 $94.9 $100.0 $90.2 $69.4 $80.0 $62.8 $60.0 $ in $ millions $40.0 $20.0 $0.0 2016 2017 2018 2019 LTM Net Income EBITDA DC
Slide 9: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage Distribution per unit has been increased twenty-five consecutive times since the IPO $0.790 $0.810 $0.820 $0.705 $0.715 $0.725 $0.750 $0.770 $0.630 $0.655 $0.680 $0.690 $0.550 $0.570 $0.590 $0.610 $0.475 $0.490 $0.510 $0.530 $0.375 $0.38
Slide 10: Assets Positioned for Permian Basin Growth
Assets Positioned for Permian Basin Growth
Slide 11: Permian Basin Outlook
Permian Basin Outlook Production continues to grow while incremental takeaway capacity outlook is uncertain Average Annual Crude Oil Production (Mbpd) (1) and WTI-Midland Price (2) • Steady growth has continued in production 7.00 $60.96 65.00 $58.88 $56.15 $54.58 • Drilling supported by improved tec
Slide 12: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects Create platforms for future growth; Ability to leverage Permian position RIO Pipeline (Delaware Basin) • MPC (67%)/ Delek Logistics (33%) • Cost: $119 million • Capacity: 80,000 Bbl/d • Length: 109 miles • Completed: September 2016 • Benefiting from increased drilling
Slide 13: Asset Overview: Paline Pipeline
Asset Overview: Paline Pipeline Provides access to Gulf Coast and ability to take advantage of crude differentials • Approximately 195 mile 42 kbpd crude oil pipeline – Longview, TX south to Beaumont • Allows shippers ability ship Midland or Cushing crude barrels to the Gulf Coast • Increased demand
Slide 14: West Texas Wholesale Business
West Texas Wholesale Business Benefiting from Permian Basin crude oil drilling activity West Texas Wholesale and Marketing Gross Margin(1) • Operates in an area around the Permian Basin; Complementary to Delek US refining/retail in region ($ in millions) $30.0 • Purchases refined products from Delek
Slide 15: Going Forward: Growing Midstream Assets
Going Forward: Growing Midstream Assets
Slide 16: Delek US Growing Midstream Asset Base
Delek US Growing Midstream Asset Base Increasing potential future drop down inventory Big Spring Gathering System Exploring Long-Haul Pipeline Investment • 250-mile gathering system, 300Kbpd • Exploring potential options to participate in throughput capacity a long haul crude oil pipeline • Currentl
Slide 17: Organic Projects Create Larger Dropdown Inventory
Organic Projects Create Larger Dropdown Inventory Supports Delek US’ goal to generate $350 million to $370 million of annual midstream EBITDA by 2023 Potential Growth for DKL Strong EBITDA Growth Profile Supporting Distribution Growth (1) • Delek US announced goal to achieve midstream target ($ in m
Slide 18: Several Visible Pathways for Growth
Several Visible Pathways for Growth Focused around developing Permian platform; Growing logistics asset base at sponsor Ability to Leverage Relationship with Delek US • Permian-based refining system with 207,000 bpd of Permian crude access (1) Midstream • Constructing Big Spring Gathering System in
Slide 19: Current Valuation Below Peer EV-to-EBITDA
Current Valuation Below Peer EV-to-EBITDA DKL’s financial flexibility and growth initiatives of strong sponsor DK positions it for growth EV/EBITDA 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x DKL ANDX HEP MPLX PBFX PSXP PAA NS MMP EPD 2019 2020 19 Avg 20 Avg (1) Data presented ending May 14, 2019 (2)
Slide 20: Majority of assets support Primarily traditional, stable Delek US’ strategically MLP assets with limited
Majority of assets support Primarily traditional, stable Delek US’ strategically MLP assets with limited located inland refining commodity price exposure system Balance sheet positioned Inflation-indexed fees for to grow with strong most contracts sponsor DK Agreements with Delek US Majority of all
Slide 21: Appendix
Appendix
Slide 22: Asset Overview: Lion Pipeline System and SALA Gathering
Asset Overview: Lion Pipeline System and SALA Gathering Lion Pipeline System (1) Lion Pipeline System 70,000 • Provides non-gathered crude oil to Delek US’ 59,362 60,000 53,461 54,960 57,366 56,555 El Dorado refinery and connects to Enterprise 52,071 51,927 51,992 50,000 47,906 TE Products Pipeline
Slide 23: Asset Overview: Terminalling
Asset Overview: Terminalling Terminal Count (4) Terminalling Assets (1) 12 • Refined products terminalling services for Delek US and/or third parties • Comprised of terminals located in: 9 • Memphis and Nashville, TN; 6 • Big Spring (asphalt and light products), Tyler, Big Sandy (1) and Mt. Pleasant
Slide 24: Summary of Certain Contracts
Summary of Certain Contracts (8) ` Termination Provision Minimum Tariff / Fee Refinery Initial / Maximum Term (1) Service 1Q19 YTD Throughput (bpd)(2) Commitment (bpd) Current Tariff / Fee Index (10) Shutdown Force Majeure Paline Pipeline N/A N/A FERC N/A N/A Crude Oil Transportation $1.57/Bbl (6) N
Slide 25: Summary of Certain Contracts Footnotes
Summary of Certain Contracts Footnotes (1) Maximum term assumes an extension of the commercial agreement pursuant to the terms thereof. Please note some terms began as early as Nov. 7, 2012. (2) Represents average daily throughput for the period indicated. (3) Excludes volumes gathered on the SALA G
Slide 26: Amended and Restated Omnibus Agreement Key Provisions
Amended and Restated Omnibus Agreement Key Provisions • Delek US will indemnify Delek Logistics for certain liabilities, including environmental and other liabilities, relating to contributed assets. • Delek US has a ROFR if Delek Logistics sells any assets that serves Delek US' refineries or the Pa
Slide 27: Summary Organizational Structure
Summary Organizational Structure Delek US Holdings, Inc. Delek Logistics GP, LLC Public Unitholders NYSE: DK 94.6% (the General Partner) ownership interest (1) 61.4% interest Limited partner-common 2.0% interest 36.6% interest General partner interest Limited partner-common Incentive distribution ri
Slide 28: DKL: Reconciliation of Cash Available for Distribution
DKL: Reconciliation of Cash Available for Distribution 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 exclud
Slide 29: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
DKL: Income Statement and Non-GAAP EBITDA Reconciliation 2013(1) 1Q14(1) 2Q14 3Q14 4Q14 2014 (1) 1Q15(2) 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 Net Revenue $907.4 $203.5 $236.3 $228.0 $173.3 $841.2 $143.5 $172.1 $165.1 $108.9 $589.7 $104.1 $111.9 $107.5 $124.7 $448.1 Cost of Sales (811.4) (172
Slide 30: Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA
Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA(1) Krotz Springs Logistics Drop Down Reconciliation of Forecasted Annualized Net Income to Forecasted Incremental EBITDA ($ in millions) Forecasted Range Forecasted Incremental Net Income $ 2.9 $ 3.3 Add Forecasted Incremental Amount
Slide 31: Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA
Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA(1) Reconciliation of Forecasted Incremental U.S. GAAP Net Income (Loss) to Forecasted Incremental EBITDA for Paline Pipeline Tariff Increase ($ in millions) Annual Monthly Forecasted Incremental Net Income $ 10.8 $ 0.9 Add Forecasted
Slide 32: Investor Relations Contact
Investor Relations Contact: Assi Ginzburg Keith Johnson Executive Vice President and CFO Vice President of Investor Relations 615-224-1158 615-435-1366
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