Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (May 2022)
32 slides from Delek Logistics Partners, L.p's investor presentation, May 10, 2022
Slide 1: Investor Presentation Delek Logistics Partners May 2022
Investor Presentation Delek Logistics Partners May 2022 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 and 1Q22 Highlights
• Current distribution: $0.98/LP unit qtr; $3.92/LP unit annualized (1); ~7.78% current yield (2) • Delivered the 5% distribution CAGR in 2021; another 5% expected in 2022 • MVC’s underpin ~63% of gross margins, providing stability to cash flows Overview (NYSE: DKL) • Net Income of $39.5 million, ne
Slide 4: Organizational Structure following Planned 3Bear Acquisition
Organizational Structure following Planned 3Bear Acquisition 3Bear Acquisition Summary • Delek Logistics to acquire 100% membership interests in 3Bear, a premier crude, gas and water gathering, processing and disposal business in the Northern Delaware Basin (the “Acquisition”) • Transaction valued a
Slide 5: Integrated Company with Asset Diversity and Scale
Asphalt 5 asphalt terminals located in: 1) El Dorado, AR 2) Muskogee, OK 3) Memphis, TN 4) Big Spring, TX 5) Henderson, TX Logistics ❑ 10 terminals ❑ ~1,600 miles of pipeline & gathering infrastructure ❑ 10.2mmbbls storage capacity ❑ Permian gathering assets ❑ West Texas wholesale ❑ JV crude oil pip
Slide 6: DKL's First Sustainability Report
DKL’s 1st ever Sustainability Report was published on May 2, 2022. The Report contains DKL’s 1st ever disclosures of Scope 1 and Scope 2 greenhouse gas emissions. 2021-2022 Sustainability Report will be published in Q4 of 2022. 6
Slide 7: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 8: 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 • ~805 miles (1) of crude and product transportation pipelines, including the 195- mile crude oil pipeline from Longview to Nederland, TX • ~ 600-mil
Slide 9: Multi-Year MVC Contracts
Multi-Year MVC Contracts Contract Highlights • The Lion/SALA Gathering System is supported by a long-term contract that includes three take-or-pay commitments • Initial term of 5 years, maximum term of 15 years • Crude oil transportation throughput of 60.6kbpd in 2022, supported by a MVC of 46kbpd •
Slide 10: Financial Flexibility and Growing Distributable Cash Flow
10 Financial Flexibility and Growing Distributable Cash Flow 1) Reconciliation of EBITDA to Net Income provided on page 24. Excluded are predecessor costs related to the crude oil storage tank and rail offloading racks acquired in March 2015. 2) Reconciliation of distributable cash flow to net cash
Slide 11: 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 1.31x 1.32x 1.34x 1.27x 1.21x 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q
Slide 12: DKL Asset & Joint Venture Detail
DKL Asset & Joint Venture Detail
Slide 13: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects Create platforms for future growth; Ability to leverage Permian position Caddo Pipeline • Delek Logistics (50%)/Plains Pipeline L.P. (50%) • Cost: $123 million • Capacity: 80,000 bpd • Length: 80 miles • Completed: January 2017 • Provides El Dorado refinery with incre
Slide 14: Red River Pipeline: Cushing to Longview
Transportation from Cushing to Longview; Increased crude oil optionality ▪ Increased from 65kbpd to 100kbpd following expansion; ▪ Incremental 24 million bbls/yr of Cushing crude oil into Longview, TX ▪ From Longview, TX DKL has access to: ❖ Delek US refining system providing ability to reduce depen
Slide 15: Midstream: Permian Gathering System
Midstream: Permian Gathering System Gathering Allows Our Customers Crude Quality & Cost Control Permian Gathering System ❑ Approximately 200-mile gathering system ❑ 350kbpd throughput capacity ❑ >300,000 dedicated acres expected in 2022 ❑ Points of origin: Howard, Borden, Martin and Midland counties
Slide 16: Midstream Growth Initiatives and EBITDA Growth
Krotz Springs • Logistics assets associated with Krotz Springs refinery Wink to Webster Pipeline • Fully committed long haul pipeline from Permian to Gulf Coast providing stable cash flow and access to additional crude inputs • Expected return well above DKL’s minimum target IRR threshold of 15% (1)
Slide 17: Several Visible Pathways for Growth
17 Several Visible Pathways for Growth Focused around developing Permian platform; Growing logistics asset base at sponsor Balance Sheet Supportive • $2.7 million cash & $586 million unused credit facility at March 31, 2022 on $850 million revolving credit facility • Leverage ratio was ~3.3x (2) at
Slide 18: 2022 Valuation Relative to Peer Average EV-to-EBITDA
18 2022 Valuation Relative to Peer Average EV-to-EBITDA Consistency: DKL Has Increased Quarterly Distributions Consecutively Since IPO in 4Q12 (1) Based on Factset as of May 5, 2022. 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x DKL HEP MPLX PBFX PAA NS MMP ET EPD EV/EBITDA (consensus estimates) 2022 2023 22
Slide 19: Wells Fargo: A Look at Midstream ROIC
19 Wells Fargo: A Look at Midstream ROIC “DKL has generated the highest value and cash returns over the past five years (2015-20) compared to its peers” (1) Source: Wells Fargo 2 0 1 5 -2 0 2 0 2 0 2 1 Drivers ➢ The execution of dropdowns and third-party acquisitions at attractive multiples ➢ Scalab
Slide 20: Overarching Objectives and Key Initiatives
20 Overarching Objectives and Key Initiatives
Slide 21: Planned 3Bear Acquisition
Planned 3Bear Acquisition
Slide 22: Investment Considerations for Planned 3Bear Acquisition
• Recently constructed asset in the most active area of the Delaware Basin (Lea and Eddy County, NM) • ~485 miles of in-ground pipeline currently • 88 MMcf/d of gas processing capacity; 140kbpd of crude gathering capacity supported by 120k bbls of storage; 200kbpd salt water disposal; offers produce
Slide 23: Established Infrastructure in the Delaware Basin
Established Infrastructure in the Delaware Basin For Planned 3Bear Acquisition Asset Overview ❑ 3Bear Delaware Holding - NM, LLC (“3Bear”) is a premier, three-stream midstream business located in the core of Northern Delaware Basin (Lea & Eddy County, New Mexico) ❑ Integrated crude, gas, and water i
Slide 24: DKL + Planned 3Bear: Integrated Company with Diversity and Scale
Rio State Line Terminal Midland Big Springs Colorado City Abilene Fort Worth Dallas Waco Hewitt Cushing Little Rock Memphis El Dorado Shreveport Longview Tyler Beaumont Monroe Krotz Spring New Orleans Nashville Knoxville Brentwood OK AR TN LA NM NM TX Permian Basin Gathering Assets East Texas Logist
Slide 25: Diversifying Cash Flows via Third-Party Revenues
Planned 3Bear Acquisition: Diversifying Cash Flows via Third-Party Revenues (1) Calculated based on 2021 Pipelines and Transportation Segment revenue from affiliate and third-party, as disclosed in our 2021 Annual Report on Form 10-K. (2) Estimated based on forecasted post-close 2023 revenue. (3) Es
Slide 26: Appendix
Appendix a)
Slide 27: 1) Distribution based on actual amounts distributed during the periods; does not include LTIP
27 1) Distribution based on actual amounts distributed during the periods; does not include LTIP accrual. Coverage is defined as ca sh 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 th
Slide 28: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
28 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 29: DKL: Reconciliation of Basic Gross Margin
29 DKL: Reconciliation of Basic Gross Margin (dollars in millions) 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 DKL: Reconciliation of Basic Gross Margin Net Revenues $152.5 $155.3 $137.6 $138.6 $163.4 $117.6 $142.3 $140.1 $152.9 $168.5 $189.6 $189.9 $206.6 Cost of Sales $117.7 $
Slide 30: Summary of Certain Contracts
30 Summary of Certain Contracts
Slide 31: Summary of Certain Contracts Footnotes
31 Summary of Certain Contracts Footnotes [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] Note: The Paline Pipeline agreements executed in February 2018 were excluded from the table above as their non-cancelable terms are less than one year. A Information obtained from the applicable ag
Slide 32: Investor Relations Contacts
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312
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