Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (September 2017)
30 slides from Delek Us's investor presentation, Sep 25, 2017
Slide 1: Delek US Holdings, Inc. Investor Presentation
September 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 share as of close of trading on September 21, 2017. (2) Annualized dividend based on quarterly dividend 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 managem
Slide 4: Integrated Company with Asset Diversity and Scale
Integrated Company with Asset Diversity and Scale Strategically Located Assets with Permian Basin Exposure 4 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 5: 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 5 • 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 Synergi
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: Midland crude oil price differential trends improving
Delek US System has approximately 207,000 bpd of Midland crude access Midland crude oil price differential trends improving 7 1) Differential source: Argus – September 21, 2017; NYMEX futures prices. -$6.00 -$4.00 -$2.00 $0.00 $2.00 $4.00 $6.00 Jan -1 5 M ar-1 5 M ay-1 5 Ju l-1 5 Se p -1 5 N o v-1 5
Slide 8: Operational Review - Hurricane Harvey
Operational Review - Hurricane Harvey Delek US has an Inland refining system with Gulf Coast based pricing Delek US refining system was operational through Hurricane Harvey August utilization was approximately 90% of crude throughput capacity (302,000 bpd) September utilization close to capaci
Slide 9: Permian Basin Estimated Breakeven Crude Oil Price
1) Wolfe Research, “U.S. E&Ps – Changing the Game” 6/17/17, 30% Pre-Tax IRR, single well breakeven based on flat natural gas of $3.00/MMbtu; regional basis differential and transport costs and approximate 25% royalty. 2) EIA production data through August 14, 2017, Drilling Productivity Report; Bake
Slide 10: Permian Basin Estimated Takeaway/Production Balance
Permian Basin Estimated Takeaway/Production Balance Current pipeline takeaway capacity adequate, but production growth may tighten balance 10 Chart Source: Simmons & Company research, August 22, 2017 “Global Macro Oil Update: Contemplating a Wide Range of Potential Outcomes”. Provided for illustrati
Slide 11: Logistics Assets Positioned for Growth
Logistics Assets Positioned for Growth
Slide 12: Increased Drop Down Inventory Creates Platform to Support Logistics Growth
Increased Drop Down Inventory Creates Platform to Support Logistics Growth 12 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 13: Logistics Assets Positioned to Benefit from Permian Basin Activity
NY008LRP - 912119_1.wor -L r - r- rLL P 912119_1.wo San Angelo Fort Worth Dallas Waco Tyler Shreveport Monroe El Dorado Beaumont New Orleans Little Rock Memphis Brentwood Nashville Knoxville Abilene Big Spring Krotz Springs NY008LRP - 912119_1.wor - rL 1.P 912119_ SALA GATHERING SYSTEM AR LA Magnoli
Slide 14: West Texas Wholesale Business Benefiting from Permian Activity
14 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 15: Delek US GP and IDR Ownership in DKL
15 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 16: DKL: Increased Distribution with Conservative Coverage and Leverage
DKL: Increased Distribution with Conservative Coverage and Leverage 16 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 17: Retail/Wholesale System in Southwest
Retail/ Wholesale System in Southwest Integrated wholesale marketing and retail network at Big Spring; complementary to DKL west Texas 17 Refineries Legend: Big Spring Krotz Springs Branded license agreement and payment card location Branded company-operated and distributor location Unbranded supply
Slide 18: Robust Synergy Opportunity from DK/ALJ Combination
Robust Synergy Opportunity from DK/ALJ Combination 18 Expect to achieve run-rate synergies of approximately $85 - $105 million in 2018 Type Description Estimate Commercial • Logistics, purchase and trading benefits from a larger platform • $20-$35 m Operational • Sharing of resources across the plat
Slide 19: 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 19 • Balance sheet should h
Slide 20: Capital Allocation Focused on Long-Term Value Creation
Focused on growing business, while maintaining financial flexibility Sold retail assets in Nov. 2016 for $535m (2) Closed Alon transaction on July 1, 2017 Ability to improve asset base through capital investment 2017 includes $75.0 million for assets acquired in the Alon transaction Eval
Slide 21: Questions and Answers
21 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 22: Appendix
Appendix
Slide 23: Non GAAP Reconciliations of Potential Dropdown EBITDA
Non GAAP Reconciliations of Potential Dropdown EBITDA (1) 23 (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 24: 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 25: Summary Organization Structure
25 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 US. Market cap based on share and unit prices o
Slide 26: -$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 Fe
-$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 0 Fe b -1 0 Ma r- 1 0 A p r- 1 0 Ma 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 N o v -1 0 D e c -1 0 J a n -1 1 Fe b -1 1 Ma r- 1 1 A p r- 1 1 Ma 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 N o v -1 1 D e c -1 1 J a
Slide 27: ($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 $2.00 Ja n -1 1 Fe
($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 $2.00 Ja n -1 1 Fe b -1 1 M ar -1 1 A p r- 11 M ay -1 1 Ju n -1 1 Ju l-1 1 A u g- 1 1 Se p -1 1 O ct-1 1 N o v- 1 1 De c- 1 1 Ja n -1 2 Fe b -1 2 M ar -1 2 A p r- 12 M ay -1 2 Ju n -1 2 Ju l-1 2 A u g- 1 2 Se p -1 2 O ct-1 2 N o v- 1 2
Slide 28: DKL: Reconciliation of Cash Available for Distribution
DKL: Reconciliation of Cash Available for Distribution 28 (1) Distribution based on actual amounts distributed during the periods; does not include a LTIP accrual. Coverage is defined as cash available for distribution divided by total distribution. (2) Results in 2013, 2014 and 2015 are as reported
Slide 29: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
DKL: Income Statement and Non-GAAP EBITDA Reconciliation 29 (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 30: 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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