Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (December 2018)
33 slides from Delek Logistics Partners, L.p's investor presentation, Dec 4, 2018
Slide 1: Delek Logistics Investor Presentation December 2018
EX 99.1 Investor Presentation Delek Logistics December 2018
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: $30.70/unit (1) • Market Capitalization: $746 million (1) Overview (NYSE: DKL) • Current Distribution: $0.790/LP unit qtr.; $3.16/LP unit annualized (2) • Current Yield: 10.29% (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 $3.26 billion equity market value and $4.3 billion enterprise value(1)(2) Fin
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 3Q18 (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 $160.0 $154.0 $140.0 $115.0 $120.0 $95.4 $96.5 $97.3 $100.0 $72.0 $81.4 $80.0 $63.8 $66.8 $62.8 $69.4 $60.0 $47.8 $ in $ millions $40.0 $20.0 $0.0 2013 (1) 2014 (1) 2015 (2) 2016
Slide 9: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage Distribution per unit has been increased twenty-three consecutive times since the IPO $0.790 $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 $0.385 $0.395 $0.4
Slide 10: Assets Positioned for Permian Basin Growth
Assets Positioned for Permian Basin Growth
Slide 11: Permian Basin Attractive Drilling Economics Support Growth
Permian Basin Attractive Drilling Economics Support Growth Production continues to grow (1) • Steady growth has continued in production Average Annual Crude Oil Production (Mbpd) (2) • Drilling supported by improved technology and low and WTI-Midland Price costs 7.00 70.00 $59.63 $54.09 $54.27 • Mid
Slide 12: Big Spring Logistics Assets Dropdown
Big Spring Logistics Assets Dropdown Located in the Permian Basin and support Delek US’ Big Spring refinery • Dropdown closed in March with an effective date of March 1, 2018 • Purchase price of $315.0 million which equates to a 7.8x EBITDA multiple. • Forecasted annualized EBITDA of $40.2M (1) • Fi
Slide 13: 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: $119 million • Capacity: 80,000 Bbl/d • Length: 109 miles • Completed: September 2016 • Benefiting from increased drilling
Slide 14: Asset Overview: Paline Pipeline
Asset Overview: Paline Pipeline Provides access to Gulf Coast and ability to take advantage of crude differentials • Approximately 195 mile 42 kbpd crude oil pipeline – Longview, TX south to Beaumont • Allows shippers ability ship Midland or Cushing crude barrels to the Gulf Coast • Increased demand
Slide 15: West Texas Wholesale Business Benefiting from Permian Drilling Activity
West Texas Wholesale Business Benefiting from Permian Basin crude oil drilling activity West Texas Wholesale and Marketing Gross Margin • Operates in an area around the Permian Basin; Complementary to Delek US refining/retail in region ($ in millions) $28.2 • Purchases refined products from Delek US
Slide 16: Going Forward Growing Sponsor Midstream Assets
Going Forward Growing Sponsor Midstream Assets
Slide 17: Delek US Growing Midstream Asset Base
Delek US Growing Midstream Asset Base Increasing potential future drop down inventory Big Spring Gathering System Proposed PGC Long-Haul Pipeline Investment • 250-mile gathering system, 300Kbpd • Partnership provides expertise, throughput throughput capacity commitments • Currently more than 200,000
Slide 18: Organic Projects Create Larger Dropdown Inventory
Organic Projects Create Larger Dropdown Inventory Supports Delek US’ goal to generate $370 million to $390 million of annual midstream EBITDA(3) Potential Growth for DKL Strong EBITDA Growth Profile Supporting Distribution Growth (1) (4) (5) • Delek US announced goal to achieve midstream $400.0 Dele
Slide 19: 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 • Premier Permian-based refining system with 207,000 bpd of Permian crude access (1) Midstream • Constructing Big Spring Gathering Sy
Slide 20: 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-USQ ANDX-USQ HEP-USQ MPLX-USQ PBFX-USQ PSXP-USQ PAA-USQ NS-USQ MMP-USQ EPD-USQ 2018 2019 18 Avg 19 Avg (1
Slide 21: 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 22: Appendix
Appendix
Slide 23: 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’ 60,000 57,366 59,362 56,672 54,960 56,555 El Dorado refinery and connects to Enterprise 49,694 53,461 52,071 51,927 50,000 46,515 47,906 47,154
Slide 24: 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 25: Summary of Certain Contracts
Summary of Certain Contracts (8) 25
Slide 26: 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 27: 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 28: 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 29: Reconciliation of Cash Available for Distribution
DKL: Reconciliation of Cash Available for Distribution (dollars in millions, except coverage) 2013 (2) 1Q14 (2) 2Q14(2) 3Q14(2) 4Q14(2) 2014 (2) 1Q15(2) 2Q15 3Q15 4Q15 2015 (3) 1Q16 2Q16 3Q16 4Q16 2016 (3) 1Q17 2Q17 3Q17 4Q17 (3) 2017(3) 1Q18 2Q18 3Q18 Reconciliation of Distributable Cash Flow to ne
Slide 30: 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 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 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 $107.5
Slide 31: Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA
Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA(1) Krotz Springs Logistics Drop Down Reconciliation of Forecasted Annualized Net Income to Forecasted EBITDA ($ in millions) Forecasted Range Forecasted Net Income $ 2.9 $ 3.3 Add: Depreciation and amortization 15.6 17.7 Interest and
Slide 32: Non-GAAP Reconciliations of Big Spring Potential Dropdown EBITDA
Non-GAAP Reconciliations of Big Spring Potential Dropdown EBITDA(1) Big Spring Logistics Drop Down and Marketing Agreement Reconciliation of Forecasted Annualized Net Income to Forecasted EBITDA Tanks, Terminals ($ in millions) and Marketing Agreement Forecasted Net Income $ 13.3 Add: Income tax exp
Slide 33: Investor Relations Contact
Investor Relations Contact: Kevin Kremke Keith Johnson Executive Vice President and CFO Vice President of Investor Relations 615-224-1323 615-435-1366
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