Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (November 2011)
31 slides from Delek Us's investor presentation, Nov 16, 2011
Slide 1: Investor Presentation November 2011
Investor Presentation November 2011
Slide 2: Safe Harbor Provision
Safe Harbor Provision Delek US Holdings is traded on the New York Stock Exchange in the United States under the symbol “DK” and, as such, is governed by the rules and regulations of the United States Securities and Exchange Com mission. This presentation may contain forward-looking statements that a
Slide 3: Integrated Downstream Energy Company
Integrated Downstream Energy Company (1) Breadth of Exposure Across Refining, Wholesale Marketing and Retail Distribution Refining Segment Operates 140,000 BPD of refined production capacity in Texas and Arkansas Marketing Segment Owned product terminals and pipeline assets in Texas, Arkansas and Te
Slide 4: Recent Financial Performance
Recent Financial Performance Growth In Contribution Margin ($MM) (1,2,3) Refining Contribution Margin ($MM) Retail, Marketing & Other Contribution Margin ($MM) $124.4mm $138.5mm $103.3mm $400.4 mm NME 2008 NME 2009 NME 2010 NME 2011 Substantial Growth In Net Income ($MM) (2,3) “Golden Age” of Refini
Slide 5: Increased Financial Flexibility
Increased Financial Flexibility Balance Sheet Discipline Remains a Key Focus Deleveraging Underway Increased cash position by $70.5 mm while reducing debt by $35 mm in 3Q11 Returning Value To Shareholders (1) Recently announced special cash dividend, plus regular quarterly cash dividend Increase In
Slide 6: Financial Snapshot | Third Quarter 2011 Executive Summary
Financial Snapshot | Third Quarter 2011 Executive Summary Reported Record Quarterly Profit Generated a record $92.5 million in net income Strong Benefit From Refining Segment Refining segment generated approximately 90% of total contribution margin Optimized Production, Product Sales Both Tyler and
Slide 7: Identified “Quick-Hit” Capital Projects
Identified “Quick-Hit” Capital Projects Low-Cost, High-Return Capital Projects at Tyler and El Dorado (1) LSR/Sat Gas Project (LSR) Scope: Improves liquid recovery of Butane & Propane at El Dorado Anticipated Cost: $16 million Anticipated Return: $20 million contribution margin annually Anticipated
Slide 8: Strategic Priorities
Ensure Operational Reliability Focus on safe, compliant and cost-effective operations Optimize production of higher-value refined products Increase Crude Slate Flexibility Run LP to maximize margin capture Crude procurement synergies between Tyler and El Dorado Access Cost-Advantaged Feedstocks (1)
Slide 9: Lion Oil Transaction Executive Summary
Lion Oil Transaction Executive Summary
Slide 10: Acquired Remaining Minority Interest In Lion Oil
Acquired Remaining Minority Interest In Lion Oil Lion Is Now Wholly Owned By Delek US DK Owns 100% Equity Interest In Lion Acquired remaining 11.7% minority equity interest on October 11, 2011 Acquired at a Cost Below Book Value Acquired from a consortium of private investors for ~$13 million in cas
Slide 11: Transaction Summary
Transaction Summary Asset Overview 80,000 BPD refinery in El Dorado, Arkansas 80-mile Magnolia-El Dorado crude oil system (Shreveport, LA to Magnolia terminal) 28-mile El Dorado crude oil system (Magnolia terminal to El Dorado refinery) Crude oil gathering system with more than 600 miles of operable
Slide 12: Light Product Marketing Throughout the Mid-Continent
Light Product Marketing Throughout the Mid-Continent Access To The Enterprise Products Pipeline (1) Expands marketing opportunity into the Mid-Continent Tyler and El Dorado Expected To Ship Product North Supply markets that support better margins Integration Opportunity El Dorado expected to supply
Slide 13: Refining Segment Operational Update
Refining Segment Operational Update
Slide 14: Refining Segment | 3Q11 Update
Refining Segment | 3Q11 Update Record quarterly contribution margin Refining CM increased by $177 mm y/y in 3Q11 3Q11 CM: Tyler = 57% / El Dorado = 43% Elevated refined product margins Gulf Coast 532 Crack Spread reached elevated levels in 3Q11 Product slate weighted toward light, high-value product
Slide 15: Optimized Production Capabilities
Optimized Production Capabilities The Addition of El Dorado has Contributed To Record System-Wide Throughputs Tyler Throughputs (BPD) El Dorado Throughputs (BPD) 58,128 bpd FY06 56,163 bpd FY07 56,922 FY08 53,802 bpd FY09 54,286 bpd FY10 58,461 bpd 1Q11 127,784 bpd 2Q11 145,878 bpd 3Q11 El Dorado Di
Slide 16: Tyler, Texas Refinery Update
Tyler, Texas Refinery Update Overview Niche, Inland Refiner In PADD III 60,000 barrels per day located in East Texas High Conversion, Moderate Complexity 9.4 complexity; equipped with a delayed coking unit Processes Mostly Light Sweet Crudes Primarily local domestic crudes such as WTI and East Texas
Slide 17: El Dorado, Arkansas Refinery Update
\ El Dorado, Arkansas Refinery Update Overview Inland refinery in PADD III 80,000 BPD, 9.0 complexity refinery located in Southern Arkansas Process Local, Offshore, Foreign Crudes Crude slate transitioning from Brent-based to WTI-based crudes Produce Mainly Light Products Historically, ~80% of produ
Slide 18: Gulf Coast Refining Margin Benchmark
Gulf Coast Refining Margin Benchmark Building a Refining Benchmark “Theoretical” Benchmark For Tyler HSD 532 Gulf Coast Crack Spread (+) Contango or (-) Backwardation High-Sulfur Diesel 5-3-2 Gulf Coast Crack Spread, Including Contango/Backwardation HSD 5-3-2 Gulf Coast Crack Spread Per Barrel 5-3-2
Slide 19: WTI Priced At A Discount To Competing Crudes
WTI Priced At A Discount To Competing Crudes Refining System Benefits From Discounted WTI-Linked Crudes Crude differentials remain wide vs. historical levels Current cost to purchase WTI is significantly below competing crudes Wider differentials benefit refiners processing WTI Cheaper crude lowers
Slide 20: Forward Curve Indicates Wide WTI/Brent Differential
Forward Curve Indicates Wide WTI/Brent Differential Futures Markets Expect the WTI-Brent Differential To Remain Wide Over a Multi-Year Period(1) Forward Curve Indicates an Average WTI-Brent Differential of $7/bbl Thru 2014 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Jan-12 Feb-12 Mar-12 Apr-12 May-1
Slide 21: Increasing Crude Slate Flexibility at El Dorado
Increasing Crude Slate Flexibility at El Dorado Reconfiguring El Dorado’s Crude Slate Toward WTI-linked Crudes El Dorado Has A Diverse Crude Slate Historically processed local Arkansas, domestic offshore and foreign crude oils Local Arkansas Crude Is WTI-Linked 15,000 BPD of local Arkansas crudes pr
Slide 22: Retail Segment Operational Update
Retail Segment Operational Update
Slide 23: Retail Segment | 3Q11 Update
Retail Segment | 3Q11 Update(1) Same-Store Merchandise Sales Growth9 th consecutive quarter of y/y same-store growth Benefit from fresh food sales and promotional efforts Benefit From Fuel Pricing Strategy Emphasized a competitively priced fuel offering Offering value to cost-conscious consumer Usin
Slide 24: Growth In Same-Store Sales
Growth In Same-Store Sales Key Factors That Drive Same-Store Sales Same-Store Merchandise Sales Relevant Factors: Location, size, appeal, offering, affordability, people Same-Store Gallons Sold Relevant Factors: Commodity prices, weather, employment, supply disruptions Same-Store Merchandise Sales 1
Slide 25: Private Label Initiative Making Progress
Private Label Initiative Making Progress Creating A New Unique Shopping Experience Quality, Affordable Replacement Option Higher margin, lower-cost option for consumers Countermeasure To Channel Blur Private label is an effective way of offering value to time-starved consumers Private Label vs. Bran
Slide 26: Store Reimaging & New Construction Initiatives
Store Reimaging & New Construction Initiatives Reimaging and Construction Update Multi-Year Store Enhancement Initiative Approximately 43% of store base was reimaged / newly constructed as of 9/30/11 Multi-Year New Store Construction Plan ) Long-term target of at least 10-20 new large-format builds
Slide 27: Marketing Segment Operational Update
Marketing Segment Operational Update
Slide 28: Marketing Segment | 3Q11 Update
Marketing Segment | 3Q11 Update Wholesale Marketing In West Texas Product Marketing Terminals Owned (San Angelo, Abilene, Tyler); Third-Party (Aledo, Odessa, Big Springs, Frost) Supply Synergies With Tyler Owned and leased pipelines transport crude to Tyler refinery Consistent Contribution Margin Po
Slide 29: Appendix Additional Data
Delelc« Cus) Appendix Additional Data
Slide 30: Historical and Projected Capital Spending
Historical and Projected Capital Spending (1) Refining Retail, Marketing, Other Total $42.3 $14.5 $56.8 2010 (A) $40.9 $38.7 $79.6 2011 (E) $77.0 $33.0 $110.0 2012 (E) Capital spending estimates as provided in the Company’s latest form 10-Q filed with the Securities and Exchange n the Company’s thir
Slide 31: DK Listed NYSE
DK LISTED NYSE
Delek US Holdings — Investor Presentation (November 2011) on 6ix