Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (August 2018)
33 slides from Delek Logistics Partners, L.p's investor presentation, Aug 24, 2018
Slide 1: Delek Logistics Partners, LP Investor Presentation August 2018
Exhibit 99.1 Delek Logistics Partners, LP Investor Presentation August 2018
Slide 2: Disclaimers
Disclaimers 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 and uncertainties. Statement
Slide 3: Investment Highlights
Investment Highlights • Current Price: $32.75/unit (1) • Market Capitalization: $796 million (1) (2) Overview (NYSE: DKL) • Current Distribution: $0.770/LP unit qtr.; $3.08/LP unit annualized • Current Yield: 9.40% (1)(2) • Distribution per LP unit growth rate target = minimum of 10% annually throug
Slide 4: Delek US – A Growth Oriented, Financially Strong Sponsor
Delek US – A Growth Oriented, Financially Strong Sponsor 302,000 bpd of refining capacity in Texas, Arkansas, Louisiana Operational Strength • • Access to crude / product terminals, pipeline and storage assets Current DK $4.5 billion equity market value and $5.7 billion enterprise value (1)(2) Finan
Slide 5: Delek Operates Premier Permian-Based Refining System
Delek Operates Premier Permian-Based Refining System DKL positioned to provide logistics support for 302,000 bpd of Crude Throughput Capacity (~69% Permian Basin Based) • Premier Permian-based refining company Permian Basin Crude Oil Production Growth (1) • 7th largest independent refiner with 302,0
Slide 6: Increased Drop Down Inventory plus Organic Project Creates Platform to Support Logistics Growth Potential
Increased Drop Down Inventory plus Organic Project Creates Platform to Support Logistics Growth Potential Growth for DKL Strong EBITDA Growth Profile Supporting Distribution Growth (1) Delek Logistics provides platform to unlock $250.0 • ($ in millions) logistics value $204 • Increased access to Per
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 Pipelines/Transportation Segment • ~805 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longv
Slide 9: Multi-Year Contracts with Firm Commitments / MVCs
Multi-Year Contracts with Firm Commitments / MVCs Duration of Contracts as of 2Q18 (1) Contract Highlights • The Lion Pipeline System and SALA Gathering System are < 1 Year 24% 25% supported by a long-term contract that includes three take- 1 to 3 Years or-pay commitments 3 to 5 Years 11% > 5 Years
Slide 10: Improving Performance and Financial Flexibility to Support Growth
Improving Performance and Financial Flexibility to Support Growth Solid Net Income and EBITDA performance since IPO in Nov. 2012 $150.0 $141.0 $130.0 $115.0 $110.0 $95.4 $96.5 $97.3 $90.0 $72.0 $81.4 $63.8 $66.8 $62.8 $69.4 $70.0 $47.8 $50.0 $ $ in millions $30.0 $10.0 -$10.0 2013 (1) 2014 (1) 2015
Slide 11: DKL: Increased Distribution with Conservative Coverage and Leverage
DKL: Increased Distribution with Conservative Coverage and Leverage Distribution per unit has been increased twenty-two consecutive times since the IPO $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 $0.405 $
Slide 12: Going Forward Assets Positioned for Permian Basin Growth
Going Forward Assets Positioned for Permian Basin Growth
Slide 13: Permian Basin Attractive Drilling Economics Support Growth
Permian Basin Attractive Drilling Economics Support Growth Production has continued to grow Crude Oil Production Grew Despite Rig Decline (1) • Crude oil production benefited by low 3,500 600 breakeven costs and improved 3,000 500 efficiencies 2,500 400 2,000 300 • As crude oil prices have increased
Slide 14: Big Spring Logistics Asset Dropdown
Big Spring Logistics Asset 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) • Fin
Slide 15: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects Create platforms for future growth; Ability to leverage Permian position RIO Pipeline (Delaware Basin) • Andeavor (67%)/ Delek Logistics (33%) • Cost: $119 million • Capacity: 80,000 Bbl/d • Length: 109 miles • Completed: September 2016 • Benefiting from increased dri
Slide 16: Asset Overview: Paline Pipeline
Asset Overview: Paline Pipeline Allows Gulf Coast access; Ability to take advantage for crude diffs; Recently Expanded Capacity • Approximately 195 mile 42 kbpd crude oil pipeline – Longview, TX south to Beaumont • Allows shippers ability ship Midland or Cushing crude barrels to the Gulf Coast • Inc
Slide 17: West Texas Wholesale Business Benefiting from Permian Activity
West Texas Wholesale Business Benefiting from Permian Activity Benefiting from Permian Basin crude oil drilling activity West Texas Wholesale and Marketing Gross Margin • Operates in an area around the Permian Basin; Complementary to Delek US refining/retail in region ($ in millions) $28.2 • Purchas
Slide 18: Several Visible Pathways for Potential Growth
Several Visible Pathways for Potential Growth Focus on developing Permian Basin Platform Ability to Leverage Relationship with Delek US • Delek US acquired the remaining 53% of the outstanding common stock of Alon USA that it did not Potential already own on July 1, 2017 Benefits from • Created the
Slide 19: EV/Frwd EBITDA below Peers
EV/Frwd EBITDA below Peers (1) DKL Growing Permian Basin Platform Supporting Performance; Improved DCF Coverage ratio EV/EBITDA 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x 2018 2019 18 Avg 19 Avg (1) Based on NASDAQ IR Insights/Factset as of August 23, 2018. 19
Slide 20: Questions and Answers
Questions and Answers Majority of assets support Primarily traditional, stable Delek US’ strategically MLP assets located inland refining system Limited commodity price Inflation-indexed fees for exposure most contracts Agreements with Delek US Majority of all margin related to capex/opex generated
Slide 21: Appendix
Appendix Datak| aD,
Slide 22: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible Tyler Refinery (1) El Dorado Refinery (1) • Inland refinery located in East Texas • Inland refinery located in southern Arkansas • 75,000 bpd, 8.7 complexity • 80,000 bpd, 10.2 complexity (configured to run light or medium sour • Process
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 55,412 54,960 56,555 El Dorado refinery and connects to 49,694 53,461 52,071 51,927 48,879 50,000 46,515 47,906 Enterprise
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) ` Termination Provision Minimum Tariff / Fee Refinery Initial / Maximum Term (1) Service 2Q18 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 Base tariff of
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
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 Organization Structure
Summary Organization 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 righ
Slide 29: Reconciliation of Distributable Cash Flow
Reconciliation of Distributable Cash Flow (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 Reconciliation of Distributable Cash Flow to net cash from o
Slide 30: Income Statement and Non-GAAP EBITDA Reconciliation
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 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
Slide 31: Non GAAP Reconciliations of EBITDA
Non GAAP Reconciliations of EBITDA (1) (1) Actual amounts of EBITDA and net income will vary based on timing, performance of the assets and DKL’s growth plans, which will affect the potential future EBITDA and interest at DKL. 31
Slide 32: Non GAAP Reconciliations of Krotz Springs Potential Dropdown EBITDA
Non GAAP Reconciliations of Krotz Springs Potential Dropdown EBITDA (1) (1) Based on projected range of potential future logistics assets that could be dropped to Delek Logistics from Delek US in the future. Actual amounts will be based on timing, performance of the assets, DKL’s growth plans and va
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 33
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