Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Credit Suisse MLP Conference 2014
31 slides from Delek Logistics Partners, L.p's conference presentation, Jun 9, 2014
Slide 1: Delek Logistics Partners, LP Investor Presentation
Delek Logistics Partners, LP Investor Presentation Credit Suisse MLP Conference June 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 These slides and any accompanying oral and written presentations contain forward-looking statements by Delek Logistics Partners, LP (defined as “we”, “our”) that are based upon our current expectations and involve a number of risks and uncertainties. Statements concernin
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of trading on June 4, 2014. (2) Annualized distribution as of June 4, 2014. (3) For reconciliation please refer to page 28 and 29. (4) Approximately 3.4% of the ownership interest in the general partner is owned by three members of
Slide 4: Delek US – A Growth Oriented, Financially Strong Sponsor
Delek US – A Growth Oriented, Financially Strong Sponsor • 140,000 bpd of refining capacity in Texas and Arkansas • Access to crude / product terminals, pipeline and storage assets • 361 convenience stores(1) Operational Strength 4 (1) As of March 31, 2014 financial statements. (2) As of June 4, 201
Slide 5: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 6: Improving EBITDA and Financial Flexibility to Support Growth
Improving EBITDA and Financial Flexibility to Support Growth 6 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing pro forma historical results for 2011 and forecasted performance for 12 months ending Sept. 30, 2013. Reconciliation on pg. 28 2) Reconciliation provided on page 28. Results
Slide 7: Increased Distribution with Conservative Coverage
Increased Distribution with Conservative Coverage 7 (1) MQD = minimum quarterly distribution set pursuant to the Partnership Agreement. (2) Distribution coverage based on distributable cash flow divided by distribution amount in each period. Please see page 29 for reconciliation. Distribution has be
Slide 8: Strong Unit Performance & Value Creation
50% 75% 100% 125% 150% 175% 11/1/2012 2/25/2013 6/21/2013 10/15/2013 2/8/2014 6/4/2014 DKL Alerian MLP Index 8 (1) Current yield reflects annualized distribution rate of $1.70 per unit and equity value based on market capitalization as of June 4, 2014. (2) Per company filings. (3) Approximately 3.4%
Slide 9: Recent Acquisitions Provided Stable Fee Based Growth
9 Approximately $22.1 million of expected annual EBITDA Recent Acquisitions Provided Stable Fee Based Growth Tyler Tank Farm and Product Terminal • July 2013 • EBITDA: $10.5 million •Price: $94.8 million •Drop down Hopewell Pipeline • July 2013 • EBITDA: $700,000 •Price: $5.7 million •3rd Party Nort
Slide 10: Asset Overview
Asset Overview
Slide 11: Stable Asset Base Positioned for Growth
Stable Asset Base Positioned for Growth 11 ~400 miles of crude transportation pipelines, includes the 195 mile crude oil pipeline from Longview to Nederland, TX ~ 600 mile crude oil gathering system in AR Storage facilities with 6.6 million barrels of active shell capacity Pipelines/Transporta
Slide 12: Continued Increase in SALA Gathering System
Continued Increase in SALA Gathering System 12 • Provides access to local Arkansas, east Texas and north Louisiana crudes to Delek US’s El Dorado refinery. • 600 mile crude oil gathering system, primarily within a 60-mile radius of the El Dorado refinery. • Positioned to benefit from development in
Slide 13: Lion Pipeline System – Potential Throughput Increase
Lion Pipeline System – Potential Throughput Increase 13 • Provides non-gathered crude oil to Delek US’ El Dorado refinery. • Connects refinery to Enterprise TE Products Pipeline. • Crude and light product throughput may benefit from improvements at Delek US’ El Dorado refinery completed in 1Q14 turn
Slide 14: West Texas Wholesale Business – Margins Remain Strong
$7.2 $7.6 $8.5 $15.5 $14.0 $5.5 $5.1 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 2009 2010 2011 2012 2013 (1) 1Q13 (2) 1Q14 (3) Gross margin, $ in millions West Texas Wholesale Business – Margins Remain Strong 14 • Operates in an area around the Permian Basin; benefiting from robust econo
Slide 15: East Texas Marketing Volume Continues to Increase
East Texas Marketing Volume Continues to Increase 15 (1) East Texas marketing volumes exclude jet fuel and coke, which are not marketed by DKL. • Volumes have been increasing as Delek US’ Tyler refinery utilization improves; 1Q2014 volume 37% above 2009 level. • Exclusive rights to market 100% of th
Slide 16: Terminals – Growing Asset Base
Terminals – Growing Asset Base 16 • Serves Delek’s retail segment and independent third parties Nashville, TN • Refined products terminalling services for Delek and/or third parties. (1) For reporting purposes, storage operations at Big Sandy, North Little Rock, El Dorado and Tyler are in the pipeli
Slide 17: Paline Pipeline – Potential EBITDA Increase in 2015
Paline Pipeline – Potential EBITDA Increase in 2015 17 (1) Fee can be pro-rated upwards if volume exceeds 30,000 bpd (2) Illustrative leverage based on 30,000 bpd multiplied by 365 days equals 10,950,000 barrels annually. A $1.00 per barrel change in the fee per barrel equates to approximately $10.9
Slide 18: Going Forward
Going Forward
Slide 19: Several Visible Pathways for Continued Growth
Several Visible Pathways for Continued Growth 19 Dropdowns from Delek US Organic Growth Acquisitive Growth $5-$10 million of potential EBITDA; expected drop down timing next 12 months 25,000 bpd (light crude) rail offloading facility at El Dorado refinery 300,000 bbl crude oil tank (under cons
Slide 20: Focus on Growth has Improved EBITDA
Focus on Growth has Improved EBITDA 20 (1) Reconciliation on pg. 28 for historical performance. Pro forma 1Q2014 includes amounts for drop down contribution based on daily EBITDA expected multiplied by days when the drop down assets were not included in operations of DKL according to purchase dates.
Slide 21: Questions and Answers
21 Questions and Answers Majority of assets support Delek US‘ strategically located inland refining system Inflation-indexed fees for most contracts Majority of all margin generated by long term, fee-based contracts with volume minimums Agreements with Delek US cap maintenance capex and limit Delek
Slide 22: Appendix
Appendix 2
Slide 23: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible 23 Inland refinery located in East Texas 60,000 bpd, 9.5 complexity Primarily processes inland light sweet crudes (100% in 2013) 93% yield of gasoline, diesel and jet fuel in 2013 El Dorado Refinery (1) Tyler Refinery (1) Inlan
Slide 24: Summary of Certain Contracts
Summary of Certain Contracts (10) 24 Initial / Maximum Term (1) Service Year Ended Dec. 31, 2013 Throughput (bpd)(2) Minimum Commitment (bpd) Tariff / Fee Tariff / Fee Escalator Refinery Shutdown Force Majeure Until December 2014 Crude Oil Transportation N/A N/A $535,700/Month (6) PPI-fg N/A N/A Fiv
Slide 25: Summary of Certain Contracts - footnotes
Summary of Certain Contracts - footnotes 25 (1) Maximum term gives effect to the extension of the commercial agreement pursuant to the terms thereof. (2) Represents average daily throughput for the period indicated. (3) Excludes volumes gathered on the SALA Gathering System. (4) Volumes gathered on
Slide 26: Amended and Restated Omnibus Agreement
Amended and Restated Omnibus Agreement 26 Under the omnibus agreement, Delek Logistics has a ROFO for 10-years post IPO if Delek US decides to sell the following assets: Rail offloading racks in the El Dorado refinery. Delek Logistics has the right to purchase logistics assets Delek US acquire
Slide 27: Summary Organization Structure
Summary Organization Structure 27 38.0% interest Limited partner-common 96.6% ownership interest (1) 2.0% interest General partner interest Incentive distribution rights Delek Logistics Partners, LP NYSE: DKL (the Partnership) 100% ownership interest Public Unitholders Operating Subsidiaries 11.3% i
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 28 (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 commitment fees and interest expen
Slide 29: Cash Available for Distribution
Cash Available for Distribution 29 (1) Non-GAAP measure. See pg. 26 for the reconciliation to GAAP. (2) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013 is based on actual amounts distributed during year; does not include a LTIP accrual in 2013.
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation 30 LTM 2011 2012 2013 2013 2014 3/31/14 Operating Income $286.1 $473.1 $237.7 $134.4 $67.7 $171.0 Loss on Sale of Assets 3.6 (0.1) - - - - Impairment of Goodwill 2.2 - - - - - Depreciation and Amortization 74.1 82.5 89.8 22.0 24.6 92.4 EBITDA $366.0 $555.5 $327.5 $156.4 $92.3
Slide 31: Investor Relations Contact
31 Investor Relations Contact: Assi Ginzburg Keith Johnson Executive Vice President, CFO Vice President of Investor Relations 615-435-1452 615-435-1366
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