Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Investor Presentation (August 2014)
36 slides from Delek Us's investor presentation, Aug 15, 2014
Slide 1: Investor Presentation – August 2014 Delek US Holdings
Investor Presentation – August 2014 Delek US Holdings
Slide 2: Safe Harbor Provision
Safe Harbor Provision 2 Delek US Holdings and Delek Logistics Partners, LP 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 rules and regulations of the United States Securities and Exchange Commission. Th
Slide 3: Delek US Holdings Overview
REFINING Delek US Holdings Overview Integrated Downstream Energy Company – Crude Gathering to Retail Locations (1) Delek Logistics Partners, LP (NYSE:DKL) began operating on Nov. 7, 2012 and, from that date, 100% of its performance has been reported as a segment of Delek US. Delek US and its affilia
Slide 4: Integrated Business Model
4 Integrated Business Model Flexible Crude Sourcing and Market Driven Production Enhance Performance Flexible Crude Oil Sourcing •Pipeline access to Midland; Gulf Coast; Cushing • Increasing Gathering – Texas and Arkansas •Access to Canadian crude Crude Logistics •Crude oil pipelines supporting refi
Slide 5: Mid-Continent Refining System
Mid-Continent Refining System 5 Strategic Location Allows Access to Cost-Advantaged Feedstocks and Niche Markets (1) Rail supplied light crude capability consists of 25,000 bpd of light crude or 12,000 bpd heavy crude offloading that is available at a company owned facility at the El Dorado refinery
Slide 6: Refining Segment Operational Update
Refining Segment Operational Update
Slide 7: U.S. Refining Environment Trends
-$30 -$20 -$10 $0 $10 $20 $30 $40 $50 J a n -1 0 F e b -1 0 M a r- 1 0 A pr -1 0 M a 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 No v -1 0 De c -1 0 J a n -1 1 F e b -1 1 M a r- 1 1 A pr -1 1 M a 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 No v -1 1 De c -1 1 J a
Slide 8: WTI Midland vs. WTI Cushing Crude Pricing
($14.00) ($12.00) ($10.00) ($8.00) ($6.00) ($4.00) ($2.00) $0.00 WTI Midland vs. WTI Cushing Crude Pricing Access to Midland Crudes Benefits Margins 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 ($ per barrel) 1Q14 87,000 bpd of Midland crude in DK system 8 2Q14 Source: Argus – as of A
Slide 9: Tyler Refinery Overview
Tyler Refinery Overview 9 Inland PADD III light product refinery located in East Texas Planning underway for 1Q15 turnaround and expansion Serves a niche market in the Tyler, TX area; priced above Gulf Coast markets Currently 60,000 bpd, 9.5 complexity; demonstrated 64,000 bpd ability; incre
Slide 10: El Dorado Refinery Overview
Improving Niche Market Position with a Crude Slate Weighted to WTI-Linked Crude El Dorado Refinery Overview 10 Inland PADD III refinery located in Southern Arkansas 80,000 bpd, 9.0 complexity (1Q14 configured to run light and medium sour crude) Improved flexibility during 1Q14 turnaround; FCC
Slide 11: Significant Organic Growth / Margin Enhancement Opportunities
Significant Organic Growth / Margin Enhancement Opportunities 11 DHT Revamp – Phases I & II Increase ULSD production from 30,000 bpd to 35,000 bpd; (Phase 1 increased to 33,000 bpd) Higher return capital projects at El Dorado and Tyler improving flexibility and providing growth SCOPE COST TIMING $
Slide 12: Tyler Refinery Expansion Overview
Tyler Refinery Expansion Overview 12 Production Increase 10,000 bpd crude throughput increase Light product throughput increased by 9,300 bpd Estimated cost $70 million Expected completion in 1Q15 Crude Supply Source incremental crude from Cushing into Longview. Additional options to acc
Slide 13: Tyler Refinery Expansion – Production Increase
Tyler Refinery Expansion – Production Increase Increase nameplate capacity to 75,000 bpd – Crude Distillation, DHT, NHT units expanded – March 2015 estimated completion 13 62.5 7.0 25.0 22.0 75.0 7.0 36.0 28.0 Crude Coker DHT NHT Capacity Improvements, 000 bpd Current Capacity Expansion Capacity
Slide 14: Tyler Refinery Expansion – Crude Supply
Tyler Refinery Expansion – Crude Supply Incremental 10,000 bpd of crude supply needed to support expansion Supply sources from Cushing, OK , Midland and Longview, TX – Base economics source crude from Cushing to Longview (approx. $1.77/bbl delivery) – Additional options include Permian Basin sup
Slide 15: Tyler Refinery Expansion – Product Marketing
Tyler Refinery Expansion – Product Marketing Incremental 9,300 bpd of light products from expansion Flexibility to supply: – Immediate Tyler area – Other local terminals – DKL terminals in west Texas Delek to contract additional terminal capacity in the Tyler area for increased throughput 15
Slide 16: Tyler Refinery Expansion Economics
Tyler Refinery Expansion Economics Incremental 10,000 bpd of crude throughput capacity – Estimated capital cost approximately $70 million; approx. $53 million spent in 2014 – March 2015 estimated completion – Primary work done during 1Q15 scheduled turnaround Expected product yield +10.1 kbpd –
Slide 17: Logistics Operational Update
Logistics Operational Update
Slide 18: Strategic Partner in Delek Logistics Partners, LP
Strategic Partner in Delek Logistics Partners, LP (NYSE: DKL) 18 Delek Logistics Partners , LP (NYSE:DKL) began operating on Nov. 7, 2012 and 100% of its performance is reported as a segment of Delek US beginning 4Q12. Delek US and its affiliates own approximately 62%, including the 2.0% general par
Slide 19: DKL: Growth Strategy
19 DKL’s stated growth strategy targets annual distribution increase of 15% in coming years DKL: Growth Strategy (1) 1) Information provided in Delek Logistics Partners, LP (NYSE: DKL) investor presentation available at www.deleklogistics.com. 2Q2014 EBITDA based on pro forma LTM information. 2Q14 p
Slide 20: DKL: Potential EBITDA Growth
DKL: Potential EBITDA Growth (1) 20 (1) Information provided in Delek Logistics Partners, LP (NYSE: DKL) investor presentation available at www.deleklogistics.com. 2Q2014 EBITDA based on pro forma LTM information provided in that presentation. Pro forma 2Q2014 includes amounts for drop down contribu
Slide 21: DKL: Increased Distribution with Conservative Coverage
DKL: Increased Distribution with Conservative Coverage 21 (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 as presented by Delek Logistics Partners’ slide prese
Slide 22: Marginal Percentage Interest in Distributions
22 Marginal Percentage Interest in Distributions Sensitivity of Incentive Distribution Rights Payments Based on Quarterly Distribution to Limited Partners (2) Delek Logistics GP Incentive Distribution Rights Total Quarterly Distribution Per Unit Target Amount Unitholders General Partner Minimum Quar
Slide 23: Retail Operational Update
Retail Operational Update
Slide 24: Retail Locations Creates Synergies for Product Marketing
990 1,039 1,082 1,112 291 303 2010 2011 2012 2013 2Q13 2Q14 $897 $951 $1,011 $1,037 $270 $287 2010 2011 2012 2013 2Q13 2Q14 Retail Locations Creates Synergies for Product Marketing 24 Expanding Market Footprint in Markets Capable of Being Supplied by El Dorado Fuel Gallons Sold Per Store (000’s) Mer
Slide 25: Focused on Organic Growth
Focused on Organic Growth 25 Large Format Stores are focal point Approximately 4,800 square feet Offer customers wider product selection Prepared food service offering increases traffic Avg. 3+ million gallons and $2+m inside sales once market penetrated 3 year growth trajectory for mark
Slide 26: Financial Update
Financial Update
Slide 27: Financial Highlights
Financial Highlights $164 $151 $130 $445 $659 $448 $427 2008 2009 2010 2011 2012 2013 LTM Jun. 2014 At June 30, 2014 Cash of $560.1 million; Debt of $616.2 million Includes $239.0 million of debt and $2.4 million of cash at Delek Logistics (DKL) Excluding DKL, Delek US’ net cash position was
Slide 28: Going Forward
Going Forward
Slide 29: Market Fundamentals
$19.83 $12.30 $13.11 $15.01 $18.26 $16.82 $16.19 $13.45 $15.56 $15.58 2Q13 3Q13 4Q13 1Q14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 8/14/14 Market Fundamentals(1) 29 Crude price beginning to decline through July Midland discount to Cushing widening (1) Source: Platts and Argus; 2014 data is through Aug
Slide 30: Delek US Focused on Building an Integrated Business Model
Delek US Focused on Building an Integrated Business Model 30 A core part of Delek US' strategy is to grow via prudent strategic transactions since 2001 (1) Includes logistic assets in purchase price. Purchase price includes working capital for refineries. 2006 Abilene & San Angelo terminals $55.1 mm
Slide 31: Delek US Asset Base has Grown and Diversified
Delek US Asset Base has Grown and Diversified 2010 2013 Crude Gathering Crude Logistics Refining Logistics Retail Total Pipeline Mileage Midland crude, bpd Throughput Capacities: Total Crude, bpd Light crude , bpd DHT, bpd Coker, bpd GHT/LSR, bpd Biodiesel Plants Product Terminals Large format store
Slide 32: Investment Highlights
32 Large, Complementary Logistics, Marketing and Retail Systems Significant Organic Growth / Margin Improvement Opportunities Focus on Shareholder Returns Strong Balance Sheet Strategically Positioned Refining Platform Questions and Answers
Slide 33: Appendix Additional Data
Appendix Additional Data
Slide 34: Historical and Projected Capital Spending
$42.3 $36.0 $65.9 $144.3 $225.5 $0.9 $10.5 $5.1 $13.1 $14.4 $36.5 $29.1 $37.9 $30.5 $0.1 $7.6 $26.5 $35.0 $21.2 2010A 2011A 2012A 2013A 2014E * Refining Logistics (Marketing) Retail Other Historical and Projected Capital Spending 34 $56.8mm $81.0mm $132.0mm $222.3mm Source: Company filings. $290.3mm
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation 35 Source: Company filings. ($ in millions) 2012 2013 Net cash provided by operating activities $462.9 $102.5 Purchase of property, plant and equipment 132.0 222.3 Free cash flow $330.9 ($119.8) Year Ended 12/31 Delek US Free Cash Flow Reconciliation ($ in millions) 2008 2009
Slide 36: Investor Relations Contact
Investor Relations Contact: Assi Ginzburg Keith Johnson Chief Financial Officer Vice President of Investor Relations 615-435-1452 615-435-1366
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