Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (November 2022)
31 slides from Delek Logistics Partners, L.p's investor presentation, Nov 16, 2022
Slide 1: Investor Presentation Delek Logistics Partners November 2022
Investor Presentation Delek Logistics Partners November 2022 Exhibit 99.1
Slide 2: Disclaimers
Disclaimers 2 Forward Looking Statements: Delek US Holdings, Inc. (“Delek US”) and Delek Logistics Partners, LP (“Delek Logistics”; and collectively with Delek US, “we” or “our”) are traded on the New York Stock Exchange in the United States under the symbols “DK” and ”DKL”, respectively. These slid
Slide 3: Investment Overview and 3Q22 Highlights
• Current distribution: $0.99/LP unit qtr; $3.96/LP unit annualized (1); ~7.1% current yield (2) • Delivered the 5% distribution CAGR in 2021; another 5% expected in 2022 • MVC’s underpin ~67% of gross margins, providing stability to cash flows Overview (NYSE: DKL) • Net Income of $44.7 million, net
Slide 4: Organizational Structure following 3Bear Acquisition
Organizational Structure following 3 Bear Acquisition 3Bear Acquisition Summary • Delek Logistics acquired 100% membership interests in 3Bear, a premier crude, gas and water gathering, processing and disposal business in the Northern Delaware Basin (the “Acquisition”) • Transaction valued at $628 mi
Slide 5: Integrated Company with Asset Diversity and Scale
Asphalt 5 asphalt terminals located in: 1) El Dorado, AR 2) Muskogee, OK 3) Memphis, TN 4) Big Spring, TX 5) Henderson, TX Logistics 10 terminals ~1,600 miles of pipeline & gathering infrastructure 10.2mmbbls storage capacity Permian gathering assets West Texas wholesale JV crude oil pip
Slide 6: DKL's First Sustainability Report
DKL’s 1st ever Sustainability Report was published on May 2, 2022. The Report contains DKL’s 1st ever disclosures of Scope 1 and Scope 2 greenhouse gas emissions. 2021-2022 Sustainability Report will be published in Q4 of 2022. 6
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 • ~805 miles (1) of crude and product transportation pipelines, including the 195- mile crude oil pipeline from Longview to Nederland, TX • ~ 600-mil
Slide 9: Multi-Year MVC Contracts
Multi-Year MVC Contracts Contract Highlights • The Lion/SALA Gathering System is supported by a long-term contract that includes three take-or-pay commitments • Initial term of 5 years, maximum term of 15 years • Crude oil transportation throughput of 73.2k bpd in 2022, supported by a MVC of 46kbpd
Slide 10: Financial Flexibility and Growing Distributable Cash Flow
10 Financial Flexibility and Growing Distributable Cash Flow 1) Reconciliation of EBITDA to Net Income provided on page 27. Excluded are predecessor costs related to the crude oil storage tank and rail offloading racks acquired in March 2015. 2) Reconciliation of distributable cash flow to net cash
Slide 11: DKL Distribution and Leverage Ratio
11 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 reconciliations starting on page 26. 3) In 4Q17, the reimbursed capital expenditure amounts in the
Slide 12: DKL Asset & Joint Venture Detail
DKL Asset & Joint Venture Detail
Slide 13: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects Create platforms for future growth; Ability to leverage Permian position Caddo Pipeline • Delek Logistics (50%)/Plains Pipeline L.P. (50%) • Cost: $123 million • Capacity: 80,000 bpd • Length: 80 miles • Completed: January 2017 • Provides El Dorado refinery with incre
Slide 14: Red River and Wink to Webster Pipelines
Transportation from Cushing to Longview; Increased crude oil optionality Increased from 65kbpd to 100kbpd following expansion; Incremental 24 million bbls/yr of Cushing crude oil into Longview, TX From Longview, TX DKL has access to: Delek US refining system providing ability to reduce depen
Slide 15: Midstream: Permian Gathering System
Midstream: Permian Gathering System Gathering Allows Our Customers Crude Quality & Cost Control Permian Gathering System Approximately 200-mile gathering system 350kbpd throughput capacity >300,000 dedicated acres expected in 2022 Points of origin: Howard, Borden, Martin and Midland counties
Slide 16: Several Visible Pathways for Growth
16 Several Visible Pathways for Growth Focused around developing Permian platform; Growing logistics asset base at sponsor Balance Sheet Supportive • $14.9 million cash & $193.1 million unused credit facility at September 30, 2022 on $1 billion revolving credit facility • Leverage ratio was ~4.35x (
Slide 17: 2022 Valuation Relative to Peer Average EV-to-EBITDA
17 2022 Valuation Relative to Peer Average EV-to-EBITDA Consistency: DKL Has Increased Quarterly Distributions Consecutively Since IPO in 4Q12 (1) Based on Factset as of November 15, 2022. 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x DKL HEP MPLX PAA NS MMP ET EPD EV/EBITDA (consensus estimates)
Slide 18: Wells Fargo: A Look at Midstream ROIC
18 Wells Fargo: A Look at Midstream ROIC “DKL has generated the highest value and cash returns over the past five years (2015-20) compared to its peers” (1) Source: Wells Fargo 20 15 -2 02 0 20 21 Drivers The execution of dropdowns and third-party acquisitions at attractive multiples Scalable pl
Slide 19: Overarching Objectives and Key Initiatives
19 Overarching Objectives and Key Initiatives
Slide 20: 3Bear Acquisition
3Bear Acquisition
Slide 21: Investment Considerations for 3Bear Acquisition
• Recently constructed asset in the most active area of the Delaware Basin (Lea and Eddy County, NM) • ~485 miles of in-ground pipeline currently • 88 MMcf/d of gas processing capacity; 140kbpd of crude gathering capacity supported by 120k bbls of storage; 200kbpd salt water disposal; offers produce
Slide 22: 3Bear: Established Infrastructure in the Delaware Basin
3 Bear: Established Infrastructure in the Delaware Basin Asset Overview 3Bear Delaware Holding - NM, LLC (“3Bear”) is a premier, three-stream midstream business located in the core of Northern Delaware Basin (Lea & Eddy County, New Mexico) Integrated crude, gas, and water infrastructure Anchor
Slide 23: DKL + 3Bear: Integrated Company with Diversity and Scale
Rio State Line Terminal Midland Big Springs Colorado City Abilene Fort Worth Dallas Waco Hewitt Cushing Little Rock Memphis El Dorado Shreveport Longview Tyler Beaumont Monroe Krotz Spring New Orleans Nashville Knoxville Brentwood OK AR TN LA NM NM TX Permian Basin Gathering Assets East Texas Logist
Slide 24: 3Bear Acquisition: Diversifying Cash Flows via Third-Party Revenues
3Bear Acquisition: Diversifying Cash Flows via Third-Party Revenues (1) Calculated based on 2021 Pipelines and Transportation Segment revenue from affiliate and third-party, as disclosed in our 2021 Annual Report on Form 10-K. (2) Estimated based on forecasted post-close 2023 revenue. (3) Estimated
Slide 25: Appendix
Appendix oO
Slide 26: 1) Distribution based on actual amounts distributed during the periods; does not include LTIP
26 1) Distribution based on actual amounts distributed during the periods; does not include LTIP accrual. Coverage is defined as cash available for distribution divided by total distribution. 2) Results in 2013, 2014 and 2015 are as reported excluding predecessor costs related to the dropdown of the
Slide 27: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
271) Results in 2013 and 2014 are as reported excluding predecessor costs related to the dropdown of the tank farms and product terminals at both Tyler and El Dorado during the respective periods. 2) Results for 1Q15 are as reported excluding predecessor costs related to the 1Q15 dropdowns. Note: Ma
Slide 28: DKL: Reconciliation of Basic Gross Margin
28 DKL: Reconciliation of Basic Gross Margin (dollars in millions) 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 DKL: Reconciliation of Basic Gross Margin Net Revenues $152.5 $155.3 $137.6 $138.6 $163.4 $117.6 $142.3 $140.1 $152.9 $168.5 $189.6 $189.9 $206.6 $266.8 $294.
Slide 29: Summary of Certain Contracts
29 Summary of Certain Contracts This does not include 3 Bear contracts
Slide 30: Summary of Certain Contracts Footnotes
30 Summary of Certain Contracts Footnotes [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] Note: The Paline Pipeline agreements executed in February 2018 were excluded from the table above as their non-cancelable terms are less than one year. A Information obtained from the applicable ag
Slide 31: Investor Relations Contacts
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312
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