Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Howard Weil Energy Conference 2011
42 slides from Delek Us's conference presentation, Mar 25, 2011
Slide 1: Howard Weil Energy Conference March 29, 2011
Howard Weil Energy Conference March 29, 2011
Slide 2: Safe Harbor Provision
Safe Harbor Provision 2 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 Commission. This presentation may contain forward-looking statements that
Slide 3: Diversified Downstream Energy Company
Diversified Downstream Energy Company(1) Breadth of Exposure Across Refining, Wholesale Marketing and Retail Distribution Inland, moderate complexity Gulf Coast refinery Refining Segment ) Owned product terminals and pipeline assets in West Texas Marketing Segment Operate 412 convenience stores - ow
Slide 4: Lion Oil Transaction Executive Summary
Lion Oil Transaction Executive Summary
Slide 5: Transaction Summary
Transaction Summary Asset Overview Purchase Summary 80,000 BPD refinery in El Dorado, Arkansas80-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 800 mil
Slide 6: Financial Highlights From March 21st Announcement
Financial Highlights From March 21st Announcement 6 Key Financial Disclosures Regarding The Lion Oil Transaction(1) Lion Oil Company generated approximately $92 million in contribution margin during calendar 2010All other overhead, marketing and terminal fees were less than $1 per barrel in recent y
Slide 7: El Dorado, Arkansas Refinery
El Dorado, Arkansas Refinery 7 Turnaround Inland, PADD III Refinery With Broad Distribution Footprint Throughout the Mid-Continent Medium Sour Crude Oil Refinery Typical crude gravity - 30.5°APITypical crude sulfur - 1.75% Key Sources of Crude Local Arkansas crude gathering system (21% of crude slat
Slide 8: Combined Asset Overview
Combined Asset Overview Delek US(Dec. 31, 2010) Lion Oil Delek US(Post-Transaction) Refining Segment Marketing Segment Other 1 refinery, Tyler, TXPADD III60,000 BPD9.4 complexityHigh conversion 3 company-owned terminals7 product pipelinesCrude pipelines 412 retail company operated retail locationsMo
Slide 9: Combined Asset Map
Combined Asset Map 9 West Texas Crude Louisiana Offshore Crude Foreign Crude Tyler Refinery El Dorado Refinery Delek US Terminals Lion Oil Terminals Crude Pipelines Product Pipelines
Slide 10: Key Strategic Opportunities
Key Strategic Opportunities 10 Optimize Crude Slate Increased access to wide range of domestic, offshore & foreign crude oilsAdding capability to process medium sour crudesAccess to crudes priced on both a WTI and Brent-basis Enhance Production Capabilities More than doubles production capacity abov
Slide 11: El Dorado Refinery Crude Slate (Calendar 2010)
El Dorado Refinery Crude Slate (Calendar 2010) 11 El Dorado processes a combination of local Arkansas, domestic offshore and foreign crude oils Louisiana Offshore crude oil includes: Eugene Island, Louisiana Light Sweet, Mars, North Louisiana Sweet, Poseidon and Thunder Horse BlendOther crude oils i
Slide 12: Transaction Expected To Diversify Delek US' Crude Slate
Transaction Expected To Diversify Delek US' Crude Slate 12 Balanced Exposure - Less Dependence on Light, Sweet Crude Pricing Essentially 50/50 (Sour-intermediate vs. Light) Crude Slate Becomes More Balanced Crude Slate Transition - Pre/Post Transaction Tyler Refinery El Dorado Refinery Pro-Forma (Co
Slide 13: El Dorado Unit Capacities
El Dorado Unit Capacities 13 Unit Description Present Capacity (BPD)(1) (1) Per the Lion Oil transaction announcement conference call held on March 21, 2011: In 2009, Lion Oil estimated that approximately $150 million in capital spending would be required to take advantage of the 100,000 barrel a da
Slide 14: El Dorado Capacity Utilization Above 90% In 2010
El Dorado Capacity Utilization Above 90% In 2010 14 (1) 2010 assumes nameplate capacity of 80,000 BPD following major turnaround and expansions projects in 2009; nameplate capacity 2006-2009 is estimated at 71,500 BPD El Dorado Production Capabilities Improved After Turnaround in 2009(1) Turnaround
Slide 15: Anticipated Combined Product Slate
Anticipated Combined Product Slate(1) 15 Tyler Refinery El Dorado Refinery Pro-Forma (Combined) (1) "Other" includes LPG, Black Oil and other residual products (CHART) (CHART) (CHART)
Slide 16: Light Product Marketing Throughout the Mid-Continent
Light Product Marketing Throughout the Mid-Continent 16 Access To The Enterprise Products Pipeline(1) Integration Opportunity Expands marketing opportunity into the Mid-Continent El Dorado expected to supply MAPCO store locations In Tennessee and Arkansas Tyler and El Dorado Expected To Ship Product
Slide 17: Summary of Potential Transaction Synergies
Summary of Potential Transaction Synergies 17 Crude Supply Improves crude procurement expertiseOptimize crude slate between Tyler and El Dorado Distribution Realize supply synergies between refining and retailExpand wholesale marketing through Enterprise systemDevelop long-term product supply contra
Slide 18: Major Capital Projects Have Been Completed
Major Capital Projects Have Been Completed 18 *Includes refining segment only; 2009 capital spending includes cost to rebuild saturated gas plant Historical/Projected Capital Spending at Tyler and El Dorado ($MM) (CHART)
Slide 19: Transaction Financing Overview
Transaction Financing Overview 19 Determined by the average closing price of Delek US' common stock as reported on the NYSE for the ten consecutive trading days immediately preceding the closing date Lion Oil will enter into five-year term loan agreements with Israeli banks in the amount of up to $1
Slide 20: Transaction Sources and Uses
Transaction Sources and Uses 20 $45 million in restricted shares of Delek US common stock(1) $145 million for equipment and shares Expected Transaction Sources Expected Transaction Uses $50 million term note payable by Lion to Ergon (guaranteed by Delek US)(2) $100 million in loans from Israeli bank
Slide 21: Refining Segment Operational Update
Refining Segment Operational Update
Slide 22: Refining Segment Operational Update
Refining Segment | Operational Update Tyler Refinery Update Gulf Coast refining economics have reached elevated levels in 1Q:11, supported by improved product cracks 22 Strong Gulf Coast Refining Economics Persisting in 1Q:11 Spreads between WTI and LLS/Brent/Mars have widened substantially during t
Slide 23: Tyler Refinery Is A Niche, Inland Asset
Tyler Refinery Is A Niche, Inland Asset Tyler Refinery 60,000 barrels per day Niche, Inland Refiner In PADD III ) 9.4 complexity; equipped with a delayed coking unit High Conversion, Moderate Complexity Primarily local domestic crudes such as WTI and East Texas Crude Processes Mostly Light Sweet Cru
Slide 24: WTI Priced At A Discount To Competing Crudes
WTI Priced At A Discount To Competing Crudes Current cost to purchase WTI is significantly below competing crudes Substantial widening of crude differentials ) Cheaper crude lowers the cost of production, benefiting refining margin Wider differentials benefit refiners processing WTI 24 WTI Is Nearly
Slide 25: WTI Contango Market Structure Favors Tyler
WTI Contango Market Structure Favors Tyler WTI Contango Benefit Effectively Reduces Tyler's Cost of Crude Oil Tyler historically has purchased mostly WTI - an inexpensive local crude Purchase Light, Sweet, Domestic Crudes ) Serves as a reduction to our cost of goods; benefits refining margin Contang
Slide 26: Crude Inventories At Cushing Remain Elevated
Crude Inventories At Cushing Remain Elevated 26 Operable Crude Oil Storage Capacity at Cushing, OK Has Risen In Recent Months(1) Source: EIA; assumes estimated operable storage capacity of 44 mil barrels (CHART)
Slide 27: Contango Benefits The Theoretical Benchmark
Contango Benefits The "Theoretical" Benchmark Building a Theoretical Benchmark High-Sulfur Diesel 5-3-2 Gulf Coast Crack Spread + Contango = Theoretical Margin "Theoretical" Benchmark For Tyler 27 High-Sulfur Diesel 5-3-2 Gulf Coast Crack Spread, Including Contango Benefit *Source: WTI Backwardation
Slide 28: Refining Benchmark Well Above Historical Levels
Refining Benchmark Well Above Historical Levels 28 Crack Spread (per bbl) Reached Multi-Year High During January and February 2011(1) (1) Source: Platts; references the High Sulfur Diesel 5-3-2 Gulf Coast Crack Spread Elevated 5-3-2 Gulf Coast Crack Spread In January and February Strong Refining Eco
Slide 29: Recent Investments Lowered Volumetric Loss
Recent Investments Lowered Volumetric Loss(1) More gasoline yield; less conversion of liquids (naphtha) to fuel the refinery MSAT II Project Improves Liquid Yield 29 Lower Volumetric Loss Partially Due to MSAT II Project (CHART) Creating More High-Value Product Helps Realizations (1) Volumetric loss
Slide 30: Retail Segment Operational Update
Retail Segment Operational Update
Slide 31: Retail Segment Operational Update
Retail Segment | Operational Update Same-store merchandise benefitting from new product offerings and food service 31 Six Consecutive Quarters of Same-Store Merchandise Sales Growth Thru 4Q:10 Saw some demand degradation in 4Q:10 due to higher crude (and fuel) prices; higher crude costs impacts marg
Slide 32: Cyclical Recovery In Same-Store Sales
Cyclical Recovery In Same-Store Sales Key Factors Affecting Same-Store Sales Relevant Factors: Location, size, appeal, offering, affordability, people Same-Store Merchandise Sales ) Relevant Factors: Commodity prices, weather, supply disruptions Same-Store Gallons Sold 32 Same-Store Merchandise Sale
Slide 33: Retention of High-Quality Assets Improves Results
Retention of High-Quality Assets Improves Results Retaining High-Quality, Top-Performing Assets Merchandise & fuel gallons sales per average number of stores increased in 2010 Multi-Year Recovery Underway ) Divested underperforming assets in the 2008-2010 timeframe Shed Underperforming Assets 33 Mer
Slide 34: Fresh Food Service Initiative Performing Well
Fresh Food Service Initiative Performing Well Opportunity To Grow Inside Sales and Margins Redefining the utility of the neighborhood convenience store Food Service as a Destination Point ) Food service margins exceed the trailing corporate merchandise margin average Food Service as a Margin Driver
Slide 35: Private Label Initiative Making Progress
Private Label Initiative Making Progress Private Label - A Value Offering That Generates Above Average Margins Higher margin, lower-cost option for consumers Quality, Affordable Replacement Option ) Private label is an effective way of offering value to time-starved consumers Countermeasure To Chann
Slide 36: Store Reimaging & New Construction Initiatives
Store Reimaging & New Construction Initiatives Elevate MAPCO Brand Through Store Remodeling and New Construction 31% of store base reimaged or newly constructed as of 12/31/10 Multi-Year Store Enhancement Initiative ) Construct 10-20 new stores per annum in the 2011-2015 timeframe(1) Five-Year New S
Slide 37: Favorable Impact From Store Reimaging
Favorable Impact From Store Reimaging Strong Economic Case Favoring Store Reimaging Investment Reshaping the retail brand identity to attract a broader demographic Newer, Cleaner Stores Draw Customers ) Atmosphere matters, especially when you are selling food and produce More Conducive To Fresh Offe
Slide 38: Marketing Segment Operational Update
Marketing Segment Operational Update
Slide 39: Marketing Segment Operational Update
Marketing Segment | Operational Update Wholesale Marketing In West Texas Owned (San Angelo, Abilene, Tyler); Third-Party (Aledo, Odessa, Big Springs, Frost) Product Marketing Terminals ) Owned and leased pipelines transport crude to Tyler refinery Supply Synergies With Tyler 39 ) Annual CAPEX less t
Slide 40: Appendix Additional Data
Delelk tus) Appendix Additional Data
Slide 41: Historical and Projected Capital Spending
Historical and Projected Capital Spending(1) 41 As indicated in the 10-K dated March 11, 2011; excludes any impact from the Lion Oil Transaction; 2010 spending includes $0.1 million of "other" capital spending (CHART)
Slide 42: NYSE: DK
DK NYSE
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