Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (September 2016)
29 slides from Delek Logistics Partners, L.p's investor presentation, Sep 1, 2016
Slide 1: Delek Logistics Partners, LP Investor Presentation
Delek Logistics Partners, LP Investor Presentation August 31, 2016
Slide 2: Disclaimers
2 Disclaimers 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 concerning current estim
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of trading on August 29, 2016. (2) Annualized distribution based on quarterly distribution for quarter ended June 30, 2016, to be paid on August 12, 2016. (3) For reconciliation please refer to pages 27 and 28. (4) Annualized EBITDA
Slide 4: Delek US – A Growth Oriented, Financially Strong Sponsor
Delek US – A Growth Oriented, Financially Strong Sponsor • 155,000 bpd of refining capacity in Texas and Arkansas • Access to crude / product terminals, pipeline and storage assets Operational Strength (1) As of June 30, 2016 financial statements in the Delek US 10Q filed on August 5, 2016. (2) As o
Slide 5: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 6: Stable Asset Base Positioned for Growth
Stable Asset Base Positioned for Growth 6 ~765 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longview to Nederland, TX ~ 600 mile crude oil gathering system in AR Storage facilities with 6.2 million barrels of active shell capacity Ra
Slide 7: Improving Performance and Financial Flexibility to Support Growth
Improving Performance and Financial Flexibility to Support Growth 7 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing pro forma results forecasted performance for 12 months ending Sept. 30, 2013. Reconciliation on pg. 28 2) Reconciliation provided on page 28. Results in 2013 and 2014 ar
Slide 8: Growth Initiatives Improved EBITDA Since 2012
Growth Initiatives Improved EBITDA Since 2012 8 1) Amounts provided in the Nov. 1, 2012 IPO prospectus showing forecasted performance for 12 months ending Sept. 30, 2013. 2) Bridge compared to the forecast provided in the prospectus based on difference in performance during the 12 months ending June
Slide 9: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage 9 Distribution per unit has been increased fourteen consecutive times since the IPO $0.375 $0.385 $0.395 $0.405 $0.415 $0.425 $0.475 $0.490 $0.510 $0.530 $0.550 $0.570 $0.590 $0.610 $0.630 MQD (1) 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 1
Slide 10: Acquisition EBITDA multiples have been below 10x
Acquisition EBITDA multiples have been below 10x (1) Provided stable fee based growth 10 Growth strategy to target acquisitions with 8x-10x EBITDA multiple range with potential to improve performance 9.0x 8.1x 6.3x 9.5x 7.9x 4.8x 9.2x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x Tyler Tan
Slide 11: Recent Events
Recent Events 11 Paline Pipeline ■ Increased flexibility to evaluate options following June 30, 2016 contract change ■ Potential to reverse flow to move crude from Gulf Coast to Longview, Texas ■ Evaluate ability to increase utilization and/or capacity Pipeline Development Projects ■ Caddo Pipeline
Slide 12: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects 12 Caddo Pipeline ■ DKL (50%)/Plains (50%) ■ Est. total cost: $120 million (1) ■ Capacity: 80,000 bpd ■ Length: 80 miles ■ Expected Completion: Jan. 2017 Rio Pipeline ■ Rangeland (67%)/ DKL (33%) ■ Cost: $119 million ■ Capacity: 55,000 bpd ■ Length: 107 miles ■ Expect
Slide 13: Segment Overview
Segment Overview
Slide 14: Lion Pipeline System and SALA Gathering
Lion Pipeline System and SALA Gathering 14 SALA Gathering System • Provides access to local Arkansas, east Texas and north Louisiana crudes to Delek US’ El Dorado refinery. • 600 mile crude oil gathering system, primarily within a 60-mile radius of the El Dorado refinery. 15,813 15,900 17,676 20,747
Slide 15: Terminalling and West Texas Wholesale Business
Terminalling and West Texas Wholesale Business 15 West Texas Wholesale and Marketing • Operates in an area around the Permian Basin • Purchases refined products from third parties for resale at owned and third party terminals in west Texas. • Includes ethanol blending activity. 18.5 12.6 75.4 96.8 1
Slide 16: Paline Pipeline
Paline Pipeline 16 Approximately 195 mile crude oil pipeline - Mainline pipeline flows from north to south 10,000 bpd of mainline capacity reserved for a third party to use exclusively from July 1, 2016 to December 31, 2016. 40-day hydro testing scheduled for 3Q16; required every five years
Slide 17: Going Forward
Going Forward
Slide 18: Several Visible Pathways for Potential Growth
Several Visible Pathways for Potential Growth 18 Organic Growth Acquisitive Growth Evaluate Paline Pipeline for potential future utilization and/or capacity increase Increasing activity in Arkansas gathering system Potential expansion of the North Little Rock terminal to 17,500 bpd Proven ab
Slide 19: Peer Comparisons
Peer Comparisons (1) 19 Current Yield as of 8/29/16 Leverage Ratio (1) 2.6x 3.2x 3.5x 3.5x 4.1x 4.7x 5.0x 6.0x 6.1x 6.1x 6.2x - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 WNRL VLP DKL MMP HEP EPD TLLP PSXP SXL PAA MPLX 9.8% 9.6% 8.5% 7.2% 7.1% 6.9% 6.6% 6.1% 6.0% 4.7% 4.1% 3.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Slide 20: Questions and Answers
20 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 21: Appendix
Appendix 2
Slide 22: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible 22 Inland refinery located in East Texas 75,000 bpd, 8.7 complexity Primarily processes inland light sweet crudes (100% in 2014) 94% yield of gasoline, diesel and jet fuel in 2014 El Dorado Refinery (1) Tyler Refinery (1) Inlan
Slide 23: Summary of Certain Contracts
Summary of Certain Contracts (9) 23 Initial / Maximum Term (1) Service 6 Months Ended Jun. 30, 2016 Throughput (bpd)(2) Minimum Commitment (bpd) Current Tariff / Fee Tariff / Fee Index (11) Refinery Shutdown Force Majeure July 1 to Dec. 31, 2016 N/A N/A $400,000/Month (6) FERC N/A N/A N/A N/A Five /
Slide 24: Summary of Certain Contracts - footnotes
Summary of Certain Contracts - footnotes 24 (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 S
Slide 25: Amended and Restated Omnibus Agreement Key Provisions
Amended and Restated Omnibus Agreement 25 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
Slide 26: Summary Organization Structure
Summary Organization Structure 26 38.3% interest Limited partner-common 95.10% 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 59.7%
Slide 27: Income Statement and Non-GAAP EBITDA Reconciliation
Income Statement and Non-GAAP EBITDA Reconciliation 27 (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 commit
Slide 28: Reconciliation of EBITDA and Cash Available for Distribution
Reconciliation of EBITDA and Cash Available for Distribution 28 (1) Forecast period for twelve month period ending 9/30/2013 EBITDA is reconciled to net income on page 28. (2) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013 , 2014 and 2015 and
Slide 29: Investor Relations Contact
29 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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