Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (September 2020)
30 slides from Delek Logistics Partners, L.p's investor presentation, Sep 1, 2020
Slide 1: Investor Presentation Delek Logistics Partners September 2020
Exhibit 99.1 Investor Presentation Delek Logistics Partners September 2020
Slide 2: Disclaimers
Disclaimers 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 slides
Slide 3: Investment Overview
Investment Overview • Current Distribution: $0.90/LP unit qtr.; $3.60/LP unit annualized (1); ~11% current yield (2) • Committed to growing distribution 5% year-over-year Overview (NYSE: DKL) • Improving outlook into second half of 2020; asset drop downs, asset optimization and business initiatives
Slide 4: Simplified Organizational Structure
Simplified Organizational Structure • Eliminated incentive distribution rights (IDRs) • General partner (GP) converted to non-economic interest • Transaction: 14 million newly issued DKL common limited partner units and $45 million in 3Q20 Delek US Holdings, Inc. Delek Logistics GP, LLC Public Unith
Slide 5: Delek US – A Growth Oriented, Financially Strong Partner
Delek US – A Growth Oriented, Financially Strong Partner Source 207,000 bpd from Permian Basin Access to Cushing; 35,000 bpd • Growing gathering system increasing to 100,000 bpd second half • Wink to Webster JV Crude oil 2020 Pipeline CADDO RIO Refining Logistics (1) Asphalt Retail Renewables 302,
Slide 6: DKL Relative to Peer Group
DKL Relative to Peer Group Where It is and Where It is Going 2Q20 Distribution Coverage Yr/Yr Distribution Growth 5.9% Achieved distribution coverage target range of 1.4x to 1.5x by 3.0% 1.5% the end of 2020 in second quarter 2020. 1.1% 0.0% DKL MPLX MMP EPD PSXP PBFX HEP PAA -41.7% -48.0% 2.16x 2.0
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 Pipelines/Transportation Segment • ~805 miles (1) of crude and product transportation pipelines, including the 195 mile crude oil pipeline from Longv
Slide 9: Delek Permian Gathering East System
Delek Permian Gathering East System Equipment DPG East System Lease Automatic Custody 45 Installations Transfer Units (LACTS) Pipeline 60 miles Tanks (bbl) 2 (50M, 300M) 9
Slide 10: Delek Permian Gathering West System
Delek Permian Gathering West System DPG West System Equipment Lease Automatic Custody 6 Transfer Units (LACTS) Installations Pipeline 70 miles Tanks (bbl) 1 (50M) 10
Slide 11: Multi-Year Contracts with Firm Commitments / MVCs
Multi-Year Contracts with Firm Commitments / MVCs Duration of Contracts as of 2Q20 (1) Contract Highlights 7% 1% < 1 Year • The Lion Pipeline System and SALA Gathering System are 1 to 3 Years 36% supported by a long-term contract that includes three take- 3 to 5 Years or-pay commitments 56% > 5 Year
Slide 12: Financial Flexibility and Growing Distributable Cash Flow
Financial Flexibility and Growing Distributable Cash Flow Solid Net Income and EBITDA performance(1) $200.0 $208.3 $178.9 $150.0 $164.0 $100.0 $115.0 $124.4 $97.3 $96.8 $in millions $90.2 $50.0 $62.8 $69.4 $0.0 (3) 2016 2017 2018 2019 2020 LTM Net Income EBITDA DCF supports distribution growth(2) Fi
Slide 13: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage Distribution per unit has increased twenty-nine consecutive times since the IPO $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 $0.655 $0.680 $0.690 $0.705 $0.715 $0.725 $0.750 $0.770 $0.
Slide 14: DKL Asset & Joint Venture Detail
DKL Asset & Joint Venture Detail
Slide 15: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects Create platforms for future growth; Ability to leverage Permian position RIO Pipeline (Delaware Basin) • MPLX (67%)/ Delek Logistics (33%) • Cost: $119 million • Capacity: 80,000 Bbl/d • Length: 109 miles • Completed: September 2016 • Benefiting from increased drillin
Slide 16: Midstream: Red River Pipeline Joint Venture
Midstream: Red River Pipeline Joint Venture Red River Pipeline JV DKL purchased 33% interest in May 2019 Planned expansion from 150 kbpd to 235 kbpd . Approx. $128.0 million initial investment; Financed with revolver Expected completion in second half of 2020 . DKL will contribute $20.0 millio
Slide 17: Midstream: Big Spring Gathering System
Midstream: Big Spring Gathering System Gathering Helps Control Crude Oil Quality and Cost into Refineries Getting closer to wellhead allows us to control crude quality and cost Big Spring Gathering System . Provides improvement in refining performance and cost structure Approximately 200-mile
Slide 18: Midstream: Utilizing Free Cash Flow & Strong Balance Sheet to Fund Growth
MidstreamMidstream:: UtilizingUtilizing Free Free Cash Cash Flow Flow & Strong & Strong Balance Balance Sheet toSheet Fund toGrowth Fund Growth Supports goal to generate approximately $370 million to $395 million of annualized midstream adjusted EBITDA by ’23 Supports goal to generate approximately
Slide 19: Several Visible Pathways for Growth
Several Visible Pathways for Growth Focused around developing Permian platform; Growing logistics asset base at sponsor Ability to Leverage Relationship with Delek US • Permian-based refining system with 207,000 bpd of Permian crude access (1) Midstream • Big Spring Gathering System in the Permian B
Slide 20: 2021 Valuation Below Peer EV-to-EBITDA
2021 Valuation Below Peer EV-to-EBITDA DKL’s financial flexibility and growth initiatives of strong sponsor DK positions it for growth EV/EBITDA 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x DKL HEP MPLX PBFX PSXP PAA NS MMP ET EPD 2020 2021 20 Avg 21 Avg (1) Based on Factset as of August 28, 2020. 20
Slide 21: Majority of assets support Delek US' strategically located inland refining system
Majority of assets support Primarily traditional, stable Delek US’ strategically MLP assets with limited located inland refining commodity price exposure system Balance sheet positioned Inflation-indexed fees for to grow with strong most contracts sponsor DK Majority of all margin Agreements with De
Slide 22: Appendix
Appendix o
Slide 23: DKL: Reconciliation of Distributable Cash Flow
DKL: Reconciliation of Distributable Cash Flow (dollars in millions, except coverage) 2013 (2) 1Q14 (2) 2Q14(2) 3Q14(2) 4Q14(2) 2014 (2) 1Q15(2) 2Q15 3Q15 4Q15 2015 (2)(3) 1Q16 2Q16 3Q16 4Q16 2016 (3) Reconciliation of Distributable Cash Flow to net cash from operating activities Net cash provided b
Slide 24: DKL: Income Statement and Non-GAAP EBITDA Reconciliation
DKL: Income Statement and Non-GAAP EBITDA Reconciliation 2013(1) 1Q14(1) 2Q14 3Q14 4Q14 2014 (1) 1Q15(2) 2Q15 3Q15 4Q15 2015(2) 1Q16 2Q16 3Q16 4Q16 2016 Net Revenue $907.4 $203.5 $236.3 $228.0 $173.3 $841.2 $143.5 $172.1 $165.1 $108.9 $589.7 $104.1 $111.9 $107.5 $124.7 $448.1 Cost of Sales (811.4) (
Slide 25: Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA
Non-GAAP Reconciliation of Increased Paline Pipeline Tariff EBITDA Reconciliation of Forecast Incremental U.S. GAAP Net Income (Loss) to Forecast Incremental EBITDA for Paline Pipeline Tariff Increase ($ in millions) Annual Monthly Forecasted Incremental Net Income $ 10.8 $ 0.9 Add Forecasted Increm
Slide 26: Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA
Non-GAAP Reconciliation of Red River Joint Venture Adjusted EBITDA Delek Logistics Partners, LPReconciliation of Forecasted Incremental U.S. GAAP Net Income (Loss) to Forecasted Incremental Adjusted EBITDA for the Red River Pipeline Joint Venture ($ in millions) Pre-Expansion Range Post-Expansion Ra
Slide 27: Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA
Non-GAAP Reconciliations of Big Spring Gathering System Forecasted EBITDA 27
Slide 28: Non-GAAP Reconciliations of Trucking Forecasted EBITDA
Non-GAAP Reconciliations of Trucking Forecasted EBITDA 28
Slide 29: Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA
Non-GAAP Reconciliation of Krotz Springs Potential Dropdown EBITDA Krotz Springs Logistics Drop Down Reconciliation of Forecasted Annualized Net Income to Forecast Incremental EBITDA ($ in millions) Forecasted Range Forecasted Incremental Net Income $ 2.9 $ 3.3 Add Forecasted Incremental Amounts for
Slide 30: Investor Relations Contacts
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312
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