Delek Logistics Partners, L.p. · NYSE:DKL
Delek Logistics Partners, L.p — Investor Presentation (January 2017)
28 slides from Delek Logistics Partners, L.p's investor presentation, Jan 30, 2017
Slide 1: Delek Logistics Partners, LP Investor Presentation January 2017
Delek Logistics Partners, LP Investor Presentation January 2017
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”, or ”Delek Logistics”) that are based upon our current expectations and involve a number of risks and uncertainties. Statements co
Slide 3: Investment Highlights
Investment Highlights (1) Based on price per common limited unit as of trading on January 26, 2017. (2) Annualized distribution based on quarterly distribution for quarter ended September 30, 2016, paid on November 14, 2016. (3) For reconciliation please refer to pages 25 and 26. (4) Annualized EBIT
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 September 30, 2016 financial statements in the Delek US 10Q filed on November 3, 2016. (
Slide 5: Delek Acquisition of Alon to Create Premier Permian Based Refining System
Delek Acquisition of Alon to Create Premier Permian Based Refining System DKL positioned to provide logistics support for 300,000 bpd of Crude Throughput Capacity (~69% Permian Basin Based) 5 • Creates the premier Permian based refining company • 7th largest independent refiner with 302,000 barrels
Slide 6: Delek Acquisition of Alon to Create Strong Platform for Logistics Growth
Delek Acquisition of Alon to Create Strong Platform for Logistics Growth Increases Dropdown Inventory; Growing Logistics Assets Support Larger Crude Sourcing and Product Marketing System 6 • Delek Logistics Partners provides platform to unlock logistics value • Increased access to Permian and Delawa
Slide 7: Delek Logistics Partners, LP Overview
Delek Logistics Partners, LP Overview
Slide 8: Stable Asset Base Positioned for Growth
Stable Asset Base Positioned for Growth 8 ~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 9: Improving Performance and Financial Flexibility to Support Growth
Improving Performance and Financial Flexibility to Support Growth 9 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. 25 2) Reconciliation provided on page 26. Results in 2013 and 2014 ar
Slide 10: Increased Distribution with Conservative Coverage and Leverage
Increased Distribution with Conservative Coverage and Leverage 10 Distribution per unit has been increased sixteenth 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 $0.655 $0.680 MQD (1) 1Q 13 2Q 13 3Q 13 4Q 13
Slide 11: Going Forward
Going Forward etek! ED
Slide 12: Several Visible Pathways for Potential Growth
Several Visible Pathways for Potential Growth 12 2017 Target Acquisitive Growth 10% minimum distribution per unit growth targeted for 2017 Driven by organic growth at DKL Contracts expiring in 2017 have been extended by Delek US for additional five year option Proven ability to make 3rd part
Slide 13: Joint Venture Pipeline Projects
Joint Venture Pipeline Projects 13 Caddo Pipeline ■ DKL (50%)/Plains (50%) ■ Est. total cost: $123 million (1) ■ Capacity: 80,000 bpd ■ Length: 80 miles ■ Completed: Jan. 2017 Rio Pipeline (Delaware Basin) ■ Rangeland (67%)/ DKL (33%) ■ Cost: $119 million ■ Capacity: 55,000 bpd ■ Length: 107 miles ■
Slide 14: Peer Comparisons
Peer Comparisons (1) 14 Current Yield as of 1/26/17 Leverage Ratio (1) 2.6x 2.7x 3.7x 3.7x 4.1x 4.5x 4.5x 4.7x 5.1x 6.1x 6.5x - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 WNRL VLP DKL MMP HEP PSXP MPLX EPD TLLP SXL PAA 8.8% 7.9% 7.8% 7.1% 6.8% 6.3% 6.2% 5.5% 5.4% 4.3% 4.1% 3.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Slide 15: Questions and Answers
15 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 related to capex/opex reimbursement an
Slide 16: Appendix
Appendix etek! ED
Slide 17: Delek US' Refineries are Strategically Positioned and Flexible
Delek US' Refineries are Strategically Positioned and Flexible 17 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 2015 El Dorado Refinery (1) Tyler Refinery (1) Inlan
Slide 18: Asset Overview: Lion Pipeline System and SALA Gathering
Asset Overview: Lion Pipeline System and SALA Gathering 18 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. • Crude pri
Slide 19: Asset Overview: Terminalling and West Texas Wholesale Business
Asset Overview: Terminalling and West Texas Wholesale Business 19 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. 19 13
Slide 20: Asset Overview: Paline Pipeline
Asset Overview: Paline Pipeline 20 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 FERC tariff in place and actively marketing available
Slide 21: Summary of Certain Contracts
Summary of Certain Contracts (8) 21 Initial / Maximum Term (1) Service 9 Months Ended Sept. 30, 2016 Throughput (bpd)(2) Minimum Commitment (bpd) Current Tariff / Fee Tariff / Fee Index (10) Refinery Shutdown Force Majeure N/A N/A FERC N/A N/A N/A N/A Five / Fifteen Years Crude Oil Transportation 55
Slide 22: Summary of Certain Contracts - footnotes
Summary of Certain Contracts - footnotes 22 (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 23: Amended and Restated Omnibus Agreement Key Provisions
Amended and Restated Omnibus Agreement 23 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 24: Summary Organization Structure
Summary Organization Structure 24 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 25: Income Statement and Non-GAAP EBITDA Reconciliation
Income Statement and Non-GAAP EBITDA Reconciliation 25 (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 26: Reconciliation of Cash Available for Distribution
Reconciliation of Cash Available for Distribution 26 (1) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013, 2014, 2015 and year to date 2016 based on actual amounts distributed during the periods; does not include a LTIP accrual. Coverage is defi
Slide 27: Non GAAP Reconciliations of Potential Dropdown EBITDA
Non GAAP Reconciliations of Potential Dropdown EBITDA (1) 27 (1) Based on projected range of potential future logistics assets that could be dropped to Delek Logistics from Delek US in the future. Amounts of EBITDA, net income and timing will vary, which will affect the potential future EBITDA and a
Slide 28: Investor Relations Contact
28 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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