Form 8-K Delek US Holdings, Inc. For: Sep 02
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 2, 2016
DELEK US HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation) | 001-32868 (Commission File Number) | 52-2319066 (IRS Employer Identification No.) |
7102 Commerce Way Brentwood, Tennessee (Address of principal executive offices) | 37027 (Zip Code) |
Registrant's telephone number, including area code: (615) 771-6701
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On September 2, 2016, Assaf Ginzburg notified the registrant, Delek US Holdings, Inc. (the “Company”), that he will resign his employment with the Company and service as the Company’s executive vice president and chief financial officer effective November 4, 2016 (the “Effective Date”). The Company has accepted Mr. Ginzburg’s resignation as of the Effective Date. After the Effective Date, Mr. Ginzburg will continue as a member of the board of directors of the Company’s subsidiary, Delek Logistics GP, LLC which is the general partner of Delek Logistics Partners, LP. Mr. Ginzburg has served as the Company’s chief financial officer since January 2013, as an executive vice president of the Company since May 2009 and as a vice president of the Company since February 2005. A copy of the press release announcing Mr. Ginzburg’s resignation is attached as Exhibit 99.1 hereto.
Item 7.01 | Regulation FD Disclosure. |
Effective September 2, 2016, senior management of Delek US Holdings, Inc. (the “Company”) will begin using the materials included in Exhibit 99.2 to this report (the “Investor Presentation”) in connection with presentations to existing and prospective investors. The Investor Presentation is incorporated into this Item 7.01 by this reference and will also be available on the Company's website at www.delekus.com.
The information in this Item 7.01 is being furnished, not filed, pursuant to Regulation FD. Accordingly, the information in Item 7.01 of this report will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Company that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company or any of its affiliates.
Forward-Looking Statements
This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning our possible future results of operations, business and growth strategies and statements of management's goals and objectives, and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “appears,” “projects” and similar expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to:
• | volatility in our refining margins or fuel gross profit as a result of changes in the prices of crude oil, other feedstocks and refined petroleum products; |
• | our ability to execute our strategy of growth through acquisitions and the transactional risks inherent in such acquisitions; |
• | acquired assets may suffer a diminishment in fair value, which may require us to record a write-down or impairment; |
• | reliability of our operating assets; |
• | competition; |
• | changes in, or the failure to comply with, the extensive government regulations applicable to our industry segments; |
• | diminution in value of long-lived assets may result in an impairment in the carrying value of the asset on our balance sheet and a resultant loss recognized in the statement of operations; |
• | general economic and business conditions, particularly levels of spending relating to travel and tourism or conditions affecting the southeastern United States; |
• | volatility of derivative instruments; |
• | dependence on one wholesaler for a significant portion of our convenience store merchandise; |
• | deterioration of creditworthiness or overall financial condition of a material counterparty (or counterparties); |
• | unanticipated increases in cost or scope of, or significant delays in the completion of, our capital and periodic turnaround projects; |
• | risks and uncertainties with respect to the quantities and costs of refined petroleum products supplied to our pipelines and/or held in our terminals; |
• | operating hazards, natural disasters, casualty losses and other matters beyond our control; |
• | increases in our debt levels or costs; |
• | changes in our ability to continue to access the credit markets; |
• | compliance, or failure to comply, with restrictive and financial covenants in our various debt agreements; |
• | the inability of our subsidiaries to freely make dividends, loans or other cash distributions to us; |
• | seasonality; |
• | acts of terrorism aimed at either our facilities or other facilities that could impair our ability to produce or transport refined products or receive feedstocks; |
• | changes in the cost or availability of transportation for feedstocks and refined products; and |
• | other factors discussed in our other filings with the United States Securities and Exchange Commission. |
In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition.
Forward-looking statements speak only as of the date the statements are made. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(a) | Financial statements of businesses acquired. |
Not applicable.
(b) | Pro forma financial information. |
Not applicable.
(c) | Shell company transactions. |
Not applicable.
(d) | Exhibits. |
99.1 Joint press release of Delek US Holdings, Inc. and Delek Logistics Partners, LP issued on September 2, 2016.
99.2 Investor presentation materials to be used beginning September 2, 2016.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: September 2, 2016 | DELEK US HOLDINGS, INC. |
/s/ Assaf Ginzburg | |
Name: Assaf Ginzburg | |
Title: EVP / Chief Financial Officer | |
EXHIBIT INDEX
Exhibit No. Description
99.1 Joint press release of Delek US Holdings, Inc. and Delek Logistics Partners, LP issued on September 2, 2016.
99.2 Investor presentation materials to be used beginning September 2, 2016.
Delek US and Delek Logistics Announce CFO Transition Plan
Ginzburg to Remain Until November 4, 2016 and Search for Successor in Progress
Brentwood, Tennessee - September 2, 2016 -- Delek US Holdings, Inc. (NYSE: DK) and Delek Logistics Partners, LP (NYSE: DKL) (collectively with Delek US Holdings, Inc., “Delek”) announced that Executive Vice President and Chief Financial Officer Assi Ginzburg has decided to resign his role as chief financial officer effective November 4, 2016 to pursue a new Israeli-based opportunity. Delek has commenced the process of identifying Mr. Ginzburg’s successor.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US Holdings, Inc. and Chairman and Chief Executive Officer of the general partner of Delek Logistics Partners, LP said “On behalf of everyone at Delek, I want to thank Assi for his years of service to our companies. Assi has been a friend and partner of mine for many years, and he has been an integral part of our growth and development since joining us in 2004. He has also served in numerous management capacities and provided solid financial leadership since becoming our CFO in 2013. During this time, we completed a multi-year investment strategy in refining, we grew Delek Logistics Partners, LP and, most recently, we completed steps to unlock the value of our retail assets while positioning us for future growth. We wish him all the best in his future endeavors.”
Assi Ginzburg, Executive Vice President and Chief Financial Officer of Delek US Holdings, Inc. and the general partner of Delek Logistics Partners, LP said “I am excited about the new opportunity, but this was not an easy decision for me and my family. Over the last twelve years, we have developed friends and relationships at Delek that we will miss. I am proud of what we accomplished and would like to thank the board, management, and my friend Uzi, for the opportunity to be part of this great company and its development. I leave the Company in a strong financial position and feel confident that the Delek team has the right strategy and is well positioned to create long-term value for shareholders.”
Following his departure, Mr. Ginzburg will remain as a member of the board of directors of Delek Logistics GP, LLC, the general partner of Delek Logistics Partners, LP.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics and convenience store retailing. The refining segment consists of refineries operated in Tyler, Texas and El Dorado, Arkansas with a combined nameplate production capacity of 155,000 barrels per day. Delek US Holdings, Inc. and its affiliates also own approximately 62 percent (including the 2 percent general partner interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP (NYSE: DKL) is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. The retail segment markets motor fuel and convenience merchandise through a network of approximately 348 company-operated convenience store locations operated under the MAPCO Express®, MAPCO Mart®, East Coast®, Fast Food and Fuel™, Favorite Markets®, Delta Express® and Discount Food Mart™ brand names. Delek US Holdings, Inc. also owns approximately 48 percent of the outstanding common stock of Alon USA Energy, Inc. (NYSE: ALJ).
About Delek Logistics Partners, LP
Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, was formed by Delek US Holdings, Inc. (NYSE: DK) to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance,
prospects and opportunities and other statements, concerns, or matters that are not historical facts are “forward-looking statements,” as that term is defined under the federal securities laws.
Investors are cautioned that the following important factors, among others, may affect these forward-looking statements. These factors include but are not limited to: risks and uncertainties with respect to the quantities and costs of crude oil we are able to obtain and the price of the refined petroleum products we ultimately sell; gains and losses from derivative instruments; changes in the scope, costs, and/or timing of capital and maintenance projects; management’s ability to execute its strategy of growth through acquisitions and the transactional risks associated with acquisitions; acquired assets may suffer a diminishment in fair value as a result of which we may need to record a write-down or impairment in carrying value of the asset on the balance sheet and a resultant loss recognized in the statement of operations; the effect on our financial results by the financial results of Alon USA Energy, Inc., in which we hold a significant equity investment; operating hazards inherent in transporting, storing and processing crude oil and intermediate and finished petroleum products; our competitive position and the effects of competition; the projected growth of the industries in which we operate; general economic and business conditions, particularly levels of spending relating to travel and tourism or conditions affecting the southeastern United States; and other risks contained in our filings with the United States Securities and Exchange Commission.
Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at or by which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Delek US undertakes no obligation to update or revise any such forward-looking statements.
Contact:
U.S. Investor / Media Relations Contact:
Keith Johnson
Delek US Holdings, Inc.
Vice President of Investor Relations
615-435-1366
Investor Presentation
Delek US Holdings
September 2016
Disclaimers
2
Delek US Holdings, Inc. (“Delek US”) and Delek Logistics Partners, LP (defined as “we”, “our”) are traded on the New York Stock Exchange in the
United States under the symbols “DK” and ”DKL” respectively, and, as such, are governed by the rules and regulations of the United States
Securities and Exchange Commission. These slides and any accompanying oral and written presentations contain forward-looking statements that
are based upon our current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations
and projections about our future results, performance, prospects and opportunities and other statements, concerns, or matters that are not
historical facts are “forward-looking statements,” as that term is defined under United States securities laws.
Investors are cautioned that the following important factors, among others, may affect these forward-looking statements. These factors include
but are not limited to: risks and uncertainties with the respect to the quantities and costs of crude oil, the costs to acquire feedstocks and the price
of the refined petroleum products we ultimately sell; losses from derivative instruments; management's ability to execute its strategy through
acquisitions and transactional risks in acquisitions and dispositions; acquired assets may suffer a diminishment in fair value as a result of which we
may need to record a write-down or impairment in carrying value of the asset; the effect on our financial results by the financial results of Alon
USA Energy, Inc., in which we hold a significant equity investment; our competitive position and the effects of competition; the projected growth
of the industry in which we operate; changes in the scope, costs, and/or timing of capital projects; operational hazards of our assets including,
without limitation, costs, penalties, regulatory or legal actions and other affects related to releases, spills and other hazards inherent in
transporting and storing crude oil and intermediate and finished petroleum products; general economic and business conditions, particularly levels
of spending relating to travel and tourism or conditions affecting the southeastern United States; and other risks contained in our filings with the
United States Securities and Exchange Commission.
Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times
at, or by which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or
management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or
results to differ materially from those expressed in the statements. Neither Delek US nor Delek Logistics Partners undertakes any obligation to
update or revise any such forward-looking statements.
Non-GAAP Disclosures:
Delek US believes that the presentation of EBITDA provides useful information to investors in assessing its financial condition, its results of
operations and cash flow its business is generating. EBITDA should not be considered as alternatives to net income, operating income, cash from
operations or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. EBITDA has important limitations
as an analytical tool because it excludes some, but not all items that affect net income. Additionally, because EBITDA may be defined differently by
other companies in its industry, Delek US' definitions of EBITDA may not be comparable to similarly titled measures of other companies, thereby
diminishing its utility. Please see reconciliations of EBITDA to its most directly comparable financial measures calculated and presented in
accordance with U.S. GAAP in the appendix.
REFINING
Delek US Holdings Overview
3
Crude Sourcing/Logistics Flexibility
• Pipeline Access:
Midland (105,000 bpd in
system)
Gulf Coast and Cushing
• Gathered Barrels:
Local barrels in Arkansas/
North Louisiana
East and West Texas
• Rail Capability at El Dorado
Up to 45,000 BPD of light
crude(1) ;Ability to offload
heavy Canadian crude
Synergies Created through integration:
Logistics assets support
operations and create growth
options
Refinery locations allow
ability to optimize the system
155,000 BPD in total
El Dorado, AR
80,000 BPD
10.2 complexity
Tyler, TX
75,000 BPD
8.7 complexity
348 Stores
Locations in 7 states
TN, AL, GA, AR, KY, MS, VA
On Aug. 29, 2016 a definitive
agreement announced to sell its
retail related assets for $535.0m
RETAIL
9 Terminals
Approx. 1,250 miles of pipelines
8.5 million bbls storage capacity
LOGISTICS (2)
Strategic crude oil supply point
that allows our refining system
access to domestic inland and
Gulf Coast feedstocks
LONGVIEW CRUDE OIL HUB
Mid-Continent Downstream Energy Company
Own approx. 48% of outstanding shares of
Alon (NYSE: ALJ):
Refining - 217,000 bpd capacity
Retail - approx. 306 stores in the southwest
US
Asphalt- 11 terminals in the southwest US
Alon Investment (3)
(1) Rail supplied light crude capability consists of 25,000 bpd of light crude or 12,000 bpd heavy crude offloading that is available at a facility owned by Delek Logistics adjacent to the El Dorado refinery. In addition, 20,000
bpd light crude capability is currently available via a third party facility adjacent to the El Dorado refinery.
(2) Delek Logistics Partners, LP (NYSE:DKL) began operating on Nov. 7, 2012 and, from that date, 100% of its performance has been reported as a segment of Delek US. Delek US and its affiliates own approximately 62%,
including the 2.0% general partner interest, of DKL. Storage and pipeline amounts are based on total DKL assets.
(3) Please see page 30 for additional information. Approximately 70,000 bpd of refining capacity is not currently operating.
Delek US Investment Highlights
4
• Crude nameplate capacity increased by 15 kbpd to 155 kpbd in 2015
• Turnarounds completed and FCC reactors replaced at both refineries
• Declining capital expenditure needs; No scheduled turnarounds until
2019/2020
Refining
Increased capacity and improved
flexibility
• Achieved LTM Net Income of $68.2 million and EBITDA of $100.5
million as of 2Q 2016
• Distribution increased 14 consecutive quarters to $0.63/unit
• In 50%/50% IDR splits for amounts above $0.5625/unit
Logistics
Growing distribution
(Delek Logistics Partners (NYSE: DKL) (1)
• Cash balance of approximately $377 million
• Debt of approx. $941 million, including $363 million at DKL
• Net debt (excl. DKL) of $201 million
Conservative Financial
Position (2)
• 69 large format stores in 348 store network
• Approx. 65% of 2015 fuel needs supplied by refining segment
• On August 29, 2016 announced definitive agreement to sell for $535.0
million
Retail
Unlocking Value
• Acquired 48% of outstanding shares, of Alon USA Energy (NYSE: ALJ)
(“Alon USA”) on May 14, 2015.
• 4 third party logistics acquisitions; Exploring other opportunities
• Proven ability to buy at right time and integrate into system
Growth Focus Through
Acquisitions
1) Delek Logistics Partners, LP (NYSE:DKL) began operating on Nov. 7, 2012 and, from that date, 100% of its performance has been reported as a segment of Delek
US. Delek US and its affiliates own approximately 62%, including the 2.0% general partner interest, of DKL. EBITDA based on 2Q16 results.
2) Based on 6/30/16 balance sheet.
2016 Initiatives to Create Value and Improve Financial Flexibility
5
• Total capital expenditure expected to be $63.9 million in 2016
• Reduced from $218.6 million in 2015 and $256.9 million in 2014
• Completed large invest program in refining in 2015
• No scheduled turnarounds until 2019/2020
Reduced Capital
Expenditures
• Experienced a $21 million year-over-year decline in operating expense
and overhead in 2Q16; partially due to cost reduction initiatives
• Initiatives focused on cost controls and procurement savings
• Cost management benefits from operating reliability
Focused on Cost
Management
• Reliability consistent with 1st quartile performance in recent Solomon
study (1)
• Benefitting from past capital projects completed in turnarounds
• Implemented Reliability Asset Management system
• Reduces downtime in the operating units and operating expense
Improving Reliability in
Refining
• On August 29, 2016 announced definitive agreement to sell for $535.0
million
• Equates to approximately 12.7x EBITDA multiple (2)
• Compares to other retail transaction in the 11x EBITDA multiple range (3)
Unlocked Value of Retail
Assets
• Sequential improvement in capture rate at refineries in 2Q16 from 1Q16
• Efforts focused on reducing RINs exposure
• Optimize crude slate in refining system
Commercial Initiatives
Underway
1) As measured by operational availability
2) Based on midpoint of previous EBITDA guidance range of $40 million to $45 million from the retail assets.
3) Please see page 6 for more information.
Retail Transaction Summary
MAPCO Sale Transaction
Retail segment and associated logistics entities to be sold to
Compañía de Petróleos de Chile COPEC S.A. (SNSE:COPEC)
$535 million in cash plus MAPCO cash on hand at close ($13 million
at 6/30/16)
Represents EBITDA multiple of approximately 12.7x (1)
Anticipated to close by year end
Retail segment is primarily comprised of MAPCO Express
convenience store chain with 348 corporate stores operating
primarily in Tennessee, Alabama and Georgia
Associated entities at MAPCO provide logistical fuel transportation
to MAPCO and third parties with approximately 50 tractors and
trailers
Delek will continue to supply fuel to certain MAPCO retail locations
under an 18-month supply agreement
•Retains wholesale business and space on the Colonial
pipeline system
•Consolidated RINs balance should not be significantly
changed by this transaction
Select Precedent C-Store Transactions
(1) Based on midpoint of previous EBITDA guidance range of $40 million to $45 million from the retail assets.
(2) All figures as of June 30, 2016
Banners Under the MAPCO Brand
Overview of MAPCO (2)
$1,414 Million
LTM
Revenue
142 / 65
Total Dealer Locations
/ Contracted Dealer
Locations
459 Million
Retail Fuel Gallons
Sold in LTM
$67 Million
LTM Contribution
Margin
(1) Transaction value excludes value of LP units owned by Susser Holdings in Susser Petroleum Partners LP (""SUSP""); net
debt of SUSP also excluded. ETP also acquired general partner of SUSP in transaction, and no value attributable to
general partner removed from transaction value. LTM EBITDA deducts $51 million SUSP EBITDA from $172 million
consolidated EBITDA and adds $5 million public company cost savings (per ETP investor presentation) only, and
excludes all other synergies, expected to total $65 million.
(2) Based on 2013 pro forma EBITDA from Form 10. Acquiror announced significant expected synergies of $190 million,
which imply a fully synergized multiple of 7.9x, to justify the premium multiple.
(3) Acquiror announced expected doubling to tripling of EBITDA (to $50-$60 million) within the second full year of operations,
which would imply a multiple of 6.5x-7.7x.
(4) Based on Wall Street Research date 5/6/16.
(5) $ in millions
A nno uncement D ate
Apr 2014 M ay 2014 Sep 2014 Sep 2014 Oct 2014 Dec 2014 M ay 2016 Aug 2016
T arget
Susser
Holdings
Hess
Corporation
Pioneer
Energy
Aloha
Petro leum
Warren
Equities, Inc.
Pantry, Inc.
79 CST
Stores
CST Brands
A cquiro r
Energy
Transfer
Partners
M arathon
Petro leum
Corporation
Parkland
Fuel
Corporation
Sunoco LP
Global
Partners, LP
Alimentation
Couche-Tard
7-Eleven, Inc.
Alimentation
Couche-Tard
Enterpise Value
$1,641 $2,863 $378 $240 $387 $1,725 $408 $4,278
13.6x
16.4x
6.9x
7.9x
19.3x
7.8x
~11.8x
10.4x
Median: 11.1x
(1)
(2)
(3)
(4)
6
(5)
Financial flexibility supports ability to explore opportunities
Delek US Focused on Creating Long Term Shareholder Value
7
$535 million(1) retail transaction should reduce debt
and improve cash position
– Debt associated with the retail assets will be repaid from
proceeds at closing. At 6/30/16 retail related debt was
approximately $160.0 million
– Based on 6/30/16 debt; net cash of $375.0 million before
taxes and fees generated by retail transaction
Enhances ability to evaluate strategic opportunities:
– Refining
• Challenging refining environment may create opportunities to
acquire assets
• Broaden system and asset diversity
– Logistics
• Evaluate third party acquisitions and organic projects
• Focus on increasing product terminals complementary to
geographic area
• Increase exposure to Permian basin logistics assets
• Corporate transactions may offer growth opportunities
1) Proceeds are before taxes and fees are deducted.
Delek US Net Debt Position
6/30/16
Cash $377.1
Total Debt 941.4
Net Debt (Cash) 564.3
DKL Debt 362.6
Net Debt (Cash)
excluding DKL $201.7
Refining Segment
Operational Update
Supports High Refining Utilization
Refineries Serve Local Niche Markets
9
0
50
100
150
200
250
300
350
400
450
500
1Q1
3
2Q1
3
3Q1
3
4Q1
3
1Q1
4
2Q1
4
3Q1
4
4Q1
4
1Q1
5
2Q1
5
3Q1
5
4Q1
5
1Q1
6
2Q1
6
Delek Logistics Partners terminals support
refining system:
Tyler primarily serves a 100 mile radius
El Dorado has access to local markets, as
well as Little Rock and Memphis
Local market netbacks higher than Gulf Coast
basis
Colonial Pipeline space has increased access to
Southeastern market
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
Ja
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-1
3
Ap
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3
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13
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3
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A
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r-14
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Delek US – Monthly Colonial Pipeline Space, (000 bbls) Gasoline Price Differential – NYMEX less Gulf Coast(1)
Improving Niche Markets
1) Source for gasoline price differential is Platts with NYMEX RBOB and Gulf Coast CBOB average posted prices through August 31, 2016.
Approximately 80% of crude slate consists of Midland and local crude supply
Increased Access to Cost Advantaged Crude
10
45.0 45.0
87.0 105.0 107.0 17.2 17.9
18.6
17.2 16.0
0
50
100
150
200
2012 2013 2014 2015 2016E
In
0
0
0
b
p
d
Midland Local Crude Throughput Capacity
$(3.31)
$(2.71)
$(6.11)
$(1.43) $(1.67) $(1.61) $(1.25) $(1.20) $(1.06)
2012 2013 2014 2015 1Q16 2Q16 Jul. Aug. Sep.
Improved access to cost advantaged crude
(Midland/local) in refining system
Midland recently trading near parity with Cushing
Long term outlook for Midland approximately $1-
$2/bbl under Cushing
Ability to access Gulf Coast crude for El Dorado
Refining margin competitive due to:
Cost advantaged crude supply
Serve niche markets
Target to reduce operating expenses per barrel
WTI Midland vs WTI Cushing, $/bbl (1)
Increasing Access to Cost Advantage Crude
1) Differential includes contango of $0.40/bbl (2012); contango of $0.07/bbl (2013); backwardation of $0.77/bbl (2014); contango of $0.97/bbl (2015); $1.80 (1Q16).; $1.43 (2Q16); $0.72
(Jul), $0.90 (Aug.); $0.93(Sep) Source: Argus – as of August 31, 2016; NYMEX futures settle prices.
2) Crack spread based on WTI crude oil and Gulf Coast pricing, using HSD. Current crack spread based on August 31, 2016.
WTI Gulf Coast 5-3-2 Crack Spread(2)
Periods incl. backwardation/contango
$0
$5
$10
$15
$20
$25
Ju
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Initiatives Underway to Improve Asset Performance
11
Consistent focus on factors under our control
•Next turnarounds in
2019 and 2020
•No large capital
projects scheduled
• Primarily maintenance
focused capital spend
•Procurement strategies
•Reduce overhead and
operating expenses
• Expand local footprint
•Minimize RINs
exposure
•Balance
production/demand
•Optimize Crude slate
• Safety
• Improve yields
•Maximize high value
products
•Reliability/Utilization
focused
Asset
Optimization
Commercial
Capital
Spending
Costs Control
Increased crude throughput capacity and operating flexibility
Refining Capital Investment Program Improved Operations
12
Large investment cycle in refining now
completed
Capital expenditure needs declining from 2015
level
2016E based on maintenance and regulatory
spending
Projects completed during 2014 and 2015
included:
Turnarounds completed at both refineries
Improved crude oil processing flexibility
Increased crude throughput capacity
Since 2012 increased light crude processing
capability by 27% based on 2015 capacity
ULSD capability improve by 37% by expanding
the DHT
$46.1
$123.6
$199.1
$164.5
$27.8
2012A 2013A 2014A 2015 2016E*
Historical Capital Spending
($ in millions)
Note: Amounts represent spending in the refining segment. Periods have been restated to reflect logistic assets that were dropped down to Delek
Logistics Partners since its inception in 2012 including tank farms, terminals and rail offloading racks.
(1) 2012 and 2013 volume based on actual crude throughput. 2014 and 2015 based on total capability of the system.
122 124
140
155
52 52 60
71
2012 2013 2014 2015
Light Crude Processing DHT
(in 000 bpd)
Light Crude Processing and DHT Capacity Increased (1)
*2016 includes sustaining maintenance, regulatory and discretionary related spending. No significant growth related capital
expenditures in the forecast.
54% 55% 54% 52% 54%
39% 39% 40% 41% 39%
7% 6% 6% 7% 7%
0%
20%
40%
60%
80%
100%
120%
2013 2014 2015 2Q15 2Q16
Gasoline Diesel Petro/Other
62,304 65,523 60,704 72,358 74,130
Tyler Refinery Overview
13
Overview
Niche market generally priced above Gulf Coast;
supported by Delek Logistics' terminals
Crude slate consists of approx. 65 kbpd Midland
sourced crude; plus east Texas and Cushing crudes
Completed schedule turnaround in March 2015;
FCC reactor replaced; next scheduled turnaround
2020
15 kbpd crude processing expansion completed in
March 2015
Achieved 75 kbpd crude throughput rate
Product yield in line with pre-expansion level
Focus on balancing expanded production level
with refining margin to maximize capture rate
75,000 bpd niche refinery serving Tyler, Texas and surrounding area
Total Production, bpd
$4.63 $4.41 $4.52
$3.82
$3.29
2013 2014 2015 2Q15 2Q15
Operating Expense Per Barrel Sold
Note: Delek US capture rate is defined as refining gross margin per barrel divided by WTI Gulf Coast 5-3-2 crack spread.
*1Q15 affected by scheduled turnaround that reduced throughput
and barrels sold.
80,000 bpd refinery with crude slate flexibility to process light and medium gravity crudes
El Dorado Refinery Overview
14
1) COPEC is a wholly owned subsidiary of Empresas COPEC S.A, which owns and operates convenience stores in Chile, Columbia, Panama,
Ecuador, Peru and Mexico. On Aug. 29, 2016 Delek US announced an agreement to sell its retail related business to COPEC.
Overview
Inland PADD III refinery located in Southern
Arkansas
Flexible crude sourcing
Access to Gulf Cost crudes beginning
in August 2016
Midland, local Arkansas, east Texas
Rail offloading capability
Mid Valley and Exxon North crude oil
pipeline access
Ability to support a portion of retail fuel
needs on direct/indirect basis through 18
month supply agreement with COPEC (1)
Improved flexibility and throughput in 1Q 2014
turnaround; next scheduled turnaround 2019
Pre-flash tower project improved light
crude processing capability to
approximately 80,000 bpd
Replaced FCC reactor with state of the art
technology
49% 50% 52% 51% 54%
38% 39% 37% 37%
37%
11% 9% 8% 9% 6%
3% 2% 3% 3% 2%
0
0
0
1
1
1
1
2013 2014 2015 2Q15 2Q16
Gasoline Diesel Asphalt Petro/Other
71,642 71,286 77,806 78,789 73,460
Total Production, bpd
$4.06 $3.94 $3.97 $4.23
$3.52
2013 2014 2015 2Q15 2Q16
Operating Expense Per Barrel Sold
Logistics
Operational Update
Strategic Partner in Delek Logistics Partners, LP (NYSE: DKL)
16
Delek Logistics Partners , LP (NYSE:DKL) began operating on Nov. 7, 2012 and 100% of its performance is reported as a segment of Delek US beginning 4Q12. Delek US and its affiliates own
approximately 62%, including the 2.0% general partner interest, of DKL. Please see the public filings of DKL for additional information and risks associated with DKL.
Note: Storage and pipeline amounts based on the pipeline and transportation segment and wholesale marketing and terminalling segment.
1. Includes approximately 240 miles of leased pipeline capacity
~ 765 miles (1) of
crude/product
transportation
pipelines, includes
the 195 mile crude
oil pipeline from
Longview to
Nederland, TX
~ 600 mile crude oil
gathering system in
AR/North LA
Rail offloading facility
Pipelines Assets
Storage facilities
with 8.5 million
barrels of active
shell capacity
Storage Assets
Wholesale and
marketing business
in Texas
9 light product
terminals:
TX, TN,AR
Wholesale/
Terminal Assets
Growing logistics assets support crude sourcing and product marketing
DKL: Joint Venture Pipeline Projects
17
Caddo Pipeline
■ DKL (50%)/Plains (50%)
■ Est. total cost: $120 million (1)
■ Capacity: 80,000 bpd
■ Length: 80 miles
■ Expected Completion: January
2017
Rio Pipeline
■ Rangeland (67%)/ DKL (33%)
■ Est. total cost: $119 million (1)
■ Capacity: 55,000 bpd
■ Length: 107 miles
■ Expected Completion: Aug. 2016
(1) Estimated investment, pending changes due to revisions in construction schedule and final construction cost of Caddo. Based latest information provided by Delek Logistics Partners in its
August 2016 investor presentation.
(2)Target EBITDA multiple. Actual performance will vary based on market conditions and operations which may change the actual multiple in future periods.
■ DKL targets EBITDA multiple is 8x to 10x investment at the joint venture level (2)
Increased Distribution with Conservative Coverage and Leverage
18
(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 page 34 for reconciliation.
(3) 2Q16 based on total distributions paid on August 12, 2016.
(4) Leverage ratio based on LTM EBITDA as defined by credit facility covenants for respective periods from DKL investor presentation.
Distribution has been increased fourteen consecutive times since the IPO
Distributable Cash Flow Coverage Ratio (2)(3)
DKL Revolver Leverage Ratio (4)
$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 14 4Q 14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
1.39x 1.32x 1.38x 1.30x
1.61x
2.01x
1.42x
1.67x
1.23x
1.47x 1.50x
1.17x 1.19x 1.31x
1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q15 1Q16 2Q16
Avg. 1.35x in 2013
Avg. 1.69x in 2014
Avg. 1.37x in 2015
1.70x 1.58x
2.28x 2.40x
3.21x
2.69x
2.55x 2.56x
3.00x 3.14x 3.11x
3.49x
3.48x 3.47x
1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16
19
Marginal Percentage Interest in Distributions
Assumed Distribution per Limited Partner Unit if
Delek Logistics Meets 15% Annual Growth Target (1)
Delek Logistics GP Incentive Distribution Rights
Total Quarterly Distribution Per Unit
Target Amount
Unitholders General Partner
Minimum Quarterly Distribution below $0.37500 98.0% 2.0%
First Target Distribution $0.37500 to $0.43125 98.0% 2.0%
Second Target Distribution $0.43125 to $0.46875 85.0% 15.0%
Third Target Distribution $0.46875 to $0.56250 75.0% 25.0%
Thereafter above $0.56250 50.0% 50.0%
Paid Distribution $0.63
for 2Q 2016
Delek US Ownership:
LP Units: 14,798,516
GP Units: 495,975
(1) Based on no change in number of units and assumes all units are paid distribution, including IDRs to Delek US and its affiliates. Targeted annual growth rate in distribution based on 15%
(per DKL target in 4Q15 earnings press release) from 2015 4Q distribution of $0.59 per unit ($2.36 annualized) to 2016. Delek US and affiliates own approximately 60% of limited partner
units and 100% of the general partner units. Information for illustrative purposes only, actual amounts will be determined by Delek Logistics based on future performance and pursuant to
its partnership agreement.
Assumed Annual Distribution (LP and GP) to Delek US
if Delek Logistics Meets 15% Annual Growth Target (1)
$1.50 $1.60
$1.90
$2.24
$2.58
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
MQD
annualized
2013A 2014A 2015A 2016E
Distribution per LP unit
$28.1
$33.1 $37.4
$1.9
$5.0
$12.4
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2014 2015 2016E
Distribution - LP Distribution - GP
$ in millions
+7%
+19%
+18%
+15%
Retail
Operational Update
Fuel Gallons Sold Per Store (000’s)
1,112
1,204 1,274
623 640
2013 2014 2015 2Q15 YTD 2Q16 YTD
1,037
1,106 1,169
564 594
2013 2014 2015 2Q15 YTD 2Q16 YTD
Retail Operations
21
Merchandise Sales Per Store ($000’s)
Tennessee
187 locations
Virginia
8 locations
Kentucky and
Mississippi
10 locations
Arkansas
12 locations
Tyler
Georgia
42 locations El Dorado
Red border indicates
region for future growth
Alabama
89 locations
Markets gasoline, diesel and merchandise
through a network of retail fuel and convenience
stores throughout the southeastern U.S.
Operates 348 stores throughout seven states
Ability to supply fuel gallons to stores from
refining and product logistics at Delek US
Currently undergoing multi-year store
enhancement initiative
62% of stores re-imaged or newly
constructed
Definitive agreement to sell retail related assets
for $535 million announced on Aug. 29, 2016 to
COPEC
Note: COPEC is a wholly owned subsidiary of Empresas COPEC S.A, which owns and operates convenience stores in Chile, Columbia, Panama, Ecuador, Peru and
Mexico.
Financial Update
Financial Highlights
At June 30, 2016
Cash of $377.1 million; Debt of $941.1 million
Includes $362.6 million of debt at Delek Logistics
(DKL)
Excluding DKL, Delek US’ net debt position was
approximately $201.7 million
Capital allocation focused on cash returned to
shareholders, acquisitions and capital program
$125 million share repurchase plan authorized in
2016
Repurchase programs in 2013 to 2015
Total of $37 million of dividends paid in 2015
Completed large capital spending program in 2015
Invested in operations for long term growth;
$257 million of capital expenditures in 2014;
$219 million in 2015
Forecast 2016 capital spending of $63.9million
Definitive agreement to sell retail related assets for
$535 million(1) announced on Aug. 29, 2016
Improves financial flexibility
Cash Balance ($MM)
Capital Invested in the Business and Returned to Shareholders
23
$68 $49
$226
$602
$400 $444
$302
$350
$377
2009 2010 2011 2012 2013 2014 2015 1Q16 2Q16
Dividends Declared ($/share)
$0.15 $0.15 $0.15 $0.21
$0.40
$0.60 $0.60 $0.60
$0.18
$0.39
$0.55
$0.40
$0.15 $0.15
$0.33
$0.60
$0.95 $1.00
$0.60 $0.60
2009 2010 2011 2012 2013 2014 2015 2Q16 LTM
Regular Special
$37
$75
$42
$6
2013 2014 2015 YTD 2Q16
Share Repurchases ($MM)
1) Proceeds are before taxes and fees are deducted.
Increases potential free cash flow generation from operations
$18.8
$74.9
$61.6
$82.9
$155.1
$42.3 $36.0
$46.1
$123.6
$199.1
$164.5
$27.8
$0.2
$0.3
$0.9
$0.5
$0.9
$30.3
$25.8
$9.2
$18.6
$14.3
$10.4
$21.4
$23.3
$18.6
$14.3
$14.4
$36.5
$29.1
$37.9
$26.2
$18.3
$13.2
$2.0
$0.1
$0.1
$7.6
$26.5
$35.0
$22.4
$17.2
$8.6
2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016E
Refining Logistics (Marketing) Retail Other
Declining Capital Needs
24
$56.8
$81.0
$132.0
$222.3
Source: Company filings.
$256.9
$218.6
$170.0
$102.4
$87.2 $96.5
$29.2
($ in millions)
*2016 estimate represents sustaining maintenance, regulatory and some discretionary related spending projects. No
significant growth related capital expenditures are included in the current forecast.
$63.9
Limited Value Attributed to Delek US Refining Assets in Current Environment
25
Creates attractive capital allocation opportunity
Refining, ($0.05) to
($0.215)
Retail, $0.535
GP, $0.12 to $0.28
ALJ, $0.30
DKL, $0.40
-$0.3
$0.0
$0.3
$0.6
$0.9
$1.2
$1.5
V
al
u
e,
$ in
b
ill
ion
s Delek US
Price: $17.55
X Shares: 62.1m
Market Cap: $1.1 B
+Debt (excl. DKL): $0.6
- Cash: $0.4
Enterprise Value: $1.3 B
DKL Value:
Price: $26.09
X Shares: 24.3m
Market Cap: $0.6 B
X 60% Ownership $0.4 B
ALJ Value:
Price: $8.18
X Shares: 70.9m
Market Cap: $0.6 B
X 48% Ownership $0.3 B
General Partner Estimated Value:
Est. Annual Distribution: $10.0m to $20.0m range
X Est. Multiple: 12.0x-14.0x
Estimated Value $0.120 B to $0.280 B
Retail Estimated Value:
Est. Annual EBITDA $40m to $45m range
Deal Value $0.535 B
Deal value is before taxes and fees are deducted
Remaining Value to refining
$1.3B EV
Notes:
• Share prices based on August 31, 2016 and shares outstanding, debt and cash balances as of June. 30, 2016. DKL debt of $362.6 million excluded from DK
enterprise value.
• Retail valuation based on estimated EBITDA range. Actual results will vary based on market conditions.
• GP Distribution range based on estimated amount if Delek Logistics (NYSE: DKL) meets its target of 15% annual growth in limited partner distributions in the
future based on DKL 2Q16 earnings release. Actual amounts paid in the future based on DKL performance and partnership agreement.
• Multiple ranges based on internal estimates.
26
Complementary
Logistics Systems
Significant Organic
Growth / Margin
Improvement
Opportunities
Focus on Shareholder
Returns
Strong Balance Sheet
Strategically Positioned
Refining Platform
Questions and Answers
Appendix
Additional Data
Delek US Focused on Growth through Acquisitions
(1) Includes logistic assets in purchase price. Purchase price includes working capital for refineries.
(2) Mt. Pleasant includes $1.1 million of inventory.
2006
Abilene & San Angelo
terminals
$55.1 mm
2012
Nettleton
Pipeline
$12.3 mm
2011
Paline Pipeline
$50 mm
Acquisition Completed
171 retail fuel &
convenience stores
& related assets
$157.3 mm
2005 to 2007 2011 to 2012 2013 to Current
Crude
Gathering
2013
Biodiesel
Facility
$5.3 mm
2011
Lion refinery &
related pipeline & terminals
$228.7 mm(1)
2005
Tyler refinery &
related assets
$68.1 mm(1)
2011 - 2014
Building new large format convenience stores
2013
Tyler-Big Sandy
Pipeline
$5.7 mm
2014
Biodiesel
Facility
$11.1 mm
Logistics Segment Retail Segment Refinery Segment
Crude
Logistics
Refining
Product
Logistics
Retail
2012
Big Sandy
terminal & pipeline
$11.0 mm
2013
North Little Rock
Product Terminal
$5.0 mm
2011
SALA Gathering
Lion Oil acquisition
Assets
P
u
rc
h
as
e
d
Increased Gathering
East and West Texas
28
2014
Mt. Pleasant
System
$11.1 mm (2)
2014
Frank
Thompson
Transport
$11.9 mm
2016 Completion
DKL Joint Ventures
Caddo Pipeline
RIO Pipeline
Exp. Inv.: ~$96.0 mm
2015
48%
ownership
in Alon USA
2015
48%
ownership
in Alon USA
29
Summary Organization Structure
(1) Currently a 4.90% interest in the Delek US ownership interest in the general partner is held by three members of senior management of Delek US. The remaining
ownership interest will be indirectly held by Delek.
Market cap based on share prices on August 31, 2016.
95.10%
ownership interest (1)
2.0% interest
General partner interest
Incentive distribution
rights
Delek Logistics Partners, LP
NYSE: DKL
Market Cap: $633 million
Delek Logistics GP, LLC
(the General Partner)
Delek US Holdings, Inc.
NYSE: DK
Market Cap: $1.1 billion
59.7% interest
Alon USA
NYSE: ALJ
Market Cap: $580 million
48% interest
30
0 122 176
146 208 80
0 176 80
255 192 0
0 128 0
127 211 141
158 211 215
185 58 7
127 127 127
Alon USA Investment
On May 14, 2015, Delek completed the
acquisition of approximately 33.7 million shares,
or approximately 48% of the outstanding shares,
of Alon USA Energy (NYSE: ALJ) (“Alon USA”)
common stock from Alon Israel Oil Company, Ltd.
(“Alon Israel”).
Five seats on the eleven-member Alon USA
board of directors, including chairman of
the board
Total consideration of approximately
$564.5 million(1); $200.0m cash(2), $145.0m
seller note; 6.0m DK shares
Potential next steps, including:
Acquire remaining 52% for 100%
ownership
Stock ratio (ALJ/DK) (4)
May 14, 2015 = 0.45x (deal closed)
August 31, 2016 = 0.47x
Focus on long term value creation
Shareholder agreement expired May 2016
No limitation on DK’s ownership interest of
ALJ after expiration
(1) Based upon a closing price of $36.59 per share of Delek US common stock on May 13, 2015.
(2) Payment was funded through a combination of cash on hand and an increase in Lion Oil’s term loan credit facility from $99.0 million to $275.0 million. The interest rate is based on LIBOR or
base rate plus applicable margins, subject in each case to an all-in interest rate floor of 5.5%
(3) Based on Alon USA publicly available information. Refineries in California are not currently operating.
(4) Ratio based on daily closing price. May 14, 2015 DK $38.46/shr and ALJ $17.16/shr = 0.446; August 31, 2016 DK $17.55/shr and ALJ $8.18/shr = 0.47
Key Retail Cities
Asphalt Terminal
Third-Party Terminal
Alon USA Terminal
Exchange Terminal
Refinery
Third-Party Pipelines
ALON USA
Alon Pipelines (idled)
Oklahoma
638167_1.wor [NY0086JT]
Texas
California
New Mexico
Arizona
Nevada
Oregon
Washington
Arkansas
Louisiana
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217,000 bpd of capacity
Big Spring
73,000 bpd
10.5 complexity
Krotz Springs
74,000 bpd
8.4 complexity
California (3)
70,000 bpd
9.2 complexity
Refining
Approx. 306 stores
Southwest US locations
Largest licensee of 7-
Eleven stores in the US
Retail
11 asphalt terminals
located in TX, WA, CA, AZ
and NV
the largest asphalt
supplier in CA and second
largest asphalt supplier in
TX
Asphalt
ALJ also owns 100% of the general partner and
81.6% of the limited partner interests in ALDW
ALDW owns the Big Spring refinery (aggregate
crude oil throughput capacity of 73,000 bpd)
Alon USA Partners (NYSE: ALDW)
Alon USA Asset Overview (3)
-$30
-$20
-$10
$0
$10
$20
$30
$40
$50
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M
a
y
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2
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u
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1
2
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2
O
c
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1
2
No
v
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J
a
n
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3
F
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b
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3
M
a
r-
1
3
A
pr
-1
3
M
a
y
-1
3
J
u
n
-1
3
J
u
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1
3
A
u
g
-1
3
S
e
p
-1
3
O
c
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1
3
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v
-1
3
De
c
-1
3
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a
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-1
4
F
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b
-1
4
M
a
r-
1
4
A
pr
-1
4
M
a
y
-1
4
J
u
n
-1
4
J
u
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1
4
A
u
g
-1
4
S
e
p
-1
4
O
c
t-
1
4
No
v
-1
4
De
c
-1
4
J
a
n
-1
5
F
e
b
-1
5
M
a
r-
1
5
A
pr
-1
5
M
a
y
-1
5
J
u
n
-1
5
J
u
l-
1
5
A
u
g
-1
5
S
e
p
-1
5
O
c
t-
1
5
No
v
-1
5
De
c
-1
5
J
a
n
-1
6
F
e
b
-1
6
M
a
r-
1
6
A
pr
-1
6
M
a
y
-1
6
J
u
n
-1
6
J
u
l-
1
6
A
u
g
-1
6
Brent-WTI Cushing Spread Per Barrel WTI 5-3-2 Gulf Coast Crack Spread Per Barrel LLS 5-3-2 Gulf Coast Crack Spread Per Barrel
U.S. Refining Environment Trends
Refined Product Margins and WTI-Linked Feedstock Favor Delek US
(1) Source: Platts; 2016 data is as of August 31, 2016; 5-3-2 crack spread based on HSD
(2) Crack Spreads: (+/-) Contango/Backwardation
(1) (2) (2)
31
($14.00)
($12.00)
($10.00)
($8.00)
($6.00)
($4.00)
($2.00)
$0.00
$2.00
Ja
n
-1
1
Fe
b
-1
1
M
ar
-1
1
A
p
r-
11
M
ay
-1
1
Ju
n
-1
1
Ju
l-1
1
A
u
g-
1
1
Se
p
-1
1
O
ct-1
1
N
o
v-
1
1
De
c-
1
1
Ja
n
-1
2
Fe
b
-1
2
M
ar
-1
2
A
p
r-
12
M
ay
-1
2
Ju
n
-1
2
Ju
l-1
2
A
u
g-
1
2
Se
p
-1
2
O
ct-1
2
N
o
v-
1
2
De
c-
1
2
Ja
n
-1
3
Fe
b
-1
3
M
ar
-1
3
A
p
r-
13
M
ay
-1
3
Ju
n
-1
3
Ju
l-1
3
A
u
g-
1
3
Se
p
-1
3
O
ct-1
3
N
o
v-
1
3
De
c-
1
3
Ja
n
-1
4
Fe
b
-1
4
M
ar
-1
4
A
p
r-
14
M
ay
-1
4
Ju
n
-1
4
Ju
l-1
4
A
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1
4
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p
-1
4
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ct-1
4
N
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1
4
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1
4
Ja
n
-1
5
Fe
b
-1
5
M
ar
-1
5
A
p
r-
15
M
ay
-1
5
Ju
n
-1
5
Ju
l-1
5
A
u
g-
1
5
Se
p
-1
5
O
ct-1
5
N
o
v-
1
5
De
c-
1
5
Ja
n
-1
6
Fe
b
-1
6
M
ar
-1
6
A
p
r-
16
M
ay
-1
6
Ju
n
-1
6
Ju
l-1
6
A
u
g-
1
6
Se
p
-1
6
O
ct-1
6
WTI Midland vs. WTI Cushing Crude Pricing
Access to Midland Crudes Benefits Margins
($ per barrel)
105,000 bpd of
Midland crude in
DK system
32
Source: Argus – as of August 31, 2016
Delek US Consolidated Income Statement
33
Source: Company filings.
($ in millions)
2008 2009 2010 2011 2012 2013 2014 2015 YTD2Q15 YTD2Q16 2Q16 LTM
Net sales $4,723.7 $2,666.7 $3,755.6 $7,198.2 $8,726.7 $8,706.8 $8,324.3 $5,762.0 $2,843.7 $2,532.3 $5,450.6
Cost of goods sold 4,308.1 2,394.1 3,412.9 6,429.9 7,708.2 7,880.7 7,315.2 5,015.6 2,444.3 2,245.0 4,816.3
Operating expenses 240.8 219.0 229.5 320.9 363.3 387.4 398.8 406.6 197.4 192.2 401.4
Impairment of goodwill 11.2 7.0 0.0 2.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Insurance proceeds - business interruption 0.0 (64.1) (12.8) 0.0 0.0 0.0 0.0 0.0 0.0 (42.4) (42.4)
Property damage proceeds, net 0.0 (40.3) (4.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
General and administrative expenses 57.0 64.3 59.0 81.4 99.7 111.2 133.4 126.0 67.0 63.9 122.9
Depreciation and amortization 41.3 52.4 61.1 74.1 82.5 89.8 111.5 134.0 63.2 73.4 144.2
Other operating (income) expenses, net (6.8) 2.9 0.7 3.6 (0.1) 0.0 (1.1) (0.9) (0.1) 0.0 (0.8)
Operating income $72.1 $31.4 $9.2 $286.1 $473.1 $237.7 $366.5 $80.7 $71.9 $0.2 $9.0
Interest expense 23.7 25.5 34.1 51.2 45.7 37.7 40.6 58.3 27.4 30.4 61.3
Interest income (2.1) (0.1) 0.0 0.0 (0.2) (0.3) (0.8) (1.1) (0.6) (0.7) (1.2)
Income from equity method investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (2.0) (7.4) 28.9 34.3
Loss on minority investment 7.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
(Gain) loss on investment in Lion Oil 0.0 0.0 60.0 (12.9) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Gain on extinguishment of debt (1.6) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other income, net 1.0 0.6 0.0 0.0 0.0 (6.3) (0.9) (1.6) (1.0) 0.5 (0.1)
Total non-operating expenses, net $28.9 $26.0 $94.1 $38.3 $45.5 $31.1 $38.9 $53.6 $18.4 $59.1 $94.3
Income before income tax (benefit) expense 43.2 5.4 (84.9) 247.8 427.6 206.6 327.6 27.1 53.5 (58.9) (85.3)
Income tax (benefit) expense 18.6 3.1 (5.0) 84.7 151.6 70.9 101.6 (16.6) 9.1 (34.2) (59.9)
Net Income 24.6 2.3 (79.9) 163.1 276.0 135.7 226.0 43.7 44.4 (24.7) (25.4)
Net income attributable to non-controlling interest (1.9) 1.6 0.0 0.0 0.0 18.0 27.4 24.3 12.2 11.7 23.8
Net income attributatble to Delek $26.5 $0.7 ($79.9) $163.1 $276.0 $117.7 $198.6 $19.4 $32.2 ($36.4) ($49.2)
Delek US Income Statement
Year Ended 12/31
DKL: Reconciliation of EBITDA and Cash Available for Distribution
34
(1) Forecast period for twelve month period ending 9/30/2013 EBITDA is reconciled to net income on page 34.
(2) Distribution for forecast period based on $1.50 per unit; Distribution for year ended December 31, 2013 , 2014 and 2015 and year to date 2016 based on actual amounts distributed during the
periods; does not include a LTIP accrual. Coverage is defined as cash available for distribution divided by total distribution.
(3) Forecast for twelve month period ending 9/30/2013 as provided in the Nov. 1, 2012 prospectus.
(4) Results in 2013 and 2014 are as reported excluding predecessor costs related to the drop down of the tank farms and product terminals at both Tyler and El Dorado during the respective
periods.
(5) Results for 1Q15 are as reported excluding predecessor costs related to the 1Q15 drop downs.
Note: May not foot due to rounding.
Forecast
(dollars in millions)
12 Months
9/30/13 (1)(3) 1Q13 (4) 2Q13(4) 3Q13(4) 4Q13(4) 2013 (4) 1Q14 (4) 2Q14 3Q14 4Q14 2014 (4) 1Q15(5) 2Q15 3Q15 4Q15 2015 (5) 1Q16 2Q16
Reconciliation of EBITDA to net cash from operating activities
Net cash provided by operating activities $2.0 $18.7 $19.9 $8.9 $49.4 $14.4 $31.2 $20.1 $20.8 $86.6 $15.9 $30.8 $20.2 $1.3 $68.2 $26.4 $31.2
Amortization of unfavorable contract liability to revenue 0.7 0.7 0.6 0.7 2.6 0.7 0.7 0.7 0.7 2.7 - - - - - - -
Amortization of deferred revenue - - - - - - - - 0.1 0.1 0.1 0.1 - 0.3 0.5 0.2 0.4
Amortization of deferred financing costs (0.2) (0.2) (0.2) (0.4) (1.0) (0.3) (0.3) (0.3) (0.3) (1.3) (0.4) (0.4) (0.4) (0.4) (1.5) (0.4) (0.4)
Accretion of asset retirement obligations (0.0) (0.1) (0.0) (0.1) (0.2) (0.1) (0.1) (0.1) 0.0 (0.2) (0.1) (0.1) (0.1) (0.1) (0.3) (0.1) (0.1)
Deferred income taxes 0.0 0.0 (0.1) (0.3) (0.3) 0.0 (0.1) (0.0) 0.2 0.1 (0.2) 0.2 0.0 0.0 (0.0) - -
Loss on equity method investments - - - - - - - - - - - (0.1) (0.3) (0.1) (0.6) (0.2) (0.2)
Gain (Loss) on asset disposals - - - (0.2) (0.2) - (0.1) - (0.0) (0.1) (0.0) 0.0 - (0.1) (0.1) 0.0 -
Unit-based compensation expense - (0.1) (0.1) (0.3) (0.5) (0.1) (0.1) (0.1) (0.1) (0.3) (0.1) (0.1) (0.1) (0.1) (0.4) (0.1) (0.1)
Changes in assets and liabilities 12.1 (4.8) (5.1) 6.3 8.6 3.4 (6.0) (1.5) 3.0 (1.0) 3.3 (7.3) 3.7 20.5 20.2 (5.4) (7.1)
Income tax expense 0.1 0.1 0.3 0.2 0.8 0.1 0.3 0.2 (0.5) 0.1 0.3 0.1 0.1 (0.6) (0.2) 0.1 0.1
Interest expense, net 0.8 0.8 1.2 1.8 4.6 2.0 2.3 2.2 2.1 8.7 2.2 2.6 2.8 3.0 10.7 3.2 3.3
EBITDA $15.5 $15.0 $16.6 $16.7 $63.8 $20.2 $27.9 $21.2 $26.1 $95.4 $21.1 $25.7 $26.1 $23.6 $96.5 $23.7 $27.1
Reconciliation of distributable cash flow to EBITDA
EBITDA $48.9 $15.5 $15.0 $16.6 $16.7 $63.8 $20.2 $27.9 $21.2 $26.1 $95.4 $21.1 $25.7 $26.1 $23.6 $96.5 $23.7 $27.1
Cash Interest (3.1) (0.6) (0.6) (1.0) (1.4) (3.6) (1.7) (2.0) (1.9) (1.8) (7.4) (1.8) (2.3) (2.5) (2.7) (9.2) (2.8) (2.9)
Capital Improvement Expenditures (5.7) - - - - - - - - - - - - - - - - -
Maint. & Reg. Capital Expenditures (10.8) (1.3) (1.1) (1.0) (1.8) (5.1) (0.8) (1.0) (0.8) (3.9) (6.0) (3.3) (3.9) (3.5) (2.7) (11.8) (0.7) (0.9)
Reimbursement for Capital Expenditures 11.9 0.3 0.2 - 0.4 0.8 - - - 1.6 1.6 1.2 1.4 2.3 0.0 5.2 0.2 0.6
Loss on equity method investments - - - - - - - - - - - - 0.1 0.3 0.1 0.6 0.2 0.2
Income Taxes - (0.1) (0.1) (0.3) (0.2) (0.8) (0.1) (0.3) (0.2) 0.5 (0.1) (0.3) (0.1) (0.1) 0.6 0.2 (0.1) (0.1)
Non-cash Unit-Based Compensation Expense - - 0.1 0.1 0.3 0.5 0.1 0.1 0.1 0.1 0.3 0.1 0.1 0.1 0.1 0.4 0.1 0.1
Amortization of Deferred Revenue - - (0.1) (0.1) (0.1) (0.2) (0.1) (0.1) (0.1) (0.1) (0.3) (0.1) (0.1) (0.1) (0.3) (0.6) (0.2) (0.4)
Amortization of Unfavorable Contract Liability - (0.7) (0.7) (0.6) (0.7) (2.6) (0.7) (0.7) (0.7) (0.7) (2.7) - - - - - - -
Cash Available for Distributions $41.2 $13.1 $12.8 $13.7 $13.3 $52.9 $16.9 $23.9 $17.7 $21.8 $80.7 $16.8 $21.1 $22.6 $18.9 $81.3 $20.4 $23.7
Coverage (2) 1.10x 1.39x 1.32x 1.38x 1.30x 0.59x 1.61x 2.01x 1.42x 1.67x 1.69x 1.23x 1.47x 1.50x 1.17x 1.37x 1.19x 1.31x
Total Distribution (2) $37.4 $9.4 $9.7 $9.9 $10.2 $89.0 $10.5 $11.9 $12.4 $13.1 $47.9 $13.7 $14.4 $15.1 $16.1 $59.3 $17.1 $18.1
DKL: Income Statement and Non-GAAP EBITDA Reconciliation
35
(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 commitment fees and interest expense that would have been paid by the predecessor had the revolving credit facility been in place during the 12
months ended 9/30/13 period presented and Delek Logistics had borrowed $90.0 million under the facility at the beginning of the period. Interest expense also includes the amortization of debt
issuance costs incurred in connection with our revolving credit facility.
(3) Forecast provided in the IPO prospectus on Nov. 1, 2012.
(4) Results in 2013 and 2014 are as reported excluding predecessor costs related to the drop down of the tank farms and product terminals at both Tyler and El Dorado during the respective periods.
(5) Results for 1Q15 are as reported excluding predecessor costs related to the 1Q15 drop downs.
Note: May not foot due to rounding.
Forecast12 Months
9/30/13
(1)(2)(3) 1Q13 (4) 2Q13(4) 3Q13(4) 4Q13(4) 2013(4) 1Q14(4) 2Q14 3Q14 4Q14 2014 1Q15(5) 2Q15 3Q15 4Q15 2015 1Q16 2Q16
Total Net Sales $797.1 $210.9 $230.1 $243.3 $223.1 $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
Cost of Goods Sold (721.8) (187.9) (208.0) (218.2) (197.3) (811.4) (172.2) (196.6) (194.1) (134.3) (697.2) (108.4) (132.5) (124.4) (71.0) (436.3) (66.8) (73.1)
Operating Expenses (18.7) (5.9) (6.1) (6.6) (7.2) (25.8) (8.5) (9.5) (10.2) (9.7) (38.0) (10.6) (10.8) (11.6) (11.7) (44.8) (10.5) (8.7)
Contribution Margin $56.6 $17.2 $16.1 $18.4 $18.6 $70.3 $22.8 $30.2 $23.7 $29.3 $106.0 $24.5 $28.8 $29.1 $26.2 $108.6 $26.8 $30.0
Depreciation and Amortization (9.3) (2.4) (2.4) (2.6) (3.4) (10.7) (3.4) (3.5) (3.7) (3.9) (14.6) (4.0) (4.7) (4.5) (5.9) (19.2) (5.0) (4.8)
General and Administration Expense (7.7) (1.7) (1.1) (1.8) (1.7) (6.3) (2.6) (2.2) (2.5) (3.3) (10.6) (3.4) (3.0) (2.7) (2.3) (11.4) (2.9) (2.7)
Gain (Loss) on Asset Disposal - - - - (0.2) (0.2) - (0.1) - - (0.1) - - - (0.1) (0.1) 0.0 -
Operating Income $39.6 $13.1 $12.6 $14.0 $13.3 $53.2 $16.8 $24.4 $17.5 $22.1 $80.8 $17.1 $21.1 $21.8 $17.9 $77.9 $19.0 $22.5
Interest Expense, net (3.6) (0.8) (0.8) (1.2) (1.8) (4.6) (2.0) (2.3) (2.2) (2.1) (8.7) (2.2) (2.6) (2.8) (3.0) (10.7) (3.2) (3.3)
Loss on Equity Method Invesments (0.1) (0.3) (0.1) (0.6) (0.2) (0.2)
Income Taxes - (0.1) (0.1) (0.3) (0.2) (0.8) (0.1) (0.3) (0.2) 0.5 (0.1) (0.3) (0.1) (0.1) 0.6 0.2 (0.1) (0.1)
Net Income $36.0 $12.2 $11.8 $12.5 $11.3 $47.8 $14.7 $21.8 $15.1 $20.5 $72.0 $14.6 $18.3 $18.6 $15.3 $66.8 $15.4 $18.9
EBITDA:
Net Income $36.0 $12.2 $11.8 $12.5 $11.3 $47.8 $14.7 $21.8 $15.1 $20.5 $72.0 $14.6 $18.3 $18.6 $15.3 $66.8 $15.4 $18.9
Income Taxes - 0.1 0.1 0.3 0.2 0.8 0.1 0.3 0.2 (0.5) 0.1 0.3 0.1 0.1 (0.6) (0.2) 0.1 0.1
Depreciation and Amortization 9.3 2.4 2.4 2.6 3.4 10.7 3.4 3.5 3.7 3.9 14.6 4.0 4.7 4.5 5.9 19.2 5.0 4.8
Interest Expense, net 3.6 0.8 0.8 1.2 1.8 4.6 2.0 2.3 2.2 2.1 8.7 2.2 2.6 2.8 3.0 10.7 3.2 3.3
EBITDA $48.9 $15.5 $15.0 $16.6 $16.7 $63.8 $20.2 $27.9 $21.2 $26.1 $95.4 $21.1 $25.7 $26.1 $23.6 $96.5 $23.7 $27.1
Delek Logistics Partners LP Income Statement and EBITDA Reconciliation
Investor Relations Contact:
Assi Ginzburg Keith Johnson
Chief Financial Officer Vice President of Investor Relations
615-435-1452 615-435-1366
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