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September 2021 Delek US Holdings, Inc. Investor Presentation Exhibit 99.1
Disclaimers 2 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 and any accompanying oral and written presentations contain forward-looking statements within the meaning of federal securities laws 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, opportunities, plans, actions and events 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. These forward-looking statements include, but are not limited to, the statements regarding the following: financial and operating guidance for future and uncompleted financial periods; financial strength and flexibility; potential for and projections of growth; return of cash to shareholders, stock repurchases and the payment of dividends, including the amount and timing thereof; cost reductions; crude oil throughput; crude oil market trends, including production, quality, pricing, demand, imports, exports and transportation costs; the performance of our joint venture investments, including Red River and Wink to Webster, and the benefits, flexibility, returns and EBITDA therefrom; the potential for, and estimates of cost savings and other benefits from, acquisitions, divestitures, dropdowns and financing activities; the attainment of certain regulatory benefits; long-term value creation from capital allocation; execution of strategic initiatives and the benefits therefrom, including cash flow stability from business model transition; and access to crude oil and the benefits therefrom. 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. Investors are cautioned that the following important factors, among others, may affect these forward-looking statements: uncertainty related to timing and amount of value returned to shareholders; 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, including uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; uncertainty relating to the impact of the COVID-19 outbreak on the demand for crude oil, refined products and transportation and storage services; Delek US’ ability to realize cost reductions; risks related to Delek US’ exposure to Permian Basin crude oil, such as supply, pricing, production and transportation capacity; gains and losses from derivative instruments; management's ability to execute its strategy of growth through acquisitions and the transactional risks associated with 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; changes in the scope, costs, and/or timing of capital and maintenance projects; the ability of the Wink to Webster joint venture to construct the long-haul pipeline; the ability of the Red River joint venture to expand the Red River pipeline; the possibility of litigation challenging renewable fuel standard waivers the ability to grow the Big Spring Gathering System; 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 affecting the geographic areas in which we operate; and other risks contained in Delek US’ and Delek Logistics’ 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 undertakes any obligation to update or revise any such forward-looking statements. Non-GAAP Disclosures: Our management uses certain “non-GAAP” operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: • Adjusting items - certain identified infrequently occurring items, non-cash items, and items that are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends; • Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income attributable to Delek US or Delek Logistics, as applicable, adjusted to add back interest expense, income tax expense, depreciation and amortization; • Adjusted Segment Earnings - calculated as reported GAAP contribution margin (or revenue less cost of materials and other and operating expenses) less estimated general and administrative expenses specific to the segment (and excluding allocations of corporate general and administrative expenses), adjusted to include gain (loss) from disposal of property and equipment, and adjusted to reflect the relevant Adjusting items (defined above). While this measure does not exactly represent EBITDA, it may be considered a reasonably comparable measure to EBITDA, in that it includes all identified material cash income and expense items, and excludes depreciation, amortization, interest and income taxes. This definition of Adjusted Segment Earnings (or, individually, Adjusted Refining Segment Earnings, Adjusted [Logistics] Midstream Segment Earnings or Adjusted Retail Segment Earnings) is specific to this communication only and the exhibits referenced herein, and may not correlate to the use of the term ‘Adjusted Contribution Margin’ or ‘Adjusted Segment Contribution Margin’ as a non-GAAP measure in other of our filings with the SEC. Accordingly, always refer to the respective Non-GAAP Disclosures section, included in each of our filings that contain non-GAAP measures, for more information regarding the use of and definition of non-GAAP measures and terms, as they relate to that specific SEC filing; and • Net debt- calculated as long-term debt (the most comparable GAAP measure) including both current and non-current portions, less cash and cash equivalents as of a specific balance sheet date. This is an important measure to monitor leverage and evaluate the balance sheet. We believe these non-GAAP measures are useful to investors, lenders, ratings agencies and analysts to assess our financial results and ongoing performance in certain segments because, when reconciled to their most comparable GAAP financial measure, they provide important information regarding trends that may aid in evaluating our performance as well improved relevant comparability between periods, to peers or to market metrics. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect contribution margin, operating income (loss), and net income (loss). These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because the non-GAAP measures referenced above may be defined differently by other companies in its industry, Delek US’s definition may not be comparable to similarly titled measures of other companies. See the accompanying tables in the appendix for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. We are unable to provide a reconciliation of forward-looking estimates of EBITDA or other forward-looking non-GAAP measures because certain information needed to make a reasonable forward-looking estimate of net income or other forward-looking GAAP measures is difficult to estimate and dependent on future events, which are uncertain or outside of our control. Accordingly, a reconciliation to the most comparable GAAP measure is not available without unreasonable effort. These amounts that would require unreasonable effort to quantify could be significant, such that the amount of the projected GAAP measure could vary substantially from projected non-GAAP measure.
3 Investment Overview (NYSE: DK) (1) Factset as of 8/16/2021 • June, 30 2021 balance sheet: • Delek US: approx. $833 million of cash; $2.2 billion of debt • Includes $2.2 million cash and $928.7 million long-term debt of DKL • Net debt (excl. DKL) of $484.8 million • Delek has established a ‘capital light’ approach to Renewable Diesel • $13.3 million option for 33% indirect interest in the net cash flow from a renewable diesel facility following its conversion • The facility will be able to produce up to 220mm gallons a year of renewable fuels • Estimated start-up first quarter 2022 • Provides diversification and stability relative to other business segments • Premium industry valuation multiples relative to traditional refining business • Compelling growth opportunity through new-to-industry (NTI) locations; resuming growth campaign with 2 NTI’s in planning phase • PADD 3 centric portfolio with product pricing tied to the Gulf Coast • Access to domestic, inland based crude feedstock typically trading at discount to global crudes • Niche market location for three of the four refineries serves as a competitive advantage Tangible Value in Delek Logistics (DKL) Renewable Diesel Retail Segment Refining Portfolio: Gulf Coast Centric; Niche Market Oriented Flexible Financial Position to Support Midstream Growth Invest rvie (NYS • Total DK ownership in DKL 80% or 34.7 million units • Implied value of DK ownership in DKL of $1.4 billion(1)
4 Asphalt 6 asphalt terminals located in: 1) El Dorado, AR 2) Muskogee, OK 3) Memphis, TN 4) Big Spring, TX 5) Henderson, TX 6) Richmond Beach, WA Refining 302,000 bpd in total El Dorado, AR Tyler, TX Big Spring, TX Krotz Springs, LA Crude oil supply: 262,000 bpd WTI linked currently Increasing crude oil optionality through Red River expansion Logistics 10 terminals Approximately 1,550 miles of pipeline 10.2 million bbls of storage capacity West Texas wholesale JV crude oil pipelines: RIO / Caddo / Red River Own ~80% of DKL Source 207,000 bpd from Permian Basin • Growing gathering system • Wink to Webster JV Crude Oil Pipeline Cushing Optionality: 100,000 bpd RIO CADDO Renewables Approximately 40m gallons biodiesel production capacity: 1) Crossett, AR 2) Cleburne, TX 3) New Albany, MS Integrated Company with Asset Diversity and Scale Strategically located assets with growing crude oil optionality Retail Approximately 252 stores Southwest US locations West Texas wholesale marketing business
5 2005 Current Long History of Opportunistic Acquisitions & Value Creation Being Nimble and Capturing Market Dislocations / Opportunities 2006 Abilene & San Angelo terminals 2012 Nettleton Pipeline 2011 Paline Pipeline Acquisition Completed 171 retail fuel & convenience stores & related assets 2013 Biodiesel Facility 2011 Lion refinery & related pipeline & terminals 2005 Tyler refinery & related assets 2013 Tyler-Big Sandy Pipeline 2014 Biodiesel Facility Logistics Segment Retail SegmentRefining Segment 2012 Big Sandy terminal & pipeline 2013 North Little Rock Product Terminal 2011 SALA Gathering Lion Oil acquisition Increased Gathering East and West Texas 2014 Mt. Pleasant System 2014 Frank Thompson Transport DKL Joint Ventures RIO Pipeline Caddo Pipeline 2015 47% ownership in Alon USA 2015 47% ownership in Alon USA 2016 Sold MAPCO 2017 Acquired rest of Alon USA 2017 Acquired rest of Alon USA 2018 Acquired rest of Alon USA Partners 2019 DKL Red River Pipeline JV 2019 Wink to Webster Long Haul JV 2018 Formed Big Spring Gathering 2005 Current 2019 New Albany Biodiesel Facility 2020 Sold Bakersfield Refinery
6 Environmental, Social, and Governance (ESG) Published New Sustainability Report in September 2020 Published our first demographic disclosures Total employees by gender and ethnicity Manager and above by gender Manager and above by race Added two female directors since 2019 Disclosure of whistle blower stats En vi ro n m e n ta l So ci al G o ve rn an ce Published our first GHG disclosures, which goes beyond what many of our peers publish Refining business unit Scope 1 & 2 emissions for 2017, 2018 & 2019 Refining business unit carbon intensity for 2018 & 2019 Enterprise-wide Scope 1 & 2 emissions for 2019 The safety and health of our employees is a core value of the company as reflected in progressive safety improvements over time 2nd Overall (combined DART & TRIR, per AFPM) among companies operating multiple refineries We measure our environmental performance daily, review our progress with the EHS Committee quarterly, and publicly report annually. The specific complexity of our processing units combined with our commitment to utilize Permian crude allows Delek to operate its refineries with a lower than industry average carbon intensity. 37% 36% Women hold 36% of jobs across Delek Other than Caucasian ethnicity 37% of the Delek workforce Delek observes responsible, ethical and transparent business practices. Led by our Board of Directors and executive leadership team, we strive to deliver market competitive returns to investors while providing tangible benefits to all of our stakeholders Board members have diverse backgrounds and experience 87.5% of Directors are independent Independent lead director, elected annually By 2022, not less than 30% of our Board of Directors will be female and/or racially diverse. Published new public policies on ESG-related topics Diversity, Equity, & Inclusion (DE&I) Policy • Implemented by a newly-created Senior Director for DE&I Human Rights Policy Conflict Minerals Policy Super Social Standards (1) Data represents Delek hours for all business units, excluding Delek Logistics, which is a separate public company (2) Rates calculated using the OSHA formula, which is based on 100 full-time employees for a one-year period (2,000 hours) (3)Does not include the Bakersfield facility, which has not produced transportation fuels since 2015, nor does it include our biodiesel plants. Consistent with our Mission, Vision and Core Values, Delek believes that a diverse workforce composed of individuals with a variety of personal and professional backgrounds and identities makes our company stronger We are committed to increasing the diversity of our already inclusive workforce and generating greater professional and economic opportunities for all employees. Achieving these mutually-supportive goals will make us stronger, more agile and resilient (1 )( 2 ) 2018 Delek US Refining 25.4 2019 Delek US Refining 26.5 Carbon Intensity of Refining Business Unit(3) Indexed to Total Refinery Input [metric tons CO2e per 1,000 barrels of refinery throughput of crude and other feed stocks]
7 Sustainability Updates Major milestones that will be featured in Delek’s forthcoming 2021 Sustainability Report Sustaining Capex E S G Governance: Delek observes responsible, ethical and transparent business practices. All Directors are elected annually. Our lead Director is independent. In 2020, we adopted a new executive compensation clawback policy. In 2021, we adopted majority voting for all Directors. Delek is are committed to playing a constructive role in legislative and regulatory processes. To ensure that such activities are conducted in a manner that inspires confidence in our ethics and integrity, Delek developed a new policy that promotes transparency with regards to our interactions with government entities and political campaigns. Social: Delek believes that a diverse workforce composed of individuals with a variety of personal and professional backgrounds and identities makes our company stronger. Delek has publicly disclosed a Diversity, Equity & Inclusion Policy, Human Rights Policy, and a Conflict Minerals Policy. In the spirit of transparency, Delek recently became one of the first downstream companies to disclose the data from the consolidated Equal Employment Opportunity Report (EEO-1) we filed with the US Department of Labor for 2020. Environmental: Delek has always been committed to operating our business in an environmentally responsible manner, and dedicated to continuously improving our performance. We recently disclosed our performance against a number of environmental criteria using the Sustainability Accounting Standards Board (SASB) framework. Our 1st SASB-aligned disclosure can be found on our website. In light of our increased emphasis on sustainability, Delek has articulated a new, standalone environmental policy.
8 Midstream: Big Spring Gathering System Gathering Helps Control Crude Oil Quality and Cost into Refineries Big Spring Gathering System Approximately 200-mile gathering system 350 kbpd throughput capacity >275,000 dedicated acres Points of origin: Howard, Borden, Martin and Midland counties Total terminal storage of 650K bbls Connection to Big Spring, TX terminal Getting closer to wellhead allows us to control crude quality and cost Provides improvement in refining performance and cost structure Drop down to DKL completed in Q1 2020 Gathering increases access to barrels Creates optionality to place barrels: Big Spring (local refinery) Midland Colorado City (access other refineries) Wink (to Gulf Coast) Control quality and blending opportunities Delek Logistics Acquired 1Q20 Expected $30 - $32 million Annual EBITDA underpinned by MVC DK to DKL MVC 120 Kbpd for Big Spring system in addition to 50mbbl/d connection to 3rd party pipeline system CAPEX potential of $33.8 million if requested by DK, matched with MVC providing 12.5% ROR Permian Supply vs. Takeaway Refining Capacity Wink to Webster Gathering Access
9 Delek US’ Investment Delek US has a 50% ownership interest in a JV that owns a 30% ownership interest in Wink to Webster Pipeline LLC Expected $340 million to $380 million net investment Integrated with Big Spring gathering system to provide source of barrels and services to producers Well above Delek US’ targeted minimum required midstream IRR of 15% Secured project financing for approximately 80% of our investment Results in ~$75 million equity contribution; balance to be project financed Midstream: Wink to Webster Crude Oil Long-Haul Pipeline Joint Venture Complements Gathering – Provides Access to Gulf Coast Markets Big Spring Midland Beaumont Junction Webster/ Baytown Wink 650-mile 36-inch diameter crude oil pipeline Wink to Webster Pipeline LLC is supported by industry leading partners – Exxon, Lotus Midstream, MPLX/Delek US JV, Plains, and Rattler Midstream Total system expected completion 2021 Main segment started transporting oil in October 2020 The Midland-to-Webster segment was commissioned in January 2021, and is now operating Supported by significant volume of long-term commitments Wink to Webster Pipeline JV
10 Enhancing Our Position In Midstream Krotz Springs • Logistics assets associated with Krotz Springs refinery Wink to Webster Pipeline • Long haul pipeline from Permian to Gulf Coast providing stable cash flow and connected to our Big Spring Gathering system, providing access to additional crude inputs • Expected return well above our minimum target IRR threshold of 15% Other Midstream Growth Initiatives • Slurry Blending- Exclusive agreement with Baker Hughes utilizing proprietary intellectual property allowing us to meet IMO regulations through blending competencies • Red River Pipeline JV – expansion from 150 Kbpd to 235 Kbpd completed during 3Q 2020 • Delek continues to explore other midstream growth opportunities Substantial Projected Growth in Consolidated Midstream Cash Flows DKL EBITDA Growth ($ in millions) ~$97 -$127 million growth opportunity: ~37%-48% $97 $115 $164 $179 $245 2016 2017 2018 2019 2020 ($ in millions) Strong EBITDA Growth Profile from Midstream Initiatives Delek US announced goal to achieve midstream EBITDA target of $365 million to $395 million by 2023 3 months annualized ending 6/30/2021 Krotz Springs Midstream assets Wink to Webster & Other Midstream Growth initiatives Total Annual Segment Earnings Potential ~$30-$35 ~$67-$92 ~$365-$395
11 Aligning Our Portfolio with the Most Attractive Opportunities Divestitures Over $800 million in proceeds since 2016 from well-timed divestitures to enhance our portfolio composition Dropdowns Asset dropdowns to DKL have created substantial value at both DK and DKL Joint Ventures Joint ventures have provided DK and DKL with low-cost opportunities to expand operations and increase cash flows Acquisitions Built a strong portfolio by strategically acquiring complementary assets 2019A Adj. Segment Earnings(1) 2022E Targeted Adj. Segment Earnings(1) (1) See definition in Non-GAAP Disclosures discussion on page 2 (2) Permission to quote was neither sought nor provided Refining Midstream & Retail Projected growth from midstream and retail (excludes upside from new stores) 61% 39% Focus on diversifying cash flow streams and reducing cash flow volatility Track record of actively managing our portfolio “We think continued growth in DK’s less noted midstream and retail segments should drive a growing focus on SOTP, supporting valuation.” – Raymond James(2) (1/10/2020) 75% 25%
4.0x 9.0x 5.0x 12.0x NTI Build Multiple Retail Trading (TEV / NTM EBITDA) Multiple Substantial value uplift potential Low build multiple 12 Enhancing Our Retail Network • Serves as a natural fuel short while improving DK’s cash flow stability and reducing its Renewable Identification Number (“RIN”) obligations • Two new-to-industry (“NTI”) stores are in the planning phase and are expected to break ground at the beginning of the year. • Operations are anticipated around mid-year 2022. • 25%+ projected IRR on NTI stores • Improving retail footprint by closing and discontinuing leases of underperforming stores and upgrading legacy stores High-Growth Opportunity Complementing Existing Operations (1) As of 5/10/2021; retail peer set: Alimentation Couche-Tard, Inc., Casey's General Stores, Inc., Murphy USA Inc. (2) Derived from dividing Adjusted Retail Segment Earnings by ending number of stores each period (1) Organic Retail Expansion Offers Attractive Return Opportunity Proven Track Record of Growth… Adjusted Retail Segment Earnings Per Store ($ in thousands)(2) …with High Growth Potential Adjusted Retail Segment Earnings ($ in millions) $53 ~$100 2021E 2025E ~250 stores ~300 stores $95 $120 $132 $150 $187 2016A 2017A 2018A 2019A 2020A
Retail: Diversifies Delek 13 ~80% integration with existing downstream operations offering synergies and competitive advantage Operate approximately 252 C-stores in Central and West Texas and New Mexico Synergistic Retail Platform Significant Profit Growth Opportunity Rebrand 7-Eleven stores to DK by 2023 Implement interior re-branding/re-imaging Longer-term build out of larger, new-to-industry locations with strong fuel/diesel offering and compelling foodservice experience
Renewables: Renewable Diesel 14 Delek has established a ‘capital light’ approach to Renewable Diesel $13.3 million option for 33% indirect interest in the net cash flow from a renewable diesel facility following its conversion The facility will be able to produce up to 220mm gallons a year of renewable fuels Estimated Start-up January 2022 For biofuel strategies to be truly effective, feedstock production must be highly scalable to meet society's growing demand for low carbon fuels. As a high oil yielding crop per acre, Camelina can be efficiently processed into low carbon biofuels such as renewable diesel and jet fuel using well established existing technologies. A counter-cyclical crop cycle like Camelina increases asset utilization and total crop year grower returns by turning an expensive fallow crop acre into a revenue-generating acre. Feedstock Advantage: Camelina GCE Holdings Acquisitions, LLC recently purchased the Bakersfield Refinery from Delek and is retooling it into the largest facility of its kind in the western United States which can produce renewable fuels from non-food feedstocks. When complete, the biorefinery will be able to produce renewable diesel from various feedstocks, including varieties of camelina.
15 Positioning for Energy Transition Existing footprint in biodiesel and reviewing opportunities in renewable diesel and de-carbonization Operate 3 Biodiesel Facilities: ~40mm gallons of annual biodiesel production capacity (equal to 407,200 metric tons of carbon reduction)(1) Crossett, AR New Albany, MSCleburne, TX Source: Global Clean Energy Holdings’ public filings (1) EPA (https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator) (2) Permission to quote was neither sought nor provided Existing Position in Biodiesel Actively Exploring Renewable Diesel Opportunities $13.3 million option to acquire a 33% indirect economic interest in Bakersfield, CA: 220mm gallons annual production capacity Bakersfield, CA Capital-light approach provides optionality Integrated with refining system and generates substantial RINs Dedicated innovation team led by Sarit Soccary Ben-Yochanan, a 15-year industry veteran Innovation is Part of Our Core Values Innovation ECO system Operations & Safety New Energy Carbon Capture Asset Management Centralized Data & Command Center Retail Customer Experience Process Automation & Optimization “… DK’s option for 73mmgal of RD exposure will cost just 18c/gal, far and away the lowest when most other projects are in the $1-3/gal range. Furthermore, the Global Clean Energy will grow its own feedstock… allowing it to potentially avoid the recent trend in higher raws.” – Tudor, Pickering, Holt(2) (2/25/2021)
87% 13% Tyler(1) WTI ETX Other (1) Crude oil slate based on amount received three months-ended as of June 30, 2021 and will vary each period based on operations and purchases. Note: WTI-Brent differential realized through crack spread and capture rates and Midland-WTI differential realized in crude slate. 16 Tyler, Texas • 75,000 bpd crude oil throughput • 8.7 complexity • Light crude oil refinery • Permian Basin, Cushing and East Texas sourced crude oil El Dorado, Arkansas • 80,000 bpd crude oil throughput • 10.2 complexity • Flexibility to process medium and light crude oil • Permian Basin, local Arkansas, East Texas, Cushing and Gulf Coast crude oils Big Spring, Texas • 73,000 bpd crude oil throughput • 10.5 complexity • Process WTI and WTS crude oil • Located in the Permian Basin Krotz Springs, Louisiana • 74,000 bpd crude oil throughput • 8.8 complexity • Permian Basin, Cushing, local and Gulf Coast crude oil sources 49% 20% 31% El Dorado(1) WTI Local AK Other 66% 34% Big Spring(1) WTI WTS 65% 33% 2% Krotz Springs(1) WTI GC Sweet Other 100% WTI linked PADD 3 Refining System with Crude Slate Optionality 100% WTI linked 100% WTI linked 75% WTI linked Crude Oil Optionality - Red River pipeline joint venture to increase access to Cushing crude oil from 35,000 bpd to 100,000 bpd following expansion in 3Q 2020 • Brings total barrels priced on a Cushing basis, excluding Midland, to 125,000 bpd Three Months Ending June 30, 2021 25,000 302,000 Permian Cushing ETX/ AR Other/GC 35,000 to 100,000 Crude Throughput Capacity Increasing Access to Cushing Crude Oil Grades, bpd Current Crude Oil Access 135,000 to 207,000 35,000 to 42,000
17 Long-term Capital Allocation Framework Four pillars underpinned by a rigorous and disciplined capital allocation program to create long-term value Priorities: • Invest: Capital allocation program focuses on safety, maintenance, and reliability as top priority • Cash Returns: Maintain a competitive cash return profile commensurate with underlying earnings power • Grow: Maintain financial strength and flexibility to support strategic growth objectives • Enhance Balance Sheet / Return Excess Cash: Reduce net debt and/or opportunistically return additional cash Sustaining Capex • Approximately $100 million sustaining capex/yr • Between $40-$75 million per turnaround • Critical for safe and reliable operations • Various amounts for regulatory capex Sustaining & Regulatory Capex Non-Discretionary • At this juncture, free cash flow used for balance sheet improvement over share buybacks or dividends Cash Returns Discretionary Growth Capex • 25% IRR for >$5mm projects at Refining; <$5mm is 50% IRR • >15% IRR minimum hurdle rate for Retail projects, dependent on size • >15% IRR hurdle rate for stable cash flow Logistics projects Cash Returns to Shareholders • Target competitive overall cash return • Continue to evaluate dividend reinstatement / share buybacks versus growth capex / investment opportunities Acquisitions • Evaluate accretive opportunities as they arise vs. alternative uses of cash Opportunistically De-lever • Continue to optimize the balance sheet • Opportunistically repay DK debt when FCF supports it
Capital Allocation – Balanced & Flexible 18 $0 $100 $200 $300 $400 $500 CAPEX CAPEX 2019-2021 2019 2020 2021E 2021E 25% lower than 2020 • 2021 spending guidance of $175 to $185 million (including turnarounds) • Net of estimated insurance proceeds • 2021 includes the following projects: • Krotz Springs Turnaround • Completed in early March 2021 • El Dorado Turnaround • Completed in early April 2021 • Second Quarter 2021 capital expenditures were $66 million reflecting turnaround activity and fire related repairs at El Dorado • No major planned turnaround activities for remainder of the year • No major planned maintenance for remainder of the year 2020 44% lower than 2019 (1) Net of estimated insurance proceeds (1) Capital Expenditures 2019 Spend 2020 Spend YTD Spend New 2021 Budget $428 $240 $133 $175-$185 (1)
$65.8 $78.3 $170.3 $13.3 $1.5 $22.9 $59.5 $63.4 $44.7 $25.0 $19.9 $1.7 $3.2 $8.7 $7.5 $2.3 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Sustaining Capex Discretionary Capex 19 Capital Allocation Discipline $1,000 $950 $781 $833 $802 $784 $781 $831 $159 $284 $496 $627 $666 $573 $604 $485 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Cash Balance Net Debt Cash Balance & Net Debt (DK Ex. DKL)(1) Capital Expenditures(1)(2) (1) Based on company filings from Q3 2019 through Q2 2021. Sustaining capex defined as regulatory & maintenance capital expenditures. Capital expenditures does not include joint venture contributions (2) Excludes purchases of rights-of-way in the amount of $19.1 million in 2019 and $2.7 million in 2020 Maintaining a Strong Balance Sheet Should support ability to invest in the business Provides ability to act quickly to take advantage of opportunities DK, excluding DKL, had $831 million of cash and $485 million net debt at 6/30/21 Capital Allocation Discipline in Practice Investing in the Business Krotz Springs and El Dorado turnarounds in 1Q21 No other major turnaround scheduled for 2021 Growing the Business Complete Midstream Growth Projects Big Spring Gathering System capital spending Joint Venture Contributions Wink to Webster long haul pipeline joint venture High Grading Retail Portfolio Resuming growth campaign with 2 NTI’s in planning phase
Market Opportunities & Valuation
41% 39% 39% 37% 35% 35% 33% 37% CVI PSX DK VLO HFC MPC PBF 2Q21 Refiners’ Middle Distillates Yield % (1) (2) (3) 54% 53% 51% 51% 49% 47% 47% 50% HFC CVI MPC VLO DK PSX PBF 2Q21 Refiners’ Gasoline Yield % (1) (3) 21 Refining system product yields Strong middle distillate yield versus peers Ability to switch ~10% between gasoline and distillate Gasoline yield should increase with operational improvements in 2H21 Crude oil slate has flexibility Ability to increase sour crude oil processing to approximately 50% based on market economics Big Spring refinery currently processes 34% WTS and can increase to 100% El Dorado refinery flexibility to process light to medium sour crude oil (up to 100%) based on economics (1) Industry average based on peer group (2) Middle distillates yield includes distillate fuel oil, kerosene and kerosene-type jet fuel (3) Sourced from respective company press releases, SEC filings, and earnings calls Light Products Yield Delek US positioned to benefit with high value product yields and crude oil slate flexibility
Tangible Assets with Underlying Value Four refineries with 302mbbl/d of aggregate capacity 80% DKL ownership provides public marker of value DK owns 34.7mm units at $38.86 or $1.4 billion (1) Retail value supported strong valuations for retail businesses ’23E EBITDA of $50mm; retail businesses have been transacting in the low double digit area on an EBITDA multiple basis Wink to Webster construction cost $340 - $380mm Expect well above 15% IRR threshold for midstream projects Project financed with $75mm equity contribution 3 Biodiesel Plants; 40mm gal/yr $13.3 million option for 33% indirect interest in the net cash flow from a renewable diesel facility following its conversion The facility will be able to produce up to 220mm gallons a year of renewable fuels (1) Factset as of 8/16/2021 22
23 Path Forward
Growing Midstream Platform to Diversify EBITDA Stream Financial Flexibility to Support Strategic Objectives An Integrated and Diversified Refining, Logistics and Retail Company Invest in the Business to Operate Reliably and Safely Permian Focused Refining System with Increasing Access to Cushing Focus on Long-Term Shareholder Returns
Appendix
26 2Q21 Cash Flows
27 2Q21 Guidance Range
28 Summary Organizational Structure 20% interest (8.7 million units) Limited partner-common 100% Delek Logistics Partners, LP NYSE: DKL (the Partnership) Public Unitholders Operating Subsidiaries 80% interest (34.7 million units) Limited partner-common Delek Logistics GP, LLC (the General Partner) Delek US Holdings, Inc. NYSE: DK • 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 cash during August 2020. Non-economic ownership interest
1.39x 1.32x 1.35x 1.30x 1.61x 2.02x 1.42x 1.67x 1.25x 1.49x 1.47x 1.18x 1.20x 1.29x 0.98x 1.00x 0.88x 1.06x 0.97x 0.96x 1.14x 1.34x 1.25x 1.03x 1.06x 1.08x 1.11x 1.08x 1.15x 1.58x 1.50x 1.41x 1.31x 1.32x 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q194Q191Q202Q203Q204Q201Q212Q21 Avg. 1.08x in 2019 Avg. 1.41x in 2020 29 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 reconciliations starting on page 30. 3) In 4Q17, the reimbursed capital expenditure amounts in the determination of distributable cash flow were revised to reflect the accrual of reimbursed capital expenditures from Delek rather than the cash amounts received for reimbursed capital expenditures during the years ended December 31, 2017, 2016 and 2015. 4) Leverage ratio based on LTM EBITDA as defined by credit facility covenants for respective periods. Distribution per unit has increased thirty-three consecutive times since the IPO (1) Distributable Cash Flow Coverage Ratio (2)(3)(4) Leverage Ratio (4) DKL Distribution and Leverage Ratio Avg. 1.35x in 2013 Avg. 1.68x in 2014 Avg. 1.35x in 2015 Avg. 1.11x in 2016 Avg. 0.97x in 2017 Avg. 1.19x in 2018 $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 $0.790 $0.810 $0.820 $0.850 $0.880 $0.885 $0.890 $0.900 $0.905 $0.910 $0.920 $0.940 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q16 2Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q194Q191Q202Q203Q204Q201Q212Q21 1.70x 1.58x 2.28x 2.35x 3.21x 2.69x 2.55x 2.56x 3.02x 3.13x 3.11x 3.49x 3.48x 3.47x 3.72x 3.84x 3.84x 3.90x 3.75x 3.77x 4.58x 4.44x 4.53x 4.08x 4.17x 4.64x 4.62x 4.48x 4.15x 4.05x 3.91x 3.75x 3.64x 3.55x 1Q132Q133Q134Q131Q14 2Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q194Q191Q202Q203Q204Q201Q212Q21
Reconciliations
31 1) Results in 2013 and 2014 are as reported excluding predecessor costs related to the dropdown of the tank farms and product terminals at both Tyler and El Dorado during the respective periods. 2) Results for 1Q15 are as reported excluding predecessor costs related to the 1Q15 dropdowns. Note: May not foot due to rounding. 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) (172.2) (196.6) (194.1) (134.3) (697.2) (108.4) (132.5) (124.4) (71.0) (436.3) (66.8) (73.1) ($73.5) ($88.8) (302.2) Operating Expenses (excluding depreciation and amortization presented below) (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) ($9.3) ($8.8) (37.2) Depreciation and Amortization Contribution Margin $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 $24.7 $27.2 $108.7 Operating Expenses (excluding depreciation and amortization presented below) Depreciation and Amortization (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) ($5.4) ($5.6) (20.8) General and Administration Expense (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) ($2.3) ($2.3) (10.3) Gain (Loss) on Asset Disposal (0.2) - (0.1) - - (0.1) - - - (0.1) (0.1) 0.0 - ($0.0) $0.0 0.0 Operating Income $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 $17.0 $19.2 $77.7 Interest Expense, net (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) ($3.4) ($3.7) (13.6) (Loss) Income from Equity Method Invesments (0.1) (0.3) (0.1) (0.6) (0.2) (0.2) ($0.3) ($0.4) (1.2) Income Taxes (0.8) (0.1) (0.3) (0.2) 0.5 (0.1) (0.3) (0.1) (0.1) 0.6 0.2 (0.1) (0.129) ($0.1) $0.3 (0.1) Net Income $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 $13.2 $15.3 $62.8 EBITDA: Net Income $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 $13.2 $15.3 $62.8 Income Taxes 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 0.13 (0.28) 0.1 Depreciation and Amortization 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 5.4 5.6 20.8 Amortization of customer contract intangible assets - - - - - - - - - - - - - - - - Interest Expense, net 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 3.4 3.7 13.6 EBITDA $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 $22.0 $24.4 $97.3 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19 4Q19 2019 1Q20 2Q20 3Q20 4Q20 2020 1Q21 2Q21 Net Revenue $129.5 $126.8 $130.6 $151.2 $538.1 $167.9 $166.3 $164.1 $159.3 $657.6 $152.5 $155.3 $137.6 $138.6 $584.0 $163.4 $117.6 $142.3 $140.1 $563.4 $152.9 $168.5 Cost of Sales (92.6) (85.0) ($89.1) ($106.1) (372.9) (119.0) (106.0) ($105.6) ($98.4) (429.1) ($96.3) ($93.9) ($72.6) ($73.8) (336.5) ($101.3) ($43.9) ($60.7) ($63.2) (269.1) ($81.2) ($88.7) Operating Expenses (excluding depreciation and amortization presented below) (10.4) (10.0) (10.7) (12.3) (43.3) (12.6) (14.9) (14.5) (15.4) (57.4) (15.3) (16.5) (17.5) (22.0) (71.3) (14.0) (11.6) (13.7) (14.6) (53.8) (13.5) (14.9) Depreciation and Amortization (6.3) (5.8) (12.1) (6.1) (6.2) (6.1) (6.4) (24.9) (5.8) (8.2) (8.9) (10.8) (33.7) (10.2) (9.5) Contribution Margin $26.5 $31.8 $30.8 $32.8 $121.9 $36.3 $45.3 $37.8 $39.6 $159.1 $34.8 $38.8 $41.3 $36.4 $151.3 $42.4 $53.9 $59.0 $51.5 $206.7 $48.0 $55.4 Operating Expenses (excluding depreciation and amortization presented below) (0.9) (0.4) (1.3) (0.8) (0.8) (0.9) (0.3) (2.8) (0.8) (0.8) (0.6) (0.3) (2.4) (0.6) (0.6) Depreciation and Amortization (5.2) (5.7) (5.5) (5.5) (21.9) (6.0) (7.0) (0.5) (0.4) (13.9) (0.5) (0.5) (0.5) (0.5) (1.8) (0.5) (0.5) (0.5) (0.5) (2.0) (0.5) (0.5) General and Administration Expense (2.8) (2.7) (2.8) (3.6) (11.8) (3.0) (3.7) (3.1) (7.4) (17.2) (4.5) (5.3) (5.3) (5.8) (20.8) (6.1) (4.7) (6.1) (5.6) (22.6) (4.9) (6.1) Gain (Loss) on Asset Disposal 0.0 0.0 (0.0) (0.0) (0.0) - 0.1 (0.7) (0.2) (0.8) (0.0) 0.0 0.1 (0.1) (0.0) 0.1 - - (0.0) 0.1 0.1 0.1 Operating Income $18.5 $23.4 $22.6 $23.7 $88.1 $27.3 $34.7 $32.6 $31.1 $125.8 $29.1 $32.3 $34.7 $29.7 $125.8 $35.0 $47.9 $51.7 $45.1 $179.8 $42.2 $48.4 Interest Expense, net (4.1) (5.5) (7.1) (7.3) (23.9) (8.1) (10.9) (11.1) (11.2) (41.3) (11.3) (11.4) (12.5) (12.2) (47.3) (11.8) (10.7) (10.4) (10.0) (42.9) (9.7) (11.7) (Loss) Income from Equity Method Invesments 0.2 1.2 1.6 1.9 5.0 0.8 1.9 1.9 1.5 6.2 2.0 4.5 8.4 5.0 19.8 5.6 6.5 4.9 5.8 22.7 4.0 6.6 Other (Expense) Income - - - - - - - - - - - (0.5) - (0.1) (0.6) - - 0.1 - (0.1) (0.0) (0.0) Income Taxes (0.1) (0.1) (0.2) 0.6 0.2 (0.1) (0.1) (0.1) (0.2) (0.5) (0.1) (0.1) (0.1) (0.7) (1.0) (1.0) 0.7 (0.2) (0.2) (0.2) (0.2) (0.2) Net Income $14.6 $19.0 $16.9 $18.9 $69.4 $20.0 $25.6 $23.3 $21.3 $90.2 $19.7 $24.9 $30.5 $21.7 $96.8 $27.8 $44.4 $46.3 $40.7 $159.2 $36.3 $43.2 EBITDA: Net Income $14.6 $19.0 $16.9 $18.9 $69.4 $20.0 $25.6 $23.3 $21.3 $90.2 $19.7 $24.9 $30.5 $21.7 $96.8 $27.8 $44.4 $46.3 $40.7 $159.2 $36.3 $43.2 Income Taxes 0.1 0.1 0.2 ($0.6) (0.2) 0.1 0.1 0.1 $0.2 0.5 0.1 0.1 0.1 0.7 1.0 1.0 (0.7) (0.2) 0.1 0.2 0.2 0.2 Depreciation and Amortization 5.2 5.7 5.5 5.5 21.9 6.0 7.0 6.7 6.3 26.0 6.6 6.6 6.6 6.9 26.7 6.3 8.7 9.5 11.3 35.7 10.7 10.0 Amortization of customer contract intangible assets - - - - - 0.6 1.8 1.8 1.8 6.0 1.8 1.8 1.8 1.8 7.2 1.8 1.8 1.8 1.8 7.2 1.8 1.8 Interest Expense, net 4.1 5.5 7.1 7.3 23.9 8.1 10.9 11.1 11.2 41.3 11.3 11.4 12.5 12.2 47.3 11.8 10.6 10.4 10.0 42.9 9.7 11.7 EBITDA $23.9 $30.3 $29.7 $31.1 $115.0 $34.7 $45.4 $43.0 $40.7 $163.9 $39.4 $44.8 $51.5 $43.3 $178.9 $48.7 $64.8 $67.8 $63.9 $245.3 $58.7 $66.8
32 Net Debt Reconciliation (1) Numbers may not foot due to rounding ($ in millions) 3Q-19 4Q-19 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 Current Portion of Long-Term Debt $65 $36 $31 $33 $33 $33 $13 $46 Long-Term Debt $1,935 $2,031 $2,186 $2,422 $2,441 $2,315 $2,354 $2,198 Total Debt $2,000 $2,067 $2,217 $2,455 $2,474 $2,348 $2,367 $2,244 Cash $1,006 $955 $785 $849 $808 $788 $794 $833 Net Debt Delek US Consolidated $994 $1,112 $1,432 $1,606 $1,666 $1,560 $1,573 $1,411 Delek Logistics Total Debt $841 $833 $940 $995 $1,006 $992 $983 $929 Cash $6 $6 $4 $16 $6 $4 $13 $2 Stockholder Equity - - - - - - - - Net Debt Delek Logistics $834 $827 $936 $979 $1,000 $988 $970 $927 Delek US, ex. Delek Logistics Total Debt $1,159 $1,234 $1,277 $1,460 $1,468 $1,356 $1,385 $1,315 Cash $1,000 $949 $781 $833 $802 $784 $781 $831 Net Debt Delek US excluding DKL $159 $284 $496 $627 $666 $573 $604 $485 (1)
33 (1) For the annual period ended December 31, 2016, the Pre-acquisition Alon Adjusted Retail Segment Earnings was derived from the Annual Report on Form 10-K filed by Alon and incorporated by reference into Delek’s 2016 Annual Report on Form 10-K, and for the six months ended June 30, 2017, the Pre-acquisition Alon Adjusted Retail Segment Earnings was derived from Exhibit 99.3 Alon Supplemental information, filed as an exhibit to Delek’s Form 8-K filed on August 3, 2017 related to the significant acquisition of Alon. In those respective filings, Alon did not present Contribution Margin as a GAAP measure for its retail segment (as defined by Alon, which is not believed to be materially different from Delek’s definition and, therefore, hereafter also referred to as “Retail Segment”). As a result, we have calculated Adjusted Retail Segment Earnings for the pre-acquisition periods using the income statement items that were disclosed for the Retail Segment by Alon. Note that the pre-acquisition period presentation of Adjusted Retail Segment Earnings is based on accounting policies as elected and applied by Alon, which may differ from accounting policies used post-acquisition by Delek and reflected in Delek’s post-acquisition Adjusted Retail Segment Earnings. Reconciliation of GAAP to Non-GAAP (Cont’d)
Investor Relations Contacts: Blake Fernandez, SVP IR/Market Intelligence 615-224-1312 Kaley Weinstein, Investor Relations Analyst 267-701-0111