Investor Presentation

Transcription

1 Investor Presentation 0

2 Safe Harbor Provision Delek US Holdings is traded on the New York Stock Exchange in the United States under the symbol DK and, as such, is governed by the rules and regulations of the United States Securities and Exchange Commission. This presentation may contain forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning our 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: an incident at the refinery could expose us to potentially significant costs and liabilities, including costs and liabilities that may not be covered at all or in limited amounts by our insurance policies; 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; losses from derivative instruments; management s ability to execute its strategy of growth through acquisitions and transactional risks in acquisitions; general economic and business conditions, particularly levels of spending relating to travel and tourism or conditions affecting the southeastern United States; risks and uncertainties with the respect to the quantities and costs of crude oil, the costs to acquire feed stocks and the price of the refined petroleum products we ultimately sell; potential conflicts of interest between our majority stockholder and other stockholders; and other risks contained in our filings with the 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. 1

3 Corporate Overview 2

4 Delek US Niche-Focused, Asset-Rich Energy Company(1) Niche, Inland Refinery. 60,000 BPD; 9.5 Complexity Large Retail Footprint. 420 locations in eight states Stable Logistics Business. Own/operate multiple terminals & pipelines in Texas Lion Oil Investment. 34.6% equity interest in 75,000 BPD refinery in Arkansas (1) All information is as of September 30,

5 Refining Segment Operational Update 4

6 Delek US Key Indicators - Refining Segment(1) Improved Gulf Coast Refining Economics in 3Q:10 Y/Y increase in 532 Gulf Coast crack spread Strong distillate crack offset weak gasoline crack Ongoing Recovery In Regional Economy Improved commercial demand Niche market remains a key advantage Lingering Contango Benefit WTI contango market structure benefits refining margins at Tyler Lower Capital Spending Requirements in 2011 Completed bulk of regulatory CAPEX at Tyler 2011 CAPEX should be well below prior years (1) All comments as indicated on the Company s third quarter 2010 earnings conference call dated November 4, 2010 or in the Company s latest 10-Q filing with the Securities & Exchange Commission 5

7 WTI Differential to CMA NYMEX Delek US WTI Contango Market Structure Favors Tyler(1) WTI Differential to CMA NYMEX (Per Barrel) $0.35 $0.81 ($0.19) ($0.49) ($1.90) ($1.43) ($0.67) ($1.02) ($1.66) ($0.86) ($1.80) ($0.97) ($0.77) ($0.71) ($4.54) (1) Quarterly WTI contango calculation derived from Argus Media (Trade) Month Average Prices 6

8 Delek US Contango Benefits Refining Benchmark High-Sulfur Diesel Gulf Coast Crack Spread + Contango Benefit HSD Gulf Coast Crack Spread GC CS (+/-) Contango/Backwardation(1) $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 (1) Source: WTI Backwardation/Contango data is published and supplied by Argus Media; Gulf Coast crack spread data provided by Platts 7

9 Delek US Operational Update Tyler, TX Refinery Unplanned maintenance impacted throughputs and sales volumes in July/August 2010 Accelerated discretionary maintenance while offline during 3Q:10 Market conditions remain favorable in the local Tyler market Total Sales Volume Average Barrels Per Day (1) Production Breakdown - Nine Months Ended 2010 Other Petrochem 4% 3% Diesel/Jet 37% Gasoline 56% 5 Yr. Avg. 3Q09 4Q09 1Q10 2Q10 3Q10 (2) (1) Light products defined as gasoline, diesel and jet fuels (2) During the third quarter 2010, the Company conducted unplanned maintenance on several process units at the Tyler refinery. The crude unit at Tyler was offline for approximately 14 days during late July and early August, resulting in lower throughputs and, subsequently, lower sales volumes at the refinery in the period, when compared to the third quarter

10 Delek US Sharp Reduction in Planned Capital Spending at Tyler(1) Refining segment historically has comprised 70-90% of total annual capital expenditures Minimal regulatory projects remaining approximately $20 million on MSAT II in 2010(2) Intend to redirect capital toward debt reduction and strategic M&A Actual/Projected CAPEX Refining Segment ($MM) 2010 CAPEX Budget Refining Segment $155.1 Discretionary Maintenance Regulatory 11% $74.9 $61.6 $ % $ (A) 2007 (A) 2008 (A) 2009 (A) 2010 (E) 77% (1) Updated full-year 2010 capital spending guidance was provided by the Company on its quarterly earnings conference call dated November 4, 2010 (2) Sourced from 10-Q dated November 5,

11 Retail Segment Operational Update 10

12 Delek US Key Indicators Retail Segment(1) Improved Same-Store Sales Same-store sales have stabilized during the last five quarters (3Q:09-3Q:10) Ethanol Blending Economics Favorable ethanol blending economics have traditionally benefited retail fuel margin Accelerated Reimaging Program ~30% of store base has been remodeled Food Service & Private Label Adding Quick Service Restaurants to locations; adding new Private Label SKUs Divest Non-Core Assets Selling underperforming retail assets; redirect proceeds toward debt reduction (1) All comments as indicated on the Company s third quarter 2010 earnings conference call dated November 4, 2010 or in the Company latest 10-Q filing with the Securities & Exchange Commission 11

13 Delek US Broad-Based Recovery in Same-Store Sales(1) Trailing Y/Y Same-Store Merchandise Sales 5.0% 4.6% 6.3% 1.8% 1.2% -3.2% -4.4% -1.4% -7.6% -8.1% 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Trailing Y/Y Same-Store Fuel (Gallons) Sold 1.0% 4.2% 3.4% 5.2% -3.2% -8.3% -5.8% -2.2% -0.8% -0.3% 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 (1) Includes Virginia stores reclassified to normal operations 12

14 Total Number of Stores (End of Period) Total Remodeled Stores as % of Total Number of Stores Delek US Multi-Year Store Remodeling Initiative Remodeled approximately 30 percent of store base (as of 9/30/10) Significant increase in 2011 retail CAPEX will support new construction & remodeling (2) New construction will focus on new, rapid-growth markets in Southeastern U.S. Anticipate new builds (annually) during next five years (3) Total Number of Stores (End of Period)(1) Reimages/Prototypes as % of Total Store Base % % % % Q10 0% (1) Total store count includes Virginia stores reclassified to normal operations (2) 10-Q filed with the SEC on November 5, 2010: The retail segment s (2011) capital spend is expected to increase to approximately $40.0 million as a result of the continuation of store reimage efforts and the initiation of a new store construction program. (3) Comments as indicated on the Company s third quarter 2010 earnings conference call dated November 4,

15 Delek US Reimaged Initiative Proving Successful Same-Store Fuel Gallons Sold (Nine Months Ended Sept. 30, 2010) 2.8% 3.8% Legacy Store Base (420 Stores) 70 Reimaged Stores Open More Than One Year Same-Store Merchandise Sales (Nine Months Ended Sept. 30, 2010) 6.8% 4.2% Legacy Store Base (420 Stores) 70 Reimaged Stores Open More Than One Year 14

16 Gross Margin (%) Delek US Private Label: A Long-Term Margin Driver Significant margin-enhancing opportunity in Providing consumers with cheaper replacement products in a recession Increases our value proposition when competing with other big-box channels Launched dozens of new SKUs YTD 2010 Soft Drinks Water Auto- Motive Candy Energy Drinks Isotonic Juice Drinks Snacks Generating Incremental Gross Profit Margin Through Private Label Unbranded Branded 60% 50% 40% 30% 20% 10% 0% Energy Shots Teas/Lemonades Fruit Juice 1/2 Liter Water 15

17 Delek US Fresh Food Service: Volume/Profit Driver QSR penetration as % of Total Store Base Is ~14% (1) Attractive QSR offering positions retail locations as a destination point Opportunity to generate incremental store-level contribution margin Grab N Go category continues to gain traction Same-Store Sales of Food & Fountain(1) 16.4% 6.6% -1.4% -9.8% -10.4% 3Q09 4Q09 1Q10 2Q10 3Q10 (1) As of September 30,

18 Delek US Next Generation MAPCO Mart Locations 17

19 Marketing Segment Operational Update 18

20 Delek US Consistent Product Marketing/Logistics Segment Logistics Arm of Delek US Sell refined products on a wholesale basis in west Texas Synergies with Tyler Company-owned and leased pipelines transport crude to the Tyler refinery Product Marketing Terminals Three Company-owned terminals in San Angelo, Abilene and Tyler; third-party operations in Aledo, Odessa, Big Springs and Frost, Texas Consistently Positive Contribution Margin Positive contribution margin every quarter since purchase in 2006 Minimal CAPEX Requirements Annual CAPEX averaged less than $1.0 million

21 Delek US Marketing Segment Remains A Steady Performer Gradual Increase In Total Sales Volumes (Y/Y % Change) 7% 3% 19% -2% -30% 3Q09 4Q09 1Q10 2Q10 3Q10 Stable Total Contribution Margin ($MM) $23.3 $23.7 $16.6 $ YTD 2009 [1] YTD 2010 [1] (1) YTD is for the nine months ended September 30 20

22 Delek US Overview 21

23 Delek US Anticipated Reduction In Capital Spending (1) Lower capital spending requirements in 2010 versus periods Redirecting capital investment from refining segment to retail segment Remain focused on debt reduction and strategic M&A 2010 Capital Spending Forecast ($MM) $170 $98 $87 $102 $ (A) 2007 (A) 2008 (A) 2009 (A) 2010 (E)[1] (1) Updated full-year 2010 capital spending guidance was provided by the Company on its quarterly earnings conference call dated November 4,

24 IR Contact Information Noel Ryan III Director - Investor Relations / Communications Noel.Ryan@DelekUS.com (615)

25 Appendix 24

26 Dollars in Millions Delek US Diversified, Downstream Asset Base 2007(1,2) 2008(1,2) 2009(1) Non- Refining, 37% Non- Refining, 53% Non- Refining, 39% Refining, 63% Refining, 47% Refining, 61% $100.0 $91.0 $75.0 $73.6 $58.2 $50.0 $25.0 $35.2 $23.3 $23.7 $0.0 Refining Contribution Margin (1) Retail Contribution Margin (1,2) Marketing Contribution Margin (1) (1) Total contribution margin excludes impact of corporate/other contribution margin (2) Operating results for 2007 and 2008 have been restated to reflect the reclassification of the retail segment s remaining nine Virginia stores back to normal operations 25