Profile: Delek US Holdings Inc (DK)

Delek US Holdings, Inc. (Delek), incorporated in April 2001, is an integrated energy business focused on petroleum refining, the wholesale distribution of refined products and convenience store retailing. Delek business consists of three operating segments: refining, marketing and retail. As of December 31, 2011, approximately 68.5% interests were beneficially owned by Delek Group Ltd. (Delek Group). On January 31, 2012, Delek, through its marketing segment, completed the acquisition of an approximately 35 miles long, eight and ten inch pipeline system from Plains Marketing, L.P. (Plains) (Nettleton Acquisition). On February 7, 2012, Delek, through its marketing segment purchased (Big Sandy Acquisition) a light petroleum products terminal located in Big Sandy, Texas, the underlying real property, and other related assets from Sunoco Partners Marketing & Terminals L.P., and the eight inch diameter Hopewell-Big Sandy Pipeline originating at Hopewell Junction, Texas and terminating at the Big Sandy Station in Big Sandy, Texas from Sunoco Pipeline L.P.

The Company’s subsidiaries include MAPCO Express, Inc. (Express), MAPCO Fleet, Inc. (Fleet), Delek Refining, Inc. (Refining), Delek Finance, Inc. (Finance), Delek Marketing & Supply, Inc. (Marketing), Lion Oil Company (Lion Oil) and Paline Pipeline Company, LLC (Paline). During the year ended December 31, 2011, it acquired Lion Oil Company. On December 19, 2011, it acquired Paline from Ergon Terminaling, Inc (Ergon Terminaling).

Refining Segment

The Company owns and operates two independent refineries located in Tyler, Texas and El Dorado, Arkansas, representing a combined 140,000 barrels per day of crude throughput capacity, along with product distribution terminals and associated logistics assets. Its refining system produces a variety of petroleum-based products used in transportation and industrial markets which are sold to a range of customers located principally in inland, domestic markets. Both of its refineries are located in the United States Gulf Coast region, which is a PADD regional zones established by the United States Department of Energy where refined products are produced and sold. Its refining segment sells products on a wholesale basis to inter-company and third-party customers located around east Texas, Arkansas, Tennessee and the Ohio River Valley.

The Company’s Tyler, Texas refinery has a crude throughput capacity of 60,000 barrels per day. The Tyler refinery has access to crude oil pipeline systems that allows the Company’s access to East Texas, West Texas, Gulf of Mexico and foreign crude oils. Its El Dorado, Arkansas refinery has a crude throughput capacity of 80,000 barrels per day. The El Dorado Pipeline segment runs from Magnolia to the El Dorado refinery. Products manufactured at the El Dorado refinery are sold to retailers through spot sales, commercial contracts and through exchange agreements in markets in Arkansas, Memphis, Tennessee and north into the Ohio River Valley region.

Marketing Segment

The Company’s marketing segment sells refined products on a wholesale basis in the Gulf Coast and Mid-Continent regions through Company-owned and third-party terminals and transports and stores crude oil for its refining segment, as well as third parties, through company owned pipelines. The segment also manages, through Company-owned and leased pipelines, the transportation of crude to, and provides storage of crude for, its Tyler refinery. The marketing segment also provides marketing services to its Tyler refinery in the sales of its products through wholesale and contract sales. Its marketing segment markets products through three Company-owned terminals in San Angelo, Abilene and Tyler, Texas and third-party terminal operations in Aledo, Odessa, Big Springs and Frost, Texas.

The Company owns seven product pipelines of approximately 114 miles between its refined product terminals in Abilene and San Angelo, Texas, which includes a line connecting its facility to Dyess Air Force Base. These refined product pipelines include an eight-inch pipeline from a Magellan Pipeline custody transfer point at Tye Station to the Abilene terminal; a 13.5 mile, four-inch pipeline from the Abilene terminal to the Magellan Pipeline tie-in; a 76.5 mile, six-inch pipeline system from the Magellan Pipeline tie-in to San Angelo; an idled, 19 mile, eight and five-eighths inch diameter pipeline system originating at Hopewell Junction, Texas and terminating at the Big Sandy Station in Big Sandy, Texas, and three other local product pipelines.

The Company owns approximately 285 miles of pipelines that are used to transport crude oil, including the 185 mile, 10-inch Paline Pipeline System that runs between Nederland, Texas and Longview; the 65 mile, variable diameter Mc Murrey Pipeline System that runs between its Atlas Tank Farm and the Tyler refinery and the terminals and tank farms, which are owned and/or leased by the Company, and the 35 mile, variable diameter Nettleton Pipeline System that runs from Nettleton Station to Tyler, Texas.

Retail Segment

The Company’s retail segment markets gasoline, diesel, other refined petroleum products and convenience merchandise through a network of approximately 377 Company-operated retail fuel and convenience stores located in Alabama, Arkansas, Georgia, Kentucky, Mississippi, Tennessee and Virginia. More than 93% of its stores were located in Tennessee, Alabama and Georgia, with additional stores located in Arkansas, Virginia, Kentucky and Mississippi. Its retail locations operate primarily under the MAPCO Express, MAPCO Mart, Discount Food Mart, Fast Food and Fuel, East Coast, Delta Express and Favorite Markets brands.

The Company’s retail fuel and convenience stores offers tobacco products and immediately consumable items, such as non-alcoholic beverages, beer and a range of snacks and prepackaged items. The sites also offer state sanctioned lottery games, automated teller machine services and money orders. As of December 31, 2011, it operated 81 quick service restaurants in its store locations. In 49 of these locations, it offers national branded quick service food chains, such as Quiznos, Subway, Krispy Krunchy Chicken and Blimpie. The Company also has a variety of in-house, quick service food offerings featuring fried chicken, breakfast biscuits, deli sandwiches and other freshly prepared foods.

The Company’s convenience stores offer unbranded, private label products in select categories. The Company’s launches include salty snacks, teas and juices and energy drinks and shots. The Company operates a fleet of delivery trucks that deliver approximately one-half of the fuel sold at its retail fuel and convenience stores. The Company’s retail segment also includes a wholesale fuel distribution network that supplies 67 dealer-operated retail locations as of December 31, 2011.