Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — Investor Presentation (March 2008)
26 slides from Hf Sinclair's investor presentation, Mar 25, 2008
Slide 1: Holly Corporation March 2008 Update
Holly Corporation March 2008 Update
Slide 2: Disclosure Statement
Disclosure Statement Statements made during the course of this presentation that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward- looking statements are inherently uncertain and necessarily involve ris
Slide 3: Holly Operations & Growth Advantages
Holly Operations & Growth Advantages Assets positioned to serve historically high growth & high margin markets Track record of superior returns on capital among peers Strong balance sheet & cash flow generation for capital investment & share repurchases Capital projects with significant impact relat
Slide 4: Existing Asset Location / Business Footprint
Existing Asset Location / Business Footprint Holly Corporation: Holly's refineries operate in historically high margin & high growth Southwest & Rockies markets 111,000 bpsd of refining capacity Refineries directly connected to Domestic or Canadian crude trading hubs Holly Energy Partners: Over 1,70
Slide 5: Strong Financial Position vs. Peer Group: Return on Invested Capital
Strong Financial Position vs. Peer Group 5 Return on Invested Capital Return on Invested Capital 2003 18% 2004 26% 2005 45% 2006 63% 2007 63% High return on invested capital Strong cash flow generation
Slide 6: Strong Financial Position vs. Peer Group: Debt / Equity
Strong Financial Position vs. Peer Group 6 Debt / Equity Debt / Equity 2003 6% 2004 3% 2005 0% 2006 0% 2007 0% No long term debt Strong balance sheet for growth
Slide 7: Capital Spending Plan: 2007-2009
Capital Spending Plan: 2007-2009 - - Elements of both Offense & Defense: Expanding refining capacity 18% by 2009 - --from 111,000 bpsd to 131,000 bpsd Increase flexibility of processing cost-advantaged crudes* - --from 5,000 bpsd to 55,000 bpsd All projects to take advantage of growing markets in th
Slide 8: Navajo Refinery: Expansion and Feedstock Flexibility
Navajo Refinery: --Expansion and Feedstock Flexibility Phase I: Expand crude capacity to approximately 100,000 bpsd (Q1 '09) Revamp Lovington crude & vacuum unit Install new 15,000 bpsd gas oil hydrocracker (40% conversion) Install new 28 mmscfd hydrogen plant Expand sulfur recovery capacity (projec
Slide 9: Woods Cross Refinery: Expansion and Feedstock Flexibility
Woods Cross Refinery: --Expansion and Feedstock Flexibility Expand refinery by 19% to 31,000 bpsd Increase amount of Canadian / Black Wax Crudes to 50% of crude capacity Install new 15,000 bpsd gas oil hydrocracker (40% conversion) New Black Wax desalter Expand sulfur recovery capacity Black Wax cru
Slide 10: UNEV Pipeline: Salt Lake City to Las Vegas
UNEV Pipeline: --Salt Lake City to Las Vegas Build 400 mile 12" pipeline Initial capacity approximately 62,000 bpd Expandable to approximately 120,000 bpd (w/ additional pump stations) 2 Terminal locations: North Las Vegas and Cedar City, UT Holly owns 75% of project with Sinclair owning 25% interes
Slide 11: Projected Capital Expenditures by Year
Projected Capital Expenditures by Year Capital Projects: 2007 2008 2009 Total NRC expansion and feedstock flexibility 59 140 46 245 Phase I - Expansion 52 91 15 158 Phase II - Feedstock Flexibility 7 49 31 87 WX expansion and feedstock flexibility 40 55 10 105 Sulfur recovery unit at NRC 9 14 3 26 S
Slide 12: Expanded Footprint in Southwest / Rocky Mountain States
Expanded Footprint in Southwest / Rocky Mountain States Current: 111,000 bpsd of refining capacity Operate in the historically high margin & high growth Southwest & Rockies markets Can process approx. 80,000 bpsd of sour crude feedstock Can process approx. 5,000 bpsd of price-advantaged crude feedst
Slide 13: NRC Refining Margins
NRC Refining Margins Red bars represent '02-'06 5-yr. high & low gross margin range. Median of that range is depicted in blue. NRC '07 GM - black solid line GC 5-Yr. Avg 3-2-1 margin- maroon line
Slide 14: Woods Cross Refining Margins
Woods Cross Refining Margins Red bars represent '02-'06 5-yr. high & low gross margin range. Median of that range is depicted in blue. WX '07 GM - black solid line GC 5-Yr. Avg 3-2-1 margin- maroon line
Slide 15: Holly Historical EBITDA & Associated Gross Margin per bbl
Gross Margin: $7.23/BBL $9.20/BBL $12.62/BBL $15.78/BBL $16.74/BBL 15 Holly Historical EBITDA (in millions) & Associated Gross Margin per bbl
Slide 16: Estimated Effects of Capital Projects at Holly's Refineries: Gross Margins
Estimated Effects of Capital Projects at Holly's Refineries Illustrative computations of impact of expansion & gross margins 16 Gross Margin/bbl Consolidated Navajo Woods Cross 2003 $7.23 $7.43 $6.10 2004 $9.20 $10.16 $6.00 2005 $12.62 $13.61 $9.62 2006 $15.78 $15.37 $17.10 2007 $16.74 $15.58 $20.69
Slide 17: Estimated Effects of Capital Projects at Holly's Refineries: Crude Mix
17 Estimated Effects of Capital Projects at Holly's Refineries Illustrative computations of impact of crude mix changes Every +/- $1 change in net feedstock costs equals $3.65 million Every +/- $1 change in net feedstock costs equals $14.6 million
Slide 18: Cash Flow at Various EBITDA Levels -- 2008
Cash Flow at Various EBITDA Levels -- 2008 (in millions) (1) Currently estimated total for anticipated sustaining capital projects and for projects that have been authorization by the Holly Board EBITDA $200 $300 $400 $500 $600 Estimated Cash Income Tax <29> <64> <100> <136> <171> CAPEX (1) <450> <4
Slide 19: Cash Flow at Various EBITDA Levels -- 2009
Cash Flow at Various EBITDA Levels -- 2009 EBITDA $200 $300 $400 $500 $600 Estimated Cash Income Tax <41> <77> <112> <148> <184> CAPEX (1) <173> <173> <173> <173> <173> Free Cash Flow < $14> $50 $115 $179 $243 (in millions) (1) Currently estimated total for anticipated sustaining capital projects an
Slide 20: Holly Operations & Growth Advantages
Holly Operations & Growth Advantages Assets positioned to serve historically high growth & high margin markets Track record of superior returns on capital among peers Strong balance sheet & cash flow generation for capital investment & share repurchases Capital projects with significant impact relat
Slide 21: Holly Corporation contact details
Holly Corporation 100 Crescent Court, Suite 1600 Dallas, Texas 75201 (214) 871-3555 Bruce Shaw, Senior VP-Chief Financial Officer M. Neale Hickerson, VP-Investor Relations www.hollycorp.com
Slide 22: Appendix
Appendix HOLLY
Slide 23: Definitions
Definitions BPD: the number of barrels per calendar day of crude oil or petroleum products. BPSD: the number of barrels per stream day of crude oil or petroleum products. EBITDA: Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA, is calculated as net income
Slide 24: Tax Benefits
Tax Benefits American Jobs Creation Act of 2004: (October 2004) Created tax incentives for small refiners to produce ULSD Provides immediate deduction of 75% of certain capital costs Provides a tax credit based on ULSD production up to 25% of these costs Domestic Manufacturers Tax Deduction Provided
Slide 25: Sulfur Credits Benefit
Sulfur Credits Benefit Value realized by Holly: In 2006, Holly sold approximately 100,000 credits for approximately $16 million In 2007, Holly sold approximately 150,000 credits for approximately $23 million Credit Generation: Compliance with Low Sulfur gasoline for small refiners, including Holly,
Slide 26: Common Stock Repurchase Programs (2005 - 2008)
Common Stock Repurchase Programs (2005 - 2008) Repurchases in 2007 Approximately 4.0 million shares repurchased for about $211.1 MM Weighted average price of $52.49 Repurchases 2005 - 2008 (as of 1/31/08) Repurchased total of approx 15.4 million shares for about $600 MM Represents approximately 24%