Holly Energy Partners LP — Investor Presentation (March 2023)
20 slides from Holly Energy Partners LP's investor presentation, Mar 2, 2023
Slide 1: Investor Presentation March 2023
Exhibit 99.1 INVESTOR PRESENTATION MARCH 2023
Slide 2: Safe Harbor Disclosure Statement
Safe Harbor Disclosure Statement Statements made during the course of this presentation that are not historical facts are “forward-looking statements” within the meaning of United States federal securities laws. Forward-looking statements are statements that are not historical in nature and may incl
Slide 3: Holly Energy Partners Company Profile
Holly Energy Partners Company Profile § Integrated systems of petroleum product and crude pipelines, storage tanks, distribution terminals, loading racks and processing units located at or near HF Sinclair’s refining assets COMPANY in high growth markets OVERVIEW § Assets strategically located in co
Slide 4: Minimum Volume Commitments
Minimum Volume Commitments 1 2 Inflation Escalators as % of FY 2022 Total Revenue MVC Contract Renewal Schedule Other 5% $100 $90 $80 $70 $60 FERC 33% $50 $40 $30 $20 PPI 61% $10 $- HF Sinclair 3rd Party MVC Contract Profile § 10-15 years = typical contract lengths with HF Sinclair § 5 years = weigh
Slide 5: Historical Leverage and Coverage Ratios
1 Historical Leverage and Coverage Ratios 1 Leverage Ratio 4.2x 4.09 § Averaged 4.0x leverage since 2005 4.07 4.06 4.1x 4.0x 3.93 § Visible path to leverage target of 3.9x 3.0-3.5x 3.8x 3.75 3.7x § Conservative annual capital need 3.6x 2 (estimated $30-45 million in 2023 ) 3.5x '18 '19 '20 '21 22 3
Slide 6: HEP Financial Strength and Capital Structure
HEP Financial Strength Credit Ratings HEP Capital Structure ($ millions) 12/31/2022 HEP § S&P BB+ Revolver Capacity $1,200 (matures 7/2025) § Moody’s Ba2 Revolver Borrowings $(668) § Fitch BB+ $532 Revolver Availability HF Sinclair Cash $11 § S&P BBB- Reimbursable Total Liquidity $543 § Moody’s Baa3
Slide 7: HEP Capital Budget
HEP Capital Budget 1 2023 Capex Budget $30-45mm Expansion & JV Investments $5-10mm Maintenance $25-35mm Holly Energy Partners (NYSE: HEP) 1) Per HEP 2022 10-K filing. 7
Slide 8: HEP Avenues for Growth
HEP Avenues for Growth OPPORTUNITIES WITH HF ORGANIC EXTERNAL TRANSACTIONS SINCLAIR § Leverage HEP’s existing § Pursue logistics assets in HEP’s § Partnering with HF Sinclair to footprint to capitalize on current geographic region build and/or acquire new commercial opportunities assets/businesses §
Slide 9: Sinclair Acquisition Highlights
Sinclair Acquisition Highlights Expansive Network of Crude and Product Assets in Key Demand Centers Pipelines § 1,200 miles of pipelines § Regional crude gathering system for Sinclair’s refineries and 3rd parties Combined Company § Refined product outlets for Sinclair’s refineries § 70-75% of revenu
Slide 10: HEP Capital Allocation Strategy
1 HEP Capital Allocation Strategy Visible Deleveraging Sustainable Increased unitholder Strategy Delivers: Pathway Free Cash Flow returns Near-term Mid to Long-term Strategy 2 § Continue to reduce leverage§ Focus on funding all capex and distributions within operating cash flow 2 § Pay sustainable q
Slide 11: HEP Ownership Structure
HEP Ownership Structure Eliminated IDRs in 2017 to simplify structure HF SINCLAIR Corporate Ratings: Baa3/BBB-/BBB- CORPORATION (DINO) 99.999% interest GENERAL PARTNER (GP) HOLLY LOGISTIC PUBLIC SERVICES, L.L.C. Non-economic GP Interest 1 59.6mm HEP units 47% LP interest 2 $1,085M Value 1 66.8mm HEP
Slide 12: HF Sinclair Asset Footprint
HF Sinclair Asset Footprint Holly Energy Partners (NYSE: HEP) 12
Slide 13: HF Sinclair Business Segment Highlights
HF Sinclair Business Segment Highlights Financially Strong Investment Grade Parent Positioned for Value Creation Across all Segments SPECIALTY MARKETING REFINING RENEWABLES MIDSTREAM LUBRICANTS 1 § 7 refineries in the Mid-§ Iconic DINO brand and § 10,000 BPD Renewable § Integrated specialty § Operat
Slide 14: HEP Historical Growth
HEP Historical Growth Committed to Continuing Successful Track Record of Growth Crude gathering Holly Corporation system expansion and Frontier Oil Acquired remaining 50% JV with 50% JV with (2014) interests in SLC / Corporation Plains for Holly Tulsa Plains for Holly intermediate complete merger Fr
Slide 15: HF Sinclair Environmental, Social and Governance
HF Sinclair Environmental, Social and Governance Environmental Social Governance Scope 1 and Scope 2 GHG Intensity Target “One HF Sinclair Culture” program instills Board leadership provides significant integrity, teamwork and ownership at every industry expertise, alongside diverse § Established go
Slide 16: Appendix
Appendix Holly Energy Partners (NYSE: HEP) 16
Slide 17: HEP Assets
HEP Assets Holly Energy Partners owns and operates substantially all of the refined product pipeline and terminalling assets that support HF Sinclair’s refining and marketing operations in the Mid-Continent, Southwest and Northwest regions of the United States § Approximately 4,400 miles of crude oi
Slide 18: Adjusted EBITDA and Total Tariffs and Fees Reconciliation
Adjusted EBITDA and Total Tariffs and Fees Reconciliation Holly Energy Partners Years Ended December 31, 1 (In thousands) 2018 2019 2020 2021 2022 Net income attributable to the partners $ 178,847 $ 224,884 $ 170,483 $ 214,946 $ 216,783 Interest expense 71,899 76,823 59,424 53,818 8 2,560 Interest i
Slide 19: Distribution Coverage and Leverage Ratio Reconciliation
Distribution Coverage and Leverage Ratio Reconciliation Years Ended December 31, (In thousands) 2018 2019 2020 2021 2022 Net income attributable to the partners $ 178,847 $ 224,884 $ 170,483 $ 214,946 $ 216,783 Depreciation and amortization 98,492 96,705 99,578 93,800 99,092 Amortization of discount
Slide 20: Definitions
Definitions NON GAAP MEASUREMENTS: We report certain financial measures that are not prescribed or authorized by U.S. Generally Accepted Accounting Principles (“GAAP”). We discuss management's reasons for reporting these non-GAAP measures below. Although management evaluates and presents these non-G
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