Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — HollyFrontier — Investor Presentation (March 2022)
34 slides from Hf Sinclair's investor presentation, Mar 1, 2022
Slide 1: HollyFrontier Investor Presentation March 2022
HOLLYFRONTIER INVESTOR PRESENTATION March 2022
Slide 2: Disclosure Statement
Disclosure Statement 2 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. Words such as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “
Slide 3: Executive Summary: Positioned for Value Creation Across all Segments
Executive Summary Positioned for Value Creation Across all Segments 3 MIDSTREAM SPECIALTY LUBRICANTSREFINING RENEWABLES Inland merchant refiner 5 refineries in the Mid- Continent, West and Pacific Northwest regions Flexible refining system with fleet wide discount to WTI Premium product mark
Slide 4: HollyFrontier Asset Footprint
HollyFrontier Asset Footprint 4 Note: Cheyenne Renewable Diesel facility completed Q4 2021. Artesia Renewable Diesel facility expected to be completed in Q2 2022.
Slide 5: Proximity to North American Crude Production Laid in Crude Advantage
5 Proximity to North American Crude Production Laid in Crude Advantage 1. Reflects removal of Cheyenne Refinery data due to conversion of Cheyenne to Renewable Diesel Facility in Q3 2020. Beneficiary of inland coastal crude discount across entire refining system 100% of HFC’s purchased crude bar
Slide 6: High Value Premium Product Markets
6 1. Gulf Coast: CBOB Unleaded 84 Octane Spot Price, Group 3: Unleaded 84 Octane Spot Price, Chicago: Unleaded CBOB 84 Octane Spot Price, Denver: CBOB 81.5 Octane Rack Price, Phoenix: CBG 84 Octane Rack Price, SLC: CBOB 81.5 Octane Rack Price, Las Vegas: CBOB 84 Octane Rack Price. Source: GlobalView
Slide 7: Refining Segment Earnings Power
7 Refining Segment Earnings Power1 21.17 14.44 19.14 20.62 21.26 12.19 $21.03 $10 $15 $20 2015 2016 2017 2018 2019 2020 2021 Mid-Cycle Refining EBITDA Gulf Coast 3-2-1 Crack $10.00 Brent/WTI Spread $4.00 Product Transportation to HFC Markets $4.00 HFC Index $18.00 Capture Rate 70% Realized Gross Mar
Slide 8: Puget Sound Refinery Acquisition Transaction Overview
8 Puget Sound Refinery Acquisition Transaction Overview Puget Sound Refinery (Anacortes, WA) Aggregate cash consideration of $624 million1 $350 million cash purchase price plus approximately $278 million of inventory and closing adjustments1 Funded with one year suspension of quarterly dividen
Slide 9: Puget Sound Refinery Acquisition Assets Acquired
9 Puget Sound Refinery Acquisition Assets Acquired The Puget Sound Refinery (PSR) is a large, complex refinery with catalytic cracking and delayed coking units and a history of strong Free Cash Flow1 generation • ~149 mbpd nameplate capacity2 • 9.3 Nelson Complexity3 Connectivity to source advan
Slide 10: HollyFrontier Renewables Strategic Rationale
10 HollyFrontier Renewables Strategic Rationale Plan to expand the renewables segment to become a meaningful part of HollyFrontier’s cash flow and diversify from traditional petroleum fuels refining Consumer preference for low carbon fuels continues to grow, driving expansion of government renew
Slide 11: HollyFrontier Renewable Diesel
11 HollyFrontier Renewable Diesel HollyFrontier is expected to produce over 200 million gallons per year of renewable diesel Renewable Diesel Defined Renewable diesel is a cleaner burning fuel with over 50% lower greenhouse (GHG) emissions than conventional diesel Renewable diesel is not biodies
Slide 12: Artesia & Cheyenne Renewable Diesel Units
12 Artesia & Cheyenne Renewable Diesel Units 12 Expected capacity to produce ~120 million gallons per year of renewable diesel HFC to construct greenfield Renewable Diesel Unit (RDU) co-located at the Navajo refinery Includes rail infrastructure and storage tanks Existing hydrogen and utilitie
Slide 13: Pre-Treatment Unit Feedstock Flexibility
13 Pre-Treatment Unit Feedstock Flexibility Pre-treatment capacity allows our renewable diesel plants to process a variety of feedstock Project Details HFC to construct pre-treatment unit to provide flexibility and upgrade of feedstock Designed to treat degummed “unrefined” soybean oil, bleachab
Slide 14: Holly Energy Partners Business Profile
14 Operate a system of petroleum product and crude pipelines, storage tanks, distribution terminals and loading rack facilities located near HFC’s refining assets in high growth markets Revenues are nearly 100% fee-based with de minimis commodity risk Customer base consisting of refining compani
Slide 15: Ownership Structure: Eliminated IDRs in 2017 to Simplify Structure
15 1. Unit Count as of December 31, 2021. 2. Based on HEP unit closing price on February 22, 2022. 15 100% Interest 45.8mm HEP units1 43% LP Interest $766M Value2 59.6mm HEP units1 57% LP Interest $997M Value2 HOLLYFRONTIER CORPORATION (HFC) GENERAL PARTNER (GP) HOLLY LOGISTIC SERVICES, L.L.C. HOLLY
Slide 16: HEP Historical Growth
HEP Historical Growth Holly Corporation and Frontier Oil intermedi Holly Tulsa Corporation Paxton ra dropdown of complete merger cropdowm loading rack (July 2011) (July 2005) (Tulsa West) HEC 25% JV with Ks fenc dropdown of Plains for El Dorado & MLP IPO ‘SLC pipeline Cheyenne (July 2004) (Mar 2009)
Slide 17: HEP Avenues for Growth
17 ORGANIC EXTERNAL TRANSACTIONS DROPDOWNS FROM HFC Leverage HEP’s existing footprint to capitalize on commercial opportunities Contractual PPI/FERC Escalators Replace incumbent HFC service providers with HEP Pursue logistics assets in HEP’s current geographic region Replace incumbent HFC serv
Slide 18: Cushing Connect Joint Venture
18 Deal Highlights JV estimated total capital of $130 million with expected initial EBITDA1 multiple of 8x-9x. HEP to build and operate pipeline, PAA to build terminal connections and operate terminal HFC entered into 15-year MVC of 100 KBPD with HEP, which commenced in Q3 2021 Cushing Connect Joint
Slide 19: HF Lubricants & Specialty Products Integrated Model from Crude to Finished Products
19 Mississauga Base Oil Plant Base Oil Production Blending & Packaging RACK BACK MarketingDistribution R&D RACK FORWARD VGO/HCB HF Lubricants & Specialty Products Integrated Model from Crude to Finished Products Base Oil White Oils Specialty Products Waxes Finished Lubricants & Greases • Rack Back c
Slide 20: Our Product Portfolio Serves a Variety of Global End Markets
20 HF Lubricants & Specialty Products Our Product Portfolio Serves a Variety of Global End Markets Adhesives Agriculture Construction Automotive Packaging Food & Beverage Forestry & Saw Mill Energy Manufacturing Health & Beauty Heavy Duty Mining Transportation Pharmaceutical Plastic Processors Railr
Slide 21: Diverse Suite of Products Supplied to Major Industrial and Consumer Brands
21 Brands Product Type • Finished Lubricants & Greases • Specialty Products • Waxes • White Oils • Base Oils • Finished Lubricants & Greases • Waxes • White Oils • Petrolatums • Specialty Products • Finished Products & Greases • Specialty Products • Waxes • Base Oils Customer Base • Consumer Discret
Slide 22: 2021 Product Slate by Volume
22 2021 Product Slate by Volume Finished Lubricants & Greases Petrolatums Waxes White Oils Specialty Products Base Oils Margin Value $/bbl Converting one barrel of Base Oil sales into Finished Product sales results in an average margin uplift of ~$50/bbl Opportunity Across the Value Chain Upgrade Ex
Slide 23: Rack Forward Multiple Up-Lift
23 Rack Forward Multiple Up-Lift Segment(s) Multiple Margin Profile Peer Group Refining & Rack Back 5-7x Variable Integrateds: BP, CVX, RDS, XOM Refiners: CLMT, CVI, DK, MPC, PBF, PSX, VLO MLP 6-9x Stable DKL, MPLX, PBFX, PSXP Note: Multiple represents range of EV/EBITDA multiples for referenced pee
Slide 24: Mid-Cycle Rack Forward Adjusted EBITDA
24 Mid-Cycle Rack Forward Adjusted EBITDA ($ in millions) $265 Target Multiple 11x Enterprise Value ($ in millions) $2,915 Mid-Cycle Rack Forward EBITDA RF EBITDA Margin 11-16% Annual SG&A $190 - $200MM Annual DD&A $80 - $90MM Upside with Organic Growth and M&A Opportunities 11x multiple in-
Slide 25: Environmental, Social, and Governance (ESG)
25 Environmental, Social, and Governance (ESG) Board leadership provides significant industry expertise, alongside diverse business, financial and EHS expertise • Environmental, Health, Safety, and Public Policy Committee at Board level • 9 of 10 directors independent, including chair • 2 female boa
Slide 26: Appendix
A P P E N D I X
Slide 27: 2022 Capex Guidance
2022 Capex Guidance Refining - $250 – $270 million Lubricants & Specialties - $45– $60 million Renewables - $225 – $300 million Turnarounds & Catalysts - $70 – $100 million HEP - $55 – $80 million Refining 36% Lubricants & Specialties 7% Renewables 36% Turnarounds & Catalysts 12% HEP 9% 20
Slide 28: Strong Historical Track Record of Cash Returns
Strong Historical Track Record of Cash Returns 28 • Strong historical track record in returning excess cash to shareholders Regular quarterly dividend of $0.35 per common share suspended for one year effective with the dividend to be declared in Q2 2021 to help fund Puget Sound Refinery acquisitio
Slide 29: HollyFrontier Capital Structure
1. Includes availability from $1.35B HFC revolving credit facility & $1.2B HEP revolving credit facility. 2. Includes availability from $1.35B HFC revolving credit facility. HollyFrontier Capital Structure 29 Investment Grade Rating from S&P (BBB-), Moody’s (Baa3), and Fitch (BBB-) Cash and cash equ
Slide 30: HollyFrontier Credit Profile
Investment Grade Rating - S&P BBB- - Moody’s Baa3 - Fitch BBB- $234 million in cash as of 12/31/21 $1.75 billion outstanding debt as of 12/31/21 - excludes non-recourse HEP debt Total debt to capital ratio 24% as of 12/31/21 Target 1x Net Debt/EBITDA (ex HEP) Debt to Capital is calculated
Slide 31: Definitions
Definitions Earnings Per Share (EPS): earnings per share is calculated as net income (loss) attributable to stockholders divided by the average number of shares of common stock outstanding. Free Cash Flow: Calculated by taking operating cash flow and subtracting capital expenditures. IDR: Incentive
Slide 32: HollyFrontier Index
HollyFrontier Index 32 32 1. West Region includes Puget Sound Refinery starting November 1, 2021. Please see p. 33 for disclaimer and www.HollyFrontier.com/investor-relations for most current version. 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22* 436,000 350,000 391,000 380,000 348,000 416,000 416,0
Slide 33: HFC Index Disclosure
HFC Index Disclosure 33 HFC's actual pricing and margins may differ from benchmark indicators due to many factors. For example: • Crude Slate differences – HFC runs a wide variety of crude oils across its refining system and crude slate may vary quarter to quarter. • Product Yield differences – HFC’
Slide 34: HollyFrontier Corporation contact details
HollyFrontier Corporation (NYSE: HFC) 2828 N. Harwood, Suite 1300 Dallas, Texas 75201 (214) 954-6510 www.hollyfrontier.com Craig Biery | Vice President, Investor Relations investors@hollyfrontier.com 214-954-6510 Trey Schonter | Investor Relations investors@hollyfrontier.com 214-954-6510