Holly Energy Partners LP — Investor Presentation (March 2022)
12 slides from Holly Energy Partners LP's investor presentation, Mar 22, 2022
Slide 1: Disclosure Statement
1 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. Words such as “anticipate,” “project,” “will”, “expect,” “plan,” “goal,” “fore
Slide 2: Holly Energy Partners (HEP) Company Profile
2 Holly Energy Partners (HEP) Company Profile STABLE EARNINGS FINANCIAL TARGETS & GUIDANCE BALANCE SHEET HIGHLIGHTS Revenues are nearly 100% fee-based with de minimis commodity risk Customer base consisting of refining companies (contracts not with E&Ps) Minimum Volume Commitments (MVCs) compr
Slide 3: HEP Assets
3 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
Slide 4: HEP Ownership Structure
4 HEP Ownership Structure 99.999% interest 66,810,171 HEP units1,2 53% LP interest1 $1,114mm Value3 59,630,030 HEP units1 47% LP interest1 $988mm Value3 HF SINCLAIR CORPORATION (HF Sinclair) GENERAL PARTNER (GP) HOLLY LOGISTIC SERVICES L.L.C. HOLLY ENERGY PARTNERS, L.P. (HEP) PUBLIC Non-economic GP
Slide 5: HEP Avenues for Growth
5 HEP Avenues for Growth ORGANIC EXTERNAL TRANSACTIONS DROPDOWNS FROM HF SINCLAIR Leverage HEP’s existing footprint to capitalize on commercial opportunities Contractual PPI/FERC escalators Replace incumbent HF Sinclair service providers with HEP Example: Frontier Pipeline Expansion Pursue l
Slide 6: Sinclair Acquisition Highlights
6 Sinclair Acquisition Highlights Expansive Network of Crude and Products Assets in Key Demand Centers Pipelines 1,200 miles of pipelines Regional crude gathering system for Sinclair’s refineries and 3rd parties Refined product outlets for Sinclair’s refineries Terminals 8 product terminals
Slide 7: HEP Pro Forma Earnings Profile
7 HEP Pro Forma Earnings Profile1 Expected $70-80 million of adjusted EBITDA uplift from Sinclair’s midstream assets Amount differs from historical results, reflecting new minimum volume commitments to be entered into between HEP and HF Sinclair, expected growth in JV earnings, and the exclusion
Slide 8: HEP Capital Allocation Strategy
8 HEP Capital Allocation Strategy1 Near-term Continue to reduce leverage Pay sustainable quarterly distribution of $0.35/unit Mid to Long-term Strategy Focus on funding all capex and distributions within operating cash flow Reduce leverage to 3.0x-3.5x Maintain distributable cash flow cove
Slide 9: Appendix
APPENDIX AHF Sinclar
Slide 10: Sinclair Transaction Overview
Sinclair Transaction Overview Creating a More Diverse, Downward Integrated Business with Scale 10 HollyFrontier Transaction Structure & Purchase Price All-stock transaction, with a transaction value of ~$2.1 billion based on HFC closing stock price on March 11, 2022 Includes the creation of a ne
Slide 11: HEP Adjusted EBITDA Reconciliation
HEP Adjusted EBITDA Reconciliation 11 Holly Energy Partners HEP HEP PF Sinclair 12/31/2021 12/31/2021 Net income attributable to the partners 214,946$ 218,727$ + Interest expense 53,818 76,055 - Interest income (29,925) (29,925) + State income tax expense 32 32 + Depreciation and amortization 93,800
Slide 12: Definitions
Definitions 12 BPD: the number of barrels per calendar day of crude oil or petroleum products. Blenders Tax Credit (BTC): Federal tax credit where qualified biodiesel blenders are eligible for an income tax credit of $1.00 per gallon of biodiesel or renewable diesel that is blended with petroleum di
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