Slide 1: Holly Corporation Spring 2005 Company Overview
Holly Corporation Spring 2005 Company Overview
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: Management Focus & Strategy
Management Focus & Strategy Manage business for the 'long haul' Focus on 'top' & 'bottom line' growth Focused on organic and acquisition growth opportunities Disciplined growth objective (reasonable prices) Company advantage because of Holly & HEP relationship Strong Balance Sheet & Cash Flows Finan
Slide 4: Strong Balance Sheet & Income Statement Performance
Strong Balance Sheet & Income Statement Performance
Slide 5: Strong Balance Sheet & Income Statement: Months Ended December 2004
Strong Balance Sheet & Income Statement: 12 months ended December, 2004 SUN VLO TSO PCO FTO GI HOC 0.039 0.05 0.02 0.05 0.039 0.012 0.063 SUN VLO TSO PCO FTO GI HOC 0.076 0.096 0.031 0.099 0.093 0.029 0.096 SUN VLO TSO PCO FTO GI HOC 0.186 0.155 0.049 0.136 0.167 0.041 0.24 (definitions at end of pr
Slide 6: Strong Balance Sheet & Income Statement: 5-Year Average
Strong Balance Sheet & Income Statement: 5-Year Average SUN VLO TSO FTO GI HOC 0.03 0.035 0.02 0.027 0.008 0.035 SUN VLO TSO FTO GI HOC 0.052 0.05 0.029 0.069 0.012 0.074 SUN VLO TSO FTO GI HOC 0.119 0.083 0.042 0.122 0.016 0.18 (definitions at end of presentation) SUN VLO TSO FTO GI HOC 0.857 0.799
Slide 7: Company Operations
Company Operations
Slide 8: Holly & HEP Assets
Holly & HEP Assets 109,000 bpd of refining capacity All HOC refineries have direct connection to Domestic / Canadian crude trading hubs Extensive crude oil gathering network in West Texas and Southeast New Mexico Over 1,500 miles of product pipelines 11 Terminals in 5 states (3 of the terminals are
Slide 9: High Margin Refining Region
Woods Cross Refinery (26,000 bpd) Montana Refinery (8,000 bpd) High Margin Refining Region Margins(d) NRC W-C MRC 2003 $7.43 $6.10 $7.63 2004 $10.16 $6.00 $7.73 2003 EBITDA (mm) $112 2004 EBITDA (mm) $178 Current Refining Capacity (bpd) 109,000 Equity Market Cap (bb)(a) $1.2 Total Debt (mm)(b) 33 Ca
Slide 10: Refining Margins by Refinery
Refining Margins by Refinery
Slide 11: NRC Refining Margins
NRC Refining Margins Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East 3.07 4.72 6.77 6.46 4.92 5.11 5.5 5.73 4.37 4.38 3.88 2 West 1.45 1.91 1.58 1.52 1.14 1.31 0.44 2.18 4.6 4.4 3.23 1.41 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 1.45 0.79 3.38 5.38 6.22 4.63 1.34 2.22 1.36 1.25 0.58 4.38
Slide 12: Woods Cross Refining Margins
Woods Cross Refining Margins Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East 1.64 1.21 5.56 4.32 5.75 2.73 2.87 4.44 -0.67 -0.95 5.29 0.57 West 0.2 2.16 2.85 2.97 1.23 1.94 4.56 3.17 9.59 8.01 1.98 2.43 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 2.85 0.26 2.31 1.42 2.78 3.98 0.17 2.14 1.34
Slide 13: MRC Refining Margins
MRC Refining Margins Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East 0.06 2.96 3.92 6.86 5.59 4.95 8.73 4.11 4.95 5.15 2.04 2.94 West 4.62 2.42 6.08 1.18 3.27 3.04 0.2 5.13 4.83 2.34 6.35 1.99 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 2.2 4.05 3.79 4.62 7.28 7.53 1.4 2.81 3.73 3.01 1.98 4
Slide 14: Recent Initiatives adding to base EBITDA
Recent Initiatives adding to base EBITDA
Slide 15: Previous guidance for Mid-Cycle EBITDA for Company operations
Previous guidance for Mid-Cycle* EBITDA for Company operations *Mid-cycle EBITDA for the refinery operations was calculated by subtracting 2004 operating expenses excluding depreciation from mid-cycle refinery gross margin. Mid-cycle refinery gross margin was calculated by applying the trailing thre
Slide 16: Increase Capacity of Sour Grades of Crude
Increase Capacity of Sour Grades of Crude Move from approx. 92% sour crude runs to 100% sour crude runs at Navajo Refinery. (Navajo primarily runs a West Texas Sour (WTS) 'type' of sour crude.) Increase low priced Canadian heavy sour crude at Woods Cross refinery to 8% of runs in 2005. Increase sour
Slide 17: Improve Refining Yields
Improve Refining Yields High Value Product Yield Improvement: Increase Clean Burning Gasoline (CBG) production at Navajo refining. Upgrade 5,200 bpd from 'conventional' gasoline to higher value CBG gasoline Increase Premium gasoline production Upgrade 1,000 bpd of regular gasoline to premium Increas
Slide 18: Increase Refinery Runs
Increase Refinery Runs Higher crude rates at all refineries. 2005 plan 1,800 bpd from all refineries Higher FCCU rates at Navajo refinery Increase gasoline & diesel production levels by buying additional gas oil from 3rd parties Increased Natural Gasoline Blending 2,100 bpd low cost natural gasoline
Slide 19: Summary of EBITDA from 2005 Refinery initiatives
Summary of EBITDA from 2005 Refinery initiatives: R&M Improvement Initiative Projected EBITDA improvement (in millions) Increased capacity of sour crude feedstocks $13 Improved refining yields 8 Increased refinery runs 7 Estimated EBITDA additions $28
Slide 20: Capital Projects Plan
Capital Projects Plan 20
Slide 21: 2005 Refinery Capital Spending Program: ROSE Asphalt Unit
2005 Refinery Capital Spending Program-Major Projects ROSE Asphalt Unit --Navajo refinery: Project Summary: Relocate and refurbish an existing purchased ROSE unit (residuum oil supercritical extraction) to the Artesia, NM facility. Unit will have a capacity of 4,500 BPD of asphalt (feedstock) Unit w
Slide 22: 2005 Refinery Capital Spending Program: Diesel Hydrotreater Unit
2005 Refinery Capital Spending Program-Major Projects Diesel Hydrotreater Unit --Woods Cross refinery : Project Summary: Compliance with ULSD requirements* Create infrastructure for potential 'sour up' project in future Projected cost: $33 million Estimated completion: 2nd quarter 2006 Target EBITDA
Slide 23: 2005 Refinery Capital Spending Program: ULSD and Expansion
2005 Refinery Capital Spending Program-Major Projects Ultra Low Sulfur Diesel and Expansion Projects --Navajo refinery: Project Summary: Compliance with ULSD requirements* 10,000 bpd expansion Projected cost: $52 million Estimated completion: 2nd quarter 2006 Target EBITDA: $12.5 million Assumption:
Slide 24: Anticipated Refinery Capital Spending
Anticipated Refinery Capital Spending Major Capital Projects Estimated Total Cost * Estimated EBITDA Addition ROSE Unit $16 $6.0 Diesel hydrotreater at Woods Cross 33 2.5 ULSD & Expansion 52 12.5 Total $101 $21.0 (in millions) *Approx. half these amounts will be spent in 2005, with the remainder in
Slide 25: Forward EBITDA Estimates
Forward EBITDA Estimates 8
Slide 26: Estimate of Mid-Cycle EBITDA
Estimate of mid-cycle EBITDA Previous Guidance 2005 2006 2007 Refining $105 $105 $105 $105 R&M Initiatives 28 28 28 Effect of capital projects 15 21 New Refining Guidance 133 148 154 Logistics assets (HEP)* 35 47 52 52 Minority interest* <17> <24> <27> <27> Total Consolidated* $123 $156 $173 $179 *T
Slide 27: Definitions
Definitions Gross refining margin - Refining revenues less refining cost of products sold Pre-tax margin - Income before income taxes divided by sales and other revenues Return on assets - Net income divided by total assets Return on invested capital - Net income divided by the sum of total stockhol
Slide 28: Definitions: EBITDA 2004 & 2003
Definitions Earnings Before Interest, Taxes, Depreciation and Amortization - 2004 & 2003 (in thousands): 2004 2003 Net Income $83,879 $46,053 Add provision for income tax 54,590 28,306 Add interest expense 3,524 2,136 Subtract interest income (4,372) (458) Add depreciation & amortization 40,481 36,2
Slide 29: Holly Corporation Holly Energy Partners, L.P. contacts
Holly Corporation Holly Energy Partners, L.P. 100 Crescent Court, Suite 1600 Dallas, Texas 75201 (214) 871-3555 Steve McDonnell Vice President, CFO (214) 871-3584 steve@hollycorp.com Neale Hickerson V.P.-Investor Relations (214) 871-3572 neale@hollycorp.com