Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — HollyFrontier — Merger or Acquisition (August 2021)
26 slides from Hf Sinclair's merger presentation, Aug 3, 2021
Slide 1: HollyFrontier & Holly Energy Partners Combination with Sinclair
HollyFrontier Corporation & Holly Energy Partners, L.P. Combination with Sinclair Oil Corporation & Sinclair Transportation Company AUGUST 3, 2021
Slide 2: Disclosure Statement
Disclosure Statement FORWARD LOOKING STATEMENTS: Statements contained herein 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,” “s
Slide 3: Compelling Strategic and Financial Benefits of Transformative Transaction
Compelling Strategic and Financial Benefits of Transformative Transaction1 DIVERSIFICATION & INTEGRATION ACCRETIVE Diversifies HollyFrontier’s business with the Accretive to earnings, cash flow and free addition of Sinclair’s iconic brand and cash flow within the first year integrated distribution n
Slide 4: HollyFrontier: A Decade of Growth and Value Creation
HollyFrontier: A Decade of Growth and Value Creation Expanding refining Emerging renewables Delivered business business Significant Value to Shareholders2 • 5 complex refineries with • Addition of renewable diesel unit 554,000 BPD of crude oil (RDU) and pre-treatment unit (PTU) processing capacity i
Slide 5: HollyFrontier Transaction: Creating a More Diverse, Downward Integrated Business with Scale
HollyFrontier Transaction: Creating a More Diverse, Downward Integrated Business with Scale STRUCTURE & PURCHASE PRICE • All-stock transaction, with a transaction value of ACQUIRED SINCLAIR BUSINESSES ~$1.8 billion based on HFC closing stock price on July 30, 2021 • Includes the creation of a new pu
Slide 6: Holly Energy Partners Transaction: Enhancing Scale and Earnings Power
Holly Energy Partners Transaction: Enhancing Scale and Earnings Power STRUCTURE & PURCHASE PRICE • Sinclair to contribute stock of Sinclair ACQUIRED SINCLAIR BUSINESSES Transportation Company with logistics assets to HEP in exchange for cash and stock, representing a transaction value of ~$758 Logis
Slide 7: HF Sinclair: Positioned for the Next Decade and Beyond
HF Sinclair: Positioned for the Next Decade and Beyond Creating Shareholder Value1 Marketing • Strong free cash flow generation • Accretive to HFC’s earnings, cash flow and free cash flow; accretive to HEP’s DCF Refining HF Renewables • Commitment to capital returns to shareholders Sinclair • Synerg
Slide 8: Combination Strengthens our Commitment to ESG
Environmental, Social and Governance (ESG) Combination Strengthens our Commitment to ESG Environmental Social Governance • Transaction increases • Annual Sustainability Report • Board leadership provides renewable diesel scale highlighting ESG efforts significant industry expertise, alongside divers
Slide 9: HF Sinclair: Pro-Forma Asset Footprint
HF Sinclair: Pro-Forma Asset Footprint1 Creating scale, increasing diversification and building an integrated business with strong marketing presence 1. Puget Sound Refinery acquisition expected to close in 4Q2021 9 9
Slide 10: Diversifying HollyFrontier with Sinclair's Iconic Brand and Integrated Distribution Network
MARKETING Diversifying HollyFrontier with Sinclair’s Iconic Brand and Integrated Distribution Network ACQUISITION HIGHLIGHTS COMBINED COMPANY Footprint: Driving growth and leveraging increased distribution network • Iconic brand • Downward integration of • 300+ distributors and 1,500+ wholesale bran
Slide 11: Growing the Size and Scale of HollyFrontier's Renewables Business
RENEWABLES Growing the Size and Scale of HollyFrontier’s Renewables Business ACQUISITION HIGHLIGHTS COMBINED COMPANY Sinclair is a First Mover in Renewables Combination creates large scale renewables business • 10,000 BPD Renewable Diesel Unit co-located at Sinclair, WY refinery • A leading U.S. pro
Slide 12: Adding Complementary Rocky Mountain Refineries to HollyFrontier's Footprint
REFINING Adding Complementary Rocky Mountain Refineries to HollyFrontier’s Footprint ACQUISITION HIGHLIGHTS COMBINED COMPANY1 Sinclair Refinery: Opportunity to create value through increased reliability and • 94,000 BPD operating capacity with 3.74mmbbl of storage improved cost structure • Crude sla
Slide 13: Expansive Network of Crude and Product Assets
LOGISTICS Expansive Network of Crude and Product Assets ACQUISITION HIGHLIGHTS COMBINED COMPANY Pipelines: Expansive network of crude and product assets in key • 1,200 miles of pipelines demand centers • Regional crude gathering system for Sinclair’s refineries and • Expected annual EBITDA 3rd parti
Slide 14: Capturing Synergy Opportunities
Capturing Synergy Opportunities: Transaction to Drive Cost Savings & Efficiencies Annual Synergies Expected within 2 years: $20 million $40 million $100 million $40 million Commercial Operating expense SG&A Expected annual improvements reductions synergies to be realized within 2 years • Downward in
Slide 15: Driving Significant Uplift to Free Cash Flow
Driving Significant Uplift to Free Cash Flow Pro-Forma Mid-Cycle Earnings Uplift1: ($mm's) HFC PSR2 Sinclair HF Sinclair REFINING $1,000 $175 $175 $1,350 LOGISTICS $350 $75 $425 RENEWABLES $250 $150 $400 MARKETING $50 $50 LUBRICANTS $250 $250 EXPECTED ANNUAL SYNERGIES $100 TOTAL EBITDA $1,850 $175 $
Slide 16: HF Sinclair Capital Allocation Strategy
HF Sinclair Capital Allocation Strategy1 Free Cash Flow Drives Capital Returns and Balanced Capital Allocation Transaction Sustainable Strengthened Reinstate Capital Delivers: Free Cash Flow Balance Sheet Returns Near-term Mid-term Long-term by 2Q22 by 1Q23 2023 and Beyond Reinstate $0.35 regular $1
Slide 17: Holly Energy Partners Capital Allocation Strategy
Holly Energy Partners Capital Allocation Strategy1 Transaction Sustainable Visible Deleveraging Increase unitholder Delivers: Free Cash Flow Pathway returns Near-term Mid-term Long-term by 2Q22 2023 2024 and Beyond Continue to reduce leverage Reduce leverage to 3.5x Maintain leverage below 3.0x Pay
Slide 18: Pathway to Completion
Pathway to Completion Transaction Proxy filings & Subject to customary Expected to agreements shareholder vote closing conditions close mid-2022 reached by both including regulatory parties 8/2021 clearance 18
Slide 19: Compelling Strategic and Financial Benefits of Transformative Transaction
Compelling Strategic and Financial Benefits of Transformative Transaction1 DIVERSIFICATION & INTEGRATION ACCRETIVE Diversifies HollyFrontier’s business with the Accretive to earnings, cash flow and free addition of Sinclair’s iconic brand and cash flow within the first year integrated distribution n
Slide 20: Appendix
Appendix => ‘7 lt HOLLYFRONTIER Te HOLLYFRONTIER. LUBRICANTS & SPECIALTIES HOLLY TRONTIER.
Slide 21: HF Sinclair Pro-Forma Capital Structure
HF Sinclair Pro-Forma Capital Structure Strengthening Credit Profile through Reduced Leverage, Increased Scale and Portfolio Diversification HFC Consolidated Capital Structure: As of 6/30/2021 ($mm's) HFC Sinclair HF Sinclair Pro-Forma Cash and Cash Equivalents $1,398 $1,398 HOLLYFRONTIER CORPORATIO
Slide 22: Holly Energy Partners Pro-Forma Capital Structure
Holly Energy Partners Pro-Forma Capital Structure Strengthening Credit Profile through Reduced Leverage, Increased Scale and Portfolio Diversification HEP Capital Structure: As of 6/30/2021 ($mm's) HEP Sinclair HEP Pro-Forma Cash and Cash Equivalents $20 $20 HEP LONG TERM DEBT HEP 5.000% Senior Note
Slide 23: JV's Provide Significant Access to Finished Product
LOGISTICS JV’s Provide Significant Access to Finished Product Pipelines and Storage Powder Flats Pipeline Joint Venture Powder River Basin crude gathering joint venture with Saddle Butte (32.5% Sinclair non-operated interest) Provides efficient access to un-blended Power River Basin crude for Si
Slide 24: Definitions
Definitions Adjusted Net Income: A non-GAAP financial measure that excludes non-cash lower of cost or market inventory valuation adjustments, long-lived asset impairments, HEP’s gain on sales-type leases, HEP’s loss on early extinguishment of debt, severance costs, restructuring charges, LIFO invent
Slide 25: Definitions (continued)
Definitions (continued) Net Debt: Net debt is total balance sheet debt net of cash, cash equivalents and short-term investments. Non GAAP measurements: We report certain financial measures that are not prescribed or authorized by U. S. generally accepted accounting principles ("GAAP"). We discuss ma
Slide 26: HollyFrontier Corporation Holly Energy Partners, L.P.
HollyFrontier Corporation Holly Energy Partners, L.P. (NYSE: HFC) (NYSE: HEP) 2828 N. Harwood, Suite 1300 2828 N. Harwood, Suite 1300 Dallas, Texas 75201 Dallas, Texas 75201 (214) 954-6510 (214) 954-6510 www.hollyfrontier.com www.hollyenergy.com Craig Biery | Vice President, Investor Relations Trey