Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — Investor Presentation (December 2009)
28 slides from Hf Sinclair's investor presentation, Dec 2, 2009
Slide 1: Holly Corporation Winter 2009
Holly Corporation Winter 2009
Slide 2: Holly Corporation Disclosure Statement
Holly Corporation 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 neces
Slide 3: Presentation Topics
Presentation Topics HOC Company Overview Financial Performance and Competitiveness Focused Growth Orientation Summary Appendix
Slide 4: Holly Investment Highlights
Holly Investment Highlights Pure Play Refiner Owns 3 refineries with combined processing capacity of 256,000 barrels per day (bpd) 40 years of refining experience-entered refining business in 1969 (profitable every year) Competitive Assets High complexity facilities with access to multiple sources o
Slide 5: Holly Overview
Holly Overview Holly Corporation: Holly's refineries operate in Southwest, Rockies & Mid-Continent markets 256,000 bpsd of refining capacity and weighted average complexity greater than 12.0 Refineries directly connected to Domestic or Canadian crude trading hubs Owns 100% of GP and 7.3 million LP u
Slide 6: Navajo Refinery
Navajo Refinery Product Sales Mix (12/31/08) Overview 561 acre site located in Artesia, NM with crude capacity of 100,000 BPSD (expanded in Q1 2009) Ability to process sour crude oils into high value light products Distributes to high margin markets in Arizona, New Mexico and West Texas Nelson Compl
Slide 7: Woods Cross Refinery
Woods Cross Refinery Product Sales Mix (12/31/08) Overview 200 acre site located in Woods Cross, UT (near Salt Lake City) with crude oil capacity of 31,000 BPD Processes regional sweet and lower cost black wax crude as well as Canadian sour crude oils Distributes to high margin markets in Utah, Idah
Slide 8: Tulsa Refinery (Sunoco)
Tulsa Refinery (Sunoco) Production Mix (12/31/08) Overview Tulsa refinery has crude capacity of 85,000 BPD Produces high value specialty lubricant products (lubes, waxes & oils) Strategically located near the Cushing crude oil hub and Magellan product system that supplies the Mid-Continent market Ne
Slide 9: Tulsa Refinery (Sunoco + Sinclair) Projected Production Mix
Tulsa Refinery (Sunoco + Sinclair) Projected Production Mix Overview Holly will integrate the two Tulsa facilities to form one complex 125,000 BPD refinery (full integration could take up to 18 months) Refineries are located less than 2 miles apart and will be pipeline interconnected Allows for imme
Slide 10: Presentation Topics
Presentation Topics HOC Company Overview Financial Performance and Competitiveness Focused Growth Orientation Summary Appendix
Slide 11: Holly Historical EBITDA
2003 2004 2005 2006 2007 2008 East 112 174 303 414 528.9 262 11 Holly Historical EBITDA (in millions) 1 HEP formed in July 200 2 Sold Montana Refinery Company (8,000 bpd) while increasing Navajo Refinery capacity (8,000 bpd) 3 Major turnaround and expansion conducted at Woods Cross in this year. Gro
Slide 12: Refining Margins (2004-2008 range)
Refining Margins (2004-2008 range) 5-yr. high & low gross margin range by quarter - red bars Gulf Coast 5-Yr. Quarterly Avg 3-2-1 margin- yellow line 5 Yr. Quarterly Average Gross Margin ($/bbl ) - Navajo, Woods Cross - - green line 5 Yr. Quarterly Average Gross Margin ($/bbl ) - PADD II - white lin
Slide 13: Strong Returns on Capital and Conservative Balance Sheet
Strong Returns on Capital and Conservative Balance Sheet Low Debt Level Compared to Peers High Returns on Invested Capital 1 - As of 9/30/09. HOC standalone (excludes HEP debt) 2 - HOC's Debt to Total Capitalization is 33% after the issuance of $100 million in debt in October 2009 resulting in total
Slide 14: Presentation Topics
Presentation Topics HOC Company Overview Financial Performance and Competitiveness Focused Growth Orientation Summary Appendix
Slide 15: Enhanced Competitive Position at Legacy Refineries
Enhanced Competitive Position at Legacy Refineries Recently Completed Refinery Enhancements Increased capacity 19% Increased lower cost black wax and Canadian crude processing from 20 to 50% Increased ULSD production percentage Enhanced black wax and Canadian heavy receiving capabilities Increased c
Slide 16: Holly will integrate the two Tulsa facilities
Holly will integrate the two Tulsa facilities (Sunoco & Sinclair) to form one complex 125,000 BPD refinery Net capex savings of approximately $125 million: Eliminates an estimated $110 million of project capital requirements Reduces MSAT 2 compliance capex by about $15 million Allows for immediate u
Slide 17: Capital Expenditure Overview
Capital Expenditure Overview Past investments make legacy refineries stronger Pipeline capex approximately $190 million from 2007 - 2009 (UNEV + crude lines) 1. Excludes HEP capex; net of contributions from UNEV JV partner; includes turnaround expenditures; excludes asset acquisitions. 2. As of 9/30
Slide 18: UNEV Pipeline & Refinery Economics
UNEV Pipeline & Refinery Economics Overview: 75% interest in 400 mile, 12" refined products pipeline from Salt Lake City to Las Vegas with terminals in Cedar City, UT and Las Vegas, NV (Sinclair is 25% equity partner) HOC is funding construction and will own through construction phase Holly expects
Slide 19: Presentation Topics
Presentation Topics HOC Company Overview Financial Performance and Competitiveness Focused Growth Orientation Summary Appendix
Slide 20: Holly Investment Highlights
Holly Investment Highlights Pure Play Refiner Owns 3 refineries with combined processing capacity of 256,000 barrels per day (bpd) 40 years of refining experience-entered refining business in 1969 (profitable every year) Competitive Assets High complexity facilities with access to multiple sources o
Slide 21: Holly Corporation contact details
Holly Corporation 100 Crescent Court, Suite 1600 Dallas, Texas 75201 (214) 871-3555 Bruce Shaw, Senior VP-Chief Financial Officer M. Neale Hickerson, VP-Investor Relations www.hollycorp.com
Slide 22: Presentation Topics
Presentation Topics HOC Company Overview Financial Performance and Competitiveness Focused Growth Orientation Summary Appendix
Slide 23: Appendix
Appendix Tulsa - Sinclair Refinery Acquisition Tulsa - Sunoco Refinery Acquisition Estimated Effects of Capital Projects
Slide 24: Sinclair Refinery - Transaction Summary
Sinclair Refinery - Transaction Summary 1Combined fully integrated capacity of Holly's existing Tulsa refinery and Sinclair's refinery is projected to be approximately 125,000 bpsd Holly has signed a definitive agreement to purchase Sinclair's Tulsa refinery Holly's portion of the purchase price wil
Slide 25: Tulsa (Sunoco) Acquisition - Transaction Summary
Tulsa (Sunoco) Acquisition - Transaction Summary Asset Summary: Tulsa refinery has crude capacity of 85,000 BPSD High complexity: 11.4 Nelson complexity factor Produces high value specialty products and transportation fuels Strategic location - direct pipeline connection to Cushing crude oil hub and
Slide 26: Estimated Effects of Capital Projects at Holly's Refineries
Estimated Effects of Capital Projects at Holly's Refineries Illustrative computations of impact of expansion & gross margins 26 Gross Margin/bbl Consolidated Navajo Woods Cross 2003 $7.23 $7.43 $6.10 2004 $9.20 $10.16 $6.00 2005 $12.62 $13.61 $9.62 2006 $15.78 $15.37 $17.10 2007 $16.74 $15.58 $20.69
Slide 27: Estimated Effects of Capital Projects: Crude Mix Changes
27 Estimated Effects of Capital Projects at Holly's Refineries Illustrative computations of impact of crude mix changes Every +/- $1 change in net feedstock costs equals $3.65 million Every +/- $1 change in net feedstock costs equals $14.6 million All dollar values are for a full year impact and ass
Slide 28: Definitions
Definitions BPD: the number of barrels per calendar day of crude oil or petroleum products. BPSD: the number of barrels per stream day of crude oil or petroleum products. EBITDA: Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA, is calculated as net income