Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — Investor Presentation (March 2009)
26 slides from Hf Sinclair's investor presentation, Mar 12, 2009
Slide 1: Holly Corporation Spring 2009 Update
Holly Corporation Spring 2009 Update
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: Holly Operations & Growth Advantages
Holly Operations & Growth Advantages Pure play independent refiner 40 years of refining experience Assets positioned to serve historically high growth & high margin markets Track record of superior returns on capital among peers Strong balance sheet & cash flow generation for capital investment & sh
Slide 4: Strong Financial Position vs. Peer Group: Return on Invested Capital
Strong Financial Position vs. Peer Group (Excludes HEP reconsolidation in 2008) 4 Return on Invested Capital Return on Invested Capital 2004 26% 2005 45% 2006 63% 2007 63% 20081 22% High return on invested capital Strong cash flow generation 1 Excludes HEP debt-including HEP debt, ROIC equals 14% 2
Slide 5: Strong Financial Position vs. Peer Group: Debt / Equity
Strong Financial Position vs. Peer Group (Excludes HEP reconsolidation in 2008) 5 Debt / Equity Debt / Equity 2004 3% 2005 0% 2006 0% 2007 0% 20081 0% No long term debt Strong balance sheet 1 Excludes HEP debt-including HEP debt, 2008 would be 63% 2 Excludes HEP debt-including HEP debt, 5-year avera
Slide 6: Existing Asset Location / Business Footprint
Existing Asset Location / Business Footprint Holly Corporation: Holly's refineries operate in historically high margin & high growth Southwest & Rockies markets 131,000 bpsd of refining capacity Refineries directly connected to Domestic or Canadian crude trading hubs Holly Energy Partners: Over 1,70
Slide 7: Navajo Refinery Description
Navajo Refinery Description Operated by wholly owned HOC subsidiary Navajo Refining Company 561 acre site in Artesia, NM Crude oil capacity of 100,000 bpsd (expanded in Q1 2009) Ability to process sour crude oils into high value light products Fully integrated facility with crude distillation, vacuu
Slide 8: Woods Cross Refinery Description
Woods Cross Refinery Description Acquired from ConocoPhillips in 2003 200 acre site in Woods Cross, UT (near Salt Lake City) Current crude oil capacity of 31,000 bpsd Processes regional sweet and black wax crude as well as Canadian sour crude oils into high value light products Fully integrated refi
Slide 9: Refining Operating Performance - Holly Corporation Product Sales Mix
Refining Operating Performance - Holly Corporation Product Sales Mix
Slide 10: Holly Historical EBITDA & Associated Gross Margin per bbl
2003 2004 2005 2006 2007 2008 East 112 174 303 414 528.9 262 Gross Margin: $7.23/BBL $9.20/BBL $12.62/BBL $15.78/BBL $16.74/BBL 10 Holly Historical EBITDA (in millions) & Associated Gross Margin per bbl *HEP formed in July 2004 $10.96/BBL
Slide 11: NRC Refining Margins (2004-2008 range)
NRC Refining Margins (2004-2008 range) Q1 Q2 Q3 Q4 East 6.43 8.07 8.56 7.47 West 3.35 7.26 4.03 3.23 0.2 0.2 0.2 0.2 6.56 12.01 3.32 3.46 nrc 08 gm 6.43 8.07 12.69 10.8 gc 321 8.33 14.61 12.86 6.62 08 gm 0 line 2006 gm Rev bud Bud 06 Red bars represent '04-'08 5-yr. high & low gross margin range by
Slide 12: Woods Cross Refining Margins (2004-2008 range)
Q1 Q2 Q3 Q4 East 3.17 10.07 4.26 4.98 West 6.18 2.32 15.43 9.97 0.2 0.2 0.2 0.2 5.19 18.63 8.15 2.13 wx 08 gm 12.54 12.49 28.04 17 gc 321 8.33 14.61 12.86 6.62 08 gm 0 line 2006 gm Rev bud Bud 06 Woods Cross Refining Margins (2004-2008 range): Red bars represent '04-'08 5-yr. high & low gross margin
Slide 13: Capital Spending Plan: 2007-2009
Capital Spending Plan: 2007-2009 - - Elements of both Offense & Defense: Expanding refining capacity 18% by 2009 - --from 111,000 bpsd to 131,000 bpsd - --COMPLETED Q1 2009 Increase flexibility of processing cost-advantaged crudes1 - --from 5,000 bpsd to 55,000 bpsd - --COMPLETED WOODS CROSS PORTION
Slide 14: Navajo Refinery: Expansion and Feedstock Flexibility
Navajo Refinery: --Expansion and Feedstock Flexibility Phase I: Expand crude capacity to approximately 100,000 bpsd Revamp Lovington crude & vacuum unit Install new 15,000 bpsd gas oil hydrocracker (40% conversion) Install new 28 mmscfd hydrogen plant Expand sulfur recovery capacity COMPLETED Q1 200
Slide 15: Woods Cross Refinery: Expansion and Feedstock Flexibility
Woods Cross Refinery: --Expansion and Feedstock Flexibility Expand refinery to 31,000 bpsd Increase amount of Canadian / Black Wax Crudes to 50% of crude capacity Install new 15,000 bpsd gas oil hydrocracker (40% conversion) New Black Wax desalter Expand sulfur recovery capacity Black Wax crude unlo
Slide 16: UNEV Pipeline: Salt Lake City to Las Vegas
UNEV Pipeline: --Salt Lake City to Las Vegas Build 400 mile 12" pipeline Initial capacity approximately 62,000 bpd Expandable to approximately 118,000 bpd (w/ additional pump stations) 2 Terminal locations: North Las Vegas, NV and Cedar City, UT Holly entity owns 75% of project with Sinclair owning
Slide 17: Projected Capital Expenditures by Year
Projected Capital Expenditures by Year Capital Projects: 2007 2008 2009 Total NRC expansion and feedstock flexibility 59 132 90 281 Phase I - Expansion 52 88 45 185 Phase II - Feedstock Flexibility 7 42 40 89 Heavy oil tankage & loading facility 0 2 5 7 WX expansion and feedstock flexibility 40 68 1
Slide 18: Cash Flow at Various EBITDA Levels - 2009
Cash Flow at Various EBITDA Levels -- 2009 EBITDA $200 $300 $400 $500 $600 Estimated Cash Income Tax <41> <77> <112> <148> <184> CAPEX1 <350> <350> <350> <350> <350> Free Cash Flow < $191> <$127> <$62> $2 $66 (in millions) 1Currently estimated total for anticipated sustaining capital projects and fo
Slide 19: Expanded Footprint in Southwest / Rocky Mountain States
Expanded Footprint in Southwest / Rocky Mountain States Current: 131,000 bpsd of refining capacity Operate in the historically high margin & high growth Southwest & Rockies markets Can process approx. 100,000 bpsd of sour crude feedstock Can process approx. 15,000 bpsd of price-advantaged crude feed
Slide 20: Estimated Effects of Capital Projects: Gross Margins
Estimated Effects of Capital Projects at Holly's Refineries Illustrative computations of impact of expansion & gross margins 20 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 21: Estimated Effects of Capital Projects: Crude Mix Changes
21 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 22: Holly Operations & Growth Advantages
Holly Operations & Growth Advantages Pure play independent refiner 40 years of refining experience Assets positioned to serve historically high growth & high margin markets Track record of superior returns on capital among peers Strong balance sheet & cash flow generation for capital investment & sh
Slide 23: 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 24: Appendix
Appendix
Slide 25: 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
Slide 26: Sulfur Credits Benefit
Sulfur Credits Benefit Value realized by Holly: In 2006, Holly sold approximately $16 million worth of credits In 2007, Holly sold approximately $23 million worth of credits In 2008, Holly sold approximately $3 million worth of credits Credit Generation: Compliance with Low Sulfur gasoline for small