Hf Sinclair Corporation · NYSE:DINO

Hf Sinclair — HollyFrontier — Investor Presentation (September 2021)

35 slides from Hf Sinclair's investor presentation, Sep 8, 2021

  1. Slide 1: HollyFrontier Investor Presentation September 2021

    HOLLYFRONTIER INVESTOR PRESENTATION September 2021

  2. Slide 2: Disclosure Statement

    Disclosure Statement 2 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,” “expect,” “plan,” “goal,” “forecast,” “

  3. Slide 3: Executive Summary: Positioned for Value Creation Across all Segments

    Executive Summary Positioned for Value Creation Across all Segments 3 MIDSTREAM SPECIALTY LUBRICANTSREFINING RENEWABLES  Inland merchant refiner  4 refineries in the Mid- Continent and West regions  Flexible refining system with fleet wide discount to WTI  Premium product markets versus Gulf Coa

  4. Slide 4: HollyFrontier Asset Footprint

    HollyFrontier Asset Footprint 4 Expected 3Q 2021

  5. Slide 5: Proximity to North American Crude Production

    5 Proximity to North American Crude Production Laid in Crude Advantage 1. Reflects removal of Cheyenne Refinery data due to conversion of Cheyenne to Renewable Diesel Facility in 3Q 2020.  Beneficiary of inland coastal crude discount across entire refining system  100% of HFC’s purchased crude bar

  6. Slide 6: High Value Premium Product Markets

    6 1. Gulf Coast: CBOB Unleaded 84 Octane Spot Price, Group 3: Unleaded 84 Octane Spot Price, Chicago: Unleaded CBOB 84 Octane Spot Price, Denver: CBOB 81.5 Octane Rack Price, Phoenix: CBG 84 Octane Rack Price, SLC: CBOB 81.5 Octane Rack Price, Las Vegas: CBOB 84 Octane Rack Price. Source: GlobalView

  7. Slide 7: Refining Segment Earnings Power

    7 Refining Segment Earnings Power $20.06 $13.86 $18.41 $19.88 $20.58 $11.83 $10 $15 $20 2015 2016 2017 2018 2019 2020 Mid-Cycle Refining EBITDA Gulf Coast 3-2-1 Crack $10.00 Brent/WTI Spread $4.00 Product Transportation to HFC Markets $3.00 HFC Index $17.00 Capture Rate 75% Realized Gross Margin Per

  8. Slide 8: Puget Sound Refinery Acquisition Transaction Overview

    8 Puget Sound Refinery Acquisition Transaction Overview Puget Sound Refinery (Anacortes, WA)  Cash purchase of $500 million  $350 million purchase price net of approximately $150-180 million of inventory  Expect to fund with one year suspension of quarterly dividend and cash on hand  Expect to g

  9. Slide 9: Puget Sound Refinery Acquisition Assets Acquired

    9 Puget Sound Refinery Acquisition Assets Acquired  The Puget Sound Refinery (“PSR”) is a large, complex refinery with catalytic cracking and delayed coking units and a history of strong free cash flow1 generation • ~149 mbpd nameplate capacity2 • 9.3 Nelson Complexity3  Connectivity to source cos

  10. Slide 10: HollyFrontier Renewables Strategic Rationale

    10 HollyFrontier Renewables Strategic Rationale  Plan to expand the renewables segment to become a meaningful part of HollyFrontier’s cash flow and diversify from traditional petroleum fuels refining  Consumer preference for low carbon fuels continues to grow, driving expansion of government renew

  11. Slide 11: HollyFrontier Renewable Diesel

    11 HollyFrontier Renewable Diesel HollyFrontier is expected to produce over 200 million gallons per year of renewable diesel Renewable Diesel Defined  Renewable diesel is a cleaner burning fuel with over 50% lower greenhouse (GHG) emissions than conventional diesel  Renewable diesel is not biodies

  12. Slide 12: Artesia & Cheyenne Renewable Diesel Units

    12 Artesia & Cheyenne Renewable Diesel Units 12 Expected capacity to produce ~120 million gallons per year of renewable diesel  HFC to construct greenfield Renewable Diesel Unit (RDU) co-located at the Navajo refinery  Includes rail infrastructure and storage tanks  Existing hydrogen and utilitie

  13. Slide 13: Pre-Treatment Unit Feedstock Flexibility

    13 Pre-Treatment Unit Feedstock Flexibility Pre-treatment capacity allows our renewable diesel plants to process a variety of feedstock Project Details  HFC to construct pre-treatment unit to provide flexibility and upgrade of feedstock  Designed to treat degummed “unrefined” soybean oil, bleachab

  14. Slide 14: Holly Energy Partners Business Profile

    14 Operate a system of petroleum product and crude pipelines, storage tanks, distribution terminals and loading rack facilities located near HFC’s refining assets in high growth markets  Revenues are nearly 100% fee-based with de minimis commodity risk  Customer base consisting of refining compani

  15. Slide 15: Ownership Structure: Eliminated IDRs in 2017 to Simplify Structure

    15 1. Unit Count as of June 30, 2021. 2. Based on HEP unit closing price on August 27, 2021. 15 100% Interest 45.8mm HEP units1 43% LP Interest $854M Value2 59.6mm HEP units1 57% LP Interest $1,132M Value2 HOLLYFRONTIER CORPORATION (HFC) GENERAL PARTNER (GP) HOLLY LOGISTIC SERVICES, L.L.C. HOLLY ENE

  16. Slide 16: HEP history and milestones timeline

    16 2004 2005 2006 2007 2008 2009 MLP IPO (July 2004) Holly intermediate feedstock pipeline dropdown (July 2005) 25% JV with Plains for SLC pipeline (Mar 2009) Holly Tulsa dropdown of loading rack (Tulsa West) (Aug 2009) Holly crude oil and tankage assets dropdown (Feb 2008) Alon pipeline and termina

  17. Slide 17: HEP Avenues for Growth

    17 ORGANIC EXTERNAL TRANSACTIONS DROPDOWNS FROM HFC  Leverage HEP’s existing footprint  Contractual PPI/FERC Escalators  Replace incumbent HFC service providers with HEP  Pursue logistics assets in HEP’s current geographic region  Replace incumbent HFC service providers with HEP  Leverage HFC

  18. Slide 18: Cushing Connect Joint Venture Deal Highlights

    18 Deal Highlights JV estimated total capital of $130 million with expected initial EBITDA1 multiple of 8x-9x. HEP to build and operate pipeline, PAA to build terminal connections and operate terminal HFC entered into 15 year minimum volume commitment of 100 KBPD with HEP, which will commence upon c

  19. Slide 19: HF Lubricants & Specialty Products Integrated Model from Crude to Finished Products

    19 Mississauga Base Oil Plant Base Oil Production Blending & Packaging RACK BACK MarketingDistribution R&D RACK FORWARD VGO/HCB HF Lubricants & Specialty Products Integrated Model from Crude to Finished Products Base Oil White Oils Specialty Products Waxes Finished Lubricants & Greases • Rack Back c

  20. Slide 20: Product Portfolio Serves a Variety of Global End Markets

    20 HF Lubricants & Specialty Products Our Product Portfolio Serves a Variety of Global End Markets Adhesives Agriculture Construction Automotive Packaging Food & Beverage Forestry & Saw Mill Energy Manufacturing Health & Beauty Heavy Duty Mining Transportation Pharmaceutical Plastic Processors Railr

  21. Slide 21: HF Lubricants & Specialty Products Diverse Suite of Products

    21 Brands Product Type • Finished Lubricants & Greases • Specialty Products • Waxes • White Oils • Base Oils • Finished Lubricants & Greases • Waxes • White Oils • Petrolatums • Specialty Products • Finished Products & Greases • Specialty Products • Waxes • Base Oils Customer Base • Consumer Discret

  22. Slide 22: 2020 Product Slate by Volume

    22 2020 Product Slate by Volume Finished Lubricants & Greases Petrolatums Waxes White Oils Specialty Products Base Oils Margin Value $/bbl Converting one barrel of Base Oil sales into Finished Product sales results in an average margin uplift of ~$50/bbl Opportunity Across the Value Chain Upgrade Ex

  23. Slide 23: Rack Forward Adjusted EBITDA Margin Stability

    23 69 38 45 29 30 58 58 55 53 40 48 47 56 52 57 49 52 64 51 61 77 23 79 48 88 23 17% 9% 12% 9% 9% 16% 16% 16% 14% 10% 13% 13% 14% 12% 13% 12% 12% 13% 11% 13% 16% 7% 19% 11% 18% 4% 0% 5% 10% 15% 20% $0 $20 $40 $60 $80 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 1Q20 3Q20 1Q21 Adjusted EBITDA Ad

  24. Slide 24: Rack Forward Multiple Up-Lift

    24 Rack Forward Multiple Up-Lift Segment(s) Multiple Margin Profile Peer Group Refining & Rack Back 5-7x Variable Integrateds: BP, CVX, RDS, XOM Refiners: CLMT, CVI, DK, MPC, PBF, PSX, VLO MLP 6-9x Stable DKL, MPLX, PBFX, PSXP Note: Multiple represents range of EV/EBITDA multiples for referenced pee

  25. Slide 25: Mid-Cycle Rack Forward Adjusted EBITDA

    25 Mid-Cycle Rack Forward Adjusted EBITDA ($ in millions) $265 Target Multiple 11x Enterprise Value ($ in millions) $2,915 Mid-Cycle Rack Forward EBITDA  RF EBITDA Margin 11-16%  Annual SG&A $190 - $200MM  Annual DD&A $80 - $90MM  Upside with Organic Growth and M&A Opportunities 11x multiple in-

  26. Slide 26: Environmental, Social, and Governance (ESG)

    26 Environmental, Social, and Governance (ESG) Board leadership provides significant industry expertise, alongside diverse business, financial and EHS expertise • Environmental, Health, Safety, and Public Policy Committee at Board level • 9 of 10 directors independent, including chair • 2 female boa

  27. Slide 27: Appendix

    A P P E N D I X

  28. Slide 28: 2021 Capex Guidance

    2021 Capex Guidance  Refining - $190 – $220 million  Lubricants & Specialties - $40 – $50 million  Renewables - $625 – $675 million  Turnarounds & Catalysts - $320 – $350 million  HEP - $60 – $71 million Refining 16% Lubricants & Specialties 3% Renewables 50% Turnarounds & Catalysts 26% HEP 5%

  29. Slide 29: Strong Historical Track Record of Cash Returns

    Strong Historical Track Record of Cash Returns 29 • Strong historical track record in returning excess cash to shareholders  Regular quarterly dividend of $0.35 per common share suspended for one year effective with the dividend to be declared in 2Q21 to help fund Puget Sound Refinery acquisition1

  30. Slide 30: HollyFrontier Capital Structure

    HollyFrontier Capital Structure 30 Investment Grade Rating from S&P (BBB-), Moody’s (Baa3), and Fitch (BBB-) Cash and cash equivalents $1,398 HOLLYFRONTIER CORPORATION HFC 2.625% Senior Notes due 2023 $350 HFC 5.875% Senior Notes due 2026 $1,000 HFC 4.500% Senior Notes due 2030 400 HFC Long Term Deb

  31. Slide 31: HollyFrontier Credit Profile

     Investment Grade Rating - S&P BBB- - Moody’s Baa3 - Fitch BBB-  $1.4 billion cash as of 6/30/21  $1.75 billion outstanding debt as of 6/30/21 - excludes non-recourse HEP debt  Total debt to capital ratio 24% as of 6/30/21  Target 1x Net Debt/EBITDA (ex HEP) • Debt to Capital is calculated by t

  32. Slide 32: Definitions

    Definitions Free Cash Flow: Calculated by taking operating cash flow and subtracting capital expenditures. IDR: Incentive Distribution Rights Internal Rate of Return (IRR): a metric used in capital budgeting to estimate the profitability of potential investments. The internal rate of return is a dis

  33. Slide 33: HollyFrontier Index

    Please see p. 35 for disclaimer and www.HollyFrontier.com/investor-relations for most current version. HollyFrontier Index 33 33

  34. Slide 34: HFC Index Disclosure

    HFC Index Disclosure 34 HFC's actual pricing and margins may differ from benchmark indicators due to many factors. For example: • Crude Slate differences – HFC runs a wide variety of crude oils across its refining system and crude slate may vary quarter to quarter. • Product Yield differences – HFC’

  35. Slide 35: HollyFrontier Corporation Contact Information

    HollyFrontier Corporation (NYSE: HFC) 2828 N. Harwood, Suite 1300 Dallas, Texas 75201 (214) 954-6510 www.hollyfrontier.com Craig Biery | Vice President, Investor Relations investors@hollyfrontier.com 214-954-6510 Trey Schonter | Investor Relations investors@hollyfrontier.com 214-954-6510

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