Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — HollyFrontier — Credit Suisse Energy Summit 2012
25 slides from Hf Sinclair's conference presentation, Feb 8, 2012
Slide 1: HollyFrontier Corporation, Credit Suisse Energy Summit
HollyFrontier CorporationCredit Suisse Energy SummitVail, COFebruary 2012
Slide 2: Disclosure Statement
2 HollyFrontier 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
Slide 3: HollyFrontier Corporation
3 HollyFrontier Corporation
Slide 4: HollyFrontier Investment Highlights
HollyFrontier Investment Highlights HollyFrontier Investment Highlights 4 1 - HEP's annualized cash distributions as of 09/30/11 to HFC exceed $54MM (LP - $38M, GP-$16M) . Annualized distributions are calculated using HEP distributions received for 3Q11 then multiplied times 4 (Qtrs). 1
Slide 5: Footprint of HollyFrontier and HEP
Footprint of HollyFrontier and HEP 5 Collaboration with Holly Energy Partners, L.P. provides strategic growth opportunities in logistics and marketing operations Refineries are well-positioned for exposure to the growing supply of lower cost domestic and Canadian crude oil.
Slide 6: UNEV Pipeline & Refinery Economics
UNEV Pipeline & Refinery Economics Overview: 400 mile, 12" refined products pipeline from Salt Lake City to Las Vegas with terminals in Cedar City, UT and Las Vegas, NVHollyFrontier owns 75% interest (Sinclair 25%)Completed-Winter 2011Benefits:Las Vegas gasoline trades seasonally at premium to Salt
Slide 7: Crude Growth in our Backyard
Crude Growth in our Backyard Canadian, Bakken, Permian, Niobrara 7 K b/d (CHART) Source: Simmons & Co, Canadian Association of Petroleum Producers, North Dakota Pipeline Authority, and the EIA. 4.8 MB/d 3.2 MB/d 50% production growth
Slide 8: Strategic Investment & Acquisition
Strategic Investment & Acquisition Approximately $600mm invested for enhanced feedstock flexibility & modest growthSynergistic acquisitions of Tulsa refineries at less than $1,000 per daily bbl*Tulsa interconnection to improve profitability through better yields & lower costs (HEP constructed for HF
Slide 9: Capital Expenditure Overview
(CHART) 9 Capital Expenditure Overview* *From HOC, FTO & HFC financial filings. Past investment make legacy refineries strongerMaintenance capital of approximately $200 million in millions
Slide 10: Cash Returns to Shareholders
10 Cash Returns to Shareholders Since the July 2011 merger:Increased our regular dividend twice Aug 25th: Raised the regular quarterly cash dividend from $0.075 to $0.0875 per share, a 14% increaseNov 16th: Raised the regular quarterly cash dividend from $0.0875 to $0.10 per share, a 13% increaseDec
Slide 11: Cash Returns to Shareholders
(CHART) 11 Cash Returns to Shareholders *Companies who also announced share repurchasesData from 10-Qs and company press releases. As of 1/31/2012 stock prices
Slide 12: Pro Forma HollyFrontier Returns on Capital
12 *5-year average ROIC calculated by 5-year average earnings divided by 5-year average total debt & shareholder equity. For HFC, legacy HOC/FTO earnings, debt & equity were combined for 5-year calculations. (See page 24 for actual calculations) Pro Forma HollyFrontier Returns on Capital (combined)
Slide 13: HFC Balance Sheet Highlights and Liquidity
HFC Balance Sheet Highlights and Liquidity (as of 9/30/11) 1 - Includes cash & cash equivalents & marketable securities (short-term & long-term). Excludes HEP cash of $1.8 million.2 - Does not include $527 million of HEP long-term debt, which is non-recourse to HFC. 13 ( $in millions) Cash & equival
Slide 14: Strong Financial Metrics vs Peers
Strong Financial Metrics vs Peers 14 Net Income per Barrel of Crude Capacity HFC earnings per bbl strongest in peer sector 2011 YTD (9/30/11) earnings/bbl included in graph but not in numerical 5-year average.HFC earnings calculated by adding HOC plus FTO earnings in years 2006 thru 2010; & FTO 2011
Slide 15: HEP Growth: Distributable Cash Flow Since Inception
15 HEP Growth: Distributable Cash Flow Since Inception (CHART) HFC has received $30.9m in cash distributions as of Sept. 31st, 2011
Slide 16: Value of HFC's LP & GP Interests in HEP
16 Value of HFC's LP & GP Interests in HEP HFC owns 11.1mm common units: $600 -- 620MM1 Multiple of GP cash flow: 15X 20X 25X Current GP Interest IDR Distributions:2 $240MM $320MM $400MM HEP value to HFC is in the approximate $800 million to $1.0 billion range.3 1 Based on range of $54 to $56 per un
Slide 17: HollyFrontier Corporation contact details
HollyFrontier Corporation (NYSE: HFC)2828 N. Harwood, Suite 1300Dallas, Texas 75201(214) 871-3555Neale Hickerson, Vice President, Investor RelationsNeale.hickerson@hollyfrontier.com214-871-3572www.hollyfrontier.com 17
Slide 18: Appendix
HOLLYFRONTIER Appendix
Slide 19: El Dorado Refinery
19 El Dorado Refinery Production Mix (3/31/11) Overview Operating Summary 1,000 acre site located in El Dorado, KS with crude capacity of 135,000 BPSD Ability to process sour and heavy (Canadian) crude oils into high value light products 19,000 BPD of coking capacityDistributes to high margin market
Slide 20: Tulsa Refinery Facilities
20 Tulsa Refinery Facilities (formerly owned by Sunoco & Sinclair) Production Mix (12/31/10)1 Overview New interconnect lines are expected to be placed into service in Fall 2011 to provide operating efficienciesRefineries are located less than 2 miles apart and will be pipeline connectedProcesses pr
Slide 21: Navajo Refining Facilities
Navajo Refining Facilities Product Sales Mix (12/31/10) Overview 561 acre site located in Artesia, NM with crude capacity of 100,000 BPSD (expanded in Q1 2009)Separate facilities in Lovington, NM-approximately 70 miles East of the Artesia facilitiesAbility to process sour and heavy (Canadian) crude
Slide 22: Cheyenne Refinery
22 Cheyenne Refinery Production Mix (3/31/11) Overview Operating Summary 255 acre site located in Cheyenne, WY with crude capacity of 52,000 BPSD Ability to process sour and heavy (Canadian) crude oils into high value light products Distributes to high margin Eastern Rockies markets & Plains statesN
Slide 23: Woods Cross Refinery
Woods Cross Refinery Product Sales Mix (12/31/10) Overview 200 acre site located in Woods Cross, UT (near Salt Lake City) with crude oil capacity of 31,000 BPDProcesses regional sweet and lower cost black wax crude as well as Canadian sour crude oils Distributes to high margin markets in Utah, Idaho
Slide 24: Financial metrics
Financial metrics* 24 * Debt levels for Sunoco exclude Sunoco Logistics (SLX) debt; Holly debt excludes HEP debt; All amounts are based on publicly-available financial statements, which we have assumed to be accurate.
Slide 25: Definitions
25 Definitions Non GAPP measurements: We report certain financial measures that are not prescribed or authorized by U. S. generally accepted accounting principles ("GAAP"). We discuss management's reasons for reporting these non-GAAP measures below. Although management evaluates and presents these n