Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — HollyFrontier — Merger or Acquisition (October 2016)
18 slides from Hf Sinclair's merger presentation, October 2016
Slide 1: Acquisition of Petro-Canada Lubricants Inc.
Acquisition of Petro-Canada Lubricants Inc. October 2016
Slide 2: HollyFrontier Disclosure Statement
HOLLYFRONTIER 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 necessaril
Slide 3: Transaction Overview
PETRO-CANADA LUBRICANTS | Transaction Overview Financial Details: • CAD$1,125 MM purchase price (approximately US$845 MM) for Petro-Canada Lubricants Inc. • CAD$783 MM (US$587 MM) purchase price net of CAD$342 MM (approximately US$257 MM) working capital • Purchase funded with a combination of cash
Slide 4: Transaction Overview: Assets Acquired
PETRO-CANADA LUBRICANTS | Transaction Overview Assets acquired include: • 15,600 barrel per day lubricants production capacity located in Mississauga, Ontario • Largest producer of base oils in Canada • Dual train production facility with Hydrotreating and Catalytic Dewaxing Units • Patented HT Puri
Slide 5: Strategic Rational
PETRO-CANADA LUBRICANTS | Strategic Rational High Value Products and Stable Cash Flows • Specialty Lubricants margins are significantly higher and more stable than fuels margins • Differentiated lubricants product portfolio • The only North American premium margin Group III base oil producer • Stron
Slide 6: Fourth Largest North American Specialty Lubricants Producer
HOLLYFRONTIER PRO FORMA SPECIALTY LUBRICANTS | Fourth Largest North American Specialty Lubricants Producer North American 2015 Base Oil Production Represents ˜90% of North American Productio 60,000 Group III Group I/II/Naphthenic 50,000 40,000 BPD ('000) 30,000 20,000 10,000 - ExxonMobil Chevron Mot
Slide 7: Integrated Lubricants Producer
PETRO-CANADA LUBRICANTS | Integrated Lubricants Producer Blending and Base Oil Production Global Distribution Packaging Vacuum Gas Oil Group II Base Oils Packaging (1 Liter to Bulk) Inline and Batch Blending Hydrotreating Unit (HTU) Global Distribution White White Oils Oils Finished Group Lubricants
Slide 8: Finished Lubricants: Premium Margins and Global Product Markets
PETRO-CANADA LUBRICANTS | Premium Margins and Global Product Markets, Exclusive and Perpetual License for Petro-Canada Lubricants Brand Product Category Average WTI PCLI Lubricant Volume Based Gross Margin: 2015A Breakdown: 2015A $150 Finished Lubricants • High margin finished lubricants products bl
Slide 9: Historic Realized Lubricant Margins vs Fuel Margins
HOLLYFRONTIER PRO FORMA SPECIALTY LUBRICANTS | Historic Realized Lubricant Margins vs Fuel Margins¹ Specialty Lubricants margins are significantly higher and more stable than fuels margins $200 $180 $160 $140 $120 $100 US $/BBL $80 $60 $40 $20 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 10: Synergy and Optimization Opportunity
PETRO-CANADA LUBRICANTS | Synergy and Optimization Opportunity Expect US$20 MM+ in potential synergies by 2018 • Tulsa product integration and product upgrade opportunity • Sales and distribution synergy opportunity for Tulsa Products • Transportation cost savings Additional Optimization Opportunity
Slide 11: Historical Financials
PETRO-CANADA LUBRICANTS | Historical Financials PCLI Historical EBITDA (US$MM) $300 $250 $200 $150 $MM $100 $50 $0 2011 2012 2013 2014 2015 Annualized 2016¹ Average Annual Sustaining Capex 1) Reported EBITDA through 6/30/16 annualized 11
Slide 12: Accretive Transaction
PETRO-CANADA LUBRICANTS | Accretive Transaction Scenario 1 Scenario 2 Scenario 3 EBITDA Accretion (US$MM) HFC EBITDA - 2017 Consensus¹ $ 1,037 $ 1,037 $ 1,037 Expected Petro-Canada EBITDA Range $ 100 $ 150 $ 200 Total EBITDA $ 1,137 $ 1,187 $ 1,237 EBITDA Accretion 10% 14% 19% EPS Accretion (US$MM)
Slide 13: Pro Forma Capital Structure and Credit Profile
HOLLYFRONTIER PRO FORMA CAPITAL STRUCTURE AND CREDIT PROFILE | As of September 30, 2016 (US$ millions) HollyFrontier Capitalization1 9/30/2016 PCLI Financing Cash and Short Term Marketable Securities $ 471 $ 471 Cash Proceeds from Woods Cross Dropdown1 $ 278 $ 278 PCLI Cash Financing $ (350) $ 749 $
Slide 14: Lubricants Diversification and Scale
HOLLYFRONTIER PRO FORMA SPECIALTY LUBRICANTS | Lubricants Diversification and Scale Sales Volume by Product (BPD ‘000) Normalized Refining EBITDA Split (US $MM) 32 26 13 28 ˜$250 $100 171 172 Other Lubricants Lubricants Distillate Fuels Gasoline $900 $900 228 228 HFC Standalone Pro Forma HFC Standal
Slide 15: Appendix
Appendix 15
Slide 16: Pro Forma Footprint
HOLLYFRONTIER PRO FORMA FOOTPRINT | PCLI Expands Domestic and International Reach About Petro-Canada Lubricants Inc. • 15,600 BPD Lubricant Production Capacity • 6 sales offices • 4 warehouses • 21 third party-operated Global Lubricants terminals worldwide Distribution • Export over 60% of PCLI • Ca
Slide 17: Definitions
DEFINITIONS Non GAAP 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 non-
Slide 18: Investor Relations Contact
2828 N. Harwood, Suite 1300 Dallas, Texas 75201 (214) 954-6510 www.hollyfrontier.com Julia Heidenreich | VP, Investor Relations Craig Biery | Manager, Investor Relations Investors@hollyfrontier.com 214-954-6150