Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — Investor Presentation (January 2011)
32 slides from Hf Sinclair's investor presentation, Jan 6, 2011
Slide 1: Holly Corporation Winter 2010
Holly CorporationWinter 2010
Slide 2: Our Mission
Our Mission Our mission is to be a premier U.S. petroleum refining, pipeline and terminal company as measured by superior financial performance and sustainable, profitable growth. ‘We seek to accomplish this by operating safely, reliably and in an environmentally responsible manner, fectively tnd ef
Slide 3: Holly Corporation Disclosure Statement
3 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 nec
Slide 4: Presentation Topics
4 Presentation Topics HOC Company OverviewFinancial Performance and CompetitivenessFocused Growth OrientationSummaryAppendix
Slide 5: Holly Investment Highlights
5 Holly Investment Highlights Holly Investment Highlights 1 - HEP's annualized cash distributions as of 9/30/10 to HOC exceed $37M (LP - $24M, GP-$13M). Annualized distributions are calculated using HEP distributions received in 3Q10 then multiplied times 4 (Qtrs). 1
Slide 6: Overview of Holly and HEP
6 Overview of Holly and HEP Holly Corporation:Holly's refineries operate in Southwest, Rockies & Mid-Continent marketsOver 250,000 bpsd of refining capacity and average complexity of over 12.0Refineries directly connected to domestic or Canadian crude trading hubsOwns 100% of GP and 7.3 million LP u
Slide 7: Navajo Refinery
7 Navajo Refinery Product Sales Mix (12/31/09) Overview 561 acre site located in Artesia, NM with crude capacity of 100,000 BPSD (expanded in Q1 2009)Ability to process sour and heavy (Canadian) crude oils into high value light products Distributes to high margin markets in Arizona, New Mexico and W
Slide 8: Woods Cross Refinery
8 Woods Cross Refinery Product Sales Mix (12/31/09) 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, Ida
Slide 9: Tulsa Refinery
9 Tulsa Refinery (formerly separate facilities owned by Sunoco & Sinclair) Projected Production Mix Overview Holly has begun to integrate the operations of the two refineries which combine to form one complex 125,000 BPD refineryNew interconnect lines are expected to be placed into service in early
Slide 10: Presentation Topics
10 Presentation Topics HOC Company OverviewFinancial Performance and CompetitivenessFocused Growth OrientationSummaryAppendix
Slide 11: Holly Historical EBITDA
11 Holly Historical EBITDA (in millions) Capacity of 256,000 bpsd Legacy refineries (Navajo and Woods Cross) - 131 bpsd Sunoco - Tulsa Refinery acquisition - June 1, 2009 (+85 bpsd) Sinclair - Tulsa Refinery acquisition - December 1, 2009 (+40 bpsd) 4 - Increased from 111,000 bpd over course of late
Slide 12: Historical Refining Margins
12 Historical Refining Margins 1 - Actual realized gross margin.2 - PADD II 3-2-1 gross margin proxy for Tulsa refineries Tulsa Gulf Coast 3-2-1: 5 Yr. Avg. 2 *Definition for non-GAAP measures such as EBITDA or Margins are located on page 32. Navajo Gulf Coast 3-2-1: 5 Yr. Avg. 1 Woods Cross 1 Gulf
Slide 13: Gasoline & Diesel Cracks
Gasoline & Diesel Cracks 13 1 - Gasoline and Diesel cracks are determined using NYMEX product and crude oil (WTI) postings for each respective period and market. These are not HOC specific cracks and are intended to display general market trends with respect to both gasoline and diesel.2 - US Energy
Slide 14: Conservative Balance Sheet and Strong Returns on Capital
Conservative Balance Sheet and Strong Returns on Capital 14 1 - Debt levels exclude Sunoco Logistics (SLX) Debt2 - HOC debt excludes HEP Debt ($489M @ 9/30/2010, which is non recourse to HOC). Supporting calculations /details are located on page 31-32. Supporting calculations /details are located on
Slide 15: Past investments make legacy refineries stronger
Past investments make legacy refineries stronger 15 Capital Expenditure Overview 1. Excludes HEP capex; net of contributions from UNEV JV partner; includes turnaround expenditures; excludes asset acquisitions2. As of 9/30/10; excludes HEP capex and cash. Strong balance sheet and liquidity going forw
Slide 16: Presentation Topics
16 Presentation Topics HOC Company OverviewFinancial Performance and CompetitivenessFocused Growth OrientationSummaryAppendix
Slide 17: HOC Growth - Thru Strategic Investments & Acquisitions
HOC Growth - Thru Strategic Investments & Acquisitions Approx $500mm invested for enhanced feedstock flexibility and modest growthSynergistic acquisitions of Tulsa refineries at less than $1,000 per daily bbl*Uniquely positioned among peers to enter up-cycle at more than 2008 capacity 17 *After acco
Slide 18: Enhanced Competitive Position at Legacy Refineries
18 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 percentageEnhanced black wax and Canadian heavy receiving capabilities Increased c
Slide 19: Integrating the Two Tulsa Facilities
19 Holly is in process of further integrating the two Tulsa facilities to form one complex 125,000 BPD refineryConstructing interconnect pipelines that will transfer various intermediate streams between facilities and optimize blending, increase yields and reduce operating expensesRefinery integrati
Slide 20: UNEV Pipeline & Refinery Economics
20 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, NVHolly owns 75% interest (Sinclair 25%)Completion Date - Spring/Summer 2011Benefits:Las Vegas gasoline trades at premium to Salt L
Slide 21: Presentation Topics
21 Presentation Topics HOC Company OverviewFinancial Performance and CompetitivenessFocused Growth OrientationSummaryAppendix
Slide 22: Summary
22 Summary Holly Corporation:Competitive refining assets in attractive marketsRecent investments to make legacy refineries even strongerLow entry cost for very complex Tulsa refining facility (Sunoco + Sinclair)Conservative capital structure plus experienced management teamHEP ownership ($375mm plus
Slide 23: Holly Corporation contact details
23 Holly Corporation (NYSE: HOC)100 Crescent Court, Suite 1600Dallas, Texas 75201(214) 871-3555Neale Hickerson, Vice President, Investor RelationsNeale.hickerson@hollycorp.com214-871-3555www.hollycorp.com
Slide 24: Presentation Topics
24 Presentation Topics HOC Company OverviewFinancial Performance and CompetitivenessFocused Growth OrientationSummaryAppendix
Slide 25: Appendix
25 Appendix Tulsa - Sunoco Refinery Acquisition Tulsa - Sinclair Refinery Acquisition Estimated Effects of Capital Projects Balance Sheet Highlights Financial metrics Definitions
Slide 26: Tulsa (Sunoco) Acquisition - Transaction Summary
26 Tulsa (Sunoco) Acquisition - Transaction Summary Asset Summary: Tulsa (West) refinery has crude capacity of 85,000 BPSDHigh complexity: 11.4 Nelson complexity factorProduces high value specialty products and transportation fuelsStrategic location - direct pipeline connection to Cushing crude oil
Slide 27: Sinclair Refinery - Transaction Summary
27 Sinclair Refinery - Transaction Summary Holly purchased Sinclair's Tulsa refinery December 1, 2009Holly's portion of the purchase price consisted of $74.0 million in Holly stock (2.8M shares @ $26.53) and $54.5 million of cash at closing (for total of $128.5)At closing Sinclair entered into a lon
Slide 28: Estimated Effects of Capital Projects at Legacy Refineries
Estimated Effects of Capital Projects at Holly's Legacy RefineriesIllustrative computations of impact of expansion & gross margins 28 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
Slide 29: Estimated Effects of Capital Projects: Crude Mix Changes
29 Estimated Effects of Capital Projects at Holly's Legacy RefineriesIllustrative 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 a
Slide 30: Balance Sheet / Liquidity
Holly (stand alone) $millions Cash $272 Senior notes $300 Revolver capacity $400 Balance - - Credit Ratings BB Ba3 Balance Sheet / Liquidity 30 Balance Sheet Highlights and Liquidity Other:HEP has an option to purchase HOC's interest in the UNEV 180 days from completion of project at HOC's cost (est
Slide 31: Financial metrics
Financial metrics 31 **Amounts from Frontier Oil Corp, Sunoco Inc., Sunoco Inc. xSXL, Tesoro Corp and Valero Energy Corp are based on publicly- available financial statements of these issuers, which we have assumed to be accurate.
Slide 32: Definitions
32 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