Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — HollyFrontier — Investor Presentation (January 2013)
27 slides from Hf Sinclair's investor presentation, Jan 7, 2013
Slide 1: Investor Presentation January 2013
Investor Presentation January 2013
Slide 2: Forward-looking statements
F JOLLY FRONTIE! E Ba Seeor 5 Sie eee oes HollyFron 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 uncerta
Slide 3: Our Mission and Values
OUR MISSION OUR MISSION Is to be the premier U.S. petroleum refining, OUR VALUES HEALTH A SAFETY WE PUT HEALTH AND SAFETY FIRST. products |= Growing both orpanicay and through strategic acquisitions. ur heath ad ale peformance standards ENVIRONMENTAL STEWAROSHIP WE CARE ABOUT THE ENVIRONMENT. here w
Slide 4: HollyFrontier Investment Highlights
HollyFrontier Investment Highlights 4 Pure play competitive refinery 5 refineries with 443,000 barrels per day refining capacity Attractive niche product markets with advantaged crude supply Rocky Mountains, Southwest and Mid-Continent Strong investment track record with future growth focu
Slide 5: Footprint of HollyFrontier and HEP
Footprint of HollyFrontier and HEP Collaboration with HEP provides strategic growth opportunities in logistics and marketing operations 5
Slide 6: Proximity to Growing North American Crude Production
Proximity to Growing North American Crude Production Refineries are well-positioned for exposure to the growing supply of lower cost domestic and Canadian crude oil 6 HFC Refining Capacity by PADD Source: Deutsche Bank, Macquarie, Simmons & Co, Canadian Association of Petroleum Producers, Turner, Ma
Slide 7: Crude Growth in our Backyard
- 2,000 4,000 6,000 8,000 10,000 12,000 Canada (conventional and oil sands) Bakken Permian Niobrara Uinta Mississippian Other N. American 2016 2011 11.3 MBPD Crude Growth in our “Backyard” Canadian, Bakken, Permian, Niobrara, Uinta, Mississippi Lime Source: Deutsche Bank, Macquarie, Simmons & Co, Ca
Slide 8: Strategic Investment & Acquisition
8 Strategic Investment & Acquisition Woods Cross Refinery Expansion Economics Strong track record of buying the right assets at the right time Woods Cross, El Dorado and Tulsa all purchased at industry lows on a per barrel basis High hurdle rate on investments and acquisitions Target AT LEAS
Slide 9: Woods Cross Refinery Expansion Economics
9 PROJECT ESTIMATED CAPEX PROJECTED EBITDA GENERATION* Woods Cross Phase 1 $225 million $125 million Potential Woods Cross Phase 2 $400-500 million >$200 million *Woods Cross Phase 1 expected EBITDA generation based on an assumed crack spread environment. Woods Cross Phase 2 expected EBITDA generati
Slide 10: Capital Expenditure Overview
Capital Expenditure Overview Past investment make legacy refineries stronger Maintenance capital approximately $200 million *2013 projected capex $350m plus $75m spend from 2012 budget Legacy HOC & FTO capital expenditures were combined for periods prior to the 2011 merger. 2011 capital expenditur
Slide 11: Strong Balance Sheet & Cash Returns
Strong Balance Sheet & Cash Returns 11 $2.3 billion cash balance as of Sept. 30, 2012 $471 million outstanding debt excluding nonrecourse HEP debt $286.8 million 9.875% June 2017 senior notes callable Sept 2013 Total debt to capital ratio 7% as of 9/30/12* Continued commitment to retur
Slide 12: Cash Returns to Shareholders
Cash Returns to Shareholders *Dividends are split adjusted reflecting HFC’s two-for-one stock split announced August 3, 2011. 12 February May August November 2011 $0.075* $0.075* $0.0875* $0.10 2012 $0.10 $0.15 $0.15 $0.20 Increased regular dividend 4 times since the merger, raising it 166% February
Slide 13: LTM Cash Yield to Shareholders
Cash Return to Shareholders LTM Cash Yield to Shareholders *WNR includes the $1.50 and $1.00 special dividend issued in November and December 2012; DK includes $0.10 special dividend declared in December 2012 Last Twelve Months includes YTD 2012 dividends declared and excludes cash dividends in the
Slide 14: Best In Class Returns on Capital Employed
Best In Class Returns on Capital Employed Pro Forma HollyFrontier Returns on Invested Capital (Average 2007-2011)* 5-year average ROIC calculated by taking the average of ROIC’s for the years 2007-2011. ROIC calculated by dividing net income by the sum of total debt and total equity. For HFC, legacy
Slide 15: Strong Financial Metrics vs Peers
Strong Financial Metrics vs Peers Net Income per Barrel of Crude Capacity HFC earnings per bbl strongest in peer sector (2007-2011) HFC earnings calculated by adding legacy HOC plus FTO earnings for periods prior to the merger. *MPC & PSX data based on a 3-year average, PBF based on 4-year average S
Slide 16: Business not Built on WTI/Brent Spread
Business not Built on WTI/Brent Spread Between 2001-2010, WTI traded on average at a $1.00 PREMIUM to Brent Between 2001-2010: Average ROIC 22% Average NI/BBL $2.69 -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 ROIC Source: Bloomberg HFC financials c
Slide 17: HEP Growth: Distributable Cash Flow Since Inception
HEP Growth: Distributable Cash Flow Since Inception 17 $0 $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 $41 $47 $51 $60 $72 $91 $100 $112** HFC received over $60m in cash distributions for 2012* milli o n s *Q4 2011 through Q3 2012 announced quarterly LP and GP distributions paid
Slide 18: Value of HFC's LP & GP Interests in HEP
Value of HFC’s LP & GP Interests in HEP 18 *Based on a range of recent HEP unit prices on the NYSE for valuation purposes. NYSE closing price on 12/31/2012 was $65.78. Methodology: • GP values are equal to quarterly GP IDR cash flow (for Q3 2012) on an annualized basis minus the $5m GP giveback for
Slide 19: HollyFrontier Corporation contact details
HollyFrontier Corporation (NYSE: HFC) 2828 N. Harwood, Suite 1300 Dallas, Texas 75201 (214) 954-6510 www.hollyfrontier.com Julia Heidenreich, Investor Relations Julia.Heidenreich@hollyfrontier.com 214-871-3422 Blake Barfield, Investor Relations Blake.Barfield@hollyfrontier.com 214-954-6506 19
Slide 20: Appendix
Appendix 20
Slide 21: Mid-Continent: El Dorado & Tulsa Refineries
Mid-Continent: El Dorado & Tulsa Refineries The Mid-Continent Region comprises our Tulsa and El Dorado Refineries and has a combined crude oil processing capacity of 260,000 BPSD. Product Mix Gasolines, 46% Diesel fuels, 32% Jet fuels, 7% Asphalt, 4% Lubricants, 4% Other, 7% Crude and Feedstocks Sou
Slide 22: Southwest: Navajo Refinery
Southwest: Navajo Refinery The Southwest Region consists of our Navajo Refinery and has a crude oil processing capacity of 100,000 BPSD. In addition, we manufacture and market commodity and modified asphalt products through the Southwest Region. Southwest Sales of Refinery Produced Products 100,660
Slide 23: Rocky Mountain: Woods Cross and Cheyenne Refineries
Rocky Mountain: Woods Cross and Cheyenne Refineries The Rocky Mountain Region comprises of our Cheyenne and Woods Cross Refineries and has a combined crude oil processing capacity of 83,000 BPSD. Rocky Mountain Sales of Refinery Produced Products 73,980 BPD • Located in Cheyenne, Wyoming • 52,000 BP
Slide 24: Holly Energy Partners
Holly Energy Partners Holly Energy Partners owns and operates substantially all of the refined product pipeline and terminalling assets that support our refining and marketing operations in the Mid- Continent, Southwest and Rocky Mountain regions of the United States. • 2,800 miles of crude oil and
Slide 25: Feedstock Flexibility
Feedstock Flexibility* • High WTI/WTS ($3 or higher) • Low WTI/WCS ($8 or less) • WTI/Brent Range ($10 to $20) • Low WTI/WTS ($2 or less) • High WTI/WCS ($20 or higher) • WTI/Brent Range ($10 to $20) • Low WTI/WTS ($2 or less) • Low WTI/WCS ($8 or less) • WTI/Brent Range ($20 or higher) *Please note
Slide 26: Financial Metrics
Financial Metrics* 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Average WTI/Brent (SNAPWTIB) $ 1.11 $ 1.04 $ 2.40 $ 3.35 $ 1.57 $ 0.33 $ (0.28) $ 1.34 $ (0.47) $ (0.57) $ 1.00 ROIC 29.1% 5.2% 7.9% 20.8% 44.0% 45.0% 45.3% 21.8% -2.3% 4.8% 22% NI/BBL $ 2.23 $ 0.41 $ 0.57 $ 1.59 $ 4.45 $ 6.28 $ 7.
Slide 27: Definitions
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 non-