Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — HollyFrontier — Investor Presentation (September 2013)
31 slides from Hf Sinclair's investor presentation, Sep 12, 2013
Slide 1: Investor Presentation September 2013
Investor Presentation September 2013
Slide 2: Forward-looking statements
sHOLLY FRONTIER: ae seers BSE Statements made during the course sa this pecorino 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 inherently uncertain and ee involve risks that m
Slide 3: Our Mission and Values
OUR MISSION OUR VALUES | OUR MISSION Is to be the premier U.S. petroleum HEALTH A SAFETY WE PUT HEALTH AND SAFETY FIRST. refining, | profitable growth ur best an sale performance sandr. WE SEEKTO ACCOMPLISH THIS BY: ENVIRONMENTAL STEWAROSHIP © Operating in a sate rlable and environmental responsible
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 Sources: Deutsche Bank, Macquarie, Simmons & Co, Canadian Association of Petroleum Producers, Turner, M
Slide 7: Feedstock Advantaged Refining
Feedstock Advantaged Refining 7 $ /b b l d is cou n t to WT I Refinery location and configuration enables a fleet-wide crude slate discounted to WTI Discounted feeds drive a higher gross margin / barrel and ultimately, EBITDA Highly flexible refining system allows feedstock optionality based o
Slide 8: Crude Growth in our Backyard
Crude Growth in our “Backyard” Canadian, Bakken, Permian, Niobrara, Uinta, Mississippi Lime Sources: Deutsche Bank, Macquarie, Simmons & Co, Canadian Association of Petroleum Producers, North Dakota Pipeline Authority, and the EIA. *Heavy crude includes High Tan Christina Lake Crude which we began p
Slide 9: Strategic Investment & Acquisition
9 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 10: Woods Cross Refinery Expansion Economics
10 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 generat
Slide 11: Capital Expenditure Overview
Capital Expenditure Overview Past investment make legacy refineries stronger Maintenance capital approximately $200 million *Our expected 2013 capital expenditure is between $400-$450 million Legacy HOC & FTO capital expenditures were combined for periods prior to the 2011 merger. 2011 capital exp
Slide 12: Strong Balance Sheet & Cash Returns
Strong Balance Sheet & Cash Returns 12 $2.0 billion cash balance as of June 30, 2013 $191 million outstanding debt excluding nonrecourse HEP debt $286.8 million 9.875% notes called in June 2013 Total debt to capital ratio 3% as of 6/30/13* Approximately $350 million in authorization rema
Slide 13: Cash Returned to Shareholders
Cash Returned to Shareholders *Dividends are split adjusted reflecting HFC’s two-for-one stock split announced August 3, 2011. **Dividend Payout Ratio calculated by dividing the sum of quarterly dividends paid by earnings per share . 13 February May August November 2011 $0.075* $0.075* $0.0875* $0.1
Slide 14: Cash Return to Shareholders: LTM Cash Yield
Cash Return to Shareholders LTM Cash Yield to Shareholders Last Twelve Months includes YTD 2013 dividends declared and excludes cash dividends in the same period through 2012. Data from public filings and press releases. As of 9/6/2013 stock prices. See page 30 for calculations. 14 0.0% 2.0% 4.0% 6.
Slide 15: Best In Class Returns on Capital Employed
Best In Class Returns on Capital Employed Pro Forma HollyFrontier Returns on Invested Capital (Average 2008-2012)* 5-year average ROIC calculated by taking the average of ROIC’s for the years 2008-2012. ROIC calculated by dividing net income by the sum of total debt and total equity. For HFC, legacy
Slide 16: 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 (2008 – 2012) HFC earnings calculated by adding legacy HOC plus FTO earnings for periods prior to the merger. *MPC & PSX data based on 4-year averages See page 30 for calculations.
Slide 17: Refinery Utilization and Crude Throughput
5 years of growth in crude throughput across our plants In the last 12 months we have completed major turnaround work at 4 of our 5 plants Refinery Utilization *2008-2011 pro forma HOC and FTO Crude Charges. 2009 assumes full year ownership of Tulsa refineries; 2008 was prior to HOC ownership of
Slide 18: 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 19: HEP Growth: Distributable Cash Flow Since Inception
HEP Growth: Distributable Cash Flow Since Inception 19 milli o n s $0 $20 $40 $60 $80 $100 $120 $140 $160 2005 2006 2007 2008 2009 2010 2011 2012 $41 $47 $51 $60 $72 $91 $100 HFC received approximately $70mm cash distributions for FY2012 $153
Slide 20: Value of HFC's LP & GP Interests in HEP
Value of HFC’s LP & GP Interests in HEP 20 *Based on a range of recent HEP unit prices on the NYSE for valuation purposes. NYSE closing price on 9/6/2013 was $33.29 Methodology: • GP values are equal to quarterly GP IDR cash flow (for 2Q 2013) on an annualized basis minus the $5m GP giveback for the
Slide 21: HollyFrontier Corporation contact details
HollyFrontier Corporation (NYSE: HFC) 2828 N. Harwood, Suite 1300 Dallas, Texas 75201 (214) 954-6510 www.hollyfrontier.com Julia Heidenreich, VP, Investor Relations Blake Barfield, Investor Relations investors@hollyfrontier.com 214-954-6510 21
Slide 22: Appendix
Appendix 22
Slide 23: Logistics Matter
Logistics Matter Proximity to Crude Oil Pricing Hubs and Takeaway Infrastructure 23 Prices reflect estimated transportation cost per barrel via pipeline, rail and marine Sources: Barclays, Credit Suisse, Deutsche Bank, Macquarie, and Tudor Pickering Holt
Slide 24: Economics of RFS Mandate
Economics of RFS Mandate 24 1.50$ 1.00$ 0.70$ 0.40$ 0.60$ 168$ 68$ 8$ (52)$ 0.40$ 212$ 112$ 52$ (8)$ 0.20$ 256$ 156$ 96$ 36$ -$ 300$ 200$ 140$ 80$ (0.20)$ 344$ 244$ 184$ 124$ (0.40)$ 388$ 288$ 228$ 168$ (0.60)$ 432$ 332$ 272$ 212$ BL EN D E CO NO MI CS (¢/ gal lon ) RINS COST HFC’s 2013 Ethanol RVO
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: 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. Mid-Continent Sales of Refinery Produced Products 254,350 BPD • Located in El Dorado, Kansas • 135,000 BPSD capacity and
Slide 27: 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 99,160 B
Slide 28: 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 77,550 BPD • Located in Cheyenne, Wyoming • 52,000 BP
Slide 29: 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. • 2,900 miles of crude oil and
Slide 30: 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 31: 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-
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