Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — FBR Capital Markets Investor Conference 2007
21 slides from Hf Sinclair's conference presentation, Nov 27, 2007
Slide 1: FBR Capital Markets Investor Conference
FBR Capital Markets Investor Conference Matt Clifton Chairman & CEO November 27, 2007 Holly Corporation
Slide 2: Disclosure Statement
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 necessarily involve ris
Slide 3: Holly Corporation (NYSE: HOC) Overview
Holly Corporation (NYSE: HOC) Overview Independent refiner in Southwest / Rocky Mountain states 2 refineries: New Mexico & Utah 111,000 barrels a day of refining capacity Wholesale marketer supplying West Texas, Arizona, New Mexico, Colorado, Utah, Nevada, Idaho & Washington In 2004 formed a publicl
Slide 4: Asset Location / Business Footprint
Asset Location / Business Footprint Holly Corporation: Holly's refineries operate in the high margin & high growth Southwest & Rockies markets 111,000 bpd of refining capacity All refineries directly connected to Domestic / Canadian crude trading hubs Extensive crude oil gathering network in West Te
Slide 5: Strengths
Holly Strengths Over 35 years in the refining business Operates in high-growth, high-margin Southwest & Rocky Mountain regions Management team with an average of over 25 years of industry experience Industry leading return on capital Conservative balance sheet / capital structure Focused on refining
Slide 6: Strength: Industry Leading Profitability
Holly Strength: Industry Leading Profitability Latest 12 Months1 5-Year Average2 Well positioned financially to support continued growth and success 1Four quarters ended 9/30/07 2Five years ended 12/31/06 SUN VLO TSO MRO FTO HOC 0.249 0.235 0.182 0.219 0.488 0.585
Slide 7: Strength: Conservative Balance Sheet
Holly Strength: Conservative Balance Sheet Latest 12 Months1 5-Year Average2 1Four quarters ended 9/30/07 2Five years ended 12/31/06 Well positioned financially to support continued growth and success SUN VLO TSO MRO FTO HOC 0.751 0.32 0.478 0.288 0.166 0
Slide 8: Crude Processing Capacity Growth
Holly Crude Processing Capacity Growth 1969 Early 1980's Early 1990's 2003 Wood Cross Acquisiton 2006-07 CURRENT TOTAL NRC Planned Expansion Woods Cross Planned PLANNED TOTAL East 0 16 30 65 75 101 0 111 126 0 West 16 14 35 10 26 10 111 15 5 131 0 16k bpd 15k bpd 30k bpd 14k bpd 10k bpd 26k bpd 111k
Slide 9: Capital Spending Plan
Capital Spending Plan - - Elements of both Offense & Defense: Expanding refining capacity 18% by 2009 - --from 111,000 bpd to 131,000 bpd Increasing cost-advantaged crude mix by over 37% by 2010* - --from 5,000 bpd to 55,000 bpd All projects to take advantage of growing markets in the Southwest and
Slide 10: Navajo Refinery: Expansion and Feedstock Flexibility
Navajo Refinery: --Expansion and Feedstock Flexibility Project Summary: Overall project expected to be completed in two phases. Phase I: Expand crude capacity to approximately 100,000 bpd (Q1 '09) Revamp existing crude unit, new gas oil hydrocracker, new hydrogen plant Increases crude thruput capabi
Slide 11: Woods Cross Refinery: Expansion and Feedstock Flexibility
Woods Cross Refinery: --Expansion and Feedstock Flexibility Project Summary: Expand refinery by 19% to 31,000 bpd Install new gas oil hydrocracker, add Black Wax desalter, and expand sulfur recovery capacity Feed stock flexibility to process up to 15,000 bpd of Black Wax or 10,000 bpd Black Wax & 5,
Slide 12: UNEV Pipeline: Salt Lake City to Las Vegas
UNEV Pipeline: --Salt Lake City to Las Vegas Project Summary: 400 mile 12" pipeline Initial capacity approximately 60,000 bpd, expandable to approximately 120,000 bpd 2 Terminal locations: North Las Vegas and Cedar City, UT Holly to own 75% of project with Sinclair owning 25% interest 180-day option
Slide 13: Projected Capital Expenditures by Year
Projected Capital Expenditures by Year Capital Projects: 2007 2008 2009 Total NRC expansion and feedstock flexibility 80 115 45 240 Phase I - Expansion 75 95 9 179 Phase II - Feedstock Flexibility 5 20 36 61 WX expansion and feedstock flexibility 40 50 10 100 Sulfur recovery unit at NRC 14 10 --- 24
Slide 14: Capital Projects Impact on Pro Forma Annual EBITDA
Capital Projects Impact on Pro Forma Annual EBITDA (full year) Major Capital Projects Total Cost '03-'05 Prices '06 Prices NRC expansion and feedstock flexibility: $240 $126 $275 Phase I -- Expansion $179 $74 $139 Phase II - Feedstock Flexibility $61 $52 $136 WX expansion and feedstock flexibility $
Slide 15: Outlook
Holly Outlook
Slide 16: Holly EBITDA - Estimated Additions from Capital Projects
HOLLY EBITDA - Estimated Additions from Capital Projects 2003 2004 2005 2006 East 112.3 178.1 302 414 Using '03-'05 Avg. Prices: 2008 2009 2010* NRC expansion and feedstock flexibility Phase I --- 74 74 Phase II --- --- 52 WX expansion and feedstock flexibility 8 31 31 8 105 157 HOC Historical EBITD
Slide 17: Cash Flow Summary - YTD thru September 2007
Cash Flow Summary - YTD thru September 2007 ($ in Millions) Note: Cash includes marketable securities. 12/31/2006 Cash from Operations HEP Distribution Stock Buyback Capex Dividends Other 09/30/2007
Slide 18: Financial Strength Highlights
Holly Financial Strength Highlights Cash balance as of 9/30/07*: $310 million No debt Stock repurchase program Total of $500 million authorized to repurchase Thus far have repurchased 10.8 million shares for a total of $386 million Average cost of repurchases: $35.62 / share Strong base from which t
Slide 19: Opportunities: Expanded Footprint in Southwest / Rocky Mountain States
Holly Opportunities: Expanded Footprint in Southwest / Rocky Mountain States Longhorn Current: 111,000 bpd of refining capacity Operate in the high margin & high growth Southwest & Rockies markets Can process approx. 80,000 bpd of price advantaged crude feedstock Future:1 131,000 bpd of refining cap
Slide 20: Concluding remarks
Strong management team Strong financial fundamentals Strong industry fundamentals Favorable comparison to peer group metrics Operates in high margin, high growth markets Demonstrated growth ability Capital initiatives in place to continue growth Industry leading return on capital Concluding remarks
Slide 21: Contact
Holly Corporation 100 Crescent Court, Suite 1600 Dallas, Texas 75201 (214) 871-3555 Steve McDonnell, VP-Chief Financial Officer M. Neale Hickerson, VP-Investor Relations www.hollycorp.com