Slide 1: Investor Presentation Fall 2012
Investor Presentation Fall 2012
Slide 2: Disclosure Statement
2 HollyFrontier 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
Slide 3: HollyFrontier Corporation
3 HollyFrontier Corporation
Slide 4: HollyFrontier Investment Highlights
4 HollyFrontier Investment Highlights Pure Play Competitive Refiner 5 refineries with combined processing capacity of over 440,000 barrels per day (bpd) High complexity facilities with access to multiple sources of crude supply—combined Nelson Complexity rating of over 12.0 High degree of crud
Slide 5: Footprint of HollyFrontier and HEP
5 Footprint of HollyFrontier and HEP Collaboration with HEP provides strategic growth opportunities in logistics and marketing operations
Slide 6: Proximity to Growing North American Crude Production
6 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
Slide 7: UNEV Pipeline & Woods Cross Refinery Economics
7 UNEV Pipeline & Woods Cross 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, NV 62,000 bpd capacity (low cost expandability to 118,000 bpd) HollyFrontier sold its 75% interest to Holly Energy
Slide 8: Crude Growth in our Backyard
2500 3500 4500 5500 6500 7500 8500 9500 10500 2011 2012 2013 2014 2015 2016 Canada (conventional & oil sands) Bakken Permian Niobrara Uinta Mississippian 8 Crude Growth in our “Backyard” Canadian, Bakken, Permian, Niobrara, Uinta, Mississippi Lime Source: Deutsche Bank, Macquarie, Simmons & Co, Cana
Slide 9: Strategic Investment & Acquisition
9 Strategic Investment & Acquisition Historical Investments • Approximately $600mm invested for enhanced feedstock flexibility & modest growth • Synergistic acquisitions of Tulsa refineries at less than $1,000 per daily bbl* • Tulsa interconnection improving profitability through better yields & low
Slide 10: Capital Expenditure Overview
10 Capital Expenditure Overview Past investment make legacy refineries stronger Maintenance capital of approximately $200 million Legacy HOC & FTO capital expenditures were combined for periods prior to the 2011 merger. 2011 capital expenditure calculated using 2011 HFC capital expenditure of $374
Slide 11: Cash Returns to Shareholders
11 Cash Returns to Shareholders Since the July 2011 merger we have declared $640m in dividends & authorized $700m of share repurchases: Increased our regular dividend three times – doubling it since the merger • Aug 25th: Raised regular quarterly cash dividend from $0.075 to $0.0875 per share, a 1
Slide 12: Cash Return to Shareholders
12 Cash Return to Shareholders LTM Cash Yield to Shareholders Last Twelve Months includes YTD 2012 dividends declared and excludes cash dividends in the same period through 2011. Data from filings and press releases. As of 8/24/2012 stock prices. See page 25 for calculations.
Slide 13: Pro Forma HollyFrontier Returns on Capital
13 Pro Forma HollyFrontier Returns on Capital (combined) 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 HOC/FTO
Slide 14: Strong Financial Metrics vs Peers
14 Strong Financial Metrics vs Peers Net Income per Barrel of Crude Capacity HFC earnings per bbl strongest in peer sector (2007-2011) Q2 2012 earnings per bbl $12.24 HFC earnings calculated by adding legacy HOC plus FTO earnings for periods prior to the merger. See page 25 for calculations.
Slide 15: Business not Built on WTI/Brent Spread
15 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 financial
Slide 16: HEP Growth: Distributable Cash Flow Since Inception
16 HEP Growth: Distributable Cash Flow Since Inception HFC received $46m in cash distributions for FY 2011
Slide 17: Value of HFC's LP & GP Interests in HEP
17 Value of HFC’s LP & GP Interests in HEP HFC owns 12.1mm common units: $780 -- 830MM1 Multiple of GP cash flow: 15X 20X 25X Current GP Interest IDR Distributions:2 $250MM $350MM $430MM HEP value to HFC is in the approximate $1 billion to $1.2 billion range.3 LP Interest: GP Interest: 1 Based on ra
Slide 18: HollyFrontier Corporation contact and investor relations
18 HollyFrontier Corporation (NYSE: HFC) 2828 N. Harwood, Suite 1300 Dallas, Texas 75201 (214) 871-3555 www.hollyfrontier.com Neale Hickerson, Vice President, Investor Relations Neale.hickerson@hollyfrontier.com 214-871-3572 Julia Heidenreich, Investor Relations Julia.Heidenreich@hollyfrontier.com 2
Slide 19: Appendix
19 Appendix
Slide 20: Mid-Continent: El Dorado & Tulsa Refineries
20 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
Slide 21: Southwest: Navajo Refinery
21 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 100,6
Slide 22: Rocky Mountain: Woods Cross and Cheyenne Refineries
22 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
Slide 23: Holly Energy Partners
23 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 a
Slide 24: Feedstock Flexibility
24 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 n
Slide 25: Financial Metrics
25 Financial Metrics* Net Income/BBL crude capacity 2011 2010 2009 2008 2007 5 yr ave HFC 8.23 0.88 -0.55 3.61 7.39 3.91 CVI 5.12 0.34 1.67 3.94 -1.62 1.89 DK 3.09 -3.65 0.03 1.21 4.40 1.02 TSO 2.25 -0.12 -0.58 1.15 2.36 1.01 VLO 2.61 0.41 -2.17 -1.19 5.31 0.99 WNR 2.41 -0.31 -4.29 0.79 2.79 0.28 AL
Slide 26: Definitions
26 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