Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — Raymond James Investor Conference March 2010
23 slides from Hf Sinclair's conference presentation, Mar 10, 2010
Slide 1: Holly Corporation and Holly Energy Partners - Raymond James Investor Conference
Holly Corporation Holly Energy Partners Raymond James - Investor Conference March 2010
Slide 2: Disclosure Statement
2 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 r
Slide 3: Presentation Outline
3 Presentation Outline Overview of Holly and HEP Financial Performance Focused Growth Orientation Balance Sheet Highlights and Liquidity Conclusion
Slide 4: Presentation Outline: Overview of Holly and HEP
4 Presentation Outline Overview of Holly and HEP Financial Performance Focused Growth Orientation Balance Sheet Highlights and Liquidity Conclusion
Slide 5: Holly Overview
5 Holly Overview Holly Corporation: Holly's refineries operate in Southwest, Rockies & Mid-Continent markets 256,000 bpsd of refining capacity and weighted average complexity greater than 12.0 Refineries directly connected to Domestic or Canadian crude trading hubs Owns 100% of GP and 7.3 million LP
Slide 6: Holly Investment Highlights
6 Holly Investment Highlights Pure Play Refiner 3 refineries with combined processing capacity of 256,000 barrels per day (bpd) 40 years of refining experience-entered refining business in 1969 (profitable every year) Competitive Assets High complexity facilities with access to multiple sources of c
Slide 7: HEP Investment Highlights
7 100% fee based revenue business Long term contracts supporting revenue stream Proven track record of distribution increases No commodity ownership risk or related hedging Well maintained assets serving high growth markets Senior management team averages over 25 years of industry experience Benefit
Slide 8: Presentation Outline: Financial Performance
8 Presentation Outline Overview of Holly and HEP Financial Performance Focused Growth Orientation Balance Sheet Highlights and Liquidity Conclusion
Slide 9: Historical EBITDA
Historical EBITDA (in millions) Holly Corporation Gross Margin ($/bbl) Capacity (bpsd) $9.20 109 $12.62 109 $15.78 109 $16.74 111 $10.96 116 $7.21 256 Holly Energy Partners Pipeline Volume (bpsd) 95 159 189 205 276 338 1 1 - Capacity and pipeline volumes are based in thousands. 2 - On 12/1/09, we so
Slide 10: Refining Margins (2004-2008 range)
10 Refining Margins (2004-2008 range) 5-yr. high & low gross margin range by quarter - tan bars Gulf Coast 5-Yr. Quarterly Avg 3-2-1 margin- green line 5 Yr. Quarterly Average Gross Margin ($/bbl ) - Navajo, Woods Cross - - blue line 5 Yr. Quarterly Average Gross Margin ($/bbl ) - PADD II - red line
Slide 11: 2009 - Gasoline & Diesel Cracks
2009 - Gasoline & Diesel Cracks 11 Diesel Diesel cracks were well below prior year and 5 year average in all markets. US demand was down over 12% (vs. 2008) Gasoline Gasoline cracks were better than 2008 in most markets while still remaining below the 5 year average. US demand was down over 1% (vs.
Slide 12: HEP Distribution Growth
12 1 Jan '10 quarterly rate of $0.805/unit times 4 quarters equals $3.22 Annual Distributions per unit Current distribution (Jan'10) annual run rate: $3.221 HEP Distribution Growth
Slide 13: Presentation Outline: Focused Growth Orientation
13 Presentation Outline Overview of Holly and HEP Financial Performance Focused Growth Orientation Balance Sheet Highlights and Liquidity Conclusion
Slide 14: Enhanced Competitive Position at Legacy Refineries
14 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 percentage Enhanced black wax and Canadian heavy receiving capabilities Increase
Slide 15: Tulsa Facilities Integration and Strategic Acquisitions
15 Holly is in process of integrating the two Tulsa facilities (Sunoco & Sinclair) to form one complex 125,000 BPD refinery Net capex savings of approximately $125 million: Eliminates an estimated $110 million of project capital requirements Reduces MSAT 2 compliance capex by about $15 million Allow
Slide 16: UNEV Pipeline & Refinery Economics
16 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, NV Holly owns 75% interest (Sinclair 25%) Completion Date - Early 2011 Benefits: Las Vegas trades at premium to Salt Lake Lowers im
Slide 17: HEP EBITDA Growth Since Inception
17 At IPO (7/04) Alon (2/05) Intermediate P/L (7/05) NRC Expansion (6/06) & Tariff Renegotiation (8/06) HOC Crude Dropdown (2/08) Plains Crude JV (2/09) So System Expand (3/09) NRC Imm P/L Tulsa Rack +Roadrunner P/L - RGPL Tulsa Sinclair Logistics Proforma '2010 EBITDA Run Rate East 35 35 52 62 67 8
Slide 18: Presentation Outline: Balance Sheet Highlights and Liquidity
18 Presentation Outline Overview of Holly and HEP Financial Performance Focused Growth Orientation Balance Sheet Highlights and Liquidity Conclusion
Slide 19: Balance Sheet Highlights and Liquidity
19 Balance Sheet Highlights and Liquidity Subsequent Events: Feb. 2010: HEP announced the execution of a letter of intent to purchase storage and loading facilities from Holly Corporation for $93mm Mar 2010: HEP executed a debt offering of $150mm of senior notes to purchase Storage and Loading Facil
Slide 20: Presentation Outline: Conclusion
20 Presentation Outline Overview of Holly and HEP Financial Performance Focused Growth Orientation Balance Sheet Highlights and Liquidity Conclusion
Slide 21: Conclusion
21 Conclusion Holly Corporation: Competitive refining assets in attractive markets Recent investments to make legacy refineries even stronger Low entry cost for complex Tulsa refining facility (Sunoco + Sinclair) Conservative capital structure plus experienced management team HEP ownership (over $28
Slide 22: Holly Corporation and Holly Energy Partners Contact Details
22 Holly Corporation Holly Energy Partners 100 Crescent Court, Suite 1600 Dallas, Texas 75201 (214) 871-3555 Bruce R. Shaw, SVP-Chief Financial Officer M. Neale Hickerson, VP-Investor Relations www.hollycorp.com
Slide 23: Definitions
23 Definitions BPD: the number of barrels per calendar day of crude oil or petroleum products. BPSD: the number of barrels per stream day of crude oil or petroleum products. EBITDA: Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA, is calculated as net inco