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January 2015 Investor Presentation – Hollyfrontier Corporation

Hollyfrontier Corporation · Jan 20, 2015 · 39 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 1
    Investor Presentation January 2015
  2. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 2
    3
  3. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 3
    HollyFrontier Investment Highlights 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…
  4. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 4
    Footprint of HollyFrontier and Holly Energy Partners Collaboration with HEP provides strategic growth opportunities in logistics and marketing operations 5
  5. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 5
    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 North American Production Growth (mbpd) 2013 2014 2015 Canada 3,400…
  6. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 6
    Advantaged Crude Slate Refinery location and configuration enables a fleet-wide crude slate discounted to WTI Discounted feeds drive higher gross margins / barrel and ultimately, EBITDA Highly flexible refining system allows…
  7. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 7
    Expanding Reach in Growing Markets Sources: Company research and the EIA. 8
  8. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 8
    Focus on Safe and Reliable Operations Personal Safety Refinery Reliability OSHA 300 Recordable Incident Rate Equivalent Distillation Capacity Process Availability Employees 1.6 97% Contractors 1.4 96% 1.2 1 95% 0.8 0.6 94%…
  9. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 9
    Strategic Investment & Acquisition Current and Potential Growth Initiatives Investment & Acquisition Strategy Strong track record of buying the right assets at the right time Woods Cross, El Dorado, and Tulsa refineries all…
  10. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 10
    Strategic Investment & Acquisition Woods Cross Expansion Phase 1 PROJECT ESTIMATED CAPEX PROJECTED EBITDA GENERATION* EXPECTED COMPLETION Woods Cross Phase 1 350 - 400 million 125 million Q4 2015 50,000 WX Black Wax Capacity Expand…
  11. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 11
    Strategic Investment & Acquisition Woods Cross Expansion Phase 2 PROJECT ESTIMATED CAPEX PROJECTED EBITDA GENERATION* Expected Completion Woods Cross Phase 2 750 million to 1 billion 350 million 2018+ Woods Cross Black Wax Capacity…
  12. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 12
    Strategic Investment & Acquisition El Dorado Naphtha Fractionation PROJECT ESTIMATED CAPEX PROJECTED EBITDA GENERATION EXPECTED COMPLETION El Dorado Naphtha Fractionation 99 million 57 million Spring 2015 The Naphtha Splitter tower…
  13. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 13
    Strategic Investment & Acquisition Tulsa Refinery Modernization: FCC Revamp PROJECT ESTIMATED CAPEX PROJECTED EBITDA GENERATION* EXPECTED COMPLETION Tulsa FCC Modernization 20 million 20 million Fall 2015 The Tulsa East and West…
  14. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 14
    Capital Expenditure Overview Historical Capital Expenditure400 377 381 400 290 272 300 200 Expenditures by Classification** 100 Turnaround - Growth 30% 20-30% 2010 2011 2012 2013 2014E* Historical Turnaround Costs 194 200…
  15. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 15
    Strong Balance Sheet & Cash Returns Since the July 2011 merger HFC has returned approximately 2.8 billion in cash to shareholders 864 1.5 billion cash on balance as of 9/30/14 900 825 780 800 188 million outstanding debt as of…
  16. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 16
    Dividend Returns to Shareholders Increased regular dividend 6 times since the merger, a 325% increase Declared 15 special dividends since the merger, total of 7.50 per share LTM Cash Yield 10.0% 8.7% 8.2% 8.0% 6.0% 4.5% 4.2%…
  17. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 17
    Best In Class Returns on Capital Employed Pro Forma HollyFrontier Returns on Invested Capital (Average 2009-2013) 14% 13% 13% 12% 11% 10% 7% 8% 6% 5% ROCE 6% 4% 4% 3% 2% 0% -1% -2% HFC MPC PSX DK WNR TSO VLO…
  18. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 18
    EV/EBITDA vs Returns on Capital Employed 5-year average ROCE calculated by taking the average of ROCE's for the years 2009-2013. ROCE calculated as net income divided by the sum of total debt and total equity. For HFC, legacy…
  19. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 19
    Strong Financial Metrics vs Peers Net Income per Barrel of Crude Capacity HFC earnings per bbl strongest in peer sector (2009 2013) 12.00 10.00 8.00 6.00 4.76 3.66 Dollars per barrel 2.92 4.00 2.00 1.42 1.18 2.00…
  20. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 20
    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 ROCE 22% Average NI/BBL 2.69 ROCE 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% 2001…
  21. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 21
    Holly Energy Partners Investment Highlights Well positioned assets that serve high growth markets Leverage to Permian growth through expanded Southeastern New Mexico Gathering system Successful execution of growth plan has resulted…
  22. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 22
    Holly Energy Partners Partnership Growth Organic Growth Increase cash flow via logical additions to existing assets, volume growth and annual contractual PPI-related revenue growth HFC Growth Partner with HollyFrontier to grow…
  23. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 23
    Holly Energy Partners Expected Visible Growth Expected Annual Expected Incremental Revenue Timing SE NM Crude Gathering 10 mm 2H 2014 (1) UNEV Volume Increase 15 mm 2015 - 2016 (2) via SLC Refinery Expansions Contractual Tariff…
  24. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 24
    Holly Energy Partners Southeastern New Mexico Crude Gathering Expansion Permian Production projected to grow from 1.5 million BPD to over 2 million BPD by 2018 Long term, bull case scenario calls for Permian Production to reach over…
  25. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 25
    Holly Energy Partners Southeastern New Mexico Crude Gathering Expansion Expansion of Southeast New Mexico crude gathering system to 100,000 BPD Provides shippers additional capacity to Navajo Refinery Connections to major clearing…
  26. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 26
    Permian Demand and Takeaway 27
  27. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 27
    HEP Growth: Cash Distribution Since Inception Total HEP Distributions (GP and LP) Total GP Distribution 30.0 29.4 160 HFC received approximately 144 140 73mm in cash 126 25.0 23.6 distributions for FY2013 120 20.0 99 100…
  28. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 28
    Value of HFCs LP & GP Interests in HEP LP INTEREST*: HEP Unit Price 28.00 30.00 32.00 HFC owns 22.4mm common units (mm): 627 672 717 GP INTEREST: Annualized GP IDR cash flow: Annualized IDR cashflow (mm): 35.6 Multiple of GP cash flow:…
  29. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 29
    HollyFrontier Corporation Julia Heidenreich, VP, Investor Relations (NYSE: HFC) Craig Biery, Investor Relations 2828 N. Harwood, Suite 1300 Dallas, Texas 75201 investorshollyfrontier.com 214-954-6510 (214) 954-6510…
  30. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 30
    Appendix 31
  31. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 31
    HollyFrontier Index Please see p. 42 for disclaimer and www.HollyFrontier.com/investor-relations for most current version. 32
  32. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 32
    HollyFrontier Enterprise Value Shares Outstanding* 197 Price per Share* 37.48 Market Cap 7,384 Less: Cash* (1,479) Add: Total Debt* 1,039 Less: HEP Debt** (851) Add: Minority Interest 587 Enterprise Value 6,680 Less: HEP GP…
  33. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 33
    Logistics Matter Proximity to Crude Oil Pricing Hubs and Takeaway Infrastructure Prices reflect estimated transportation cost per barrel via pipeline, rail and marine Sources: Barclays, Credit Suisse, Deutsche Bank, Macquarie, and…
  34. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 34
    Feedstock Flexibility* WCS Black Wax Low WTI/WTS (2 or less) WTI 35% 52% High WTI/WCS (20 or higher) WTS 13% WTI/Brent Range (10 to 20) Low WTI/WTS (2 or less) Low WTI/WCS (8 or less) WTI/Brent Range (20 or higher) High…
  35. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 35
    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…
  36. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 36
    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…
  37. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 37
    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…
  38. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 38
    Holly Energy Partners Holly Energy Partners owns and operates substantially all of the refined product pipeline and terminaling assets that support our refining and marketing operations in the Mid- Continent, Southwest and Rocky…
  39. January 2015 Investor Presentation – Hollyfrontier Corporation – slide 39
    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 ROCE 29.1% 5.2% 7.9% 20.8% 44.0% 45.0% 45.3% 21.8% -2.3% 4.8% 22% NI/BBL…

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