01—Abstract
Summary
Summary of the 8-K filed January 3, 2024. Cited figures are marked; the original filing is the authoritative source.
HF Sinclair Corporation (NYSE: DINO) furnished an investor presentation dated January 2024 under Item 7.01 (Regulation FD Disclosure) of this Form 8-K.
The filing itself contains no new financial results; it incorporates by reference Exhibit 99.1, a presentation the company will use in meetings with current and potential investors, and states that the information is furnished rather than filed for purposes of Section 18 of the Exchange Act. The presentation outlines the company's operating footprint: 678,000 BPD of refining capacity across seven refineries, roughly 4,400 miles of crude and product pipelines, a lubricants and specialty products business with 34,000 BPD of production capacity, over 1,500 branded retail sites, and approximately 380 million gallons per year of renewable diesel capacity. It also highlights the December 1, 2023 completion of the acquisition of the public units of Holly Energy Partners, L.P. for a combination of HF Sinclair common stock and cash.
For capital allocation, the presentation states a target payout ratio of 50% of adjusted net income (dividends plus repurchases), a $0.45a regular quarterly dividend, and a $1.0 billion share repurchase program authorized August 15, 2023, with approximately $676 million remaining as of December 18, 2023. As of September 30, 2023, consolidated debt was $3.187 billion, cash and cash equivalents were $2.215 billion, and total liquidity was $4.486 billion. The presentation also lists 2024 capex guidance, with turnarounds and catalysts at $415 million and growth at $75 million.
02—Key points
Key Highlights
- Furnished under Item 7.01 as an investor presentation; the information is not deemed "filed" under Section 18 of the Exchange Act.
- Operates 678,000 BPD of refining capacity across seven refineries in the Mid-Continent, West and Pacific Northwest regions.
- Completed the acquisition of all publicly held Holly Energy Partners, L.P. units on December 1, 2023, paid in HF Sinclair common stock and cash.
- Capital return target of 50% payout ratio (dividends plus repurchases) of adjusted net income; $0.45 quarterly dividend; $1.0 billion buyback authorized August 15, 2023 with about $676 million remaining as of December 18, 2023.
- Consolidated debt of $3.187 billion, cash of $2.215 billion and total liquidity of $4.486 billion as of September 30, 2023; credit ratings cited as BBB- (S&P), Baa3 (Moody's) and BBB- (Fitch).
- Renewables segment has about 380 million gallons per year of renewable diesel capacity across three units in Sinclair, WY, Cheyenne, WY and Artesia, NM.
- 2024 capex guidance includes $415 million for turnarounds and catalysts and $75 million for growth.
03—Questions
Frequently Asked Questions
Does this 8-K report new financial results?
No. The filing furnishes an investor presentation under Item 7.01 and states that the information is not deemed filed for purposes of Section 18 of the Exchange Act. The presentation contains operating and capital structure data but no new quarterly or annual earnings results.
What was the Holly Energy Partners transaction?
The presentation states that on December 1, 2023, HF Sinclair completed the acquisition of all outstanding common units of Holly Energy Partners, L.P. not already owned by HF Sinclair and its subsidiaries, for a combination of HF Sinclair common stock and cash. It also notes that on December 4, 2023, exchange offers for HEP 6.375% notes due 2027 and 5.000% notes due 2028 were completed, with $399,875,000 and $498,879,000 of principal tendered, respectively.
How much capital is the company returning to shareholders?
The presentation targets a payout ratio of 50% of adjusted net income, covering dividends plus repurchases, and pays a $0.45 regular quarterly dividend. It states that over $1.3 billion was returned through dividends and share repurchases in 2023 year to date, as of the presentation date.
What is the company's debt and liquidity position?
As of September 30, 2023, consolidated debt was $3.187 billion, with consolidated debt to total capitalization of 23% and consolidated net debt to capitalization of 7%. Consolidated total liquidity was $4.486 billion, including $2.215 billion of cash and cash equivalents.
What are the company's main business segments?
The presentation describes four segments: Refining (678,000 BPD across seven refineries), Marketing (over 1,500 branded retail sites), Renewables (three renewable diesel units with about 380 million gallons per year of capacity), and Lubricants & Specialty Products (34,000 BPD of production capacity), plus Midstream, which operates about 4,400 miles of pipelines and 17.8 million barrels of storage.
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