01—Abstract
Summary
Summary of the 8-K filed August 30, 2024. Cited figures are marked; the original filing is the authoritative source.
HF Sinclair Corporation (NYSE: DINO) furnished an investor presentation dated August 2024 under Item 7.01 (Regulation FD Disclosure) of this Form 8-K, filed August 30, 2024.
The presentation is furnished rather than filed, and it is intended for meetings with current and potential investors. It describes the company as operating 7 refineries with 678,000 BPD of refining capacity across the Mid-Continent, West and Pacific Northwest regions, plus marketing, renewables, lubricants and specialties, and midstream segments. The presentation highlights a renewable diesel business with three production facilities and approximately 380 million gallons of annual capacity, and a lubricants business with 34,000 BPD of production capacity.
It also presents an illustrative mid-cycle refining EBITDA of approximately $1.6 billiona, based on management's current expectations, with assumptions including a $21.50 HF Sinclair Index, a 70% capture rate, and a target throughput of 640,000 BPD. On capital allocation, the company states it plans a $0.50 regular quarterly dividend, a target payout ratio of 50% of adjusted net income for dividends plus repurchases, and a new $1.0 billion share repurchase program authorized May 7, 2024, with approximately $925 million remaining as of June 30, 2024. Total 2024 capital guidance is $875 million, and consolidated total liquidity was $3.366 billion as of June 30, 2024.
02—Key points
Key Highlights
- Refining footprint of 7 refineries with 678,000 BPD of capacity, with fleet-wide discounts to WTI and premium product distribution areas versus the Gulf Coast
- Renewables business with three renewable diesel units totaling approximately 380 million gallons of annual capacity
- Illustrative mid-cycle refining EBITDA of approximately $1.6 billion, based on management's current expectations
- Capital returns: $0.50 quarterly dividend, 50% target payout ratio, and approximately $925 million remaining on a $1.0 billion buyback authorized May 7, 2024
- Approximately $732 million returned through dividends and share repurchases in 2024 through June 30, 2024, versus over $1.3 billion in 2023
- Consolidated debt to capitalization of 21% and net debt to capitalization of 14% as of June 30, 2024, with total liquidity of $3.366 billion
- 2024 total capital expenditure guidance of $875 million, including $800 million sustaining and $75 million growth capital
03—Questions
Frequently Asked Questions
How much capacity does HF Sinclair have in its refining system?
The presentation states HF Sinclair operates 7 refineries in the Mid-Continent, West and Pacific Northwest regions with 678,000 BPD of refining capacity.
What is the company's capital return plan?
HF Sinclair plans to pay a $0.50 regular quarterly dividend and targets a 50% payout ratio (dividends plus repurchases) of adjusted net income. A new $1.0 billion share repurchase program was authorized May 7, 2024, with approximately $925 million remaining as of June 30, 2024.
What is the company's illustrative mid-cycle refining EBITDA?
The presentation shows illustrative mid-cycle refining EBITDA of approximately $1.6 billion, based on a $21.50 HF Sinclair Index, a 70% capture rate, $15.00 adjusted refinery gross margin per barrel, $7.25 operating expenses per barrel, and a 640,000 BPD target throughput. Management notes this estimate is based in part on current expectations.
How is the company's balance sheet positioned?
As of June 30, 2024, total long-term debt was $2.65 billion, cash and cash equivalents were $866 million, and consolidated total liquidity was $3.366 billion. Credit ratings were BBB- (S&P), Baa3 (Moody's) and BBB- (Fitch).
What is the status of the company's renewable fuels business?
HF Sinclair operates renewable diesel units at its Sinclair, WY (10,000 BPD), Cheyenne, WY (6,000 BPD) and Artesia, NM (9,000 BPD) refineries, with a pre-treatment unit at Artesia to provide feedstock flexibility.
04—Continue