final texpo 2015
TRANSCRIPT
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Matt Roush, CTPSenior Treasury AnalystHollyFrontier CorporationBen LattinBusiness Development ManagerClearwater Analytics
When it Comes to Investments, How Do Your Treasury Operations Measure Up?
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Objectives
– I have a better understanding of my peers’ challenges
– I have a better understanding of where I sit in comparison
– I have a better understanding of how to improve my existing business processes
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Matt Roush, CTPSenior Treasury
Analyst
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Overview of HollyFrontier
– Headquartered in Dallas, Texas with operations throughout the Mid-Continent, Southwest, and Rocky Mountain regions
– One of the largest independent petroleum refiners in the United States
– Through its subsidiaries, operates five complex refineries with 443,000 barrels per day of crude oil processing capacity
– Subsidiaries produce and market gasoline, diesel, jet fuel, asphalt, heavy products, and specialty lubricant products
– Owns a 39% interest in Holly Energy Partners, L.P. (NYSE: HEP), which includes the 2% general partner interest
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Overview of HollyFrontier
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HollyFrontier Investment EnvironmentScope
– Policy applies to HollyFrontier Corporation and all subsidiaries
– Applies to cash managed in-house and cash with external managers, if any
– Not applicable for benefit/retirement plan-related investments
Objectives (in order of priority)
1. Safety of principal is foremost
2. Maintain liquidity sufficient to meet company’s projected cash requirements
3. Maximize after-tax return (net of fees) consistent with safety of principal and liquidity objectives
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HollyFrontier Investment EnvironmentParameters
– Permitted investments
– Credit quality
– Diversification/concentration
– Maturity restrictions
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HollyFrontier Investment EnvironmentYE 2014 Financial Highlights– Sales and other revenues: $19.8
billion– Cash and marketable securities:
$1.04 billion– Net income attributed to HFC
stockholders: $281 million– Total assets: $9.2 billion– HFC stockholder equity: $5.5 billion– Employees: 2,686
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Survey Demographics
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Survey Demographics
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Industry Type
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Size of Liquidity Portfolio
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What Are Your Biggest Investment-Related
Concerns?
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Top Investment-Related Concerns
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Investment Outlook and Regulatory Environment
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Regulatory Environment
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Who Advises You on Regulatory Change?
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Interest Rate Outlook
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What is Your Level of Concern with Money Market Fund Reform?
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Investment Strategy
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Asset Class OutlookCurrently Investing In vs. Considering
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Are You Considering Moving Into Separately Managed Accounts?
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In One Sentence, What is the Basis for Your Decision to Only Invest in Money Funds?
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What are the Key Reasons that Preclude You from Investing in SMAs?
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On Average, How Many Benchmarks Do You Use?
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How Many External Managers Do You Have?
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What Precludes You from Hiring Additional Asset Managers?
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Operational Efficiency
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How Many People on Your Organization’s Staff are Involved with Investment Accounting and Reporting?
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HollyFrontier Treasury Department
Treasury Vice President and Treasurer
Treasury Corporate Finance
Treasury Operations & Cash Management
Treasury Operations & Cash Management
Senior Treasury Analyst
Treasury Operations & Cash Management
Senior Treasury Analyst
Credit & Collections Manager, Credit and Collections
Credit & Collections
Credit Analyst
Credit & Collections
Credit Analyst
Credit & Collections
Credit Analyst
Insurance Manager, Risk
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Who Do You Provide Investment Reporting To?
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HollyFrontier Internal Customers
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Time to Compile Investment Reports
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Biggest Challenge When Compiling Investment Packages
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Closing the Books: How Many Days?
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What are Your Biggest Auditing Challenges?
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Which Auditor Do You Use?
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Matt Roush, CTPSenior Treasury Analyst
Case Study
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Seeking A Better Way (Improving Efficiencies)– Monitor risk concentration, credit quality,
duration, etc. for entire portfolio
– Compare performance among external managers and multiple benchmarks
– Daily audit quality reports of all holdings
– Automate and reduce man hours for accounting close cycle
– Improved investment reporting for daily operations, board meetings, etc.
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Takeaways
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Challenges
– Optimizing returns in a low-yield environment
– Adjusting the investment strategy in an uncertain interest rate environment
– Maximizing efficiencies while manual processes are still prevalent
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Trends
– Uncertainty in the changing regulatory environment, but generally confident interest rates will change within the next two years
– Concern with regulatory reform, but sticking with traditional investment types
– Closing the books and building investment packages remains time-consuming, despite pressure from CFOs for quicker results
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Questions