Transcript No Slide Title

Thirteenth Annual Global
High Yield Conference
September 2005
Forward Looking Statements
This presentation contains forward-looking statements that involve known and unknown risks and
uncertainties. Forward-looking statements are identified by words or phrases such as “believes,”
“expects,” “anticipates,” “estimates,” “should,” “could,” “plans,” “intends,” ”will,” variations of such
words and phrases, and other similar expressions. While these forward-looking statements are
made in good faith, and reflect the Company’s current judgment regarding such matters, actual
results could vary materially from the forward-looking statements. Important factors that could
cause actual results to differ from forward-looking statements include, the risk that the pipeline
acquisition and the acquisition of Dial Oil Company will not result in additional growth or increased
profitability for our Four Corners operations, the risk that it will not be possible to place the acquired
pipeline system in operation and/or operate the Bloomfield and Ciniza refineries at maximum rates
due to financial, operational or other constraints, the risk that the timetable for placing the pipeline
system into operation will be different than anticipated, the risk that it will not be possible to obtain
additional crude oil for processing at the Bloomfield and Ciniza refineries at cost effective prices,
the risk that the operations of Dial Oil Company will not complement our existing wholesale and
retail businesses, the risk that the combination of the operations of Dial Oil Company with the
operations or Phoenix Fuel will not provide a platform for future growth, the risk that we will not be
able to obtain a larger credit facility should we want it, the risk that refining fundamentals will not
remain more positive than the same time last year, the risk that our retail group will not continue to
see fuel volumes and merchandise sales above last year’s levels, the risk that Phoenix Fuel will not
continue to see stronger margins than last year or volumes consistent with the same time last year,
, and other risks detailed from time to time in the Company’s filings with the Securities and
Exchange Commission. All subsequent written and oral forward-looking statements attributable to
the Company, or persons acting on behalf of the Company, are expressly qualified in their entirety
by the foregoing. Forward-looking statements made by the Company represent its judgment on the
dates such statements are made. The Company assumes no obligation to update any forwardlooking statements to reflect new or changed events or circumstance.
1
Company Overview
Refining Group





(a)
(b)
(c)
80% of EBITDA(a)
3 refineries (104,500
mbpd(b))
2 terminals
Crude gathering pipeline
system
Truck transports
Retail Group


11% of EBITDA(a)
124 convenience stores
located in NM, AZ, CO(c)
2004 EBITDA, before corporate overhead and discontinued operations. See
appendix for explanatory note and reconciliation.
Total combined refining capacity.
2
As of June 30, 2005.
Phoenix Fuel





9% of EBITDA(a)
One of the largest wholesale
distributors in Arizona
Distribution plants
Unmanned fleet fueling
locations
Delivery trucks
Key Investment Considerations

Strong refining margin environment and positive
long-term trends

Diversified operations and geographic markets

Proven ability to optimize operations and grow
earnings

Long-term crude supply agreement for Yorktown
enhances earnings and mitigates risks

Improved balance sheet

Additional growth opportunities
3
Giant Strategic Objectives
Grow the Business

Refining Growth




Evaluate divestitures from larger
competitors
Consolidation of smaller
independents
Evaluate refinery projects on ROCE
Retail Growth



Grow the
Business
Increase market share in current
markets
Enter new refinery markets
Maximize ROCE
Phoenix Fuel


Capitalize on supply economics and
technology to expand market share
Identify acquisition opportunities to
expand geographic area (Dial Oil
Co.)
4
Achieve & Maintain
Strong Capital Structure
Giant Strategic Objectives
Maximize Return on Capital Employed

Optimize operations, costs and
capital spending

Identify strategic partners to improve
costs and earnings

Increase crude supply to Four
Corners refineries (Pipeline
Acquisition)

Continue to increase merchandise
and fuel sales in retail group

Continue to increase wholesale,
cardlock and lubricant market share
Grow the
Business
Maximize ROCE
5
Achieve & Maintain
Strong Capital Structure
Giant Strategic Objectives
Maintain Strong Capital Structure

Focus on continued debt reduction

Utilize free cash flow for debt
repayment

Maintain capital discipline

Strict capital planning for capital
expenditure requirements

Cost effectively manage operating
and overhead costs

Grow the
Business
Maximize ROCE
Balanced acquisition financing
6
Achieve & Maintain
Strong Capital Structure
Significant Recent Debt Reduction

Giant has been disciplined about debt reduction

Debt to capitalization ratio reduced from 77% to 50%

Approximately $175MM of debt reduction since June 30, 2002
Balance Sheet ($MM)
6/30/2002
6/30/2005
$11.6
$59.9
$60.0
$0.0
11% Senior Sub Notes
$194.2
$127.0
9% Senior Sub Notes
$150.0
$0.0
Cash
Debt
Revolving Credit Facility
8 % Senior Sub Notes
$147.6
Term Loan
Capital Leases
Total Debt
Shareholders’ Equity
Debt / Book Cap
7
$38.9
$0.0
$6.8
$0.0
$449.9
$274.6
$132.3
$270.9
77%
50%
Continuing Debt Reduction
Balance Sheet ($MM)
6/30/2005
Adjustments
Pro Forma
6/30/2005
Cash
$59.9
Acquisitions
$72.2
($40.0)
Equity Proceeds
$52.3
Debt
Revolving Credit Facility
$0.0
$0.0
11% Senior Sub Notes
$127.0
$127.0
9% Senior Sub Notes
$0.0
8 % Senior Sub Notes
$147.6
$147.6
Total Debt
$274.6
$274.6
$0.0
Shareholders’ Equity
$270.9
Debt / Book Cap
50.3%
45.9%
Net Debt /Net Book Cap
44.2%
38.5%
8
$52.3
$323.2
Strong Financial Performance

Giant made significant progress restoring financial flexibility and
improving operating performance
EBITDA ($MM)(a)
2002
EBITDA
Depreciation & Amortization
EBIT
Interest Expense
Other (Incl. One Time Items)
Taxes
Earnings (Cont. Ops.)
$54.6
Cash Flow ($MM)(a)
2003
2004
$102.5
$111.8
35.2
36.9
37.1
$19.4
$65.6
$74.7
36.3
39.0
32.9
2.2
6.4
14.8
(7.7)
7.9
10.7
($11.5)
$12.3
$16.3
Change in Accounting Principle
0.0
(0.7)
0.0
Discontinued Operations
2.3
(0.4)
(0.1)
Net Income
($9.3)
$11.2
2002
Net Income
(a) See appendix for explanatory note and reconciliation.
(b) Excludes acquisitions, asset sales and insurance settlements.
$11.2
$16.2
35.2
36.9
37.1
0.1
8.0
8.6
Other
(0.7)
7.8
7.4
Changes in Working Capital
12.7
(1.5)
7.2
Deferred Taxes
Cash Flow From Operations
$38.1
$62.3
$76.5
Less: Capital Expenditures (b)
($13.0)
($17.9)
($58.7)
$25.1
$44.5
$17.8
Cash Flow
9
2004
($9.3)
Depreciation & Amortization
$16.2
2003
Giant Industries: An Attractive Investment Opportunity



Diversified lines of business
Experienced management
Growth opportunities across
all business segments
Grow the
Business





Strong industry fundamentals
Increasing mid-cycle margins
Strong operating performance
Increased operating flexibility
Positive impact from high-acid
crude agreement and refinancing
transactions

Maximize ROCE
Achieve & Maintain
Strong Capital Structure



10
Significant leverage reduction
Improved float & liquidity
Valuation discount to
independent refining peers
New flexibility to pursue
growth opportunities
EBITDA Reconciliation
EBITDA represents income before interest expense, interest income, income
tax, and depreciation and amortization. EBITDA is not a calculation based upon
generally accepted accounting principles; however, the amounts included in the
EBITDA calculation are derived from amounts included in the consolidated
financial statements of the Company. EBITDA should not be considered as an
alternative to net income or operating income, as an indication of operating
performance of the Company or as an alternative to operating cash flow as a
measure of liquidity. EBITDA is not necessarily comparable to similarly titled
measures of other companies.
Segment EBITDA ($MM)(a)
Consolidated EBITDA ($MM)
EBITDA
Depreciation & Amortization
EBIT
Net Gain on Asset Sale
Gain from Insurance Settlement
Interest Expense
Early Debt Extinguishment Costs
Financing Fee Amortization / Writeoff
Interest and Investment Income
Income Taxes
Earnings from Continuing Operations
Change in Accounting Principle
Discontinued Operations
Net Income
2002
$54.6
(35.2)
$19.4
0.6
2003
$102.5
(36.9)
$65.6
(1.8)
(36.3)
(39.0)
(3.3)
0.4
7.7
($11.5)
0.0
2.3
($9.3)
(4.7)
0.2
(7.9)
$12.3
(0.7)
(0.4)
$11.2
2004
$111.8
(37.1)
$74.7
(0.2)
3.9
(32.9)
(10.6)
(8.3)
0.4
(10.7)
$16.3
0.0
(0.1)
$16.2
(a) Prior to corporate overhead allocation. Segment EBITDAs
do not add to consolidated total due to overheads and other
reconciling items. Excludes discontinued operations.
2004 Operating Income
D&A
EBITDA
11
Refining
Group
$83.7
Retail
Group
$6.8
Phoenix
Fuel
$10.5
25.5
9.1
1.6
$109.2
$15.9
$12.1
EBIT Definition and Cash Flow Reconciliation
EBIT represents income before interest expense, interest income and income
tax. EBIT is not a calculation based upon generally accepted accounting
principles; however, the amounts included in the EBIT calculation are derived
from amounts included in the consolidated financial statements of the
Company. EBIT should not be considered as an indication of operating
performance of the Company or as an alternative to operating cash flow as a
measure of liquidity. EBIT is not necessarily comparable to similarly titled
measures of other companies.
Cash flow is defined as cash flow from operations less capital expenditures.
Cash flow is not a calculation based upon generally accepted accounting
principles; however, the amounts included in the cash flow calculation are
derived from amounts included in the consolidated financial statements of the
Company. Cash flow should not be considered as an indication of liquidity of
the company or as an alternative to cash flow from operations as a measure of
liquidity. Cash flow is not necessarily comparable to similarly titled measures of
other companies.
12