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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?
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
Matt Roush, CTPSenior Treasury
Analyst
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
Overview of HollyFrontier
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
HollyFrontier Investment EnvironmentParameters
– Permitted investments
– Credit quality
– Diversification/concentration
– Maturity restrictions
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
Survey Demographics
Survey Demographics
Industry Type
Size of Liquidity Portfolio
What Are Your Biggest Investment-Related
Concerns?
Top Investment-Related Concerns
Investment Outlook and Regulatory Environment
Regulatory Environment
Who Advises You on Regulatory Change?
Interest Rate Outlook
What is Your Level of Concern with Money Market Fund Reform?
Investment Strategy
Asset Class OutlookCurrently Investing In vs. Considering
Are You Considering Moving Into Separately Managed Accounts?
In One Sentence, What is the Basis for Your Decision to Only Invest in Money Funds?
What are the Key Reasons that Preclude You from Investing in SMAs?
On Average, How Many Benchmarks Do You Use?
How Many External Managers Do You Have?
What Precludes You from Hiring Additional Asset Managers?
Operational Efficiency
How Many People on Your Organization’s Staff are Involved with Investment Accounting and Reporting?
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
Who Do You Provide Investment Reporting To?
HollyFrontier Internal Customers
Time to Compile Investment Reports
Biggest Challenge When Compiling Investment Packages
Closing the Books: How Many Days?
What are Your Biggest Auditing Challenges?
Which Auditor Do You Use?
Matt Roush, CTPSenior Treasury Analyst
Case Study
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.
Takeaways
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
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
Questions
