DALLAS--(BUSINESS WIRE)--
HollyFrontier Corporation (NYSE:HFC) (“HollyFrontier” or the “Company”)
today reported fourth quarter net income attributable to HollyFrontier
stockholders of $53.2 million or $0.30 per diluted share for the quarter
ended December 31, 2016, compared to a net loss of $(43.9) million or
$(0.24) per diluted share for the quarter ended December 31, 2015.
Included in the current quarter results were items consisting of a
non-cash lower of cost or market inventory adjustment that increased
pre-tax earnings by $97.7 million and pre-acquisition costs related to
our recent PCLI purchase that decreased pre-tax earnings by $13.4
million. Excluding these items, net loss attributable to HollyFrontier
stockholders was $(10.0) million or $(0.06) per diluted share. Actual to
adjusted amounts are reconciled in the tables included in the
accompanying reconciliations to amounts reported under Generally
Accepted Accounting Principles.
For the fourth quarter, net income attributable to our stockholders,
exclusive of lower of cost or market inventory adjustments, PCLI
pre-acquisition costs and related tax effects, decreased by $54.1
million compared to the same period of 2015, principally reflecting
lower refining margins. Production levels averaged approximately 453,000
barrels per day ("BPD") and crude oil charges averaged 432,000 BPD for
the current quarter. On a per barrel basis, consolidated refinery gross
margin was $7.23 per produced barrel, a 27% decrease compared to $9.91
for the fourth quarter of 2015. Total operating expenses for the quarter
were $258.7 million compared to $285.2 million for the fourth quarter of
last year, and refining operating expenses averaged $5.51 per produced
barrel sold compared to $6.40 per barrel for the same period of 2015.
HollyFrontier’s President & CEO, George Damiris, commented, "2016
presented a challenging refining environment for the industry as a whole
and for HFC due to weak benchmark refining margins, rising RFS
compliance costs and narrow crude differentials In the face of these
macro challenges we continue to focus on what we can control. We have
achieved approximately $300 million of the $700 million in annual EBITDA
improvements targeted by 2018. We also completed the largest acquisition
in our company’s history with the addition of the Petro-Canada
Lubricants business. We look forward to realizing the benefits from
combining this differentiated, high margin business with HollyFrontier.”
For the fourth quarter of 2016, net cash provided by operations totaled
$164.3 million. During the period, we declared a regular dividend of
$0.33 per share to shareholders totaling approximately $58.8 million. At
December 31, 2016, our combined balance of cash and short-term
investments totaled $1.1 billion, and our consolidated debt was $2.2
billion. Our debt, exclusive of Holly Energy Partners' debt which is
nonrecourse to HollyFrontier, was $991.2 million at December 31, 2016.
In February 2017, we amended our credit agreement, increasing the credit
facility size to $1.35 billion and extended the maturity to 2022.
Additionally, we paid $862.1 million in cash upon closing of our PCLI
acquisition on February 1, 2017.
The Company has scheduled a webcast conference call for today, February
22, 2017, at 8:30 AM Eastern Time to discuss fourth quarter financial
results. This webcast may be accessed at: https://event.webcasts.com/starthere.jsp?ei=1131678.
An audio archive of this webcast will be available using the above noted
link through March 10, 2017.
HollyFrontier Corporation, headquartered in Dallas, Texas, is an
independent petroleum refiner and marketer that produces high-value
light products such as gasoline, diesel fuel, jet fuel and other
specialty products. HollyFrontier operates through its subsidiaries a
135,000 barrels per stream day (“BPSD”) refinery located in El Dorado,
Kansas, two refinery facilities with a combined capacity of 125,000 BPSD
located in Tulsa, Oklahoma, a 100,000 BPSD refinery located in Artesia,
New Mexico, a 52,000 BPSD refinery located in Cheyenne, Wyoming and a
45,000 BPSD refinery in Woods Cross, Utah. HollyFrontier markets its
refined products principally in the Southwest U.S., the Rocky Mountains
extending into the Pacific Northwest and in other neighboring Plains
states. Additionally, HollyFrontier owns Petro-Canada Lubricants Inc.
whose Mississauga, Ontario facility produces 15,600 BPD of base oils and
other specialized lubricant products. A subsidiary of HollyFrontier also
owns a 37% interest (including the general partner interest) in Holly
Energy Partners, L.P.
The following is a “safe harbor” statement under the Private Securities
Litigation Reform Act of 1995: The statements in this press release
relating to matters that are not historical facts are “forward-looking
statements” based on management’s beliefs and assumptions using
currently available information and expectations as of the date hereof,
are not guarantees of future performance and involve certain risks and
uncertainties, including those contained in our filings with the
Securities and Exchange Commission. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable, we cannot assure you that our expectations will prove
correct. Therefore, actual outcomes and results could materially differ
from what is expressed, implied or forecast in such statements. Any
differences could be caused by a number of factors, including, but not
limited to, risks and uncertainties with respect to the following:
-
the actions of actual or potential competitive suppliers of refined
petroleum products in the Company’s markets;
-
the ability to successfully integrate PCLI's business with the company;
-
the demand for and supply of crude oil and refined products;
-
the spread between market prices for refined products and market
prices for crude oil;
-
the possibility of constraints on the transportation of refined
products;
-
the possibility of inefficiencies, curtailments or shutdowns in
refinery operations or pipelines;
-
effects of governmental and environmental regulations and policies;
-
the availability and cost of financing to the Company;
-
the effectiveness of the Company’s capital investments and marketing
strategies;
-
the Company’s efficiency in carrying out construction projects;
-
the ability of the Company to acquire refined product operations or
pipeline and terminal operations on acceptable terms and to integrate
any future acquired operations;
-
the possibility of terrorist attacks and the consequences of any such
attacks;
-
general economic conditions; and
-
other financial, operational and legal risks and uncertainties
detailed from time to time in the Company’s Securities and Exchange
Commission filings.
The forward-looking statements speak only as of the date made and, other
than as required by law, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
|
|
|
|
|
|
|
RESULTS OF OPERATIONS
Financial Data (all information in this release is unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Change from 2015
|
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
|
Percent
|
|
|
|
(In thousands, except per share data)
|
Sales and other revenues
|
|
|
$
|
2,955,068
|
|
|
|
$
|
2,943,559
|
|
|
|
$
|
11,509
|
|
|
|
—
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold (exclusive of lower of cost or market
inventory valuation adjustment)
|
|
|
2,550,772
|
|
|
|
2,446,511
|
|
|
|
104,261
|
|
|
|
4
|
|
Lower of cost or market inventory adjustment
|
|
|
(97,656
|
)
|
|
|
143,554
|
|
|
|
(241,210
|
)
|
|
|
(168
|
)
|
|
|
|
2,453,116
|
|
|
|
2,590,065
|
|
|
|
(136,949
|
)
|
|
|
(5
|
)
|
Operating expenses
|
|
|
258,688
|
|
|
|
285,214
|
|
|
|
(26,526
|
)
|
|
|
(9
|
)
|
General and administrative expenses
|
|
|
37,378
|
|
|
|
34,414
|
|
|
|
2,964
|
|
|
|
9
|
|
Depreciation and amortization
|
|
|
93,594
|
|
|
|
90,572
|
|
|
|
3,022
|
|
|
|
3
|
|
Total operating costs and expenses
|
|
|
2,842,776
|
|
|
|
3,000,265
|
|
|
|
(157,489
|
)
|
|
|
(5
|
)
|
Income (loss) from operations
|
|
|
112,292
|
|
|
|
(56,706
|
)
|
|
|
168,998
|
|
|
|
(298
|
)
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings of equity method investments
|
|
|
4,058
|
|
|
|
2,169
|
|
|
|
1,889
|
|
|
|
87
|
|
Interest income
|
|
|
1,111
|
|
|
|
988
|
|
|
|
123
|
|
|
|
12
|
|
Interest expense
|
|
|
(26,304
|
)
|
|
|
(11,657
|
)
|
|
|
(14,647
|
)
|
|
|
126
|
|
Other, net
|
|
|
(7,741
|
)
|
|
|
535
|
|
|
|
(8,276
|
)
|
|
|
(1,547
|
)
|
|
|
|
(28,876
|
)
|
|
|
(7,965
|
)
|
|
|
(20,911
|
)
|
|
|
263
|
|
Income (loss) before income taxes
|
|
|
83,416
|
|
|
|
(64,671
|
)
|
|
|
148,087
|
|
|
|
(229
|
)
|
Income tax expense (benefit)
|
|
|
12,952
|
|
|
|
(40,724
|
)
|
|
|
53,676
|
|
|
|
(132
|
)
|
Net income (loss)
|
|
|
70,464
|
|
|
|
(23,947
|
)
|
|
|
94,411
|
|
|
|
(394
|
)
|
Less net income attributable to noncontrolling interest
|
|
|
17,299
|
|
|
|
19,974
|
|
|
|
(2,675
|
)
|
|
|
(13
|
)
|
Net income (loss) attributable to HollyFrontier stockholders
|
|
|
$
|
53,165
|
|
|
|
$
|
(43,921
|
)
|
|
|
$
|
97,086
|
|
|
|
(221
|
)%
|
Earnings (loss) per share attributable to HollyFrontier
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.30
|
|
|
|
$
|
(0.24
|
)
|
|
|
$
|
0.54
|
|
|
|
(225
|
)%
|
Diluted
|
|
|
$
|
0.30
|
|
|
|
$
|
(0.24
|
)
|
|
|
$
|
0.54
|
|
|
|
(225
|
)%
|
Cash dividends declared per common share
|
|
|
$
|
0.33
|
|
|
|
$
|
0.33
|
|
|
|
$
|
—
|
|
|
|
—
|
%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
175,936
|
|
|
|
181,460
|
|
|
|
(5,524
|
)
|
|
|
(3
|
)%
|
Diluted
|
|
|
176,137
|
|
|
|
181,460
|
|
|
|
(5,323
|
)
|
|
|
(3
|
)%
|
EBITDA
|
|
|
$
|
184,904
|
|
|
|
$
|
16,596
|
|
|
|
$
|
168,308
|
|
|
|
1,014
|
%
|
Adjusted EBITDA
|
|
|
$
|
100,654
|
|
|
|
$
|
160,150
|
|
|
|
$
|
(59,496
|
)
|
|
|
(37
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
Change from 2015
|
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
|
Percent
|
|
|
|
(In thousands, except per share data)
|
Sales and other revenues
|
|
|
$
|
10,535,700
|
|
|
|
$
|
13,237,920
|
|
|
|
$
|
(2,702,220
|
)
|
|
|
(20
|
)%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold (exclusive of lower of cost or market
inventory valuation adjustment)
|
|
|
8,765,927
|
|
|
|
10,239,218
|
|
|
|
(1,473,291
|
)
|
|
|
(14
|
)
|
Lower of cost or market inventory adjustment
|
|
|
(291,938
|
)
|
|
|
226,979
|
|
|
|
(518,917
|
)
|
|
|
(229
|
)
|
|
|
|
8,473,989
|
|
|
|
10,466,197
|
|
|
|
(1,992,208
|
)
|
|
|
(19
|
)
|
Operating expenses
|
|
|
1,018,839
|
|
|
|
1,060,373
|
|
|
|
(41,534
|
)
|
|
|
(4
|
)
|
General and administrative expenses
|
|
|
125,648
|
|
|
|
120,846
|
|
|
|
4,802
|
|
|
|
4
|
|
Depreciation and amortization
|
|
|
363,027
|
|
|
|
346,151
|
|
|
|
16,876
|
|
|
|
5
|
|
Goodwill and asset impairment
|
|
|
654,084
|
|
|
|
—
|
|
|
|
654,084
|
|
|
|
—
|
|
Total operating costs and expenses
|
|
|
10,635,587
|
|
|
|
11,993,567
|
|
|
|
(1,357,980
|
)
|
|
|
(11
|
)
|
Income (loss) from operations
|
|
|
(99,887
|
)
|
|
|
1,244,353
|
|
|
|
(1,344,240
|
)
|
|
|
(108
|
)
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss of equity method investments
|
|
|
14,213
|
|
|
|
(3,738
|
)
|
|
|
17,951
|
|
|
|
(480
|
)
|
Interest income
|
|
|
2,491
|
|
|
|
3,391
|
|
|
|
(900
|
)
|
|
|
(27
|
)
|
Interest expense
|
|
|
(72,192
|
)
|
|
|
(43,470
|
)
|
|
|
(28,722
|
)
|
|
|
66
|
|
Loss on early extinguishment of debt
|
|
|
(8,718
|
)
|
|
|
(1,370
|
)
|
—
|
|
|
(7,348
|
)
|
|
|
536
|
|
Other, net
|
|
|
(7,441
|
)
|
|
|
9,402
|
|
|
|
(16,843
|
)
|
|
|
(179
|
)
|
|
|
|
(71,647
|
)
|
|
|
(35,785
|
)
|
|
|
(35,862
|
)
|
|
|
100
|
|
Income (loss) before income taxes
|
|
|
(171,534
|
)
|
|
|
1,208,568
|
|
|
|
(1,380,102
|
)
|
|
|
(114
|
)
|
Income tax expense
|
|
|
19,411
|
|
|
|
406,060
|
|
|
|
(386,649
|
)
|
|
|
(95
|
)
|
Net income (loss)
|
|
|
(190,945
|
)
|
|
|
802,508
|
|
|
|
(993,453
|
)
|
|
|
(124
|
)
|
Less net income attributable to noncontrolling interest
|
|
|
69,508
|
|
|
|
62,407
|
|
|
|
7,101
|
|
|
|
11
|
|
Net income (loss) attributable to HollyFrontier stockholders
|
|
|
$
|
(260,453
|
)
|
|
|
$
|
740,101
|
|
|
|
$
|
(1,000,554
|
)
|
|
|
(135
|
)%
|
Earnings (loss) per share attributable to HollyFrontier
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(1.48
|
)
|
|
|
$
|
3.91
|
|
|
|
$
|
(5.39
|
)
|
|
|
(138
|
)%
|
Diluted
|
|
|
$
|
(1.48
|
)
|
|
|
$
|
3.90
|
|
|
|
$
|
(5.38
|
)
|
|
|
(138
|
)%
|
Cash dividends declared per common share
|
|
|
$
|
1.32
|
|
|
|
$
|
1.31
|
|
|
|
$
|
0.01
|
|
|
|
1
|
%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
176,101
|
|
|
|
188,731
|
|
|
|
(12,630
|
)
|
|
|
(7
|
)%
|
Diluted
|
|
|
176,101
|
|
|
|
188,940
|
|
|
|
(12,839
|
)
|
|
|
(7
|
)%
|
EBITDA
|
|
|
$
|
200,404
|
|
|
|
$
|
1,533,761
|
|
|
|
$
|
(1,333,357
|
)
|
|
|
(87
|
)%
|
Adjusted EBITDA
|
|
|
$
|
575,956
|
|
|
|
$
|
1,760,740
|
|
|
|
$
|
(1,184,784
|
)
|
|
|
(67
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(In thousands)
|
Cash, cash equivalents and investments in marketable securities
|
|
|
$
|
1,134,727
|
|
|
|
$
|
210,552
|
Working capital
|
|
|
$
|
1,767,780
|
|
|
|
$
|
587,450
|
Total assets
|
|
|
$
|
9,435,661
|
|
|
|
$
|
8,388,299
|
Long-term debt
|
|
|
$
|
2,235,137
|
|
|
|
$
|
1,040,040
|
Total equity
|
|
|
$
|
5,301,985
|
|
|
|
$
|
5,809,773
|
|
|
|
|
|
|
|
|
|
|
Segment Information
Our operations are organized into two reportable segments, Refining and
HEP. Our operations that are not included in the Refining and HEP
segments are included in Corporate and Other. Intersegment transactions
are eliminated in our consolidated financial statements and are included
in Consolidations and Eliminations. The Refining segment includes the
operations of our El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross
refineries and HFC Asphalt (aggregated as a reportable segment).
Refining activities involve the purchase and refining of crude oil and
wholesale and branded marketing of refined products, such as gasoline,
diesel fuel and jet fuel. These petroleum products are primarily
marketed in the Mid-Continent, Southwest and Rocky Mountain regions of
the United States. Additionally, the Refining Segment includes specialty
lubricant products produced at our Tulsa refineries that are marketed
throughout North America and are distributed in Central and South
America. HFC Asphalt operates various terminals in Arizona, New Mexico
and Oklahoma.
The HEP segment involves all of the operations of HEP, a consolidated
variable interest entity, which owns and operates logistics assets
consisting of petroleum product and crude oil pipelines, terminals,
tankage, loading rack facilities and refinery process units in the
Mid-Continent, Southwest and Rocky Mountain regions of the United
States. The HEP segment also includes a 75% interest in UNEV Pipeline
(an HEP consolidated subsidiary), a 50% ownership interest in each of
the Frontier Pipeline, Osage Pipeline and Cheyenne Pipeline and a 25%
ownership interest in the SLC Pipeline. Revenues from the HEP segment
are earned through transactions with unaffiliated parties for pipeline
transportation, rental and terminalling operations as well as revenues
relating to pipeline transportation services provided for our refining
operations. Due to certain basis differences, our reported amounts for
the HEP segment may not agree to amounts reported in HEP's periodic
public filings.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining
|
|
|
HEP
|
|
|
Corporate and Other
|
|
|
Consolidations and Eliminations
|
|
|
Consolidated Total
|
|
|
|
(In thousands)
|
Three Months Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other revenues
|
|
|
$
|
2,936,386
|
|
|
|
$
|
112,526
|
|
|
|
$
|
—
|
|
|
|
$
|
(93,844
|
)
|
|
|
$
|
2,955,068
|
|
Depreciation and amortization
|
|
|
$
|
71,973
|
|
|
|
$
|
18,841
|
|
|
|
$
|
2,987
|
|
|
|
$
|
(207
|
)
|
|
|
$
|
93,594
|
|
Income (loss) from operations
|
|
|
$
|
95,455
|
|
|
|
$
|
54,953
|
|
|
|
$
|
(37,548
|
)
|
|
|
$
|
(568
|
)
|
|
|
$
|
112,292
|
|
Earnings of equity method investments
|
|
|
$
|
—
|
|
|
|
$
|
4,058
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
4,058
|
|
Capital expenditures
|
|
|
$
|
78,360
|
|
|
|
$
|
11,480
|
|
|
|
$
|
2,473
|
|
|
|
$
|
—
|
|
|
|
$
|
92,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other revenues
|
|
|
$
|
2,924,218
|
|
|
|
$
|
97,251
|
|
|
|
$
|
190
|
|
|
|
$
|
(78,100
|
)
|
|
|
$
|
2,943,559
|
|
Depreciation and amortization
|
|
|
$
|
70,997
|
|
|
|
$
|
16,483
|
|
|
|
$
|
3,299
|
|
|
|
$
|
(207
|
)
|
|
|
$
|
90,572
|
|
Income (loss) from operations
|
|
|
$
|
(72,473
|
)
|
|
|
$
|
52,356
|
|
|
|
$
|
(36,020
|
)
|
|
|
$
|
(569
|
)
|
|
|
$
|
(56,706
|
)
|
Earnings of equity method investments
|
|
|
$
|
—
|
|
|
|
$
|
2,169
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
2,169
|
|
Capital expenditures
|
|
|
$
|
164,141
|
|
|
|
$
|
34,967
|
|
|
|
$
|
3,150
|
|
|
|
$
|
—
|
|
|
|
$
|
202,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other revenues
|
|
|
$
|
10,467,190
|
|
|
|
$
|
402,043
|
|
|
|
$
|
168
|
|
|
|
$
|
(333,701
|
)
|
|
|
$
|
10,535,700
|
|
Depreciation and amortization
|
|
|
$
|
282,321
|
|
|
|
$
|
68,811
|
|
|
|
$
|
12,723
|
|
|
|
$
|
(828
|
)
|
|
|
$
|
363,027
|
|
Income (loss) from operations
|
|
|
$
|
(163,624
|
)
|
|
|
$
|
196,716
|
|
|
|
$
|
(130,565
|
)
|
|
|
$
|
(2,414
|
)
|
|
|
$
|
(99,887
|
)
|
Earnings of equity method investments
|
|
|
$
|
—
|
|
|
|
$
|
14,213
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
14,213
|
|
Capital expenditures
|
|
|
$
|
363,115
|
|
|
|
$
|
107,595
|
|
|
|
$
|
9,080
|
|
|
|
$
|
—
|
|
|
|
$
|
479,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other revenues
|
|
|
$
|
13,171,183
|
|
|
|
$
|
358,875
|
|
|
|
$
|
663
|
|
|
|
$
|
(292,801
|
)
|
|
|
$
|
13,237,920
|
|
Depreciation and amortization
|
|
|
$
|
273,345
|
|
|
|
$
|
61,690
|
|
|
|
$
|
11,944
|
|
|
|
$
|
(828
|
)
|
|
|
$
|
346,151
|
|
Income (loss) from operations
|
|
|
$
|
1,190,578
|
|
|
|
$
|
179,075
|
|
|
|
$
|
(123,004
|
)
|
|
|
$
|
(2,296
|
)
|
|
|
$
|
1,244,353
|
|
Earnings (loss) of equity method investments
|
|
|
$
|
—
|
|
|
|
$
|
4,803
|
|
|
|
$
|
(8,541
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(3,738
|
)
|
Capital expenditures
|
|
|
$
|
469,011
|
|
|
|
$
|
193,121
|
|
|
|
$
|
14,023
|
|
|
|
$
|
—
|
|
|
|
$
|
676,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and investments in marketable securities
|
|
|
$
|
49
|
|
|
|
$
|
3,657
|
|
|
|
$
|
1,131,021
|
|
|
|
$
|
—
|
|
|
|
$
|
1,134,727
|
|
Total assets
|
|
|
$
|
6,513,806
|
|
|
|
$
|
1,920,487
|
|
|
|
$
|
1,306,169
|
|
|
|
$
|
(304,801
|
)
|
|
|
$
|
9,435,661
|
|
Long-term debt
|
|
|
$
|
—
|
|
|
|
$
|
1,243,912
|
|
|
|
$
|
991,225
|
|
|
|
$
|
—
|
|
|
|
$
|
2,235,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and investments in marketable securities
|
|
|
$
|
91
|
|
|
|
$
|
15,013
|
|
|
|
$
|
195,448
|
|
|
|
$
|
—
|
|
|
|
$
|
210,552
|
|
Total assets
|
|
|
$
|
6,597,355
|
|
|
|
$
|
1,812,279
|
|
|
|
$
|
289,225
|
|
|
|
$
|
(310,560
|
)
|
|
|
$
|
8,388,299
|
|
Long-term debt
|
|
|
$
|
—
|
|
|
|
$
|
1,008,752
|
|
|
|
$
|
31,288
|
|
|
|
$
|
—
|
|
|
|
$
|
1,040,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining Operating Data
The following tables set forth information, including non-GAAP
performance measures about our refinery operations. The cost of products
and refinery gross and net operating margins do not include the non-cash
effects of lower of cost or market inventory valuation adjustments and
depreciation and amortization. Reconciliations to amounts reported under
GAAP are provided under “Reconciliations to Amounts Reported Under
Generally Accepted Accounting Principles” below.
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Mid-Continent Region (El Dorado and Tulsa Refineries)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude charge (BPD) (1)
|
|
|
272,520
|
|
|
|
238,280
|
|
|
|
262,170
|
|
|
|
263,340
|
|
Refinery throughput (BPD) (2)
|
|
|
289,990
|
|
|
|
250,080
|
|
|
|
280,920
|
|
|
|
277,260
|
|
Refinery production (BPD) (3)
|
|
|
279,760
|
|
|
|
240,010
|
|
|
|
269,840
|
|
|
|
266,170
|
|
Sales of produced refined products (BPD)
|
|
|
284,480
|
|
|
|
238,240
|
|
|
|
261,200
|
|
|
|
258,420
|
|
Sales of refined products (BPD) (4)
|
|
|
299,770
|
|
|
|
308,110
|
|
|
|
285,080
|
|
|
|
295,470
|
|
Refinery utilization (5)
|
|
|
104.8
|
%
|
|
|
91.6
|
%
|
|
|
100.8
|
%
|
|
|
101.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per produced barrel (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
62.19
|
|
|
|
$
|
62.38
|
|
|
|
$
|
58.14
|
|
|
|
$
|
72.33
|
|
Cost of products (7)
|
|
|
55.41
|
|
|
|
52.30
|
|
|
|
50.17
|
|
|
|
56.88
|
|
Refinery gross margin (8)
|
|
|
6.78
|
|
|
|
10.08
|
|
|
|
7.97
|
|
|
|
15.45
|
|
Refinery operating expenses (9)
|
|
|
4.22
|
|
|
|
5.82
|
|
|
|
4.69
|
|
|
|
4.95
|
|
Net operating margin (8)
|
|
|
$
|
2.56
|
|
|
|
$
|
4.26
|
|
|
|
$
|
3.28
|
|
|
|
$
|
10.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery operating expenses per throughput barrel (10)
|
|
|
$
|
4.14
|
|
|
|
$
|
5.54
|
|
|
|
$
|
4.36
|
|
|
|
$
|
4.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feedstocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet crude oil
|
|
|
59
|
%
|
|
|
56
|
%
|
|
|
58
|
%
|
|
|
59
|
%
|
Sour crude oil
|
|
|
19
|
%
|
|
|
23
|
%
|
|
|
18
|
%
|
|
|
21
|
%
|
Heavy sour crude oil
|
|
|
16
|
%
|
|
|
16
|
%
|
|
|
17
|
%
|
|
|
15
|
%
|
Other feedstocks and blends
|
|
|
6
|
%
|
|
|
5
|
%
|
|
|
7
|
%
|
|
|
5
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasolines
|
|
|
53
|
%
|
|
|
53
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
Diesel fuels
|
|
|
31
|
%
|
|
|
29
|
%
|
|
|
33
|
%
|
|
|
33
|
%
|
Jet fuels
|
|
|
8
|
%
|
|
|
8
|
%
|
|
|
7
|
%
|
|
|
7
|
%
|
Fuel oil
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
Asphalt
|
|
|
1
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
Lubricants
|
|
|
4
|
%
|
|
|
4
|
%
|
|
|
5
|
%
|
|
|
4
|
%
|
LPG and other
|
|
|
2
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Southwest Region (Navajo Refinery)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude charge (BPD) (1)
|
|
|
92,450
|
|
|
|
101,500
|
|
|
|
98,090
|
|
|
|
100,450
|
|
Refinery throughput (BPD) (2)
|
|
|
100,720
|
|
|
|
112,850
|
|
|
|
107,690
|
|
|
|
111,840
|
|
Refinery production (BPD) (3)
|
|
|
99,930
|
|
|
|
111,590
|
|
|
|
106,460
|
|
|
|
110,210
|
|
Sales of produced refined products (BPD)
|
|
|
102,460
|
|
|
|
112,320
|
|
|
|
108,280
|
|
|
|
111,580
|
|
Sales of refined products (BPD) (4)
|
|
|
107,430
|
|
|
|
118,160
|
|
|
|
110,740
|
|
|
|
119,560
|
|
Refinery utilization (5)
|
|
|
92.5
|
%
|
|
|
101.5
|
%
|
|
|
98.1
|
%
|
|
|
100.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per produced barrel (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
64.45
|
|
|
|
$
|
59.14
|
|
|
|
$
|
57.87
|
|
|
|
$
|
69.76
|
|
Cost of products (7)
|
|
|
55.21
|
|
|
|
50.96
|
|
|
|
48.68
|
|
|
|
53.57
|
|
Refinery gross margin (8)
|
|
|
9.24
|
|
|
|
8.18
|
|
|
|
9.19
|
|
|
|
16.19
|
|
Refinery operating expenses (9)
|
|
|
5.04
|
|
|
|
5.07
|
|
|
|
4.72
|
|
|
|
4.92
|
|
Net operating margin (8)
|
|
|
$
|
4.20
|
|
|
|
$
|
3.11
|
|
|
|
$
|
4.47
|
|
|
|
$
|
11.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery operating expenses per throughput barrel (10)
|
|
|
$
|
5.13
|
|
|
|
$
|
5.05
|
|
|
|
$
|
4.75
|
|
|
|
$
|
4.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feedstocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet crude oil
|
|
|
25
|
%
|
|
|
42
|
%
|
|
|
28
|
%
|
|
|
36
|
%
|
Sour crude oil
|
|
|
67
|
%
|
|
|
48
|
%
|
|
|
63
|
%
|
|
|
54
|
%
|
Heavy sour crude oil
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
Other feedstocks and blends
|
|
|
8
|
%
|
|
|
10
|
%
|
|
|
9
|
%
|
|
|
10
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasolines
|
|
|
53
|
%
|
|
|
56
|
%
|
|
|
54
|
%
|
|
|
55
|
%
|
Diesel fuels
|
|
|
39
|
%
|
|
|
40
|
%
|
|
|
40
|
%
|
|
|
39
|
%
|
Fuel oil
|
|
|
4
|
%
|
|
|
1
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
Asphalt
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
LPG and other
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude charge (BPD) (1)
|
|
|
67,100
|
|
|
|
67,530
|
|
|
|
63,650
|
|
|
|
68,770
|
|
Refinery throughput (BPD) (2)
|
|
|
75,930
|
|
|
|
73,650
|
|
|
|
68,870
|
|
|
|
74,480
|
|
Refinery production (BPD) (3)
|
|
|
73,220
|
|
|
|
69,600
|
|
|
|
65,810
|
|
|
|
70,180
|
|
Sales of produced refined products (BPD)
|
|
|
72,290
|
|
|
|
68,940
|
|
|
|
65,940
|
|
|
|
68,000
|
|
Sales of refined products (BPD) (4)
|
|
|
73,190
|
|
|
|
75,700
|
|
|
|
69,160
|
|
|
|
73,320
|
|
Refinery utilization (5)
|
|
|
69.2
|
%
|
|
|
81.4
|
%
|
|
|
65.6
|
%
|
|
|
82.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per produced barrel (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
60.54
|
|
|
|
$
|
59.13
|
|
|
|
$
|
57.80
|
|
|
|
$
|
70.05
|
|
Cost of products (7)
|
|
|
54.38
|
|
|
|
46.92
|
|
|
|
49.13
|
|
|
|
51.80
|
|
Refinery gross margin (8)
|
|
|
6.16
|
|
|
|
12.21
|
|
|
|
8.67
|
|
|
|
18.25
|
|
Refinery operating expenses (9)
|
|
|
11.25
|
|
|
|
10.60
|
|
|
|
10.45
|
|
|
|
9.89
|
|
Net operating margin (8)
|
|
|
$
|
(5.09
|
)
|
|
|
$
|
1.61
|
|
|
|
$
|
(1.78
|
)
|
|
|
$
|
8.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery operating expenses per throughput barrel (10)
|
|
|
$
|
10.71
|
|
|
|
$
|
9.92
|
|
|
|
$
|
10.01
|
|
|
|
$
|
9.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feedstocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet crude oil
|
|
|
37
|
%
|
|
|
40
|
%
|
|
|
39
|
%
|
|
|
42
|
%
|
Sour crude oil
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
Heavy sour crude oil
|
|
|
32
|
%
|
|
|
36
|
%
|
|
|
35
|
%
|
|
|
37
|
%
|
Black wax crude oil
|
|
|
19
|
%
|
|
|
16
|
%
|
|
|
18
|
%
|
|
|
13
|
%
|
Other feedstocks and blends
|
|
|
12
|
%
|
|
|
8
|
%
|
|
|
8
|
%
|
|
|
8
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasolines
|
|
|
61
|
%
|
|
|
59
|
%
|
|
|
60
|
%
|
|
|
57
|
%
|
Diesel fuels
|
|
|
30
|
%
|
|
|
32
|
%
|
|
|
33
|
%
|
|
|
36
|
%
|
Jet fuels
|
|
|
—
|
%
|
|
|
1
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
Fuel oil
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
Asphalt
|
|
|
4
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
LPG and other
|
|
|
2
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude charge (BPD) (1)
|
|
|
432,070
|
|
|
|
407,310
|
|
|
|
423,910
|
|
|
|
432,560
|
|
Refinery throughput (BPD) (2)
|
|
|
466,640
|
|
|
|
436,580
|
|
|
|
457,480
|
|
|
|
463,580
|
|
Refinery production (BPD) (3)
|
|
|
452,910
|
|
|
|
421,200
|
|
|
|
442,110
|
|
|
|
446,560
|
|
Sales of produced refined products (BPD)
|
|
|
459,230
|
|
|
|
419,500
|
|
|
|
435,420
|
|
|
|
438,000
|
|
Sales of refined products (BPD) (4)
|
|
|
480,390
|
|
|
|
501,970
|
|
|
|
464,980
|
|
|
|
488,350
|
|
Refinery utilization (5)
|
|
|
94.5
|
%
|
|
|
91.9
|
%
|
|
|
92.8
|
%
|
|
|
97.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average per produced barrel (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
62.43
|
|
|
|
$
|
60.97
|
|
|
|
$
|
58.02
|
|
|
|
$
|
71.32
|
|
Cost of products (7)
|
|
|
55.20
|
|
|
|
51.06
|
|
|
|
49.64
|
|
|
|
55.25
|
|
Refinery gross margin (8)
|
|
|
7.23
|
|
|
|
9.91
|
|
|
|
8.38
|
|
|
|
16.07
|
|
Refinery operating expenses (9)
|
|
|
5.51
|
|
|
|
6.40
|
|
|
|
5.57
|
|
|
|
5.71
|
|
Net operating margin (8)
|
|
|
$
|
1.72
|
|
|
|
$
|
3.51
|
|
|
|
$
|
2.81
|
|
|
|
$
|
10.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery operating expenses per throughput barrel (10)
|
|
|
$
|
5.42
|
|
|
|
$
|
6.15
|
|
|
|
$
|
5.30
|
|
|
|
$
|
5.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feedstocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweet crude oil
|
|
|
48
|
%
|
|
|
49
|
%
|
|
|
48
|
%
|
|
|
51
|
%
|
Sour crude oil
|
|
|
26
|
%
|
|
|
26
|
%
|
|
|
26
|
%
|
|
|
25
|
%
|
Heavy sour crude oil
|
|
|
16
|
%
|
|
|
15
|
%
|
|
|
16
|
%
|
|
|
15
|
%
|
Black wax crude oil
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
Other feedstocks and blends
|
|
|
7
|
%
|
|
|
7
|
%
|
|
|
7
|
%
|
|
|
7
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gasolines
|
|
|
54
|
%
|
|
|
55
|
%
|
|
|
52
|
%
|
|
|
52
|
%
|
Diesel fuels
|
|
|
33
|
%
|
|
|
32
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
Jet fuels
|
|
|
5
|
%
|
|
|
4
|
%
|
|
|
4
|
%
|
|
|
4
|
%
|
Fuel oil
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
1
|
%
|
Asphalt
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
Lubricants
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
|
|
3
|
%
|
LPG and other
|
|
|
2
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Crude charge represents the barrels per day of crude oil processed
at our refineries.
|
(2)
|
|
Refinery throughput represents the barrels per day of crude and
other refinery feedstocks input to the crude units and other
conversion units at our refineries.
|
(3)
|
|
Refinery production represents the barrels per day of refined
products yielded from processing crude and other refinery feedstocks
through the crude units and other conversion units at our refineries.
|
(4)
|
|
Includes refined products purchased for resale.
|
(5)
|
|
Represents crude charge divided by total crude capacity (BPSD).
Effective July 1, 2016, our consolidated crude capacity increased
from 443,000 BPSD to 457,000 BPSD upon completion of our Woods
Cross Refinery expansion project.
|
(6)
|
|
Represents average per barrel amount for produced refined products
sold, which is a non-GAAP measure. Reconciliations to amounts
reported under GAAP are provided under “Reconciliations to Amounts
Reported Under Generally Accepted Accounting Principles” below.
|
(7)
|
|
Transportation, terminal and refinery storage costs billed from HEP
are included in cost of products.
|
(8)
|
|
Excludes lower of cost or market inventory valuation adjustments
of $(97.7) million and $(291.9) million for the three months and
year ended December 31, 2016, respectively and $143.6 million and
$227.0 million for the three months and year ended December 31,
2015, respectively.
|
(9)
|
|
Represents operating expenses of our refineries, exclusive of
depreciation and amortization.
|
(10)
|
|
Represents refinery operating expenses, exclusive of depreciation
and amortization, divided by refinery throughput.
|
|
|
|
Reconciliations to Amounts Reported Under Generally Accepted
Accounting Principles
Reconciliations of earnings before interest, taxes, depreciation
and amortization (“EBITDA”) and EBITDA excluding “non-cash” lower of
cost or market inventory valuation adjustments, goodwill and asset
impairment charges and PCLI pre-acquisition costs (“Adjusted EBITDA”) to
amounts reported under generally accepted accounting principles in
financial statements.
Earnings before interest, taxes, depreciation and amortization, which we
refer to as EBITDA, is calculated as net income (loss) attributable to
HollyFrontier stockholders plus (i) interest expense, net of interest
income, (ii) income tax provision, and (iii) depreciation and
amortization. Adjusted EBITDA is calculated as EBITDA plus or minus (i)
lower of cost or market inventory valuation adjustment, (ii) goodwill
and asset impairment charges and (iii) PCLI pre-acquisition costs.
EBITDA and Adjusted EBITDA are not calculations provided for under GAAP;
however, the amounts included in these calculations are derived from
amounts included in our consolidated financial statements. EBITDA and
Adjusted EBITDA should not be considered as alternatives to net income
or operating income as an indication of our operating performance or as
an alternative to operating cash flow as a measure of liquidity. EBITDA
and Adjusted EBITDA are not necessarily comparable to similarly titled
measures of other companies. They are presented here because they are
widely used financial indicators used by investors and analysts to
measure performance. EBITDA and Adjusted EBITDA are also used by our
management for internal analysis and as a basis for financial covenants.
Set forth below is our calculation of EBITDA and Adjusted EBITDA.
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(In thousands)
|
Net income (loss) attributable to HollyFrontier stockholders
|
|
|
$
|
53,165
|
|
|
|
$
|
(43,921
|
)
|
|
|
$
|
(260,453
|
)
|
|
|
$
|
740,101
|
|
Add (subtract) income tax provision (benefit)
|
|
|
12,952
|
|
|
|
(40,724
|
)
|
|
|
19,411
|
|
|
|
406,060
|
|
Add interest expense (1)
|
|
|
26,304
|
|
|
|
11,657
|
|
|
|
80,910
|
|
|
|
44,840
|
|
Subtract interest income
|
|
|
(1,111
|
)
|
|
|
(988
|
)
|
|
|
(2,491
|
)
|
|
|
(3,391
|
)
|
Add depreciation and amortization
|
|
|
93,594
|
|
|
|
90,572
|
|
|
|
363,027
|
|
|
|
346,151
|
|
EBITDA
|
|
|
$
|
184,904
|
|
|
|
$
|
16,596
|
|
|
|
$
|
200,404
|
|
|
|
$
|
1,533,761
|
|
Add (subtract) lower of cost or market inventory adjustment
|
|
|
(97,656
|
)
|
|
|
143,554
|
|
|
|
(291,938
|
)
|
|
|
226,979
|
|
Add goodwill and asset impairment
|
|
|
—
|
|
|
|
—
|
|
|
|
654,084
|
|
|
|
—
|
|
PCLI pre-acquisition costs
|
|
|
13,406
|
|
|
|
|
—
|
|
|
|
13,406
|
|
|
|
|
—
|
|
Adjusted EBITDA
|
|
|
$
|
100,654
|
|
|
|
$
|
160,150
|
|
|
|
$
|
575,956
|
|
|
|
$
|
1,760,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes loss on early extinguishment of debt of $8.7 million
and $1.4 million for the years ended December 31, 2016 and 2015,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of refinery operating information (non-GAAP
performance measures) to amounts reported under generally accepted
accounting principles in financial statements.
Refinery gross margin and net operating margin are non-GAAP performance
measures that are used by our management and others to compare our
refining performance to that of other companies in our industry. We
believe these margin measures are helpful to investors in evaluating our
refining performance on a relative and absolute basis.
Refinery gross margin per barrel is the difference between average net
sales price and average cost of products per barrel of produced refined
products. Net operating margin per barrel is the difference between
refinery gross margin and refinery operating expenses per barrel of
produced refined products. These two margins do not include the non-cash
effects of lower of cost or market inventory valuation adjustments,
goodwill and asset impairment charges and depreciation and amortization.
Each of these component performance measures can be reconciled directly
to our consolidated statements of income.
Other companies in our industry may not calculate these performance
measures in the same manner.
Refinery Gross and Net Operating Margins
Below are reconciliations to our consolidated statements of income for
(i) net sales, cost of products sold (exclusive of lower of cost or
market inventory valuation adjustment) and operating expenses, in each
case averaged per produced barrel sold, and (ii) net operating margin
and refinery gross margin. Due to rounding of reported numbers, some
amounts may not calculate exactly.
|
|
|
|
|
|
|
Reconciliation of produced product sales to
total sales and other revenues
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(Dollars in thousands, except per barrel amounts)
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price per produced barrel sold
|
|
|
$
|
62.43
|
|
|
|
$
|
60.97
|
|
|
|
$
|
58.02
|
|
|
|
$
|
71.32
|
|
Times sales of produced refined products (BPD)
|
|
|
459,230
|
|
|
|
419,500
|
|
|
|
435,420
|
|
|
|
438,000
|
|
Times number of days in period
|
|
|
92
|
|
|
|
92
|
|
|
|
366
|
|
|
|
365
|
|
Produced refined product sales
|
|
|
$
|
2,637,615
|
|
|
|
$
|
2,353,076
|
|
|
|
$
|
9,246,283
|
|
|
|
$
|
11,401,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total produced refined product sales
|
|
|
$
|
2,637,615
|
|
|
|
$
|
2,353,076
|
|
|
|
$
|
9,246,283
|
|
|
|
$
|
11,401,928
|
|
Add refined product sales from purchased products and rounding (1)
|
|
|
123,401
|
|
|
|
438,809
|
|
|
|
624,233
|
|
|
|
1,214,920
|
|
Total refined product sales
|
|
|
2,761,016
|
|
|
|
2,791,885
|
|
|
|
9,870,516
|
|
|
|
12,616,848
|
|
Add direct sales of excess crude oil (2)
|
|
|
142,129
|
|
|
|
91,435
|
|
|
|
436,974
|
|
|
|
352,113
|
|
Add other refining segment revenue (3)
|
|
|
33,241
|
|
|
|
40,898
|
|
|
|
159,700
|
|
|
|
202,222
|
|
Total refining segment revenue
|
|
|
2,936,386
|
|
|
|
2,924,218
|
|
|
|
10,467,190
|
|
|
|
13,171,183
|
|
Add HEP segment sales and other revenues
|
|
|
112,526
|
|
|
|
97,251
|
|
|
|
402,043
|
|
|
|
358,875
|
|
Add corporate and other revenues
|
|
|
—
|
|
|
|
190
|
|
|
|
168
|
|
|
|
663
|
|
Subtract consolidations and eliminations
|
|
|
(93,844
|
)
|
|
|
(78,100
|
)
|
|
|
(333,701
|
)
|
|
|
(292,801
|
)
|
Sales and other revenues
|
|
|
$
|
2,955,068
|
|
|
|
$
|
2,943,559
|
|
|
|
$
|
10,535,700
|
|
|
|
$
|
13,237,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of average cost of products
per produced barrel sold to cost of products sold (exclusive of
lower of cost or market inventory valuation adjustment)
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(Dollars in thousands, except per barrel amounts)
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost of products per produced barrel sold
|
|
|
$
|
55.20
|
|
|
|
$
|
51.06
|
|
|
|
$
|
49.64
|
|
|
|
$
|
55.25
|
|
Times sales of produced refined products (BPD)
|
|
|
459,230
|
|
|
|
419,500
|
|
|
|
435,420
|
|
|
|
438,000
|
|
Times number of days in period
|
|
|
92
|
|
|
|
92
|
|
|
|
366
|
|
|
|
365
|
|
Cost of products for produced products sold
|
|
|
$
|
2,332,154
|
|
|
|
$
|
1,970,610
|
|
|
|
$
|
7,910,815
|
|
|
|
$
|
8,832,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of products for produced products sold
|
|
|
$
|
2,332,154
|
|
|
|
$
|
1,970,610
|
|
|
|
$
|
7,910,815
|
|
|
|
$
|
8,832,818
|
|
Add refined product costs from purchased products and rounding (1)
|
|
|
129,858
|
|
|
|
439,110
|
|
|
|
638,540
|
|
|
|
1,245,451
|
|
Total cost of refined products sold
|
|
|
2,462,012
|
|
|
|
2,409,720
|
|
|
|
8,549,355
|
|
|
|
10,078,269
|
|
Add crude oil cost of direct sales of excess crude oil (2)
|
|
|
143,686
|
|
|
|
93,833
|
|
|
|
441,180
|
|
|
|
348,362
|
|
Add other refining segment cost of products sold (4)
|
|
|
17,818
|
|
|
|
17,430
|
|
|
|
72,222
|
|
|
|
98,979
|
|
Total refining segment cost of products sold
|
|
|
2,623,516
|
|
|
|
2,520,983
|
|
|
|
9,062,757
|
|
|
|
10,525,610
|
|
Subtract consolidations and eliminations
|
|
|
(72,744
|
)
|
|
|
(74,472
|
)
|
|
|
(296,830
|
)
|
|
|
(286,392
|
)
|
Costs of products sold (exclusive of lower of cost or market
inventory valuation adjustment and depreciation and amortization)
|
|
|
$
|
2,550,772
|
|
|
|
$
|
2,446,511
|
|
|
|
$
|
8,765,927
|
|
|
|
$
|
10,239,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of average refinery operating
expenses per produced barrel sold to total operating expenses
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(Dollars in thousands, except per barrel amounts)
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Average refinery operating expenses per produced barrel sold
|
|
|
$
|
5.51
|
|
|
|
$
|
6.40
|
|
|
|
$
|
5.57
|
|
|
|
$
|
5.71
|
|
Times sales of produced refined products (BPD)
|
|
|
459,230
|
|
|
|
419,500
|
|
|
|
435,420
|
|
|
|
438,000
|
|
Times number of days in period
|
|
|
92
|
|
|
|
92
|
|
|
|
366
|
|
|
|
365
|
|
Refinery operating expenses for produced products sold
|
|
|
$
|
232,793
|
|
|
|
$
|
247,002
|
|
|
|
$
|
887,656
|
|
|
|
$
|
912,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total refinery operating expenses for produced products sold
|
|
|
$
|
232,793
|
|
|
|
$
|
247,002
|
|
|
|
$
|
887,656
|
|
|
|
$
|
912,858
|
|
Add other refining segment operating expenses and rounding (5)
|
|
|
10,305
|
|
|
|
14,715
|
|
|
|
35,934
|
|
|
|
41,813
|
|
Total refining segment operating expenses
|
|
|
243,098
|
|
|
|
261,717
|
|
|
|
923,590
|
|
|
|
954,671
|
|
Add HEP segment operating expenses
|
|
|
34,819
|
|
|
|
24,955
|
|
|
|
123,985
|
|
|
|
105,554
|
|
Add corporate and other costs
|
|
|
1,096
|
|
|
|
1,394
|
|
|
|
4,893
|
|
|
|
3,433
|
|
Subtract consolidations and eliminations
|
|
|
(20,325
|
)
|
|
|
(2,852
|
)
|
|
|
(33,629
|
)
|
|
|
(3,285
|
)
|
Operating expenses (exclusive of depreciation and amortization)
|
|
|
$
|
258,688
|
|
|
|
$
|
285,214
|
|
|
|
$
|
1,018,839
|
|
|
|
$
|
1,060,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net operating margin per
barrel to refinery gross margin per barrel to total sales and
other revenues
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(Dollars in thousands, except per barrel amounts)
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating margin per barrel
|
|
|
$
|
1.72
|
|
|
|
$
|
3.51
|
|
|
|
$
|
2.81
|
|
|
|
$
|
10.36
|
|
Add average refinery operating expenses per produced barrel
|
|
|
5.51
|
|
|
|
6.40
|
|
|
|
5.57
|
|
|
|
5.71
|
|
Refinery gross margin per barrel
|
|
|
7.23
|
|
|
|
9.91
|
|
|
|
8.38
|
|
|
|
16.07
|
|
Add average cost of products per produced barrel sold
|
|
|
55.20
|
|
|
|
51.06
|
|
|
|
49.64
|
|
|
|
55.25
|
|
Average sales price per produced barrel sold
|
|
|
$
|
62.43
|
|
|
|
$
|
60.97
|
|
|
|
$
|
58.02
|
|
|
|
$
|
71.32
|
|
Times sales of produced refined products (BPD)
|
|
|
459,230
|
|
|
|
419,500
|
|
|
|
435,420
|
|
|
|
438,000
|
|
Times number of days in period
|
|
|
92
|
|
|
|
92
|
|
|
|
366
|
|
|
|
365
|
Produced refined product sales
|
|
|
$
|
2,637,615
|
|
|
|
$
|
2,353,076
|
|
|
|
$
|
9,246,283
|
|
|
|
$
|
11,401,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total produced refined product sales
|
|
|
$
|
2,637,615
|
|
|
|
$
|
2,353,076
|
|
|
|
$
|
9,246,283
|
|
|
|
$
|
11,401,928
|
|
Add refined product sales from purchased products and rounding (1)
|
|
|
123,401
|
|
|
|
438,809
|
|
|
|
624,233
|
|
|
|
1,214,920
|
|
Total refined product sales
|
|
|
2,761,016
|
|
|
|
2,791,885
|
|
|
|
9,870,516
|
|
|
|
12,616,848
|
|
Add direct sales of excess crude oil (2)
|
|
|
142,129
|
|
|
|
91,435
|
|
|
|
436,974
|
|
|
|
352,113
|
|
Add other refining segment revenue (3)
|
|
|
33,241
|
|
|
|
40,898
|
|
|
|
159,700
|
|
|
|
202,222
|
|
Total refining segment revenue
|
|
|
2,936,386
|
|
|
|
2,924,218
|
|
|
|
10,467,190
|
|
|
|
13,171,183
|
|
Add HEP segment sales and other revenues
|
|
|
112,526
|
|
|
|
97,251
|
|
|
|
402,043
|
|
|
|
358,875
|
|
Add corporate and other revenues
|
|
|
—
|
|
|
|
190
|
|
|
|
168
|
|
|
|
663
|
|
Subtract consolidations and eliminations
|
|
|
(93,844
|
)
|
|
|
(78,100
|
)
|
|
|
(333,701
|
)
|
|
|
(292,801
|
)
|
Sales and other revenues
|
|
|
$
|
2,955,068
|
|
|
|
$
|
2,943,559
|
|
|
|
$
|
10,535,700
|
|
|
|
$
|
13,237,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
We purchase finished products to facilitate delivery to certain
locations or to meet delivery commitments.
|
(2)
|
|
We purchase crude oil that at times exceeds the supply needs of our
refineries. Quantities in excess of our needs are sold at market
prices to purchasers of crude oil that are recorded on a gross basis
with the sales price recorded as revenues and the corresponding
acquisition cost as inventory and then upon sale as cost of products
sold. Additionally, at times we enter into buy/sell exchanges of
crude oil with certain parties to facilitate the delivery of
quantities to certain locations that are netted at cost.
|
(3)
|
|
Other refining segment revenue includes the incremental revenues
associated with HFC Asphalt, product purchased and sold forward for
profit as market conditions and available storage capacity allows
and miscellaneous revenue.
|
(4)
|
|
Other refining segment cost of products sold includes the
incremental cost of products for HFC Asphalt, the incremental cost
associated with storing product purchased and sold forward as market
conditions and available storage capacity allows and miscellaneous
costs.
|
(5)
|
|
Other refining segment operating expenses include the marketing
costs associated with our refining segment and the operating
expenses of HFC Asphalt.
|
|
|
|
Reconciliation of net income (loss) attributable
to HollyFrontier stockholders to adjusted net income attributable to
HollyFrontier stockholders
Adjusted net income attributable to HollyFrontier stockholders is a
non-GAAP financial measure that excludes non-cash lower of cost or
market inventory valuation adjustments, impairment charges and PCLI
pre-acquisition costs. We believe this measure is helpful to investors
and others in evaluating our financial performance and to compare our
results to that of other companies in our industry. Similarly titled
performance measures of other companies may not be calculated in the
same manner.
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(Dollars in thousands, except per share amounts)
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
$
|
83,416
|
|
|
|
$
|
(64,671
|
)
|
|
|
$
|
(171,534
|
)
|
|
|
$
|
1,208,568
|
Income tax expense (benefit)
|
|
|
12,952
|
|
|
|
(40,724
|
)
|
|
|
19,411
|
|
|
|
406,060
|
Net income (loss)
|
|
|
70,464
|
|
|
|
(23,947
|
)
|
|
|
(190,945
|
)
|
|
|
802,508
|
Less net income attributable to noncontrolling interest
|
|
|
17,299
|
|
|
|
19,974
|
|
|
|
69,508
|
|
|
|
62,407
|
Net income (loss) attributable to HollyFrontier stockholders
|
|
|
53,165
|
|
|
|
(43,921
|
)
|
|
|
(260,453
|
)
|
|
|
740,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NonGAAP adjustments to arrive at adjusted results:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of cost or market inventory valuation adjustment (1)
|
|
|
(97,656
|
)
|
|
|
143,554
|
|
|
|
(291,938
|
)
|
|
|
226,979
|
Impairment loss - long-lived assets (2)
|
|
|
—
|
|
|
|
—
|
|
|
|
344,766
|
|
|
|
—
|
Impairment loss - goodwill (2)
|
|
|
—
|
|
|
|
—
|
|
|
|
309,318
|
|
|
|
—
|
Pre-acquisition PCLI costs (3)
|
|
|
13,406
|
|
|
|
—
|
|
|
|
13,406
|
|
|
|
—
|
Total adjustments - pretax
|
|
|
(84,250
|
)
|
|
|
143,554
|
|
|
|
375,552
|
|
|
|
226,979
|
Income tax expense (benefit)
|
|
|
(21,062
|
)
|
|
|
55,555
|
|
|
|
25,491
|
|
|
|
87,841
|
Total adjustments, net of tax
|
|
|
(63,188
|
)
|
|
|
87,999
|
|
|
|
350,061
|
|
|
|
139,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted results - NonGAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss) before income taxes
|
|
|
(834
|
)
|
|
|
78,883
|
|
|
|
204,018
|
|
|
|
1,435,547
|
Income tax expense (benefit)
|
|
|
(8,110
|
)
|
|
|
14,831
|
|
|
|
44,902
|
|
|
|
493,901
|
Adjusted net income
|
|
|
7,276
|
|
|
|
64,052
|
|
|
|
159,116
|
|
|
|
941,646
|
Less net income attributable to noncontrolling interest
|
|
|
17,299
|
|
|
|
19,974
|
|
|
|
69,508
|
|
|
|
62,407
|
Adjusted net income (loss) attributable to HollyFrontier stockholders
|
|
|
$
|
(10,023
|
)
|
|
|
$
|
44,078
|
|
|
|
$
|
89,608
|
|
|
|
$
|
879,239
|
Adjusted earnings (loss) per share attributable to HollyFrontier
stockholders
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
0.24
|
|
|
|
$
|
0.51
|
|
|
|
$
|
4.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
GAAP requires that inventories be stated at the lower of cost or
market. We maintain an inventory valuation reserve, whereby
inventory costs in excess of market values are written down to
current replacement costs and charged to cost of products sold. The
valuation reserve is reassessed quarterly, at which time an
inventory valuation adjustment is recorded, as a new lower of cost
or market inventory valuation reserve is established. Such inventory
valuation adjustments result in non-cash charges or benefits.
|
(2)
|
|
Our goodwill is evaluated for impairment annually or when impairment
indicators occur. In the second quarter of 2016, we determined that
goodwill and long-lived assets of our Cheyenne Refinery had been
impaired and recorded related impairment charges of $309.3 million
and $344.8 million, respectively.
|
(3)
|
|
Pre-acquisition PCLI costs consist of legal and professional fees
related to our Petro-Canada Lubricants Inc. acquisition that closed
on February 1, 2017, and losses incurred attributable to Canadian
currency exchange swaps serving as economic hedges of our PCLI
acquisition cost.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of effective tax rate to
adjusted effective tax rate
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2016
|
|
|
2016
|
|
|
|
(Dollars in thousands)
|
GAAP
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
$
|
83,416
|
|
|
|
$
|
(171,534
|
)
|
Income tax expense
|
|
|
$
|
12,952
|
|
|
|
$
|
19,411
|
|
Effective tax rate for GAAP financial statements
|
|
|
16
|
%
|
|
|
(11
|
)%
|
|
|
|
|
|
|
|
Effect of NonGAAP adjustments (lower of cost or market inventory
adjustments, goodwill and asset impairment and PCLI pre-acquisition
costs)
|
|
|
956%
|
|
|
33%
|
Adjusted - NonGAAP
|
|
|
|
|
|
|
Effective tax rate for adjusted results
|
|
|
972%
|
|
|
22%
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170222005491/en/
Source: HollyFrontier Corporation