ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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75-1056913
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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2828 N. Harwood, Suite 1300
Dallas, Texas
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75201
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Page
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September 30
, 2013 (Unaudited) and December 31, 201
2
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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•
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risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets;
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•
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the demand for and supply of crude oil and refined products;
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•
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the spread between market prices for refined products and market prices for crude oil;
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•
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the possibility of constraints on the transportation of refined products;
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•
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the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines;
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•
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effects of governmental and environmental regulations and policies;
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•
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the availability and cost of our financing;
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•
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the effectiveness of our capital investments and marketing strategies;
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•
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our efficiency in carrying out construction projects;
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•
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our ability to acquire refined product operations or pipeline and terminal operations on acceptable terms and to integrate any existing or future acquired operations;
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•
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the possibility of terrorist attacks and the consequences of any such attacks;
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•
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general economic conditions; and
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•
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other financial, operational and legal risks and uncertainties detailed from time to time in our SEC filings.
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Item 1.
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Financial Statements
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September 30,
2013 |
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December 31, 2012
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||||
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(Unaudited)
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ASSETS
|
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||||
Current assets:
|
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|
||||
Cash and cash equivalents
(HEP: $11,220 and $5,237, respectively)
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$
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1,294,484
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$
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1,757,699
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Marketable securities
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656,749
|
|
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630,586
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|
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Accounts receivable: Product and transportation
(HEP: $35,876 and $38,097, respectively)
|
676,797
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|
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587,728
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|
||
Crude oil resales
|
78,875
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46,502
|
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755,672
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|
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634,230
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|
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Inventories: Crude oil and refined products
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1,461,310
|
|
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1,238,678
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Materials, supplies and other
(HEP: $1,638 and $1,259, respectively)
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86,863
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|
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80,954
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1,548,173
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1,319,632
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Income taxes receivable
|
74,287
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|
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74,957
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|
||
Prepayments and other
(HEP: $2,701 and $2,360, respectively)
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80,770
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53,161
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|
||
Total current assets
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4,410,135
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4,470,265
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||
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|
||||
Properties, plants and equipment, at cost
(HEP: $1,177,772 and $1,155,710, respectively)
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4,207,876
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3,943,114
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Less accumulated depreciation
(HEP: $(179,215) and $(141,154), respectively)
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(895,621
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)
|
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(748,414
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)
|
||
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3,312,255
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3,194,700
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Marketable securities (long-term)
|
5,415
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5,116
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|
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Other assets: Turnaround costs
|
257,086
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151,764
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|
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Goodwill
(HEP: $288,991 and $288,991, respectively)
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2,338,302
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2,338,302
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Intangibles and other
(HEP: $74,385 and $76,300, respectively)
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175,451
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168,850
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2,770,839
|
|
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2,658,916
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Total assets
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$
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10,498,644
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$
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10,328,997
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|
||||
LIABILITIES AND EQUITY
|
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|
||||
Current liabilities:
|
|
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|
||||
Accounts payable
(HEP: $13,001 and $12,030, respectively)
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$
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1,615,970
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$
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1,314,151
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Accrued liabilities
(HEP: $22,324 and $23,705, respectively)
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144,038
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195,077
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|
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Deferred income tax liabilities
|
133,940
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145,216
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Total current liabilities
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1,893,948
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1,654,444
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|
||||
Long-term debt
(HEP: $809,391 and $864,673, respectively)
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999,884
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1,336,238
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Deferred income taxes
(HEP: $5,287 and $4,951, respectively)
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658,143
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536,670
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Other long-term liabilities
(HEP: $33,139 and $28,683, respectively)
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150,519
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158,987
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||||
Equity:
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|
||||
HollyFrontier stockholders’ equity:
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|
||||
Preferred stock, $1.00 par value – 5,000,000 shares authorized; none issued
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—
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—
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Common stock $.01 par value – 320,000,000 shares authorized; 255,962,866 shares issued as of September 30, 2013 and December 31, 2012
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2,560
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2,560
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Additional capital
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3,991,159
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3,911,353
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Retained earnings
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3,241,694
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3,054,769
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Accumulated other comprehensive income (loss)
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36,174
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(8,425
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)
|
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Common stock held in treasury, at cost – 56,516,027 and 52,411,370 shares as of September 30, 2013 and December 31, 2012, respectively
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(1,097,428
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)
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(907,303
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)
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Total HollyFrontier stockholders’ equity
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6,174,159
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6,052,954
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Noncontrolling interest
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621,991
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589,704
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Total equity
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6,796,150
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6,642,658
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Total liabilities and equity
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$
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10,498,644
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$
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10,328,997
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2013
|
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2012
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2013
|
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2012
|
||||||||
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Sales and other revenues
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$
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5,327,122
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$
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5,204,798
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$
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15,333,759
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$
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14,943,217
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Operating costs and expenses:
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Cost of products sold (exclusive of depreciation and amortization)
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4,809,990
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3,898,736
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13,059,333
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11,767,417
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|
||||
Operating expenses (exclusive of depreciation and amortization)
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256,318
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233,859
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798,959
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|
|
698,212
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|
||||
General and administrative expenses (exclusive of depreciation and amortization)
|
|
28,937
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|
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28,787
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|
|
92,135
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|
|
88,421
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|
||||
Depreciation and amortization
|
|
82,127
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65,112
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|
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224,381
|
|
|
178,162
|
|
||||
Total operating costs and expenses
|
|
5,177,372
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4,226,494
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|
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14,174,808
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|
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12,732,212
|
|
||||
Income from operations
|
|
149,750
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|
|
978,304
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1,158,951
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|
|
2,211,005
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|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) of equity method investments
|
|
159
|
|
|
852
|
|
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(871
|
)
|
|
2,455
|
|
||||
Interest income
|
|
1,482
|
|
|
2,219
|
|
|
3,791
|
|
|
3,360
|
|
||||
Interest expense
|
|
(13,954
|
)
|
|
(21,103
|
)
|
|
(55,068
|
)
|
|
(81,360
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
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(22,109
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)
|
|
—
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|
||||
Gain on sale of marketable equity securities
|
|
—
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|
|
—
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|
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—
|
|
|
326
|
|
||||
|
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(12,313
|
)
|
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(18,032
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)
|
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(74,257
|
)
|
|
(75,219
|
)
|
||||
Income before income taxes
|
|
137,437
|
|
|
960,272
|
|
|
1,084,694
|
|
|
2,135,786
|
|
||||
Income tax provision:
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
(10,454
|
)
|
|
324,211
|
|
|
339,612
|
|
|
753,018
|
|
||||
Deferred
|
|
58,982
|
|
|
25,411
|
|
|
47,053
|
|
|
22,728
|
|
||||
|
|
48,528
|
|
|
349,622
|
|
|
386,665
|
|
|
775,746
|
|
||||
Net income
|
|
88,909
|
|
|
610,650
|
|
|
698,029
|
|
|
1,360,040
|
|
||||
Less net income attributable to noncontrolling interest
|
|
6,619
|
|
|
10,277
|
|
|
25,089
|
|
|
24,472
|
|
||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
82,290
|
|
|
$
|
600,373
|
|
|
$
|
672,940
|
|
|
$
|
1,335,568
|
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.41
|
|
|
$
|
2.95
|
|
|
$
|
3.33
|
|
|
$
|
6.46
|
|
Diluted
|
|
$
|
0.41
|
|
|
$
|
2.94
|
|
|
$
|
3.33
|
|
|
$
|
6.44
|
|
Cash dividends declared per common share
|
|
$
|
0.80
|
|
|
$
|
1.15
|
|
|
$
|
2.40
|
|
|
$
|
2.40
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
199,098
|
|
|
202,655
|
|
|
201,109
|
|
|
205,768
|
|
||||
Diluted
|
|
199,509
|
|
|
203,532
|
|
|
201,486
|
|
|
206,654
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
88,909
|
|
|
$
|
610,650
|
|
|
$
|
698,029
|
|
|
$
|
1,360,040
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on available-for-sale securities
|
|
44
|
|
|
(2
|
)
|
|
18
|
|
|
189
|
|
||||
Reclassification adjustments to net income on sale or maturity of marketable securities
|
|
(10
|
)
|
|
15
|
|
|
(13
|
)
|
|
(392
|
)
|
||||
Net unrealized gain (loss) on available-for-sale securities
|
|
34
|
|
|
13
|
|
|
5
|
|
|
(203
|
)
|
||||
Hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Change in fair value of cash flow hedging instruments
|
|
25,423
|
|
|
(146,437
|
)
|
|
42,739
|
|
|
(261,893
|
)
|
||||
Reclassification adjustments to net income on settlement of cash flow hedging instruments
|
|
(21,478
|
)
|
|
33,830
|
|
|
153
|
|
|
21,925
|
|
||||
Amortization of unrealized loss attributable to discontinued cash flow hedges
|
|
270
|
|
|
1,274
|
|
|
1,479
|
|
|
3,821
|
|
||||
Net unrealized gain (loss) on hedging instruments
|
|
4,215
|
|
|
(111,333
|
)
|
|
44,371
|
|
|
(236,147
|
)
|
||||
Settlement of pension plan obligations
|
|
—
|
|
|
—
|
|
|
28,986
|
|
|
—
|
|
||||
Actuarial loss on post-retirement healthcare plan reclassified to net income upon partial plan settlement
|
|
—
|
|
|
—
|
|
|
1,726
|
|
|
—
|
|
||||
Pension plan curtailment adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,102
|
|
||||
Other comprehensive income (loss) before income taxes
|
|
4,249
|
|
|
(111,320
|
)
|
|
75,088
|
|
|
(229,248
|
)
|
||||
Income tax expense (benefit)
|
|
1,946
|
|
|
(43,353
|
)
|
|
28,421
|
|
|
(89,383
|
)
|
||||
Other comprehensive income (loss)
|
|
2,303
|
|
|
(67,967
|
)
|
|
46,667
|
|
|
(139,865
|
)
|
||||
Total comprehensive income
|
|
91,212
|
|
|
542,683
|
|
|
744,696
|
|
|
1,220,175
|
|
||||
Less noncontrolling interest in comprehensive income
|
|
5,954
|
|
|
10,406
|
|
|
27,156
|
|
|
25,001
|
|
||||
Comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
85,258
|
|
|
$
|
532,277
|
|
|
$
|
717,540
|
|
|
$
|
1,195,174
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
698,029
|
|
|
$
|
1,360,040
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
224,381
|
|
|
178,162
|
|
||
Distributions in excess of earnings of equity method investments
|
|
3,184
|
|
|
169
|
|
||
Loss on early extinguishment of debt attributable to unamortized discount
|
|
7,948
|
|
|
—
|
|
||
Gain on sale of marketable equity securities
|
|
—
|
|
|
(326
|
)
|
||
Deferred income taxes
|
|
47,053
|
|
|
22,728
|
|
||
Equity-based compensation expense
|
|
25,239
|
|
|
25,399
|
|
||
Change in fair value – derivative instruments
|
|
(39,745
|
)
|
|
(10,977
|
)
|
||
(Increase) decrease in current assets:
|
|
|
|
|
||||
Accounts receivable
|
|
(110,402
|
)
|
|
(29,474
|
)
|
||
Inventories
|
|
(228,541
|
)
|
|
(370,831
|
)
|
||
Income taxes receivable
|
|
670
|
|
|
53,465
|
|
||
Prepayments and other
|
|
18,983
|
|
|
16,690
|
|
||
Increase (decrease) in current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
298,916
|
|
|
(96,263
|
)
|
||
Income taxes payable
|
|
—
|
|
|
110,533
|
|
||
Accrued liabilities
|
|
(7,888
|
)
|
|
(6,166
|
)
|
||
Turnaround expenditures
|
|
(170,468
|
)
|
|
(74,612
|
)
|
||
Other, net
|
|
34,804
|
|
|
(6,749
|
)
|
||
Net cash provided by operating activities
|
|
802,163
|
|
|
1,171,788
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Additions to properties, plants and equipment
|
|
(255,090
|
)
|
|
(178,235
|
)
|
||
Additions to properties, plants and equipment – HEP
|
|
(31,099
|
)
|
|
(29,302
|
)
|
||
Acquisition of trucking operations
|
|
(11,301
|
)
|
|
—
|
|
||
Proceeds from sale of property and equipment
|
|
5,802
|
|
|
—
|
|
||
Investment in Sabine Biofuels
|
|
(3,000
|
)
|
|
(2,000
|
)
|
||
Net advances to Sabine Biofuels
|
|
(11,040
|
)
|
|
—
|
|
||
Purchases of marketable securities
|
|
(672,701
|
)
|
|
(236,315
|
)
|
||
Sales and maturities of marketable securities
|
|
646,301
|
|
|
212,216
|
|
||
Net cash used for investing activities
|
|
(332,128
|
)
|
|
(233,636
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Borrowings under credit agreement – HEP
|
|
256,500
|
|
|
523,000
|
|
||
Repayments under credit agreement – HEP
|
|
(312,500
|
)
|
|
(292,000
|
)
|
||
Net proceeds from issuance of senior notes – HEP
|
|
—
|
|
|
294,750
|
|
||
Redemption of senior notes – HFC
|
|
(286,812
|
)
|
|
(205,000
|
)
|
||
Redemption premium on early extinguishment of debt
|
|
(14,161
|
)
|
|
—
|
|
||
Principal tender on senior notes – HEP
|
|
—
|
|
|
(185,000
|
)
|
||
Proceeds from sale of HEP common units
|
|
73,444
|
|
|
—
|
|
||
Proceeds from common unit offerings - HEP
|
|
73,444
|
|
|
—
|
|
||
Purchase of treasury stock
|
|
(184,947
|
)
|
|
(190,307
|
)
|
||
Structured stock repurchase arrangement
|
|
—
|
|
|
8,620
|
|
||
Contribution from joint venture partner
|
|
—
|
|
|
6,000
|
|
||
Dividends
|
|
(485,411
|
)
|
|
(382,610
|
)
|
||
Distributions to noncontrolling interest
|
|
(52,835
|
)
|
|
(43,749
|
)
|
||
Excess tax benefit from equity-based compensation
|
|
2,739
|
|
|
16,021
|
|
||
Purchase of units for incentive grants – HEP
|
|
(3,379
|
)
|
|
(4,919
|
)
|
||
Deferred financing costs and other
|
|
668
|
|
|
(4,454
|
)
|
||
Net cash used for financing activities
|
|
(933,250
|
)
|
|
(459,648
|
)
|
||
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Increase (decrease) for the period
|
|
(463,215
|
)
|
|
478,504
|
|
||
Beginning of period
|
|
1,757,699
|
|
|
1,578,904
|
|
||
End of period
|
|
$
|
1,294,484
|
|
|
$
|
2,057,408
|
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
67,822
|
|
|
$
|
77,184
|
|
Income taxes
|
|
$
|
336,588
|
|
|
$
|
622,314
|
|
NOTE 1:
|
Description of Business and Presentation of Financial Statements
|
•
|
owned and operated a petroleum refinery in El Dorado, Kansas (the “El Dorado Refinery”),
two
refinery facilities located in Tulsa, Oklahoma (collectively, the “Tulsa Refineries”), a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated
65
miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”), a refinery located in Cheyenne, Wyoming (the “Cheyenne Refinery”) and a refinery in Woods Cross, Utah (the “Woods Cross Refinery”);
|
•
|
owned and operated NK Asphalt Partners (“NK Asphalt”) which operates various asphalt terminals in Arizona and New Mexico;
|
•
|
owned a
50%
interest in Sabine Biofuels II, LLC (“Sabine Biofuels”), a biodiesel production facility located in Port Arthur, Texas; and
|
•
|
owned a
39%
interest in HEP, a consolidated variable interest entity (“VIE”), which includes our
2%
general partner interest. HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines and terminal, tankage and loading rack facilities that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Alon USA, Inc.'s (“Alon”) refinery in Big Spring, Texas. Additionally, HEP owns a
75%
interest in UNEV Pipeline, LLC (“UNEV”), which owns a
12
-inch refined products pipeline from Salt Lake City, Utah to Las Vegas, Nevada, together with terminal facilities in the Cedar City, Utah and North Las Vegas areas (the “UNEV Pipeline”), and a
25%
interest in SLC Pipeline LLC (the “SLC Pipeline”), a
95
-mile intrastate pipeline system that serves refineries in the Salt Lake City area.
|
NOTE 2:
|
Variable Interest Entities
|
NOTE 3:
|
Financial Instruments
|
•
|
(Level 1) Quoted prices in active markets for identical assets or liabilities.
|
•
|
(Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data.
|
•
|
(Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs.
|
|
|
|
|
|
|
Fair Value by Input Level
|
||||||||||||||
Financial Instrument
|
|
Carrying Amount
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marketable debt securities
|
|
$
|
662,164
|
|
|
$
|
662,164
|
|
|
$
|
—
|
|
|
$
|
662,164
|
|
|
$
|
—
|
|
NYMEX futures contracts
|
|
7,405
|
|
|
7,405
|
|
|
7,405
|
|
|
—
|
|
|
—
|
|
|||||
Commodity price swaps
|
|
84,762
|
|
|
84,762
|
|
|
—
|
|
|
58,450
|
|
|
26,312
|
|
|||||
HEP interest rate swaps
|
|
1,424
|
|
|
1,424
|
|
|
—
|
|
|
1,424
|
|
|
—
|
|
|||||
Total assets
|
|
$
|
755,755
|
|
|
$
|
755,755
|
|
|
$
|
7,405
|
|
|
$
|
722,038
|
|
|
$
|
26,312
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NYMEX futures contracts
|
|
$
|
1,934
|
|
|
$
|
1,934
|
|
|
$
|
1,934
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
79,764
|
|
|
79,764
|
|
|
—
|
|
|
65,106
|
|
|
14,658
|
|
|||||
HollyFrontier senior notes
|
|
155,272
|
|
|
161,062
|
|
|
—
|
|
|
161,062
|
|
|
—
|
|
|||||
HEP senior notes
|
|
444,391
|
|
|
465,375
|
|
|
—
|
|
|
465,375
|
|
|
—
|
|
|||||
HEP interest rate swaps
|
|
1,976
|
|
|
1,976
|
|
|
—
|
|
|
1,976
|
|
|
—
|
|
|||||
Total liabilities
|
|
$
|
683,337
|
|
|
$
|
710,111
|
|
|
$
|
1,934
|
|
|
$
|
693,519
|
|
|
$
|
14,658
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marketable debt securities
|
|
$
|
635,702
|
|
|
$
|
635,702
|
|
|
$
|
—
|
|
|
$
|
635,702
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
17,383
|
|
|
17,383
|
|
|
—
|
|
|
6,151
|
|
|
11,232
|
|
|||||
Total assets
|
|
$
|
653,085
|
|
|
$
|
653,085
|
|
|
$
|
—
|
|
|
$
|
641,853
|
|
|
$
|
11,232
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NYMEX futures contracts
|
|
$
|
5,563
|
|
|
$
|
5,563
|
|
|
$
|
5,563
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
83,982
|
|
|
83,982
|
|
|
—
|
|
|
39,092
|
|
|
44,890
|
|
|||||
HollyFrontier senior notes
|
|
435,254
|
|
|
470,990
|
|
|
—
|
|
|
470,990
|
|
|
—
|
|
|||||
HEP senior notes
|
|
443,673
|
|
|
484,125
|
|
|
—
|
|
|
484,125
|
|
|
—
|
|
|||||
HEP interest rate swaps
|
|
3,430
|
|
|
3,430
|
|
|
—
|
|
|
3,430
|
|
|
—
|
|
|||||
Total liabilities
|
|
$
|
971,902
|
|
|
$
|
1,048,090
|
|
|
$
|
5,563
|
|
|
$
|
997,637
|
|
|
$
|
44,890
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Level 3 Financial Instruments
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Asset (liability) balance at beginning of period
|
|
$
|
37,126
|
|
|
$
|
119,461
|
|
|
$
|
(33,658
|
)
|
|
$
|
31,616
|
|
Change in fair value:
|
|
|
|
|
|
|
|
|
||||||||
Recognized in other comprehensive income
|
|
(9,956
|
)
|
|
(192,446
|
)
|
|
(8,542
|
)
|
|
(158,893
|
)
|
||||
Recognized in cost of products sold
|
|
(17,194
|
)
|
|
—
|
|
|
30,027
|
|
|
—
|
|
||||
Settlement date fair value of contractual maturities:
|
|
|
|
|
|
|
|
|
||||||||
Recognized in sales and other revenues
|
|
10,138
|
|
|
44,937
|
|
|
25,454
|
|
|
99,229
|
|
||||
Recognized in cost of products sold
|
|
(8,460
|
)
|
|
—
|
|
|
(1,627
|
)
|
|
—
|
|
||||
Asset (liability) balance at end of period
|
|
$
|
11,654
|
|
|
$
|
(28,048
|
)
|
|
$
|
11,654
|
|
|
$
|
(28,048
|
)
|
NOTE 4:
|
Earnings Per Share
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
82,290
|
|
|
$
|
600,373
|
|
|
$
|
672,940
|
|
|
$
|
1,335,568
|
|
Participating securities' share in earnings
|
|
285
|
|
|
2,657
|
|
|
2,447
|
|
|
5,745
|
|
||||
Net income attributable to common shares
|
|
$
|
82,005
|
|
|
$
|
597,716
|
|
|
$
|
670,493
|
|
|
$
|
1,329,823
|
|
Average number of shares of common stock outstanding
|
|
199,098
|
|
|
202,655
|
|
|
201,109
|
|
|
205,768
|
|
||||
Effect of dilutive variable restricted shares and
performance share units
(1)
|
|
411
|
|
|
877
|
|
|
377
|
|
|
886
|
|
||||
Average number of shares of common stock outstanding assuming dilution
|
|
199,509
|
|
|
203,532
|
|
|
201,486
|
|
|
206,654
|
|
||||
Basic earnings per share
|
|
$
|
0.41
|
|
|
$
|
2.95
|
|
|
$
|
3.33
|
|
|
$
|
6.46
|
|
Diluted earnings per share
|
|
$
|
0.41
|
|
|
$
|
2.94
|
|
|
$
|
3.33
|
|
|
$
|
6.44
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Excludes anti-dilutive restricted and performance share units of:
|
|
251
|
|
|
—
|
|
|
1
|
|
|
3
|
|
NOTE 5:
|
Stock-Based Compensation
|
Restricted Stock and Restricted Stock Units
|
|
Grants
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value ($000)
|
|||||
|
|
|
|
|
|
|
|||||
Outstanding at January 1, 2013 (non-vested)
|
|
843,527
|
|
|
$
|
34.52
|
|
|
|
||
Granted
|
|
33,181
|
|
|
46.09
|
|
|
|
|||
Vesting (transfer/conversion to common stock)
|
|
(125,600
|
)
|
|
23.53
|
|
|
|
|||
Forfeited
|
|
(14,661
|
)
|
|
35.78
|
|
|
|
|||
Outstanding at September 30, 2013 (non-vested)
|
|
736,447
|
|
|
$
|
36.89
|
|
|
$
|
31,012
|
|
Performance Share Units
|
|
Grants
|
|
|
|
|
|
Outstanding at January 1, 2013 (non-vested)
|
|
875,574
|
|
Granted
|
|
528
|
|
Vesting and transfer of ownership to recipients
|
|
—
|
|
Forfeited
|
|
(19,382
|
)
|
Outstanding at September 30, 2013 (non-vested)
|
|
856,720
|
|
NOTE 6:
|
Cash and Cash Equivalents and Investments in Marketable Securities
|
|
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
(Net Carrying Amount)
|
||||||||
|
|
(In thousands)
|
||||||||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
$
|
69,756
|
|
|
$
|
16
|
|
|
$
|
(4
|
)
|
|
$
|
69,768
|
|
Commercial paper
|
|
40,237
|
|
|
10
|
|
|
—
|
|
|
40,247
|
|
||||
Corporate debt securities
|
|
66,791
|
|
|
8
|
|
|
(16
|
)
|
|
66,783
|
|
||||
State and political subdivisions debt securities
|
|
485,394
|
|
|
34
|
|
|
(62
|
)
|
|
485,366
|
|
||||
Total marketable securities
|
|
$
|
662,178
|
|
|
$
|
68
|
|
|
$
|
(82
|
)
|
|
$
|
662,164
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2012
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
$
|
82,791
|
|
|
$
|
14
|
|
|
$
|
(6
|
)
|
|
$
|
82,799
|
|
Commercial paper
|
|
45,737
|
|
|
17
|
|
|
—
|
|
|
45,754
|
|
||||
Corporate debt securities
|
|
49,587
|
|
|
2
|
|
|
(30
|
)
|
|
49,559
|
|
||||
State and political subdivisions debt securities
|
|
457,615
|
|
|
26
|
|
|
(51
|
)
|
|
457,590
|
|
||||
Total marketable securities
|
|
$
|
635,730
|
|
|
$
|
59
|
|
|
$
|
(87
|
)
|
|
$
|
635,702
|
|
NOTE 7:
|
Inventories
|
|
|
September 30,
2013 |
|
December 31, 2012
|
||||
|
|
(In thousands)
|
||||||
Crude oil
|
|
$
|
576,672
|
|
|
$
|
502,978
|
|
Other raw materials and unfinished products
(1)
|
|
190,635
|
|
|
150,090
|
|
||
Finished products
(2)
|
|
694,003
|
|
|
585,610
|
|
||
Process chemicals
(3)
|
|
5,682
|
|
|
3,514
|
|
||
Repairs and maintenance supplies and other
|
|
81,181
|
|
|
77,440
|
|
||
Total inventory
|
|
$
|
1,548,173
|
|
|
$
|
1,319,632
|
|
(1)
|
Other raw materials and unfinished products include feedstocks and blendstocks, other than crude.
|
(2)
|
Finished products include gasolines, jet fuels, diesels, lubricants, asphalts, LPG’s and residual fuels.
|
(3)
|
Process chemicals include additives and other chemicals.
|
NOTE 8:
|
Environmental
|
NOTE 9:
|
Debt
|
•
|
8.25%
HEP senior notes (
$150 million
principal amount maturing March 2018)
|
•
|
6.5%
HEP senior notes (
$300 million
principal amount maturing March 2020)
|
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
|
|
(In thousands)
|
||||||
9.875% Senior Notes
|
|
|
|
|
||||
Principal
|
|
$
|
—
|
|
|
$
|
286,812
|
|
Unamortized discount
|
|
—
|
|
|
(7,468
|
)
|
||
|
|
—
|
|
|
279,344
|
|
||
6.875% Senior Notes
|
|
|
|
|
||||
Principal
|
|
150,000
|
|
|
150,000
|
|
||
Unamortized premium
|
|
5,272
|
|
|
5,910
|
|
||
|
|
155,272
|
|
|
155,910
|
|
||
Financing Obligation
|
|
35,221
|
|
|
36,311
|
|
||
|
|
|
|
|
||||
Total HollyFrontier long-term debt
|
|
190,493
|
|
|
471,565
|
|
||
|
|
|
|
|
||||
HEP Credit Agreement
|
|
365,000
|
|
|
421,000
|
|
||
|
|
|
|
|
||||
HEP 8.25% Senior Notes
|
|
|
|
|
||||
Principal
|
|
150,000
|
|
|
150,000
|
|
||
Unamortized discount
|
|
(1,373
|
)
|
|
(1,602
|
)
|
||
|
|
148,627
|
|
|
148,398
|
|
||
HEP 6.5% Senior Notes
|
|
|
|
|
||||
Principal
|
|
300,000
|
|
|
300,000
|
|
||
Unamortized discount
|
|
(4,236
|
)
|
|
(4,725
|
)
|
||
|
|
295,764
|
|
|
295,275
|
|
||
|
|
|
|
|
||||
Total HEP long-term debt
|
|
809,391
|
|
|
864,673
|
|
||
|
|
|
|
|
||||
Total long-term debt
|
|
$
|
999,884
|
|
|
$
|
1,336,238
|
|
•
|
our inventory positions;
|
•
|
natural gas purchases;
|
•
|
costs of crude oil and related grade differentials;
|
•
|
prices of refined products; and
|
•
|
our refining margins.
|
|
Unrealized Gain (Loss) Recognized in OCI
|
|
Gain (Loss) Recognized in Earnings Due to Settlements
|
|
Gain (Loss) Attributable to Hedge Ineffectiveness Recognized in Earnings
|
||||||||||
|
|
Location
|
|
Amount
|
|
Location
|
|
Amount
|
|||||||
|
(In thousands)
|
||||||||||||||
Three Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||
Commodity price swaps
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
27,049
|
|
|
Sales and other revenues
|
|
$
|
(10,138
|
)
|
|
Sales and other revenues
|
|
$
|
1,949
|
|
Gain reclassified to earnings due to settlements
|
(22,007
|
)
|
|
Cost of products sold
|
|
32,874
|
|
|
Cost of products sold
|
|
(962
|
)
|
|||
Amortization of discontinued hedge reclassified to earnings
|
270
|
|
|
Operating expenses
|
|
(999
|
)
|
|
Operating expenses
|
|
259
|
|
|||
Total
|
$
|
5,312
|
|
|
|
|
$
|
21,737
|
|
|
|
|
$
|
1,246
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
||||||
Commodity price swaps
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
(144,635
|
)
|
|
Sales and other revenues
|
|
$
|
(44,936
|
)
|
|
Sales and other revenues
|
|
$
|
(3,531
|
)
|
Loss reclassified to earnings due to settlements
|
33,409
|
|
|
Cost of products sold
|
|
11,527
|
|
|
Cost of products sold
|
|
6,208
|
|
|||
Total
|
$
|
(111,226
|
)
|
|
|
|
$
|
(33,409
|
)
|
|
|
|
$
|
2,677
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||
Commodity price swaps
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
41,410
|
|
|
Sales and other revenues
|
|
$
|
(25,454
|
)
|
|
Sales and other revenues
|
|
$
|
2,143
|
|
Gain reclassified to earnings due to settlements
|
(1,396
|
)
|
|
Cost of products sold
|
|
28,271
|
|
|
Cost of products sold
|
|
730
|
|
|||
Amortization of discontinued hedge reclassified to earnings
|
630
|
|
|
Operating expenses
|
|
(2,051
|
)
|
|
Operating expenses
|
|
—
|
|
|||
Total
|
$
|
40,644
|
|
|
|
|
$
|
766
|
|
|
|
|
$
|
2,873
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
||||||
Commodity price swaps
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
(257,711
|
)
|
|
Sales and other revenues
|
|
$
|
(99,228
|
)
|
|
Sales and other revenues
|
|
$
|
(1,876
|
)
|
Loss reclassified to earnings due to settlements
|
20,986
|
|
|
Cost of products sold
|
|
78,242
|
|
|
Cost of products sold
|
|
(109
|
)
|
|||
Total
|
$
|
(236,725
|
)
|
|
|
|
$
|
(20,986
|
)
|
|
|
|
$
|
(1,985
|
)
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
||||||||||||||
Derivative Instrument
|
|
Total Outstanding Notional
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Unit of Measure
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commodity Price Swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Natural gas - long
|
|
40,800,000
|
|
|
2,400,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
MMBTU
|
WTI crude oil - long
|
|
11,610,500
|
|
|
2,668,000
|
|
|
8,942,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
Ultra-low sulfur diesel - short
|
|
11,610,500
|
|
|
2,668,000
|
|
|
8,942,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Location of Gain (Loss) Recognized in Income
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Cost of products sold
|
|
$
|
(29,515
|
)
|
|
$
|
19,869
|
|
|
$
|
5,916
|
|
|
$
|
55,738
|
|
Operating expenses
|
|
(157
|
)
|
|
604
|
|
|
(5,458
|
)
|
|
446
|
|
||||
Total
|
|
$
|
(29,672
|
)
|
|
$
|
20,473
|
|
|
$
|
458
|
|
|
$
|
56,184
|
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
||||||||||||||
Derivative Instrument
|
|
Total Outstanding Notional
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Unit of Measure
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commodity price swap (WCS spread) - long
|
|
3,801,500
|
|
|
1,794,000
|
|
|
2,007,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
Commodity price swap (WTS spread) - long
|
|
736,000
|
|
|
736,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
Commodity price swap (natural gas) - long
|
|
40,800,000
|
|
|
2,400,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
MMBTU
|
Commodity price swap (natural gas) - short
|
|
40,800,000
|
|
|
2,400,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
MMBTU
|
NYMEX futures (WTI) - short
|
|
2,536,000
|
|
|
2,139,000
|
|
|
397,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|
Unrealized Gain (Loss) Recognized in OCI
|
|
Loss Recognized in Earnings Due to Settlements
|
||||||
|
|
Location
|
|
Amount
|
|||||
|
(In thousands)
|
||||||||
Three Months Ended September 30, 2013
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
(1,626
|
)
|
|
|
|
|
||
Loss reclassified to earnings due to settlements
|
529
|
|
|
Interest expense
|
|
$
|
(529
|
)
|
|
Total
|
$
|
(1,097
|
)
|
|
|
|
$
|
(529
|
)
|
|
|
|
|
|
|
||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
(1,802
|
)
|
|
|
|
|
||
Loss reclassified to earnings due to settlements
|
421
|
|
|
|
|
|
|||
Amortization of discontinued hedge reclassified to earnings
|
1,274
|
|
|
Interest expense
|
|
$
|
(1,695
|
)
|
|
Total
|
$
|
(107
|
)
|
|
|
|
$
|
(1,695
|
)
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2013
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
1,329
|
|
|
|
|
|
||
Loss reclassified to earnings due to settlements
|
1,549
|
|
|
|
|
|
|||
Amortization of discontinued hedge reclassified to earnings
|
849
|
|
|
Interest expense
|
|
$
|
(2,398
|
)
|
|
Total
|
$
|
3,727
|
|
|
|
|
$
|
(2,398
|
)
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
(4,182
|
)
|
|
|
|
|
||
Loss reclassified to earnings due to settlements
|
939
|
|
|
|
|
|
|||
Amortization of discontinued hedge reclassified to earnings
|
3,821
|
|
|
Interest expense
|
|
$
|
(4,760
|
)
|
|
Total
|
$
|
578
|
|
|
|
|
$
|
(4,760
|
)
|
|
|
Derivatives in Net Asset Position
|
|
Derivatives in Net Liability Position
|
||||||||||||||||||||
|
|
Gross Assets
|
|
Gross Liabilities Offset in Balance Sheet
|
|
Net Assets Recognized in Balance Sheet
|
|
Gross Liabilities
|
|
Gross Assets Offset in Balance Sheet
|
|
Net Liabilities Recognized in Balance Sheet
|
||||||||||||
|
|
|
|
(In thousands)
|
|
|
||||||||||||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
51,593
|
|
|
$
|
(7,207
|
)
|
|
$
|
44,386
|
|
|
$
|
16,724
|
|
|
$
|
—
|
|
|
$
|
16,724
|
|
Interest rate swap contracts
|
|
1,424
|
|
|
—
|
|
|
1,424
|
|
|
1,976
|
|
|
—
|
|
|
1,976
|
|
||||||
|
|
$
|
53,017
|
|
|
$
|
(7,207
|
)
|
|
$
|
45,810
|
|
|
$
|
18,700
|
|
|
$
|
—
|
|
|
$
|
18,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
986
|
|
|
$
|
(5,642
|
)
|
|
$
|
(4,656
|
)
|
|
$
|
28,238
|
|
|
$
|
(10,230
|
)
|
|
$
|
18,008
|
|
NYMEX futures contracts
|
|
7,405
|
|
|
(1,934
|
)
|
|
5,471
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
8,391
|
|
|
$
|
(7,576
|
)
|
|
$
|
815
|
|
|
$
|
28,238
|
|
|
$
|
(10,230
|
)
|
|
$
|
18,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
46,625
|
|
|
|
|
|
|
$
|
36,708
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet classification:
|
|
Prepayment and other
|
|
$
|
45,201
|
|
|
Accrued liabilities
|
|
$
|
12,779
|
|
||||||||||||
|
|
Intangibles and other
|
|
1,424
|
|
|
Other long-term liabilities
|
|
23,929
|
|
||||||||||||||
|
|
|
|
|
|
$
|
46,625
|
|
|
|
|
|
|
$
|
36,708
|
|
|
|
Derivatives in Net Asset Position
|
|
Derivatives in Net Liability Position
|
||||||||||||||||||||
|
|
Gross Assets
|
|
Gross Liabilities Offset in Balance Sheet
|
|
Net Assets Recognized in Balance Sheet
|
|
Gross Liabilities
|
|
Gross Assets Offset in Balance Sheet
|
|
Net Liabilities Recognized in Balance Sheet
|
||||||||||||
|
|
|
|
(In thousands)
|
|
|
||||||||||||||||||
December 31, 2012
|
|
|
||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,828
|
|
|
$
|
(17,383
|
)
|
|
$
|
20,445
|
|
Interest rate swap contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,430
|
|
|
—
|
|
|
3,430
|
|
||||||
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41,258
|
|
|
$
|
(17,383
|
)
|
|
$
|
23,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,154
|
|
|
$
|
—
|
|
|
$
|
46,154
|
|
NYMEX futures contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,563
|
|
|
—
|
|
|
5,563
|
|
||||||
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,717
|
|
|
$
|
—
|
|
|
$
|
51,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
$
|
75,592
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet classification:
|
|
|
|
|
|
|
|
Accrued liabilities
|
|
$
|
62,388
|
|
||||||||||||
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
13,204
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
$
|
75,592
|
|
NOTE 11:
|
Equity
|
|
|
HollyFrontier
Stockholders’
Equity
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at December 31, 2012
|
|
$
|
6,052,954
|
|
|
$
|
589,704
|
|
|
$
|
6,642,658
|
|
Net income
|
|
672,940
|
|
|
25,089
|
|
|
698,029
|
|
|||
Dividends
|
|
(486,015
|
)
|
|
—
|
|
|
(486,015
|
)
|
|||
Distributions to noncontrolling interest holders
|
|
—
|
|
|
(52,835
|
)
|
|
(52,835
|
)
|
|||
Other comprehensive income, net of tax
|
|
44,599
|
|
|
2,068
|
|
|
46,667
|
|
|||
Allocated equity on HEP common unit issuances, net of tax
|
|
54,011
|
|
|
58,702
|
|
|
112,713
|
|
|||
Equity-based compensation
|
|
22,597
|
|
|
2,642
|
|
|
25,239
|
|
|||
Excess tax benefit attributable to equity-based compensation
|
|
2,739
|
|
|
—
|
|
|
2,739
|
|
|||
Purchase of treasury stock
(1)
|
|
(189,666
|
)
|
|
—
|
|
|
(189,666
|
)
|
|||
Purchase of HEP units for restricted grants
|
|
—
|
|
|
(3,379
|
)
|
|
(3,379
|
)
|
|||
Balance at September 30, 2013
|
|
$
|
6,174,159
|
|
|
$
|
621,991
|
|
|
$
|
6,796,150
|
|
(1)
|
Includes
44,233
shares withheld under the terms of stock-based compensation agreements to provide funds for the payment of payroll and income taxes due at the vesting of share-based awards.
|
NOTE 12:
|
Other Comprehensive Income (Loss)
|
|
|
Before-Tax
|
|
Tax Expense
(Benefit)
|
|
After-Tax
|
||||||
|
|
(In thousands)
|
||||||||||
Three Months Ended September 30, 2013
|
|
|
|
|
|
|
||||||
Unrealized gain, net of reclassifications from sale or maturity, on available-for-sale securities
|
|
$
|
34
|
|
|
$
|
13
|
|
|
$
|
21
|
|
Unrealized gain on hedging activities
|
|
4,215
|
|
|
1,933
|
|
|
2,282
|
|
|||
Other comprehensive income
|
|
4,249
|
|
|
1,946
|
|
|
2,303
|
|
|||
Less other comprehensive loss attributable to noncontrolling interest
|
|
(665
|
)
|
|
—
|
|
|
(665
|
)
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
4,914
|
|
|
$
|
1,946
|
|
|
$
|
2,968
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
|
||||||
Unrealized gain, net of reclassifications from sale or maturity, on available-for-sale securities
|
|
$
|
13
|
|
|
$
|
6
|
|
|
$
|
7
|
|
Unrealized loss on hedging activities
|
|
(111,333
|
)
|
|
(43,359
|
)
|
|
(67,974
|
)
|
|||
Other comprehensive loss
|
|
(111,320
|
)
|
|
(43,353
|
)
|
|
(67,967
|
)
|
|||
Less other comprehensive income attributable to noncontrolling interest
|
|
129
|
|
|
—
|
|
|
129
|
|
|||
Other comprehensive loss attributable to HollyFrontier stockholders
|
|
$
|
(111,449
|
)
|
|
$
|
(43,353
|
)
|
|
$
|
(68,096
|
)
|
|
|
Before-Tax
|
|
Tax Expense
(Benefit)
|
|
After-Tax
|
||||||
|
|
(In thousands)
|
||||||||||
Nine Months Ended September 30, 2013
|
|
|
|
|
|
|
||||||
Unrealized gain, net of reclassifications from sale or maturity, on available-for-sale securities
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Unrealized gain on hedging activities
|
|
44,371
|
|
|
16,473
|
|
|
27,898
|
|
|||
Actuarial loss on retirement pension plan reclassified to net income upon partial plan settlement
|
|
28,986
|
|
|
11,275
|
|
|
17,711
|
|
|||
Actuarial loss on post-retirement healthcare plan reclassified to net income upon partial plan settlement
|
|
1,726
|
|
|
671
|
|
|
1,055
|
|
|||
Other comprehensive income
|
|
75,088
|
|
|
28,421
|
|
|
46,667
|
|
|||
Less other comprehensive income attributable to noncontrolling interest
|
|
2,068
|
|
|
—
|
|
|
2,068
|
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
73,020
|
|
|
$
|
28,421
|
|
|
$
|
44,599
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
||||||
Unrealized loss, net of reclassifications from sale or maturity, on available-for-sale securities
|
|
$
|
(203
|
)
|
|
$
|
(78
|
)
|
|
$
|
(125
|
)
|
Unrealized loss on hedging activities
|
|
(236,147
|
)
|
|
(92,068
|
)
|
|
(144,079
|
)
|
|||
Pension plan curtailment
|
|
7,102
|
|
|
2,763
|
|
|
4,339
|
|
|||
Other comprehensive loss
|
|
(229,248
|
)
|
|
(89,383
|
)
|
|
(139,865
|
)
|
|||
Less other comprehensive income attributable to noncontrolling interest
|
|
529
|
|
|
—
|
|
|
529
|
|
|||
Other comprehensive loss attributable to HollyFrontier stockholders
|
|
$
|
(229,777
|
)
|
|
$
|
(89,383
|
)
|
|
$
|
(140,394
|
)
|
AOCI Component
|
|
Gain (Loss) Reclassified From AOCI
|
|
Income Statement Line Item
|
||||||
|
|
(In thousands)
|
|
|
||||||
|
|
Three Months Ended September 30, 2013
|
|
Nine Months Ended September 30, 2013
|
|
|
||||
|
|
|
|
|
|
|
||||
Securities available-for-sale
|
|
$
|
10
|
|
|
$
|
13
|
|
|
Interest income
|
|
|
4
|
|
|
5
|
|
|
Income tax expense
|
||
|
|
6
|
|
|
8
|
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Hedging instruments:
|
|
|
|
|
|
|
||||
Commodity price swaps
|
|
(10,138
|
)
|
|
(25,454
|
)
|
|
Sales and other revenues
|
||
|
|
32,874
|
|
|
28,271
|
|
|
Cost of products sold
|
||
|
|
(999
|
)
|
|
(2,051
|
)
|
|
Operating expenses
|
||
Interest rate swaps
|
|
(529
|
)
|
|
(2,398
|
)
|
|
Interest expense
|
||
|
|
21,208
|
|
|
(1,632
|
)
|
|
|
||
|
|
8,375
|
|
|
(69
|
)
|
|
Income tax expense (benefit)
|
||
|
|
12,833
|
|
|
(1,563
|
)
|
|
Net of tax
|
||
|
|
321
|
|
|
1,453
|
|
|
Noncontrolling interest
|
||
|
|
13,154
|
|
|
(110
|
)
|
|
Net of tax and noncontrolling interest
|
||
|
|
|
|
|
|
|
||||
Pension obligation
|
|
—
|
|
|
(2,460
|
)
|
|
Cost of products sold
|
||
|
|
—
|
|
|
(23,260
|
)
|
|
Operating expenses
|
||
|
|
—
|
|
|
(3,266
|
)
|
|
General and administrative expenses
|
||
|
|
—
|
|
|
(28,986
|
)
|
|
|
||
|
|
—
|
|
|
(11,275
|
)
|
|
Income tax benefit
|
||
|
|
—
|
|
|
(17,711
|
)
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Retiree medical obligation
|
|
—
|
|
|
(84
|
)
|
|
Cost of products sold
|
||
|
|
—
|
|
|
(1,549
|
)
|
|
Operating expenses
|
||
|
|
—
|
|
|
(93
|
)
|
|
General and administrative expenses
|
||
|
|
—
|
|
|
(1,726
|
)
|
|
|
||
|
|
—
|
|
|
(671
|
)
|
|
Income tax benefit
|
||
|
|
—
|
|
|
(1,055
|
)
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
|
$
|
13,160
|
|
|
$
|
(18,868
|
)
|
|
|
AOCI Component
|
|
Gain (Loss) Reclassified From AOCI
|
|
Income Statement Line Item
|
||||||
|
|
(In thousands)
|
|
|
||||||
|
|
Three Months Ended September 30, 2012
|
|
Nine Months Ended September 30, 2012
|
|
|
||||
|
|
|
|
|
|
|
||||
Securities available-for-sale
|
|
$
|
(15
|
)
|
|
$
|
66
|
|
|
Interest income
|
|
|
—
|
|
|
326
|
|
|
Gain on sale of marketable equity securities
|
||
|
|
(15
|
)
|
|
392
|
|
|
|
||
|
|
(6
|
)
|
|
152
|
|
|
Income tax expense (benefit)
|
||
|
|
(9
|
)
|
|
240
|
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Hedging instruments
|
|
|
|
|
|
|
||||
Commodity price swaps
|
|
(44,936
|
)
|
|
(99,228
|
)
|
|
Sales and other revenues
|
||
|
|
11,527
|
|
|
78,242
|
|
|
Cost of products sold
|
||
Interest rate swaps
|
|
(1,695
|
)
|
|
(4,760
|
)
|
|
Interest expense
|
||
|
|
(35,104
|
)
|
|
(25,746
|
)
|
|
|
||
|
|
(13,293
|
)
|
|
(8,958
|
)
|
|
Income tax benefit
|
||
|
|
(21,811
|
)
|
|
(16,788
|
)
|
|
Net of tax
|
||
|
|
932
|
|
|
2,717
|
|
|
Noncontrolling interest
|
||
|
|
(20,879
|
)
|
|
(14,071
|
)
|
|
Net of tax and noncontrolling interest
|
||
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
|
$
|
(20,888
|
)
|
|
$
|
(13,831
|
)
|
|
|
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
|
|
(In thousands)
|
||||||
Pension obligation
|
|
$
|
(6,262
|
)
|
|
$
|
(23,973
|
)
|
Retiree medical obligation
|
|
29,660
|
|
|
28,605
|
|
||
Unrealized loss on available-for-sale securities
|
|
(4
|
)
|
|
(7
|
)
|
||
Unrealized gain (loss) on hedging activities, net of noncontrolling interest
|
|
12,780
|
|
|
(13,050
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
$
|
36,174
|
|
|
$
|
(8,425
|
)
|
NOTE 13:
|
Retirement Plan
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Service cost – benefit earned during the period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
679
|
|
Interest cost on projected benefit obligations
|
|
—
|
|
|
955
|
|
|
1,797
|
|
|
3,007
|
|
||||
Expected return on plan assets
|
|
—
|
|
|
(950
|
)
|
|
(92
|
)
|
|
(2,849
|
)
|
||||
Amortization of prior service cost
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67
|
|
||||
Amortization of net loss
|
|
—
|
|
|
415
|
|
|
1,386
|
|
|
1,518
|
|
||||
Curtailment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
899
|
|
||||
Settlement
|
|
—
|
|
|
—
|
|
|
30,893
|
|
|
—
|
|
||||
Net periodic pension expense
|
|
$
|
—
|
|
|
$
|
420
|
|
|
$
|
33,984
|
|
|
$
|
3,321
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Service cost – benefit earned during the period
|
|
$
|
278
|
|
|
$
|
475
|
|
|
$
|
834
|
|
|
$
|
1,425
|
|
Interest cost on projected benefit obligations
|
|
159
|
|
|
875
|
|
|
477
|
|
|
2,625
|
|
||||
Amortization of prior service credit
|
|
(1,474
|
)
|
|
(550
|
)
|
|
(4,422
|
)
|
|
(1,650
|
)
|
||||
Amortization of net loss
|
|
31
|
|
|
75
|
|
|
93
|
|
|
225
|
|
||||
Actuarial loss on post-retirement healthcare plan reclassified to net income upon partial plan settlement
|
|
—
|
|
|
—
|
|
|
1,726
|
|
|
—
|
|
||||
Net periodic pension expense (credit)
|
|
$
|
(1,006
|
)
|
|
$
|
875
|
|
|
$
|
(1,292
|
)
|
|
$
|
2,625
|
|
NOTE 14:
|
Contingencies
|
NOTE 15:
|
Segment Information
|
|
|
Refining
|
|
HEP
|
|
Corporate
and Other
|
|
Consolidations
and Eliminations
|
|
Consolidated
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Three Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues
|
|
$
|
5,314,954
|
|
|
$
|
77,625
|
|
|
$
|
257
|
|
|
$
|
(65,714
|
)
|
|
$
|
5,327,122
|
|
Depreciation and amortization
|
|
$
|
61,553
|
|
|
$
|
19,042
|
|
|
$
|
1,739
|
|
|
$
|
(207
|
)
|
|
$
|
82,127
|
|
Income (loss) from operations
|
|
$
|
144,508
|
|
|
$
|
34,481
|
|
|
$
|
(28,701
|
)
|
|
$
|
(538
|
)
|
|
$
|
149,750
|
|
Capital expenditures
|
|
$
|
92,918
|
|
|
$
|
14,238
|
|
|
$
|
8,230
|
|
|
$
|
—
|
|
|
$
|
115,386
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues
|
|
$
|
5,192,649
|
|
|
$
|
72,570
|
|
|
$
|
352
|
|
|
$
|
(60,773
|
)
|
|
$
|
5,204,798
|
|
Depreciation and amortization
|
|
$
|
47,555
|
|
|
$
|
12,971
|
|
|
$
|
4,793
|
|
|
$
|
(207
|
)
|
|
$
|
65,112
|
|
Income (loss) from operations
|
|
$
|
973,837
|
|
|
$
|
36,876
|
|
|
$
|
(31,861
|
)
|
|
$
|
(548
|
)
|
|
$
|
978,304
|
|
Capital expenditures
|
|
$
|
70,069
|
|
|
$
|
5,683
|
|
|
$
|
3,765
|
|
|
$
|
—
|
|
|
$
|
79,517
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues
|
|
$
|
15,294,261
|
|
|
$
|
229,230
|
|
|
$
|
1,054
|
|
|
$
|
(190,786
|
)
|
|
$
|
15,333,759
|
|
Depreciation and amortization
|
|
$
|
172,166
|
|
|
$
|
48,410
|
|
|
$
|
4,426
|
|
|
$
|
(621
|
)
|
|
$
|
224,381
|
|
Income (loss) from operations
|
|
$
|
1,145,487
|
|
|
$
|
102,347
|
|
|
$
|
(87,319
|
)
|
|
$
|
(1,564
|
)
|
|
$
|
1,158,951
|
|
Capital expenditures
|
|
$
|
231,416
|
|
|
$
|
31,099
|
|
|
$
|
23,674
|
|
|
$
|
—
|
|
|
$
|
286,189
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues
|
|
$
|
14,908,033
|
|
|
$
|
207,250
|
|
|
$
|
653
|
|
|
$
|
(172,719
|
)
|
|
$
|
14,943,217
|
|
Depreciation and amortization
|
|
$
|
133,087
|
|
|
$
|
38,683
|
|
|
$
|
7,013
|
|
|
$
|
(621
|
)
|
|
$
|
178,162
|
|
Income (loss) from operations
|
|
$
|
2,200,564
|
|
|
$
|
100,918
|
|
|
$
|
(88,889
|
)
|
|
$
|
(1,588
|
)
|
|
$
|
2,211,005
|
|
Capital expenditures
|
|
$
|
171,865
|
|
|
$
|
29,302
|
|
|
$
|
6,370
|
|
|
$
|
—
|
|
|
$
|
207,537
|
|
|
|
Refining
|
|
HEP
|
|
Corporate and Other
|
|
Consolidations and Eliminations
|
|
Consolidated Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and investments in marketable securities
|
|
$
|
40
|
|
|
$
|
11,220
|
|
|
$
|
1,945,388
|
|
|
$
|
—
|
|
|
$
|
1,956,648
|
|
Total assets
|
|
$
|
7,285,965
|
|
|
$
|
1,413,368
|
|
|
$
|
2,129,518
|
|
|
$
|
(330,207
|
)
|
|
$
|
10,498,644
|
|
Long-term debt
|
|
$
|
—
|
|
|
$
|
809,391
|
|
|
$
|
205,943
|
|
|
$
|
(15,450
|
)
|
|
$
|
999,884
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and investments in marketable securities
|
|
$
|
2,101
|
|
|
$
|
5,237
|
|
|
$
|
2,386,063
|
|
|
$
|
—
|
|
|
$
|
2,393,401
|
|
Total assets
|
|
$
|
6,702,872
|
|
|
$
|
1,426,800
|
|
|
$
|
2,531,967
|
|
|
$
|
(332,642
|
)
|
|
$
|
10,328,997
|
|
Long-term debt
|
|
$
|
—
|
|
|
$
|
864,673
|
|
|
$
|
487,472
|
|
|
$
|
(15,907
|
)
|
|
$
|
1,336,238
|
|
NOTE 16:
|
Supplemental Guarantor/Non-Guarantor Financial Information
|
Condensed Consolidating Statement of Income and Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Three Months Ended September 30, 2013
|
|
Parent
|
|
Guarantor
Restricted
Subsidiaries
|
|
Non-
Guarantor
Restricted
Subsidiaries
|
|
Eliminations
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
Non-Guarantor
Non-Restricted
Subsidiaries
(HEP Segment)
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||||||
Sales and other revenues
|
|
$
|
146
|
|
|
$
|
5,315,037
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
5,315,211
|
|
|
$
|
77,625
|
|
|
$
|
(65,714
|
)
|
|
$
|
5,327,122
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of products sold
|
|
—
|
|
|
4,874,603
|
|
|
—
|
|
|
—
|
|
|
4,874,603
|
|
|
—
|
|
|
(64,613
|
)
|
|
4,809,990
|
|
||||||||
Operating expenses
|
|
—
|
|
|
234,987
|
|
|
—
|
|
|
—
|
|
|
234,987
|
|
|
21,687
|
|
|
(356
|
)
|
|
256,318
|
|
||||||||
General and administrative
|
|
25,995
|
|
|
422
|
|
|
105
|
|
|
—
|
|
|
26,522
|
|
|
2,415
|
|
|
—
|
|
|
28,937
|
|
||||||||
Depreciation and amortization
|
|
1,496
|
|
|
65,195
|
|
|
—
|
|
|
—
|
|
|
66,691
|
|
|
19,042
|
|
|
(3,606
|
)
|
|
82,127
|
|
||||||||
Total operating costs and expenses
|
|
27,491
|
|
|
5,175,207
|
|
|
105
|
|
|
—
|
|
|
5,202,803
|
|
|
43,144
|
|
|
(68,575
|
)
|
|
5,177,372
|
|
||||||||
Income (loss) from operations
|
|
(27,345
|
)
|
|
139,830
|
|
|
(77
|
)
|
|
—
|
|
|
112,408
|
|
|
34,481
|
|
|
2,861
|
|
|
149,750
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings (loss) of equity method investments
|
|
158,437
|
|
|
16,207
|
|
|
16,822
|
|
|
(175,320
|
)
|
|
16,146
|
|
|
835
|
|
|
(16,822
|
)
|
|
159
|
|
||||||||
Interest income (expense)
|
|
(782
|
)
|
|
2,400
|
|
|
138
|
|
|
—
|
|
|
1,756
|
|
|
(11,812
|
)
|
|
(2,416
|
)
|
|
(12,472
|
)
|
||||||||
|
|
157,655
|
|
|
18,607
|
|
|
16,960
|
|
|
(175,320
|
)
|
|
17,902
|
|
|
(10,977
|
)
|
|
(19,238
|
)
|
|
(12,313
|
)
|
||||||||
Income before income taxes
|
|
130,310
|
|
|
158,437
|
|
|
16,883
|
|
|
(175,320
|
)
|
|
130,310
|
|
|
23,504
|
|
|
(16,377
|
)
|
|
137,437
|
|
||||||||
Income tax provision
|
|
48,488
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,488
|
|
|
40
|
|
|
—
|
|
|
48,528
|
|
||||||||
Net income
|
|
81,822
|
|
|
158,437
|
|
|
16,883
|
|
|
(175,320
|
)
|
|
81,822
|
|
|
23,464
|
|
|
(16,377
|
)
|
|
88,909
|
|
||||||||
Less net income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,172
|
|
|
5,447
|
|
|
6,619
|
|
||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
81,822
|
|
|
$
|
158,437
|
|
|
$
|
16,883
|
|
|
$
|
(175,320
|
)
|
|
$
|
81,822
|
|
|
$
|
22,292
|
|
|
$
|
(21,824
|
)
|
|
$
|
82,290
|
|
Comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
84,790
|
|
|
$
|
163,317
|
|
|
$
|
16,450
|
|
|
$
|
(179,767
|
)
|
|
$
|
84,790
|
|
|
$
|
21,859
|
|
|
$
|
(21,391
|
)
|
|
$
|
85,258
|
|
Condensed Consolidating Statement of Income and Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Nine Months Ended September 30, 2013
|
|
Parent
|
|
Guarantor
Restricted
Subsidiaries
|
|
Non-
Guarantor
Restricted
Subsidiaries
|
|
Eliminations
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
Non-Guarantor
Non-Restricted
Subsidiaries
(HEP Segment)
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||||||
Sales and other revenues
|
|
$
|
777
|
|
|
$
|
15,294,447
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
15,295,315
|
|
|
$
|
229,230
|
|
|
$
|
(190,786
|
)
|
|
$
|
15,333,759
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of products sold
|
|
—
|
|
|
13,246,883
|
|
|
—
|
|
|
—
|
|
|
13,246,883
|
|
|
—
|
|
|
(187,550
|
)
|
|
13,059,333
|
|
||||||||
Operating expenses
|
|
—
|
|
|
730,284
|
|
|
—
|
|
|
—
|
|
|
730,284
|
|
|
69,726
|
|
|
(1,051
|
)
|
|
798,959
|
|
||||||||
General and administrative
|
|
80,368
|
|
|
2,827
|
|
|
193
|
|
|
—
|
|
|
83,388
|
|
|
8,747
|
|
|
—
|
|
|
92,135
|
|
||||||||
Depreciation and amortization
|
|
3,822
|
|
|
182,858
|
|
|
—
|
|
|
—
|
|
|
186,680
|
|
|
48,410
|
|
|
(10,709
|
)
|
|
224,381
|
|
||||||||
Total operating costs and expenses
|
|
84,190
|
|
|
14,162,852
|
|
|
193
|
|
|
—
|
|
|
14,247,235
|
|
|
126,883
|
|
|
(199,310
|
)
|
|
14,174,808
|
|
||||||||
Income (loss) from operations
|
|
(83,413
|
)
|
|
1,131,595
|
|
|
(102
|
)
|
|
—
|
|
|
1,048,080
|
|
|
102,347
|
|
|
8,524
|
|
|
1,158,951
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings (loss) of equity method investments
|
|
1,178,587
|
|
|
40,413
|
|
|
43,215
|
|
|
(1,222,109
|
)
|
|
40,106
|
|
|
2,238
|
|
|
(43,215
|
)
|
|
(871
|
)
|
||||||||
Interest income (expense)
|
|
(15,459
|
)
|
|
6,579
|
|
|
409
|
|
|
—
|
|
|
(8,471
|
)
|
|
(35,818
|
)
|
|
(6,988
|
)
|
|
(51,277
|
)
|
||||||||
Loss on early extinguishment of debt
|
|
(22,109
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,109
|
)
|
|
—
|
|
|
—
|
|
|
(22,109
|
)
|
||||||||
|
|
1,141,019
|
|
|
46,992
|
|
|
43,624
|
|
|
(1,222,109
|
)
|
|
9,526
|
|
|
(33,580
|
)
|
|
(50,203
|
)
|
|
(74,257
|
)
|
||||||||
Income before income taxes
|
|
1,057,606
|
|
|
1,178,587
|
|
|
43,522
|
|
|
(1,222,109
|
)
|
|
1,057,606
|
|
|
68,767
|
|
|
(41,679
|
)
|
|
1,084,694
|
|
||||||||
Income tax provision
|
|
386,225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
386,225
|
|
|
440
|
|
|
—
|
|
|
386,665
|
|
||||||||
Net income
|
|
671,381
|
|
|
1,178,587
|
|
|
43,522
|
|
|
(1,222,109
|
)
|
|
671,381
|
|
|
68,327
|
|
|
(41,679
|
)
|
|
698,029
|
|
||||||||
Less net income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,192
|
|
|
19,897
|
|
|
25,089
|
|
||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
671,381
|
|
|
$
|
1,178,587
|
|
|
$
|
43,522
|
|
|
$
|
(1,222,109
|
)
|
|
$
|
671,381
|
|
|
$
|
63,135
|
|
|
$
|
(61,576
|
)
|
|
$
|
672,940
|
|
Comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
715,981
|
|
|
$
|
1,220,890
|
|
|
$
|
45,181
|
|
|
$
|
(1,266,071
|
)
|
|
$
|
715,981
|
|
|
$
|
64,794
|
|
|
$
|
(63,235
|
)
|
|
$
|
717,540
|
|
Condensed Consolidating Statement of Cash Flows
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Nine Months Ended September 30, 2013
|
|
Parent
|
|
Guarantor
Restricted
Subsidiaries
|
|
Non-
Guarantor
Restricted
Subsidiaries
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
Non-Guarantor
Non-Restricted
Subsidiaries
(HEP Segment)
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||
Cash flows from operating activities
|
|
$
|
464,059
|
|
|
$
|
264,490
|
|
|
$
|
1,498
|
|
|
$
|
730,047
|
|
|
$
|
124,922
|
|
|
$
|
(52,806
|
)
|
|
$
|
802,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Additions to properties, plants and equip
|
|
(8,056
|
)
|
|
(247,034
|
)
|
|
—
|
|
|
(255,090
|
)
|
|
—
|
|
|
—
|
|
|
(255,090
|
)
|
|||||||
Additions to properties, plants and equip – HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,099
|
)
|
|
—
|
|
|
(31,099
|
)
|
|||||||
Acquisition of trucking operations
|
|
—
|
|
|
(11,301
|
)
|
|
—
|
|
|
(11,301
|
)
|
|
—
|
|
|
—
|
|
|
(11,301
|
)
|
|||||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
3,321
|
|
|
—
|
|
|
3,321
|
|
|
2,481
|
|
|
—
|
|
|
5,802
|
|
|||||||
Investment in Sabine Biofuels
|
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
|||||||
Net advances to Sabine Biofuels
|
|
—
|
|
|
(11,040
|
)
|
|
—
|
|
|
(11,040
|
)
|
|
—
|
|
|
—
|
|
|
(11,040
|
)
|
|||||||
Purchases of marketable securities
|
|
(672,701
|
)
|
|
—
|
|
|
—
|
|
|
(672,701
|
)
|
|
—
|
|
|
—
|
|
|
(672,701
|
)
|
|||||||
Sales and maturities of marketable securities
|
|
646,301
|
|
|
—
|
|
|
—
|
|
|
646,301
|
|
|
—
|
|
|
—
|
|
|
646,301
|
|
|||||||
|
|
(34,456
|
)
|
|
(269,054
|
)
|
|
—
|
|
|
(303,510
|
)
|
|
(28,618
|
)
|
|
—
|
|
|
(332,128
|
)
|
|||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net repayments under credit agreement – HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,000
|
)
|
|
—
|
|
|
(56,000
|
)
|
|||||||
Redemption of senior notes - HFC
|
|
(286,812
|
)
|
|
—
|
|
|
—
|
|
|
(286,812
|
)
|
|
—
|
|
|
—
|
|
|
(286,812
|
)
|
|||||||
Redemption premium on early extinguishment of debt
|
|
(14,161
|
)
|
|
—
|
|
|
—
|
|
|
(14,161
|
)
|
|
—
|
|
|
—
|
|
|
(14,161
|
)
|
|||||||
Proceeds from common unit offerings - HEP
|
|
73,444
|
|
|
—
|
|
|
—
|
|
|
73,444
|
|
|
73,444
|
|
|
—
|
|
|
146,888
|
|
|||||||
Purchase of treasury stock
|
|
(184,947
|
)
|
|
—
|
|
|
—
|
|
|
(184,947
|
)
|
|
—
|
|
|
—
|
|
|
(184,947
|
)
|
|||||||
Contribution from general partner
|
|
—
|
|
|
—
|
|
|
(1,499
|
)
|
|
(1,499
|
)
|
|
1,499
|
|
|
—
|
|
|
—
|
|
|||||||
Dividends
|
|
(485,411
|
)
|
|
—
|
|
|
—
|
|
|
(485,411
|
)
|
|
—
|
|
|
—
|
|
|
(485,411
|
)
|
|||||||
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105,641
|
)
|
|
52,806
|
|
|
(52,835
|
)
|
|||||||
Excess tax benefit from equity-based compensation
|
|
2,739
|
|
|
—
|
|
|
—
|
|
|
2,739
|
|
|
—
|
|
|
—
|
|
|
2,739
|
|
|||||||
Purchase of units for incentive grants - HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,379
|
)
|
|
—
|
|
|
(3,379
|
)
|
|||||||
Other
|
|
—
|
|
|
912
|
|
|
—
|
|
|
912
|
|
|
(244
|
)
|
|
—
|
|
|
668
|
|
|||||||
|
|
(895,148
|
)
|
|
912
|
|
|
(1,499
|
)
|
|
(895,735
|
)
|
|
(90,321
|
)
|
|
52,806
|
|
|
(933,250
|
)
|
|||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Increase (decrease) for the period
|
|
(465,545
|
)
|
|
(3,652
|
)
|
|
(1
|
)
|
|
(469,198
|
)
|
|
5,983
|
|
|
—
|
|
|
(463,215
|
)
|
|||||||
Beginning of period
|
|
1,748,808
|
|
|
3,652
|
|
|
2
|
|
|
1,752,462
|
|
|
5,237
|
|
|
—
|
|
|
1,757,699
|
|
|||||||
End of period
|
|
$
|
1,283,263
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1,283,264
|
|
|
$
|
11,220
|
|
|
$
|
—
|
|
|
$
|
1,294,484
|
|
Condensed Consolidating Statement of Cash Flows
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Nine Months Ended September 30, 2012
|
|
Parent
|
|
Guarantor
Restricted
Subsidiaries
|
|
Non-
Guarantor
Restricted
Subsidiaries
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
Non-Guarantor
Non-Restricted
Subsidiaries
(HEP Segment)
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||
Cash flows from operating activities
|
|
$
|
1,260,731
|
|
|
$
|
(142,743
|
)
|
|
$
|
—
|
|
|
$
|
1,117,988
|
|
|
$
|
100,652
|
|
|
$
|
(46,852
|
)
|
|
$
|
1,171,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Additions to properties, plants and equip
|
|
(4,993
|
)
|
|
(173,242
|
)
|
|
—
|
|
|
(178,235
|
)
|
|
—
|
|
|
—
|
|
|
(178,235
|
)
|
|||||||
Additions to properties, plants and equip – HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,302
|
)
|
|
—
|
|
|
(29,302
|
)
|
|||||||
Investment in Sabine Biofuels
|
|
—
|
|
|
(2,000
|
)
|
|
—
|
|
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|||||||
Purchases of marketable securities
|
|
(236,315
|
)
|
|
—
|
|
|
—
|
|
|
(236,315
|
)
|
|
—
|
|
|
—
|
|
|
(236,315
|
)
|
|||||||
Sales and maturities of marketable securities
|
|
211,286
|
|
|
930
|
|
|
—
|
|
|
212,216
|
|
|
—
|
|
|
—
|
|
|
212,216
|
|
|||||||
|
|
(30,022
|
)
|
|
(174,312
|
)
|
|
—
|
|
|
(204,334
|
)
|
|
(29,302
|
)
|
|
—
|
|
|
(233,636
|
)
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net borrowings under credit agreement – HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
231,000
|
|
|
—
|
|
|
231,000
|
|
|||||||
Repayment of promissory notes
|
|
—
|
|
|
72,900
|
|
|
—
|
|
|
72,900
|
|
|
(72,900
|
)
|
|
—
|
|
|
—
|
|
|||||||
Net proceeds from issuance of senior notes - HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
294,750
|
|
|
—
|
|
|
294,750
|
|
|||||||
Redemption of senior notes - HFC
|
|
(205,000
|
)
|
|
—
|
|
|
—
|
|
|
(205,000
|
)
|
|
—
|
|
|
—
|
|
|
(205,000
|
)
|
|||||||
Principal tender on senior notes - HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(185,000
|
)
|
|
—
|
|
|
(185,000
|
)
|
|||||||
Purchase of treasury stock
|
|
(190,307
|
)
|
|
—
|
|
|
—
|
|
|
(190,307
|
)
|
|
—
|
|
|
—
|
|
|
(190,307
|
)
|
|||||||
Structured stock repurchase arrangement
|
|
8,620
|
|
|
—
|
|
|
—
|
|
|
8,620
|
|
|
—
|
|
|
—
|
|
|
8,620
|
|
|||||||
Contribution to HEP
|
|
—
|
|
|
(10,286
|
)
|
|
—
|
|
|
(10,286
|
)
|
|
10,286
|
|
|
—
|
|
|
—
|
|
|||||||
Contribution from joint venture partner
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,000
|
|
|
—
|
|
|
6,000
|
|
|||||||
Distribution from HEP upon UNEV transfer
|
|
—
|
|
|
260,922
|
|
|
—
|
|
|
260,922
|
|
|
(260,922
|
)
|
|
—
|
|
|
—
|
|
|||||||
Dividends
|
|
(382,610
|
)
|
|
—
|
|
|
—
|
|
|
(382,610
|
)
|
|
—
|
|
|
—
|
|
|
(382,610
|
)
|
|||||||
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,063
|
)
|
|
47,314
|
|
|
(43,749
|
)
|
|||||||
Excess tax benefit from equity-based compensation
|
|
16,021
|
|
|
—
|
|
|
—
|
|
|
16,021
|
|
|
—
|
|
|
—
|
|
|
16,021
|
|
|||||||
Purchase of units for incentive grants - HEP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,919
|
)
|
|
—
|
|
|
(4,919
|
)
|
|||||||
Deferred financing costs and other
|
|
—
|
|
|
(1,034
|
)
|
|
—
|
|
|
(1,034
|
)
|
|
(2,958
|
)
|
|
(462
|
)
|
|
(4,454
|
)
|
|||||||
|
|
(753,276
|
)
|
|
322,502
|
|
|
—
|
|
|
(430,774
|
)
|
|
(75,726
|
)
|
|
46,852
|
|
|
(459,648
|
)
|
|||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Increase (decrease) for the period:
|
|
477,433
|
|
|
5,447
|
|
|
—
|
|
|
482,880
|
|
|
(4,376
|
)
|
|
—
|
|
|
478,504
|
|
|||||||
Beginning of period
|
|
1,575,891
|
|
|
(3,358
|
)
|
|
2
|
|
|
1,572,535
|
|
|
6,369
|
|
|
—
|
|
|
1,578,904
|
|
|||||||
End of period
|
|
$
|
2,053,324
|
|
|
$
|
2,089
|
|
|
$
|
2
|
|
|
$
|
2,055,415
|
|
|
$
|
1,993
|
|
|
$
|
—
|
|
|
$
|
2,057,408
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended September 30,
|
|
Change from 2012
|
|||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
Percent
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||
Sales and other revenues
|
|
$
|
5,327,122
|
|
|
$
|
5,204,798
|
|
|
$
|
122,324
|
|
|
2
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of products sold (exclusive of depreciation and amortization)
|
|
4,809,990
|
|
|
3,898,736
|
|
|
911,254
|
|
|
23
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
256,318
|
|
|
233,859
|
|
|
22,459
|
|
|
10
|
|
|||
General and administrative expenses (exclusive of depreciation and amortization)
|
|
28,937
|
|
|
28,787
|
|
|
150
|
|
|
1
|
|
|||
Depreciation and amortization
|
|
82,127
|
|
|
65,112
|
|
|
17,015
|
|
|
26
|
|
|||
Total operating costs and expenses
|
|
5,177,372
|
|
|
4,226,494
|
|
|
950,878
|
|
|
22
|
|
|||
Income from operations
|
|
149,750
|
|
|
978,304
|
|
|
(828,554
|
)
|
|
(85
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings (loss) of equity method investments
|
|
159
|
|
|
852
|
|
|
(693
|
)
|
|
(81
|
)
|
|||
Interest income
|
|
1,482
|
|
|
2,219
|
|
|
(737
|
)
|
|
(33
|
)
|
|||
Interest expense
|
|
(13,954
|
)
|
|
(21,103
|
)
|
|
7,149
|
|
|
(34
|
)
|
|||
|
|
(12,313
|
)
|
|
(18,032
|
)
|
|
5,719
|
|
|
(32
|
)
|
|||
Income before income taxes
|
|
137,437
|
|
|
960,272
|
|
|
(822,835
|
)
|
|
(86
|
)
|
|||
Income tax provision
|
|
48,528
|
|
|
349,622
|
|
|
(301,094
|
)
|
|
(86
|
)
|
|||
Net income
|
|
88,909
|
|
|
610,650
|
|
|
(521,741
|
)
|
|
(85
|
)
|
|||
Less net income attributable to noncontrolling interest
|
|
6,619
|
|
|
10,277
|
|
|
(3,658
|
)
|
|
(36
|
)
|
|||
Net income attributable to HollyFrontier stockholders
|
|
$
|
82,290
|
|
|
$
|
600,373
|
|
|
$
|
(518,083
|
)
|
|
(86
|
)%
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
0.41
|
|
|
$
|
2.95
|
|
|
$
|
(2.54
|
)
|
|
(86
|
)%
|
Diluted
|
|
$
|
0.41
|
|
|
$
|
2.94
|
|
|
$
|
(2.53
|
)
|
|
(86
|
)%
|
Cash dividends declared per common share
|
|
$
|
0.80
|
|
|
$
|
1.15
|
|
|
$
|
(0.35
|
)
|
|
(30
|
)%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
199,098
|
|
|
202,655
|
|
|
(3,557
|
)
|
|
(2
|
)%
|
|||
Diluted
|
|
199,509
|
|
|
203,532
|
|
|
(4,023
|
)
|
|
(2
|
)%
|
|
|
Nine Months Ended September 30,
|
|
Change from 2012
|
|||||||||||
|
|
2013
|
|
2012
|
|
Change
|
|
Percent
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||
Sales and other revenues
|
|
$
|
15,333,759
|
|
|
$
|
14,943,217
|
|
|
$
|
390,542
|
|
|
3
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of products sold (exclusive of depreciation and amortization)
|
|
13,059,333
|
|
|
11,767,417
|
|
|
1,291,916
|
|
|
11
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
798,959
|
|
|
698,212
|
|
|
100,747
|
|
|
14
|
|
|||
General and administrative expenses (exclusive of depreciation and amortization)
|
|
92,135
|
|
|
88,421
|
|
|
3,714
|
|
|
4
|
|
|||
Depreciation and amortization
|
|
224,381
|
|
|
178,162
|
|
|
46,219
|
|
|
26
|
|
|||
Total operating costs and expenses
|
|
14,174,808
|
|
|
12,732,212
|
|
|
1,442,596
|
|
|
11
|
|
|||
Income from operations
|
|
1,158,951
|
|
|
2,211,005
|
|
|
(1,052,054
|
)
|
|
(48
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings (loss) of equity method investments
|
|
(871
|
)
|
|
2,455
|
|
|
(3,326
|
)
|
|
(135
|
)
|
|||
Interest income
|
|
3,791
|
|
|
3,360
|
|
|
431
|
|
|
13
|
|
|||
Interest expense
|
|
(55,068
|
)
|
|
(81,360
|
)
|
|
26,292
|
|
|
(32
|
)
|
|||
Loss on early extinguishment of debt
|
|
(22,109
|
)
|
|
—
|
|
|
(22,109
|
)
|
|
—
|
|
|||
Gain on sale of marketable securities
|
|
—
|
|
|
326
|
|
|
(326
|
)
|
|
(100
|
)
|
|||
|
|
(74,257
|
)
|
|
(75,219
|
)
|
|
962
|
|
|
(1
|
)
|
|||
Income before income taxes
|
|
1,084,694
|
|
|
2,135,786
|
|
|
(1,051,092
|
)
|
|
(49
|
)
|
|||
Income tax provision
|
|
386,665
|
|
|
775,746
|
|
|
(389,081
|
)
|
|
(50
|
)
|
|||
Net income
|
|
698,029
|
|
|
1,360,040
|
|
|
(662,011
|
)
|
|
(49
|
)
|
|||
Less net income attributable to noncontrolling interest
|
|
25,089
|
|
|
24,472
|
|
|
617
|
|
|
3
|
|
|||
Net income attributable to HollyFrontier stockholders
|
|
$
|
672,940
|
|
|
$
|
1,335,568
|
|
|
$
|
(662,628
|
)
|
|
(50
|
)%
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
3.33
|
|
|
$
|
6.46
|
|
|
$
|
(3.13
|
)
|
|
(48
|
)%
|
Diluted
|
|
$
|
3.33
|
|
|
$
|
6.44
|
|
|
$
|
(3.11
|
)
|
|
(48
|
)%
|
Cash dividends declared per common share
|
|
$
|
2.40
|
|
|
$
|
2.40
|
|
|
$
|
—
|
|
|
—
|
%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
201,109
|
|
|
205,768
|
|
|
(4,659
|
)
|
|
(2
|
)%
|
|||
Diluted
|
|
201,486
|
|
|
206,654
|
|
|
(5,168
|
)
|
|
(3
|
)%
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
|
(Unaudited)
|
|
|
||||
|
|
(In thousands)
|
||||||
Cash, cash equivalents and investments in marketable securities
|
|
$
|
1,956,648
|
|
|
$
|
2,393,401
|
|
Working capital
|
|
$
|
2,516,187
|
|
|
$
|
2,815,821
|
|
Total assets
|
|
$
|
10,498,644
|
|
|
$
|
10,328,997
|
|
Long-term debt
|
|
$
|
999,884
|
|
|
$
|
1,336,238
|
|
Total equity
|
|
$
|
6,796,150
|
|
|
$
|
6,642,658
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Net cash provided by operating activities
|
|
$
|
350,648
|
|
|
$
|
742,285
|
|
|
$
|
802,163
|
|
|
$
|
1,171,788
|
|
Net cash used for investing activities
|
|
$
|
(151,035
|
)
|
|
$
|
(89,183
|
)
|
|
$
|
(332,128
|
)
|
|
$
|
(233,636
|
)
|
Net cash provided by (used for) financing activities
|
|
$
|
(254,549
|
)
|
|
$
|
32,108
|
|
|
$
|
(933,250
|
)
|
|
$
|
(459,648
|
)
|
Capital expenditures
|
|
$
|
115,386
|
|
|
$
|
79,517
|
|
|
$
|
286,189
|
|
|
$
|
207,537
|
|
EBITDA
(1)
|
|
$
|
225,417
|
|
|
$
|
1,033,991
|
|
|
$
|
1,357,372
|
|
|
$
|
2,367,476
|
|
(1)
|
Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA”, is calculated as net income plus (i) interest expense, net of interest income, (ii) income tax provision, and (iii) depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative 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 is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants. EBITDA presented above is reconciled to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries)
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
248,130
|
|
|
256,850
|
|
|
231,490
|
|
|
252,110
|
|
||||
Refinery throughput (BPD)
(2)
|
|
264,900
|
|
|
278,990
|
|
|
252,630
|
|
|
270,380
|
|
||||
Refinery production (BPD)
(3)
|
|
257,410
|
|
|
268,310
|
|
|
246,120
|
|
|
262,830
|
|
||||
Sales of produced refined products (BPD)
|
|
261,270
|
|
|
246,360
|
|
|
239,080
|
|
|
249,320
|
|
||||
Sales of refined products (BPD)
(4)
|
|
274,350
|
|
|
248,690
|
|
|
263,430
|
|
|
253,050
|
|
||||
Refinery utilization
(5)
|
|
95.4
|
%
|
|
98.8
|
%
|
|
89.0
|
%
|
|
97.0
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
120.09
|
|
|
$
|
121.83
|
|
|
$
|
118.30
|
|
|
$
|
120.19
|
|
Cost of products
(7)
|
|
107.61
|
|
|
92.84
|
|
|
99.89
|
|
|
96.49
|
|
||||
Refinery gross margin
|
|
12.48
|
|
|
28.99
|
|
|
18.41
|
|
|
23.70
|
|
||||
Refinery operating expenses
(8)
|
|
4.93
|
|
|
4.71
|
|
|
5.59
|
|
|
4.72
|
|
||||
Net operating margin
|
|
$
|
7.55
|
|
|
$
|
24.28
|
|
|
$
|
12.82
|
|
|
$
|
18.98
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(9)
|
|
$
|
4.86
|
|
|
$
|
4.16
|
|
|
$
|
5.29
|
|
|
$
|
4.35
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
71
|
%
|
|
69
|
%
|
|
72
|
%
|
|
70
|
%
|
||||
Sour crude oil
|
|
8
|
%
|
|
9
|
%
|
|
5
|
%
|
|
8
|
%
|
||||
Heavy sour crude oil
|
|
15
|
%
|
|
14
|
%
|
|
15
|
%
|
|
15
|
%
|
||||
Other feedstocks and blends
|
|
6
|
%
|
|
8
|
%
|
|
8
|
%
|
|
7
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Mid-Continent Region (El Dorado and Tulsa Refineries)
|
|
|
|
|
|
|
|
|
||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||
Gasolines
|
|
47
|
%
|
|
50
|
%
|
|
46
|
%
|
|
47
|
%
|
Diesel fuels
|
|
33
|
%
|
|
26
|
%
|
|
32
|
%
|
|
29
|
%
|
Jet fuels
|
|
6
|
%
|
|
10
|
%
|
|
8
|
%
|
|
10
|
%
|
Fuel oil
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Asphalt
|
|
3
|
%
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
Lubricants
|
|
4
|
%
|
|
5
|
%
|
|
4
|
%
|
|
5
|
%
|
LPG and other
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Southwest Region (Navajo Refinery)
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
100,950
|
|
|
101,480
|
|
|
92,470
|
|
|
91,890
|
|
||||
Refinery throughput (BPD)
(2)
|
|
110,380
|
|
|
110,080
|
|
|
102,010
|
|
|
100,558
|
|
||||
Refinery production (BPD)
(3)
|
|
107,770
|
|
|
108,810
|
|
|
98,910
|
|
|
98,980
|
|
||||
Sales of produced refined products (BPD)
|
|
108,420
|
|
|
106,370
|
|
|
96,940
|
|
|
97,470
|
|
||||
Sales of refined products (BPD)
(4)
|
|
112,660
|
|
|
110,760
|
|
|
107,490
|
|
|
102,450
|
|
||||
Refinery utilization
(5)
|
|
101.0
|
%
|
|
101.5
|
%
|
|
92.5
|
%
|
|
91.9
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
119.68
|
|
|
$
|
122.16
|
|
|
$
|
119.23
|
|
|
$
|
123.64
|
|
Cost of products
(7)
|
|
113.17
|
|
|
92.26
|
|
|
103.96
|
|
|
97.37
|
|
||||
Refinery gross margin
|
|
6.51
|
|
|
29.90
|
|
|
15.27
|
|
|
26.27
|
|
||||
Refinery operating expenses
(8)
|
|
5.15
|
|
|
5.14
|
|
|
5.84
|
|
|
5.57
|
|
||||
Net operating margin
|
|
$
|
1.36
|
|
|
$
|
24.76
|
|
|
$
|
9.43
|
|
|
$
|
20.70
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(9)
|
|
$
|
5.06
|
|
|
$
|
4.97
|
|
|
$
|
5.55
|
|
|
$
|
5.40
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
13
|
%
|
|
2
|
%
|
|
8
|
%
|
|
2
|
%
|
||||
Sour crude oil
|
|
69
|
%
|
|
75
|
%
|
|
72
|
%
|
|
78
|
%
|
||||
Heavy sour crude oil
|
|
10
|
%
|
|
16
|
%
|
|
11
|
%
|
|
11
|
%
|
||||
Other feedstocks and blends
|
|
8
|
%
|
|
7
|
%
|
|
9
|
%
|
|
9
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||||||
Gasolines
|
|
50
|
%
|
|
52
|
%
|
|
50
|
%
|
|
52
|
%
|
||||
Diesel fuels
|
|
40
|
%
|
|
36
|
%
|
|
39
|
%
|
|
37
|
%
|
||||
Fuel oil
|
|
6
|
%
|
|
7
|
%
|
|
6
|
%
|
|
6
|
%
|
||||
Asphalt
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
||||
LPG and other
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
|
|
|
|
|
|
|
|
|
||||
Crude charge (BPD)
(1)
|
|
67,830
|
|
|
75,040
|
|
|
69,170
|
|
|
73,660
|
|
Refinery throughput (BPD)
(2)
|
|
72,960
|
|
|
82,030
|
|
|
74,800
|
|
|
81,550
|
|
Refinery production (BPD)
(3)
|
|
70,630
|
|
|
79,500
|
|
|
72,330
|
|
|
79,650
|
|
Sales of produced refined products (BPD)
|
|
71,690
|
|
|
81,200
|
|
|
72,650
|
|
|
79,360
|
|
Sales of refined products (BPD)
(4)
|
|
73,110
|
|
|
83,080
|
|
|
75,560
|
|
|
81,590
|
|
Refinery utilization
(5)
|
|
81.7
|
%
|
|
90.4
|
%
|
|
83.3
|
%
|
|
88.7
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
117.87
|
|
|
$
|
120.44
|
|
|
$
|
114.30
|
|
|
$
|
117.51
|
|
Cost of products
(7)
|
|
107.67
|
|
|
84.35
|
|
|
95.57
|
|
|
88.87
|
|
||||
Refinery gross margin
|
|
10.20
|
|
|
36.09
|
|
|
18.73
|
|
|
28.64
|
|
||||
Refinery operating expenses
(8)
|
|
8.25
|
|
|
6.30
|
|
|
7.94
|
|
|
6.30
|
|
||||
Net operating margin
|
|
$
|
1.95
|
|
|
$
|
29.79
|
|
|
$
|
10.79
|
|
|
$
|
22.34
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(9)
|
|
$
|
8.11
|
|
|
$
|
6.24
|
|
|
$
|
7.71
|
|
|
$
|
6.13
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
43
|
%
|
|
51
|
%
|
|
43
|
%
|
|
44
|
%
|
||||
Sour crude oil
|
|
1
|
%
|
|
2
|
%
|
|
1
|
%
|
|
2
|
%
|
||||
Heavy sour crude oil
|
|
35
|
%
|
|
28
|
%
|
|
34
|
%
|
|
33
|
%
|
||||
Black wax crude oil
|
|
14
|
%
|
|
11
|
%
|
|
14
|
%
|
|
11
|
%
|
||||
Other feedstocks and blends
|
|
7
|
%
|
|
8
|
%
|
|
8
|
%
|
|
10
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||||||
Gasolines
|
|
54
|
%
|
|
56
|
%
|
|
54
|
%
|
|
55
|
%
|
||||
Diesel fuels
|
|
32
|
%
|
|
31
|
%
|
|
32
|
%
|
|
31
|
%
|
||||
Fuel oil
|
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
|
2
|
%
|
||||
Asphalt
|
|
5
|
%
|
|
7
|
%
|
|
6
|
%
|
|
6
|
%
|
||||
LPG and other
|
|
7
|
%
|
|
4
|
%
|
|
7
|
%
|
|
6
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
416,910
|
|
|
433,370
|
|
|
393,130
|
|
|
417,660
|
|
||||
Refinery throughput (BPD)
(2)
|
|
448,240
|
|
|
471,100
|
|
|
429,440
|
|
|
452,488
|
|
||||
Refinery production (BPD)
(3)
|
|
435,810
|
|
|
456,620
|
|
|
417,360
|
|
|
441,460
|
|
||||
Sales of produced refined products (BPD)
|
|
441,380
|
|
|
433,930
|
|
|
408,670
|
|
|
426,150
|
|
||||
Sales of refined products (BPD)
(4)
|
|
460,120
|
|
|
442,530
|
|
|
446,480
|
|
|
437,090
|
|
||||
Refinery utilization
(5)
|
|
94.1
|
%
|
|
97.8
|
%
|
|
88.7
|
%
|
|
94.3
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
119.62
|
|
|
$
|
121.66
|
|
|
$
|
117.81
|
|
|
$
|
120.48
|
|
Cost of products
(7)
|
|
108.98
|
|
|
91.11
|
|
|
100.09
|
|
|
95.28
|
|
||||
Refinery gross margin
|
|
10.64
|
|
|
30.55
|
|
|
17.72
|
|
|
25.20
|
|
||||
Refinery operating expenses
(8)
|
|
5.53
|
|
|
5.11
|
|
|
6.07
|
|
|
5.21
|
|
||||
Net operating margin
|
|
$
|
5.11
|
|
|
$
|
25.44
|
|
|
$
|
11.65
|
|
|
$
|
19.99
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(9)
|
|
$
|
5.44
|
|
|
$
|
4.71
|
|
|
$
|
5.77
|
|
|
$
|
4.91
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
52
|
%
|
|
50
|
%
|
|
52
|
%
|
|
49
|
%
|
||||
Sour crude oil
|
|
22
|
%
|
|
23
|
%
|
|
20
|
%
|
|
22
|
%
|
||||
Heavy sour crude oil
|
|
17
|
%
|
|
17
|
%
|
|
17
|
%
|
|
16
|
%
|
||||
Black wax crude oil
|
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
||||
Other feedstocks and blends
|
|
7
|
%
|
|
8
|
%
|
|
8
|
%
|
|
11
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Consolidated
|
|
|
|
|
|
|
|
|
||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||
Gasolines
|
|
49
|
%
|
|
51
|
%
|
|
49
|
%
|
|
50
|
%
|
Diesel fuels
|
|
35
|
%
|
|
29
|
%
|
|
34
|
%
|
|
31
|
%
|
Jet fuels
|
|
4
|
%
|
|
6
|
%
|
|
4
|
%
|
|
6
|
%
|
Fuel oil
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
Asphalt
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
Lubricants
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
|
3
|
%
|
LPG and other
|
|
5
|
%
|
|
5
|
%
|
|
6
|
%
|
|
5
|
%
|
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). Our consolidated crude capacity is 443,000 BPSD.
|
(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” following Item 3 of Part I of this Form 10-Q.
|
(7)
|
Transportation, terminal and refinery storage costs billed from HEP are included in cost of products.
|
(8)
|
Represents operating expenses of our refineries, exclusive of depreciation and amortization and pension settlement costs.
|
(9)
|
Represents refinery operating expenses, exclusive of depreciation and amortization and pension settlement costs, divided by refinery throughput.
|
•
|
8.25% HEP senior notes (
$150 million
principal amount maturing March 2018)
|
•
|
6.5% HEP senior notes (
$300 million
principal amount maturing March 2020)
|
•
|
our inventory positions;
|
•
|
natural gas purchases;
|
•
|
costs of crude oil and related grade differentials;
|
•
|
prices of refined products; and
|
•
|
our refining margins.
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
||||||||||||||
Contract Description
|
|
Total Outstanding Notional
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Unit of Measure
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Natural gas price swap - long
|
|
81,600,000
|
|
|
4,800,000
|
|
|
19,200,000
|
|
|
19,200,000
|
|
|
19,200,000
|
|
|
19,200,000
|
|
|
MMBTU
|
Natural gas price swap - short
|
|
40,800,000
|
|
|
2,400,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
9,600,000
|
|
|
MMBTU
|
WTI price swap - long
|
|
11,610,500
|
|
|
2,668,000
|
|
|
8,942,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
Ultra-low sulfur diesel price swap - short
|
|
11,610,500
|
|
|
2,668,000
|
|
|
8,942,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
WCS price swap - long
|
|
3,801,500
|
|
|
1,794,000
|
|
|
2,007,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
WTS price swap - long
|
|
736,000
|
|
|
736,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
NYMEX futures (WTI) - short
|
|
2,536,000
|
|
|
2,139,000
|
|
|
397,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|
|
Derivative Fair Value Gain (Loss) at September 30,
|
||||||
Change in Underlying Commodity Prices of Hedged Positions
|
|
2013
|
|
2012
|
||||
|
|
(In thousands)
|
||||||
10% increase in underlying commodity prices
|
|
$
|
(49,302
|
)
|
|
$
|
(80,754
|
)
|
10% decrease in underlying commodity prices
|
|
$
|
49,302
|
|
|
$
|
80,754
|
|
|
|
Outstanding
Principal
|
|
Estimated
Fair Value
|
|
Estimated
Change in
Fair Value
|
||||||
|
|
(In thousands)
|
||||||||||
HollyFrontier Senior Notes
|
|
$
|
150,000
|
|
|
$
|
161,062
|
|
|
$
|
3,650
|
|
HEP Senior Notes
|
|
$
|
450,000
|
|
|
$
|
465,375
|
|
|
$
|
13,824
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
82,290
|
|
|
$
|
600,373
|
|
|
$
|
672,940
|
|
|
$
|
1,335,568
|
|
Add income tax provision
|
|
48,528
|
|
|
349,622
|
|
|
386,665
|
|
|
775,746
|
|
||||
Add interest expense
(1)
|
|
13,954
|
|
|
21,103
|
|
|
77,177
|
|
|
81,360
|
|
||||
Subtract interest income
|
|
(1,482
|
)
|
|
(2,219
|
)
|
|
(3,791
|
)
|
|
(3,360
|
)
|
||||
Add depreciation and amortization
|
|
82,127
|
|
|
65,112
|
|
|
224,381
|
|
|
178,162
|
|
||||
EBITDA
|
|
$
|
225,417
|
|
|
$
|
1,033,991
|
|
|
$
|
1,357,372
|
|
|
$
|
2,367,476
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Average sales price per produced barrel sold
|
$
|
119.62
|
|
|
$
|
121.66
|
|
|
$
|
117.81
|
|
|
$
|
120.48
|
|
Times sales of produced refined products sold (BPD)
|
441,380
|
|
|
433,930
|
|
|
408,670
|
|
|
426,150
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Refined product sales from produced products sold
|
$
|
4,857,405
|
|
|
$
|
4,856,857
|
|
|
$
|
13,143,698
|
|
|
$
|
14,067,859
|
|
|
|
|
|
|
|
|
|
||||||||
Total refined product sales from produced products sold
|
$
|
4,857,405
|
|
|
$
|
4,856,857
|
|
|
$
|
13,143,698
|
|
|
$
|
14,067,859
|
|
Add refined product sales from purchased products and rounding
(1)
|
214,892
|
|
|
100,674
|
|
|
1,281,251
|
|
|
376,813
|
|
||||
Total refined product sales
|
5,072,297
|
|
|
4,957,531
|
|
|
14,424,949
|
|
|
14,444,672
|
|
||||
Add direct sales of excess crude oil
(2)
|
200,073
|
|
|
187,196
|
|
|
758,847
|
|
|
378,036
|
|
||||
Add other refining segment revenue
(3)
|
42,584
|
|
|
47,922
|
|
|
110,465
|
|
|
85,325
|
|
||||
Total refining segment revenue
|
5,314,954
|
|
|
5,192,649
|
|
|
15,294,261
|
|
|
14,908,033
|
|
||||
Add HEP segment sales and other revenues
|
77,625
|
|
|
72,570
|
|
|
229,230
|
|
|
207,250
|
|
||||
Add corporate and other revenues
|
257
|
|
|
352
|
|
|
1,054
|
|
|
653
|
|
||||
Subtract consolidations and eliminations
|
(65,714
|
)
|
|
(60,773
|
)
|
|
(190,786
|
)
|
|
(172,719
|
)
|
||||
Sales and other revenues
|
$
|
5,327,122
|
|
|
$
|
5,204,798
|
|
|
$
|
15,333,759
|
|
|
$
|
14,943,217
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Average cost of products per produced barrel sold
|
$
|
108.98
|
|
|
$
|
91.11
|
|
|
$
|
100.09
|
|
|
$
|
95.28
|
|
Times sales of produced refined products sold (BPD)
|
441,380
|
|
|
433,930
|
|
|
408,670
|
|
|
426,150
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Cost of products for produced products sold
|
$
|
4,425,347
|
|
|
$
|
3,637,253
|
|
|
$
|
11,166,732
|
|
|
$
|
11,125,379
|
|
|
|
|
|
|
|
|
|
||||||||
Total cost of products for produced products sold
|
$
|
4,425,347
|
|
|
$
|
3,637,253
|
|
|
$
|
11,166,732
|
|
|
$
|
11,125,379
|
|
Add refined product costs from purchased products and rounding
(1)
|
213,114
|
|
|
100,078
|
|
|
1,253,932
|
|
|
377,476
|
|
||||
Total cost of refined products sold
|
4,638,461
|
|
|
3,737,331
|
|
|
12,420,664
|
|
|
11,502,855
|
|
||||
Add crude oil cost of direct sales of excess crude oil
(2)
|
198,885
|
|
|
182,252
|
|
|
744,806
|
|
|
367,795
|
|
||||
Add other refining segment cost of products sold
(4)
|
37,257
|
|
|
38,817
|
|
|
81,413
|
|
|
67,259
|
|
||||
Total refining segment cost of products sold
|
4,874,603
|
|
|
3,958,400
|
|
|
13,246,883
|
|
|
11,937,909
|
|
||||
Subtract consolidations and eliminations
|
(64,613
|
)
|
|
(59,664
|
)
|
|
(187,550
|
)
|
|
(170,492
|
)
|
||||
Costs of products sold (exclusive of depreciation and amortization)
|
$
|
4,809,990
|
|
|
$
|
3,898,736
|
|
|
$
|
13,059,333
|
|
|
$
|
11,767,417
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Average refinery operating expenses per produced barrel sold
|
$
|
5.53
|
|
|
$
|
5.11
|
|
|
$
|
6.07
|
|
|
$
|
5.21
|
|
Times sales of produced refined products sold (BPD)
|
441,380
|
|
|
433,930
|
|
|
408,670
|
|
|
426,150
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Refinery operating expenses for produced products sold
|
$
|
224,556
|
|
|
$
|
203,999
|
|
|
$
|
677,211
|
|
|
$
|
608,346
|
|
|
|
|
|
|
|
|
|
||||||||
Total refinery operating expenses for produced products sold
|
$
|
224,556
|
|
|
$
|
203,999
|
|
|
$
|
677,211
|
|
|
$
|
608,346
|
|
Add refining segment pension settlement costs
|
—
|
|
|
—
|
|
|
23,773
|
|
|
—
|
|
||||
Add other refining segment operating expenses and rounding
(5)
|
10,206
|
|
|
8,858
|
|
|
29,213
|
|
|
28,127
|
|
||||
Total refining segment operating expenses
|
234,762
|
|
|
212,857
|
|
|
730,197
|
|
|
636,473
|
|
||||
Add HEP segment operating expenses
|
21,687
|
|
|
21,323
|
|
|
69,726
|
|
|
61,724
|
|
||||
Add corporate and other costs
|
225
|
|
|
33
|
|
|
87
|
|
|
33
|
|
||||
Subtract consolidations and eliminations
|
(356
|
)
|
|
(354
|
)
|
|
(1,051
|
)
|
|
(18
|
)
|
||||
Operating expenses (exclusive of depreciation and amortization)
|
$
|
256,318
|
|
|
$
|
233,859
|
|
|
$
|
798,959
|
|
|
$
|
698,212
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Net operating margin per barrel
|
$
|
5.11
|
|
|
$
|
25.44
|
|
|
$
|
11.65
|
|
|
$
|
19.99
|
|
Add average refinery operating expenses per produced barrel
|
5.53
|
|
|
5.11
|
|
|
6.07
|
|
|
5.21
|
|
||||
Refinery gross margin per barrel
|
10.64
|
|
|
30.55
|
|
|
17.72
|
|
|
25.20
|
|
||||
Add average cost of products per produced barrel sold
|
108.98
|
|
|
91.11
|
|
|
100.09
|
|
|
95.28
|
|
||||
Average sales price per produced barrel sold
|
$
|
119.62
|
|
|
$
|
121.66
|
|
|
$
|
117.81
|
|
|
$
|
120.48
|
|
Times sales of produced refined products sold (BPD)
|
441,380
|
|
|
433,930
|
|
|
408,670
|
|
|
426,150
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Refined product sales from produced products sold
|
$
|
4,857,405
|
|
|
$
|
4,856,857
|
|
|
$
|
13,143,698
|
|
|
$
|
14,067,859
|
|
|
|
|
|
|
|
|
|
||||||||
Total refined product sales from produced products sold
|
$
|
4,857,405
|
|
|
$
|
4,856,857
|
|
|
$
|
13,143,698
|
|
|
$
|
14,067,859
|
|
Add refined product sales from purchased products and rounding
(1)
|
214,892
|
|
|
100,674
|
|
|
1,281,251
|
|
|
376,813
|
|
||||
Total refined product sales
|
5,072,297
|
|
|
4,957,531
|
|
|
14,424,949
|
|
|
14,444,672
|
|
||||
Add direct sales of excess crude oil
(2)
|
200,073
|
|
|
187,196
|
|
|
758,847
|
|
|
378,036
|
|
||||
Add other refining segment revenue
(3)
|
42,584
|
|
|
47,922
|
|
|
110,465
|
|
|
85,325
|
|
||||
Total refining segment revenue
|
5,314,954
|
|
|
5,192,649
|
|
|
15,294,261
|
|
|
14,908,033
|
|
||||
Add HEP segment sales and other revenues
|
77,625
|
|
|
72,570
|
|
|
229,230
|
|
|
207,250
|
|
||||
Add corporate and other revenues
|
257
|
|
|
352
|
|
|
1,054
|
|
|
653
|
|
||||
Subtract consolidations and eliminations
|
(65,714
|
)
|
|
(60,773
|
)
|
|
(190,786
|
)
|
|
(172,719
|
)
|
||||
Sales and other revenues
|
$
|
5,327,122
|
|
|
$
|
5,204,798
|
|
|
$
|
15,333,759
|
|
|
$
|
14,943,217
|
|
(1)
|
We purchase finished products when opportunities arise that provide a profit on the sale of such products, 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 carryover cost.
|
(3)
|
Other refining segment revenue includes the incremental revenues associated with NK Asphalt and miscellaneous revenue.
|
(4)
|
Other refining segment cost of products sold includes the incremental cost of products for NK Asphalt and miscellaneous costs.
|
(5)
|
Other refining segment operating expenses include the marketing costs associated with our refining segment and the operating expenses of NK Asphalt.
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar
Value of Shares
that May Yet Be
Purchased Under the Plans or Programs
|
||||||
July 2013
|
|
199,931
|
|
|
$
|
39.70
|
|
|
199,931
|
|
|
$
|
348,435,620
|
|
August 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
348,435,620
|
|
September 2013
|
|
398,741
|
|
|
$
|
42.55
|
|
|
398,741
|
|
|
$
|
331,467,542
|
|
Total for July to September 2013
|
|
598,672
|
|
|
|
|
598,672
|
|
|
|
Item 6.
|
Exhibits
|
|
|
|
|
|
|
HOLLYFRONTIER CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: November 7, 2013
|
|
|
/s/ Douglas S. Aron
|
|
|
|
Douglas S. Aron
|
|
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
Date: November 7, 2013
|
|
|
/s/ J. W. Gann, Jr.
|
|
|
|
J. W. Gann, Jr.
|
|
|
|
Vice President, Controller and
Chief Accounting Officer
(Principal Accounting Officer)
|
Exhibit Number
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K filed July 8, 2011, File No. 1-03876).
|
|
|
|
3.2
|
|
Amended and Restated By-Laws of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K filed November 21, 2011, File No. 1-03876).
|
|
|
|
4.1*
|
|
Fourth Supplemental Indenture, dated September 6, 2013, among HollyFrontier Corporation, as issuer (as successor-in-interest to Frontier Oil Corporation), the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (supplemental to Indenture dated November 22, 2010, providing for the issuance of 6 7/8% Senior Notes due 2018).
|
|
|
|
10.1
|
|
Transportation Services Agreement, dated July 16, 2013, by and between HollyFrontier Refining & Marketing LLC and Holly Energy Partners - Operating, L.P. (incorporated by reference to Exhibit 10.1 of Registrant's Current Report on Form 8-K filed July 22, 2013, File No. 1-03876).
|
|
|
|
10.2
|
|
Eighth Amended and Restated Omnibus Agreement, dated July 16, 2013, by and among HollyFrontier Corporation, Holly Energy Partners, L.P. and certain of their respective subsidiaries (incorporated by reference to Exhibit 10.2 of Registrant's Current Report on Form 8-K filed July 22, 2013, File No. 1-03876).
|
|
|
|
10.3
|
|
Second Amended and Restated Crude Pipeline and Tankage Agreement, dated July 16, 2013, by and among Navajo Refining Company, L.L.C., Holly Refining & Marketing Company - Woods Cross LLC, HollyFrontier Refining & Marketing LLC, Holly Energy Partners - Operating, L.P., HEP Pipeline, LLC and HEP Woods Cross, L.L.C. (incorporated by reference to Exhibit 10.3 of Registrant's Quarterly Report on Form 10-Q for its quarterly period ended June 30, 2013, File No. 1-03876).
|
|
|
|
10.4*
|
|
Second Amended and Restated Throughput Agreement (Tucson Terminal), entered into as of September 19, 2013 to be effective as of June 1, 2013, by and among HollyFrontier Refining & Marketing LLC, HEP Refining, L.L.C. and Holly Energy Partners - Operating, L.P.
|
|
|
|
10.5*
|
|
Seventeenth Amendment, dated August 27, 2013, to the Frontier Products Offtake Agreement El Dorado Refinery, dated October 19, 1999, between Frontier Oil and Refining Company (now HollyFrontier Refining & Marketing LLC, as successor-by-merger to Frontier Oil and Refining Company) and Equiva Trading Company (now Shell Oil Products US, assignee of Equiva Trading Company).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101+
|
|
The following financial information from HollyFrontier Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements.
|
2.
|
The Provisional Product Pricing section of Schedule B is hereby amended and restated in its entirety as follows:
|
3.
|
This Seventeenth Amendment is hereby incorporated into the Agreement for all intents and purposes and all terms, provisions and definitions in the Agreement shall apply hereto. The Agreement and this Seventeenth Amendment set forth in its entirety the agreement of HFR and SOPUS with respect to the subject matter hereof. Except as explicitly stated herein, no other provisions of the Agreement, or any prior Amendments are affected by this Seventeenth Amendment and they remain in full force and effect.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of HollyFrontier Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting
|
Date: November 7, 2013
|
|
/s/ Michael C. Jennings
|
|
|
Michael C. Jennings
|
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of HollyFrontier Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's most recent fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 7, 2013
|
|
/s/ Douglas S. Aron
|
|
|
Douglas S. Aron
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 7, 2013
|
|
/s/ Michael C. Jennings
|
|
|
Michael C. Jennings
|
|
|
Chief Executive Officer and President
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 7, 2013
|
|
/s/ Douglas S. Aron
|
|
|
Douglas S. Aron
|
|
|
Executive Vice President and Chief Financial Officer
|