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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Emerging growth company
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¨
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Page
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September 30, 2017 (Unaudited) and December 31, 2016
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Three and Nine Months Ended September 30, 2017 and 2016
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Three and Nine Months Ended September 30, 2017 and 2016
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Nine Months Ended September 30, 2017 and 2016
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Index to Exhibits
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Signatures
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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 recent or future acquired operations, including Petro-Canada Lubricants Inc.;
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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,
2017 |
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December 31, 2016
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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: $7,476 and $3,657, respectively)
|
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$
|
630,742
|
|
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$
|
710,579
|
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Marketable securities
|
|
—
|
|
|
424,148
|
|
||
Total cash, cash equivalents and short-term marketable securities
|
|
630,742
|
|
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1,134,727
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|
||
Accounts receivable: Product and transportation
(HEP: $7,330 and $7,846, respectively)
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644,695
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|
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449,036
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Crude oil resales
|
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69,653
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30,163
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||
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714,348
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479,199
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||
Inventories: Crude oil and refined products
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1,261,245
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|
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970,361
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||
Materials, supplies and other
(HEP: $888 and $1,402, respectively)
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158,597
|
|
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165,315
|
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||
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1,419,842
|
|
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1,135,676
|
|
||
Income taxes receivable
|
|
—
|
|
|
68,371
|
|
||
Prepayments and other
(HEP: $1,407 and $1,486, respectively)
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32,129
|
|
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33,036
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||
Total current assets
|
|
2,797,061
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2,851,009
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||
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||||
Properties, plants and equipment, at cost
(HEP: $1,730,903 and $1,702,703, respectively)
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6,175,414
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5,546,856
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Less accumulated depreciation
(HEP: $(389,133) and $(337,135), respectively)
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(1,738,583
|
)
|
|
(1,538,408
|
)
|
||
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4,436,831
|
|
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4,008,448
|
|
||
Other assets: Turnaround costs
|
|
238,877
|
|
|
217,340
|
|
||
Goodwill
(HEP: $288,991 and $288,991, respectively)
|
|
2,213,805
|
|
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2,022,463
|
|
||
Intangibles and other
(HEP: $212,692 and $208,975, respectively)
|
|
461,781
|
|
|
336,401
|
|
||
|
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2,914,463
|
|
|
2,576,204
|
|
||
Total assets
|
|
$
|
10,148,355
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$
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9,435,661
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|
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||||
LIABILITIES AND EQUITY
|
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|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
(HEP: $13,659 and $10,518, respectively)
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$
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1,101,668
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|
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$
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935,387
|
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Income taxes payable
|
|
64,255
|
|
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—
|
|
||
Accrued liabilities
(HEP: $31,333 and $37,793, respectively)
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|
235,092
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|
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147,842
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Total current liabilities
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1,401,015
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1,083,229
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||||
Long-term debt
(HEP: $1,245,066 and $1,243,912, respectively)
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2,236,514
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2,235,137
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Deferred income taxes
(HEP: $522 and $509, respectively)
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842,122
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620,414
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Other long-term liabilities
(HEP: $61,361 and $62,971, respectively)
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202,927
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194,896
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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; 256,009,012 and 255,962,866 shares issued as of September 30, 2017 and December 31, 2016, respectively
|
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2,560
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2,560
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Additional capital
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4,067,836
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4,026,805
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Retained earnings
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2,884,524
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2,776,728
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Accumulated other comprehensive income
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31,440
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10,612
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Common stock held in treasury, at cost – 78,732,977 and 78,617,600 shares as of September 30, 2017 and December 31, 2016, respectively
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(2,137,496
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)
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(2,135,311
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)
|
||
Total HollyFrontier stockholders’ equity
|
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4,848,864
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4,681,394
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Noncontrolling interest
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616,913
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620,591
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Total equity
|
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5,465,777
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5,301,985
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Total liabilities and equity
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$
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10,148,355
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$
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9,435,661
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
||||||||||||
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2017
|
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2016
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2017
|
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2016
|
||||||||
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||||||||
Sales and other revenues
|
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$
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3,719,247
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$
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2,847,270
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$
|
10,258,594
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|
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$
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7,580,632
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Operating costs and expenses:
|
|
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|
|
|
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||||||||
Cost of products sold (exclusive of depreciation and amortization):
|
|
|
|
|
|
|
|
|
||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
2,888,530
|
|
|
2,341,837
|
|
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8,283,127
|
|
|
6,215,155
|
|
||||
Lower of cost or market inventory valuation adjustment
|
|
(111,128
|
)
|
|
312
|
|
|
(15,323
|
)
|
|
(194,282
|
)
|
||||
|
|
2,777,402
|
|
|
2,342,149
|
|
|
8,267,804
|
|
|
6,020,873
|
|
||||
Operating expenses (exclusive of depreciation and amortization)
|
|
321,668
|
|
|
256,232
|
|
|
944,437
|
|
|
760,151
|
|
||||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
68,013
|
|
|
32,994
|
|
|
184,659
|
|
|
88,270
|
|
||||
Depreciation and amortization
|
|
102,884
|
|
|
91,130
|
|
|
304,206
|
|
|
269,433
|
|
||||
Goodwill and asset impairment
|
|
—
|
|
|
—
|
|
|
19,247
|
|
|
654,084
|
|
||||
Total operating costs and expenses
|
|
3,269,967
|
|
|
2,722,505
|
|
|
9,720,353
|
|
|
7,792,811
|
|
||||
Income (loss) from operations
|
|
449,280
|
|
|
124,765
|
|
|
538,241
|
|
|
(212,179
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Earnings of equity method investments
|
|
5,072
|
|
|
3,767
|
|
|
10,965
|
|
|
10,155
|
|
||||
Interest income
|
|
1,074
|
|
|
778
|
|
|
2,069
|
|
|
1,380
|
|
||||
Interest expense
|
|
(28,731
|
)
|
|
(19,550
|
)
|
|
(85,534
|
)
|
|
(45,888
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(12,225
|
)
|
|
(8,718
|
)
|
||||
Gain on foreign currency swap
|
|
—
|
|
|
—
|
|
|
24,545
|
|
|
—
|
|
||||
Gain on foreign currency transactions
|
|
19,122
|
|
|
—
|
|
|
19,517
|
|
|
—
|
|
||||
Other, net
|
|
286
|
|
|
107
|
|
|
23
|
|
|
300
|
|
||||
|
|
(3,177
|
)
|
|
(14,898
|
)
|
|
(40,640
|
)
|
|
(42,771
|
)
|
||||
Income (loss) before income taxes
|
|
446,103
|
|
|
109,867
|
|
|
497,601
|
|
|
(254,950
|
)
|
||||
Income tax expense (benefit):
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
72,307
|
|
|
10,094
|
|
|
80,242
|
|
|
(32,272
|
)
|
||||
Deferred
|
|
86,079
|
|
|
12,102
|
|
|
93,351
|
|
|
38,731
|
|
||||
|
|
158,386
|
|
|
22,196
|
|
|
173,593
|
|
|
6,459
|
|
||||
Net income (loss)
|
|
287,717
|
|
|
87,671
|
|
|
324,008
|
|
|
(261,409
|
)
|
||||
Less net income attributable to noncontrolling interest
|
|
15,703
|
|
|
13,174
|
|
|
39,695
|
|
|
52,209
|
|
||||
Net income (loss) attributable to HollyFrontier stockholders
|
|
$
|
272,014
|
|
|
$
|
74,497
|
|
|
$
|
284,313
|
|
|
$
|
(313,618
|
)
|
Earnings (loss) per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.53
|
|
|
$
|
0.42
|
|
|
$
|
1.60
|
|
|
$
|
(1.78
|
)
|
Diluted
|
|
$
|
1.53
|
|
|
$
|
0.42
|
|
|
$
|
1.60
|
|
|
$
|
(1.78
|
)
|
Cash dividends declared per common share
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.99
|
|
|
$
|
0.99
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
176,149
|
|
|
175,871
|
|
|
176,143
|
|
|
176,157
|
|
||||
Diluted
|
|
176,530
|
|
|
175,993
|
|
|
176,616
|
|
|
176,157
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
287,717
|
|
|
$
|
87,671
|
|
|
$
|
324,008
|
|
|
$
|
(261,409
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
16,702
|
|
|
—
|
|
|
24,287
|
|
|
—
|
|
||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities
|
|
—
|
|
|
(29
|
)
|
|
(4
|
)
|
|
61
|
|
||||
Reclassification adjustments to net income on sale or maturity of marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Net unrealized gain (loss) on marketable securities
|
|
—
|
|
|
(29
|
)
|
|
(4
|
)
|
|
84
|
|
||||
Hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Change in fair value of cash flow hedging instruments
|
|
(2,094
|
)
|
|
(1,310
|
)
|
|
2,708
|
|
|
(19,307
|
)
|
||||
Reclassification adjustments to net income on settlement of cash flow hedging instruments
|
|
5,115
|
|
|
4,141
|
|
|
5,049
|
|
|
37,450
|
|
||||
Amortization of unrealized loss attributable to discontinued cash flow hedges
|
|
270
|
|
|
270
|
|
|
810
|
|
|
810
|
|
||||
Net unrealized gain on hedging instruments
|
|
3,291
|
|
|
3,101
|
|
|
8,567
|
|
|
18,953
|
|
||||
Other comprehensive income before income taxes
|
|
19,993
|
|
|
3,072
|
|
|
32,850
|
|
|
19,037
|
|
||||
Income tax expense
|
|
7,140
|
|
|
1,119
|
|
|
11,841
|
|
|
7,436
|
|
||||
Other comprehensive income
|
|
12,853
|
|
|
1,953
|
|
|
21,009
|
|
|
11,601
|
|
||||
Total comprehensive income (loss)
|
|
300,570
|
|
|
89,624
|
|
|
345,017
|
|
|
(249,808
|
)
|
||||
Less noncontrolling interest in comprehensive income (loss)
|
|
15,663
|
|
|
13,353
|
|
|
39,638
|
|
|
52,028
|
|
||||
Comprehensive income (loss) attributable to HollyFrontier stockholders
|
|
$
|
284,907
|
|
|
$
|
76,271
|
|
|
$
|
305,379
|
|
|
$
|
(301,836
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
324,008
|
|
|
$
|
(261,409
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
304,206
|
|
|
269,433
|
|
||
Goodwill and asset impairment
|
|
19,247
|
|
|
654,084
|
|
||
Lower of cost or market inventory valuation adjustment
|
|
(15,323
|
)
|
|
(194,282
|
)
|
||
Earnings of equity method investments, inclusive of distributions
|
|
816
|
|
|
313
|
|
||
(Gain) loss on sale of assets
|
|
540
|
|
|
(107
|
)
|
||
Loss on early extinguishment of debt attributable to unamortized discount
|
|
2,475
|
|
|
8,718
|
|
||
Deferred income taxes
|
|
93,351
|
|
|
38,731
|
|
||
Equity-based compensation expense
|
|
26,430
|
|
|
16,696
|
|
||
Change in fair value – derivative instruments
|
|
2,073
|
|
|
(12,319
|
)
|
||
Excess tax expense from equity-based compensation
|
|
—
|
|
|
(4,051
|
)
|
||
(Increase) decrease in current assets:
|
|
|
|
|
||||
Accounts receivable
|
|
(116,986
|
)
|
|
(43,959
|
)
|
||
Inventories
|
|
(43,822
|
)
|
|
(54,643
|
)
|
||
Income taxes receivable
|
|
68,371
|
|
|
(42,683
|
)
|
||
Prepayments and other
|
|
(5,268
|
)
|
|
18,236
|
|
||
Increase (decrease) in current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
88,010
|
|
|
114,771
|
|
||
Income taxes payable
|
|
60,661
|
|
|
(8,142
|
)
|
||
Accrued liabilities
|
|
83,918
|
|
|
39,527
|
|
||
Turnaround expenditures
|
|
(111,513
|
)
|
|
(104,224
|
)
|
||
Other, net
|
|
4,219
|
|
|
9,584
|
|
||
Net cash provided by operating activities
|
|
785,413
|
|
|
444,274
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Additions to properties, plants and equipment
|
|
(162,442
|
)
|
|
(291,362
|
)
|
||
Additions to properties, plants and equipment – HEP
|
|
(30,675
|
)
|
|
(96,115
|
)
|
||
Purchase of equity method investment - HEP
|
|
—
|
|
|
(42,550
|
)
|
||
Purchase of PCLI, net of cash acquired
|
|
(870,627
|
)
|
|
—
|
|
||
Purchases of marketable securities
|
|
(41,565
|
)
|
|
(155,091
|
)
|
||
Sales and maturities of marketable securities
|
|
465,716
|
|
|
187,358
|
|
||
Other, net
|
|
2,297
|
|
|
606
|
|
||
Net cash used for investing activities
|
|
(637,296
|
)
|
|
(397,154
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Borrowings under credit agreements
|
|
654,000
|
|
|
625,500
|
|
||
Repayments under credit agreements
|
|
(457,000
|
)
|
|
(957,500
|
)
|
||
Proceeds from issuance of senior notes - HFC
|
|
—
|
|
|
246,690
|
|
||
Proceeds from issuance of senior notes - HEP
|
|
101,750
|
|
|
394,000
|
|
||
Proceeds from issuance of term loan - HFC
|
|
—
|
|
|
350,000
|
|
||
Redemption of senior notes - HEP
|
|
(309,750
|
)
|
|
—
|
|
||
Repayment of financing obligation
|
|
—
|
|
|
(39,500
|
)
|
||
Proceeds from issuance of common units - HEP
|
|
52,285
|
|
|
22,791
|
|
||
Purchase of treasury stock
|
|
—
|
|
|
(133,430
|
)
|
||
Dividends
|
|
(176,519
|
)
|
|
(175,194
|
)
|
||
Distributions to noncontrolling interest
|
|
(81,797
|
)
|
|
(66,571
|
)
|
||
Other, net
|
|
(13,421
|
)
|
|
(14,118
|
)
|
||
Net cash provided by (used for) financing activities
|
|
(230,452
|
)
|
|
252,668
|
|
||
|
|
|
|
|
||||
Effect of exchange rate on cash flow
|
|
2,498
|
|
|
—
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Increase (decrease) for the period
|
|
(79,837
|
)
|
|
299,788
|
|
||
Beginning of period
|
|
710,579
|
|
|
66,533
|
|
||
End of period
|
|
$
|
630,742
|
|
|
$
|
366,321
|
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
||||
Cash (paid) received during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
(84,380
|
)
|
|
$
|
(39,671
|
)
|
Income taxes, net
|
|
$
|
50,957
|
|
|
$
|
(23,557
|
)
|
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 HollyFrontier Asphalt Company LLC (“HFC Asphalt”) which operates various asphalt terminals in Arizona, New Mexico and Oklahoma;
|
•
|
owned and operated Petro-Canada Lubricants Inc. (“PCLI”) located in Mississauga, Ontario which produces base oils and other specialized lubricant products; and
|
•
|
owned a
36%
interest in HEP, a consolidated variable interest entity (“VIE”), which includes our
2%
general partner interest.
|
NOTE 2:
|
PCLI Acquisition
|
|
|
(in millions)
|
||
|
|
|
||
Cash and cash equivalents
|
|
$
|
21.6
|
|
Accounts receivable and other current assets
|
|
118.5
|
|
|
Inventories
|
|
214.9
|
|
|
Properties, plants and equipment
|
|
468.8
|
|
|
Goodwill
|
|
185.2
|
|
|
Intangibles and precious metals
|
|
103.5
|
|
|
Accounts payable and accrued liabilities
|
|
(88.7
|
)
|
|
Deferred income tax liabilities
|
|
(106.2
|
)
|
|
Other long-term liabilities
|
|
(13.3
|
)
|
|
Net assets acquired
|
|
$
|
904.3
|
|
NOTE 3:
|
Holly Energy Partners
|
NOTE 4:
|
Fair Value Measurements
|
•
|
(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
|
||||||||||||
|
|
Carrying Amount
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
(In thousands)
|
||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price swaps
|
|
$
|
5,556
|
|
|
$
|
—
|
|
|
$
|
5,556
|
|
|
$
|
—
|
|
Commodity forward contracts
|
|
1,358
|
|
|
—
|
|
|
1,358
|
|
|
—
|
|
||||
Total assets
|
|
$
|
6,914
|
|
|
$
|
—
|
|
|
$
|
6,914
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
NYMEX futures contracts
|
|
$
|
5,881
|
|
|
$
|
5,881
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
16,030
|
|
|
—
|
|
|
12,401
|
|
|
3,629
|
|
||||
Commodity forward contracts
|
|
1,611
|
|
|
—
|
|
|
1,611
|
|
|
—
|
|
||||
RINs credit obligations
(1)
|
|
22,586
|
|
|
—
|
|
|
22,586
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
46,108
|
|
|
$
|
5,881
|
|
|
$
|
36,598
|
|
|
$
|
3,629
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
|
$
|
424,148
|
|
|
$
|
—
|
|
|
$
|
424,148
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
14,563
|
|
|
—
|
|
|
14,358
|
|
|
205
|
|
||||
Commodity forward contracts
|
|
5,905
|
|
|
—
|
|
|
5,905
|
|
|
—
|
|
||||
HEP interest rate swaps
|
|
91
|
|
|
—
|
|
|
91
|
|
|
—
|
|
||||
Total assets
|
|
$
|
444,707
|
|
|
$
|
—
|
|
|
$
|
444,502
|
|
|
$
|
205
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
NYMEX futures contracts
|
|
$
|
1,975
|
|
|
$
|
1,975
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
26,845
|
|
|
—
|
|
|
24,086
|
|
|
2,759
|
|
||||
Commodity forward contracts
|
|
8,316
|
|
|
—
|
|
|
8,316
|
|
|
—
|
|
||||
Foreign currency forward contracts
|
|
6,519
|
|
|
—
|
|
|
6,519
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
43,655
|
|
|
$
|
1,975
|
|
|
$
|
38,921
|
|
|
$
|
2,759
|
|
(1)
|
Represent obligations for RINs credits for which we do not have sufficient quantities at
September 30, 2017
to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.
|
|
|
Three Months Ended
September 30, 2017 |
|
Nine Months Ended
September 30, 2017 |
||||
Level 3 Instruments
|
|
|
||||||
|
|
(In thousands)
|
||||||
Liability balance at beginning of period
|
|
$
|
—
|
|
|
$
|
(2,554
|
)
|
Change in fair value:
|
|
|
|
|
||||
Recognized in other comprehensive income
|
|
—
|
|
|
1,625
|
|
||
Recognized in cost of products sold
|
|
(3,629
|
)
|
|
(3,630
|
)
|
||
Settlement date fair value of contractual maturities:
|
|
|
|
|
||||
Recognized in sales and other revenues
|
|
—
|
|
|
(165
|
)
|
||
Recognized in cost of products sold
|
|
—
|
|
|
1,095
|
|
||
Liability balance at end of period
|
|
$
|
(3,629
|
)
|
|
$
|
(3,629
|
)
|
NOTE 5:
|
Earnings Per Share
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Net income (loss) attributable to HollyFrontier stockholders
|
|
$
|
272,014
|
|
|
$
|
74,497
|
|
|
$
|
284,313
|
|
|
$
|
(313,618
|
)
|
Participating securities’ (restricted stock) share in earnings
|
|
1,735
|
|
|
275
|
|
|
1,822
|
|
|
647
|
|
||||
Net income (loss) attributable to common shares
|
|
$
|
270,279
|
|
|
$
|
74,222
|
|
|
$
|
282,491
|
|
|
$
|
(314,265
|
)
|
Average number of shares of common stock outstanding
|
|
176,149
|
|
|
175,871
|
|
|
176,143
|
|
|
176,157
|
|
||||
Effect of dilutive variable restricted shares and
performance share units
(1)
|
|
381
|
|
|
122
|
|
|
473
|
|
|
—
|
|
||||
Average number of shares of common stock outstanding assuming dilution
|
|
176,530
|
|
|
175,993
|
|
|
176,616
|
|
|
176,157
|
|
||||
Basic earnings (loss) per share
|
|
$
|
1.53
|
|
|
$
|
0.42
|
|
|
$
|
1.60
|
|
|
$
|
(1.78
|
)
|
Diluted earnings (loss) per share
|
|
$
|
1.53
|
|
|
$
|
0.42
|
|
|
$
|
1.60
|
|
|
$
|
(1.78
|
)
|
(1)
Excludes anti-dilutive restricted and performance share units of:
|
|
104
|
|
|
204
|
|
|
120
|
|
|
188
|
|
NOTE 6:
|
Stock-Based Compensation
|
Restricted Stock and Restricted Stock Units
|
|
Grants
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value ($000)
|
|||||
|
|
|
|
|
|
|
|||||
Outstanding at January 1, 2017 (non-vested)
|
|
1,188,774
|
|
|
$
|
28.87
|
|
|
|
||
Granted
(1)
|
|
735,478
|
|
|
28.19
|
|
|
|
|||
Vesting (transfer/conversion to common stock)
|
|
(33,177
|
)
|
|
32.53
|
|
|
|
|||
Forfeited
|
|
(49,711
|
)
|
|
30.38
|
|
|
|
|||
Outstanding at September 30, 2017 (non-vested)
|
|
1,841,364
|
|
|
$
|
28.82
|
|
|
$
|
66,234
|
|
Performance Share Units
|
|
Grants
|
|
|
|
|
|
Outstanding at January 1, 2017 (non-vested)
|
|
703,939
|
|
Granted
|
|
21,923
|
|
Forfeited
|
|
(88,893
|
)
|
Outstanding at September 30, 2017 (non-vested)
|
|
636,969
|
|
NOTE 7:
|
Cash and Cash Equivalents and Investments in Marketable Securities
|
|
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
(Net Carrying Amount)
|
||||||||
|
|
(In thousands)
|
||||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
|
$
|
7,687
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
7,687
|
|
Corporate debt securities
|
|
4,001
|
|
|
—
|
|
|
—
|
|
|
4,001
|
|
||||
State and political subdivisions debt securities
|
|
412,462
|
|
|
1
|
|
|
(3
|
)
|
|
412,460
|
|
||||
Total marketable securities
|
|
$
|
424,150
|
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
|
$
|
424,148
|
|
NOTE 8:
|
Inventories
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
|
|
(In thousands)
|
||||||
Crude oil
|
|
$
|
544,837
|
|
|
$
|
549,886
|
|
Other raw materials and unfinished products
(1)
|
|
363,483
|
|
|
287,561
|
|
||
Finished products
(2)
|
|
670,120
|
|
|
465,432
|
|
||
Lower of cost or market reserve
|
|
(317,195
|
)
|
|
(332,518
|
)
|
||
Process chemicals
(3)
|
|
26,173
|
|
|
2,767
|
|
||
Repair and maintenance supplies and other
(4)
|
|
132,424
|
|
|
162,548
|
|
||
Total inventory
|
|
$
|
1,419,842
|
|
|
$
|
1,135,676
|
|
(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.
|
(4)
|
Includes RINs.
|
NOTE 9:
|
Environmental
|
NOTE 10:
|
Debt
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
|
(In thousands)
|
||||||
HollyFrontier 5.875% Senior Notes
|
|
|
|
|
||||
Principal
|
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
Unamortized discount and debt issuance costs
|
|
(8,552
|
)
|
|
(8,775
|
)
|
||
|
|
991,448
|
|
|
991,225
|
|
||
|
|
|
|
|
||||
HEP Credit Agreement
|
|
750,000
|
|
|
553,000
|
|
||
|
|
|
|
|
||||
HEP 6% Senior Notes
|
|
|
|
|
||||
Principal
|
|
500,000
|
|
|
400,000
|
|
||
Unamortized discount and debt issuance costs
|
|
(4,934
|
)
|
|
(6,607
|
)
|
||
|
|
495,066
|
|
|
393,393
|
|
||
HEP 6.5% Senior Notes
|
|
|
|
|
||||
Principal
|
|
—
|
|
|
300,000
|
|
||
Unamortized discount and debt issuance costs
|
|
—
|
|
|
(2,481
|
)
|
||
|
|
—
|
|
|
297,519
|
|
||
|
|
|
|
|
||||
Total HEP long-term debt
|
|
1,245,066
|
|
|
1,243,912
|
|
||
|
|
|
|
|
||||
Total long-term debt
|
|
$
|
2,236,514
|
|
|
$
|
2,235,137
|
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
|
(In thousands)
|
||||||
|
|
|
|
|
||||
HollyFrontier senior notes
|
|
$
|
1,091,470
|
|
|
$
|
1,022,500
|
|
|
|
|
|
|
||||
HEP senior notes
|
|
$
|
524,390
|
|
|
$
|
723,750
|
|
•
|
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, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
(2,095
|
)
|
|
|
|
|
|
|
|
|
||||
Loss reclassified to earnings due to settlements
|
5,179
|
|
|
Sales and other revenues
|
|
$
|
(488
|
)
|
|
|
|
|
|||
Amortization of discontinued hedges reclassified to earnings
|
270
|
|
|
Operating expenses
|
|
(4,961
|
)
|
|
Operating expenses
|
|
$
|
18
|
|
||
Total
|
$
|
3,354
|
|
|
|
|
$
|
(5,449
|
)
|
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
(1,511
|
)
|
|
|
|
|
|
|
|
|
||||
Loss reclassified to earnings due to settlements
|
4,046
|
|
|
Sales and other revenue
|
|
$
|
228
|
|
|
|
|
|
|||
Amortization of discontinued hedges reclassified to earnings
|
270
|
|
|
Operating expenses
|
|
(4,544
|
)
|
|
Operating expenses
|
|
$
|
—
|
|
||
Total
|
$
|
2,805
|
|
|
|
|
$
|
(4,316
|
)
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
2,620
|
|
|
Sales and other revenues
|
|
$
|
7,937
|
|
|
|
|
|
||
Loss reclassified to earnings due to settlements
|
5,228
|
|
|
Cost of products sold
|
|
(299
|
)
|
|
|
|
|
||||
Amortization of discontinued hedge reclassified to earnings
|
810
|
|
|
Operating expenses
|
|
(13,676
|
)
|
|
Operating expenses
|
|
$
|
—
|
|
||
Total
|
$
|
8,658
|
|
|
|
|
$
|
(6,038
|
)
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Change in fair value
|
$
|
(18,570
|
)
|
|
|
|
|
|
|
|
|
||||
Loss reclassified to earnings due to settlements
|
37,012
|
|
|
Sales and other revenues
|
|
$
|
(20,425
|
)
|
|
|
|
|
|||
Amortization of discontinued hedge reclassified to earnings
|
810
|
|
|
Operating expenses
|
|
(17,397
|
)
|
|
Operating expenses
|
|
$
|
—
|
|
||
Total
|
$
|
19,252
|
|
|
|
|
$
|
(37,822
|
)
|
|
|
|
$
|
—
|
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
||||||||||||||
Derivative Instrument
|
|
Total Outstanding Notional
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Unit of Measure
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Natural gas price swaps - long
|
|
9,600,000
|
|
|
2,400,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
MMBTU
|
Physical crude contracts - short
|
|
150,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
Location of Gain (Loss) Recognized in Earnings
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Cost of products sold
|
|
$
|
(10,632
|
)
|
|
$
|
(2,438
|
)
|
|
$
|
3,403
|
|
|
$
|
(1,135
|
)
|
Operating expenses
|
|
(629
|
)
|
|
(2,291
|
)
|
|
(6,392
|
)
|
|
2,322
|
|
||||
Gain on foreign currency swap
|
|
—
|
|
|
—
|
|
|
24,545
|
|
|
—
|
|
||||
Total
|
|
$
|
(11,261
|
)
|
|
$
|
(4,729
|
)
|
|
$
|
21,556
|
|
|
$
|
1,187
|
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
|||||
Derivative Instrument
|
|
Total Outstanding Notional
|
|
2017
|
|
2018
|
|
Unit of Measure
|
|||
|
|
|
|
|
|
|
|
|
|||
Crude price swaps (basis spread) - long
|
|
918,000
|
|
|
918,000
|
|
|
—
|
|
|
Barrels
|
WTI and sub-octane gasoline crack spread swaps - short
|
|
700,000
|
|
|
700,000
|
|
|
—
|
|
|
Barrels
|
Natural gas price swaps (basis spread) - long
|
|
2,577,000
|
|
|
2,577,000
|
|
|
—
|
|
|
MMBTU
|
Natural gas price swaps - long
|
|
2,400,000
|
|
|
2,400,000
|
|
|
—
|
|
|
MMBTU
|
Natural gas price swaps - short
|
|
2,400,000
|
|
|
2,400,000
|
|
|
—
|
|
|
MMBTU
|
NYMEX futures (WTI) - short
|
|
1,870,000
|
|
|
955,000
|
|
|
915,000
|
|
|
Barrels
|
Forward gasoline and diesel contracts - long
|
|
715,000
|
|
|
705,000
|
|
|
10,000
|
|
|
Barrels
|
|
Unrealized Gain (Loss) Recognized in OCI
|
|
Gain (Loss) Recognized in Earnings Due to Settlements
|
||||||
|
|
Location
|
|
Amount
|
|||||
|
(In thousands)
|
||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
1
|
|
|
|
|
|
||
Gain reclassified to earnings due to settlements
|
(64
|
)
|
|
Interest expense
|
|
$
|
64
|
|
|
Total
|
$
|
(63
|
)
|
|
|
|
$
|
64
|
|
|
|
|
|
|
|
||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
201
|
|
|
|
|
|
||
Loss reclassified to earnings due to settlements
|
95
|
|
|
Interest expense
|
|
$
|
(95
|
)
|
|
Total
|
$
|
296
|
|
|
|
|
$
|
(95
|
)
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
88
|
|
|
|
|
|
||
Gain reclassified to earnings due to settlements
|
(179
|
)
|
|
Interest expense
|
|
$
|
179
|
|
|
Total
|
$
|
(91
|
)
|
|
|
|
$
|
179
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
||||
Interest rate swaps
|
|
|
|
|
|
||||
Change in fair value
|
$
|
(737
|
)
|
|
|
|
|
||
Loss reclassified to earnings due to settlements
|
438
|
|
|
Interest expense
|
|
$
|
(438
|
)
|
|
Total
|
$
|
(299
|
)
|
|
|
|
$
|
(438
|
)
|
|
|
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, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,374
|
|
|
$
|
—
|
|
|
$
|
6,374
|
|
Forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
707
|
|
|
—
|
|
|
707
|
|
||||||
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,081
|
|
|
$
|
—
|
|
|
$
|
7,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,517
|
|
|
$
|
(4,417
|
)
|
|
$
|
4,100
|
|
NYMEX futures contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,881
|
|
|
—
|
|
|
5,881
|
|
||||||
Forward contracts
|
|
1,358
|
|
|
—
|
|
|
1,358
|
|
|
904
|
|
|
—
|
|
|
904
|
|
||||||
|
|
$
|
1,358
|
|
|
$
|
—
|
|
|
$
|
1,358
|
|
|
$
|
15,302
|
|
|
$
|
(4,417
|
)
|
|
$
|
10,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
1,358
|
|
|
|
|
|
|
$
|
17,966
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet classification:
|
|
|
|
|
|
Accrued liabilities
|
|
$
|
17,182
|
|
||||||||||||||
|
|
|
|
|
|
Other long-term liabilities
|
|
784
|
|
|||||||||||||||
|
|
Prepayment and other
|
|
$
|
1,358
|
|
|
|
|
|
|
$
|
17,966
|
|
|
|
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, 2016
|
|
|
||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,185
|
|
|
$
|
(431
|
)
|
|
$
|
12,754
|
|
Commodity forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,978
|
|
|
—
|
|
|
2,978
|
|
||||||
Interest rate swap contracts
|
|
91
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
16,163
|
|
|
$
|
(431
|
)
|
|
$
|
15,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
4,244
|
|
|
$
|
(756
|
)
|
|
$
|
3,488
|
|
|
$
|
12,903
|
|
|
$
|
(9,887
|
)
|
|
$
|
3,016
|
|
NYMEX futures contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,975
|
|
|
—
|
|
|
1,975
|
|
||||||
Commodity forward contracts
|
|
5,905
|
|
|
—
|
|
|
5,905
|
|
|
5,338
|
|
|
—
|
|
|
5,338
|
|
||||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,519
|
|
|
—
|
|
|
6,519
|
|
||||||
|
|
$
|
10,149
|
|
|
$
|
(756
|
)
|
|
$
|
9,393
|
|
|
$
|
26,735
|
|
|
$
|
(9,887
|
)
|
|
$
|
16,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
9,484
|
|
|
|
|
|
|
$
|
32,580
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet classification:
|
|
Prepayment and other
|
|
$
|
9,484
|
|
|
Accrued liabilities
|
|
$
|
32,580
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 12:
|
Equity
|
|
|
HollyFrontier
Stockholders’
Equity
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at December 31, 2016
|
|
$
|
4,681,394
|
|
|
$
|
620,591
|
|
|
$
|
5,301,985
|
|
Net income
|
|
284,313
|
|
|
39,695
|
|
|
324,008
|
|
|||
Dividends
|
|
(176,519
|
)
|
|
—
|
|
|
(176,519
|
)
|
|||
Distributions to noncontrolling interest holders
|
|
—
|
|
|
(81,797
|
)
|
|
(81,797
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
21,066
|
|
|
(57
|
)
|
|
21,009
|
|
|||
Allocated equity on HEP common unit issuances, net of tax
|
|
9,360
|
|
|
37,015
|
|
|
46,375
|
|
|||
Equity awards issued in PCLI acquisition
|
|
5,056
|
|
|
—
|
|
|
5,056
|
|
|||
Equity-based compensation
|
|
24,484
|
|
|
1,946
|
|
|
26,430
|
|
|||
Purchase of treasury stock
(1)
|
|
(290
|
)
|
|
—
|
|
|
(290
|
)
|
|||
Purchase of HEP units for restricted grants
|
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|||
Other
|
|
—
|
|
|
(445
|
)
|
|
(445
|
)
|
|||
Balance at September 30, 2017
|
|
$
|
4,848,864
|
|
|
$
|
616,913
|
|
|
$
|
5,465,777
|
|
NOTE 13:
|
Other Comprehensive Income
|
|
|
Before-Tax
|
|
Tax Expense
(Benefit)
|
|
After-Tax
|
||||||
|
|
(In thousands)
|
||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustment
|
|
$
|
16,702
|
|
|
$
|
5,851
|
|
|
$
|
10,851
|
|
Net unrealized gain on hedging instruments
|
|
3,291
|
|
|
1,289
|
|
|
2,002
|
|
|||
Other comprehensive income
|
|
19,993
|
|
|
7,140
|
|
|
12,853
|
|
|||
Less other comprehensive loss attributable to noncontrolling interest
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
20,033
|
|
|
$
|
7,140
|
|
|
$
|
12,893
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
||||||
Net unrealized loss on marketable securities
|
|
$
|
(29
|
)
|
|
$
|
(12
|
)
|
|
$
|
(17
|
)
|
Net unrealized gain on hedging instruments
|
|
3,101
|
|
|
1,131
|
|
|
1,970
|
|
|||
Other comprehensive income
|
|
3,072
|
|
|
1,119
|
|
|
1,953
|
|
|||
Less other comprehensive income attributable to noncontrolling interest
|
|
179
|
|
|
—
|
|
|
179
|
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
2,893
|
|
|
$
|
1,119
|
|
|
$
|
1,774
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustment
|
|
$
|
24,287
|
|
|
$
|
8,505
|
|
|
$
|
15,782
|
|
Net unrealized loss on marketable securities
|
|
(4
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Net unrealized gain on hedging instruments
|
|
8,567
|
|
|
3,337
|
|
|
5,230
|
|
|||
Other comprehensive income
|
|
32,850
|
|
|
11,841
|
|
|
21,009
|
|
|||
Less other comprehensive loss attributable to noncontrolling interest
|
|
(57
|
)
|
|
—
|
|
|
(57
|
)
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
32,907
|
|
|
$
|
11,841
|
|
|
$
|
21,066
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
||||||
Net unrealized gain on marketable securities
|
|
$
|
84
|
|
|
$
|
32
|
|
|
$
|
52
|
|
Net unrealized gain on hedging instruments
|
|
18,953
|
|
|
7,404
|
|
|
11,549
|
|
|||
Other comprehensive income
|
|
19,037
|
|
|
7,436
|
|
|
11,601
|
|
|||
Less other comprehensive loss attributable to noncontrolling interest
|
|
(181
|
)
|
|
—
|
|
|
(181
|
)
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
19,218
|
|
|
$
|
7,436
|
|
|
$
|
11,782
|
|
AOCI Component
|
|
Gain (Loss) Reclassified From AOCI
|
|
Income Statement Line Item
|
||||||
|
|
(In thousands)
|
|
|
||||||
|
|
Three Months Ended September 30,
|
|
|
||||||
|
|
2017
|
|
2016
|
|
|
||||
|
|
|
|
|
|
|
||||
Hedging instruments:
|
|
|
|
|
|
|
||||
Commodity price swaps
|
|
$
|
(488
|
)
|
|
$
|
228
|
|
|
Sales and other revenues
|
|
|
(4,961
|
)
|
|
(4,544
|
)
|
|
Operating expenses
|
||
Interest rate swaps
|
|
64
|
|
|
(95
|
)
|
|
Interest expense
|
||
|
|
(5,385
|
)
|
|
(4,411
|
)
|
|
|
||
|
|
(2,100
|
)
|
|
(1,685
|
)
|
|
Income tax benefit
|
||
|
|
(3,285
|
)
|
|
(2,726
|
)
|
|
Net of tax
|
||
|
|
(41
|
)
|
|
58
|
|
|
Noncontrolling interest
|
||
|
|
(3,326
|
)
|
|
(2,668
|
)
|
|
Net of tax and noncontrolling interest
|
||
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
|
$
|
(3,326
|
)
|
|
$
|
(2,668
|
)
|
|
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended September 30,
|
|
|
||||||
|
|
2017
|
|
2016
|
|
|
||||
|
|
|
|
|
|
|
||||
Marketable securities
|
|
$
|
—
|
|
|
$
|
(23
|
)
|
|
Interest income
|
|
|
—
|
|
|
(9
|
)
|
|
Income tax benefit
|
||
|
|
—
|
|
|
(14
|
)
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Hedging instruments:
|
|
|
|
|
|
|
||||
Commodity price swaps
|
|
7,937
|
|
|
(20,425
|
)
|
|
Sales and other revenues
|
||
|
|
(299
|
)
|
|
—
|
|
|
Cost of products sold
|
||
|
|
(13,676
|
)
|
|
(17,397
|
)
|
|
Operating expenses
|
||
Interest rate swaps
|
|
179
|
|
|
(438
|
)
|
|
Interest expense
|
||
|
|
(5,859
|
)
|
|
(38,260
|
)
|
|
|
||
|
|
(2,312
|
)
|
|
(14,704
|
)
|
|
Income tax benefit
|
||
|
|
(3,547
|
)
|
|
(23,556
|
)
|
|
Net of tax
|
||
|
|
(114
|
)
|
|
267
|
|
|
Noncontrolling interest
|
||
|
|
(3,661
|
)
|
|
(23,289
|
)
|
|
Net of tax and noncontrolling interest
|
||
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
|
$
|
(3,661
|
)
|
|
$
|
(23,303
|
)
|
|
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
|
(In thousands)
|
||||||
Foreign currency translation adjustment
|
|
$
|
15,782
|
|
|
$
|
—
|
|
Unrealized gain on post-retirement benefit obligations
|
|
20,055
|
|
|
20,055
|
|
||
Unrealized gain on marketable securities
|
|
—
|
|
|
3
|
|
||
Unrealized loss on hedging instruments, net of noncontrolling interest
|
|
(4,397
|
)
|
|
(9,446
|
)
|
||
Accumulated other comprehensive income
|
|
$
|
31,440
|
|
|
$
|
10,612
|
|
NOTE 14:
|
Post-retirement Plans
|
|
February 1, 2017
|
||
|
(in thousands)
|
||
Projected benefit obligation
|
$
|
52,851
|
|
Estimated pension assets
|
54,156
|
|
|
Estimated funded status
|
$
|
1,305
|
|
|
|
Three Months Ended
September 30, 2017 |
|
February 1, 2017 to September 30, 2017
|
||||
|
|
(in thousands)
|
||||||
Service cost - benefit earned during the period
|
|
$
|
1,013
|
|
|
$
|
2,596
|
|
Interest cost on projected benefit obligations
|
|
556
|
|
|
1,424
|
|
||
Expected return on plan assets
|
|
(802
|
)
|
|
(2,053
|
)
|
||
Net periodic pension expense
|
|
$
|
767
|
|
|
$
|
1,967
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Service cost – benefit earned during the period
|
|
$
|
300
|
|
|
$
|
324
|
|
|
$
|
901
|
|
|
$
|
972
|
|
Interest cost on projected benefit obligations
|
|
170
|
|
|
197
|
|
|
509
|
|
|
591
|
|
||||
Amortization of prior service credit
|
|
(870
|
)
|
|
(871
|
)
|
|
(2,610
|
)
|
|
(2,613
|
)
|
||||
Net periodic post-retirement credit
|
|
$
|
(400
|
)
|
|
$
|
(350
|
)
|
|
$
|
(1,200
|
)
|
|
$
|
(1,050
|
)
|
NOTE 15:
|
Contingencies
|
NOTE 16:
|
Segment Information
|
|
|
Refining
(1)
|
|
PCLI
|
|
HEP
(2)
|
|
Corporate
and Other
|
|
Consolidations
and Eliminations
|
|
Consolidated
Total
|
||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales and other revenues
|
|
$
|
3,409,795
|
|
|
$
|
298,137
|
|
|
$
|
110,364
|
|
|
$
|
(325
|
)
|
|
$
|
(98,724
|
)
|
|
$
|
3,719,247
|
|
Operating expenses
|
|
$
|
249,478
|
|
|
$
|
56,111
|
|
|
$
|
35,998
|
|
|
$
|
817
|
|
|
$
|
(20,736
|
)
|
|
$
|
321,668
|
|
Depreciation and amortization
|
|
$
|
74,312
|
|
|
$
|
7,492
|
|
|
$
|
18,601
|
|
|
$
|
2,686
|
|
|
$
|
(207
|
)
|
|
$
|
102,884
|
|
Income (loss) from operations
|
|
$
|
408,739
|
|
|
$
|
28,511
|
|
|
$
|
52,142
|
|
|
$
|
(39,549
|
)
|
|
$
|
(563
|
)
|
|
$
|
449,280
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,072
|
|
Capital expenditures
|
|
$
|
31,152
|
|
|
$
|
9,643
|
|
|
$
|
10,151
|
|
|
$
|
5,121
|
|
|
$
|
—
|
|
|
$
|
56,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales and other revenues
|
|
$
|
2,832,195
|
|
|
$
|
—
|
|
|
$
|
92,611
|
|
|
$
|
11
|
|
|
$
|
(77,547
|
)
|
|
$
|
2,847,270
|
|
Operating expenses
|
|
$
|
227,079
|
|
|
$
|
—
|
|
|
$
|
32,099
|
|
|
$
|
1,390
|
|
|
$
|
(4,336
|
)
|
|
$
|
256,232
|
|
Depreciation and amortization
|
|
$
|
69,565
|
|
|
$
|
—
|
|
|
$
|
18,515
|
|
|
$
|
3,257
|
|
|
$
|
(207
|
)
|
|
$
|
91,130
|
|
Income (loss) from operations
|
|
$
|
120,985
|
|
|
$
|
—
|
|
|
$
|
39,332
|
|
|
$
|
(34,965
|
)
|
|
$
|
(587
|
)
|
|
$
|
124,765
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,767
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,767
|
|
Capital expenditures
|
|
$
|
74,173
|
|
|
$
|
—
|
|
|
$
|
20,730
|
|
|
$
|
2,529
|
|
|
$
|
—
|
|
|
$
|
97,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales and other revenues
|
|
$
|
9,413,008
|
|
|
$
|
809,643
|
|
|
$
|
325,141
|
|
|
$
|
(283
|
)
|
|
$
|
(288,915
|
)
|
|
$
|
10,258,594
|
|
Operating expenses
|
|
$
|
751,858
|
|
|
$
|
144,792
|
|
|
$
|
102,584
|
|
|
$
|
3,152
|
|
|
$
|
(57,949
|
)
|
|
$
|
944,437
|
|
Depreciation and amortization
|
|
$
|
219,636
|
|
|
$
|
19,868
|
|
|
$
|
56,515
|
|
|
$
|
8,808
|
|
|
$
|
(621
|
)
|
|
$
|
304,206
|
|
Income (loss) from operations
|
|
$
|
445,087
|
|
|
$
|
58,416
|
|
|
$
|
157,170
|
|
|
$
|
(120,730
|
)
|
|
$
|
(1,702
|
)
|
|
$
|
538,241
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,965
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,965
|
|
Capital expenditures
|
|
$
|
131,016
|
|
|
$
|
19,995
|
|
|
$
|
30,675
|
|
|
$
|
11,431
|
|
|
$
|
—
|
|
|
$
|
193,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales and other revenues
|
|
$
|
7,530,804
|
|
|
$
|
—
|
|
|
$
|
289,517
|
|
|
$
|
168
|
|
|
$
|
(239,857
|
)
|
|
$
|
7,580,632
|
|
Operating expenses
|
|
$
|
680,591
|
|
|
$
|
—
|
|
|
$
|
89,067
|
|
|
$
|
3,797
|
|
|
$
|
(13,304
|
)
|
|
$
|
760,151
|
|
Depreciation and amortization
|
|
$
|
210,466
|
|
|
$
|
—
|
|
|
$
|
49,852
|
|
|
$
|
9,736
|
|
|
$
|
(621
|
)
|
|
$
|
269,433
|
|
Income (loss) from operations
|
|
$
|
(259,296
|
)
|
|
$
|
—
|
|
|
$
|
141,980
|
|
|
$
|
(93,017
|
)
|
|
$
|
(1,846
|
)
|
|
$
|
(212,179
|
)
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,155
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,155
|
|
Capital expenditures
|
|
$
|
284,755
|
|
|
$
|
—
|
|
|
$
|
96,115
|
|
|
$
|
6,607
|
|
|
$
|
—
|
|
|
$
|
387,477
|
|
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash, cash equivalents and investments in marketable securities
|
|
$
|
10,713
|
|
|
$
|
91,485
|
|
|
$
|
7,476
|
|
|
$
|
521,068
|
|
|
$
|
—
|
|
|
$
|
630,742
|
|
Total assets
|
|
$
|
6,637,119
|
|
|
$
|
1,282,396
|
|
|
$
|
1,903,307
|
|
|
$
|
610,341
|
|
|
$
|
(284,808
|
)
|
|
$
|
10,148,355
|
|
Long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,245,066
|
|
|
$
|
991,448
|
|
|
$
|
—
|
|
|
$
|
2,236,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash, cash equivalents and investments in marketable securities
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
3,657
|
|
|
$
|
1,131,021
|
|
|
$
|
—
|
|
|
$
|
1,134,727
|
|
Total assets
|
|
$
|
6,513,806
|
|
|
$
|
—
|
|
|
$
|
1,920,487
|
|
|
$
|
1,306,169
|
|
|
$
|
(304,801
|
)
|
|
$
|
9,435,661
|
|
Long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,243,912
|
|
|
$
|
991,225
|
|
|
$
|
—
|
|
|
$
|
2,235,137
|
|
NOTE 17:
|
Additional Financial Information
|
Condensed Consolidating Balance Sheet
|
|
|
|
|
|
|
|
|||||||||
September 30, 2017
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
HEP Segment
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||
|
|
(In thousands)
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
623,266
|
|
|
$
|
7,476
|
|
|
$
|
—
|
|
|
$
|
630,742
|
|
Accounts receivable, net
|
|
713,580
|
|
|
50,083
|
|
|
(49,315
|
)
|
|
714,348
|
|
||||
Inventories
|
|
1,418,954
|
|
|
888
|
|
|
—
|
|
|
1,419,842
|
|
||||
Income taxes receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Prepayments and other
|
|
36,810
|
|
|
1,407
|
|
|
(6,088
|
)
|
|
32,129
|
|
||||
Total current assets
|
|
2,792,610
|
|
|
59,854
|
|
|
(55,403
|
)
|
|
2,797,061
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Properties, plants and equipment, net
|
|
3,315,512
|
|
|
1,341,770
|
|
|
(220,451
|
)
|
|
4,436,831
|
|
||||
Intangibles and other assets
|
|
2,412,156
|
|
|
501,683
|
|
|
624
|
|
|
2,914,463
|
|
||||
Total assets
|
|
$
|
8,520,278
|
|
|
$
|
1,903,307
|
|
|
$
|
(275,230
|
)
|
|
$
|
10,148,355
|
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
|
$
|
1,127,840
|
|
|
$
|
23,143
|
|
|
$
|
(49,315
|
)
|
|
$
|
1,101,668
|
|
Income tax payable
|
|
64,255
|
|
|
—
|
|
|
—
|
|
|
64,255
|
|
||||
Accrued liabilities
|
|
209,847
|
|
|
31,333
|
|
|
(6,088
|
)
|
|
235,092
|
|
||||
Total current liabilities
|
|
1,401,942
|
|
|
54,476
|
|
|
(55,403
|
)
|
|
1,401,015
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
991,448
|
|
|
1,245,066
|
|
|
—
|
|
|
2,236,514
|
|
||||
Liability to HEP
|
|
199,210
|
|
|
—
|
|
|
(199,210
|
)
|
|
—
|
|
||||
Deferred income taxes
|
|
841,600
|
|
|
522
|
|
|
—
|
|
|
842,122
|
|
||||
Other long-term liabilities
|
|
142,087
|
|
|
61,361
|
|
|
(521
|
)
|
|
202,927
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Investment in HEP
|
|
158,016
|
|
|
—
|
|
|
(158,016
|
)
|
|
—
|
|
||||
Equity – HollyFrontier
|
|
4,785,975
|
|
|
450,591
|
|
|
(387,702
|
)
|
|
4,848,864
|
|
||||
Equity – noncontrolling interest
|
|
—
|
|
|
91,291
|
|
|
525,622
|
|
|
616,913
|
|
||||
Total liabilities and equity
|
|
$
|
8,520,278
|
|
|
$
|
1,903,307
|
|
|
$
|
(275,230
|
)
|
|
$
|
10,148,355
|
|
Condensed Consolidating Balance Sheet
|
|
|
|
|
|
|
|
|||||||||
December 31, 2016
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
HEP Segment
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||
|
|
(In thousands)
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
706,922
|
|
|
$
|
3,657
|
|
|
$
|
—
|
|
|
$
|
710,579
|
|
Marketable securities
|
|
424,148
|
|
|
—
|
|
|
—
|
|
|
424,148
|
|
||||
Accounts receivable, net
|
|
487,693
|
|
|
50,408
|
|
|
(58,902
|
)
|
|
479,199
|
|
||||
Inventories
|
|
1,134,274
|
|
|
1,402
|
|
|
—
|
|
|
1,135,676
|
|
||||
Income taxes receivable
|
|
68,371
|
|
|
—
|
|
|
—
|
|
|
68,371
|
|
||||
Prepayments and other
|
|
37,379
|
|
|
1,486
|
|
|
(5,829
|
)
|
|
33,036
|
|
||||
Total current assets
|
|
2,858,787
|
|
|
56,953
|
|
|
(64,731
|
)
|
|
2,851,009
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Properties, plants and equipment, net
|
|
2,874,041
|
|
|
1,365,568
|
|
|
(231,161
|
)
|
|
4,008,448
|
|
||||
Intangibles and other assets
|
|
2,077,683
|
|
|
497,966
|
|
|
555
|
|
|
2,576,204
|
|
||||
Total assets
|
|
$
|
7,810,511
|
|
|
$
|
1,920,487
|
|
|
$
|
(295,337
|
)
|
|
$
|
9,435,661
|
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
|
$
|
967,347
|
|
|
$
|
26,942
|
|
|
$
|
(58,902
|
)
|
|
$
|
935,387
|
|
Accrued liabilities
|
|
115,878
|
|
|
37,793
|
|
|
(5,829
|
)
|
|
147,842
|
|
||||
Total current liabilities
|
|
1,083,225
|
|
|
64,735
|
|
|
(64,731
|
)
|
|
1,083,229
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
991,225
|
|
|
1,243,912
|
|
|
—
|
|
|
2,235,137
|
|
||||
Liability to HEP
|
|
208,603
|
|
|
—
|
|
|
(208,603
|
)
|
|
—
|
|
||||
Deferred income taxes
|
|
619,905
|
|
|
509
|
|
|
—
|
|
|
620,414
|
|
||||
Other long-term liabilities
|
|
132,515
|
|
|
62,971
|
|
|
(590
|
)
|
|
194,896
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Investment in HEP
|
|
136,435
|
|
|
—
|
|
|
(136,435
|
)
|
|
—
|
|
||||
Equity – HollyFrontier
|
|
4,638,603
|
|
|
454,803
|
|
|
(412,012
|
)
|
|
4,681,394
|
|
||||
Equity – noncontrolling interest
|
|
—
|
|
|
93,557
|
|
|
527,034
|
|
|
620,591
|
|
||||
Total liabilities and equity
|
|
$
|
7,810,511
|
|
|
$
|
1,920,487
|
|
|
$
|
(295,337
|
)
|
|
$
|
9,435,661
|
|
Condensed Consolidating Statement of Income and Comprehensive Income
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2016
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
HEP Segment
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||
|
(In thousands)
|
|||||||||||||||
Sales and other revenues
|
|
$
|
2,832,206
|
|
|
$
|
92,611
|
|
|
$
|
(77,547
|
)
|
|
$
|
2,847,270
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of products sold
|
|
2,414,254
|
|
|
—
|
|
|
(72,417
|
)
|
|
2,341,837
|
|
||||
Lower of cost or market inventory valuation adjustment
|
|
312
|
|
|
—
|
|
|
—
|
|
|
312
|
|
||||
Operating expenses
|
|
228,469
|
|
|
32,099
|
|
|
(4,336
|
)
|
|
256,232
|
|
||||
Selling, general and administrative
|
|
30,329
|
|
|
2,665
|
|
|
—
|
|
|
32,994
|
|
||||
Depreciation and amortization
|
|
76,225
|
|
|
18,515
|
|
|
(3,610
|
)
|
|
91,130
|
|
||||
Total operating costs and expenses
|
|
2,749,589
|
|
|
53,279
|
|
|
(80,363
|
)
|
|
2,722,505
|
|
||||
Income from operations
|
|
82,617
|
|
|
39,332
|
|
|
2,816
|
|
|
124,765
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Earnings of equity method investments
|
|
23,414
|
|
|
3,767
|
|
|
(23,414
|
)
|
|
3,767
|
|
||||
Interest expense
|
|
(2,042
|
)
|
|
(14,339
|
)
|
|
(2,391
|
)
|
|
(18,772
|
)
|
||||
Other, net
|
|
(3
|
)
|
|
110
|
|
|
—
|
|
|
107
|
|
||||
|
|
21,369
|
|
|
(10,462
|
)
|
|
(25,805
|
)
|
|
(14,898
|
)
|
||||
Income before income taxes
|
|
103,986
|
|
|
28,870
|
|
|
(22,989
|
)
|
|
109,867
|
|
||||
Income tax expense
|
|
22,135
|
|
|
61
|
|
|
—
|
|
|
22,196
|
|
||||
Net income
|
|
81,851
|
|
|
28,809
|
|
|
(22,989
|
)
|
|
87,671
|
|
||||
Less net income (loss) attributable to noncontrolling interest
|
|
(8
|
)
|
|
1,166
|
|
|
12,016
|
|
|
13,174
|
|
||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
81,859
|
|
|
$
|
27,643
|
|
|
$
|
(35,005
|
)
|
|
$
|
74,497
|
|
Comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
83,632
|
|
|
$
|
27,760
|
|
|
$
|
(35,121
|
)
|
|
$
|
76,271
|
|
Condensed Consolidating Statement of Income and Comprehensive Income
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2016
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
HEP Segment
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||
|
(In thousands)
|
|||||||||||||||
Sales and other revenues
|
|
$
|
7,530,972
|
|
|
$
|
289,517
|
|
|
$
|
(239,857
|
)
|
|
$
|
7,580,632
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of products sold
|
|
6,439,241
|
|
|
—
|
|
|
(224,086
|
)
|
|
6,215,155
|
|
||||
Lower of cost or market inventory valuation adjustment
|
|
(194,282
|
)
|
|
—
|
|
|
—
|
|
|
(194,282
|
)
|
||||
Operating expenses
|
|
684,388
|
|
|
89,067
|
|
|
(13,304
|
)
|
|
760,151
|
|
||||
Selling, general and administrative
|
|
79,652
|
|
|
8,618
|
|
|
—
|
|
|
88,270
|
|
||||
Depreciation and amortization
|
|
230,332
|
|
|
49,852
|
|
|
(10,751
|
)
|
|
269,433
|
|
||||
Goodwill and asset impairment
|
|
654,084
|
|
|
—
|
|
|
—
|
|
|
654,084
|
|
||||
Total operating costs and expenses
|
|
7,893,415
|
|
|
147,537
|
|
|
(248,141
|
)
|
|
7,792,811
|
|
||||
Income (loss) from operations
|
|
(362,443
|
)
|
|
141,980
|
|
|
8,284
|
|
|
(212,179
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Earnings of equity method investments
|
|
74,307
|
|
|
10,155
|
|
|
(74,307
|
)
|
|
10,155
|
|
||||
Interest expense
|
|
(1,673
|
)
|
|
(35,926
|
)
|
|
(6,909
|
)
|
|
(44,508
|
)
|
||||
Loss on early extinguishment of debt
|
|
(8,718
|
)
|
|
—
|
|
|
—
|
|
|
(8,718
|
)
|
||||
Other, net
|
|
197
|
|
|
103
|
|
|
—
|
|
|
300
|
|
||||
|
|
64,113
|
|
|
(25,668
|
)
|
|
(81,216
|
)
|
|
(42,771
|
)
|
||||
Income (loss) before income taxes
|
|
(298,330
|
)
|
|
116,312
|
|
|
(72,932
|
)
|
|
(254,950
|
)
|
||||
Income tax expense
|
|
6,249
|
|
|
210
|
|
|
—
|
|
|
6,459
|
|
||||
Net income (loss)
|
|
(304,579
|
)
|
|
116,102
|
|
|
(72,932
|
)
|
|
(261,409
|
)
|
||||
Less net income (loss) attributable to noncontrolling interest
|
|
(24
|
)
|
|
8,448
|
|
|
43,785
|
|
|
52,209
|
|
||||
Net income (loss) attributable to HollyFrontier stockholders
|
|
$
|
(304,555
|
)
|
|
$
|
107,654
|
|
|
$
|
(116,717
|
)
|
|
$
|
(313,618
|
)
|
Comprehensive income (loss) attributable to HollyFrontier stockholders
|
|
$
|
(292,773
|
)
|
|
$
|
107,537
|
|
|
$
|
(116,600
|
)
|
|
$
|
(301,836
|
)
|
Condensed Consolidating Statement of Cash Flows
|
|
|
|
|
|
|
|
|||||||||
Nine Months Ended September 30, 2017
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
HEP Segment
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Cash flows from operating activities
|
|
$
|
701,021
|
|
|
$
|
177,762
|
|
|
$
|
(93,370
|
)
|
|
$
|
785,413
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
||||||||
Additions to properties, plants and equipment
|
|
(162,442
|
)
|
|
—
|
|
|
—
|
|
|
(162,442
|
)
|
||||
Additions to properties, plants and equipment – HEP
|
|
—
|
|
|
(30,675
|
)
|
|
—
|
|
|
(30,675
|
)
|
||||
Purchase of PCLI, net of cash acquired
|
|
(870,627
|
)
|
|
—
|
|
|
—
|
|
|
(870,627
|
)
|
||||
Purchases of marketable securities
|
|
(41,565
|
)
|
|
—
|
|
|
—
|
|
|
(41,565
|
)
|
||||
Sales and maturities of marketable securities
|
|
465,716
|
|
|
—
|
|
|
—
|
|
|
465,716
|
|
||||
Other, net
|
|
1,006
|
|
|
1,715
|
|
|
(424
|
)
|
|
2,297
|
|
||||
|
|
(607,912
|
)
|
|
(28,960
|
)
|
|
(424
|
)
|
|
(637,296
|
)
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
||||||||
Net borrowings under credit agreements
|
|
—
|
|
|
197,000
|
|
|
—
|
|
|
197,000
|
|
||||
Proceeds from issuance of senior notes - HEP
|
|
—
|
|
|
101,750
|
|
|
—
|
|
|
101,750
|
|
||||
Redemption of senior notes - HEP
|
|
—
|
|
|
(309,750
|
)
|
|
—
|
|
|
(309,750
|
)
|
||||
Proceeds from issuance of common units - HEP
|
|
—
|
|
|
52,285
|
|
|
—
|
|
|
52,285
|
|
||||
Dividends
|
|
(176,519
|
)
|
|
—
|
|
|
—
|
|
|
(176,519
|
)
|
||||
Distributions to noncontrolling interest
|
|
—
|
|
|
(176,560
|
)
|
|
94,763
|
|
|
(81,797
|
)
|
||||
Other, net
|
|
(2,744
|
)
|
|
(9,708
|
)
|
|
(969
|
)
|
|
(13,421
|
)
|
||||
|
|
(179,263
|
)
|
|
(144,983
|
)
|
|
93,794
|
|
|
(230,452
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Effect of exchange rates on cash flows
|
|
2,498
|
|
|
—
|
|
|
—
|
|
|
2,498
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Increase (decrease) for the period
|
|
(83,656
|
)
|
|
3,819
|
|
|
—
|
|
|
(79,837
|
)
|
||||
Beginning of period
|
|
706,922
|
|
|
3,657
|
|
|
—
|
|
|
710,579
|
|
||||
End of period
|
|
$
|
623,266
|
|
|
$
|
7,476
|
|
|
$
|
—
|
|
|
$
|
630,742
|
|
Condensed Consolidating Statement of Cash Flows
|
|
|
|
|
|
|
|
|||||||||
Nine Months Ended September 30, 2016
|
|
HollyFrontier
Corp. Before
Consolidation
of HEP
|
|
HEP Segment
|
|
Consolidations and Eliminations
|
|
Consolidated
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Cash flows from operating activities
|
|
$
|
335,983
|
|
|
$
|
184,268
|
|
|
$
|
(75,977
|
)
|
|
$
|
444,274
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Additions to properties, plants and equipment
|
|
(291,362
|
)
|
|
—
|
|
|
—
|
|
|
(291,362
|
)
|
||||
Additions to properties, plants and equipment – HEP
|
|
—
|
|
|
(96,115
|
)
|
|
—
|
|
|
(96,115
|
)
|
||||
Purchase of equity method investment - HEP
|
|
—
|
|
|
(42,550
|
)
|
|
—
|
|
|
(42,550
|
)
|
||||
Purchases of marketable securities
|
|
(155,091
|
)
|
|
—
|
|
|
—
|
|
|
(155,091
|
)
|
||||
Sales and maturities of marketable securities
|
|
187,358
|
|
|
—
|
|
|
—
|
|
|
187,358
|
|
||||
Other, net
|
|
396
|
|
|
210
|
|
|
—
|
|
|
606
|
|
||||
|
|
(258,699
|
)
|
|
(138,455
|
)
|
|
—
|
|
|
(397,154
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Net repayments under credit agreements
|
|
—
|
|
|
(332,000
|
)
|
|
—
|
|
|
(332,000
|
)
|
||||
Proceeds from issuance of senior notes - HFC
|
|
246,690
|
|
|
—
|
|
|
—
|
|
|
246,690
|
|
||||
Proceeds from issuance of senior notes - HEP
|
|
—
|
|
|
394,000
|
|
|
—
|
|
|
394,000
|
|
||||
Proceeds from issuance of term loan
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
||||
Proceeds from issuance of common units - HEP
|
|
—
|
|
|
22,791
|
|
|
—
|
|
|
22,791
|
|
||||
Repayment of financing obligation
|
|
—
|
|
|
(39,500
|
)
|
|
—
|
|
|
(39,500
|
)
|
||||
Purchase of treasury stock
|
|
(133,430
|
)
|
|
—
|
|
|
—
|
|
|
(133,430
|
)
|
||||
Dividends
|
|
(175,194
|
)
|
|
—
|
|
|
—
|
|
|
(175,194
|
)
|
||||
Distributions to noncontrolling interest
|
|
—
|
|
|
(142,548
|
)
|
|
75,977
|
|
|
(66,571
|
)
|
||||
Contribution from general partner
|
|
(55,027
|
)
|
|
55,027
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
|
(2,730
|
)
|
|
(11,388
|
)
|
|
—
|
|
|
(14,118
|
)
|
||||
|
|
230,309
|
|
|
(53,618
|
)
|
|
75,977
|
|
|
252,668
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Increase (decrease) for the period:
|
|
307,593
|
|
|
(7,805
|
)
|
|
—
|
|
|
299,788
|
|
||||
Beginning of period
|
|
51,520
|
|
|
15,013
|
|
|
—
|
|
|
66,533
|
|
||||
End of period
|
|
$
|
359,113
|
|
|
$
|
7,208
|
|
|
$
|
—
|
|
|
$
|
366,321
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended September 30,
|
|
Change from 2016
|
|||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
Percent
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||
Sales and other revenues
|
|
$
|
3,719,247
|
|
|
$
|
2,847,270
|
|
|
$
|
871,977
|
|
|
31
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of products sold (exclusive of depreciation and amortization):
|
|
|
|
|
|
|
|
|
|||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
2,888,530
|
|
|
2,341,837
|
|
|
546,693
|
|
|
23
|
|
|||
Lower of cost or market inventory valuation adjustment
|
|
(111,128
|
)
|
|
312
|
|
|
(111,440
|
)
|
|
(35,718
|
)
|
|||
|
|
2,777,402
|
|
|
2,342,149
|
|
|
435,253
|
|
|
19
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
321,668
|
|
|
256,232
|
|
|
65,436
|
|
|
26
|
|
|||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
68,013
|
|
|
32,994
|
|
|
35,019
|
|
|
106
|
|
|||
Depreciation and amortization
|
|
102,884
|
|
|
91,130
|
|
|
11,754
|
|
|
13
|
|
|||
Total operating costs and expenses
|
|
3,269,967
|
|
|
2,722,505
|
|
|
547,462
|
|
|
20
|
|
|||
Income from operations
|
|
449,280
|
|
|
124,765
|
|
|
324,515
|
|
|
260
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings of equity method investments
|
|
5,072
|
|
|
3,767
|
|
|
1,305
|
|
|
35
|
|
|||
Interest income
|
|
1,074
|
|
|
778
|
|
|
296
|
|
|
38
|
|
|||
Interest expense
|
|
(28,731
|
)
|
|
(19,550
|
)
|
|
(9,181
|
)
|
|
47
|
|
|||
Gain on foreign currency transactions
|
|
19,122
|
|
|
—
|
|
|
19,122
|
|
|
—
|
|
|||
Other, net
|
|
286
|
|
|
107
|
|
|
179
|
|
|
167
|
|
|||
|
|
(3,177
|
)
|
|
(14,898
|
)
|
|
11,721
|
|
|
(79
|
)
|
|||
Income before income taxes
|
|
446,103
|
|
|
109,867
|
|
|
336,236
|
|
|
306
|
|
|||
Income tax expense
|
|
158,386
|
|
|
22,196
|
|
|
136,190
|
|
|
614
|
|
|||
Net income
|
|
287,717
|
|
|
87,671
|
|
|
200,046
|
|
|
228
|
|
|||
Less net income attributable to noncontrolling interest
|
|
15,703
|
|
|
13,174
|
|
|
2,529
|
|
|
19
|
|
|||
Net income attributable to HollyFrontier stockholders
|
|
$
|
272,014
|
|
|
$
|
74,497
|
|
|
$
|
197,517
|
|
|
265
|
%
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
1.53
|
|
|
$
|
0.42
|
|
|
$
|
1.11
|
|
|
264
|
%
|
Diluted
|
|
$
|
1.53
|
|
|
$
|
0.42
|
|
|
$
|
1.11
|
|
|
264
|
%
|
Cash dividends declared per common share
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
—
|
|
|
—
|
%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
176,149
|
|
|
175,871
|
|
|
278
|
|
|
—
|
%
|
|||
Diluted
|
|
176,530
|
|
|
175,993
|
|
|
537
|
|
|
—
|
%
|
|
|
Nine Months Ended
September 30, |
|
Change from 2016
|
|||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
Percent
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||
Sales and other revenues
|
|
$
|
10,258,594
|
|
|
$
|
7,580,632
|
|
|
$
|
2,677,962
|
|
|
35
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of products sold (exclusive of depreciation and amortization):
|
|
|
|
|
|
|
|
|
|||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
8,283,127
|
|
|
6,215,155
|
|
|
2,067,972
|
|
|
33
|
|
|||
Lower of cost or market inventory valuation adjustment
|
|
(15,323
|
)
|
|
(194,282
|
)
|
|
178,959
|
|
|
(92
|
)
|
|||
|
|
8,267,804
|
|
|
6,020,873
|
|
|
2,246,931
|
|
|
37
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
944,437
|
|
|
760,151
|
|
|
184,286
|
|
|
24
|
|
|||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
184,659
|
|
|
88,270
|
|
|
96,389
|
|
|
109
|
|
|||
Depreciation and amortization
|
|
304,206
|
|
|
269,433
|
|
|
34,773
|
|
|
13
|
|
|||
Goodwill and asset impairment
|
|
19,247
|
|
|
654,084
|
|
|
(634,837
|
)
|
|
(97
|
)
|
|||
Total operating costs and expenses
|
|
9,720,353
|
|
|
7,792,811
|
|
|
1,927,542
|
|
|
25
|
|
|||
Income (loss) from operations
|
|
538,241
|
|
|
(212,179
|
)
|
|
750,420
|
|
|
(354
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings of equity method investments
|
|
10,965
|
|
|
10,155
|
|
|
810
|
|
|
8
|
|
|||
Interest income
|
|
2,069
|
|
|
1,380
|
|
|
689
|
|
|
50
|
|
|||
Interest expense
|
|
(85,534
|
)
|
|
(45,888
|
)
|
|
(39,646
|
)
|
|
86
|
|
|||
Loss on early extinguishment of debt
|
|
(12,225
|
)
|
|
(8,718
|
)
|
|
(3,507
|
)
|
|
40
|
|
|||
Gain on foreign currency swaps
|
|
24,545
|
|
|
—
|
|
|
24,545
|
|
|
—
|
|
|||
Gain on foreign currency transactions
|
|
19,517
|
|
|
—
|
|
|
19,517
|
|
|
—
|
|
|||
Other, net
|
|
23
|
|
|
300
|
|
|
(277
|
)
|
|
(92
|
)
|
|||
|
|
(40,640
|
)
|
|
(42,771
|
)
|
|
2,131
|
|
|
(5
|
)
|
|||
Income (loss) before income taxes
|
|
497,601
|
|
|
(254,950
|
)
|
|
752,551
|
|
|
(295
|
)
|
|||
Income tax expense
|
|
173,593
|
|
|
6,459
|
|
|
167,134
|
|
|
2,588
|
|
|||
Net income (loss)
|
|
324,008
|
|
|
(261,409
|
)
|
|
585,417
|
|
|
(224
|
)
|
|||
Less net income attributable to noncontrolling interest
|
|
39,695
|
|
|
52,209
|
|
|
(12,514
|
)
|
|
(24
|
)
|
|||
Net income (loss) attributable to HollyFrontier stockholders
|
|
$
|
284,313
|
|
|
$
|
(313,618
|
)
|
|
$
|
597,931
|
|
|
(191
|
)%
|
Earnings (loss) per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
1.60
|
|
|
$
|
(1.78
|
)
|
|
$
|
3.38
|
|
|
(190
|
)%
|
Diluted
|
|
$
|
1.60
|
|
|
$
|
(1.78
|
)
|
|
$
|
3.38
|
|
|
(190
|
)%
|
Cash dividends declared per common share
|
|
$
|
0.99
|
|
|
$
|
0.99
|
|
|
$
|
—
|
|
|
—
|
%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
176,143
|
|
|
176,157
|
|
|
(14
|
)
|
|
—
|
%
|
|||
Diluted
|
|
176,616
|
|
|
176,157
|
|
|
459
|
|
|
—
|
%
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(Unaudited)
|
|
|
||||
|
|
(In thousands)
|
||||||
Cash, cash equivalents and total investments in marketable securities
|
|
$
|
630,742
|
|
|
$
|
1,134,727
|
|
Working capital
|
|
$
|
1,396,046
|
|
|
$
|
1,767,780
|
|
Total assets
|
|
$
|
10,148,355
|
|
|
$
|
9,435,661
|
|
Long-term debt
|
|
$
|
2,236,514
|
|
|
$
|
2,235,137
|
|
Total equity
|
|
$
|
5,465,777
|
|
|
$
|
5,301,985
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Net cash provided by operating activities
|
|
$
|
312,015
|
|
|
$
|
133,948
|
|
|
$
|
785,413
|
|
|
$
|
444,274
|
|
Net cash used for investing activities
|
|
$
|
(56,787
|
)
|
|
$
|
(127,818
|
)
|
|
$
|
(637,296
|
)
|
|
$
|
(397,154
|
)
|
Net cash provided by (used for) financing activities
|
|
$
|
(86,986
|
)
|
|
$
|
(91,799
|
)
|
|
$
|
(230,452
|
)
|
|
$
|
252,668
|
|
Capital expenditures
|
|
$
|
56,067
|
|
|
$
|
97,432
|
|
|
$
|
193,117
|
|
|
$
|
387,477
|
|
EBITDA
(1)
|
|
$
|
560,941
|
|
|
$
|
206,595
|
|
|
$
|
857,802
|
|
|
$
|
15,500
|
|
(1)
|
Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as net income (loss) attributable to HollyFrontier stockholders plus (i) interest expense, net of interest income, (ii) income tax provision, and (iii) depreciation and amortization. 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. 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,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries)
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
262,470
|
|
|
271,780
|
|
|
258,420
|
|
|
258,680
|
|
||||
Refinery throughput (BPD)
(2)
|
|
275,270
|
|
|
289,010
|
|
|
274,200
|
|
|
277,870
|
|
||||
Refinery production (BPD)
(3)
|
|
263,760
|
|
|
276,720
|
|
|
263,520
|
|
|
266,510
|
|
||||
Sales of produced refined products (BPD)
|
|
252,350
|
|
|
262,060
|
|
|
254,000
|
|
|
253,390
|
|
||||
Sales of refined products (BPD)
(4)
|
|
270,720
|
|
|
292,310
|
|
|
278,180
|
|
|
280,150
|
|
||||
Refinery utilization
(5)
|
|
101.0
|
%
|
|
104.5
|
%
|
|
99.4
|
%
|
|
99.5
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
69.81
|
|
|
$
|
61.71
|
|
|
$
|
67.12
|
|
|
$
|
56.61
|
|
Cost of products
(7)
|
|
56.40
|
|
|
52.08
|
|
|
57.19
|
|
|
48.19
|
|
||||
Refinery gross margin
(8)
|
|
13.41
|
|
|
9.63
|
|
|
9.93
|
|
|
8.42
|
|
||||
Refinery operating expenses
(9)
|
|
4.98
|
|
|
4.70
|
|
|
5.14
|
|
|
4.87
|
|
||||
Net operating margin
(8)
|
|
$
|
8.43
|
|
|
$
|
4.93
|
|
|
$
|
4.79
|
|
|
$
|
3.55
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(10)
|
|
$
|
4.57
|
|
|
$
|
4.26
|
|
|
$
|
4.76
|
|
|
$
|
4.44
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Mid-Continent Region (El Dorado and Tulsa Refineries)
|
|
|
|
|
|
|
|
|
||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||
Sweet crude oil
|
|
65
|
%
|
|
62
|
%
|
|
62
|
%
|
|
58
|
%
|
Sour crude oil
|
|
14
|
%
|
|
15
|
%
|
|
17
|
%
|
|
17
|
%
|
Heavy sour crude oil
|
|
16
|
%
|
|
17
|
%
|
|
15
|
%
|
|
18
|
%
|
Other feedstocks and blends
|
|
5
|
%
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||
Gasolines
|
|
50
|
%
|
|
51
|
%
|
|
50
|
%
|
|
49
|
%
|
Diesel fuels
|
|
34
|
%
|
|
33
|
%
|
|
33
|
%
|
|
34
|
%
|
Jet fuels
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
|
6
|
%
|
Fuel oil
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Asphalt
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
Lubricants
|
|
4
|
%
|
|
5
|
%
|
|
4
|
%
|
|
5
|
%
|
LPG and other
|
|
2
|
%
|
|
1
|
%
|
|
2
|
%
|
|
2
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Southwest Region (Navajo Refinery)
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
112,060
|
|
|
100,180
|
|
|
96,350
|
|
|
99,990
|
|
||||
Refinery throughput (BPD)
(2)
|
|
122,890
|
|
|
109,350
|
|
|
105,190
|
|
|
110,020
|
|
||||
Refinery production (BPD)
(3)
|
|
121,040
|
|
|
107,940
|
|
|
103,620
|
|
|
108,660
|
|
||||
Sales of produced refined products (BPD)
|
|
125,770
|
|
|
107,010
|
|
|
103,680
|
|
|
110,240
|
|
||||
Sales of refined products (BPD)
(4)
|
|
125,790
|
|
|
110,270
|
|
|
109,070
|
|
|
111,850
|
|
||||
Refinery utilization
(5)
|
|
112.1
|
%
|
|
100.2
|
%
|
|
96.4
|
%
|
|
100.0
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
70.21
|
|
|
$
|
60.24
|
|
|
$
|
67.99
|
|
|
$
|
55.81
|
|
Cost of products
(7)
|
|
55.38
|
|
|
50.74
|
|
|
55.94
|
|
|
46.64
|
|
||||
Refinery gross margin
(8)
|
|
14.83
|
|
|
9.50
|
|
|
12.05
|
|
|
9.17
|
|
||||
Refinery operating expenses
(9)
|
|
4.04
|
|
|
4.86
|
|
|
5.05
|
|
|
4.62
|
|
||||
Net operating margin
(8)
|
|
$
|
10.79
|
|
|
$
|
4.64
|
|
|
$
|
7.00
|
|
|
$
|
4.55
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(10)
|
|
$
|
4.13
|
|
|
$
|
4.76
|
|
|
$
|
4.98
|
|
|
$
|
4.63
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
25
|
%
|
|
26
|
%
|
|
23
|
%
|
|
29
|
%
|
||||
Sour crude oil
|
|
66
|
%
|
|
66
|
%
|
|
68
|
%
|
|
62
|
%
|
||||
Other feedstocks and blends
|
|
9
|
%
|
|
8
|
%
|
|
9
|
%
|
|
9
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||||||
Gasolines
|
|
51
|
%
|
|
52
|
%
|
|
52
|
%
|
|
54
|
%
|
||||
Diesel fuels
|
|
42
|
%
|
|
42
|
%
|
|
41
|
%
|
|
41
|
%
|
||||
Fuel oil
|
|
4
|
%
|
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
||||
Asphalt
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
||||
LPG and other
|
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
|
|
|
|
|
|
|
|
|
||||
Crude charge (BPD)
(1)
|
|
80,260
|
|
|
71,600
|
|
|
76,510
|
|
|
62,490
|
|
Refinery throughput (BPD)
(2)
|
|
87,620
|
|
|
75,470
|
|
|
84,050
|
|
|
66,490
|
|
Refinery production (BPD)
(3)
|
|
84,800
|
|
|
72,080
|
|
|
81,370
|
|
|
63,320
|
|
Sales of produced refined products (BPD)
|
|
77,840
|
|
|
68,630
|
|
|
78,140
|
|
|
63,800
|
|
Sales of refined products (BPD)
(4)
|
|
78,230
|
|
|
71,450
|
|
|
78,570
|
|
|
67,800
|
|
Refinery utilization
(5)
|
|
82.7
|
%
|
|
73.8
|
%
|
|
78.9
|
%
|
|
71.3
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
72.43
|
|
|
$
|
61.89
|
|
|
$
|
68.91
|
|
|
$
|
56.76
|
|
Cost of products
(7)
|
|
54.65
|
|
|
50.83
|
|
|
53.20
|
|
|
47.13
|
|
||||
Refinery gross margin
(8)
|
|
17.78
|
|
|
11.06
|
|
|
15.71
|
|
|
9.63
|
|
||||
Refinery operating expenses
(9)
|
|
10.50
|
|
|
9.48
|
|
|
10.30
|
|
|
10.14
|
|
||||
Net operating margin
(8)
|
|
$
|
7.28
|
|
|
$
|
1.58
|
|
|
$
|
5.41
|
|
|
$
|
(0.51
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(10)
|
|
$
|
9.33
|
|
|
$
|
8.62
|
|
|
$
|
9.58
|
|
|
$
|
9.73
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
32
|
%
|
|
33
|
%
|
|
34
|
%
|
|
39
|
%
|
||||
Heavy sour crude oil
|
|
37
|
%
|
|
42
|
%
|
|
36
|
%
|
|
37
|
%
|
||||
Black wax crude oil
|
|
23
|
%
|
|
20
|
%
|
|
21
|
%
|
|
18
|
%
|
||||
Other feedstocks and blends
|
|
8
|
%
|
|
5
|
%
|
|
9
|
%
|
|
6
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||||||
Gasolines
|
|
59
|
%
|
|
58
|
%
|
|
59
|
%
|
|
59
|
%
|
||||
Diesel fuels
|
|
33
|
%
|
|
34
|
%
|
|
33
|
%
|
|
34
|
%
|
||||
Fuel oil
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
||||
Asphalt
|
|
2
|
%
|
|
3
|
%
|
|
4
|
%
|
|
2
|
%
|
||||
LPG and other
|
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
|
3
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
454,790
|
|
|
443,560
|
|
|
431,280
|
|
|
421,160
|
|
||||
Refinery throughput (BPD)
(2)
|
|
485,780
|
|
|
473,830
|
|
|
463,440
|
|
|
454,380
|
|
||||
Refinery production (BPD)
(3)
|
|
469,600
|
|
|
456,740
|
|
|
448,510
|
|
|
438,490
|
|
||||
Sales of produced refined products (BPD)
|
|
455,960
|
|
|
437,700
|
|
|
435,820
|
|
|
427,430
|
|
||||
Sales of refined products (BPD)
(4)
|
|
474,740
|
|
|
474,030
|
|
|
465,820
|
|
|
459,800
|
|
||||
Refinery utilization
(5)
|
|
99.5
|
%
|
|
97.1
|
%
|
|
94.4
|
%
|
|
94.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(6)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
70.37
|
|
|
$
|
61.38
|
|
|
$
|
67.65
|
|
|
$
|
56.43
|
|
Cost of products
(7)
|
|
55.82
|
|
|
51.55
|
|
|
56.18
|
|
|
47.64
|
|
||||
Refinery gross margin
(8)
|
|
14.55
|
|
|
9.83
|
|
|
11.47
|
|
|
8.79
|
|
||||
Refinery operating expenses
(9)
|
|
5.67
|
|
|
5.49
|
|
|
6.04
|
|
|
5.59
|
|
||||
Net operating margin
(8)
|
|
$
|
8.88
|
|
|
$
|
4.34
|
|
|
$
|
5.43
|
|
|
$
|
3.20
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(10)
|
|
$
|
5.32
|
|
|
$
|
5.07
|
|
|
$
|
5.69
|
|
|
$
|
5.26
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
49
|
%
|
|
49
|
%
|
|
48
|
%
|
|
48
|
%
|
||||
Sour crude oil
|
|
25
|
%
|
|
25
|
%
|
|
25
|
%
|
|
26
|
%
|
||||
Heavy sour crude oil
|
|
16
|
%
|
|
17
|
%
|
|
16
|
%
|
|
16
|
%
|
||||
Black wax crude oil
|
|
4
|
%
|
|
3
|
%
|
|
4
|
%
|
|
3
|
%
|
||||
Other feedstocks and blends
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
|
7
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Consolidated
|
|
|
|
|
|
|
|
|
||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||
Gasolines
|
|
52
|
%
|
|
52
|
%
|
|
52
|
%
|
|
52
|
%
|
Diesel fuels
|
|
36
|
%
|
|
35
|
%
|
|
35
|
%
|
|
36
|
%
|
Jet fuels
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
Fuel oil
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
Asphalt
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
Lubricants
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
LPG and other
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Crude charge represents the barrels per day of crude oil processed at our refineries.
|
(2)
|
Refinery throughput represents the barrels per day of crude and other refinery feedstocks input to the crude units and other conversion units at our refineries.
|
(3)
|
Refinery production represents the barrels per day of refined products yielded from processing crude and other refinery feedstocks through the crude units and other conversion units at our refineries.
|
(4)
|
Includes refined products purchased for resale.
|
(5)
|
Represents crude charge divided by total crude capacity (BPSD). Effective July 1, 2016, our consolidated crude capacity increased from 443,000 BPSD to 457,000 BPSD upon completion of our Woods Cross Refinery expansion project.
|
(6)
|
Represents average per barrel amount for produced refined products sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” 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)
|
Excludes lower of cost or market inventory valuation adjustments that increased gross margin by
$111.1 million
and decreased gross margin by
$0.3 million
for the
three
months ended
September 30, 2017
and
2016
, respectively and increased gross margin by
$15.3 million
and
$194.3 million
for the
nine
months ended
September 30, 2017
and
2016
, respectively.
|
(9)
|
Represents operating expenses of our refineries, exclusive of depreciation and amortization.
|
(10)
|
Represents refinery operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.
|
|
|
Three months ended September 30, 2017
|
|
Period from February 1, 2017 through September 30, 2017
|
||
PCLI
|
|
|
|
|
||
Throughput (BPD)
(1)
|
|
22,356
|
|
|
21,978
|
|
Production (BPD)
(2)
|
|
21,666
|
|
|
21,393
|
|
Sales of produced refined products (BPD)
|
|
20,599
|
|
|
20,655
|
|
(1)
|
Throughput represents the barrels per day of feedstocks (principally vacuum gas oil and hydrocracker bottoms) input into our PCLI production facilities.
|
(2)
|
Production represents the barrels per day of products yielded from our PCLI production facilities.
|
•
|
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
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Unit of Measure
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Natural gas price swaps - long
|
|
12,000,000
|
|
|
4,800,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
MMBTU
|
Natural gas price swaps - short
|
|
2,400,000
|
|
|
2,400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
MMBTU
|
Natural gas price swaps (basis spread) - long
|
|
2,577,000
|
|
|
2,577,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
MMBTU
|
Crude price swaps (basis spread) - long
|
|
918,000
|
|
|
918,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
WTI and sub-octane gasoline crack spread swaps - short
|
|
700,000
|
|
|
700,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
NYMEX futures (WTI) - short
|
|
1,870,000
|
|
|
955,000
|
|
|
915,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
Forward gasoline and diesel contracts - long
|
|
715,000
|
|
|
705,000
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
Physical crude contracts -short
|
|
150,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|
|
Estimated Change in Fair Value at June 30,
|
||||||
Commodity-based Derivative Contracts
|
|
2017
|
|
2016
|
||||
|
|
(In thousands)
|
||||||
Hypothetical 10% change in underlying commodity prices
|
|
$
|
7,360
|
|
|
$
|
1,064
|
|
|
|
Outstanding
Principal
|
|
Estimated
Fair Value
|
|
Estimated
Change in
Fair Value
|
||||||
|
|
(In thousands)
|
||||||||||
HollyFrontier Senior Notes
|
|
$
|
1,000,000
|
|
|
$
|
1,091,470
|
|
|
$
|
33,555
|
|
HEP Senior Notes
|
|
$
|
500,000
|
|
|
$
|
524,390
|
|
|
$
|
15,158
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Net income (loss) attributable to HollyFrontier stockholders
|
$
|
272,014
|
|
|
$
|
74,497
|
|
|
$
|
284,313
|
|
|
$
|
(313,618
|
)
|
Add income tax expense
|
158,386
|
|
|
22,196
|
|
|
173,593
|
|
|
6,459
|
|
||||
Add interest expense
(1)
|
28,731
|
|
|
19,550
|
|
|
97,759
|
|
|
54,606
|
|
||||
Subtract interest income
|
(1,074
|
)
|
|
(778
|
)
|
|
(2,069
|
)
|
|
(1,380
|
)
|
||||
Add depreciation and amortization
|
102,884
|
|
|
91,130
|
|
|
304,206
|
|
|
269,433
|
|
||||
EBITDA
|
$
|
560,941
|
|
|
$
|
206,595
|
|
|
$
|
857,802
|
|
|
$
|
15,500
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Average sales price per produced barrel sold
|
$
|
70.37
|
|
|
$
|
61.38
|
|
|
$
|
67.65
|
|
|
$
|
56.43
|
|
Times sales of produced refined products (BPD)
|
455,960
|
|
|
437,700
|
|
|
435,820
|
|
|
427,430
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Produced refined product sales
|
$
|
2,951,903
|
|
|
$
|
2,471,674
|
|
|
$
|
8,048,920
|
|
|
$
|
6,608,846
|
|
|
|
|
|
|
|
|
|
||||||||
Total produced refined products sales
|
$
|
2,951,903
|
|
|
$
|
2,471,674
|
|
|
$
|
8,048,920
|
|
|
$
|
6,608,846
|
|
Add refined product sales from purchased products and rounding
(1)
|
125,519
|
|
|
207,698
|
|
|
558,786
|
|
|
500,509
|
|
||||
Total refined product sales
|
3,077,422
|
|
|
2,679,372
|
|
|
8,607,706
|
|
|
7,109,355
|
|
||||
Add direct sales of excess crude oil
(2)
|
277,810
|
|
|
103,145
|
|
|
658,117
|
|
|
294,845
|
|
||||
Add other refining segment revenue
(3)
|
54,563
|
|
|
49,678
|
|
|
147,185
|
|
|
126,604
|
|
||||
Total refining segment revenue
|
3,409,795
|
|
|
2,832,195
|
|
|
9,413,008
|
|
|
7,530,804
|
|
||||
Add PCLI segment sales and other revenues
|
298,137
|
|
|
—
|
|
|
809,643
|
|
|
—
|
|
||||
Add HEP segment sales and other revenues
|
110,364
|
|
|
92,611
|
|
|
325,141
|
|
|
289,517
|
|
||||
Add corporate and other revenues
|
(325
|
)
|
|
11
|
|
|
(283
|
)
|
|
168
|
|
||||
Subtract consolidations and eliminations
|
(98,724
|
)
|
|
(77,547
|
)
|
|
(288,915
|
)
|
|
(239,857
|
)
|
||||
Sales and other revenues
|
$
|
3,719,247
|
|
|
$
|
2,847,270
|
|
|
$
|
10,258,594
|
|
|
$
|
7,580,632
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Average cost of products per produced barrel sold
|
$
|
55.82
|
|
|
$
|
51.55
|
|
|
$
|
56.18
|
|
|
$
|
47.64
|
|
Times sales of produced refined products (BPD)
|
455,960
|
|
|
437,700
|
|
|
435,820
|
|
|
427,430
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Cost of products for produced products sold
|
$
|
2,341,555
|
|
|
$
|
2,075,836
|
|
|
$
|
6,684,232
|
|
|
$
|
5,579,398
|
|
|
|
|
|
|
|
|
|
||||||||
Total cost of products for produced products sold
|
$
|
2,341,555
|
|
|
$
|
2,075,836
|
|
|
$
|
6,684,232
|
|
|
$
|
5,579,398
|
|
Add refined product costs from purchased products and rounding
(1)
|
126,739
|
|
|
211,309
|
|
|
560,313
|
|
|
508,127
|
|
||||
Total cost of refined products sold
|
2,468,294
|
|
|
2,287,145
|
|
|
7,244,545
|
|
|
6,087,525
|
|
||||
Add crude oil cost of direct sales of excess crude oil
(2)
|
282,751
|
|
|
104,187
|
|
|
664,035
|
|
|
297,494
|
|
||||
Add other refining segment cost of products sold
(4)
|
37,349
|
|
|
22,922
|
|
|
83,923
|
|
|
54,222
|
|
||||
Total refining segment cost of products sold
|
2,788,394
|
|
|
2,414,254
|
|
|
7,992,503
|
|
|
6,439,241
|
|
||||
Add PCLI segment cost of products sold
|
177,324
|
|
|
—
|
|
|
519,187
|
|
|
—
|
|
||||
Subtract consolidations and eliminations
|
(77,188
|
)
|
|
(72,417
|
)
|
|
(228,563
|
)
|
|
(224,086
|
)
|
||||
Costs of products sold (exclusive of lower of cost or market inventory valuation adjustment and depreciation and amortization)
|
$
|
2,888,530
|
|
|
$
|
2,341,837
|
|
|
$
|
8,283,127
|
|
|
$
|
6,215,155
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Average refinery operating expenses per produced barrel sold
|
$
|
5.67
|
|
|
$
|
5.49
|
|
|
$
|
6.04
|
|
|
$
|
5.59
|
|
Times sales of produced refined products (BPD)
|
455,960
|
|
|
437,700
|
|
|
435,820
|
|
|
427,430
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Refinery operating expenses for produced products sold
|
$
|
237,847
|
|
|
$
|
221,074
|
|
|
$
|
718,632
|
|
|
$
|
654,677
|
|
|
|
|
|
|
|
|
|
||||||||
Total refinery operating expenses for produced products sold
|
$
|
237,847
|
|
|
$
|
221,074
|
|
|
$
|
718,632
|
|
|
$
|
654,677
|
|
Add other refining segment operating expenses and rounding
(5)
|
11,631
|
|
|
6,005
|
|
|
33,226
|
|
|
25,914
|
|
||||
Total refining segment operating expenses
|
249,478
|
|
|
227,079
|
|
|
751,858
|
|
|
680,591
|
|
||||
Add PCLI segment operating expenses
|
56,111
|
|
|
—
|
|
|
144,792
|
|
|
—
|
|
||||
Add HEP segment operating expenses
|
35,998
|
|
|
32,099
|
|
|
102,584
|
|
|
89,067
|
|
||||
Add corporate and other costs
|
817
|
|
|
1,390
|
|
|
3,152
|
|
|
3,797
|
|
||||
Subtract consolidations and eliminations
|
(20,736
|
)
|
|
(4,336
|
)
|
|
(57,949
|
)
|
|
(13,304
|
)
|
||||
Operating expenses (exclusive of depreciation and amortization)
|
$
|
321,668
|
|
|
$
|
256,232
|
|
|
$
|
944,437
|
|
|
$
|
760,151
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Net operating margin per barrel
|
$
|
8.88
|
|
|
$
|
4.34
|
|
|
$
|
5.43
|
|
|
$
|
3.20
|
|
Add average refinery operating expenses per produced barrel
|
5.67
|
|
|
5.49
|
|
|
6.04
|
|
|
5.59
|
|
||||
Refinery gross margin per barrel
|
14.55
|
|
|
9.83
|
|
|
11.47
|
|
|
8.79
|
|
||||
Add average cost of products per produced barrel sold
|
55.82
|
|
|
51.55
|
|
|
56.18
|
|
|
47.64
|
|
||||
Average sales price per produced barrel sold
|
$
|
70.37
|
|
|
$
|
61.38
|
|
|
$
|
67.65
|
|
|
$
|
56.43
|
|
Times sales of produced refined products (BPD)
|
455,960
|
|
|
437,700
|
|
|
435,820
|
|
|
427,430
|
|
||||
Times number of days in period
|
92
|
|
|
92
|
|
|
273
|
|
|
274
|
|
||||
Produced refined products sales
|
$
|
2,951,903
|
|
|
$
|
2,471,674
|
|
|
$
|
8,048,920
|
|
|
$
|
6,608,846
|
|
|
|
|
|
|
|
|
|
||||||||
Total produced refined products sales
|
$
|
2,951,903
|
|
|
$
|
2,471,674
|
|
|
$
|
8,048,920
|
|
|
$
|
6,608,846
|
|
Add refined product sales from purchased products and rounding
(1)
|
125,519
|
|
|
207,698
|
|
|
558,786
|
|
|
500,509
|
|
||||
Total refined product sales
|
3,077,422
|
|
|
2,679,372
|
|
|
8,607,706
|
|
|
7,109,355
|
|
||||
Add direct sales of excess crude oil
(2)
|
277,810
|
|
|
103,145
|
|
|
658,117
|
|
|
294,845
|
|
||||
Add other refining segment revenue
(3)
|
54,563
|
|
|
49,678
|
|
|
147,185
|
|
|
126,604
|
|
||||
Total refining segment revenue
|
3,409,795
|
|
|
2,832,195
|
|
|
9,413,008
|
|
|
7,530,804
|
|
||||
Add PCLI segment sales and other revenues
|
298,137
|
|
|
—
|
|
|
809,643
|
|
|
—
|
|
||||
Add HEP segment sales and other revenues
|
110,364
|
|
|
92,611
|
|
|
325,141
|
|
|
289,517
|
|
||||
Add corporate and other revenues
|
(325
|
)
|
|
11
|
|
|
(283
|
)
|
|
168
|
|
||||
Subtract consolidations and eliminations
|
(98,724
|
)
|
|
(77,547
|
)
|
|
(288,915
|
)
|
|
(239,857
|
)
|
||||
Sales and other revenues
|
$
|
3,719,247
|
|
|
$
|
2,847,270
|
|
|
$
|
10,258,594
|
|
|
$
|
7,580,632
|
|
(1)
|
We purchase finished products to facilitate delivery to certain locations or to meet delivery commitments.
|
(2)
|
We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as inventory and then upon sale as cost of products sold. Additionally, at times we enter into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at cost.
|
(3)
|
Other refining segment revenue includes the incremental revenues associated with HFC Asphalt, product purchased and sold forward for profit as market conditions and available storage capacity allows and miscellaneous revenue.
|
(4)
|
Other refining segment cost of products sold includes the incremental cost of products for HFC Asphalt, the incremental cost associated with storing product purchased and sold forward as market conditions and available storage capacity allows and miscellaneous costs.
|
(5)
|
Other refining segment operating expenses include the marketing costs associated with our refining segment and the operating expenses of HFC Asphalt.
|
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 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
178,811,213
|
|
August 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
178,811,213
|
|
September 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
178,811,213
|
|
Total for July to September 2017
|
|
—
|
|
|
|
|
—
|
|
|
|
Item 6.
|
Exhibits
|
Exhibit Number
|
|
Description
|
|
|
|
2.1
|
|
Equity Restructuring Agreement, dated as of October 18, 2017, by and between HEP Logistics Holdings, L.P. and Holly Energy Partners, L.P. (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed October 19, 2017, File No. 1-03876).
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101+
|
|
The following financial information from HollyFrontier Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, 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.
|
|
|
|
|
|
|
HOLLYFRONTIER CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: November 2, 2017
|
|
|
/s/ Richard L. Voliva III
|
|
|
|
Richard L.Voliva III
|
|
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
Date: November 2, 2017
|
|
|
/s/ J. W. Gann, Jr.
|
|
|
|
J. W. Gann, Jr.
|
|
|
|
Vice President, Controller and
Chief Accounting Officer
(Principal Accounting Officer)
|
1.
|
The following storage tanks located on the Land described under “Storage Tanks” and “Propane Tank Loading Rack and Tanks 600-621” on
Exhibit F-1
.
|
TANK ID NUMBER
|
CURRENT SERVICE/PRODUCT
|
NOMINAL CAPACITY, BBLS
|
1
|
N/A
|
DEMO
|
2
|
N/A
|
DEMO
|
3
|
ULSD
|
40,425
|
15
|
ULSD
|
12,422
|
16
|
Light Slop
|
28,880
|
17
|
Gasoline
|
92,740
|
18
|
Gasoline
|
88,600
|
19
|
Gasoline
|
90,733
|
20
|
Finish Gasoline
|
17,961
|
21
|
ULSD
|
120,639
|
23
|
ULSD
|
113,182
|
24
|
ULSD
|
119,269
|
25
|
Av Jet
|
65,117
|
29
|
CRU1 Feed
|
33,723
|
30
|
CRU2 Feed
|
39,417
|
31
|
ULSD
|
23,792
|
32
|
Finish Gasoline
|
74,847
|
64
|
Gasoline
|
17,961
|
65
|
Gasoline
|
17,941
|
66
|
Naphtha
|
22,582
|
75
|
ULS k
|
24,938
|
78
|
ULS k
|
9,226
|
127
|
Heavy Slop
|
20,504
|
654
|
Sour Distilate
|
77,596
|
642
|
HTU2 Chg.
|
78,511
|
655
|
HTU2 Chg.
|
76,750
|
649
|
HTU4 CHg.
|
100,000
|
TANK ID NUMBER
|
CURRENT SERVICE/PRODUCT
|
NOMINAL CAPACITY, BBLS
|
137
|
Gas Oil/Sour diesel
|
192,000
|
138
|
Gas Oil
|
193,742
|
139
|
Gas Oil
|
74,792
|
142
|
Gas Oil
|
191,563
|
143
|
Gas Oil
|
191,570
|
159
|
Slurry
|
9,778
|
167
|
Slurry
|
8,908
|
650
|
ULSD Dock
|
36,000
|
178
|
Coke Charge/Swing Tank
|
80,000
|
192
|
N/A
|
DEMO
|
212
|
Coker Chg.
|
76,524
|
213
|
Asphalt
|
77,675
|
215
|
AV Jet
|
67,529
|
216
|
Alkylate
|
72,618
|
218
|
Gas Oil
|
77,675
|
219
|
Reformate
|
71,466
|
220
|
Swing Tank
|
71,495
|
221
|
Gasoline Swing
|
71,508
|
222
|
Gasoline Swing
|
71,509
|
223
|
Reformate
|
72,893
|
224
|
Jet Fuel
|
71,534
|
225
|
HTU1 Chg, kerosene
|
28,882
|
226
|
Finish Gasoline
|
27,679
|
227
|
Natural Gasoline
|
27,701
|
230
|
Diesel (RAM)
|
4,780
|
231
|
Light Cycle (RAM)
|
1,923
|
250
|
FCCU Gasoline
|
75,354
|
TANK ID NUMBER
|
CURRENT SERVICE/PRODUCT
|
NOMINAL CAPACITY, BBLS
|
251
|
FCCU Gasoline
|
75,968
|
252
|
FCCU Gasoline
|
75,968
|
253
|
Natural Gasoline
|
74,653
|
254
|
Isomerate
|
19,318
|
255
|
Isomerate
|
19,318
|
256
|
TEL Wash
|
950
|
447
|
Finish Gasoline
|
17,730
|
448
|
Gasoline
|
16,109
|
453
|
Ethanol
|
5,121
|
457
|
HTU3 Chg, LSR
|
32,690
|
458
|
Isomerate
|
32,690
|
490
|
ULSD
|
116,094
|
600
|
Propane
|
625
|
601
|
Propane
|
625
|
602
|
Propane
|
625
|
603
|
Propane
|
625
|
604
|
Propane
|
625
|
605
|
Propane
|
625
|
606
|
Propane
|
625
|
607
|
Propane
|
625
|
608
|
Propane
|
625
|
609
|
Propane
|
625
|
610
|
Propane
|
625
|
611
|
Propane
|
625
|
612
|
Propane
|
625
|
613
|
Propane
|
625
|
614
|
Propane
|
625
|
TANK ID NUMBER
|
CURRENT SERVICE/PRODUCT
|
NOMINAL CAPACITY, BBLS
|
615
|
Propane
|
625
|
616
|
Propane
|
625
|
617
|
Propane
|
625
|
618
|
Propane
|
625
|
619
|
Propane
|
625
|
620
|
Propane
|
575
|
621
|
Propane
|
100
|
640
|
Asphalt
|
66,859
|
641
|
Propane
|
6,813
|
647
|
Asphalt
|
76,600
|
651
|
Heavy Atmospheric Gas Oil (HAGO)
|
32,346
|
653
|
HAGO
|
32,344
|
656
|
Diesel
|
500
|
657
|
Diesel
|
500
|
2.
|
The Refined Products Truck Loading Rack located on the Land described under “Refined Products Truck Loading Rack” on
Exhibit F-1
.
|
3.
|
The Propane Truck Loading Rack located on the Land described under “Propane Truck Loading Rack” on
Exhibit F-1
.
|
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 2, 2017
|
|
/s/ George J. Damiris
|
|
|
George J. Damiris
|
|
|
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 2, 2017
|
|
/s/ Richard L. Voliva III
|
|
|
Richard L. Voliva III
|
|
|
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 2, 2017
|
|
/s/ George J. Damiris
|
|
|
George J. Damiris
|
|
|
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 2, 2017
|
|
/s/ Richard L. Voliva III
|
|
|
Richard L. Voliva III
|
|
|
Executive Vice President and Chief Financial Officer
|