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, 2018 (Unaudited) and December 31, 2017
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Three and Nine Months Ended September 30, 2018 and 2017
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Three and Nine Months Ended September 30, 2018 and 2017
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Nine Months Ended September 30, 2018 and 2017
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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 existing or future acquired operations;
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•
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the possibility of terrorist or cyber 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,
2018 |
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December 31, 2017
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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: $6,375 and $7,776, respectively)
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$
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1,075,677
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$
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630,757
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||||
Accounts receivable: Product and transportation
(HEP: $10,301 and $12,803, respectively)
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828,629
|
|
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659,530
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Crude oil resales
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18,967
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61,203
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847,596
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720,733
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Inventories: Crude oil and refined products
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1,635,861
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1,409,538
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Materials, supplies and other
(HEP: $918 and $916, respectively)
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226,639
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220,554
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1,862,500
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1,630,092
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||
Income taxes receivable
|
|
14,886
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|
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44,337
|
|
||
Prepayments and other
(HEP: $1,794 and $1,395, respectively)
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57,066
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36,909
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||
Total current assets
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3,857,725
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3,062,828
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||||
Properties, plants and equipment, at cost
(HEP: $2,039,922 and $2,011,915, respectively)
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6,704,162
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6,523,789
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Less accumulated depreciation
(HEP: $(467,862) and $(408,599), respectively)
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(2,030,719
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)
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(1,810,515
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)
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4,673,443
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4,713,274
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Other assets: Turnaround costs
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272,601
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231,319
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Goodwill
(HEP: $314,229 and $310,610, respectively)
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2,255,541
|
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2,244,744
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Intangibles and other
(HEP: $183,288 and $206,167, respectively)
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435,816
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439,989
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2,963,958
|
|
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2,916,052
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Total assets
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$
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11,495,126
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$
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10,692,154
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||||
LIABILITIES AND EQUITY
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|
||||
Current liabilities:
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|
||||
Accounts payable
(HEP: $9,987 and $14,637, respectively)
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$
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1,176,417
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$
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1,220,795
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Income taxes payable
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78,316
|
|
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3,159
|
|
||
Accrued liabilities
(HEP: $29,182 and $33,214, respectively)
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285,902
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198,756
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Total current liabilities
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1,540,635
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1,422,710
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||||
Long-term debt
(HEP: $1,416,748 and $1,507,308, respectively)
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2,409,148
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2,498,993
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Deferred income taxes
(HEP: $558 and $525, respectively)
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755,561
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647,785
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Other long-term liabilities
(HEP: $63,106 and $62,590, respectively)
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226,270
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225,726
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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; 256,015,579 and 256,015,550 shares issued as of September 30, 2018 and December 31, 2017, respectively
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2,560
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2,560
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Additional capital
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4,199,938
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4,132,696
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Retained earnings
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4,112,629
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3,346,615
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Accumulated other comprehensive income
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25,906
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29,869
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Common stock held in treasury, at cost – 81,558,916 and 78,607,928 shares as of September 30, 2018 and December 31, 2017, respectively
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(2,328,747
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)
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(2,140,911
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)
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Total HollyFrontier stockholders’ equity
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6,012,286
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5,370,829
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Noncontrolling interest
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551,226
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526,111
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Total equity
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6,563,512
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5,896,940
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Total liabilities and equity
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$
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11,495,126
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$
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10,692,154
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
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2018
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2017
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2018
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2017
|
||||||||
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Sales and other revenues
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$
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4,770,799
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$
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3,719,247
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$
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13,370,462
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$
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10,258,594
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Operating costs and expenses:
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||||||||
Cost of products sold (exclusive of depreciation and amortization):
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|
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||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
3,752,234
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2,888,549
|
|
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10,695,275
|
|
|
8,283,183
|
|
||||
Lower of cost or market inventory valuation adjustment
|
|
17,837
|
|
|
(111,128
|
)
|
|
(192,927
|
)
|
|
(15,323
|
)
|
||||
|
|
3,770,071
|
|
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2,777,421
|
|
|
10,502,348
|
|
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8,267,860
|
|
||||
Operating expenses (exclusive of depreciation and amortization)
|
|
317,196
|
|
|
322,277
|
|
|
933,699
|
|
|
946,264
|
|
||||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
71,130
|
|
|
68,252
|
|
|
204,469
|
|
|
185,303
|
|
||||
Depreciation and amortization
|
|
108,885
|
|
|
102,884
|
|
|
323,605
|
|
|
304,206
|
|
||||
Long-lived asset impairment
|
|
—
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|
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—
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—
|
|
|
19,247
|
|
||||
Total operating costs and expenses
|
|
4,267,282
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|
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3,270,834
|
|
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11,964,121
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9,722,880
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|
||||
Income from operations
|
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503,517
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|
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448,413
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1,406,341
|
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535,714
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Earnings of equity method investments
|
|
1,114
|
|
|
5,072
|
|
|
4,127
|
|
|
10,965
|
|
||||
Interest income
|
|
5,136
|
|
|
1,074
|
|
|
10,660
|
|
|
2,069
|
|
||||
Interest expense
|
|
(32,399
|
)
|
|
(28,731
|
)
|
|
(97,446
|
)
|
|
(85,534
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,225
|
)
|
||||
Gain on foreign currency transactions
|
|
281
|
|
|
19,122
|
|
|
5,516
|
|
|
19,517
|
|
||||
Gain on foreign currency swap contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,545
|
|
||||
Other, net
|
|
741
|
|
|
1,153
|
|
|
3,451
|
|
|
2,550
|
|
||||
|
|
(25,127
|
)
|
|
(2,310
|
)
|
|
(73,692
|
)
|
|
(38,113
|
)
|
||||
Income before income taxes
|
|
478,390
|
|
|
446,103
|
|
|
1,332,649
|
|
|
497,601
|
|
||||
Income tax expense (benefit):
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
70,595
|
|
|
72,307
|
|
|
216,529
|
|
|
80,242
|
|
||||
Deferred
|
|
45,663
|
|
|
86,079
|
|
|
102,213
|
|
|
93,351
|
|
||||
|
|
116,258
|
|
|
158,386
|
|
|
318,742
|
|
|
173,593
|
|
||||
Net income
|
|
362,132
|
|
|
287,717
|
|
|
1,013,907
|
|
|
324,008
|
|
||||
Less net income attributable to noncontrolling interest
|
|
19,666
|
|
|
15,703
|
|
|
57,843
|
|
|
39,695
|
|
||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
342,466
|
|
|
$
|
272,014
|
|
|
$
|
956,064
|
|
|
$
|
284,313
|
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.95
|
|
|
$
|
1.53
|
|
|
$
|
5.42
|
|
|
$
|
1.60
|
|
Diluted
|
|
$
|
1.93
|
|
|
$
|
1.53
|
|
|
$
|
5.37
|
|
|
$
|
1.60
|
|
Cash dividends declared per common share
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.99
|
|
|
$
|
0.99
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
175,097
|
|
|
176,149
|
|
|
175,865
|
|
|
176,143
|
|
||||
Diluted
|
|
176,927
|
|
|
176,530
|
|
|
177,557
|
|
|
176,616
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
362,132
|
|
|
$
|
287,717
|
|
|
$
|
1,013,907
|
|
|
$
|
324,008
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
8,325
|
|
|
16,702
|
|
|
(15,118
|
)
|
|
24,287
|
|
||||
Unrealized loss on marketable securities available for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Change in fair value of cash flow hedging instruments
|
|
4,161
|
|
|
(2,094
|
)
|
|
(4,296
|
)
|
|
2,708
|
|
||||
Reclassification adjustments to net income on settlement of cash flow hedging instruments
|
|
1,631
|
|
|
5,115
|
|
|
6,038
|
|
|
5,049
|
|
||||
Amortization of unrealized loss attributable to discontinued cash flow hedges
|
|
—
|
|
|
270
|
|
|
—
|
|
|
810
|
|
||||
Net unrealized gain on hedging instruments
|
|
5,792
|
|
|
3,291
|
|
|
1,742
|
|
|
8,567
|
|
||||
Other comprehensive income (loss) before income taxes
|
|
14,117
|
|
|
19,993
|
|
|
(13,376
|
)
|
|
32,850
|
|
||||
Income tax expense (benefit)
|
|
124
|
|
|
7,140
|
|
|
(9,413
|
)
|
|
11,841
|
|
||||
Other comprehensive income (loss)
|
|
13,993
|
|
|
12,853
|
|
|
(3,963
|
)
|
|
21,009
|
|
||||
Total comprehensive income
|
|
376,125
|
|
|
300,570
|
|
|
1,009,944
|
|
|
345,017
|
|
||||
Less noncontrolling interest in comprehensive income
|
|
19,666
|
|
|
15,663
|
|
|
57,843
|
|
|
39,638
|
|
||||
Comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
356,459
|
|
|
$
|
284,907
|
|
|
$
|
952,101
|
|
|
$
|
305,379
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
1,013,907
|
|
|
$
|
324,008
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
323,605
|
|
|
304,206
|
|
||
Long-lived asset impairment
|
|
—
|
|
|
19,247
|
|
||
Lower of cost or market inventory valuation adjustment
|
|
(192,927
|
)
|
|
(15,323
|
)
|
||
Earnings of equity method investments, inclusive of distributions
|
|
463
|
|
|
816
|
|
||
(Gain) loss on sale of assets
|
|
(52
|
)
|
|
540
|
|
||
Loss on early extinguishment of debt attributable to unamortized discount
|
|
—
|
|
|
2,475
|
|
||
Deferred income taxes
|
|
102,213
|
|
|
93,351
|
|
||
Equity-based compensation expense
|
|
26,096
|
|
|
26,430
|
|
||
Change in fair value – derivative instruments
|
|
(3,007
|
)
|
|
2,073
|
|
||
(Increase) decrease in current assets:
|
|
|
|
|
||||
Accounts receivable
|
|
(136,764
|
)
|
|
(116,986
|
)
|
||
Inventories
|
|
(33,856
|
)
|
|
(43,822
|
)
|
||
Income taxes receivable
|
|
27,792
|
|
|
68,371
|
|
||
Prepayments and other
|
|
(14,089
|
)
|
|
(5,268
|
)
|
||
Increase (decrease) in current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
(37,160
|
)
|
|
88,010
|
|
||
Income taxes payable
|
|
76,277
|
|
|
60,661
|
|
||
Accrued liabilities
|
|
84,328
|
|
|
83,918
|
|
||
Turnaround expenditures
|
|
(114,593
|
)
|
|
(111,513
|
)
|
||
Other, net
|
|
7,664
|
|
|
4,219
|
|
||
Net cash provided by operating activities
|
|
1,129,897
|
|
|
785,413
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Additions to properties, plants and equipment
|
|
(167,967
|
)
|
|
(162,442
|
)
|
||
Additions to properties, plants and equipment – HEP
|
|
(41,111
|
)
|
|
(30,675
|
)
|
||
Purchase of PCLI, net of cash acquired
|
|
—
|
|
|
(870,627
|
)
|
||
Purchase of Red Giant Oil, net of cash acquired
|
|
(54,088
|
)
|
|
—
|
|
||
Purchases of marketable securities
|
|
—
|
|
|
(41,565
|
)
|
||
Sales and maturities of marketable securities
|
|
—
|
|
|
465,716
|
|
||
Other, net
|
|
3,999
|
|
|
2,297
|
|
||
Net cash used for investing activities
|
|
(259,167
|
)
|
|
(637,296
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Borrowings under credit agreements
|
|
256,000
|
|
|
654,000
|
|
||
Repayments under credit agreements
|
|
(347,000
|
)
|
|
(457,000
|
)
|
||
Proceeds from issuance of senior notes - HEP
|
|
—
|
|
|
101,750
|
|
||
Redemption of senior notes - HEP
|
|
—
|
|
|
(309,750
|
)
|
||
Proceeds from issuance of common units - HEP
|
|
114,887
|
|
|
52,285
|
|
||
Purchase of treasury stock
|
|
(177,710
|
)
|
|
—
|
|
||
Dividends
|
|
(175,921
|
)
|
|
(176,519
|
)
|
||
Distributions to noncontrolling interest
|
|
(93,128
|
)
|
|
(81,797
|
)
|
||
Shares withheld for tax withholding obligations
|
|
(544
|
)
|
|
(290
|
)
|
||
Other, net
|
|
—
|
|
|
(13,131
|
)
|
||
Net cash used for financing activities
|
|
(423,416
|
)
|
|
(230,452
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate on cash flow
|
|
(2,394
|
)
|
|
2,498
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Increase (decrease) for the period
|
|
444,920
|
|
|
(79,837
|
)
|
||
Beginning of period
|
|
630,757
|
|
|
710,579
|
|
||
End of period
|
|
$
|
1,075,677
|
|
|
$
|
630,742
|
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
||||
Cash (paid) received during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
(89,553
|
)
|
|
$
|
(84,380
|
)
|
Income taxes, net
|
|
$
|
(112,520
|
)
|
|
$
|
50,957
|
|
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 Petro-Canada Lubricants Inc. (“PCLI”) located in Mississauga, Ontario, which produces base oils and other specialized lubricant products;
|
•
|
owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil with storage facilities in Idaho, Utah and Wyoming, along with a blending and packaging facility in Texas;
|
•
|
owned and operated HollyFrontier Asphalt Company LLC (“HFC Asphalt”), which operates various asphalt terminals in Arizona, New Mexico and Oklahoma; and
|
•
|
owned a
57%
limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”).
|
|
|
Three Months Ended September 30, 2017
|
||||||||||
Income Statement
|
|
Prior to Adoption
|
|
Increase
|
|
As Adjusted
|
||||||
|
|
(In thousands)
|
||||||||||
Cost of products sold
|
|
$
|
2,888,530
|
|
|
$
|
19
|
|
|
$
|
2,888,549
|
|
Operating expenses
|
|
$
|
321,668
|
|
|
$
|
609
|
|
|
$
|
322,277
|
|
Selling, general and administrative expenses
|
|
$
|
68,013
|
|
|
$
|
239
|
|
|
$
|
68,252
|
|
Other, net
|
|
$
|
286
|
|
|
$
|
867
|
|
|
$
|
1,153
|
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||
Income Statement
|
|
Prior to Adoption
|
|
Increase
|
|
As Adjusted
|
||||||
|
|
(In thousands)
|
||||||||||
Cost of products sold
|
|
$
|
8,283,127
|
|
|
$
|
56
|
|
|
$
|
8,283,183
|
|
Operating expenses
|
|
$
|
944,437
|
|
|
$
|
1,827
|
|
|
$
|
946,264
|
|
Selling, general and administrative expenses
|
|
$
|
184,659
|
|
|
$
|
644
|
|
|
$
|
185,303
|
|
Other, net
|
|
$
|
23
|
|
|
$
|
2,527
|
|
|
$
|
2,550
|
|
|
|
Prior to Adoption
|
|
Increase (Decrease)
|
|
As Adjusted
|
||||||
|
|
(In thousands)
|
||||||||||
Accounts receivable: Product and transportation
|
|
$
|
659,530
|
|
|
$
|
(8,198
|
)
|
|
$
|
651,332
|
|
Inventories: Crude oil and refined products
|
|
$
|
1,409,538
|
|
|
$
|
5,124
|
|
|
$
|
1,414,662
|
|
Accounts payable
|
|
$
|
1,220,795
|
|
|
$
|
7,336
|
|
|
$
|
1,228,131
|
|
Deferred income taxes
|
|
$
|
647,785
|
|
|
$
|
(2,963
|
)
|
|
$
|
644,822
|
|
Retained earnings
|
|
$
|
3,346,615
|
|
|
$
|
(7,447
|
)
|
|
$
|
3,339,168
|
|
NOTE 2:
|
Holly Energy Partners
|
NOTE 3:
|
Revenues from Contracts with Customers
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Revenues by type
|
|
|
|
|
|
|
|
|
||||||||
Refined product revenues
|
|
|
|
|
|
|
|
|
||||||||
Transportation fuels
(1)
|
|
$
|
3,598,815
|
|
|
$
|
2,839,543
|
|
|
$
|
10,193,218
|
|
|
$
|
7,910,289
|
|
Specialty lubricant products
(2)
|
|
422,760
|
|
|
369,822
|
|
|
1,237,002
|
|
|
1,054,161
|
|
||||
Asphalt, fuel oil and other products
(3)
|
|
288,013
|
|
|
201,596
|
|
|
741,139
|
|
|
539,526
|
|
||||
Total refined product revenues
|
|
4,309,588
|
|
|
3,410,961
|
|
|
12,171,359
|
|
|
9,503,976
|
|
||||
Excess crude oil revenues
(4)
|
|
422,122
|
|
|
277,810
|
|
|
1,074,928
|
|
|
658,117
|
|
||||
Transportation and logistic services
|
|
25,596
|
|
|
15,227
|
|
|
77,799
|
|
|
47,826
|
|
||||
Other revenues
(5)
|
|
13,493
|
|
|
15,249
|
|
|
46,376
|
|
|
48,675
|
|
||||
Total sales and other revenues
|
|
$
|
4,770,799
|
|
|
$
|
3,719,247
|
|
|
$
|
13,370,462
|
|
|
$
|
10,258,594
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Refined product revenues by market
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
|
|
|
|
|
|
|
||||||||
Mid-Continent
|
|
$
|
2,337,689
|
|
|
$
|
1,748,044
|
|
|
$
|
6,458,935
|
|
|
$
|
5,111,301
|
|
Southwest
|
|
1,016,771
|
|
|
842,347
|
|
|
2,865,324
|
|
|
2,100,850
|
|
||||
Rocky Mountains
|
|
627,542
|
|
|
528,380
|
|
|
1,869,414
|
|
|
1,489,203
|
|
||||
Northeast
|
|
85,344
|
|
|
66,467
|
|
|
261,380
|
|
|
189,039
|
|
||||
Canada
|
|
190,727
|
|
|
177,767
|
|
|
563,088
|
|
|
486,380
|
|
||||
Europe and Asia
|
|
51,515
|
|
|
47,956
|
|
|
153,218
|
|
|
127,203
|
|
||||
Total refined product revenues
|
|
$
|
4,309,588
|
|
|
$
|
3,410,961
|
|
|
$
|
12,171,359
|
|
|
$
|
9,503,976
|
|
(1)
|
Transportation fuels consist of gasoline, diesel and jet fuel.
|
(2)
|
Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.
|
(3)
|
Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of
$234,887
and
$53,126
, respectively, for the
three
months ended
September 30, 2018
,
$158,344
and
$43,252
, respectively, for the
three
months ended
September 30, 2017
,
$589,726
and
$151,413
, respectively, for the
nine
months ended
September 30, 2018
, and
$415,344
and
$124,182
, respectively, for the
nine
months ended
September 30, 2017
.
|
(4)
|
Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.
|
(5)
|
Other revenues are principally attributable to our Refining segment.
|
|
|
January 1, 2018
|
|
Increase
|
|
Recognized as Revenue
|
|
September 30, 2018
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Accrued liabilities
|
|
$
|
179
|
|
|
$
|
5,269
|
|
|
$
|
(1,746
|
)
|
|
$
|
3,702
|
|
|
|
Remainder of 2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
|||||
|
|
(In thousands)
|
|||||||||||||
Refined product sales volumes (barrels)
|
|
6,546
|
|
|
20,013
|
|
|
777
|
|
|
164
|
|
|
27,500
|
|
|
|
Remainder of 2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
HEP contractual minimum revenues
|
|
$
|
10,437
|
|
|
$
|
41,863
|
|
|
$
|
18,040
|
|
|
$
|
12,553
|
|
|
$
|
82,893
|
|
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, 2018
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
9,137
|
|
|
$
|
—
|
|
|
$
|
9,137
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
1,565
|
|
|
—
|
|
|
1,565
|
|
|
—
|
|
||||
Commodity forward contracts
|
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
||||
Total assets
|
|
$
|
10,727
|
|
|
$
|
—
|
|
|
$
|
10,727
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
NYMEX futures contracts
|
|
$
|
8,854
|
|
|
$
|
8,854
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
1,615
|
|
|
—
|
|
|
1,615
|
|
|
—
|
|
||||
Commodity forward contracts
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
RINs credit obligations
(1)
|
|
5,221
|
|
|
—
|
|
|
5,221
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
15,694
|
|
|
$
|
8,854
|
|
|
$
|
6,840
|
|
|
$
|
—
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Commodity forward contracts
|
|
$
|
3,840
|
|
|
$
|
—
|
|
|
$
|
3,840
|
|
|
$
|
—
|
|
Total assets
|
|
$
|
3,840
|
|
|
$
|
—
|
|
|
$
|
3,840
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
NYMEX futures contracts
|
|
$
|
3,360
|
|
|
$
|
3,360
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity price swaps
|
|
2,424
|
|
|
—
|
|
|
2,424
|
|
|
—
|
|
||||
Commodity forward contracts
|
|
1,020
|
|
|
—
|
|
|
1,020
|
|
|
—
|
|
||||
RINs credit obligations
(1)
|
|
8,931
|
|
|
—
|
|
|
8,931
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
15,735
|
|
|
$
|
3,360
|
|
|
$
|
12,375
|
|
|
$
|
—
|
|
(1)
|
Represent obligations for RINs credits for which we do not have sufficient quantities at
September 30, 2018
and
December 31, 2017
to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.
|
NOTE 5:
|
Earnings Per Share
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
342,466
|
|
|
$
|
272,014
|
|
|
$
|
956,064
|
|
|
$
|
284,313
|
|
Participating securities’ (restricted stock) share in earnings
|
|
1,171
|
|
|
1,735
|
|
|
3,321
|
|
|
1,822
|
|
||||
Net income attributable to common shares
|
|
$
|
341,295
|
|
|
$
|
270,279
|
|
|
$
|
952,743
|
|
|
$
|
282,491
|
|
Average number of shares of common stock outstanding
|
|
175,097
|
|
|
176,149
|
|
|
175,865
|
|
|
176,143
|
|
||||
Effect of dilutive variable restricted shares and
performance share units
(1)
|
|
1,830
|
|
|
381
|
|
|
1,692
|
|
|
473
|
|
||||
Average number of shares of common stock outstanding assuming dilution
|
|
176,927
|
|
|
176,530
|
|
|
177,557
|
|
|
176,616
|
|
||||
Basic earnings per share
|
|
$
|
1.95
|
|
|
$
|
1.53
|
|
|
$
|
5.42
|
|
|
$
|
1.60
|
|
Diluted earnings per share
|
|
$
|
1.93
|
|
|
$
|
1.53
|
|
|
$
|
5.37
|
|
|
$
|
1.60
|
|
(1)
Excludes anti-dilutive restricted and performance share units of:
|
|
—
|
|
|
104
|
|
|
2
|
|
|
120
|
|
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, 2018 (non-vested)
|
|
1,726,188
|
|
|
$
|
33.51
|
|
|
|
||
Granted
|
|
32,583
|
|
|
55.85
|
|
|
|
|||
Vesting (transfer/conversion to common stock)
|
|
(29,656
|
)
|
|
31.49
|
|
|
|
|||
Forfeited
|
|
(103,488
|
)
|
|
34.45
|
|
|
|
|||
Outstanding at September 30, 2018 (non-vested)
|
|
1,625,627
|
|
|
33.94
|
|
|
$
|
113,631
|
|
Performance Share Units
|
|
Grants
|
|
|
|
|
|
Outstanding at January 1, 2018 (non-vested)
|
|
692,661
|
|
Forfeited
|
|
(44,008
|
)
|
Outstanding at September 30, 2018 (non-vested)
|
|
648,653
|
|
NOTE 7:
|
Inventories
|
|
|
September 30,
2018 |
|
December 31, 2017
|
||||
|
|
(In thousands)
|
||||||
Crude oil
|
|
$
|
529,252
|
|
|
$
|
581,417
|
|
Other raw materials and unfinished products
(1)
|
|
383,953
|
|
|
396,618
|
|
||
Finished products
(2)
|
|
753,562
|
|
|
655,336
|
|
||
Lower of cost or market reserve
|
|
(30,906
|
)
|
|
(223,833
|
)
|
||
Process chemicals
(3)
|
|
35,259
|
|
|
24,792
|
|
||
Repair and maintenance supplies and other
(4)
|
|
191,380
|
|
|
195,762
|
|
||
Total inventory
|
|
$
|
1,862,500
|
|
|
$
|
1,630,092
|
|
(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 8:
|
Environmental
|
NOTE 9:
|
Debt
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In thousands)
|
||||||
HollyFrontier 5.875% Senior Notes
|
|
|
|
|
||||
Principal
|
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
Unamortized discount and debt issuance costs
|
|
(7,600
|
)
|
|
(8,315
|
)
|
||
|
|
992,400
|
|
|
991,685
|
|
||
|
|
|
|
|
||||
HEP Credit Agreement
|
|
921,000
|
|
|
1,012,000
|
|
||
|
|
|
|
|
||||
HEP 6% Senior Notes
|
|
|
|
|
||||
Principal
|
|
500,000
|
|
|
500,000
|
|
||
Unamortized discount and debt issuance costs
|
|
(4,252
|
)
|
|
(4,692
|
)
|
||
|
|
495,748
|
|
|
495,308
|
|
||
|
|
|
|
|
||||
Total HEP long-term debt
|
|
1,416,748
|
|
|
1,507,308
|
|
||
|
|
|
|
|
||||
Total long-term debt
|
|
$
|
2,409,148
|
|
|
$
|
2,498,993
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In thousands)
|
||||||
|
|
|
|
|
||||
HollyFrontier senior notes
|
|
$
|
1,065,980
|
|
|
$
|
1,113,470
|
|
|
|
|
|
|
||||
HEP senior notes
|
|
$
|
512,840
|
|
|
$
|
525,120
|
|
|
|
Unrealized Gain (Loss) Recognized in OCI
|
|
Gain (Loss) Reclassified into Earnings
|
||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments
|
|
Three Months Ended
September 30, |
|
Income Statement Location
|
|
Three Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||
Commodity contracts
|
|
$
|
5,792
|
|
|
$
|
3,354
|
|
|
Sales and other revenues
|
|
$
|
(1,422
|
)
|
|
$
|
(488
|
)
|
|
|
|
|
|
|
Operating expenses
|
|
(209
|
)
|
|
(4,961
|
)
|
||||||
Interest rate contracts
(1)
|
|
—
|
|
|
(63
|
)
|
|
Interest expense
|
|
—
|
|
|
64
|
|
||||
Total
|
|
$
|
5,792
|
|
|
$
|
3,291
|
|
|
|
|
$
|
(1,631
|
)
|
|
$
|
(5,385
|
)
|
|
|
Unrealized Gain (Loss) Recognized in OCI
|
|
Gain (Loss) Reclassified into Earnings
|
||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments
|
|
Nine Months Ended
September 30, |
|
Income Statement Location
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||
Commodity contracts
|
|
$
|
1,742
|
|
|
$
|
8,658
|
|
|
Sales and other revenues
|
|
$
|
(5,093
|
)
|
|
$
|
7,937
|
|
|
|
|
|
|
|
Cost of products sold
|
|
—
|
|
|
(299
|
)
|
||||||
|
|
|
|
|
|
Operating expenses
|
|
(945
|
)
|
|
(13,676
|
)
|
||||||
Interest rate contracts
(1)
|
|
—
|
|
|
(91
|
)
|
|
Interest expense
|
|
—
|
|
|
179
|
|
||||
Total
|
|
$
|
1,742
|
|
|
$
|
8,567
|
|
|
|
|
$
|
(6,038
|
)
|
|
$
|
(5,859
|
)
|
|
|
Gain (Loss) Recognized in Earnings
|
||||||||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
Income Statement Location
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||||
|
|
|
|
(In thousands)
|
||||||||||||||
Commodity contracts
|
|
Cost of products sold
|
|
$
|
(8,252
|
)
|
|
$
|
(10,632
|
)
|
|
$
|
(20,580
|
)
|
|
$
|
3,403
|
|
|
|
Operating expenses
|
|
—
|
|
|
(629
|
)
|
|
—
|
|
|
(6,392
|
)
|
||||
Foreign currency contracts
|
|
Gain on foreign currency transactions
|
|
(7,052
|
)
|
|
—
|
|
|
18,504
|
|
|
—
|
|
||||
|
|
Gain on foreign currency swap contracts
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,545
|
|
||||
|
|
Total
|
|
$
|
(15,304
|
)
|
|
$
|
(11,261
|
)
|
|
$
|
(2,076
|
)
|
|
$
|
21,556
|
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
||||||||||||||
|
|
Total Outstanding Notional
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Unit of Measure
|
||||||||
Derivatives Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Natural gas price swaps - long
|
|
5,850,000
|
|
|
450,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
MMBTU
|
|||
Crude oil price swaps (basis spread) - long
|
|
4,388,000
|
|
|
—
|
|
|
1,460,000
|
|
|
2,928,000
|
|
|
—
|
|
|
Barrels
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
NYMEX futures (WTI) - short
|
|
2,303,000
|
|
|
2,102,000
|
|
|
201,000
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|||
WTI and sub-octane gasoline crack spread swaps - short
|
|
400,000
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|||
Forward gasoline contracts - long
|
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|||
Foreign currency forward contracts
|
|
$
|
446,361,369
|
|
|
$
|
113,632,223
|
|
|
$
|
332,729,146
|
|
|
—
|
|
|
—
|
|
|
U.S. Dollar
|
|
|
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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
1,565
|
|
|
$
|
—
|
|
|
$
|
1,565
|
|
|
$
|
3,243
|
|
|
$
|
(2,114
|
)
|
|
$
|
1,129
|
|
|
|
$
|
1,565
|
|
|
$
|
—
|
|
|
$
|
1,565
|
|
|
$
|
3,243
|
|
|
$
|
(2,114
|
)
|
|
$
|
1,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Foreign exchange forward contracts
|
|
$
|
9,137
|
|
|
$
|
—
|
|
|
$
|
9,137
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NYMEX futures contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,854
|
|
|
—
|
|
|
8,854
|
|
||||||
Commodity price swap contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,288
|
|
|
(802
|
)
|
|
486
|
|
||||||
Commodity forward contracts
|
|
25
|
|
|
—
|
|
|
25
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
|
|
$
|
9,162
|
|
|
$
|
—
|
|
|
$
|
9,162
|
|
|
$
|
10,146
|
|
|
$
|
(802
|
)
|
|
$
|
9,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
10,727
|
|
|
|
|
|
|
$
|
10,473
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet classification:
|
|
Prepayment and other
|
|
$
|
9,162
|
|
|
Accrued liabilities
|
|
$
|
10,332
|
|
||||||||||||
|
|
Intangibles and other
|
|
1,565
|
|
|
Other long-term liabilities
|
|
141
|
|
||||||||||||||
|
|
|
|
$
|
10,727
|
|
|
|
|
|
|
$
|
10,473
|
|
|
|
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, 2017
|
|
|
||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,424
|
|
|
$
|
—
|
|
|
$
|
2,424
|
|
Commodity forward contracts
|
|
3,067
|
|
|
—
|
|
|
3,067
|
|
|
418
|
|
|
—
|
|
|
418
|
|
||||||
|
|
$
|
3,067
|
|
|
$
|
—
|
|
|
$
|
3,067
|
|
|
$
|
2,842
|
|
|
$
|
—
|
|
|
$
|
2,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
NYMEX futures contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,360
|
|
|
$
|
—
|
|
|
$
|
3,360
|
|
Commodity forward contracts
|
|
773
|
|
|
—
|
|
|
773
|
|
|
602
|
|
|
—
|
|
|
602
|
|
||||||
|
|
$
|
773
|
|
|
$
|
—
|
|
|
$
|
773
|
|
|
$
|
3,962
|
|
|
$
|
—
|
|
|
$
|
3,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
3,840
|
|
|
|
|
|
|
$
|
6,804
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet classification:
|
|
|
|
|
|
|
Accrued liabilities
|
|
$
|
5,365
|
|
|||||||||||||
|
|
|
|
|
|
Other long-term liabilities
|
|
1,439
|
|
|||||||||||||||
|
|
Prepayment and other
|
|
$
|
3,840
|
|
|
|
|
|
|
$
|
6,804
|
|
NOTE 11:
|
Equity
|
|
|
HollyFrontier
Stockholders’
Equity
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at December 31, 2017
|
|
$
|
5,370,829
|
|
|
$
|
526,111
|
|
|
$
|
5,896,940
|
|
Net income
|
|
956,064
|
|
|
57,843
|
|
|
1,013,907
|
|
|||
Dividends
|
|
(175,921
|
)
|
|
—
|
|
|
(175,921
|
)
|
|||
Distributions to noncontrolling interest holders
|
|
—
|
|
|
(93,128
|
)
|
|
(93,128
|
)
|
|||
Other comprehensive loss, net of tax
|
|
(3,963
|
)
|
|
—
|
|
|
(3,963
|
)
|
|||
Allocated equity on HEP common unit issuances, net of tax
|
|
42,198
|
|
|
58,202
|
|
|
100,400
|
|
|||
Equity-based compensation
|
|
23,840
|
|
|
2,256
|
|
|
26,096
|
|
|||
Purchase of treasury stock
(1)
|
|
(186,632
|
)
|
|
—
|
|
|
(186,632
|
)
|
|||
Purchase of HEP units for restricted grants
|
|
—
|
|
|
(58
|
)
|
|
(58
|
)
|
|||
Adoption of accounting standards
|
|
(14,129
|
)
|
|
—
|
|
|
(14,129
|
)
|
|||
Balance at September 30, 2018
|
|
$
|
6,012,286
|
|
|
$
|
551,226
|
|
|
$
|
6,563,512
|
|
NOTE 12:
|
Other Comprehensive Income
|
|
|
Before-Tax
|
|
Tax Expense
(Benefit)
|
|
After-Tax
|
||||||
|
|
(In thousands)
|
||||||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustment
|
|
$
|
8,325
|
|
|
$
|
(1,354
|
)
|
|
$
|
9,679
|
|
Net unrealized gain on hedging instruments
|
|
5,792
|
|
|
1,478
|
|
|
4,314
|
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
14,117
|
|
|
$
|
124
|
|
|
$
|
13,993
|
|
|
|
|
|
|
|
|
||||||
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
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustment
|
|
$
|
(15,118
|
)
|
|
$
|
(6,304
|
)
|
|
$
|
(8,814
|
)
|
Net unrealized gain on hedging instruments
|
|
1,742
|
|
|
625
|
|
|
1,117
|
|
|||
Net change in pension and other post-retirement benefit obligations
|
|
—
|
|
|
(3,734
|
)
|
|
3,734
|
|
|||
Other comprehensive loss attributable to HollyFrontier stockholders
|
|
$
|
(13,376
|
)
|
|
$
|
(9,413
|
)
|
|
$
|
(3,963
|
)
|
|
|
|
|
|
|
|
||||||
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
|
|
AOCI Component
|
|
Gain (Loss) Reclassified From AOCI
|
|
Income Statement Line Item
|
||||||
|
|
(In thousands)
|
|
|
||||||
|
|
Three Months Ended
September 30, |
|
|
||||||
|
|
2018
|
|
2017
|
|
|
||||
|
|
|
|
|
|
|
||||
Hedging instruments:
|
|
|
|
|
|
|
||||
Commodity price swaps
|
|
$
|
(1,422
|
)
|
|
$
|
(488
|
)
|
|
Sales and other revenues
|
|
|
(209
|
)
|
|
(4,961
|
)
|
|
Operating expenses
|
||
Interest rate swaps
|
|
—
|
|
|
64
|
|
|
Interest expense
|
||
|
|
(1,631
|
)
|
|
(5,385
|
)
|
|
|
||
|
|
(416
|
)
|
|
(2,100
|
)
|
|
Income tax benefit
|
||
|
|
(1,215
|
)
|
|
(3,285
|
)
|
|
Net of tax
|
||
|
|
—
|
|
|
(41
|
)
|
|
Noncontrolling interest
|
||
Total reclassifications for the period
|
|
$
|
(1,215
|
)
|
|
$
|
(3,326
|
)
|
|
Net of tax and noncontrolling interest
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended
September 30, |
|
|
||||||
|
|
2018
|
|
2017
|
|
|
||||
|
|
|
|
|
|
|
||||
Hedging instruments:
|
|
|
|
|
|
|
||||
Commodity price swaps
|
|
$
|
(5,093
|
)
|
|
$
|
7,937
|
|
|
Sales and other revenues
|
|
|
—
|
|
|
(299
|
)
|
|
Cost of products sold
|
||
|
|
(945
|
)
|
|
(13,676
|
)
|
|
Operating expenses
|
||
Interest rate swaps
|
|
—
|
|
|
179
|
|
|
Interest expense
|
||
|
|
(6,038
|
)
|
|
(5,859
|
)
|
|
|
||
|
|
(1,540
|
)
|
|
(2,312
|
)
|
|
Income tax benefit
|
||
|
|
(4,498
|
)
|
|
(3,547
|
)
|
|
Net of tax
|
||
|
|
—
|
|
|
(114
|
)
|
|
Noncontrolling interest
|
||
Total reclassifications for the period
|
|
$
|
(4,498
|
)
|
|
$
|
(3,661
|
)
|
|
Net of tax and noncontrolling interest
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In thousands)
|
||||||
Foreign currency translation adjustment
|
|
$
|
5,563
|
|
|
$
|
14,377
|
|
Unrealized loss on pension obligation
|
|
(692
|
)
|
|
(654
|
)
|
||
Unrealized gain on post-retirement benefit obligations
|
|
20,711
|
|
|
16,939
|
|
||
Unrealized gain (loss) on hedging instruments
|
|
324
|
|
|
(793
|
)
|
||
Accumulated other comprehensive income
|
|
$
|
25,906
|
|
|
$
|
29,869
|
|
NOTE 13:
|
Post-retirement Plans
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
February 1 to September 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Service cost - benefit earned during the period
|
|
$
|
1,093
|
|
|
$
|
1,013
|
|
|
$
|
3,337
|
|
|
$
|
2,596
|
|
Interest cost on projected benefit obligations
|
|
556
|
|
|
556
|
|
|
1,698
|
|
|
1,424
|
|
||||
Expected return on plan assets
|
|
(856
|
)
|
|
(802
|
)
|
|
(2,615
|
)
|
|
(2,053
|
)
|
||||
Net periodic pension expense
|
|
$
|
793
|
|
|
$
|
767
|
|
|
$
|
2,420
|
|
|
$
|
1,967
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Service cost – benefit earned during the period
|
|
$
|
411
|
|
|
$
|
380
|
|
|
$
|
1,238
|
|
|
$
|
1,106
|
|
Interest cost on projected benefit obligations
|
|
234
|
|
|
250
|
|
|
705
|
|
|
714
|
|
||||
Amortization of prior service credit
|
|
(870
|
)
|
|
(870
|
)
|
|
(2,611
|
)
|
|
(2,610
|
)
|
||||
Net periodic post-retirement credit
|
|
$
|
(225
|
)
|
|
$
|
(240
|
)
|
|
$
|
(668
|
)
|
|
$
|
(790
|
)
|
NOTE 14:
|
Contingencies
|
NOTE 15:
|
Segment Information
|
|
|
Refining
|
|
Lubricants and Specialty Products
|
|
HEP
|
|
Corporate, Other
and Eliminations
|
|
Consolidated
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and other revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
|
$
|
4,270,835
|
|
|
$
|
474,260
|
|
|
$
|
25,596
|
|
|
$
|
108
|
|
|
$
|
4,770,799
|
|
Intersegment revenues
|
|
101,334
|
|
|
1,626
|
|
|
100,188
|
|
|
(203,148
|
)
|
|
—
|
|
|||||
|
|
$
|
4,372,169
|
|
|
$
|
475,886
|
|
|
$
|
125,784
|
|
|
$
|
(203,040
|
)
|
|
$
|
4,770,799
|
|
Cost of products sold (exclusive of lower of cost or market inventory)
|
|
$
|
3,572,593
|
|
|
$
|
359,742
|
|
|
$
|
—
|
|
|
$
|
(180,101
|
)
|
|
$
|
3,752,234
|
|
Lower of cost or market inventory valuation adjustment
|
|
$
|
17,837
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,837
|
|
Operating expenses
|
|
$
|
262,010
|
|
|
$
|
40,288
|
|
|
$
|
35,995
|
|
|
$
|
(21,097
|
)
|
|
$
|
317,196
|
|
Selling, general and administrative expenses
|
|
$
|
30,394
|
|
|
$
|
33,514
|
|
|
$
|
2,498
|
|
|
$
|
4,724
|
|
|
$
|
71,130
|
|
Depreciation and amortization
|
|
$
|
70,793
|
|
|
$
|
11,139
|
|
|
$
|
24,367
|
|
|
$
|
2,586
|
|
|
$
|
108,885
|
|
Income (loss) from operations
|
|
$
|
418,542
|
|
|
$
|
31,203
|
|
|
$
|
62,924
|
|
|
$
|
(9,152
|
)
|
|
$
|
503,517
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,114
|
|
|
$
|
—
|
|
|
$
|
1,114
|
|
Capital expenditures
|
|
$
|
47,088
|
|
|
$
|
8,094
|
|
|
$
|
9,541
|
|
|
$
|
5,214
|
|
|
$
|
69,937
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and other revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
|
$
|
3,291,417
|
|
|
$
|
413,074
|
|
|
$
|
15,227
|
|
|
$
|
(471
|
)
|
|
$
|
3,719,247
|
|
Intersegment revenues
|
|
82,705
|
|
|
—
|
|
|
95,137
|
|
|
(177,842
|
)
|
|
—
|
|
|||||
|
|
$
|
3,374,122
|
|
|
$
|
413,074
|
|
|
$
|
110,364
|
|
|
$
|
(178,313
|
)
|
|
$
|
3,719,247
|
|
Cost of products sold (exclusive of lower of cost or market inventory)
|
|
$
|
2,774,722
|
|
|
$
|
270,279
|
|
|
$
|
—
|
|
|
$
|
(156,452
|
)
|
|
$
|
2,888,549
|
|
Lower of cost or market inventory valuation adjustment
|
|
$
|
(109,690
|
)
|
|
$
|
(1,438
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(111,128
|
)
|
Operating expenses
|
|
$
|
246,409
|
|
|
$
|
59,726
|
|
|
$
|
36,061
|
|
|
$
|
(19,919
|
)
|
|
$
|
322,277
|
|
Selling, general and administrative expenses
|
|
$
|
26,582
|
|
|
$
|
30,796
|
|
|
$
|
3,626
|
|
|
$
|
7,248
|
|
|
$
|
68,252
|
|
Depreciation and amortization
|
|
$
|
74,070
|
|
|
$
|
7,734
|
|
|
$
|
18,601
|
|
|
$
|
2,479
|
|
|
$
|
102,884
|
|
Income (loss) from operations
|
|
$
|
362,029
|
|
|
$
|
45,977
|
|
|
$
|
52,076
|
|
|
$
|
(11,669
|
)
|
|
$
|
448,413
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,072
|
|
|
$
|
—
|
|
|
$
|
5,072
|
|
Capital expenditures
|
|
$
|
30,979
|
|
|
$
|
9,815
|
|
|
$
|
10,151
|
|
|
$
|
5,122
|
|
|
$
|
56,067
|
|
|
|
Refining
|
|
Lubricants and Specialty Products
|
|
HEP
|
|
Corporate, Other
and Eliminations |
|
Consolidated
Total |
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and other revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
|
$
|
11,915,797
|
|
|
$
|
1,376,531
|
|
|
$
|
77,799
|
|
|
$
|
335
|
|
|
$
|
13,370,462
|
|
Intersegment revenues
|
|
284,538
|
|
|
11,884
|
|
|
295,629
|
|
|
(592,051
|
)
|
|
—
|
|
|||||
|
|
$
|
12,200,335
|
|
|
$
|
1,388,415
|
|
|
$
|
373,428
|
|
|
$
|
(591,716
|
)
|
|
$
|
13,370,462
|
|
Cost of products sold (exclusive of lower of cost or market inventory)
|
|
$
|
10,179,509
|
|
|
$
|
1,040,414
|
|
|
$
|
—
|
|
|
$
|
(524,648
|
)
|
|
$
|
10,695,275
|
|
Lower of cost or market inventory valuation adjustment
|
|
$
|
(192,927
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(192,927
|
)
|
Operating expenses
|
|
$
|
764,415
|
|
|
$
|
125,101
|
|
|
$
|
106,731
|
|
|
$
|
(62,548
|
)
|
|
$
|
933,699
|
|
Selling, general and administrative expenses
|
|
$
|
82,966
|
|
|
$
|
99,425
|
|
|
$
|
8,293
|
|
|
$
|
13,785
|
|
|
$
|
204,469
|
|
Depreciation and amortization
|
|
$
|
210,957
|
|
|
$
|
30,023
|
|
|
$
|
74,117
|
|
|
$
|
8,508
|
|
|
$
|
323,605
|
|
Income (loss) from operations
|
|
$
|
1,155,415
|
|
|
$
|
93,452
|
|
|
$
|
184,287
|
|
|
$
|
(26,813
|
)
|
|
$
|
1,406,341
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,127
|
|
|
$
|
—
|
|
|
$
|
4,127
|
|
Capital expenditures
|
|
$
|
132,050
|
|
|
$
|
23,138
|
|
|
$
|
41,111
|
|
|
$
|
12,779
|
|
|
$
|
209,078
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and other revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
|
$
|
9,033,148
|
|
|
$
|
1,178,343
|
|
|
$
|
47,826
|
|
|
$
|
(723
|
)
|
|
$
|
10,258,594
|
|
Intersegment revenues
|
|
268,208
|
|
|
—
|
|
|
277,315
|
|
|
(545,523
|
)
|
|
—
|
|
|||||
|
|
$
|
9,301,356
|
|
|
$
|
1,178,343
|
|
|
$
|
325,141
|
|
|
$
|
(546,246
|
)
|
|
$
|
10,258,594
|
|
Cost of products sold (exclusive of lower of cost or market inventory)
|
|
$
|
7,949,813
|
|
|
$
|
818,981
|
|
|
$
|
—
|
|
|
$
|
(485,611
|
)
|
|
$
|
8,283,183
|
|
Lower of cost or market inventory valuation adjustment
|
|
$
|
(15,365
|
)
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15,323
|
)
|
Operating expenses
|
|
$
|
743,493
|
|
|
$
|
154,795
|
|
|
$
|
102,773
|
|
|
$
|
(54,797
|
)
|
|
$
|
946,264
|
|
Selling, general and administrative expenses
|
|
$
|
71,591
|
|
|
$
|
71,877
|
|
|
$
|
8,882
|
|
|
$
|
32,953
|
|
|
$
|
185,303
|
|
Depreciation and amortization
|
|
$
|
218,934
|
|
|
$
|
20,570
|
|
|
$
|
56,515
|
|
|
$
|
8,187
|
|
|
$
|
304,206
|
|
Asset impairment
|
|
$
|
19,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,247
|
|
Income (loss) from operations
|
|
$
|
313,643
|
|
|
$
|
112,078
|
|
|
$
|
156,971
|
|
|
$
|
(46,978
|
)
|
|
$
|
535,714
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,965
|
|
|
$
|
—
|
|
|
$
|
10,965
|
|
Capital expenditures
|
|
$
|
130,238
|
|
|
$
|
20,772
|
|
|
$
|
30,675
|
|
|
$
|
11,432
|
|
|
$
|
193,117
|
|
|
|
Refining
|
|
Lubricants and Specialty Products
|
|
HEP
|
|
Corporate, Other
and Eliminations
|
|
Consolidated
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
6,915
|
|
|
$
|
72,652
|
|
|
$
|
6,375
|
|
|
$
|
989,735
|
|
|
$
|
1,075,677
|
|
Total assets
|
|
$
|
7,044,358
|
|
|
$
|
1,498,586
|
|
|
$
|
2,146,124
|
|
|
$
|
806,058
|
|
|
$
|
11,495,126
|
|
Long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,416,748
|
|
|
$
|
992,400
|
|
|
$
|
2,409,148
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
7,488
|
|
|
$
|
41,756
|
|
|
$
|
7,776
|
|
|
$
|
573,737
|
|
|
$
|
630,757
|
|
Total assets
|
|
$
|
6,474,666
|
|
|
$
|
1,610,472
|
|
|
$
|
2,191,984
|
|
|
$
|
415,032
|
|
|
$
|
10,692,154
|
|
Long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,507,308
|
|
|
$
|
991,685
|
|
|
$
|
2,498,993
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended
September 30, |
|
Change from 2017
|
|||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
Percent
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||
Sales and other revenues
|
|
$
|
4,770,799
|
|
|
$
|
3,719,247
|
|
|
$
|
1,051,552
|
|
|
28
|
%
|
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)
|
|
3,752,234
|
|
|
2,888,549
|
|
|
863,685
|
|
|
30
|
|
|||
Lower of cost or market inventory valuation adjustment
|
|
17,837
|
|
|
(111,128
|
)
|
|
128,965
|
|
|
(116
|
)
|
|||
|
|
3,770,071
|
|
|
2,777,421
|
|
|
992,650
|
|
|
36
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
317,196
|
|
|
322,277
|
|
|
(5,081
|
)
|
|
(2
|
)
|
|||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
71,130
|
|
|
68,252
|
|
|
2,878
|
|
|
4
|
|
|||
Depreciation and amortization
|
|
108,885
|
|
|
102,884
|
|
|
6,001
|
|
|
6
|
|
|||
Total operating costs and expenses
|
|
4,267,282
|
|
|
3,270,834
|
|
|
996,448
|
|
|
30
|
|
|||
Income from operations
|
|
503,517
|
|
|
448,413
|
|
|
55,104
|
|
|
12
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings of equity method investments
|
|
1,114
|
|
|
5,072
|
|
|
(3,958
|
)
|
|
(78
|
)
|
|||
Interest income
|
|
5,136
|
|
|
1,074
|
|
|
4,062
|
|
|
378
|
|
|||
Interest expense
|
|
(32,399
|
)
|
|
(28,731
|
)
|
|
(3,668
|
)
|
|
13
|
|
|||
Gain on foreign currency transactions
|
|
281
|
|
|
19,122
|
|
|
(18,841
|
)
|
|
(99
|
)
|
|||
Other, net
|
|
741
|
|
|
1,153
|
|
|
(412
|
)
|
|
(36
|
)
|
|||
|
|
(25,127
|
)
|
|
(2,310
|
)
|
|
(22,817
|
)
|
|
988
|
|
|||
Income before income taxes
|
|
478,390
|
|
|
446,103
|
|
|
32,287
|
|
|
7
|
|
|||
Income tax expense
|
|
116,258
|
|
|
158,386
|
|
|
(42,128
|
)
|
|
(27
|
)
|
|||
Net income
|
|
362,132
|
|
|
287,717
|
|
|
74,415
|
|
|
26
|
|
|||
Less net income attributable to noncontrolling interest
|
|
19,666
|
|
|
15,703
|
|
|
3,963
|
|
|
25
|
|
|||
Net income attributable to HollyFrontier stockholders
|
|
$
|
342,466
|
|
|
$
|
272,014
|
|
|
$
|
70,452
|
|
|
26
|
%
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
1.95
|
|
|
$
|
1.53
|
|
|
$
|
0.42
|
|
|
27
|
%
|
Diluted
|
|
$
|
1.93
|
|
|
$
|
1.53
|
|
|
$
|
0.40
|
|
|
26
|
%
|
Cash dividends declared per common share
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
—
|
|
|
—
|
%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
175,097
|
|
|
176,149
|
|
|
(1,052
|
)
|
|
(1
|
)%
|
|||
Diluted
|
|
176,927
|
|
|
176,530
|
|
|
397
|
|
|
—
|
%
|
|
|
Nine Months Ended
September 30, |
|
Change from 2017
|
|||||||||||
|
|
2018
|
|
2017
|
|
Change
|
|
Percent
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||
Sales and other revenues
|
|
$
|
13,370,462
|
|
|
$
|
10,258,594
|
|
|
$
|
3,111,868
|
|
|
30
|
%
|
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)
|
|
10,695,275
|
|
|
8,283,183
|
|
|
2,412,092
|
|
|
29
|
|
|||
Lower of cost or market inventory valuation adjustment
|
|
(192,927
|
)
|
|
(15,323
|
)
|
|
(177,604
|
)
|
|
1,159
|
|
|||
|
|
10,502,348
|
|
|
8,267,860
|
|
|
2,234,488
|
|
|
27
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
933,699
|
|
|
946,264
|
|
|
(12,565
|
)
|
|
(1
|
)
|
|||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
204,469
|
|
|
185,303
|
|
|
19,166
|
|
|
10
|
|
|||
Depreciation and amortization
|
|
323,605
|
|
|
304,206
|
|
|
19,399
|
|
|
6
|
|
|||
Long-lived asset impairment
|
|
—
|
|
|
19,247
|
|
|
(19,247
|
)
|
|
(100
|
)
|
|||
Total operating costs and expenses
|
|
11,964,121
|
|
|
9,722,880
|
|
|
2,241,241
|
|
|
23
|
|
|||
Income from operations
|
|
1,406,341
|
|
|
535,714
|
|
|
870,627
|
|
|
163
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Earnings of equity method investments
|
|
4,127
|
|
|
10,965
|
|
|
(6,838
|
)
|
|
(62
|
)
|
|||
Interest income
|
|
10,660
|
|
|
2,069
|
|
|
8,591
|
|
|
415
|
|
|||
Interest expense
|
|
(97,446
|
)
|
|
(85,534
|
)
|
|
(11,912
|
)
|
|
14
|
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
(12,225
|
)
|
|
12,225
|
|
|
(100
|
)
|
|||
Gain on foreign currency transactions
|
|
5,516
|
|
|
19,517
|
|
|
(14,001
|
)
|
|
(72
|
)
|
|||
Gain on foreign currency swap contracts
|
|
—
|
|
|
24,545
|
|
|
(24,545
|
)
|
|
(100
|
)
|
|||
Other, net
|
|
3,451
|
|
|
2,550
|
|
|
901
|
|
|
35
|
|
|||
|
|
(73,692
|
)
|
|
(38,113
|
)
|
|
(35,579
|
)
|
|
93
|
|
|||
Income before income taxes
|
|
1,332,649
|
|
|
497,601
|
|
|
835,048
|
|
|
168
|
|
|||
Income tax expense
|
|
318,742
|
|
|
173,593
|
|
|
145,149
|
|
|
84
|
|
|||
Net income
|
|
1,013,907
|
|
|
324,008
|
|
|
689,899
|
|
|
213
|
|
|||
Less net income attributable to noncontrolling interest
|
|
57,843
|
|
|
39,695
|
|
|
18,148
|
|
|
46
|
|
|||
Net income attributable to HollyFrontier stockholders
|
|
$
|
956,064
|
|
|
$
|
284,313
|
|
|
$
|
671,751
|
|
|
236
|
%
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
5.42
|
|
|
$
|
1.60
|
|
|
$
|
3.82
|
|
|
239
|
%
|
Diluted
|
|
$
|
5.37
|
|
|
$
|
1.60
|
|
|
$
|
3.77
|
|
|
236
|
%
|
Cash dividends declared per common share
|
|
$
|
0.99
|
|
|
$
|
0.99
|
|
|
$
|
—
|
|
|
—
|
%
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
175,865
|
|
|
176,143
|
|
|
(278
|
)
|
|
—
|
%
|
|||
Diluted
|
|
177,557
|
|
|
176,616
|
|
|
941
|
|
|
1
|
%
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
|
(Unaudited)
|
|
|
||||
|
|
(In thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
1,075,677
|
|
|
$
|
630,757
|
|
Working capital
|
|
$
|
2,317,090
|
|
|
$
|
1,640,118
|
|
Total assets
|
|
$
|
11,495,126
|
|
|
$
|
10,692,154
|
|
Long-term debt
|
|
$
|
2,409,148
|
|
|
$
|
2,498,993
|
|
Total equity
|
|
$
|
6,563,512
|
|
|
$
|
5,896,940
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Net cash provided by operating activities
|
|
$
|
401,752
|
|
|
$
|
312,015
|
|
|
$
|
1,129,897
|
|
|
$
|
785,413
|
|
Net cash used for investing activities
|
|
$
|
(113,089
|
)
|
|
$
|
(56,787
|
)
|
|
$
|
(259,167
|
)
|
|
$
|
(637,296
|
)
|
Net cash used for financing activities
|
|
$
|
(193,701
|
)
|
|
$
|
(86,986
|
)
|
|
$
|
(423,416
|
)
|
|
$
|
(230,452
|
)
|
Capital expenditures
|
|
$
|
59,601
|
|
|
$
|
56,067
|
|
|
$
|
209,078
|
|
|
$
|
193,117
|
|
EBITDA
(1)
|
|
$
|
594,872
|
|
|
$
|
560,941
|
|
|
$
|
1,685,197
|
|
|
$
|
845,577
|
|
(1)
|
Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as net income 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 and as a basis for financial covenants. EBITDA presented above is reconciled to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q.
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries)
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
262,550
|
|
|
262,470
|
|
|
260,150
|
|
|
258,420
|
|
||||
Refinery throughput (BPD)
(2)
|
|
276,560
|
|
|
275,270
|
|
|
274,330
|
|
|
274,200
|
|
||||
Sales of produced refined products (BPD)
(3)
|
|
255,840
|
|
|
253,700
|
|
|
259,890
|
|
|
255,160
|
|
||||
Refinery utilization
(4)
|
|
101.0
|
%
|
|
101.0
|
%
|
|
100.1
|
%
|
|
99.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(5)
|
|
|
|
|
|
|
|
|
||||||||
Refinery gross margin
(6)
|
|
$
|
16.43
|
|
|
$
|
12.60
|
|
|
$
|
12.99
|
|
|
$
|
9.36
|
|
Refinery operating expenses
(7)
|
|
5.48
|
|
|
5.02
|
|
|
5.18
|
|
|
5.17
|
|
||||
Net operating margin
|
|
$
|
10.95
|
|
|
$
|
7.58
|
|
|
$
|
7.81
|
|
|
$
|
4.19
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(8)
|
|
$
|
5.07
|
|
|
$
|
4.63
|
|
|
$
|
4.90
|
|
|
$
|
4.81
|
|
Feedstocks:
|
|
|
|
|
|
|
|
|
||||
Sweet crude oil
|
|
59
|
%
|
|
65
|
%
|
|
54
|
%
|
|
62
|
%
|
Sour crude oil
|
|
21
|
%
|
|
14
|
%
|
|
24
|
%
|
|
17
|
%
|
Heavy sour crude oil
|
|
15
|
%
|
|
16
|
%
|
|
17
|
%
|
|
15
|
%
|
Other feedstocks and blends
|
|
5
|
%
|
|
5
|
%
|
|
5
|
%
|
|
6
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||
Gasolines
|
|
49
|
%
|
|
50
|
%
|
|
51
|
%
|
|
50
|
%
|
Diesel fuels
|
|
34
|
%
|
|
34
|
%
|
|
33
|
%
|
|
33
|
%
|
Jet fuels
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
Fuel oil
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Asphalt
|
|
4
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
Base oils
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
LPG and other
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Southwest Region (Navajo Refinery)
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
109,560
|
|
|
112,060
|
|
|
109,200
|
|
|
96,350
|
|
||||
Refinery throughput (BPD)
(2)
|
|
117,880
|
|
|
122,890
|
|
|
118,300
|
|
|
105,190
|
|
||||
Sales of produced refined products (BPD)
(3)
|
|
122,210
|
|
|
130,740
|
|
|
120,900
|
|
|
107,890
|
|
||||
Refinery utilization
(4)
|
|
109.6
|
%
|
|
112.1
|
%
|
|
109.2
|
%
|
|
96.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(5)
|
|
|
|
|
|
|
|
|
||||||||
Refinery gross margin
(6)
|
|
$
|
22.60
|
|
|
$
|
14.64
|
|
|
$
|
17.84
|
|
|
$
|
12.21
|
|
Refinery operating expenses
(7)
|
|
4.53
|
|
|
4.34
|
|
|
4.63
|
|
|
5.38
|
|
||||
Net operating margin
|
|
$
|
18.07
|
|
|
$
|
10.30
|
|
|
$
|
13.21
|
|
|
$
|
6.83
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(8)
|
|
$
|
4.69
|
|
|
$
|
4.62
|
|
|
$
|
4.73
|
|
|
$
|
5.52
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
28
|
%
|
|
25
|
%
|
|
31
|
%
|
|
23
|
%
|
||||
Sour crude oil
|
|
65
|
%
|
|
66
|
%
|
|
61
|
%
|
|
68
|
%
|
||||
Other feedstocks and blends
|
|
7
|
%
|
|
9
|
%
|
|
8
|
%
|
|
9
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||||||
Gasolines
|
|
49
|
%
|
|
49
|
%
|
|
50
|
%
|
|
50
|
%
|
||||
Diesel fuels
|
|
41
|
%
|
|
40
|
%
|
|
40
|
%
|
|
40
|
%
|
||||
Fuel oil
|
|
3
|
%
|
|
4
|
%
|
|
3
|
%
|
|
3
|
%
|
||||
Asphalt
|
|
5
|
%
|
|
5
|
%
|
|
4
|
%
|
|
4
|
%
|
||||
LPG and other
|
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
|
|
|
|
|
|
|
|
|
||||
Crude charge (BPD)
(1)
|
|
69,880
|
|
|
80,260
|
|
|
71,000
|
|
|
76,510
|
|
Refinery throughput (BPD)
(2)
|
|
76,120
|
|
|
87,620
|
|
|
78,410
|
|
|
84,050
|
|
Sales of produced refined products (BPD)
(3)
|
|
69,720
|
|
|
79,310
|
|
|
74,850
|
|
|
78,910
|
|
Refinery utilization
(4)
|
|
72.0
|
%
|
|
82.7
|
%
|
|
73.2
|
%
|
|
78.9
|
%
|
Average per produced barrel
(5)
|
|
|
|
|
|
|
|
|
||||||||
Refinery gross margin
(6)
|
|
$
|
24.75
|
|
|
$
|
17.71
|
|
|
$
|
24.95
|
|
|
$
|
15.78
|
|
Refinery operating expenses
(7)
|
|
12.80
|
|
|
10.47
|
|
|
11.97
|
|
|
10.36
|
|
||||
Net operating margin
|
|
$
|
11.95
|
|
|
$
|
7.24
|
|
|
$
|
12.98
|
|
|
$
|
5.42
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(8)
|
|
$
|
11.72
|
|
|
$
|
9.48
|
|
|
$
|
11.42
|
|
|
$
|
9.72
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
24
|
%
|
|
32
|
%
|
|
25
|
%
|
|
34
|
%
|
||||
Heavy sour crude oil
|
|
44
|
%
|
|
37
|
%
|
|
44
|
%
|
|
36
|
%
|
||||
Black wax crude oil
|
|
24
|
%
|
|
23
|
%
|
|
22
|
%
|
|
21
|
%
|
||||
Other feedstocks and blends
|
|
8
|
%
|
|
8
|
%
|
|
9
|
%
|
|
9
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||||||
Gasolines
|
|
54
|
%
|
|
58
|
%
|
|
56
|
%
|
|
58
|
%
|
||||
Diesel fuels
|
|
34
|
%
|
|
32
|
%
|
|
33
|
%
|
|
33
|
%
|
||||
Fuel oil
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
||||
Asphalt
|
|
7
|
%
|
|
4
|
%
|
|
5
|
%
|
|
5
|
%
|
||||
LPG and other
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
2
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Crude charge (BPD)
(1)
|
|
441,990
|
|
|
454,790
|
|
|
440,350
|
|
|
431,280
|
|
||||
Refinery throughput (BPD)
(2)
|
|
470,560
|
|
|
485,780
|
|
|
471,040
|
|
|
463,440
|
|
||||
Sales of produced refined products (BPD)
(3)
|
|
447,770
|
|
|
463,750
|
|
|
455,640
|
|
|
441,960
|
|
||||
Refinery utilization
(4)
|
|
96.7
|
%
|
|
99.5
|
%
|
|
96.4
|
%
|
|
94.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Average per produced barrel
(5)
|
|
|
|
|
|
|
|
|
||||||||
Refinery gross margin
(6)
|
|
$
|
19.41
|
|
|
$
|
14.05
|
|
|
$
|
16.25
|
|
|
$
|
11.20
|
|
Refinery operating expenses
(7)
|
|
6.36
|
|
|
5.78
|
|
|
6.15
|
|
|
6.16
|
|
||||
Net operating margin
|
|
$
|
13.05
|
|
|
$
|
8.27
|
|
|
$
|
10.10
|
|
|
$
|
5.04
|
|
|
|
|
|
|
|
|
|
|
||||||||
Refinery operating expenses per throughput barrel
(8)
|
|
$
|
6.05
|
|
|
$
|
5.51
|
|
|
$
|
5.94
|
|
|
$
|
5.88
|
|
|
|
|
|
|
|
|
|
|
||||||||
Feedstocks:
|
|
|
|
|
|
|
|
|
||||||||
Sweet crude oil
|
|
45
|
%
|
|
49
|
%
|
|
43
|
%
|
|
48
|
%
|
||||
Sour crude oil
|
|
29
|
%
|
|
25
|
%
|
|
30
|
%
|
|
25
|
%
|
||||
Heavy sour crude oil
|
|
16
|
%
|
|
16
|
%
|
|
17
|
%
|
|
16
|
%
|
||||
Black wax crude oil
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
||||
Other feedstocks and blends
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
||||
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)
|
Represents barrels sold of refined products produced at our refineries (including HFC Asphalt) and does not include volumes
|
(4)
|
Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 457,000 BPSD.
|
(5)
|
Represents average amount per produced barrel 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.
|
(6)
|
Excludes lower of cost or market inventory valuation adjustments that decreased gross margin by
$17.8 million
and increased gross margin by
$111.1 million
for the
three
months ended
September 30, 2018
and
2017
, respectively, and increased gross margin by
$192.9 million
and
$15.3 million
for the
nine
months ended
September 30, 2018
and
2017
, respectively.
|
(7)
|
Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes
|
(8)
|
Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Lubricants and Specialty Products
|
|
|
|
|
|
|
|
|
||||
Throughput (BPD)
|
|
21,410
|
|
|
22,360
|
|
|
20,530
|
|
|
21,980
|
|
Sales of produced refined products (BPD)
|
|
31,970
|
|
|
30,440
|
|
|
21,340
|
|
|
34,790
|
|
|
|
|
|
|
|
|
|
|
||||
Sales of produced refined products:
|
|
|
|
|
|
|
|
|
||||
Finished products
|
|
49
|
%
|
|
49
|
%
|
|
48
|
%
|
|
44
|
%
|
Base oils
|
|
28
|
%
|
|
28
|
%
|
|
31
|
%
|
|
33
|
%
|
Other
|
|
23
|
%
|
|
23
|
%
|
|
21
|
%
|
|
23
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Rack Back
(1)
|
|
Rack Forward
(2)
|
|
Eliminations
(3)
|
|
Total Lubricants and Specialty Products
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Three months ended September 30, 2018
|
|
|
|
|
|
|
|
|
||||||||
Sales and other revenues
|
|
$
|
197,226
|
|
|
$
|
424,386
|
|
|
$
|
(145,726
|
)
|
|
$
|
475,886
|
|
Cost of products sold
|
|
177,748
|
|
|
327,720
|
|
|
(145,726
|
)
|
|
359,742
|
|
||||
Operating expenses
|
|
26,748
|
|
|
13,540
|
|
|
—
|
|
|
40,288
|
|
||||
Selling, general and administrative expenses
|
|
7,439
|
|
|
26,075
|
|
|
—
|
|
|
33,514
|
|
||||
Depreciation and amortization
|
|
6,345
|
|
|
4,794
|
|
|
—
|
|
|
11,139
|
|
||||
Income (loss) from operations
|
|
$
|
(21,054
|
)
|
|
$
|
52,257
|
|
|
$
|
—
|
|
|
$
|
31,203
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Sales and other revenues
|
|
$
|
166,851
|
|
|
$
|
369,822
|
|
|
$
|
(123,599
|
)
|
|
$
|
413,074
|
|
Cost of products sold
|
|
127,371
|
|
|
266,507
|
|
|
(123,599
|
)
|
|
270,279
|
|
||||
Lower of cost or market inventory valuation adjustment
|
|
—
|
|
|
(1,438
|
)
|
|
—
|
|
|
(1,438
|
)
|
||||
Operating expenses
|
|
26,691
|
|
|
33,035
|
|
|
—
|
|
|
59,726
|
|
||||
Selling, general and administrative expenses
|
|
6,847
|
|
|
23,949
|
|
|
—
|
|
|
30,796
|
|
||||
Depreciation and amortization
|
|
5,388
|
|
|
2,346
|
|
|
—
|
|
|
7,734
|
|
||||
Income (loss) from operations
|
|
$
|
554
|
|
|
$
|
45,423
|
|
|
$
|
—
|
|
|
$
|
45,977
|
|
|
|
Rack Back
(1)
|
|
Rack Forward
(2)
|
|
Eliminations
(3)
|
|
Total Lubricants and Specialty Products
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Nine months ended September 30, 2018
|
|
|
|
|
|
|
|
|
||||||||
Sales and other revenues
|
|
$
|
546,300
|
|
|
$
|
1,248,886
|
|
|
$
|
(406,771
|
)
|
|
$
|
1,388,415
|
|
Cost of products sold
|
|
482,842
|
|
|
964,343
|
|
|
(406,771
|
)
|
|
1,040,414
|
|
||||
Operating expenses
|
|
82,729
|
|
|
42,372
|
|
|
—
|
|
|
125,101
|
|
||||
Selling, general and administrative expenses
|
|
22,146
|
|
|
77,279
|
|
|
—
|
|
|
99,425
|
|
||||
Depreciation and amortization
|
|
17,986
|
|
|
12,037
|
|
|
—
|
|
|
30,023
|
|
||||
Income (loss) from operations
|
|
$
|
(59,403
|
)
|
|
$
|
152,855
|
|
|
$
|
—
|
|
|
$
|
93,452
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Sales and other revenues
|
|
$
|
434,675
|
|
|
$
|
1,054,161
|
|
|
$
|
(310,493
|
)
|
|
$
|
1,178,343
|
|
Cost of products sold
|
|
351,641
|
|
|
777,833
|
|
|
(310,493
|
)
|
|
818,981
|
|
||||
Lower of cost or market inventory valuation adjustment
|
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
||||
Operating expenses
|
|
65,252
|
|
|
89,543
|
|
|
—
|
|
|
154,795
|
|
||||
Selling, general and administrative expenses
|
|
15,905
|
|
|
55,972
|
|
|
—
|
|
|
71,877
|
|
||||
Depreciation and amortization
|
|
14,475
|
|
|
6,095
|
|
|
—
|
|
|
20,570
|
|
||||
Income (loss) from operations
|
|
$
|
(12,598
|
)
|
|
$
|
124,676
|
|
|
$
|
—
|
|
|
$
|
112,078
|
|
|
Expected Cash Spending Range
|
||||||
|
(In millions)
|
||||||
Type:
|
|
|
|
||||
Capital
|
$
|
240.0
|
|
-
|
$
|
270.0
|
|
Turnarounds
|
235.0
|
|
-
|
260.0
|
|
||
Total
|
$
|
475.0
|
|
-
|
$
|
530.0
|
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|||||||||||||||
Contract Description
|
|
Total Outstanding Notional
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Unit of Measure
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Natural gas price swaps - long
|
|
5,850,000
|
|
|
450,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
MMBTU
|
|||
Crude oil price swaps (basis spread) - long
|
|
4,388,000
|
|
|
—
|
|
|
1,460,000
|
|
|
2,928,000
|
|
|
—
|
|
|
Barrels
|
|||
NYMEX futures (WTI) - short
|
|
2,303,000
|
|
|
2,102,000
|
|
|
201,000
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|||
WTI and sub-octane gasoline crack spread swaps - short
|
|
400,000
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|||
Forward gasoline contracts - long
|
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Barrels
|
|||
Foreign currency forward contracts
|
|
$
|
446,361,369
|
|
|
$
|
113,632,223
|
|
|
$
|
332,729,146
|
|
|
—
|
|
|
—
|
|
|
U.S. Dollar
|
|
|
Estimated Change in Fair Value at
|
||||||
|
|
September 30,
|
||||||
Commodity-based Derivative Contracts
|
|
2018
|
|
2017
|
||||
|
|
(In thousands)
|
||||||
Hypothetical 10% change in underlying commodity prices
|
|
$
|
14,837
|
|
|
$
|
7,360
|
|
|
|
Outstanding
Principal
|
|
Estimated
Fair Value
|
|
Estimated
Change in
Fair Value
|
||||||
|
|
(In thousands)
|
||||||||||
HollyFrontier Senior Notes
|
|
$
|
1,000,000
|
|
|
$
|
1,065,980
|
|
|
$
|
31,244
|
|
HEP Senior Notes
|
|
$
|
500,000
|
|
|
$
|
512,840
|
|
|
$
|
13,824
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
342,466
|
|
|
$
|
272,014
|
|
|
$
|
956,064
|
|
|
$
|
284,313
|
|
Add income tax expense
|
|
116,258
|
|
|
158,386
|
|
|
318,742
|
|
|
173,593
|
|
||||
Add interest expense
|
|
32,399
|
|
|
28,731
|
|
|
97,446
|
|
|
85,534
|
|
||||
Subtract interest income
|
|
(5,136
|
)
|
|
(1,074
|
)
|
|
(10,660
|
)
|
|
(2,069
|
)
|
||||
Add depreciation and amortization
|
|
108,885
|
|
|
102,884
|
|
|
323,605
|
|
|
304,206
|
|
||||
EBITDA
|
|
$
|
594,872
|
|
|
$
|
560,941
|
|
|
$
|
1,685,197
|
|
|
$
|
845,577
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Net operating margin per produced barrel sold
|
|
$
|
13.05
|
|
|
$
|
8.27
|
|
|
$
|
10.10
|
|
|
$
|
5.04
|
|
Add average refinery operating expenses per produced barrel sold
|
|
6.36
|
|
|
5.78
|
|
|
6.15
|
|
|
6.16
|
|
||||
Refinery gross margin per produced barrel sold
|
|
19.41
|
|
|
14.05
|
|
|
16.25
|
|
|
11.20
|
|
||||
Times produced barrels sold (BPD)
|
|
447,770
|
|
|
463,750
|
|
|
455,640
|
|
|
441,960
|
|
||||
Times number of days in period
|
|
92
|
|
|
92
|
|
|
273
|
|
|
273
|
|
||||
Refining segment gross margin
|
|
799,592
|
|
|
599,443
|
|
|
2,021,333
|
|
|
1,351,337
|
|
||||
Add (subtract) rounding
|
|
(16
|
)
|
|
(43
|
)
|
|
(507
|
)
|
|
206
|
|
||||
Total refining segment gross margin
|
|
799,576
|
|
|
599,400
|
|
|
2,020,826
|
|
|
1,351,543
|
|
||||
Add refining segment cost of products sold
|
|
3,572,593
|
|
|
2,774,722
|
|
|
10,179,509
|
|
|
7,949,813
|
|
||||
Refining segment sales and other revenues
|
|
4,372,169
|
|
|
3,374,122
|
|
|
12,200,335
|
|
|
9,301,356
|
|
||||
Add lubricants and specialty products segment sales and other revenues
|
|
475,886
|
|
|
413,074
|
|
|
1,388,415
|
|
|
1,178,343
|
|
||||
Add HEP segment sales and other revenues
|
|
125,784
|
|
|
110,364
|
|
|
373,428
|
|
|
325,141
|
|
||||
Subtract corporate, other and eliminations
|
|
(203,040
|
)
|
|
(178,313
|
)
|
|
(591,716
|
)
|
|
(546,246
|
)
|
||||
Sales and other revenues
|
|
$
|
4,770,799
|
|
|
$
|
3,719,247
|
|
|
$
|
13,370,462
|
|
|
$
|
10,258,594
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Average refinery operating expenses per produced barrel sold
|
|
$
|
6.36
|
|
|
$
|
5.78
|
|
|
$
|
6.15
|
|
|
$
|
6.16
|
|
Times produced barrels sold (BPD)
|
|
447,770
|
|
|
463,750
|
|
|
455,640
|
|
|
441,960
|
|
||||
Times number of days in period
|
|
92
|
|
|
92
|
|
|
273
|
|
|
273
|
|
||||
Refinery operating expenses
|
|
261,999
|
|
|
246,604
|
|
|
764,997
|
|
|
743,235
|
|
||||
Add (subtract) rounding
|
|
11
|
|
|
(195
|
)
|
|
(582
|
)
|
|
258
|
|
||||
Total refining segment operating expenses
|
|
262,010
|
|
|
246,409
|
|
|
764,415
|
|
|
743,493
|
|
||||
Add lubricants and specialty products segment operating expenses
|
|
40,288
|
|
|
59,726
|
|
|
125,101
|
|
|
154,795
|
|
||||
Add HEP segment operating expenses
|
|
35,995
|
|
|
36,061
|
|
|
106,731
|
|
|
102,773
|
|
||||
Subtract corporate, other and eliminations
|
|
(21,097
|
)
|
|
(19,919
|
)
|
|
(62,548
|
)
|
|
(54,797
|
)
|
||||
Operating expenses (exclusive of depreciation and amortization)
|
|
$
|
317,196
|
|
|
$
|
322,277
|
|
|
$
|
933,699
|
|
|
$
|
946,264
|
|
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 2018
|
|
155,000
|
|
|
$
|
69.91
|
|
|
155,000
|
|
|
$
|
112,867,060
|
|
August 2018
|
|
675,000
|
|
|
$
|
70.70
|
|
|
675,000
|
|
|
$
|
65,147,830
|
|
September 2018
(1)
|
|
1,030,000
|
|
|
$
|
70.41
|
|
|
1,030,000
|
|
|
$
|
949,330,686
|
|
Total for July to September 2018
|
|
1,860,000
|
|
|
|
|
1,860,000
|
|
|
|
Item 6.
|
Exhibits
|
Exhibit Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
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, 2018, 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: October 31, 2018
|
|
|
/s/ Richard L. Voliva III
|
|
|
|
Richard L.Voliva III
|
|
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
Date: October 31, 2018
|
|
|
/s/ J. W. Gann, Jr.
|
|
|
|
J. W. Gann, Jr.
|
|
|
|
Vice President, Controller and
Chief Accounting Officer
(Principal Accounting Officer)
|
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
|
October 31, 2018
|
|
/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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Date: October 31, 2018
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/s/ Richard L. Voliva III
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Richard L. Voliva III
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Executive Vice President and Chief Financial Officer
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1.
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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
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: October 31, 2018
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/s/ George J. Damiris
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George J. Damiris
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Chief Executive Officer and President
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1.
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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
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: October 31, 2018
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/s/ Richard L. Voliva III
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Richard L. Voliva III
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Executive Vice President and Chief Financial Officer
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