(Mark One)
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☒
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ANNUAL 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
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Dallas
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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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☒
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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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Item
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Page
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PART I
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PART II
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PART III
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PART IV
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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 and transporters of refined petroleum products or lubricant and specialty products in our markets;
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•
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the demand for and supply of crude oil, refined products and lubricant and specialty 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 or lubricant and specialty 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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effects of governmental and environmental regulations and policies;
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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 and consummating construction projects;
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our ability to acquire refined or lubricant 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 cyberattacks and the consequences of any such attacks;
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general economic conditions; and
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other financial, operational and legal risks and uncertainties detailed from time to time in our Securities and Exchange Commission filings.
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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”);
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•
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owned and operated PCLI located in Mississauga, Ontario, which produces base oils and other specialty lubricant products;
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owned and operated Sonneborn with manufacturing facilities in Petrolia, Pennsylvania and the Netherlands, which produce specialty lubricant products such as white oils, petrolatums and waxes;
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•
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owned and operated Red Giant Oil, which supplies locomotive engine oil and has storage and distribution facilities in Iowa, Kansas, Utah and Wyoming, along with a blending and packaging facility in Texas;
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•
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owned and operated HollyFrontier Asphalt Company LLC (“HFC Asphalt”), which operates various asphalt terminals in Arizona, New Mexico and Oklahoma; and
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•
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owned a 57% limited partner interest and a non-economic general partner interest in HEP. HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States.
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Years Ended December 31,
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2019
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2018
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2017
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Consolidated
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Crude charge (BPD) (1)
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427,600
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431,570
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438,800
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Refinery throughput (BPD) (2)
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458,600
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463,340
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472,010
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Sales of produced refined products (BPD) (3)
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449,190
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452,630
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452,270
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Refinery utilization (4)
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93.6
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%
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94.4
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%
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96.0
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%
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Average per produced barrel sold (5)
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Refinery gross margin
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$
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15.96
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$
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17.71
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$
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11.56
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Refinery operating expenses (6)
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6.68
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6.39
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6.11
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Net operating margin
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$
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9.28
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$
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11.32
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$
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5.45
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Refinery operating expenses per throughput barrel (7)
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$
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6.54
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$
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6.24
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$
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5.86
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Feedstocks:
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Sweet crude oil
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44
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%
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43
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%
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48
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%
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Sour crude oil
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30
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%
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30
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%
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25
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%
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Heavy sour crude oil
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15
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%
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17
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%
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16
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%
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Black wax crude oil
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4
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%
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4
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%
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4
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%
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Other feedstocks and blends
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7
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%
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6
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%
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7
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%
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Total
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100
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%
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100
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%
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100
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%
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(1)
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Crude charge represents the barrels per day of crude oil processed at our refineries.
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(2)
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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.
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(3)
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Represents barrels sold of refined products produced at our refineries (including HFC Asphalt) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.
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(4)
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Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 457,000 BPSD.
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(5)
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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 7A of Part II of this Form 10-K.
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(6)
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Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of refined products produced at our refineries.
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(7)
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Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.
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Years Ended December 31,
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2019
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2018
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2017
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Consolidated
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Sales of refined products:
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Gasolines
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52
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%
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52
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%
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52
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%
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Diesel fuels
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34
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%
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34
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%
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34
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%
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Jet fuels
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4
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%
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3
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%
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4
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%
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Fuel oil
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2
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%
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2
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%
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2
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%
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Asphalt
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4
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%
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4
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%
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4
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%
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Base oils
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2
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%
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2
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%
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2
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%
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LPG and other
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2
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%
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3
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%
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2
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%
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Total
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100
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%
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100
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%
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100
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%
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Years Ended December 31,
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2019
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2018
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2017
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Mid-Continent Region (El Dorado and Tulsa Refineries)
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Crude charge (BPD) (1)
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254,010
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249,240
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261,380
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Refinery throughput (BPD) (2)
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268,500
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264,730
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277,940
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Sales of produced refined products (BPD) (3)
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259,310
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255,800
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260,800
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Refinery utilization (4)
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97.7
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%
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95.9
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%
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100.5
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%
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Average per produced barrel sold (5)
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Refinery gross margin
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$
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13.71
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$
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14.44
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$
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9.91
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Refinery operating expenses (6)
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5.77
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5.51
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5.15
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Net operating margin
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$
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7.94
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$
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8.93
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$
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4.76
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Refinery operating expenses per throughput barrel (7)
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$
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5.58
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$
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5.32
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$
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4.83
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Years Ended December 31,
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2019
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2018
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2017
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Mid-Continent Region (El Dorado and Tulsa Refineries)
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Feedstocks:
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Sweet crude oil
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55
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%
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54
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%
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61
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%
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Sour crude oil
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24
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%
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24
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%
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17
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%
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Heavy sour crude oil
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16
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%
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16
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%
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16
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%
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Other feedstocks and blends
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5
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%
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6
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%
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6
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%
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Total
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100
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%
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100
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%
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100
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%
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Years Ended December 31,
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|||||||
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2019
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2018
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2017
|
|||
Mid-Continent Region (El Dorado and Tulsa Refineries)
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Sales of refined products:
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Gasolines
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51
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%
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51
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%
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50
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%
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Diesel fuels
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32
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%
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33
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%
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33
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%
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Jet fuels
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7
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%
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6
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%
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7
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%
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Fuel oil
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1
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%
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|
1
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%
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|
1
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%
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Asphalt
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3
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%
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|
3
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%
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|
3
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%
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Base oils
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4
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%
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4
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%
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4
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%
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LPG and other
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2
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%
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|
2
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%
|
|
2
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%
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Total
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|
100
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%
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|
100
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%
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|
100
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%
|
|
|
Years Ended December 31,
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||||||||||
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|
2019
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|
2018
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2017
|
||||||
Southwest Region (Navajo Refinery)
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|
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|
||||||
Crude charge (BPD) (1)
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101,760
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|
109,440
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|
100,040
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Refinery throughput (BPD) (2)
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111,870
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|
118,630
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|
|
109,280
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|
|||
Sales of produced refined products (BPD) (3)
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117,230
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|
|
120,520
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|
|
111,630
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|
|||
Refinery utilization (4)
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101.8
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%
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|
109.4
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%
|
|
100.0
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%
|
|||
|
|
|
|
|
|
|
||||||
Average per produced barrel sold (5)
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|
|
|
|
|
|
||||||
Refinery gross margin
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$
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18.97
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|
|
$
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19.05
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|
|
$
|
12.40
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Refinery operating expenses (6)
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|
5.10
|
|
|
4.81
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|
|
5.20
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|
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Net operating margin
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$
|
13.87
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|
|
$
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14.24
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|
|
$
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7.20
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|
|
|
|
|
|
|
|
||||||
Refinery operating expenses per throughput barrel (7)
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$
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5.35
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$
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4.89
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|
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$
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5.31
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|
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Years Ended December 31,
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2019
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2018
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2017
|
|||
Southwest Region (Navajo Refinery)
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|
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Feedstocks:
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Sweet crude oil
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21
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%
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|
27
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%
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|
25
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%
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Sour crude oil
|
|
70
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%
|
|
65
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%
|
|
66
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%
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Other feedstocks and blends
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9
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%
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|
8
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%
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|
9
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%
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Total
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|
100
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%
|
|
100
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%
|
|
100
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%
|
|
|
Years Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Southwest Region (Navajo Refinery)
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|
|
|
|
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|
|||
Sales of refined products:
|
|
|
|
|
|
|
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Gasolines
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52
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%
|
|
50
|
%
|
|
51
|
%
|
Diesel fuels
|
|
37
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%
|
|
40
|
%
|
|
39
|
%
|
Fuel oil
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
Asphalt
|
|
5
|
%
|
|
4
|
%
|
|
4
|
%
|
LPG and other
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Years Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
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|
|
|
|
|||||
Sales of refined products:
|
|
|
|
|
|
|
|||
Gasolines
|
|
53
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%
|
|
55
|
%
|
|
58
|
%
|
Diesel fuels
|
|
34
|
%
|
|
33
|
%
|
|
32
|
%
|
Fuel oil
|
|
4
|
%
|
|
3
|
%
|
|
3
|
%
|
Asphalt
|
|
5
|
%
|
|
5
|
%
|
|
4
|
%
|
LPG and other
|
|
4
|
%
|
|
4
|
%
|
|
3
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Years Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Lubricants and Specialty Products
|
|
|
|
|
|
|
|||
Throughput (BPD)
|
|
20,251
|
|
|
19,590
|
|
|
21,710
|
|
Sales of produced refined products (BPD)
|
|
34,827
|
|
|
30,510
|
|
|
32,910
|
|
|
|
|
|
|
|
|
|||
Sales of produced refined products:
|
|
|
|
|
|
|
|||
Finished products
|
|
49
|
%
|
|
48
|
%
|
|
45
|
%
|
Base oils
|
|
27
|
%
|
|
31
|
%
|
|
31
|
%
|
Other
|
|
24
|
%
|
|
21
|
%
|
|
24
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
approximately 800 miles of refined product pipelines, including 340 miles of leased pipelines, that transport gasoline, diesel and jet fuel principally from our Navajo Refinery in New Mexico to our customers in the metropolitan and rural areas of Texas, New Mexico, Arizona, Colorado, Utah and northern Mexico;
|
•
|
approximately 510 miles of refined product pipelines that transport refined products from Delek's Big Spring refinery in Texas to its customers in Texas and Oklahoma;
|
•
|
two 65-mile pipelines that transport intermediate feedstocks and crude oil from our Navajo Refinery crude oil distillation and vacuum facilities in Lovington, New Mexico to our petroleum refinery facilities in Artesia, New Mexico;
|
•
|
one 65-mile intermediate pipeline that is used for the shipment of crude oil from the gathering systems in Barnsdall and Beeson, New Mexico to our Navajo Refinery;
|
•
|
the SLC Pipeline, a 95-mile intrastate crude oil pipeline system that transports crude oil into the Salt Lake City, Utah area from the Utah terminus of the Frontier Pipeline, as well as crude oil flowing from Wyoming and Utah via Plains Rocky Mountain Pipeline;
|
•
|
the Frontier Pipeline, a 289-mile crude oil pipeline running from Casper, Wyoming to Frontier Station, Utah through a connection to the SLC Pipeline;
|
•
|
approximately 940 miles of crude oil trunk, gathering and connection pipelines located in west Texas, New Mexico and Oklahoma that primarily deliver crude oil to our Navajo Refinery;
|
•
|
approximately 8 miles of refined product pipelines that support our Woods Cross Refinery located near Salt Lake City, Utah;
|
•
|
gasoline and diesel connecting pipelines that support our Tulsa East facility;
|
•
|
five intermediate product and gas pipelines between our Tulsa East and Tulsa West facilities;
|
•
|
crude receiving assets located at our Cheyenne Refinery;
|
•
|
a 75% interest in the UNEV Pipeline, a 427-mile, 12-inch refined products pipeline running from Woods Cross, Utah to Las Vegas, Nevada;
|
•
|
a 50% interest in the Osage Pipeline, a 135-mile pipeline that transports crude oil from Cushing, Oklahoma to our El Dorado Refinery and also has a connection to the Jayhawk pipeline that services the CHS refinery in McPherson, Kansas;
|
•
|
a 50% interest in the Cheyenne Pipeline, an 87-mile crude oil pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming; and
|
•
|
a 50% interest in Cushing Connect, a joint venture formed to construct a 160,000 BPD pipeline to connect the Cushing, Oklahoma crude oil hub to our Tulsa Refineries.
|
•
|
three refined product terminals located in Orla, Texas and Moriarty and Bloomfield, New Mexico, with an aggregate capacity of approximately 458,000 barrels, that are integrated with HEP's refined product pipeline system that serves our Navajo Refinery;
|
•
|
one refined product terminal located in Spokane, Washington, with a capacity of approximately 400,000 barrels, that serves third-party common carrier pipelines;
|
•
|
one refined product terminal near Mountain Home, Idaho, with a capacity of 120,000 barrels, that serves a nearby United States Air Force Base;
|
•
|
two refined product terminals, located in Wichita Falls and Abilene, Texas, and one tank farm in Orla, Texas with aggregate capacity of approximately 600,000 barrels, that are integrated with HEP's refined product pipelines that serve Delek's Big Spring, Texas refinery;
|
•
|
a refined product terminal in Catoosa, Oklahoma that stores specialty lubricant products and is utilized by our Tulsa Refineries;
|
•
|
a refined product loading rack facility at each of our El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries, heavy product / asphalt loading rack facilities at our Tulsa East facility, Navajo Refinery Lovington facility and Cheyenne Refinery, LPG loading rack facilities at our El Dorado Refinery, Tulsa West facility and Cheyenne Refinery, lube oil loading racks at our Tulsa West facility and crude oil Leased Automatic Custody Transfer units located at our Cheyenne Refinery;
|
•
|
on-site crude oil tankage at our Tulsa, El Dorado, Navajo, Cheyenne and Woods Cross Refineries having an aggregate storage capacity of approximately 1,350,000 barrels;
|
•
|
on-site refined and intermediate product tankage at our El Dorado, Tulsa and Cheyenne Refineries having an aggregate storage capacity of approximately 8,800,000 barrels;
|
•
|
eleven crude oil tanks adjacent to our El Dorado Refinery with a capacity of approximately 1,200,000 barrels that primarily serve our El Dorado Refinery;
|
•
|
Frontier Pipeline's tankage with an aggregate capacity of approximately 72,000 barrels; and
|
•
|
a 75% interest in UNEV Pipeline's product terminals near Cedar City, Utah and Las Vegas, Nevada with an aggregate capacity of approximately 615,000 barrels; and
|
•
|
a 50% interest in Cushing Connect's crude oil tankage with a capacity of approximately 1,500,000 barrels in Cushing, Oklahoma.
|
•
|
a naphtha fractionation tower at our El Dorado Refinery, with a capacity of 50,000 BPD of desulfurized naphtha;
|
•
|
a hydrogen generation unit at our El Dorado Refinery, with a capacity of 6.1 million standard cubic feet per day of natural gas.
|
•
|
a crude unit, which is primarily an atmospheric distillation tower, a desalter and heat exchangers, at our Woods Cross Refinery, with a feedstock capacity of 15,000 BPD of crude oil;
|
•
|
a FCC unit at our Woods Cross Refinery, which converts crude oil to high-value refined products such as gasoline, diesel and liquefied petroleum gases, with a capacity of 8,000 BPD; and
|
•
|
a polymerization unit at our Woods Cross Refinery, that uses the output of the fluid cracking unit and converts them into gasoline blendstock, with a capacity of 2,500 BPD.
|
Item 1A.
|
Risk Factors
|
•
|
third party challenges to, denials, or delays with respect to the issuance of requisite regulatory approvals and/or obtaining or renewing permits, licenses, registrations and other authorizations;
|
•
|
societal and political pressures and other forms of opposition;
|
•
|
compliance with or liability under environmental regulations;
|
•
|
unplanned increases in the cost of construction materials or labor;
|
•
|
disruptions in transportation of modular components and/or construction materials;
|
•
|
severe adverse weather conditions, natural disasters, terrorists or cyberattacks, domestic vandalism or other events (such as equipment malfunctions, explosions, fires, spills) affecting our facilities, or those of vendors and suppliers;
|
•
|
shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;
|
•
|
market-related increases in a project's debt or equity financing costs; and/or
|
•
|
nonperformance or force majeure by, or disputes with, vendors, suppliers, contractors, or sub-contractors involved with a project.
|
•
|
diversion of management time and attention from our existing business;
|
•
|
challenges in managing the increased scope, geographic diversity and complexity of operations and inefficiencies that may result therefrom;
|
•
|
difficulties in integrating the financial, technological and management standards, processes, procedures and controls of an acquired business with those of our existing operations;
|
•
|
liability for known or unknown environmental conditions or other contingent liabilities not covered by indemnification or insurance;
|
•
|
greater than anticipated expenditures required for compliance with environmental or other regulatory standards or for investments to improve operating results;
|
•
|
difficulties or delays in achieving anticipated operational improvements or benefits or inaccurate assumptions about future synergies or revenues;
|
•
|
incurrence of additional indebtedness to finance acquisitions or capital expenditures relating to acquired assets; and
|
•
|
issuance of additional equity, which could result in further dilution of the ownership interest of existing stockholders.
|
•
|
its reliance on its significant customers, including us;
|
•
|
competition from other pipelines;
|
•
|
environmental regulations affecting pipeline operations;
|
•
|
operational hazards and risks;
|
•
|
pipeline tariff regulations affecting the rates HEP can charge;
|
•
|
limitations on additional borrowings and other restrictions due to HEP's debt covenants; and
|
•
|
other financial, operational and legal risks.
|
•
|
our quarterly or annual earnings or those of other companies in our industry;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
general economic, industry global and stock market conditions;
|
•
|
the failure of securities analysts to cover our common stock or changes in financial estimates by analysts;
|
•
|
future sales of our common stock;
|
•
|
announcements by us or our competitors of significant contracts or acquisitions;
|
•
|
sales of common stock by us, our senior officers or our affiliates; and/or
|
•
|
the other factors described in these Risk Factors.
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
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
|
||||||
October 2019
|
|
564,778
|
|
|
$
|
54.58
|
|
|
564,778
|
|
|
$
|
282,392,758
|
|
November 2019
|
|
25,000
|
|
|
$
|
55.09
|
|
|
25,000
|
|
|
$
|
281,015,550
|
|
December 2019
|
|
71,970
|
|
|
$
|
52.72
|
|
|
—
|
|
|
$
|
1,000,000,000
|
|
Total for October to December 2019
|
|
661,748
|
|
|
|
|
589,778
|
|
|
|
Item 6.
|
Selected Financial Data
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
For the period
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues
|
$
|
17,486,578
|
|
|
$
|
17,714,666
|
|
|
$
|
14,251,299
|
|
|
$
|
10,535,700
|
|
|
$
|
13,237,920
|
|
Income (loss) before income taxes
|
1,171,504
|
|
|
1,524,467
|
|
|
868,863
|
|
|
(171,534
|
)
|
|
1,208,568
|
|
|||||
Income tax expense (benefit)
|
299,152
|
|
|
347,243
|
|
|
(12,379
|
)
|
|
19,411
|
|
|
406,060
|
|
|||||
Net income (loss)
|
872,352
|
|
|
1,177,224
|
|
|
881,242
|
|
|
(190,945
|
)
|
|
802,508
|
|
|||||
Less net income attributable to noncontrolling interest
|
99,964
|
|
|
79,264
|
|
|
75,847
|
|
|
69,508
|
|
|
62,407
|
|
|||||
Net income (loss) attributable to HollyFrontier stockholders
|
$
|
772,388
|
|
|
$
|
1,097,960
|
|
|
$
|
805,395
|
|
|
$
|
(260,453
|
)
|
|
$
|
740,101
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share attributable to HollyFrontier stockholders - basic
|
$
|
4.64
|
|
|
$
|
6.25
|
|
|
$
|
4.54
|
|
|
$
|
(1.48
|
)
|
|
$
|
3.91
|
|
Earnings (loss) per share attributable to HollyFrontier stockholders - diluted
|
$
|
4.61
|
|
|
$
|
6.19
|
|
|
$
|
4.52
|
|
|
$
|
(1.48
|
)
|
|
$
|
3.90
|
|
Cash dividends declared per common share
|
$
|
1.34
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
|
$
|
1.31
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
166,287
|
|
|
175,009
|
|
|
176,174
|
|
|
176,101
|
|
|
188,731
|
|
|||||
Diluted
|
167,385
|
|
|
176,661
|
|
|
177,196
|
|
|
176,101
|
|
|
188,940
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
1,548,611
|
|
|
$
|
1,554,416
|
|
|
$
|
951,390
|
|
|
$
|
606,948
|
|
|
$
|
985,868
|
|
Net cash used for investing activities
|
$
|
(972,914
|
)
|
|
$
|
(360,520
|
)
|
|
$
|
(959,670
|
)
|
|
$
|
(801,597
|
)
|
|
$
|
(381,748
|
)
|
Net cash provided by (used for) financing activities
|
$
|
(848,255
|
)
|
|
$
|
(664,328
|
)
|
|
$
|
(72,630
|
)
|
|
$
|
838,695
|
|
|
$
|
(1,105,572
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At end of period
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and investments in marketable securities
|
$
|
885,162
|
|
|
$
|
1,154,752
|
|
|
$
|
630,757
|
|
|
$
|
1,134,727
|
|
|
$
|
210,552
|
|
Working capital
|
$
|
1,620,261
|
|
|
$
|
2,128,224
|
|
|
$
|
1,640,118
|
|
|
$
|
1,767,780
|
|
|
$
|
587,450
|
|
Total assets
|
$
|
12,164,841
|
|
|
$
|
10,994,601
|
|
|
$
|
10,692,154
|
|
|
$
|
9,435,661
|
|
|
$
|
8,388,299
|
|
Total debt
|
$
|
2,455,640
|
|
|
$
|
2,411,540
|
|
|
$
|
2,498,993
|
|
|
$
|
2,235,137
|
|
|
$
|
1,040,040
|
|
Total equity
|
$
|
6,509,426
|
|
|
$
|
6,459,059
|
|
|
$
|
5,896,940
|
|
|
$
|
5,301,985
|
|
|
$
|
5,809,773
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands, except per share data)
|
||||||||||
Sales and other revenues
|
|
$
|
17,486,578
|
|
|
$
|
17,714,666
|
|
|
$
|
14,251,299
|
|
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)
|
|
13,918,384
|
|
|
13,940,782
|
|
|
11,467,873
|
|
|||
Lower of cost or market inventory valuation adjustment
|
|
(119,775
|
)
|
|
136,305
|
|
|
(108,685
|
)
|
|||
|
|
13,798,609
|
|
|
14,077,087
|
|
|
11,359,188
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
1,394,052
|
|
|
1,285,838
|
|
|
1,296,669
|
|
|||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
354,236
|
|
|
290,424
|
|
|
265,721
|
|
|||
Depreciation and amortization
|
|
509,925
|
|
|
437,324
|
|
|
409,937
|
|
|||
Goodwill and asset impairment
|
|
152,712
|
|
|
—
|
|
|
19,247
|
|
|||
Total operating costs and expenses
|
|
16,209,534
|
|
|
16,090,673
|
|
|
13,350,762
|
|
|||
Income from operations
|
|
1,277,044
|
|
|
1,623,993
|
|
|
900,537
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Earnings of equity method investments
|
|
5,180
|
|
|
5,825
|
|
|
12,510
|
|
|||
Interest income
|
|
22,139
|
|
|
16,892
|
|
|
3,736
|
|
|||
Interest expense
|
|
(143,321
|
)
|
|
(131,363
|
)
|
|
(117,597
|
)
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(12,225
|
)
|
|||
Gain on foreign currency transactions
|
|
5,449
|
|
|
6,197
|
|
|
16,921
|
|
|||
Gain on foreign currency swap contracts
|
|
—
|
|
|
—
|
|
|
24,545
|
|
|||
Remeasurement gain on HEP pipeline interest acquisitions
|
|
—
|
|
|
—
|
|
|
36,254
|
|
|||
Other, net
|
|
5,013
|
|
|
2,923
|
|
|
4,182
|
|
|||
|
|
(105,540
|
)
|
|
(99,526
|
)
|
|
(31,674
|
)
|
|||
Income before income taxes
|
|
1,171,504
|
|
|
1,524,467
|
|
|
868,863
|
|
|||
Income tax expense (benefit)
|
|
299,152
|
|
|
347,243
|
|
|
(12,379
|
)
|
|||
Net income
|
|
872,352
|
|
|
1,177,224
|
|
|
881,242
|
|
|||
Less net income attributable to noncontrolling interest
|
|
99,964
|
|
|
79,264
|
|
|
75,847
|
|
|||
Net income attributable to HollyFrontier stockholders
|
|
$
|
772,388
|
|
|
$
|
1,097,960
|
|
|
$
|
805,395
|
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
4.64
|
|
|
$
|
6.25
|
|
|
$
|
4.54
|
|
Diluted
|
|
$
|
4.61
|
|
|
$
|
6.19
|
|
|
$
|
4.52
|
|
Cash dividends declared per common share
|
|
$
|
1.34
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
166,287
|
|
|
175,009
|
|
|
176,174
|
|
|||
Diluted
|
|
167,385
|
|
|
176,661
|
|
|
177,196
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
1,548,611
|
|
|
$
|
1,554,416
|
|
|
$
|
951,390
|
|
Net cash used for investing activities
|
|
$
|
(972,914
|
)
|
|
$
|
(360,520
|
)
|
|
$
|
(959,670
|
)
|
Net cash used for financing activities
|
|
$
|
(848,255
|
)
|
|
$
|
(664,328
|
)
|
|
$
|
(72,630
|
)
|
Capital expenditures
|
|
$
|
293,763
|
|
|
$
|
311,029
|
|
|
$
|
272,259
|
|
EBITDA (1)
|
|
$
|
1,702,647
|
|
|
$
|
1,996,998
|
|
|
$
|
1,316,814
|
|
(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 7A of Part II of this Form 10-K.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Consolidated
|
|
|
|
|
|
|
||||||
Crude charge (BPD) (1)
|
|
427,600
|
|
|
431,570
|
|
|
438,800
|
|
|||
Refinery throughput (BPD) (2)
|
|
458,600
|
|
|
463,340
|
|
|
472,010
|
|
|||
Sales of produced refined products (BPD) (3)
|
|
449,190
|
|
|
452,630
|
|
|
452,270
|
|
|||
Refinery utilization (4)
|
|
93.6
|
%
|
|
94.4
|
%
|
|
96.0
|
%
|
|||
|
|
|
|
|
|
|
||||||
Average per produced barrel (5)
|
|
|
|
|
|
|
||||||
Refinery gross margin
|
|
$
|
15.96
|
|
|
$
|
17.71
|
|
|
$
|
11.56
|
|
Refinery operating expenses (6)
|
|
6.68
|
|
|
6.39
|
|
|
6.11
|
|
|||
Net operating margin
|
|
$
|
9.28
|
|
|
$
|
11.32
|
|
|
$
|
5.45
|
|
|
|
|
|
|
|
|
||||||
Refinery operating expenses per throughput barrel (7)
|
|
$
|
6.54
|
|
|
$
|
6.24
|
|
|
$
|
5.86
|
|
(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 of refined products purchased for resale or volumes of excess crude oil sold.
|
(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 7A of Part II of this Form 10-K.
|
(6)
|
Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of refined products produced at our refineries.
|
(7)
|
Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.
|
|
|
Years Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Lubricants and Specialty Products
|
|
|
|
|
|
|
|||
Throughput (BPD)
|
|
20,251
|
|
|
19,590
|
|
|
21,710
|
|
Sales of produced barrels sold (BPD)
|
|
34,827
|
|
|
30,510
|
|
|
32,910
|
|
|
|
Rack Back (1)
|
|
Rack Forward (2)
|
|
Eliminations (3)
|
|
Total Lubricants and Specialty Products
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Sales and other revenues
|
|
$
|
661,523
|
|
|
$
|
1,883,920
|
|
|
$
|
(452,915
|
)
|
|
$
|
2,092,528
|
|
Cost of products sold
|
|
620,660
|
|
|
1,412,291
|
|
|
(452,915
|
)
|
|
1,580,036
|
|
||||
Operating expenses
|
|
116,984
|
|
|
114,539
|
|
|
—
|
|
|
231,523
|
|
||||
Selling, general and administrative expenses
|
|
31,854
|
|
|
136,741
|
|
|
—
|
|
|
168,595
|
|
||||
Depreciation and amortization
|
|
37,001
|
|
|
51,780
|
|
|
—
|
|
|
88,781
|
|
||||
Goodwill impairment (4)
|
|
152,712
|
|
|
—
|
|
|
—
|
|
|
152,712
|
|
||||
Income (loss) from operations
|
|
$
|
(297,688
|
)
|
|
$
|
168,569
|
|
|
$
|
—
|
|
|
$
|
(129,119
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Sales and other revenues
|
|
$
|
682,892
|
|
|
$
|
1,650,056
|
|
|
$
|
(520,245
|
)
|
|
$
|
1,812,703
|
|
Cost of products sold
|
|
633,459
|
|
|
1,268,326
|
|
|
(520,245
|
)
|
|
1,381,540
|
|
||||
Operating expenses
|
|
111,155
|
|
|
56,665
|
|
|
—
|
|
|
167,820
|
|
||||
Selling, general and administrative expenses
|
|
32,086
|
|
|
111,664
|
|
|
—
|
|
|
143,750
|
|
||||
Depreciation and amortization
|
|
26,955
|
|
|
16,300
|
|
|
—
|
|
|
43,255
|
|
||||
Income (loss) from operations
|
|
$
|
(120,763
|
)
|
|
$
|
197,101
|
|
|
$
|
—
|
|
|
$
|
76,338
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Sales and other revenues
|
|
$
|
621,153
|
|
|
$
|
1,415,842
|
|
|
$
|
(442,959
|
)
|
|
$
|
1,594,036
|
|
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
504,782
|
|
|
1,032,161
|
|
|
(442,959
|
)
|
|
1,093,984
|
|
||||
Lower of cost or market inventory valuation adjustment
|
|
—
|
|
|
(1,206
|
)
|
|
—
|
|
|
(1,206
|
)
|
||||
Operating expenses
|
|
95,303
|
|
|
127,158
|
|
|
—
|
|
|
222,461
|
|
||||
Selling, general and administrative expenses
|
|
27,764
|
|
|
77,902
|
|
|
—
|
|
|
105,666
|
|
||||
Depreciation and amortization
|
|
23,471
|
|
|
8,423
|
|
|
—
|
|
|
31,894
|
|
||||
Income (loss) from operations
|
|
$
|
(30,167
|
)
|
|
$
|
171,404
|
|
|
$
|
—
|
|
|
$
|
141,237
|
|
(1)
|
Rack back consists of our PCLI base oil production activities, by-product sales to third parties and intra-segment base oil sales to rack forward. Rack back results reflect the increase in feedstock prices from 2017 to 2019 combined with softening market conditions from the increased supply of base oils.
|
(2)
|
Rack forward activities include the purchase of base oils from rack back and the blending, packaging, marketing and distribution and sales of finished lubricants and specialty products to third parties.
|
(3)
|
Intra-segment sales of rack back produced base oils to rack forward are eliminated under the “Eliminations” column.
|
(4)
|
During the three months ended June 30, 2019, a goodwill impairment charge of $152.7 million was recorded in the PCLI reporting unit within the Lubricants and Specialty Products segment. We have separately allocated this charge for purposes of management’s discussion and analysis presentation of Rack Back and Rack Forward results entirely to Rack Back.
|
|
Expected Cash Spending Range
|
||||||
|
(In millions)
|
||||||
HollyFrontier Capital Expenditures
|
|
|
|
||||
Refining
|
$
|
270.0
|
|
|
$
|
300.0
|
|
Renewable Diesel Unit
|
130.0
|
|
|
150.0
|
|
||
Lubricants and Specialty Products
|
40.0
|
|
|
60.0
|
|
||
Turnarounds and catalyst
|
125.0
|
|
|
150.0
|
|
||
Total HollyFrontier
|
565.0
|
|
|
660.0
|
|
||
|
|
|
|
||||
HEP
|
|
|
|
||||
Maintenance
|
8.0
|
|
|
12.0
|
|
||
Expansion and joint venture investment
|
45.0
|
|
|
50.0
|
|
||
Refining unit turnarounds
|
5.0
|
|
|
7.0
|
|
||
Total HEP
|
58.0
|
|
|
69.0
|
|
||
Total
|
$
|
623.0
|
|
|
$
|
729.0
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
Contractual Obligations and Commitments
|
|
Total
|
|
2020
|
|
2021 & 2022
|
|
2023 & 2024
|
|
Thereafter
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
HollyFrontier Corporation
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt - principal
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000,000
|
|
Long-term debt - interest (1)
|
|
367,188
|
|
|
58,750
|
|
|
117,500
|
|
|
117,500
|
|
|
73,438
|
|
|||||
Financing arrangements
|
|
39,971
|
|
|
—
|
|
|
39,971
|
|
|
—
|
|
|
—
|
|
|||||
Supply agreements (2)
|
|
2,882,811
|
|
|
884,034
|
|
|
1,055,896
|
|
|
648,595
|
|
|
294,286
|
|
|||||
Transportation and storage agreements (3)
|
|
1,274,852
|
|
|
137,457
|
|
|
227,116
|
|
|
224,338
|
|
|
685,941
|
|
|||||
Operating and finance leases (4)
|
|
447,665
|
|
|
115,255
|
|
|
176,889
|
|
|
110,114
|
|
|
45,407
|
|
|||||
Other long-term obligations
|
|
13,296
|
|
|
8,494
|
|
|
2,696
|
|
|
1,106
|
|
|
1,000
|
|
|||||
|
|
6,025,783
|
|
|
1,203,990
|
|
|
1,620,068
|
|
|
1,101,653
|
|
|
2,100,072
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Holly Energy Partners
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt - principal (5)
|
|
1,465,500
|
|
|
—
|
|
|
965,500
|
|
|
500,000
|
|
|
—
|
|
|||||
Long-term debt - interest (6)
|
|
227,200
|
|
|
64,900
|
|
|
114,800
|
|
|
47,500
|
|
|
—
|
|
|||||
Operating and finance leases (4)
|
|
119,413
|
|
|
8,383
|
|
|
15,295
|
|
|
14,273
|
|
|
81,462
|
|
|||||
Other agreements
|
|
4,931
|
|
|
1,820
|
|
|
3,111
|
|
|
—
|
|
|
—
|
|
|||||
|
|
1,817,044
|
|
|
75,103
|
|
|
1,098,706
|
|
|
561,773
|
|
|
81,462
|
|
|||||
Total
|
|
$
|
7,842,827
|
|
|
$
|
1,279,093
|
|
|
$
|
2,718,774
|
|
|
$
|
1,663,426
|
|
|
$
|
2,181,534
|
|
(1)
|
Interest payments consist of interest on our 5.875% senior notes.
|
(2)
|
We have long-term supply agreements to secure certain quantities of crude oil, feedstock and other resources used in the production process at market prices. We have estimated future payments under these fixed-quantity agreements expiring between 2020 and 2025 using current market rates. Additionally, commitments include purchases of 20,000 BPD of crude oil under a 10-year agreement to supply our Woods Cross Refinery.
|
(3)
|
Consists of contractual obligations under agreements with third parties for the transportation of crude oil, natural gas and feedstocks to our refineries and for terminal and storage services under contracts expiring between 2020 and 2039.
|
(4)
|
Operating and finance lease obligations include options to extend terms that are reasonably certain of being exercised.
|
(5)
|
HEP's long-term debt consists of the $500.0 million principal balance on the 6% HEP senior notes and $965.5 million of outstanding borrowings under the HEP Credit Agreement. The HEP Credit Agreement expires in 2022.
|
(6)
|
Interest payments consist of interest on the 6% HEP senior notes and interest on long-term debt under the HEP Credit Agreement. Interest on the HEP Credit Agreement debt is based on the weighted average rate of 3.61% at December 31, 2019.
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
|||||
Contract Description
|
|
Total Outstanding Notional
|
|
2020
|
|
2021
|
|
Unit of Measure
|
|||
|
|
|
|
|
|
|
|
|
|||
Natural gas price swaps - long
|
|
3,600,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
MMBTU
|
Crude oil price swaps (basis spread) - long
|
|
6,222,000
|
|
|
6,222,000
|
|
|
—
|
|
|
Barrels
|
NYMEX futures (WTI) - short
|
|
1,365,000
|
|
|
1,365,000
|
|
|
—
|
|
|
Barrels
|
Forward gasoline and diesel contracts - long
|
|
1,251,200
|
|
|
1,251,200
|
|
|
—
|
|
|
Barrels
|
Foreign currency forward contracts
|
|
434,340,348
|
|
|
434,340,348
|
|
|
—
|
|
|
U.S. dollar
|
Forward commodity contracts (platinum) (1)
|
|
41,147
|
|
|
—
|
|
|
41,147
|
|
|
Troy ounces
|
|
|
Estimated Change in Fair Value at December 31,
|
||||||
Commodity-based Derivative Contracts
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Hypothetical 10% change in underlying commodity prices
|
|
$
|
7,420
|
|
|
$
|
1,485
|
|
|
|
Outstanding
Principal
|
|
Estimated
Fair Value
|
|
Estimated
Change in
Fair Value
|
||||||
|
|
(In thousands)
|
||||||||||
HollyFrontier Senior Notes
|
|
$
|
1,000,000
|
|
|
$
|
1,127,610
|
|
|
$
|
22,552
|
|
HEP Senior Notes
|
|
$
|
500,000
|
|
|
$
|
522,045
|
|
|
$
|
10,892
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
772,388
|
|
|
$
|
1,097,960
|
|
|
$
|
805,395
|
|
Add (subtract) income tax provision
|
|
299,152
|
|
|
347,243
|
|
|
(12,379
|
)
|
|||
Add interest expense
|
|
143,321
|
|
|
131,363
|
|
|
117,597
|
|
|||
Subtract interest income
|
|
(22,139
|
)
|
|
(16,892
|
)
|
|
(3,736
|
)
|
|||
Add depreciation and amortization
|
|
509,925
|
|
|
437,324
|
|
|
409,937
|
|
|||
EBITDA
|
|
$
|
1,702,647
|
|
|
$
|
1,996,998
|
|
|
$
|
1,316,814
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||
Consolidated
|
|
|
|
|
|
|
||||||
Net operating margin per produced barrel sold
|
|
$
|
9.28
|
|
|
$
|
11.32
|
|
|
$
|
5.45
|
|
Add average refinery operating expenses per produced barrel sold
|
|
6.68
|
|
|
6.39
|
|
|
6.11
|
|
|||
Refinery gross margin per produced barrel sold
|
|
15.96
|
|
|
17.71
|
|
|
11.56
|
|
|||
Times produced barrels sold (BPD)
|
|
449,190
|
|
|
452,630
|
|
|
452,270
|
|
|||
Times number of days in period
|
|
365
|
|
|
365
|
|
|
365
|
|
|||
Refining segment gross margin
|
|
2,616,711
|
|
|
2,925,868
|
|
|
1,908,308
|
|
|||
Add (subtract) rounding
|
|
(429
|
)
|
|
(154
|
)
|
|
335
|
|
|||
Total refining segment gross margin
|
|
2,616,282
|
|
|
2,925,714
|
|
|
1,908,643
|
|
|||
Add refining segment cost of products sold
|
|
12,980,506
|
|
|
13,250,849
|
|
|
11,009,419
|
|
|||
Refining segment sales and other revenues
|
|
15,596,788
|
|
|
16,176,563
|
|
|
12,918,062
|
|
|||
Add lubricants and specialty products segment sales and other revenues
|
|
2,092,528
|
|
|
1,812,703
|
|
|
1,594,036
|
|
|||
Add HEP segment sales and other revenues
|
|
532,777
|
|
|
506,220
|
|
|
454,362
|
|
|||
Subtract corporate, other and eliminations
|
|
(735,515
|
)
|
|
(780,820
|
)
|
|
(715,161
|
)
|
|||
Sales and other revenues
|
|
$
|
17,486,578
|
|
|
$
|
17,714,666
|
|
|
$
|
14,251,299
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(Dollars in thousands, except per barrel amounts)
|
||||||||||
Consolidated
|
|
|
|
|
|
|
||||||
Average refinery operating expenses per produced barrel sold
|
|
$
|
6.68
|
|
|
$
|
6.39
|
|
|
$
|
6.11
|
|
Times produced barrels sold (BPD)
|
|
449,190
|
|
|
452,630
|
|
|
452,270
|
|
|||
Times number of days in period
|
|
365
|
|
|
365
|
|
|
365
|
|
|||
Refinery operating expenses
|
|
1,095,215
|
|
|
1,055,692
|
|
|
1,008,630
|
|
|||
Add (subtract) rounding
|
|
273
|
|
|
(483
|
)
|
|
229
|
|
|||
Total refining segment operating expenses
|
|
1,095,488
|
|
|
1,055,209
|
|
|
1,008,859
|
|
|||
Add lubricants and specialty products segment operating expenses
|
|
231,523
|
|
|
167,820
|
|
|
222,461
|
|
|||
Add HEP segment operating expenses
|
|
161,996
|
|
|
146,430
|
|
|
137,856
|
|
|||
Subtract corporate, other and eliminations
|
|
(94,955
|
)
|
|
(83,621
|
)
|
|
(72,507
|
)
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
$
|
1,394,052
|
|
|
$
|
1,285,838
|
|
|
$
|
1,296,669
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page Reference
|
|
|
|
|
Consolidated Balance Sheets at December 31, 2019 and 2018
|
|
|
|
Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Equity for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Valuation of Intangible Assets in the Sonneborn Acquisition
|
Description of the Matter
|
During 2019, the Company completed its acquisition of Sonneborn for net consideration of $662.7 million, as disclosed in Note 2 to the consolidated financial statements. The transaction was accounted for as a business combination.
Auditing the Company's accounting for its acquisition of Sonneborn was complex due to the significant estimation uncertainty in determining the fair value of the acquired intangible assets of $214.6 million, which primarily consisted of customer relationships and trademarks. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to the significant underlying assumptions utilized in the measurement of the fair values of the intangible assets. The significant assumptions used to estimate the values of the intangible assets included discount rates, revenue growth rates, customer attrition rates, royalty rates as a percentage of revenue, and the economic life of trademarks. These significant assumptions are forward looking and could be affected by future economic and market conditions.
|
|
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the valuation of intangible assets related to the acquisition. For example, we tested controls over management’s review of the valuation models and the underlying assumptions used to develop estimated values of intangible assets.
To test the estimated fair values of the intangible assets, our audit procedures included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions used by the Company's valuation specialist, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the significant assumptions to current industry and market trends and to the historical results of the acquired business. We also performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the acquired trademarks and customer relationship intangible assets that would result from changes in the assumptions. In addition, we involved our valuation specialists to assist with our evaluation of the methodologies used by the Company and significant assumptions included in the fair value estimates.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents (HEP: $13,287 and $3,045, respectively)
|
$
|
885,162
|
|
|
$
|
1,154,752
|
|
|
|
|
|
||||
Accounts receivable: Product and transportation (HEP: $18,732 and $12,332, respectively)
|
834,771
|
|
|
635,623
|
|
||
Crude oil resales
|
44,914
|
|
|
36,078
|
|
||
|
879,685
|
|
|
671,701
|
|
||
Inventories: Crude oil and refined products
|
1,282,789
|
|
|
1,166,404
|
|
||
Materials, supplies and other (HEP: $833 and $858, respectively)
|
191,413
|
|
|
187,975
|
|
||
|
1,474,202
|
|
|
1,354,379
|
|
||
Income taxes receivable
|
5,478
|
|
|
34,040
|
|
||
Prepayments and other (HEP: $6,795 and $3,452, respectively)
|
61,662
|
|
|
81,507
|
|
||
Total current assets
|
3,306,189
|
|
|
3,296,379
|
|
||
|
|
|
|
||||
Properties, plants and equipment, at cost (HEP: $2,047,674 and $2,058,388, respectively)
|
7,237,297
|
|
|
6,780,980
|
|
||
Less accumulated depreciation (HEP: $(552,786) and $(489,217), respectively)
|
(2,414,585
|
)
|
|
(2,098,446
|
)
|
||
|
4,822,712
|
|
|
4,682,534
|
|
||
Operating lease right-of-use assets (HEP: $2,652)
|
467,109
|
|
|
—
|
|
||
|
|
|
|
||||
Other assets: Turnaround costs
|
521,278
|
|
|
339,861
|
|
||
Goodwill (HEP: $312,873 and $314,229, respectively)
|
2,373,907
|
|
|
2,246,435
|
|
||
Intangibles and other (HEP: $319,569 and $176,291, respectively)
|
673,646
|
|
|
429,392
|
|
||
|
3,568,831
|
|
|
3,015,688
|
|
||
Total assets
|
$
|
12,164,841
|
|
|
$
|
10,994,601
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable (HEP: $18,050 and $16,723, respectively)
|
$
|
1,215,555
|
|
|
$
|
872,627
|
|
Income taxes payable
|
27,965
|
|
|
17,636
|
|
||
Operating lease liabilities (HEP $3,608)
|
104,415
|
|
|
—
|
|
||
Accrued liabilities (HEP: $30,418 and $27,240, respectively)
|
337,993
|
|
|
277,892
|
|
||
Total current liabilities
|
1,685,928
|
|
|
1,168,155
|
|
||
|
|
|
|
||||
Long-term debt (HEP: $1,462,031 and $1,418,900, respectively)
|
2,455,640
|
|
|
2,411,540
|
|
||
Noncurrent operating lease liabilities (HEP $72,000)
|
364,420
|
|
|
—
|
|
||
Deferred income taxes (HEP: $424 and $488, respectively)
|
889,270
|
|
|
722,576
|
|
||
Other long-term liabilities (HEP: $59,021 and $63,534, respectively)
|
260,157
|
|
|
233,271
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
||||
HollyFrontier stockholders’ equity:
|
|
|
|
||||
Preferred stock, $1.00 par value – 5,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock $.01 par value – 320,000,000 shares authorized; 256,042,554 and 256,036,788 shares issued as of December 31, 2019 and December 31, 2018
|
2,560
|
|
|
2,560
|
|
||
Additional capital
|
4,204,547
|
|
|
4,196,125
|
|
||
Retained earnings
|
4,744,120
|
|
|
4,196,902
|
|
||
Accumulated other comprehensive income
|
14,774
|
|
|
13,623
|
|
||
Common stock held in treasury, at cost – 94,196,029 and 83,915,297 shares as of December 31, 2019 and December 31, 2018, respectively
|
(2,987,808
|
)
|
|
(2,490,639
|
)
|
||
Total HollyFrontier stockholders’ equity
|
5,978,193
|
|
|
5,918,571
|
|
||
Noncontrolling interest
|
531,233
|
|
|
540,488
|
|
||
Total equity
|
6,509,426
|
|
|
6,459,059
|
|
||
Total liabilities and equity
|
$
|
12,164,841
|
|
|
$
|
10,994,601
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Sales and other revenues
|
|
$
|
17,486,578
|
|
|
$
|
17,714,666
|
|
|
$
|
14,251,299
|
|
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)
|
|
13,918,384
|
|
|
13,940,782
|
|
|
11,467,873
|
|
|||
Lower of cost or market inventory valuation adjustment
|
|
(119,775
|
)
|
|
136,305
|
|
|
(108,685
|
)
|
|||
|
|
13,798,609
|
|
|
14,077,087
|
|
|
11,359,188
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
|
1,394,052
|
|
|
1,285,838
|
|
|
1,296,669
|
|
|||
Selling, general and administrative expenses (exclusive of depreciation and amortization)
|
|
354,236
|
|
|
290,424
|
|
|
265,721
|
|
|||
Depreciation and amortization
|
|
509,925
|
|
|
437,324
|
|
|
409,937
|
|
|||
Goodwill and long-lived asset impairment
|
|
152,712
|
|
|
—
|
|
|
19,247
|
|
|||
Total operating costs and expenses
|
|
16,209,534
|
|
|
16,090,673
|
|
|
13,350,762
|
|
|||
Income from operations
|
|
1,277,044
|
|
|
1,623,993
|
|
|
900,537
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Earnings of equity method investments
|
|
5,180
|
|
|
5,825
|
|
|
12,510
|
|
|||
Interest income
|
|
22,139
|
|
|
16,892
|
|
|
3,736
|
|
|||
Interest expense
|
|
(143,321
|
)
|
|
(131,363
|
)
|
|
(117,597
|
)
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(12,225
|
)
|
|||
Gain on foreign currency transactions
|
|
5,449
|
|
|
6,197
|
|
|
16,921
|
|
|||
Gain on foreign currency swap contracts
|
|
—
|
|
|
—
|
|
|
24,545
|
|
|||
Remeasurement gain on HEP pipeline interest acquisitions
|
|
—
|
|
|
—
|
|
|
36,254
|
|
|||
Other, net
|
|
5,013
|
|
|
2,923
|
|
|
4,182
|
|
|||
|
|
(105,540
|
)
|
|
(99,526
|
)
|
|
(31,674
|
)
|
|||
Income before income taxes
|
|
1,171,504
|
|
|
1,524,467
|
|
|
868,863
|
|
|||
Income tax expense (benefit):
|
|
|
|
|
|
|
||||||
Current
|
|
220,486
|
|
|
270,274
|
|
|
125,143
|
|
|||
Deferred
|
|
78,666
|
|
|
76,969
|
|
|
(137,522
|
)
|
|||
|
|
299,152
|
|
|
347,243
|
|
|
(12,379
|
)
|
|||
Net income
|
|
872,352
|
|
|
1,177,224
|
|
|
881,242
|
|
|||
Less net income attributable to noncontrolling interest
|
|
99,964
|
|
|
79,264
|
|
|
75,847
|
|
|||
Net income attributable to HollyFrontier stockholders
|
|
$
|
772,388
|
|
|
$
|
1,097,960
|
|
|
$
|
805,395
|
|
Earnings per share attributable to HollyFrontier stockholders:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
4.64
|
|
|
$
|
6.25
|
|
|
$
|
4.54
|
|
Diluted
|
|
$
|
4.61
|
|
|
$
|
6.19
|
|
|
$
|
4.52
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
166,287
|
|
|
175,009
|
|
|
176,174
|
|
|||
Diluted
|
|
167,385
|
|
|
176,661
|
|
|
177,196
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
872,352
|
|
|
$
|
1,177,224
|
|
|
$
|
881,242
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
13,337
|
|
|
(38,227
|
)
|
|
22,151
|
|
|||
Unrealized loss on marketable securities available for sale
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Hedging instruments:
|
|
|
|
|
|
|
||||||
Change in fair value of cash flow hedging instruments
|
|
14,364
|
|
|
5,166
|
|
|
2,919
|
|
|||
Reclassification adjustments to net income on settlement of cash flow hedging instruments
|
|
(19,713
|
)
|
|
6,055
|
|
|
10,448
|
|
|||
Amortization of unrealized loss attributable to discontinued cash flow hedges
|
|
—
|
|
|
—
|
|
|
1,080
|
|
|||
Net unrealized gain (loss) on hedging instruments
|
|
(5,349
|
)
|
|
11,221
|
|
|
14,447
|
|
|||
Other post-retirement benefit obligations:
|
|
|
|
|
|
|
||||||
Actuarial loss on pension plans
|
|
(990
|
)
|
|
(923
|
)
|
|
(1,162
|
)
|
|||
Actuarial gain (loss) on post-retirement healthcare plans
|
|
(2,412
|
)
|
|
2,612
|
|
|
(1,058
|
)
|
|||
Post-retirement healthcare plans gain reclassified to net income
|
|
(3,587
|
)
|
|
(3,481
|
)
|
|
(3,481
|
)
|
|||
Actuarial gain (loss) on retirement restoration plan
|
|
(224
|
)
|
|
258
|
|
|
(123
|
)
|
|||
Retirement restoration plan loss reclassified to net income
|
|
6
|
|
|
27
|
|
|
17
|
|
|||
Net change in other post-retirement benefit obligations
|
|
(7,207
|
)
|
|
(1,507
|
)
|
|
(5,807
|
)
|
|||
Other comprehensive income (loss) before income taxes
|
|
781
|
|
|
(28,513
|
)
|
|
30,787
|
|
|||
Income tax expense (benefit)
|
|
(370
|
)
|
|
(5,585
|
)
|
|
11,349
|
|
|||
Other comprehensive income (loss)
|
|
1,151
|
|
|
(22,928
|
)
|
|
19,438
|
|
|||
Total comprehensive income
|
|
873,503
|
|
|
1,154,296
|
|
|
900,680
|
|
|||
Less noncontrolling interest in comprehensive income
|
|
99,964
|
|
|
79,264
|
|
|
75,790
|
|
|||
Comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
773,539
|
|
|
$
|
1,075,032
|
|
|
$
|
824,890
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
872,352
|
|
|
$
|
1,177,224
|
|
|
$
|
881,242
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
509,925
|
|
|
437,324
|
|
|
409,937
|
|
|||
Goodwill and long-lived asset impairment
|
|
152,712
|
|
|
—
|
|
|
19,247
|
|
|||
Lower of cost or market inventory valuation adjustment
|
|
(119,775
|
)
|
|
136,305
|
|
|
(108,685
|
)
|
|||
Earnings of equity method investments, inclusive of distributions
|
|
(213
|
)
|
|
(149
|
)
|
|
1,450
|
|
|||
Loss on early extinguishment of debt attributable to unamortized discount
|
|
—
|
|
|
—
|
|
|
2,475
|
|
|||
Remeasurement gain on HEP pipeline interest acquisitions
|
|
—
|
|
|
—
|
|
|
(36,254
|
)
|
|||
Loss on sale of assets
|
|
50
|
|
|
2,171
|
|
|
508
|
|
|||
Deferred income taxes
|
|
78,666
|
|
|
76,969
|
|
|
(137,522
|
)
|
|||
Equity-based compensation expense
|
|
42,269
|
|
|
42,172
|
|
|
42,337
|
|
|||
Change in fair value – derivative instruments
|
|
36,888
|
|
|
(31,515
|
)
|
|
(4,265
|
)
|
|||
(Increase) decrease in current assets:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(150,437
|
)
|
|
35,793
|
|
|
(115,322
|
)
|
|||
Inventories
|
|
91,599
|
|
|
136,551
|
|
|
(162,297
|
)
|
|||
Income taxes receivable
|
|
32,368
|
|
|
7,752
|
|
|
50,601
|
|
|||
Prepayments and other
|
|
3,633
|
|
|
(10,340
|
)
|
|
(6,753
|
)
|
|||
Increase (decrease) in current liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
312,794
|
|
|
(326,030
|
)
|
|
188,975
|
|
|||
Income taxes payable
|
|
9,048
|
|
|
15,281
|
|
|
(18,525
|
)
|
|||
Accrued liabilities
|
|
13,748
|
|
|
53,281
|
|
|
57,227
|
|
|||
Turnaround expenditures
|
|
(318,415
|
)
|
|
(217,228
|
)
|
|
(135,104
|
)
|
|||
Other, net
|
|
(18,601
|
)
|
|
18,855
|
|
|
22,118
|
|
|||
Net cash provided by operating activities
|
|
1,548,611
|
|
|
1,554,416
|
|
|
951,390
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Additions to properties, plants and equipment
|
|
(263,651
|
)
|
|
(256,888
|
)
|
|
(227,449
|
)
|
|||
Additions to properties, plants and equipment – HEP
|
|
(30,112
|
)
|
|
(54,141
|
)
|
|
(44,810
|
)
|
|||
Acquisitions, net of cash acquired
|
|
(662,665
|
)
|
|
(54,179
|
)
|
|
(870,627
|
)
|
|||
Purchase of pipeline interests, net of cash acquired - HEP
|
|
—
|
|
|
—
|
|
|
(245,446
|
)
|
|||
Investment in joint venture
|
|
(17,886
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of assets
|
|
194
|
|
|
3,100
|
|
|
1,377
|
|
|||
Purchases of marketable securities
|
|
—
|
|
|
—
|
|
|
(41,565
|
)
|
|||
Sales and maturities of marketable securities
|
|
—
|
|
|
—
|
|
|
465,716
|
|
|||
Other, net
|
|
1,206
|
|
|
1,588
|
|
|
3,134
|
|
|||
Net cash used for investing activities
|
|
(972,914
|
)
|
|
(360,520
|
)
|
|
(959,670
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Borrowings under credit agreements
|
|
365,500
|
|
|
337,000
|
|
|
995,000
|
|
|||
Repayments under credit agreements
|
|
(323,000
|
)
|
|
(426,000
|
)
|
|
(536,000
|
)
|
|||
Proceeds from issuance of senior notes – HEP
|
|
—
|
|
|
—
|
|
|
101,750
|
|
|||
Redemption of senior notes - HEP
|
|
—
|
|
|
—
|
|
|
(309,750
|
)
|
|||
Proceeds of financing arrangements
|
|
—
|
|
|
32,547
|
|
|
—
|
|
|||
Proceeds from issuance of common units - HEP
|
|
—
|
|
|
114,759
|
|
|
52,110
|
|
|||
Purchase of treasury stock
|
|
(533,083
|
)
|
|
(363,437
|
)
|
|
(15,926
|
)
|
|||
Dividends
|
|
(225,170
|
)
|
|
(233,544
|
)
|
|
(235,508
|
)
|
|||
Distributions to noncontrolling interest
|
|
(132,268
|
)
|
|
(125,653
|
)
|
|
(110,351
|
)
|
|||
Contribution from noncontrolling interest
|
|
3,210
|
|
|
—
|
|
|
—
|
|
|||
Payments on finance leases
|
|
(1,551
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
(1,893
|
)
|
|
—
|
|
|
(13,955
|
)
|
|||
Net cash used for financing activities
|
|
(848,255
|
)
|
|
(664,328
|
)
|
|
(72,630
|
)
|
|||
|
|
|
|
|
|
|
||||||
Effect of exchange rate on cash flow
|
|
2,968
|
|
|
(5,573
|
)
|
|
1,088
|
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
|
||||||
Increase (decrease) for the period
|
|
(269,590
|
)
|
|
523,995
|
|
|
(79,822
|
)
|
|||
Beginning of period
|
|
1,154,752
|
|
|
630,757
|
|
|
710,579
|
|
|||
End of period
|
|
$
|
885,162
|
|
|
$
|
1,154,752
|
|
|
$
|
630,757
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest
|
|
$
|
(133,809
|
)
|
|
$
|
(130,106
|
)
|
|
$
|
(124,375
|
)
|
Income taxes, net
|
|
$
|
(178,967
|
)
|
|
$
|
(252,644
|
)
|
|
$
|
(93,272
|
)
|
|
HollyFrontier Stockholders' Equity
|
|
|
|
|
||||||||||||||||||||||
|
Common Stock
|
|
Additional Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Treasury Stock
|
|
Non-controlling Interest
|
|
Total Equity
|
||||||||||||||
Balance at December 31, 2016
|
$
|
2,560
|
|
|
$
|
4,026,805
|
|
|
$
|
2,776,728
|
|
|
$
|
10,612
|
|
|
$
|
(2,135,311
|
)
|
|
$
|
620,591
|
|
|
$
|
5,301,985
|
|
Net income
|
—
|
|
|
—
|
|
|
805,395
|
|
|
—
|
|
|
—
|
|
|
75,847
|
|
|
881,242
|
|
|||||||
Dividends ($1.32 declared per common share)
|
—
|
|
|
—
|
|
|
(235,508
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(235,508
|
)
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110,351
|
)
|
|
(110,351
|
)
|
|||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
19,495
|
|
|
—
|
|
|
(57
|
)
|
|
19,438
|
|
|||||||
Equity attributable to HEP common unit issuances, net of tax
|
—
|
|
|
69,802
|
|
|
—
|
|
|
(238
|
)
|
|
—
|
|
|
(61,390
|
)
|
|
8,174
|
|
|||||||
Equity awards issued in PCLI acquisition
|
—
|
|
|
6,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,600
|
|
|||||||
Issuance of common stock under incentive compensation plans, net of forfeitures
|
—
|
|
|
(10,326
|
)
|
|
—
|
|
|
—
|
|
|
10,326
|
|
|
—
|
|
|
—
|
|
|||||||
Equity-based compensation, inclusive of tax expense
|
—
|
|
|
39,815
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,522
|
|
|
42,337
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,926
|
)
|
|
—
|
|
|
(15,926
|
)
|
|||||||
Purchase of HEP units for restricted grants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(605
|
)
|
|
(605
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(446
|
)
|
|
(446
|
)
|
|||||||
Balance at December 31, 2017
|
$
|
2,560
|
|
|
$
|
4,132,696
|
|
|
$
|
3,346,615
|
|
|
$
|
29,869
|
|
|
$
|
(2,140,911
|
)
|
|
$
|
526,111
|
|
|
$
|
5,896,940
|
|
Net income
|
—
|
|
|
—
|
|
|
1,097,960
|
|
|
—
|
|
|
—
|
|
|
79,264
|
|
|
1,177,224
|
|
|||||||
Dividends ($1.32 declared per common share)
|
—
|
|
|
—
|
|
|
(233,544
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(233,544
|
)
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(125,653
|
)
|
|
(125,653
|
)
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,928
|
)
|
|
—
|
|
|
—
|
|
|
(22,928
|
)
|
|||||||
Equity attributable to HEP common unit issuances, net of tax
|
—
|
|
|
42,199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,134
|
|
|
100,333
|
|
|||||||
Issuance of common stock under incentive compensation plans, net of forfeitures
|
—
|
|
|
(17,742
|
)
|
|
—
|
|
|
—
|
|
|
17,742
|
|
|
—
|
|
|
—
|
|
|||||||
Equity-based compensation
|
—
|
|
|
38,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,200
|
|
|
42,172
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(367,470
|
)
|
|
—
|
|
|
(367,470
|
)
|
|||||||
Purchase of HEP units for restricted grants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(568
|
)
|
|
(568
|
)
|
|||||||
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
(14,129
|
)
|
|
6,682
|
|
|
—
|
|
|
—
|
|
|
(7,447
|
)
|
|||||||
Balance at December 31, 2018
|
$
|
2,560
|
|
|
$
|
4,196,125
|
|
|
$
|
4,196,902
|
|
|
$
|
13,623
|
|
|
$
|
(2,490,639
|
)
|
|
$
|
540,488
|
|
|
$
|
6,459,059
|
|
Net income
|
—
|
|
|
—
|
|
|
772,388
|
|
|
—
|
|
|
—
|
|
|
99,964
|
|
|
872,352
|
|
|||||||
Dividends ($1.34 declared per common share)
|
—
|
|
|
—
|
|
|
(225,170
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(225,170
|
)
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(132,268
|
)
|
|
(132,268
|
)
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1,151
|
|
|
—
|
|
|
—
|
|
|
1,151
|
|
|||||||
Equity attributable to HEP common unit issuances, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
|
(139
|
)
|
|||||||
Issuance of common stock under incentive compensation plans, net of forfeitures
|
—
|
|
|
(31,314
|
)
|
|
—
|
|
|
—
|
|
|
31,314
|
|
|
—
|
|
|
—
|
|
|||||||
Equity-based compensation
|
—
|
|
|
39,736
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,533
|
|
|
42,269
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(528,483
|
)
|
|
—
|
|
|
(528,483
|
)
|
|||||||
Purchase of HEP units for restricted grants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,893
|
)
|
|
(1,893
|
)
|
|||||||
Contributions from joint venture partner
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,548
|
|
|
22,548
|
|
|||||||
Balance at December 31, 2019
|
$
|
2,560
|
|
|
$
|
4,204,547
|
|
|
$
|
4,744,120
|
|
|
$
|
14,774
|
|
|
$
|
(2,987,808
|
)
|
|
$
|
531,233
|
|
|
$
|
6,509,426
|
|
NOTE 1:
|
Description of Business and Summary of Significant Accounting Policies
|
•
|
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 specialty lubricant products;
|
•
|
owned and operated Sonneborn with manufacturing facilities in Petrolia, Pennsylvania and the Netherlands, which produce specialty lubricant products, such as white oils, petrolatums and waxes;
|
•
|
owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil and has storage and distribution facilities in Iowa, Kansas, 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”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States.
|
NOTE 2:
|
Acquisitions
|
|
(In millions)
|
||
Cash and cash equivalents
|
$
|
38.9
|
|
Accounts receivable and other current assets
|
58.4
|
|
|
Inventories
|
81.0
|
|
|
Properties, plants and equipment
|
168.2
|
|
|
Goodwill
|
282.3
|
|
|
Intangibles and other noncurrent assets
|
231.5
|
|
|
Accounts payable and accrued liabilities
|
(47.9
|
)
|
|
Deferred income tax liabilities
|
(83.0
|
)
|
|
Other long-term liabilities
|
(27.8
|
)
|
|
|
$
|
701.6
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Sales and other revenues
|
|
$
|
2,124,778
|
|
|
$
|
2,195,690
|
|
Operating income (1)
|
|
$
|
(116,254
|
)
|
|
$
|
99,371
|
|
NOTE 3:
|
Leases
|
|
|
December 31, 2019
|
||
|
|
(In thousands)
|
||
Operating leases:
|
|
|
||
Operating lease right-of-use assets
|
|
$
|
467,109
|
|
|
|
|
||
Operating lease liabilities
|
|
104,415
|
|
|
Noncurrent operating lease liabilities
|
|
364,420
|
|
|
Total operating lease liabilities
|
|
$
|
468,835
|
|
|
|
|
||
Finance leases:
|
|
|
||
Properties, plants and equipment, at cost
|
|
$
|
13,406
|
|
Accumulated amortization
|
|
(6,233
|
)
|
|
Properties, plants and equipment, net
|
|
$
|
7,173
|
|
|
|
|
||
Accrued liabilities
|
|
$
|
1,567
|
|
Other long-term liabilities
|
|
5,163
|
|
|
Total finance lease liabilities
|
|
$
|
6,730
|
|
|
|
December 31, 2019
|
|
|
|
|
|
Weighted average remaining lease term (in years)
|
|
|
|
Operating leases
|
|
7.2
|
|
Finance leases
|
|
8.1
|
|
|
|
|
|
Weighted average discount rate
|
|
|
|
Operating leases
|
|
4.0
|
%
|
Finance leases
|
|
5.2
|
%
|
|
|
Year Ended
December 31, 2019 |
||
|
|
(In thousands)
|
||
Operating lease expense
|
|
$
|
112,770
|
|
Finance lease expense:
|
|
|
||
Amortization of right-of-use assets
|
|
1,543
|
|
|
Interest on lease liabilities
|
|
334
|
|
|
Variable lease cost
|
|
4,449
|
|
|
Total lease expense
|
|
$
|
119,096
|
|
|
|
Operating
|
|
Finance
|
||||
|
|
(In thousands)
|
||||||
2020
|
|
$
|
121,511
|
|
|
$
|
2,128
|
|
2021
|
|
102,480
|
|
|
1,304
|
|
||
2022
|
|
87,344
|
|
|
1,056
|
|
||
2023
|
|
72,751
|
|
|
1,110
|
|
||
2024
|
|
49,901
|
|
|
626
|
|
||
2025 and thereafter
|
|
124,612
|
|
|
2,255
|
|
||
Future minimum lease payments
|
|
558,599
|
|
|
8,479
|
|
||
Less: imputed interest
|
|
89,764
|
|
|
1,749
|
|
||
Total lease obligations
|
|
468,835
|
|
|
6,730
|
|
||
Less: current obligations
|
|
104,415
|
|
|
1,567
|
|
||
Long-term lease obligations
|
|
$
|
364,420
|
|
|
$
|
5,163
|
|
|
|
(In thousands)
|
||
2020
|
|
$
|
18,839
|
|
2021
|
|
12,794
|
|
|
2022
|
|
11,377
|
|
|
2023
|
|
11,248
|
|
|
2024
|
|
11,248
|
|
|
Thereafter
|
|
2,812
|
|
|
Total
|
|
$
|
68,318
|
|
|
|
(In thousands)
|
||
2019
|
|
$
|
104,362
|
|
2020
|
|
92,491
|
|
|
2021
|
|
84,581
|
|
|
2022
|
|
70,874
|
|
|
2023
|
|
61,063
|
|
|
Thereafter
|
|
88,206
|
|
|
Total
|
|
$
|
501,577
|
|
NOTE 4:
|
Holly Energy Partners
|
NOTE 5:
|
Revenues
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Revenues by type
|
|
|
|
|
|
|
||||||
Refined product revenues
|
|
|
|
|
|
|
||||||
Transportation fuels (1)
|
|
$
|
12,952,899
|
|
|
$
|
13,326,654
|
|
|
$
|
11,056,038
|
|
Specialty lubricant products (2)
|
|
1,864,450
|
|
|
1,636,859
|
|
|
1,415,842
|
|
|||
Asphalt, fuel oil and other products (3)
|
|
1,025,663
|
|
|
985,234
|
|
|
743,394
|
|
|||
Total refined product revenues
|
|
15,843,012
|
|
|
15,948,747
|
|
|
13,215,274
|
|
|||
Excess crude oil revenues (4)
|
|
1,470,148
|
|
|
1,597,321
|
|
|
891,756
|
|
|||
Transportation and logistic services
|
|
121,027
|
|
|
108,412
|
|
|
77,225
|
|
|||
Other revenues (5)
|
|
52,391
|
|
|
60,186
|
|
|
67,044
|
|
|||
Total sales and other revenues
|
|
$
|
17,486,578
|
|
|
$
|
17,714,666
|
|
|
$
|
14,251,299
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Refined product revenues by market
|
|
|
|
|
|
|
||||||
United States
|
|
|
|
|
|
|
||||||
Mid-Continent
|
|
$
|
8,424,191
|
|
|
$
|
8,427,200
|
|
|
$
|
7,099,754
|
|
Southwest
|
|
3,621,273
|
|
|
3,772,278
|
|
|
2,952,224
|
|
|||
Rocky Mountains
|
|
2,208,541
|
|
|
2,476,044
|
|
|
2,055,221
|
|
|||
Northeast
|
|
578,932
|
|
|
339,407
|
|
|
259,840
|
|
|||
Canada
|
|
721,169
|
|
|
732,321
|
|
|
673,842
|
|
|||
Europe, Asia and Latin America
|
|
288,906
|
|
|
201,497
|
|
|
174,393
|
|
|||
Total refined product revenues
|
|
$
|
15,843,012
|
|
|
$
|
15,948,747
|
|
|
$
|
13,215,274
|
|
(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 $808.9 million and $216.8 million, respectively, for the year ended December 31, 2019, $822.6 million and $162.6 million, respectively, for the year ended December 31, 2018, and $565.2 million and $178.2 million, respectively, for the year ended December 31, 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.
|
|
|
Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Balance at January 1
|
|
$
|
132
|
|
|
$
|
179
|
|
Sonneborn acquisition
|
|
6,463
|
|
|
—
|
|
||
Increase
|
|
26,751
|
|
|
6,748
|
|
||
Recognized as revenue
|
|
(28,694
|
)
|
|
(6,795
|
)
|
||
Balance at December 31
|
|
$
|
4,652
|
|
|
$
|
132
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|||||
|
(In thousands)
|
||||||||||||||
Refined product sales volumes (barrels)
|
|
21,051
|
|
|
14,622
|
|
|
12,775
|
|
|
24,465
|
|
|
72,913
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||
|
(In thousands)
|
|||||||||||||||||||
HEP contractual minimum revenues
|
|
$
|
29,536
|
|
|
$
|
22,822
|
|
|
$
|
13,267
|
|
|
$
|
25,308
|
|
|
$
|
90,933
|
|
NOTE 6:
|
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.
|
|
|
Carrying Amount
|
|
Fair Value by Input Level
|
||||||||||||
Financial Instrument
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
|
|
(In thousands)
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price swaps
|
|
$
|
13,455
|
|
|
$
|
—
|
|
|
$
|
13,455
|
|
|
$
|
—
|
|
Commodity forward contracts
|
|
4,133
|
|
|
—
|
|
|
4,133
|
|
|
—
|
|
||||
Total assets
|
|
$
|
17,588
|
|
|
$
|
—
|
|
|
$
|
17,588
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
NYMEX futures contracts
|
|
$
|
2,578
|
|
|
$
|
2,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
6,722
|
|
|
—
|
|
|
6,722
|
|
|
—
|
|
||||
Commodity price swaps
|
|
1,230
|
|
|
—
|
|
|
1,230
|
|
|
—
|
|
||||
Commodity forward contracts
|
|
3,685
|
|
|
—
|
|
|
3,685
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
14,215
|
|
|
$
|
2,578
|
|
|
$
|
11,637
|
|
|
$
|
—
|
|
|
|
Carrying Amount
|
|
Fair Value by Input Level
|
||||||||||||
Financial Instrument
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
|
|
(In thousands)
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
NYMEX futures contracts
|
|
$
|
2,473
|
|
|
$
|
2,473
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
25,956
|
|
|
—
|
|
|
25,956
|
|
|
—
|
|
||||
Commodity price swaps
|
|
10,817
|
|
|
—
|
|
|
10,817
|
|
|
—
|
|
||||
Commodity forward contracts
|
|
1,034
|
|
|
—
|
|
|
1,034
|
|
|
—
|
|
||||
Total assets
|
|
$
|
40,280
|
|
|
$
|
2,473
|
|
|
$
|
37,807
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price swaps
|
|
$
|
956
|
|
|
$
|
—
|
|
|
$
|
956
|
|
|
$
|
—
|
|
Commodity forward contracts
|
|
1,137
|
|
|
—
|
|
|
1,137
|
|
|
—
|
|
||||
RINs credit obligations (1)
|
|
4,084
|
|
|
—
|
|
|
4,084
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
6,177
|
|
|
$
|
—
|
|
|
$
|
6,177
|
|
|
$
|
—
|
|
NOTE 7:
|
Earnings Per Share
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands, except per share data)
|
||||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
772,388
|
|
|
$
|
1,097,960
|
|
|
$
|
805,395
|
|
Participating securities’ (restricted stock) share in earnings
|
|
1,034
|
|
|
3,714
|
|
|
5,047
|
|
|||
Net income attributable to common shares
|
|
$
|
771,354
|
|
|
$
|
1,094,246
|
|
|
$
|
800,348
|
|
Average number of shares of common stock outstanding
|
|
166,287
|
|
|
175,009
|
|
|
176,174
|
|
|||
Effect of dilutive variable restricted shares and performance share units (1)
|
|
1,098
|
|
|
1,652
|
|
|
1,022
|
|
|||
Average number of shares of common stock outstanding assuming dilution
|
|
167,385
|
|
|
176,661
|
|
|
177,196
|
|
|||
Basic earnings per share
|
|
$
|
4.64
|
|
|
$
|
6.25
|
|
|
$
|
4.54
|
|
Diluted earnings per share
|
|
$
|
4.61
|
|
|
$
|
6.19
|
|
|
$
|
4.52
|
|
|
|
|
|
|
|
|
||||||
(1) Excludes anti-dilutive restricted and performance share units of:
|
|
302
|
|
|
238
|
|
|
543
|
|
NOTE 8:
|
Stock-Based Compensation
|
Restricted Stock and Restricted Stock Units
|
|
Grants
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value ($000)
|
|||||
|
|
|
|
|
|
|
|||||
Outstanding at January 1, 2019
|
|
1,196,914
|
|
|
$
|
46.81
|
|
|
|
||
Granted
|
|
661,329
|
|
|
$
|
52.62
|
|
|
|
||
Vested
|
|
(739,613
|
)
|
|
$
|
41.74
|
|
|
|
||
Forfeited
|
|
(60,234
|
)
|
|
$
|
46.30
|
|
|
|
||
Converted from performance share units
|
|
43,385
|
|
|
$
|
35.80
|
|
|
|
||
Outstanding at December 31, 2019
|
|
1,101,781
|
|
|
$
|
53.30
|
|
|
$
|
55,871
|
|
Performance Share Units
|
|
Grants
|
|
|
|
|
|
Outstanding at January 1, 2019
|
|
662,431
|
|
Granted
|
|
177,428
|
|
Vested
|
|
(427,715
|
)
|
Forfeited
|
|
(11,046
|
)
|
Converted to restricted stock units
|
|
(25,510
|
)
|
Outstanding at December 31, 2019
|
|
375,588
|
|
NOTE 9:
|
Inventories
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Crude oil
|
|
$
|
489,169
|
|
|
$
|
503,705
|
|
Other raw materials and unfinished products(1)
|
|
394,045
|
|
|
360,124
|
|
||
Finished products(2)
|
|
639,938
|
|
|
662,713
|
|
||
Lower of cost or market reserve
|
|
(240,363
|
)
|
|
(360,138
|
)
|
||
Process chemicals(3)
|
|
36,786
|
|
|
31,413
|
|
||
Repairs and maintenance supplies and other (4)
|
|
154,627
|
|
|
156,562
|
|
||
Total inventory
|
|
$
|
1,474,202
|
|
|
$
|
1,354,379
|
|
(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 10:
|
Properties, Plants and Equipment
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Land, buildings and improvements
|
|
$
|
447,547
|
|
|
$
|
455,508
|
|
Refining facilities
|
|
4,258,764
|
|
|
4,034,546
|
|
||
Pipelines and terminals
|
|
1,775,657
|
|
|
1,729,994
|
|
||
Transportation vehicles
|
|
27,214
|
|
|
20,311
|
|
||
Other fixed assets
|
|
540,953
|
|
|
296,843
|
|
||
Construction in progress
|
|
187,162
|
|
|
243,778
|
|
||
|
|
7,237,297
|
|
|
6,780,980
|
|
||
Accumulated depreciation
|
|
(2,414,585
|
)
|
|
(2,098,446
|
)
|
||
|
|
$
|
4,822,712
|
|
|
$
|
4,682,534
|
|
NOTE 11:
|
Goodwill, Long-lived Assets and Intangibles
|
|
|
Refining
|
|
Lubricants and Specialty Products
|
|
HEP
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Balance at December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
$
|
2,042,790
|
|
|
$
|
198,734
|
|
|
$
|
314,229
|
|
|
$
|
2,555,753
|
|
Accumulated impairment losses
|
|
(309,318
|
)
|
|
—
|
|
|
—
|
|
|
(309,318
|
)
|
||||
|
|
1,733,472
|
|
|
198,734
|
|
|
314,229
|
|
|
2,246,435
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Additional goodwill acquired
|
|
—
|
|
|
282,273
|
|
|
—
|
|
|
282,273
|
|
||||
Current year impairment losses
|
|
—
|
|
|
(152,712
|
)
|
|
—
|
|
|
(152,712
|
)
|
||||
Current year adjustments
|
|
—
|
|
|
—
|
|
|
(1,356
|
)
|
|
(1,356
|
)
|
||||
Foreign currency translation adjustment
|
|
—
|
|
|
(733
|
)
|
|
—
|
|
|
(733
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
2,042,790
|
|
|
480,274
|
|
|
312,873
|
|
|
2,835,937
|
|
||||
Accumulated impairment losses
|
|
(309,318
|
)
|
|
(152,712
|
)
|
|
—
|
|
|
(462,030
|
)
|
||||
|
|
$
|
1,733,472
|
|
|
$
|
327,562
|
|
|
$
|
312,873
|
|
|
$
|
2,373,907
|
|
|
|
|
|
December 31
|
||||||
|
|
Useful Life
|
|
2019
|
|
2018
|
||||
|
|
|
|
(In thousands)
|
||||||
Customer relationships
|
|
10 - 20 years
|
|
$
|
245,479
|
|
|
$
|
91,941
|
|
Transportation agreements
|
|
30 years
|
|
59,933
|
|
|
59,933
|
|
||
Trademarks, patents and other
|
|
10 - 20 years
|
|
154,863
|
|
|
83,326
|
|
||
|
|
|
|
460,275
|
|
|
235,200
|
|
||
Accumulated amortization
|
|
|
|
(86,768
|
)
|
|
(52,834
|
)
|
||
Total intangibles, net
|
|
|
|
$
|
373,507
|
|
|
$
|
182,366
|
|
NOTE 12:
|
Environmental
|
NOTE 13:
|
Debt
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
HollyFrontier 5.875% Senior Notes
|
|
|
|
|
||||
Principal
|
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
Unamortized discount and debt issuance costs
|
|
(6,391
|
)
|
|
(7,360
|
)
|
||
|
|
993,609
|
|
|
992,640
|
|
||
|
|
|
|
|
||||
HEP Credit Agreement
|
|
965,500
|
|
|
923,000
|
|
||
|
|
|
|
|
||||
HEP 6% Senior Notes
|
|
|
|
|
||||
Principal
|
|
500,000
|
|
|
500,000
|
|
||
Unamortized discount and debt issuance costs
|
|
(3,469
|
)
|
|
(4,100
|
)
|
||
|
|
496,531
|
|
|
495,900
|
|
||
|
|
|
|
|
||||
Total HEP long-term debt
|
|
1,462,031
|
|
|
1,418,900
|
|
||
|
|
|
|
|
||||
Total long-term debt
|
|
$
|
2,455,640
|
|
|
$
|
2,411,540
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
|
|
|
|
|
||||
HollyFrontier senior notes
|
|
$
|
1,127,610
|
|
|
$
|
1,019,160
|
|
|
|
|
|
|
||||
HEP senior notes
|
|
$
|
522,045
|
|
|
$
|
488,310
|
|
Years Ending December 31,
|
(In thousands)
|
||
2020
|
$
|
—
|
|
2021
|
—
|
|
|
2022
|
965,500
|
|
|
2023
|
—
|
|
|
2024
|
500,000
|
|
|
Thereafter
|
1,000,000
|
|
|
Total
|
$
|
2,465,500
|
|
NOTE 14:
|
Derivative Instruments and Hedging Activities
|
|
|
Net Unrealized Gain (Loss) Recognized in OCI
|
|
Gain (Loss) Reclassified into Earnings
|
||||||||||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments
|
|
Years Ended December 31,
|
|
Income Statement Location
|
|
Years Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||
Commodity contracts
|
|
$
|
(5,349
|
)
|
|
$
|
11,221
|
|
|
$
|
14,538
|
|
|
Sales and other revenues
|
|
$
|
(1,799
|
)
|
|
$
|
(5,093
|
)
|
|
$
|
7,836
|
|
|
|
|
|
|
|
|
|
Cost of products sold
|
|
22,876
|
|
|
—
|
|
|
(299
|
)
|
|||||||||
|
|
|
|
|
|
|
|
Operating expenses
|
|
(1,364
|
)
|
|
(962
|
)
|
|
(19,244
|
)
|
|||||||||
Interest rate contracts (1)
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
|
Interest expense
|
|
—
|
|
|
—
|
|
|
179
|
|
||||||
Total
|
|
$
|
(5,349
|
)
|
|
$
|
11,221
|
|
|
$
|
14,447
|
|
|
|
|
$
|
19,713
|
|
|
$
|
(6,055
|
)
|
|
$
|
(11,528
|
)
|
|
|
Gain (Loss) Recognized in Earnings
|
||||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
Years Ended December 31,
|
||||||||||
|
Income Statement Location
|
|
2019
|
|
2018
|
|
2017
|
|||||||
|
|
|
|
(In thousands)
|
||||||||||
Commodity contracts
|
|
Cost of products sold
|
|
$
|
(8,475
|
)
|
|
$
|
16,655
|
|
|
$
|
(12,327
|
)
|
|
|
Operating expenses
|
|
—
|
|
|
—
|
|
|
(6,697
|
)
|
|||
|
|
Interest expense
|
|
(6,427
|
)
|
|
(198
|
)
|
|
—
|
|
|||
Foreign currency contracts
|
|
Gain on foreign currency transactions
|
|
(17,430
|
)
|
|
41,834
|
|
|
—
|
|
|||
|
|
Gain on foreign currency swap contracts (1)
|
|
—
|
|
|
—
|
|
|
24,545
|
|
|||
|
|
Total
|
|
$
|
(32,332
|
)
|
|
$
|
58,291
|
|
|
$
|
5,521
|
|
|
|
|
|
Notional Contract Volumes by Year of Maturity
|
|
|
|||||
|
|
Total Outstanding Notional
|
|
2020
|
|
2021
|
|
Unit of Measure
|
|||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||
Natural gas price swaps - long
|
|
3,600,000
|
|
|
1,800,000
|
|
|
1,800,000
|
|
|
MMBTU
|
Crude oil price swaps (basis spread) - long
|
|
4,758,000
|
|
|
4,758,000
|
|
|
—
|
|
|
Barrels
|
|
|
|
|
|
|
|
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||
NYMEX futures (WTI) - short
|
|
1,365,000
|
|
|
1,365,000
|
|
|
—
|
|
|
Barrels
|
Crude oil price swaps (basis spread) - long
|
|
1,464,000
|
|
|
1,464,000
|
|
|
—
|
|
|
Barrels
|
Forward gasoline and diesel contracts - long
|
|
1,251,200
|
|
|
1,251,200
|
|
|
—
|
|
|
Barrels
|
Foreign currency forward contracts
|
|
434,340,348
|
|
|
434,340,348
|
|
|
—
|
|
|
U. S. dollar
|
Forward commodity contracts (platinum)
|
|
41,147
|
|
|
—
|
|
|
41,147
|
|
|
Troy ounces
|
|
|
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, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
7,526
|
|
|
$
|
(1,784
|
)
|
|
$
|
5,742
|
|
|
$
|
1,230
|
|
|
$
|
—
|
|
|
$
|
1,230
|
|
|
|
$
|
7,526
|
|
|
$
|
(1,784
|
)
|
|
$
|
5,742
|
|
|
$
|
1,230
|
|
|
$
|
—
|
|
|
$
|
1,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
NYMEX futures contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,578
|
|
|
$
|
—
|
|
|
$
|
2,578
|
|
Commodity price swap contracts
|
|
7,713
|
|
|
—
|
|
|
7,713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commodity forward contracts
|
|
4,133
|
|
|
—
|
|
|
4,133
|
|
|
3,685
|
|
|
—
|
|
|
3,685
|
|
||||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,722
|
|
|
—
|
|
|
6,722
|
|
||||||
|
|
$
|
11,846
|
|
|
$
|
—
|
|
|
$
|
11,846
|
|
|
$
|
12,985
|
|
|
$
|
—
|
|
|
$
|
12,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
17,588
|
|
|
|
|
|
|
$
|
14,215
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet classification:
|
|
Prepayment and other
|
|
$
|
17,588
|
|
|
Accrued liabilities
|
|
$
|
12,985
|
|
||||||||||||
|
|
|
|
—
|
|
|
Other long-term liabilities
|
|
1,230
|
|
||||||||||||||
|
|
|
|
$
|
17,588
|
|
|
|
|
|
|
$
|
14,215
|
|
|
|
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, 2018
|
|
|
||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
Commodity price swap contracts
|
|
$
|
11,790
|
|
|
$
|
(973
|
)
|
|
$
|
10,817
|
|
|
$
|
1,755
|
|
|
$
|
(799
|
)
|
|
$
|
956
|
|
|
|
$
|
11,790
|
|
|
$
|
(973
|
)
|
|
$
|
10,817
|
|
|
$
|
1,755
|
|
|
$
|
(799
|
)
|
|
$
|
956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives not designated as cash flow hedging instruments:
|
|
|
||||||||||||||||||||||
NYMEX futures contracts
|
|
$
|
2,473
|
|
|
$
|
—
|
|
|
$
|
2,473
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity forward contracts
|
|
1,034
|
|
|
—
|
|
|
1,034
|
|
|
1,137
|
|
|
—
|
|
|
1,137
|
|
||||||
Foreign currency forward contracts
|
|
25,956
|
|
|
—
|
|
|
25,956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
29,463
|
|
|
$
|
—
|
|
|
$
|
29,463
|
|
|
$
|
1,137
|
|
|
$
|
—
|
|
|
$
|
1,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total net balance
|
|
|
|
|
|
$
|
40,280
|
|
|
|
|
|
|
$
|
2,093
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Prepayments and other
|
|
$
|
37,982
|
|
|
Accrued liabilities
|
|
$
|
1,137
|
|
||||||||||||
|
|
Intangibles and other
|
|
2,298
|
|
|
Other long-term liabilities
|
|
956
|
|
||||||||||||||
Balance sheet classification:
|
|
|
|
$
|
40,280
|
|
|
|
|
|
|
$
|
2,093
|
|
NOTE 15:
|
Income Taxes
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Current
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
187,134
|
|
|
$
|
239,566
|
|
|
$
|
102,786
|
|
State
|
|
29,547
|
|
|
40,788
|
|
|
2,760
|
|
|||
Foreign
|
|
3,805
|
|
|
(10,080
|
)
|
|
19,597
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
Federal
|
|
77,916
|
|
|
46,434
|
|
|
(156,767
|
)
|
|||
State
|
|
26,073
|
|
|
27,845
|
|
|
28,527
|
|
|||
Foreign
|
|
(25,323
|
)
|
|
2,690
|
|
|
(9,282
|
)
|
|||
|
|
$
|
299,152
|
|
|
$
|
347,243
|
|
|
$
|
(12,379
|
)
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Tax computed at statutory rate
|
|
$
|
246,013
|
|
|
$
|
320,138
|
|
|
$
|
304,102
|
|
Effect of the Tax Cuts and Jobs Act
|
|
—
|
|
|
(7,800
|
)
|
|
(307,101
|
)
|
|||
State income taxes, net of federal tax benefit
|
|
47,259
|
|
|
56,936
|
|
|
21,343
|
|
|||
Domestic production activities deduction
|
|
—
|
|
|
—
|
|
|
(9,937
|
)
|
|||
Noncontrolling interest in net income
|
|
(25,494
|
)
|
|
(20,215
|
)
|
|
(29,357
|
)
|
|||
Effect of nondeductible goodwill impairment charge
|
|
32,069
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
(695
|
)
|
|
(1,816
|
)
|
|
8,571
|
|
|||
|
|
$
|
299,152
|
|
|
$
|
347,243
|
|
|
$
|
(12,379
|
)
|
|
|
December 31, 2019
|
||||||||||
|
|
Assets
|
|
Liabilities
|
|
Total
|
||||||
|
|
(In thousands)
|
||||||||||
Deferred income taxes
|
|
|
|
|
|
|
||||||
Properties, plants and equipment (due primarily to tax in excess of book depreciation)
|
|
$
|
—
|
|
|
$
|
(809,966
|
)
|
|
$
|
(809,966
|
)
|
Lease obligation
|
|
120,435
|
|
|
—
|
|
|
120,435
|
|
|||
Accrued employee benefits
|
|
13,635
|
|
|
—
|
|
|
13,635
|
|
|||
Accrued post-retirement benefits
|
|
11,027
|
|
|
—
|
|
|
11,027
|
|
|||
Accrued environmental costs
|
|
28,708
|
|
|
—
|
|
|
28,708
|
|
|||
Hedging instruments
|
|
—
|
|
|
(2,439
|
)
|
|
(2,439
|
)
|
|||
Inventory differences
|
|
—
|
|
|
(43,500
|
)
|
|
(43,500
|
)
|
|||
Deferred turnaround costs
|
|
—
|
|
|
(135,920
|
)
|
|
(135,920
|
)
|
|||
Net operating loss and tax credit carryforwards
|
|
22,912
|
|
|
—
|
|
|
22,912
|
|
|||
Investment in HEP
|
|
—
|
|
|
(95,037
|
)
|
|
(95,037
|
)
|
|||
Valuation allowance
|
|
—
|
|
|
(4,600
|
)
|
|
(4,600
|
)
|
|||
Other
|
|
5,475
|
|
|
—
|
|
|
5,475
|
|
|||
Total
|
|
$
|
202,192
|
|
|
$
|
(1,091,462
|
)
|
|
$
|
(889,270
|
)
|
|
|
December 31, 2018
|
||||||||||
|
|
Assets
|
|
Liabilities
|
|
Total
|
||||||
|
|
(In thousands)
|
||||||||||
Deferred income taxes
|
|
|
|
|
|
|
||||||
Properties, plants and equipment (due primarily to tax in excess of book depreciation)
|
|
$
|
—
|
|
|
$
|
(577,133
|
)
|
|
$
|
(577,133
|
)
|
Accrued employee benefits
|
|
15,395
|
|
|
—
|
|
|
15,395
|
|
|||
Accrued post-retirement benefits
|
|
8,482
|
|
|
—
|
|
|
8,482
|
|
|||
Accrued environmental costs
|
|
29,937
|
|
|
—
|
|
|
29,937
|
|
|||
Hedging instruments
|
|
—
|
|
|
(4,099
|
)
|
|
(4,099
|
)
|
|||
Inventory differences
|
|
—
|
|
|
(22,518
|
)
|
|
(22,518
|
)
|
|||
Deferred turnaround costs
|
|
—
|
|
|
(87,360
|
)
|
|
(87,360
|
)
|
|||
Net operating loss and tax credit carryforwards
|
|
13,702
|
|
|
—
|
|
|
13,702
|
|
|||
Investment in HEP
|
|
—
|
|
|
(94,587
|
)
|
|
(94,587
|
)
|
|||
Valuation allowance
|
|
—
|
|
|
(3,100
|
)
|
|
(3,100
|
)
|
|||
Other
|
|
—
|
|
|
(1,295
|
)
|
|
(1,295
|
)
|
|||
Total
|
|
$
|
67,516
|
|
|
$
|
(790,092
|
)
|
|
$
|
(722,576
|
)
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
(In thousands)
|
|
|
||||||
Balance at January 1
|
|
$
|
53,752
|
|
|
$
|
53,752
|
|
|
$
|
22,137
|
|
Additions based on tax positions related to the current year
|
|
—
|
|
|
—
|
|
|
31,615
|
|
|||
Additions for tax positions of prior years
|
|
2,893
|
|
|
—
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at December 31
|
|
$
|
56,621
|
|
|
$
|
53,752
|
|
|
$
|
53,752
|
|
NOTE 16:
|
Stockholders' Equity
|
|
|
Years Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|||||||
Common shares outstanding at January 1
|
|
172,121,491
|
|
|
177,407,622
|
|
|
177,345,266
|
|
Issuance of restricted stock, excluding restricted stock with performance feature
|
|
—
|
|
|
—
|
|
|
55,626
|
|
Vesting of performance units
|
|
592,602
|
|
|
115,596
|
|
|
138,374
|
|
Vesting of restricted stock with performance feature
|
|
412,465
|
|
|
543,396
|
|
|
350,063
|
|
Forfeitures of restricted stock
|
|
(13,807
|
)
|
|
(58,497
|
)
|
|
(139,634
|
)
|
Purchase of treasury stock (1)
|
|
(11,266,226
|
)
|
|
(5,886,626
|
)
|
|
(342,073
|
)
|
Common shares outstanding at December 31
|
|
161,846,525
|
|
|
172,121,491
|
|
|
177,407,622
|
|
(1)
|
Includes 415,466, 369,255 and 342,073 shares, respectively, withheld under the terms of stock-based compensation agreements to provide funds for the payment of payroll and income taxes due at the vesting of share-based awards, as well as other stock repurchases under separate authority from our Board of Directors.
|
NOTE 17:
|
Other Comprehensive Income (Loss)
|
|
|
Before-Tax
|
|
Tax Expense
(Benefit)
|
|
After-Tax
|
||||||
|
|
(In thousands)
|
||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustment
|
|
$
|
13,337
|
|
|
$
|
2,848
|
|
|
$
|
10,489
|
|
Net unrealized loss on hedging instruments
|
|
(5,349
|
)
|
|
(1,365
|
)
|
|
(3,984
|
)
|
|||
Net change in pension and other post-retirement benefit obligations
|
|
(7,207
|
)
|
|
(1,853
|
)
|
|
(5,354
|
)
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
781
|
|
|
$
|
(370
|
)
|
|
$
|
1,151
|
|
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustment
|
|
$
|
(38,227
|
)
|
|
$
|
(8,064
|
)
|
|
$
|
(30,163
|
)
|
Net unrealized gain on hedging instruments
|
|
11,221
|
|
|
2,857
|
|
|
8,364
|
|
|||
Net change in pension and other post-retirement benefit obligations
|
|
(1,507
|
)
|
|
(378
|
)
|
|
(1,129
|
)
|
|||
Other comprehensive loss attributable to HollyFrontier stockholders
|
|
$
|
(28,513
|
)
|
|
$
|
(5,585
|
)
|
|
$
|
(22,928
|
)
|
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustment
|
|
$
|
22,151
|
|
|
$
|
7,774
|
|
|
$
|
14,377
|
|
Net unrealized loss on marketable securities
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
Net unrealized gain on hedging instruments
|
|
14,447
|
|
|
5,613
|
|
|
8,834
|
|
|||
Net change in pension and other post-retirement benefit obligations
|
|
(5,807
|
)
|
|
(2,037
|
)
|
|
(3,770
|
)
|
|||
Other comprehensive income
|
|
30,787
|
|
|
11,349
|
|
|
19,438
|
|
|||
Less other comprehensive loss attributable to noncontrolling interest
|
|
(57
|
)
|
|
—
|
|
|
(57
|
)
|
|||
Other comprehensive income attributable to HollyFrontier stockholders
|
|
$
|
30,844
|
|
|
$
|
11,349
|
|
|
$
|
19,495
|
|
AOCI Component
|
|
Gain (Loss) Reclassified From AOCI
|
|
Income Statement Line Item
|
||||||||||
|
|
Years Ended December 31,
|
|
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
|
||||||
|
|
(In thousands)
|
|
|
||||||||||
Hedging instruments:
|
|
|
|
|
|
|
|
|
||||||
Commodity price swaps
|
|
$
|
(1,799
|
)
|
|
$
|
(5,093
|
)
|
|
$
|
7,836
|
|
|
Sales and other revenues
|
|
|
22,876
|
|
|
—
|
|
|
(299
|
)
|
|
Cost of products sold
|
|||
|
|
(1,364
|
)
|
|
(962
|
)
|
|
(19,244
|
)
|
|
Operating expenses
|
|||
Interest rate swaps
|
|
—
|
|
|
—
|
|
|
179
|
|
|
Interest expense
|
|||
|
|
19,713
|
|
|
(6,055
|
)
|
|
(11,528
|
)
|
|
|
|||
|
|
5,027
|
|
|
(1,544
|
)
|
|
(4,490
|
)
|
|
Income tax benefit
|
|||
|
|
14,686
|
|
|
(4,511
|
)
|
|
(7,038
|
)
|
|
Net of tax
|
|||
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
Noncontrolling interest
|
|||
|
|
14,686
|
|
|
(4,511
|
)
|
|
(7,112
|
)
|
|
Net of tax and noncontrolling interest
|
|||
|
|
|
|
|
|
|
|
|
||||||
Other post-retirement benefit obligations:
|
|
|
|
|
|
|
|
|
||||||
Post-retirement healthcare obligations
|
|
3,587
|
|
|
3,481
|
|
|
3,481
|
|
|
Other, net
|
|||
|
|
915
|
|
|
888
|
|
|
1,347
|
|
|
Income tax expense
|
|||
|
|
2,672
|
|
|
2,593
|
|
|
2,134
|
|
|
Net of tax
|
|||
|
|
|
|
|
|
|
|
|
||||||
Retirement restoration plan
|
|
(6
|
)
|
|
(27
|
)
|
|
(17
|
)
|
|
Other, net
|
|||
|
|
(2
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
Income tax benefit
|
|||
|
|
(4
|
)
|
|
(20
|
)
|
|
(10
|
)
|
|
Net of tax
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total reclassifications for the period
|
|
$
|
17,354
|
|
|
$
|
(1,938
|
)
|
|
$
|
(4,988
|
)
|
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Foreign currency translation adjustment
|
|
$
|
(2,187
|
)
|
|
$
|
(12,676
|
)
|
Unrealized loss on pension obligation
|
|
(1,733
|
)
|
|
(1,404
|
)
|
||
Unrealized gain on post-retirement benefit obligations
|
|
15,333
|
|
|
20,358
|
|
||
Unrealized gain on hedging instruments
|
|
3,361
|
|
|
7,345
|
|
||
Accumulated other comprehensive income
|
|
$
|
14,774
|
|
|
$
|
13,623
|
|
NOTE 18:
|
Pension and Post-retirement Plans
|
|
|
Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Change in plans' benefit obligations
|
|
|
|
|
||||
Pension plans benefit obligation - beginning of period
|
|
$
|
64,435
|
|
|
$
|
63,582
|
|
Acquisition of Sonneborn
|
|
31,686
|
|
|
—
|
|
||
Service cost
|
|
4,135
|
|
|
4,420
|
|
||
Interest cost
|
|
3,026
|
|
|
2,249
|
|
||
Actuarial loss
|
|
5,161
|
|
|
1,058
|
|
||
Benefits paid
|
|
(1,132
|
)
|
|
(1,429
|
)
|
||
Transfer from other plans
|
|
330
|
|
|
—
|
|
||
Foreign currency exchange rate changes
|
|
2,769
|
|
|
(5,445
|
)
|
||
Pension plans benefit obligation - end of year
|
|
$
|
110,410
|
|
|
$
|
64,435
|
|
|
|
|
|
|
||||
Change in pension plans assets
|
|
|
|
|
||||
Fair value of plans assets - beginning of period
|
|
$
|
62,462
|
|
|
$
|
59,261
|
|
Acquisition of Sonneborn
|
|
29,376
|
|
|
—
|
|
||
Actual return on plans assets
|
|
7,947
|
|
|
3,599
|
|
||
Employer contributions
|
|
3,681
|
|
|
6,239
|
|
||
Benefits paid
|
|
(1,132
|
)
|
|
(1,429
|
)
|
||
Transfer payments
|
|
330
|
|
|
—
|
|
||
Foreign currency exchange rate changes
|
|
2,694
|
|
|
(5,208
|
)
|
||
Fair value of plans assets - end of year
|
|
$
|
105,358
|
|
|
$
|
62,462
|
|
|
|
|
|
|
||||
Funded status
|
|
|
|
|
||||
Under-funded balance
|
|
$
|
(5,052
|
)
|
|
$
|
(1,973
|
)
|
|
|
|
|
|
||||
Amounts recognized in consolidated balance sheets
|
|
|
|
|
||||
Other long-term liabilities
|
|
$
|
(5,052
|
)
|
|
$
|
(1,973
|
)
|
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive income
|
|
|
|
|
||||
Cumulative actuarial loss
|
|
$
|
3,155
|
|
|
$
|
1,977
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Service cost - benefit earned during the period
|
|
$
|
4,135
|
|
|
$
|
4,420
|
|
Interest cost on projected benefit obligations
|
|
3,026
|
|
|
2,249
|
|
||
Expected return on plans assets
|
|
(3,840
|
)
|
|
(3,464
|
)
|
||
Net periodic pension expense
|
|
$
|
3,321
|
|
|
$
|
3,205
|
|
|
|
Percentage of Plan Assets at Year End
|
||||
|
|
December 31, 2019
|
|
December 31, 2018
|
||
Asset Category
|
|
|
||||
|
|
|
|
|
||
Canadian equities
|
|
47
|
%
|
|
—
|
%
|
Fixed income
|
|
29
|
%
|
|
—
|
%
|
Real estate and infrastructure
|
|
14
|
%
|
|
—
|
%
|
Other
|
|
9
|
%
|
|
—
|
%
|
Cash
|
|
1
|
%
|
|
100
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
|
Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In thousands)
|
||||||
Change in plans' benefit obligation
|
|
|
|
|
||||
Post-retirement plans' benefit obligation - beginning of year
|
|
$
|
26,880
|
|
|
$
|
29,499
|
|
Sonneborn acquisition
|
|
877
|
|
|
—
|
|
||
Service cost
|
|
1,582
|
|
|
1,648
|
|
||
Interest cost
|
|
1,029
|
|
|
938
|
|
||
Participant contributions
|
|
—
|
|
|
178
|
|
||
Benefits paid
|
|
(2,028
|
)
|
|
(1,931
|
)
|
||
Actuarial loss (gain)
|
|
2,412
|
|
|
(2,643
|
)
|
||
Foreign currency exchange rate changes
|
|
521
|
|
|
(809
|
)
|
||
Post-retirement plans' benefit obligation - end of year
|
|
$
|
31,273
|
|
|
$
|
26,880
|
|
|
|
|
|
|
||||
Change in plan assets
|
|
|
|
|
||||
Fair value of plan assets - beginning of year
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer contributions
|
|
2,003
|
|
|
1,676
|
|
||
Participant contributions
|
|
25
|
|
|
255
|
|
||
Benefits paid
|
|
(2,028
|
)
|
|
(1,931
|
)
|
||
Fair value of plan assets - end of year
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Funded status
|
|
|
|
|
||||
Under-funded balance
|
|
$
|
(31,273
|
)
|
|
$
|
(26,880
|
)
|
|
|
|
|
|
||||
Amounts recognized in consolidated balance sheets
|
|
|
|
|
||||
Accrued liabilities
|
|
$
|
(1,817
|
)
|
|
$
|
(1,909
|
)
|
Other long-term liabilities
|
|
(29,456
|
)
|
|
(24,971
|
)
|
||
|
|
$
|
(31,273
|
)
|
|
$
|
(26,880
|
)
|
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive income
|
|
|
|
|
||||
Cumulative actuarial (loss) gain
|
|
$
|
(197
|
)
|
|
$
|
2,379
|
|
Prior service credit
|
|
21,992
|
|
|
25,473
|
|
||
Total
|
|
$
|
21,795
|
|
|
$
|
27,852
|
|
|
|
December 31,
|
||
|
|
2019
|
|
2018
|
|
|
|
|
|
Discount rate
|
|
2.94% - 3.20%
|
|
3.70% - 3.95%
|
Current health care trend rate
|
|
6.00% - 6.50%
|
|
6.50%
|
Ultimate health care trend rate
|
|
4.50% - 5.00%
|
|
5.00%
|
Year rate reaches ultimate trend rate
|
|
2022 - 2023
|
|
2022 - 2028
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Service cost – benefit earned during the year
|
|
$
|
1,582
|
|
|
$
|
1,648
|
|
|
$
|
1,511
|
|
Interest cost on projected benefit obligations
|
|
1,029
|
|
|
938
|
|
|
987
|
|
|||
Amortization of prior service credit
|
|
(3,481
|
)
|
|
(3,481
|
)
|
|
(3,481
|
)
|
|||
Amortization of gain
|
|
(106
|
)
|
|
—
|
|
|
—
|
|
|||
Net periodic post-retirement credit
|
|
$
|
(976
|
)
|
|
$
|
(895
|
)
|
|
$
|
(983
|
)
|
|
|
1% Point Increase
|
|
1% Point Decrease
|
||||
|
|
(In thousands)
|
||||||
Service and interest costs
|
|
$
|
502
|
|
|
$
|
(396
|
)
|
Year-end accumulated post-retirement benefit obligation
|
|
$
|
3,489
|
|
|
$
|
(2,990
|
)
|
NOTE 19:
|
Contingencies and Contractual Commitments
|
|
|
(In thousands)
|
||
2020
|
|
$
|
137,457
|
|
2021
|
|
116,058
|
|
|
2022
|
|
111,058
|
|
|
2023
|
|
112,399
|
|
|
2024
|
|
111,939
|
|
|
Thereafter
|
|
685,941
|
|
|
Total
|
|
$
|
1,274,852
|
|
NOTE 20:
|
Segment Information
|
|
|
Refining
|
|
Lubricants and Specialty Products
|
|
HEP
|
|
Corporate, Other and Eliminations
|
|
Consolidated
Total |
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
|
$
|
15,284,110
|
|
|
$
|
2,081,221
|
|
|
$
|
121,027
|
|
|
$
|
220
|
|
|
$
|
17,486,578
|
|
Intersegment revenues
|
|
312,678
|
|
|
11,307
|
|
|
411,750
|
|
|
(735,735
|
)
|
|
—
|
|
|||||
|
|
$
|
15,596,788
|
|
|
$
|
2,092,528
|
|
|
$
|
532,777
|
|
|
$
|
(735,515
|
)
|
|
$
|
17,486,578
|
|
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
$
|
12,980,506
|
|
|
$
|
1,580,036
|
|
|
$
|
—
|
|
|
$
|
(642,158
|
)
|
|
$
|
13,918,384
|
|
Lower of cost or market inventory valuation adjustment
|
|
$
|
(119,775
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(119,775
|
)
|
Operating expenses
|
|
$
|
1,095,488
|
|
|
$
|
231,523
|
|
|
$
|
161,996
|
|
|
$
|
(94,955
|
)
|
|
$
|
1,394,052
|
|
Selling, general and administrative expenses
|
|
$
|
120,518
|
|
|
$
|
168,595
|
|
|
$
|
10,251
|
|
|
$
|
54,872
|
|
|
$
|
354,236
|
|
Depreciation and amortization
|
|
$
|
309,932
|
|
|
$
|
88,781
|
|
|
$
|
96,706
|
|
|
$
|
14,506
|
|
|
$
|
509,925
|
|
Goodwill impairment
|
|
$
|
—
|
|
|
$
|
152,712
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
152,712
|
|
Income (loss) from operations
|
|
$
|
1,210,119
|
|
|
$
|
(129,119
|
)
|
|
$
|
263,824
|
|
|
$
|
(67,780
|
)
|
|
$
|
1,277,044
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,180
|
|
|
$
|
—
|
|
|
$
|
5,180
|
|
Capital expenditures
|
|
$
|
199,002
|
|
|
$
|
40,997
|
|
|
$
|
30,112
|
|
|
$
|
23,652
|
|
|
$
|
293,763
|
|
Total assets
|
|
$
|
7,189,094
|
|
|
$
|
2,223,418
|
|
|
$
|
2,205,437
|
|
|
$
|
546,892
|
|
|
$
|
12,164,841
|
|
|
|
Refining
|
|
Lubricants and Specialty Products
|
|
HEP
|
|
Corporate, Other and Eliminations
|
|
Consolidated
Total |
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
|
$
|
15,806,304
|
|
|
$
|
1,799,506
|
|
|
$
|
108,412
|
|
|
$
|
444
|
|
|
$
|
17,714,666
|
|
Intersegment revenues
|
|
370,259
|
|
|
13,197
|
|
|
397,808
|
|
|
(781,264
|
)
|
|
—
|
|
|||||
|
|
$
|
16,176,563
|
|
|
$
|
1,812,703
|
|
|
$
|
506,220
|
|
|
$
|
(780,820
|
)
|
|
$
|
17,714,666
|
|
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
$
|
13,250,849
|
|
|
$
|
1,381,540
|
|
|
$
|
—
|
|
|
$
|
(691,607
|
)
|
|
$
|
13,940,782
|
|
Lower of cost or market inventory valuation adjustment
|
|
$
|
136,305
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136,305
|
|
Operating expenses
|
|
$
|
1,055,209
|
|
|
$
|
167,820
|
|
|
$
|
146,430
|
|
|
$
|
(83,621
|
)
|
|
$
|
1,285,838
|
|
Selling, general and administrative expenses
|
|
$
|
113,641
|
|
|
$
|
143,750
|
|
|
$
|
11,041
|
|
|
$
|
21,992
|
|
|
$
|
290,424
|
|
Depreciation and amortization
|
|
$
|
284,439
|
|
|
$
|
43,255
|
|
|
$
|
98,492
|
|
|
$
|
11,138
|
|
|
$
|
437,324
|
|
Income (loss) from operations
|
|
$
|
1,336,120
|
|
|
$
|
76,338
|
|
|
$
|
250,257
|
|
|
$
|
(38,722
|
)
|
|
$
|
1,623,993
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,825
|
|
|
$
|
—
|
|
|
$
|
5,825
|
|
Capital expenditures
|
|
$
|
202,791
|
|
|
$
|
37,448
|
|
|
$
|
54,141
|
|
|
$
|
16,649
|
|
|
$
|
311,029
|
|
Total assets
|
|
$
|
6,465,155
|
|
|
$
|
1,506,209
|
|
|
$
|
2,142,027
|
|
|
$
|
881,210
|
|
|
$
|
10,994,601
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
|
$
|
12,579,672
|
|
|
$
|
1,594,036
|
|
|
$
|
77,225
|
|
|
$
|
366
|
|
|
$
|
14,251,299
|
|
Intersegment revenues
|
|
338,390
|
|
|
—
|
|
|
377,137
|
|
|
(715,527
|
)
|
|
—
|
|
|||||
|
|
$
|
12,918,062
|
|
|
$
|
1,594,036
|
|
|
$
|
454,362
|
|
|
$
|
(715,161
|
)
|
|
$
|
14,251,299
|
|
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
|
|
$
|
11,009,419
|
|
|
$
|
1,093,984
|
|
|
$
|
—
|
|
|
$
|
(635,530
|
)
|
|
$
|
11,467,873
|
|
Lower of cost or market inventory valuation adjustment
|
|
$
|
(107,479
|
)
|
|
$
|
(1,206
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(108,685
|
)
|
Operating expenses
|
|
$
|
1,008,859
|
|
|
$
|
222,461
|
|
|
$
|
137,856
|
|
|
$
|
(72,507
|
)
|
|
$
|
1,296,669
|
|
Selling, general and administrative expenses
|
|
$
|
103,246
|
|
|
$
|
105,666
|
|
|
$
|
14,336
|
|
|
$
|
42,473
|
|
|
$
|
265,721
|
|
Depreciation and amortization
|
|
$
|
289,434
|
|
|
$
|
31,894
|
|
|
$
|
77,660
|
|
|
$
|
10,949
|
|
|
$
|
409,937
|
|
Long-lived asset impairment
|
|
$
|
19,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,247
|
|
Income (loss) from operations
|
|
$
|
595,336
|
|
|
$
|
141,237
|
|
|
$
|
224,510
|
|
|
$
|
(60,546
|
)
|
|
$
|
900,537
|
|
Earnings of equity method investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,510
|
|
|
$
|
—
|
|
|
$
|
12,510
|
|
Capital expenditures
|
|
$
|
176,533
|
|
|
$
|
31,464
|
|
|
$
|
44,810
|
|
|
$
|
19,452
|
|
|
$
|
272,259
|
|
Total assets
|
|
$
|
6,474,666
|
|
|
$
|
1,610,472
|
|
|
$
|
2,191,984
|
|
|
$
|
415,032
|
|
|
$
|
10,692,154
|
|
NOTE 21:
|
Quarterly Information (Unaudited)
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Year
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues
|
|
$
|
3,897,247
|
|
|
$
|
4,782,615
|
|
|
$
|
4,424,828
|
|
|
$
|
4,381,888
|
|
|
$
|
17,486,578
|
|
Operating costs and expenses
|
|
$
|
3,507,906
|
|
|
$
|
4,450,874
|
|
|
$
|
3,998,049
|
|
|
$
|
4,252,705
|
|
|
$
|
16,209,534
|
|
Income from operations (1) (2)
|
|
$
|
389,341
|
|
|
$
|
331,741
|
|
|
$
|
426,779
|
|
|
$
|
129,183
|
|
|
$
|
1,277,044
|
|
Income before income taxes
|
|
$
|
363,991
|
|
|
$
|
306,153
|
|
|
$
|
401,001
|
|
|
$
|
100,359
|
|
|
$
|
1,171,504
|
|
Net income attributable to HollyFrontier stockholders
|
|
$
|
253,055
|
|
|
$
|
196,915
|
|
|
$
|
261,813
|
|
|
$
|
60,605
|
|
|
$
|
772,388
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share attributable to HollyFrontier stockholders - basic
|
|
$
|
1.48
|
|
|
$
|
1.16
|
|
|
$
|
1.60
|
|
|
$
|
0.38
|
|
|
$
|
4.64
|
|
Net income per share attributable to HollyFrontier stockholders - diluted
|
|
$
|
1.47
|
|
|
$
|
1.15
|
|
|
$
|
1.58
|
|
|
$
|
0.37
|
|
|
$
|
4.61
|
|
Dividends per common share
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.35
|
|
|
$
|
1.34
|
|
Average number of shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
170,851
|
|
|
169,356
|
|
|
163,676
|
|
|
161,398
|
|
|
166,287
|
|
|||||
Diluted
|
|
172,239
|
|
|
170,547
|
|
|
165,011
|
|
|
162,898
|
|
|
167,385
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other revenues
|
|
$
|
4,128,427
|
|
|
$
|
4,471,236
|
|
|
$
|
4,770,799
|
|
|
$
|
4,344,204
|
|
|
$
|
17,714,666
|
|
Operating costs and expenses
|
|
$
|
3,732,580
|
|
|
$
|
3,964,259
|
|
|
$
|
4,267,282
|
|
|
$
|
4,126,552
|
|
|
$
|
16,090,673
|
|
Income from operations (3)
|
|
$
|
395,847
|
|
|
$
|
506,977
|
|
|
$
|
503,517
|
|
|
$
|
217,652
|
|
|
$
|
1,623,993
|
|
Income before income taxes
|
|
$
|
373,899
|
|
|
$
|
480,360
|
|
|
$
|
478,390
|
|
|
$
|
191,818
|
|
|
$
|
1,524,467
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to HollyFrontier stockholders
|
|
$
|
268,091
|
|
|
$
|
345,507
|
|
|
$
|
342,466
|
|
|
$
|
141,896
|
|
|
$
|
1,097,960
|
|
Net income per share attributable to HollyFrontier stockholders - basic
|
|
$
|
1.51
|
|
|
$
|
1.96
|
|
|
$
|
1.95
|
|
|
$
|
0.82
|
|
|
$
|
6.25
|
|
Net income per share attributable to HollyFrontier stockholders - diluted
|
|
$
|
1.50
|
|
|
$
|
1.94
|
|
|
$
|
1.93
|
|
|
$
|
0.81
|
|
|
$
|
6.19
|
|
Dividends per common share
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
$
|
1.32
|
|
Average number of shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
176,617
|
|
|
175,899
|
|
|
175,097
|
|
|
172,485
|
|
|
175,009
|
|
|||||
Diluted
|
|
177,954
|
|
|
177,586
|
|
|
176,927
|
|
|
174,259
|
|
|
176,661
|
|
|
Page in Form 10-K
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Balance Sheets at December 31, 2019 and 2018
|
|
|
|
Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Equity for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Notes to Consolidated Financial Statements
|
Exhibit Number
|
|
Description
|
|
|
|
2.1†
|
|
|
|
|
|
2.2†
|
|
|
|
|
|
2.3†
|
|
|
|
|
|
2.4†
|
|
|
|
|
|
2.5†
|
|
|
|
|
|
2.6†
|
|
|
|
|
|
2.7
|
|
|
|
|
|
3.1
|
|
|
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|
3.2
|
|
|
|
|
|
4.1
|
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|
4.2
|
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|
4.3
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4.4
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|
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4.5
|
|
Exhibit Number
|
|
Description
|
|
|
|
4.6
|
|
|
|
|
|
4.7*
|
|
|
|
|
|
10.1
|
|
|
|
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|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
Exhibit Number
|
|
Description
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
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|
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10.23
|
|
|
|
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|
10.24
|
|
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|
10.25
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31+
|
|
|
|
|
|
10.32+
|
|
|
|
|
|
10.33+
|
|
|
|
|
|
10.34+
|
|
|
|
|
|
10.35+
|
|
Fourth Amendment to the HollyFrontier Corporation Long-Term Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 of Registrant's Current Report on Form 8-K filed May 15, 2015, File No. 1-03876).
|
|
|
|
10.36+
|
|
|
|
|
|
10.37+
|
|
|
|
|
|
10.38+
|
|
|
|
|
|
10.39+
|
|
|
|
|
|
10.40+
|
|
|
|
|
|
10.41+
|
|
|
|
|
|
10.42+*
|
|
|
|
|
|
10.43+
|
|
|
|
|
|
10.44+
|
|
Exhibit Number
|
|
Description
|
|
|
|
10.45+
|
|
|
|
|
|
10.46+
|
|
|
|
|
|
10.47+
|
|
|
|
|
|
10.48+
|
|
|
|
|
|
10.49+*
|
|
|
|
|
|
10.50+*
|
|
|
|
|
|
10.51+*
|
|
|
|
|
|
10.52+*
|
|
|
|
|
|
10.53+
|
|
|
|
|
|
10.54+
|
|
|
.
|
|
|
10.55+
|
|
|
|
|
|
10.56+
|
|
|
|
|
|
10.57+
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101
|
|
The following financial information from Registrant's Annual Report on Form 10-K for its fiscal year ended December 31, 2019, formatted as inline XBRL (Inline 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, (v) Consolidated Statements of Equity, and (vi) Notes to the Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
104
|
|
Cover page Interactive Data File (formatted as inline XBRL and contained in exhibit 101).
|
|
|
HOLLYFRONTIER CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date: February 20, 2020
|
|
|
/s/ Michael C. Jennings
|
|
|
|
Michael C. Jennings
|
|
|
|
Chief Executive Officer and President
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/ Michael C. Jennings
|
|
Chief Executive Officer, President
|
|
February 20, 2020
|
Michael C. Jennings
|
|
and Director
|
|
|
|
|
|
|
|
/s/ Richard L. Voliva III
|
|
Executive Vice President and
|
|
February 20, 2020
|
Richard L. Voliva III
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ J.W. Gann, Jr.
|
|
Vice President, Controller and
|
|
February 20, 2020
|
J.W. Gann, Jr.
|
|
Chief Accounting Officer
|
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Franklin Myers
|
|
Chairman of the Board
|
|
February 20, 2020
|
Franklin Myers
|
|
|
|
|
|
|
|
|
|
/s/ Anne-Marie N. Ainsworth
|
|
Director
|
|
February 20, 2020
|
Anne-Marie N. Ainsworth
|
|
|
|
|
|
|
|
|
|
/s/ Douglas Y. Bech
|
|
Director
|
|
February 20, 2020
|
Douglas Y. Bech
|
|
|
|
|
|
|
|
|
|
/s/ Anna C. Catalano
|
|
Director
|
|
February 20, 2020
|
Anna C. Catalano
|
|
|
|
|
|
|
|
|
|
/s/ Leldon Echols
|
|
Director
|
|
February 20, 2020
|
Leldon Echols
|
|
|
|
|
|
|
|
|
|
/s/ R. Craig Knocke
|
|
Director
|
|
February 20, 2020
|
R. Craig Knocke
|
|
|
|
|
|
|
|
|
|
/s/ Robert J. Kostelnik
|
|
Director
|
|
February 20, 2020
|
Robert J. Kostelnik
|
|
|
|
|
|
|
|
|
|
/s/ James H. Lee
|
|
Director
|
|
February 20, 2020
|
James H. Lee
|
|
|
|
|
|
|
|
|
|
/s/ Michael E. Rose
|
|
Director
|
|
February 20, 2020
|
Michael E. Rose
|
|
|
|
|
|
•
|
|
before that person became a 15% stockholder, our Board of Directors approved the transaction in which the stockholder became a 15% stockholder or approved the business combination;
|
|
•
|
|
upon completion of the transaction that resulted in the stockholder’s becoming a 15% stockholder, the stockholder owned at least 85% of our voting stock outstanding at the time the transaction began (excluding stock held by directors who are also officers and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); and
|
|
•
|
|
after the transaction in which that person became a 15% stockholder, the business combination is approved by our Board of Directors and authorized at a stockholders’ meeting by at least two-thirds of the outstanding voting stock not owned by the 15% stockholder.
|
Ranking of the Company within Peer Group
|
ROCE Performance Percentage
|
90th Percentile or Better
|
Maximum (200% of Target)
|
<90th Percentile But Better than 50th Percentile
|
Interpolate between 100% and 200%
|
50th Percentile
|
Target (100%)
|
<50th Percentile But Better than 25th Percentile
|
Interpolate between 25% and 100%
|
25th Percentile
|
25% of Target (Minimum)
|
<25th Percentile
|
Zero
|
Ranking of the Company within Peer Group
|
TSR Performance Percentage
|
90th Percentile or Better
|
Maximum (200% of Target)
|
<90th Percentile But Better than 50th Percentile
|
Interpolate between 100% and 200%
|
50th Percentile
|
Target (100%)
|
<50th Percentile But Better than 25th Percentile
|
Interpolate between 25% and 100%
|
25th Percentile
|
25% of Target (Minimum)
|
<25th Percentile
|
Zero
|
Grantee:
|
______________________
|
Date of Grant:
|
__________ __, 2019 (“Date of Grant”)
|
Number of Restricted Stock Units:
|
______________________
|
Vesting Schedule:
|
The restrictions on all of the RSUs granted pursuant to the Agreement will expire and the RSUs will vest according to the following schedule (or on the first business day thereafter if the date below falls on a weekend) (each such date, a “Regular Vesting Date”); provided, that (except as otherwise provided in Section 6 of your Agreement) you remain in the employ of the Company or its Subsidiaries continuously from the Date of Grant through such Regular Vesting Dates (as determined under the Agreement).
|
Retirement Date:
|
December 31, 2019
|
Local HR Contact:
|
Dale Kunneman
|
Job Title:
|
Senior Vice President, General Counsel, Secretary, and Chief Compliance Officer
|
Retirement Date:
|
August 12, 2019
|
(1)
|
Navajo Pipeline Co., L.P. also does business as Navajo Pipeline Co.
|
(2)
|
Holly Energy Partners, L.P. and Holly Energy Partners – Operating, L.P. also do business as Holly Energy Partners.
|
(3)
|
Represents a subsidiary of Holly Energy Partners, L.P. We have presented these entities in our list of subsidiaries as a result of our reconsolidation of Holly Energy Partners, L.P. on March 1, 2008.
|
(1)
|
Registration Statement (Form S-8 No. 333-211557) of HollyFrontier Corporation, and
|
(2)
|
Registration Statement (Form S-3 ASR No. 333-228429) of HollyFrontier Corporation;
|
1.
|
I have reviewed this annual report on Form 10-K of HollyFrontier Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting
|
Date: February 20, 2020
|
|
/s/ Michael C. Jennings
|
|
|
Michael C. Jennings
|
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this annual report on Form 10-K of HollyFrontier Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 20, 2020
|
|
/s/ Richard L. Voliva III
|
|
|
Richard L. Voliva III
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 20, 2020
|
|
/s/ Michael C. Jennings
|
|
|
Michael C. Jennings
|
|
|
Chief Executive Officer and President
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 20, 2020
|
|
/s/ Richard L. Voliva III
|
|
|
Richard L. Voliva III
|
|
|
Executive Vice President and Chief Financial Officer
|