ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 75-1056913 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
2828 N. Harwood, Suite 1300 Dallas, Texas | 75201 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Page | |
Consolidated Balance Sheets | |
Consolidated Statements of Comprehensive Income (Unaudited) | |
• | risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets; |
• | the demand for and supply of crude oil and refined products; |
• | the spread between market prices for refined products and market prices for crude oil; |
• | the possibility of constraints on the transportation of refined products; |
• | the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines; |
• | effects of governmental and environmental regulations and policies; |
• | the availability and cost of our financing; |
• | the effectiveness of our capital investments and marketing strategies; |
• | our efficiency in carrying out construction projects; |
• | our ability to acquire refined product operations or pipeline and terminal operations on acceptable terms and to integrate any existing or future acquired operations; |
• | the possibility of terrorist attacks and the consequences of any such attacks; |
• | general economic conditions; |
• | our ability to realize fully or at all the anticipated benefits of our “merger of equals” with Frontier; and |
• | other financial, operational and legal risks and uncertainties detailed from time to time in our SEC filings. |
Item 1. | Financial Statements |
March 31, 2012 | December 31, 2011 | ||||||
(Unaudited) | As Adjusted (See Note 2) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents (HEP: $12,402 and $3,269, respectively) | $ | 1,659,550 | $ | 1,578,904 | |||
Marketable securities | 241,929 | 211,639 | |||||
Accounts receivable: Product and transportation (HEP: $34,784 and $34,071, respectively) | 676,839 | 703,691 | |||||
Crude oil resales | 56,308 | 5,166 | |||||
733,147 | 708,857 | ||||||
Inventories: Crude oil and refined products | 1,288,591 | 1,052,084 | |||||
Materials and supplies (HEP: $1,483 and $1,483, respectively) | 56,564 | 62,535 | |||||
1,345,155 | 1,114,619 | ||||||
Income taxes receivable | 93,648 | 87,277 | |||||
Prepayments and other (HEP: $920 and $1,161, respectively) | 54,172 | 219,450 | |||||
Total current assets | 4,127,601 | 3,920,746 | |||||
Properties, plants and equipment, at cost (HEP: $686,131 and $679,852, respectively) | 3,693,550 | 3,631,787 | |||||
Less accumulated depreciation (HEP: $(98,900) and $(89,609), respectively) | (622,337 | ) | (578,882 | ) | |||
3,071,213 | 3,052,905 | ||||||
Marketable securities (long-term) | 26,057 | 50,067 | |||||
Other assets: Turnaround costs | 64,175 | 57,060 | |||||
Goodwill (HEP: $288,991 and $288,991, respectively) | 2,334,530 | 2,336,510 | |||||
Intangibles and other (HEP: $75,597 and $75,902, respectively) | 162,174 | 158,955 | |||||
2,560,879 | 2,552,525 | ||||||
Total assets | $ | 9,785,750 | $ | 9,576,243 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable (HEP: $12,593 and $11,406, respectively) | $ | 1,641,107 | $ | 1,504,694 | |||
Income taxes payable | 152,212 | 40,366 | |||||
Accrued liabilities (HEP: $8,942 and $16,285, respectively) | 126,380 | 169,940 | |||||
Deferred income tax liabilities | 172,401 | 175,683 | |||||
Current portion of long-term debt (HEP: $26,281) | 26,281 | — | |||||
Total current liabilities | 2,118,381 | 1,890,683 | |||||
Long-term debt (HEP: $597,956 and $598,761, respectively) | 1,285,761 | 1,214,742 | |||||
Deferred income taxes | 400,993 | 463,721 | |||||
Other long-term liabilities (HEP: $4,636 and $4,000, respectively) | 191,036 | 171,197 | |||||
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; 255,962,866 shares issued as of March 31, 2012 and December 31, 2011 | 2,560 | 2,563 | |||||
Additional capital | 3,857,601 | 3,859,367 | |||||
Retained earnings | 2,080,848 | 1,964,656 | |||||
Accumulated other comprehensive income (loss) | (17,421 | ) | 77,873 | ||||
Common stock held in treasury, at cost – 48,140,292 and 46,630,220 shares as of March 31, 2012 and December 31, 2011, respectively | (759,275 | ) | (700,449 | ) | |||
Total HollyFrontier stockholders’ equity | 5,164,313 | 5,204,010 | |||||
Noncontrolling interest | 625,266 | 631,890 | |||||
Total equity | 5,789,579 | 5,835,900 | |||||
Total liabilities and equity | $ | 9,785,750 | $ | 9,576,243 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Sales and other revenues | $ | 4,931,738 | $ | 2,326,585 | ||||
Operating costs and expenses: | ||||||||
Cost of products sold (exclusive of depreciation and amortization) | 4,186,917 | 1,984,617 | ||||||
Operating expenses (exclusive of depreciation and amortization) | 241,627 | 134,743 | ||||||
General and administrative expenses (exclusive of depreciation and amortization) | 27,528 | 16,818 | ||||||
Depreciation and amortization | 56,102 | 31,308 | ||||||
Total operating costs and expenses | 4,512,174 | 2,167,486 | ||||||
Income from operations | 419,564 | 159,099 | ||||||
Other income (expense): | ||||||||
Earnings of equity method investments | 717 | 740 | ||||||
Interest income | 460 | 85 | ||||||
Interest expense | (33,315 | ) | (16,204 | ) | ||||
Merger transaction costs | — | (3,698 | ) | |||||
(32,138 | ) | (19,077 | ) | |||||
Income before income taxes | 387,426 | 140,022 | ||||||
Income tax provision: | ||||||||
Current | 142,870 | 49,489 | ||||||
Deferred | (2,464 | ) | (478 | ) | ||||
140,406 | 49,011 | |||||||
Net income | 247,020 | 91,011 | ||||||
Less net income attributable to noncontrolling interest | 5,324 | 6,317 | ||||||
Net income attributable to HollyFrontier stockholders | $ | 241,696 | $ | 84,694 | ||||
Earnings per share attributable to HollyFrontier stockholders: | ||||||||
Basic | $ | 1.16 | $ | 0.79 | ||||
Diluted | $ | 1.16 | $ | 0.79 | ||||
Cash dividends declared per common share | $ | 0.60 | $ | 0.075 | ||||
Average number of common shares outstanding: | ||||||||
Basic | 208,531 | 106,614 | ||||||
Diluted | 209,138 | 107,266 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Net income | $ | 247,020 | $ | 91,011 | ||||
Other comprehensive income (loss): | ||||||||
Securities available-for-sale: | ||||||||
Unrealized gain on available-for-sale securities | 305 | 142 | ||||||
Reclassification adjustment to net income on sale or maturity of marketable securities | (117 | ) | — | |||||
Net unrealized gain on available-for-sale securities | 188 | 142 | ||||||
Hedging instruments: | ||||||||
Change in fair value of cash flow hedging instruments | (140,473 | ) | 1,321 | |||||
Reclassification adjustment to net income on settlement of cash flow hedging instruments | (16,416 | ) | — | |||||
Amortization of unrealized loss attributable to discontinued cash flow hedge | 1,274 | — | ||||||
Net unrealized gain (loss) on hedging instruments | (155,615 | ) | 1,321 | |||||
Other comprehensive income (loss) before income taxes | (155,427 | ) | 1,463 | |||||
Income tax expense (benefit) | (60,670 | ) | 242 | |||||
Other comprehensive income (loss) | (94,757 | ) | 1,221 | |||||
Total comprehensive income | 152,263 | 92,232 | ||||||
Less noncontrolling interest in comprehensive income | 5,861 | 7,159 | ||||||
Comprehensive income attributable to HollyFrontier stockholders | $ | 146,402 | $ | 85,073 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
As Adjusted (See Note 2) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 247,020 | $ | 91,011 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 56,102 | 31,308 | ||||||
Earnings of equity method investments, net of distributions | 34 | (365 | ) | |||||
Deferred income taxes | (2,464 | ) | (478 | ) | ||||
Equity-based compensation expense | 9,485 | 1,754 | ||||||
Change in fair value – derivative instruments | 12,122 | 1,092 | ||||||
(Increase) decrease in current assets: | ||||||||
Accounts receivable | (25,247 | ) | (69,352 | ) | ||||
Inventories | (230,536 | ) | (73,089 | ) | ||||
Income taxes receivable | 365 | 48,992 | ||||||
Prepayments and other | (1,831 | ) | 6,978 | |||||
Increase (decrease) in current liabilities: | ||||||||
Accounts payable | 124,235 | 91,259 | ||||||
Income taxes payable | 111,846 | — | ||||||
Accrued liabilities | (46,358 | ) | 14,155 | |||||
Turnaround expenditures | (21,762 | ) | (16,924 | ) | ||||
Other, net | 20,894 | 4,201 | ||||||
Net cash provided by operating activities | 253,905 | 130,542 | ||||||
Cash flows from investing activities: | ||||||||
Additions to properties, plants and equipment | (55,060 | ) | (62,563 | ) | ||||
Additions to properties, plants and equipment – HEP | (6,327 | ) | (11,475 | ) | ||||
Investment in Sabine Biofuels | (1,200 | ) | — | |||||
Purchases of marketable securities | (106,573 | ) | (98,937 | ) | ||||
Sales and maturities of marketable securities | 100,480 | 31,925 | ||||||
Net cash used for investing activities | (68,680 | ) | (141,050 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under credit agreement – HEP | 36,000 | 30,000 | ||||||
Repayments under credit agreement – HEP | (81,000 | ) | (7,000 | ) | ||||
Net proceeds from issuance of senior notes – HEP | 294,750 | — | ||||||
Principal tender on senior notes - HEP | (157,761 | ) | — | |||||
Purchase of treasury stock | (62,532 | ) | (2,051 | ) | ||||
Contribution from joint venture partner | 5,500 | 8,500 | ||||||
Dividends | (126,019 | ) | (7,984 | ) | ||||
Distributions to noncontrolling interest | (14,391 | ) | (12,485 | ) | ||||
Excess tax benefit from equity-based compensation | 3,792 | 261 | ||||||
Purchase of units for incentive grants – HEP | (1,283 | ) | (399 | ) | ||||
Deferred financing costs | (1,123 | ) | (3,044 | ) | ||||
Other | (512 | ) | (277 | ) | ||||
Net cash provided by (used for) financing activities | (104,579 | ) | 5,521 | |||||
Cash and cash equivalents: | ||||||||
Increase (decrease) for the period | 80,646 | (4,987 | ) | |||||
Beginning of period | 1,578,904 | 229,101 | ||||||
End of period | $ | 1,659,550 | $ | 224,114 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 24,422 | $ | 12,602 | ||||
Income taxes | $ | 27,006 | $ | 8 |
NOTE 1: | Description of Business and Presentation of Financial Statements |
• | owned and operated a petroleum refinery in El Dorado, Kansas (the “El Dorado Refinery”), two refinery facilities located in Tulsa, Oklahoma (collectively, the “Tulsa Refineries”), a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”), a refinery located in Cheyenne, Wyoming (the “Cheyenne Refinery”) and a refinery in Woods Cross, Utah (the “Woods Cross Refinery”); |
• | owned and operated NK Asphalt Partners (“NK Asphalt”) which operates various asphalt terminals in Arizona and New Mexico; |
• | owned a 75% interest in a 12-inch refined products pipeline from Salt Lake City, Utah to Las Vegas, Nevada, together with terminal facilities in the Cedar City, Utah and North Las Vegas areas (the “UNEV Pipeline”); |
• | owned Ethanol Management Company (“EMC”), a products terminal and blending facility near Denver, Colorado and a 50% interest in Sabine Biofuels II, LLC (“Sabine Biofuels”), a biodiesel production facility located in Port Arthur, Texas; and |
• | owned a 42% interest in HEP, a consolidated variable interest entity (“VIE”), which includes our 2% general partner interest. HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines and terminal, tankage and loading rack facilities that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Alon USA, Inc.'s (“Alon”) refinery in Big Spring, Texas. Additionally, HEP owns a 25% interest in SLC Pipeline LLC (the “SLC Pipeline”), a 95-mile intrastate pipeline system that serves refineries in the Salt Lake City area. |
NOTE 2: | Change in Accounting Principle |
As Originally Reported | As Adjusted | Effect of Change | |||||||||
(In thousands) | |||||||||||
Accounts receivable: Crude oil resales | $ | 743,544 | $ | 5,166 | $ | (738,378 | ) | ||||
Total current assets | 4,659,124 | 3,920,746 | (738,378 | ) | |||||||
Total assets | $ | 10,314,621 | $ | 9,576,243 | $ | (738,378 | ) | ||||
Accounts payable | $ | 2,243,072 | $ | 1,504,694 | $ | (738,378 | ) | ||||
Total current liabilities | 2,629,061 | 1,890,683 | (738,378 | ) | |||||||
Total liabilities and equity | $ | 10,314,621 | $ | 9,576,243 | $ | (738,378 | ) |
As Originally Reported | As Adjusted | Effect of Change | |||||||||
(In thousands) | |||||||||||
(Increase) decrease in current assets: | |||||||||||
Accounts receivable | $ | (159,138 | ) | $ | (69,352 | ) | $ | 89,786 | |||
Increase (decrease) in current liabilities: | |||||||||||
Accounts payable | $ | 181,045 | $ | 91,259 | $ | (89,786 | ) |
NOTE 3: | Holly-Frontier Merger |
(in millions) | |||
Cash and cash equivalents | $ | 872.7 | |
Accounts receivable | 737.9 | ||
Inventories | 657.4 | ||
Properties, plants and equipment | 1,054.8 | ||
Goodwill | 2,252.0 | ||
Income taxes receivable | 44.5 | ||
Other assets | 32.9 | ||
Accounts payable | (1,076.7 | ) | |
Accrued liabilities | (40.7 | ) | |
Long-term debt | (370.6 | ) | |
Other long-term liabilities | (104.4 | ) | |
Deferred income taxes | (354.6 | ) | |
Net tangible and intangible assets acquired and liabilities assumed | $ | 3,705.2 |
Three Months Ended March 31, 2011 | ||||
(In thousands, except per share amounts) | ||||
Sales and other revenues | $ | 4,235,239 | ||
Net income attributable to HollyFrontier stockholders | $ | 234,066 | ||
Basic earnings per share | $ | 1.12 | ||
Diluted earnings per share | $ | 1.11 |
NOTE 4: | Holly Energy Partners |
NOTE 5: | Financial Instruments |
• | (Level 1) Quoted prices in active markets for identical assets or liabilities. |
• | (Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data. |
• | (Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs. |
March 31, 2012 | December 31, 2011 | |||||||||||||||||
Financial Instrument | Fair Value Input Level | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||||
Investments in marketable securities: | ||||||||||||||||||
Equity securities | Level 1 | $ | 967 | $ | 967 | $ | 753 | $ | 753 | |||||||||
Marketable debt securities | Level 2 | $ | 267,019 | $ | 267,019 | $ | 260,953 | $ | 260,953 | |||||||||
Derivative instruments: | ||||||||||||||||||
NYMEX futures contracts | Level 1 | $ | 8,480 | $ | 8,480 | $ | (1,252 | ) | $ | (1,252 | ) | |||||||
Commodity price swaps | Level 2 | $ | 145,212 | $ | 145,212 | $ | 144,038 | $ | 144,038 | |||||||||
Commodity price swaps | Level 3 | $ | (149,278 | ) | $ | (149,278 | ) | $ | 31,616 | $ | 31,616 | |||||||
HEP interest rate swap | Level 2 | $ | 873 | $ | 873 | $ | (520 | ) | $ | (520 | ) | |||||||
Senior notes: | ||||||||||||||||||
HollyFrontier senior notes | Level 2 | $ | 650,497 | $ | 699,834 | $ | 651,262 | $ | 693,979 | |||||||||
HEP senior notes | Level 2 | $ | 469,237 | $ | 494,062 | $ | 325,860 | $ | 344,350 |
(in thousands) | |||
Asset balance at January 1, 2012 | $ | 31,616 | |
Unrealized losses included in other comprehensive income | (146,769 | ) | |
Settlements | (34,125 | ) | |
Liability balance at March 31, 2012 | $ | (149,278 | ) |
NOTE 6: | Earnings Per Share |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(In thousands, except per share data) | ||||||||
Earnings attributable to HollyFrontier stockholders | $ | 241,696 | $ | 84,694 | ||||
Average number of shares of common stock outstanding | 208,531 | 106,614 | ||||||
Effect of dilutive variable restricted shares and performance share units | 607 | 652 | ||||||
Average number of shares of common stock outstanding assuming dilution | 209,138 | 107,266 | ||||||
Basic earnings per share | $ | 1.16 | $ | 0.79 | ||||
Diluted earnings per share | $ | 1.16 | $ | 0.79 |
NOTE 7: | Stock-Based Compensation |
Restricted Stock | Grants | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value ($000) | ||||||||
Outstanding at January 1, 2012 (non-vested) | 1,122,350 | $ | 25.48 | ||||||||
Granted | 404,577 | $ | 33.81 | ||||||||
Vesting and transfer of ownership to recipients | (503,327 | ) | $ | 24.24 | |||||||
Outstanding at March 31, 2012 (non-vested) | 1,023,600 | $ | 29.38 | $ | 32,909 |
Performance Share Units | Grants | ||
Outstanding at January 1, 2012 (non-vested) | 774,788 | ||
Granted | 293,559 | ||
Vesting and transfer of ownership to recipients | (235,924 | ) | |
Outstanding at March 31, 2012 (non-vested) | 832,423 |
NOTE 8: | Cash and Cash Equivalents and Investments in Marketable Securities |
Available-for-Sale Securities | ||||||||||||
Amortized Cost | Gross Unrealized Gain | Estimated Fair Value (Net Carrying Amount) | ||||||||||
(In thousands) | ||||||||||||
March 31, 2012 | ||||||||||||
Marketable debt securities (state and political subdivisions) | $ | 266,971 | $ | 48 | $ | 267,019 | ||||||
Equity securities | 610 | 357 | 967 | |||||||||
Total marketable securities | $ | 267,581 | $ | 405 | $ | 267,986 | ||||||
December 31, 2011 | ||||||||||||
Marketable debt securities (state and political subdivisions) | $ | 260,879 | $ | 74 | $ | 260,953 | ||||||
Equity securities | $ | 610 | $ | 143 | $ | 753 | ||||||
Total marketable securities | $ | 261,489 | $ | 217 | $ | 261,706 |
NOTE 9: | Inventories |
March 31, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
Crude oil | $ | 571,730 | $ | 400,952 | ||||
Other raw materials and unfinished products(1) | 159,854 | 137,356 | ||||||
Finished products(2) | 557,007 | 513,776 | ||||||
Process chemicals(3) | 1,188 | 1,180 | ||||||
Repairs and maintenance supplies and other | 55,376 | 61,355 | ||||||
Total inventory | $ | 1,345,155 | $ | 1,114,619 |
(1) | Other raw materials and unfinished products include feedstocks and blendstocks, other than crude. |
(2) | Finished products include gasolines, jet fuels, diesels, lubricants, asphalts, LPG’s and residual fuels. |
(3) | Process chemicals include additives and other chemicals. |
NOTE 10: | Goodwill |
Refining Segment | HEP | Total | |||||||||
(In thousands) | |||||||||||
Balance at January 1, 2012 | $ | 2,047,519 | $ | 288,991 | $ | 2,336,510 | |||||
Adjustment to goodwill related to Frontier merger | (1,980 | ) | — | (1,980 | ) | ||||||
Balance at March 31, 2012 | $ | 2,045,539 | $ | 288,991 | $ | 2,334,530 |
NOTE 11: | Environmental |
NOTE 12: | Debt |
• | 9.875% Senior Notes ($291.8 million principal amount maturing June 2017) |
• | 6.875% Senior Notes ($150 million principal amount maturing November 2018) |
• | 8.5% Senior Notes ($200 million principal amount maturing September 2016) |
• | 6.25% HEP Senior Notes ($27.3 million principal amount outstanding at March 31, 2012 and redeemed in April 2012) |
• | 6.5% HEP Senior Notes ($300 million principal amount maturing March 2020) |
• | 8.25% HEP Senior Notes ($150 million principal amount maturing March 2018) |
March 31, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
9.875% Senior Notes | ||||||||
Principal | $ | 291,812 | $ | 291,812 | ||||
Unamortized discount | (8,628 | ) | (8,930 | ) | ||||
283,184 | 282,882 | |||||||
6.875% Senior Notes | ||||||||
Principal | 150,000 | 150,000 | ||||||
Unamortized premium | 6,192 | 6,490 | ||||||
156,192 | 156,490 | |||||||
8.5% Senior Notes | ||||||||
Principal | 199,985 | 199,985 | ||||||
Unamortized premium | 11,136 | 11,905 | ||||||
211,121 | 211,890 | |||||||
Financing obligation | 37,308 | 37,620 | ||||||
Total HollyFrontier long-term debt | 687,805 | 688,882 | ||||||
March 31, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
HEP Credit Agreement | 155,000 | 200,000 | ||||||
HEP 6.5% Senior Notes | ||||||||
Principal | 300,000 | — | ||||||
Unamortized discount | (5,214 | ) | — | |||||
294,786 | — | |||||||
HEP 6.25% Senior Notes | ||||||||
Principal | 27,254 | 185,000 | ||||||
Unamortized discount | (1,126 | ) | (8,331 | ) | ||||
Unamortized premium – designated fair value hedge | 153 | 1,098 | ||||||
26,281 | 177,767 | |||||||
HEP 8.25% Senior Notes | ||||||||
Principal | 150,000 | 150,000 | ||||||
Unamortized discount | (1,830 | ) | (1,907 | ) | ||||
148,170 | 148,093 | |||||||
Total HEP debt | 624,237 | 525,860 | ||||||
Less current portion of HEP long-term debt | (26,281 | ) | — | |||||
Total HEP long-term debt | 597,956 | 525,860 | ||||||
Total long-term debt | $ | 1,285,761 | $ | 1,214,742 |
• | our inventory positions; |
• | natural gas purchases; |
• | costs of crude oil and related grade differentials; |
• | prices of refined products; and |
• | our refining margins. |
Derivative Instruments | Balance Sheet Location | Fair Value | Location of Offsetting Balance | Offsetting Amount | ||||||||
(In thousands) | ||||||||||||
March 31, 2012 | ||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 174,227 | Accumulated other comprehensive income (net unrealized gain) | $ | 16,801 | ||||||
Accrued liabilities | 158,309 | Revenues (decrease) | 883 | |||||||||
Net asset balance | $ | 15,918 | $ | 15,918 | ||||||||
Variable-to-fixed interest rate swap contract | Other long-term liabilities | $ | 873 | Accumulated other comprehensive income (unrealized loss) | $ | 873 | ||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 8,480 | Cost of products sold (net increase) | $ | 10,055 | ||||||
Accrued liabilities | 19,984 | Operating expenses (increase) | 1,449 | |||||||||
Net liability balance | $ | 11,504 | $ | 11,504 | ||||||||
December 31, 2011 | ||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 173,784 | Accumulated other comprehensive income (unrealized gain) | $ | 173,338 | ||||||
Cost of products sold (decrease) | 446 | |||||||||||
$ | 173,784 | $ | 173,784 | |||||||||
Variable-to-fixed interest rate swap contract | Other long-term liabilities | $ | 520 | Accumulated other comprehensive income (unrealized loss) | $ | 520 | ||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 1,870 | Cost of products sold (decrease) | $ | 1,870 | ||||||
Accrued liabilities | $ | 1,252 | Cost of products sold (increase) | $ | 1,252 |
NOTE 14: | Equity |
HollyFrontier Stockholders’ Equity | Noncontrolling Interest | Total Equity | ||||||||||
(In thousands) | ||||||||||||
Balance at December 31, 2011 | $ | 5,204,010 | $ | 631,890 | $ | 5,835,900 | ||||||
Net income | 241,696 | 5,324 | 247,020 | |||||||||
Other comprehensive income (loss) | (95,294 | ) | 537 | (94,757 | ) | |||||||
Dividends | (125,504 | ) | — | (125,504 | ) | |||||||
Distributions to noncontrolling interest holders | — | (14,391 | ) | (14,391 | ) | |||||||
Contribution from joint venture partner | — | 3,000 | 3,000 | |||||||||
Equity-based compensation, net of tax benefit | 12,334 | 943 | 13,277 | |||||||||
Purchase of HEP units for restricted grants | — | (2,037 | ) | (2,037 | ) | |||||||
Purchase of treasury stock (1) | (72,929 | ) | — | (72,929 | ) | |||||||
Balance at March 31, 2012 | $ | 5,164,313 | $ | 625,266 | $ | 5,789,579 |
(1) | Includes 301,065 shares withheld under the terms of stock-based compensation agreements to provide funds for the payment of payroll and income taxes due at the vesting of share-based awards. |
NOTE 15: | Other Comprehensive Income (Loss) |
Before-Tax | Tax Expense (Benefit) | After-Tax | ||||||||||
(In thousands) | ||||||||||||
Three Months Ended March 31, 2012 | ||||||||||||
Unrealized gain on available-for-sale securities | $ | 188 | $ | 74 | $ | 114 | ||||||
Unrealized loss on hedging activities | (155,615 | ) | (60,744 | ) | (94,871 | ) | ||||||
Other comprehensive loss | (155,427 | ) | (60,670 | ) | (94,757 | ) | ||||||
Less other comprehensive income attributable to noncontrolling interest | 537 | — | 537 | |||||||||
Other comprehensive loss attributable to HollyFrontier stockholders | $ | (155,964 | ) | $ | (60,670 | ) | $ | (95,294 | ) | |||
Three Months Ended March 31, 2011 | ||||||||||||
Unrealized gain on available-for-sale securities | $ | 142 | $ | 55 | $ | 87 | ||||||
Unrealized gain on hedging activities | 1,321 | 187 | 1,134 | |||||||||
Other comprehensive income | 1,463 | 242 | 1,221 | |||||||||
Less other comprehensive income attributable to noncontrolling interest | 841 | — | 841 | |||||||||
Other comprehensive income attributable to HollyFrontier stockholders | $ | 622 | $ | 242 | $ | 380 |
March 31, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
Pension obligation adjustment | $ | (22,715 | ) | $ | (22,715 | ) | ||
Retiree medical obligation adjustment | (4,042 | ) | (4,042 | ) | ||||
Unrealized gain on available-for-sale securities | 248 | 134 | ||||||
Unrealized gain on hedging activities, net of noncontrolling interest | 9,088 | 104,496 | ||||||
Accumulated other comprehensive income (loss) | $ | (17,421 | ) | $ | 77,873 |
NOTE 16: | Retirement Plan |
Three Months Ended March 31, | |||||||||
2012 | 2011 | ||||||||
(In thousands) | |||||||||
Service cost – benefit earned during the period | $ | 170 | $ | 1,267 | |||||
Interest cost on projected benefit obligations | 991 | 1,281 | |||||||
Expected return on plan assets | (950 | ) | (1,339 | ) | |||||
Amortization of prior service cost | 17 | 98 | |||||||
Amortization of net loss | 483 | 533 | |||||||
Estimated effect of curtailment | 225 | — | |||||||
Amortization of transition obligation | 3,380 | — | |||||||
Net periodic pension expense | $ | 4,316 | $ | 1,840 |
Three Months Ended March 31, 2012 | ||||
(In thousands) | ||||
Service cost - benefit earned during the period | $ | 475 | ||
Interest cost on project benefit obligations | 875 | |||
Amortization of prior service credit | (550 | ) | ||
Amortization of net loss | 75 | |||
Net periodic benefit expense | $ | 875 | ||
NOTE 17: | Contingencies |
NOTE 18: | Segment Information |
Refining (1) | HEP | Corporate and Other | Consolidations and Eliminations | Consolidated Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months Ended March 31, 2012 | ||||||||||||||||||||
Sales and other revenues | $ | 4,919,731 | $ | 63,515 | $ | 4,224 | $ | (55,732 | ) | $ | 4,931,738 | |||||||||
Depreciation and amortization | $ | 41,532 | $ | 9,859 | $ | 4,918 | $ | (207 | ) | $ | 56,102 | |||||||||
Income (loss) from operations | $ | 415,126 | $ | 34,629 | $ | (29,749 | ) | $ | (442 | ) | $ | 419,564 | ||||||||
Capital expenditures | $ | 45,534 | $ | 6,327 | $ | 9,526 | $ | — | $ | 61,387 | ||||||||||
Three Months Ended March 31, 2011 | ||||||||||||||||||||
Sales and other revenues | $ | 2,315,092 | $ | 45,005 | $ | 648 | $ | (34,160 | ) | $ | 2,326,585 | |||||||||
Depreciation and amortization | $ | 22,983 | $ | 7,235 | $ | 1,297 | $ | (207 | ) | $ | 31,308 | |||||||||
Income (loss) from operations | $ | 152,104 | $ | 23,611 | $ | (16,098 | ) | $ | (518 | ) | $ | 159,099 | ||||||||
Capital expenditures | $ | 22,965 | $ | 11,475 | $ | 39,598 | $ | — | $ | 74,038 |
March 31, 2012 | ||||||||||||||||||||
Cash, cash equivalents and investments in marketable securities | $ | — | $ | 12,402 | $ | 1,915,134 | $ | — | $ | 1,927,536 | ||||||||||
Total assets | $ | 6,350,079 | $ | 998,400 | $ | 2,481,873 | $ | (44,602 | ) | $ | 9,785,750 | |||||||||
Long-term debt, including current portion | $ | — | $ | 624,237 | $ | 704,126 | $ | (16,321 | ) | $ | 1,312,042 | |||||||||
December 31, 2011 | ||||||||||||||||||||
Cash, cash equivalents and investments in marketable securities | $ | — | $ | 3,269 | $ | 1,837,341 | $ | — | $ | 1,840,610 | ||||||||||
Total assets | $ | 6,280,426 | $ | 992,408 | $ | 2,421,140 | $ | (117,731 | ) | $ | 9,576,243 | |||||||||
Long-term debt | $ | — | $ | 598,761 | $ | 705,331 | $ | (89,350 | ) | $ | 1,214,742 |
NOTE 19: | Supplemental Guarantor/Non-Guarantor Financial Information |
Condensed Consolidating Balance Sheet | ||||||||||||||||||||||||||||||||
March 31, 2012 | Parent | Guarantor Restricted Subsidiaries | Non- Guarantor Restricted Subsidiaries | Eliminations | HollyFrontier Corp. Before Consolidation of HEP | Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) | Eliminations | Consolidated | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,637,144 | $ | 9,257 | $ | 747 | $ | — | $ | 1,647,148 | $ | 12,402 | $ | — | $ | 1,659,550 | ||||||||||||||||
Marketable securities | 240,962 | 967 | — | — | 241,929 | — | — | 241,929 | ||||||||||||||||||||||||
Accounts receivable, net | 3,200 | 729,751 | 1,644 | — | 734,595 | 34,784 | (36,232 | ) | 733,147 | |||||||||||||||||||||||
Intercompany accounts receivable (payable) | 2,792,262 | (3,082,558 | ) | 290,296 | — | — | — | — | — | |||||||||||||||||||||||
Inventories | — | 1,343,672 | — | — | 1,343,672 | 1,483 | — | 1,345,155 | ||||||||||||||||||||||||
Income taxes receivable | 93,644 | 4 | — | — | 93,648 | — | — | 93,648 | ||||||||||||||||||||||||
Prepayments and other | 14,665 | 41,471 | 1,068 | — | 57,204 | 920 | (3,952 | ) | 54,172 | |||||||||||||||||||||||
Total current assets | 4,781,877 | (957,436 | ) | 293,755 | — | 4,118,196 | 49,589 | (40,184 | ) | 4,127,601 | ||||||||||||||||||||||
Properties, plants and equip, net | 26,506 | 2,060,174 | 403,376 | — | 2,490,056 | 587,231 | (6,074 | ) | 3,071,213 | |||||||||||||||||||||||
Marketable securities (long-term) | 26,057 | — | — | — | 26,057 | — | — | 26,057 | ||||||||||||||||||||||||
Investment in subsidiaries | 1,490,174 | 615,641 | (242,029 | ) | (1,863,786 | ) | — | — | — | — | ||||||||||||||||||||||
Intangibles and other assets | 9,775 | 2,187,868 | 25,000 | (25,000 | ) | 2,197,643 | 364,587 | (1,351 | ) | 2,560,879 | ||||||||||||||||||||||
Total assets | $ | 6,334,389 | $ | 3,906,247 | $ | 480,102 | $ | (1,888,786 | ) | $ | 8,831,952 | $ | 1,001,407 | $ | (47,609 | ) | $ | 9,785,750 | ||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 30,315 | $ | 1,631,613 | $ | 2,818 | $ | — | $ | 1,664,746 | $ | 12,593 | $ | (36,232 | ) | $ | 1,641,107 | |||||||||||||||
Income taxes payable | 3,659 | 148,553 | — | — | 152,212 | — | — | 152,212 | ||||||||||||||||||||||||
Accrued liabilities | 50,889 | 69,279 | 1,222 | — | 121,390 | 8,942 | (3,952 | ) | 126,380 | |||||||||||||||||||||||
Deferred income tax liabilities | 188,791 | (16,390 | ) | — | — | 172,401 | — | — | 172,401 | |||||||||||||||||||||||
Current portion of long-term debt | — | — | — | — | — | 26,281 | — | 26,281 | ||||||||||||||||||||||||
Total current liabilities | 273,654 | 1,833,055 | 4,040 | — | 2,110,749 | 47,816 | (40,184 | ) | 2,118,381 | |||||||||||||||||||||||
Long-term debt | 650,498 | 53,628 | — | — | 704,126 | 597,956 | (16,321 | ) | 1,285,761 | |||||||||||||||||||||||
Deferred income tax liabilities | 159,952 | 235,085 | 1,005 | — | 396,042 | — | 4,951 | 400,993 | ||||||||||||||||||||||||
Other long-term liabilities | 142,513 | 71,383 | — | (25,000 | ) | 188,896 | 4,635 | (2,495 | ) | 191,036 | ||||||||||||||||||||||
Investment in HEP | — | 222,922 | — | — | 222,922 | — | (222,922 | ) | — | |||||||||||||||||||||||
Equity – HollyFrontier | 5,107,772 | 1,490,174 | 475,057 | (1,965,231 | ) | 5,107,772 | 351,000 | (294,459 | ) | 5,164,313 | ||||||||||||||||||||||
Equity – noncontrolling interest | — | — | — | 101,445 | 101,445 | — | 523,821 | 625,266 | ||||||||||||||||||||||||
Total liabilities and equity | $ | 6,334,389 | $ | 3,906,247 | $ | 480,102 | $ | (1,888,786 | ) | $ | 8,831,952 | $ | 1,001,407 | $ | (47,609 | ) | $ | 9,785,750 |
Condensed Consolidating Balance Sheet | ||||||||||||||||||||||||||||||||
December 31, 2011 | Parent | Guarantor Restricted Subsidiaries | Non- Guarantor Restricted Subsidiaries | Eliminations | HollyFrontier Corp. Before Consolidation of HEP | Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) | Eliminations | Consolidated | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,575,891 | $ | (3,358 | ) | $ | 3,102 | $ | — | $ | 1,575,635 | $ | 3,269 | $ | — | $ | 1,578,904 | |||||||||||||||
Marketable securities | 210,886 | 753 | — | — | 211,639 | — | — | 211,639 | ||||||||||||||||||||||||
Accounts receivable, net | 8,317 | 699,056 | 3,074 | — | 710,447 | 34,071 | (35,661 | ) | 708,857 | |||||||||||||||||||||||
Intercompany accounts receivable (payable) | 3,075,563 | (3,374,597 | ) | 299,034 | — | — | — | — | — | |||||||||||||||||||||||
Inventories | — | 1,113,136 | — | — | 1,113,136 | 1,483 | — | 1,114,619 | ||||||||||||||||||||||||
Income taxes receivable | 87,273 | 4 | — | — | 87,277 | — | — | 87,277 | ||||||||||||||||||||||||
Prepayments and other | 19,379 | 202,428 | 1,089 | — | 222,896 | 1,161 | (4,607 | ) | 219,450 | |||||||||||||||||||||||
Total current assets | 4,977,309 | (1,362,578 | ) | 306,299 | — | 3,921,030 | 39,984 | (40,268 | ) | 3,920,746 | ||||||||||||||||||||||
Properties, plants and equip, net | 26,702 | 2,043,257 | 398,984 | — | 2,468,943 | 590,243 | (6,281 | ) | 3,052,905 | |||||||||||||||||||||||
Marketable securities (long-term) | 50,067 | — | — | — | 50,067 | — | — | 50,067 | ||||||||||||||||||||||||
Investment in subsidiaries | 1,160,801 | 593,118 | (240,060 | ) | (1,513,859 | ) | — | — | — | — | ||||||||||||||||||||||
Intangibles and other assets | 19,329 | 2,242,197 | — | — | 2,261,526 | 364,893 | (73,894 | ) | 2,552,525 | |||||||||||||||||||||||
Total assets | $ | 6,234,208 | $ | 3,515,994 | $ | 465,223 | $ | (1,513,859 | ) | $ | 8,701,566 | $ | 995,120 | $ | (120,443 | ) | $ | 9,576,243 | ||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 23,497 | $ | 1,494,453 | $ | 10,999 | $ | — | $ | 1,528,949 | $ | 11,406 | $ | (35,661 | ) | $ | 1,504,694 | |||||||||||||||
Income taxes payable | (109,320 | ) | 149,686 | — | — | 40,366 | — | — | 40,366 | |||||||||||||||||||||||
Accrued liabilities | 53,390 | 103,636 | 1,236 | — | 158,262 | 16,285 | (4,607 | ) | 169,940 | |||||||||||||||||||||||
Deferred income tax liabilities | 192,073 | (16,390 | ) | — | — | 175,683 | — | — | 175,683 | |||||||||||||||||||||||
Total current liabilities | 159,640 | 1,731,385 | 12,235 | — | 1,903,260 | 27,691 | (40,268 | ) | 1,890,683 | |||||||||||||||||||||||
Long-term debt | 651,261 | 54,070 | — | — | 705,331 | 598,761 | (89,350 | ) | 1,214,742 | |||||||||||||||||||||||
Deferred income tax liabilities | 162,021 | 295,893 | 856 | — | 458,770 | — | 4,951 | 463,721 | ||||||||||||||||||||||||
Other long-term liabilities | 116,443 | 52,892 | — | — | 169,335 | 4,000 | (2,138 | ) | 171,197 | |||||||||||||||||||||||
Investment in HEP | — | 220,953 | — | — | 220,953 | — | (220,953 | ) | — | |||||||||||||||||||||||
Equity – HollyFrontier Corporation | 5,144,843 | 1,160,801 | 452,132 | (1,612,933 | ) | 5,144,843 | 364,668 | (305,501 | ) | 5,204,010 | ||||||||||||||||||||||
Equity – noncontrolling interest | — | — | — | 99,074 | 99,074 | — | 532,816 | 631,890 | ||||||||||||||||||||||||
Total liabilities and equity | $ | 6,234,208 | $ | 3,515,994 | $ | 465,223 | $ | (1,513,859 | ) | $ | 8,701,566 | $ | 995,120 | $ | (120,443 | ) | $ | 9,576,243 |
Condensed Consolidating Statement of Income | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2012 | Parent | Guarantor Restricted Subsidiaries | Non- Guarantor Restricted Subsidiaries | Eliminations | HollyFrontier Corp. Before Consolidation of HEP | Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) | Eliminations | Consolidated | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Sales and other revenues | $ | 99 | $ | 4,916,794 | $ | 4,118 | $ | — | $ | 4,921,011 | $ | 63,515 | $ | (52,788 | ) | $ | 4,931,738 | |||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of products sold | — | 4,238,848 | — | — | 4,238,848 | — | (51,931 | ) | 4,186,917 | |||||||||||||||||||||||
Operating expenses | — | 221,716 | 3,056 | — | 224,772 | 16,988 | (133 | ) | 241,627 | |||||||||||||||||||||||
General and administrative | 24,973 | 516 | — | — | 25,489 | 2,039 | — | 27,528 | ||||||||||||||||||||||||
Depreciation and amortization | 1,103 | 41,811 | 3,536 | — | 46,450 | 9,859 | (207 | ) | 56,102 | |||||||||||||||||||||||
Total operating costs and expenses | 26,076 | 4,502,891 | 6,592 | — | 4,535,559 | 28,886 | (52,271 | ) | 4,512,174 | |||||||||||||||||||||||
Income (loss) from operations | (25,977 | ) | 413,903 | (2,474 | ) | — | 385,452 | 34,629 | (517 | ) | 419,564 | |||||||||||||||||||||
Other income (expense): | — | |||||||||||||||||||||||||||||||
Earnings of equity method investments | 424,651 | 11,204 | 12,964 | (435,969 | ) | 12,850 | 831 | (12,964 | ) | 717 | ||||||||||||||||||||||
Interest income (expense) | (14,023 | ) | (456 | ) | 199 | — | (14,280 | ) | (19,170 | ) | 595 | (32,855 | ) | |||||||||||||||||||
410,628 | 10,748 | 13,163 | (435,969 | ) | (1,430 | ) | (18,339 | ) | (12,369 | ) | (32,138 | ) | ||||||||||||||||||||
Income before income taxes | 384,651 | 424,651 | 10,689 | (435,969 | ) | 384,022 | 16,290 | (12,886 | ) | 387,426 | ||||||||||||||||||||||
Income tax provision | 140,331 | — | — | — | 140,331 | 75 | — | 140,406 | ||||||||||||||||||||||||
Net income | 244,320 | 424,651 | 10,689 | (435,969 | ) | 243,691 | 16,215 | (12,886 | ) | 247,020 | ||||||||||||||||||||||
Less net income attributable to noncontrolling interest | — | — | — | (629 | ) | (629 | ) | — | 5,953 | 5,324 | ||||||||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 244,320 | $ | 424,651 | $ | 10,689 | $ | (435,340 | ) | $ | 244,320 | $ | 16,215 | $ | (18,839 | ) | $ | 241,696 |
Condensed Consolidating Statement of Income | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2011 | Parent | Guarantor Restricted Subsidiaries | Non- Guarantor Restricted Subsidiaries | Eliminations | HollyFrontier Corp. Before Consolidation of HEP | Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) | Eliminations | Consolidated | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Sales and other revenues | $ | 648 | $ | 2,315,092 | $ | — | $ | — | $ | 2,315,740 | $ | 45,005 | $ | (34,160 | ) | $ | 2,326,585 | |||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of products sold | — | 2,017,926 | — | — | 2,017,926 | — | (33,309 | ) | 1,984,617 | |||||||||||||||||||||||
Operating expenses | — | 121,685 | 388 | — | 122,073 | 12,796 | (126 | ) | 134,743 | |||||||||||||||||||||||
General and administrative | 15,353 | 102 | — | — | 15,455 | 1,363 | — | 16,818 | ||||||||||||||||||||||||
Depreciation and amortization | 940 | 23,161 | 179 | — | 24,280 | 7,235 | (207 | ) | 31,308 | |||||||||||||||||||||||
Total operating costs and expenses | 16,293 | 2,162,874 | 567 | — | 2,179,734 | 21,394 | (33,642 | ) | 2,167,486 | |||||||||||||||||||||||
Income (loss) from operations | (15,645 | ) | 152,218 | (567 | ) | — | 136,006 | 23,611 | (518 | ) | 159,099 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Earnings of equity method investments | 158,957 | 7,563 | 8,020 | (166,520 | ) | 8,020 | 740 | (8,020 | ) | 740 | ||||||||||||||||||||||
Interest income (expense) | (6,808 | ) | (824 | ) | 13 | — | (7,619 | ) | (9,112 | ) | 612 | (16,119 | ) | |||||||||||||||||||
Merger transaction costs | (3,698 | ) | — | — | — | (3,698 | ) | — | — | (3,698 | ) | |||||||||||||||||||||
148,451 | 6,739 | 8,033 | (166,520 | ) | (3,297 | ) | (8,372 | ) | (7,408 | ) | (19,077 | ) | ||||||||||||||||||||
Income before income taxes | 132,806 | 158,957 | 7,466 | (166,520 | ) | 132,709 | 15,239 | (7,926 | ) | 140,022 | ||||||||||||||||||||||
Income tax provision | 48,783 | — | — | — | 48,783 | 228 | — | 49,011 | ||||||||||||||||||||||||
Net income | 84,023 | 158,957 | 7,466 | (166,520 | ) | 83,926 | 15,011 | (7,926 | ) | 91,011 | ||||||||||||||||||||||
Less net income attributable to noncontrolling interest | — | — | — | (97 | ) | (97 | ) | — | 6,414 | 6,317 | ||||||||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 84,023 | $ | 158,957 | $ | 7,466 | $ | (166,423 | ) | $ | 84,023 | $ | 15,011 | $ | (14,340 | ) | $ | 84,694 |
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2012 | Parent | Guarantor Restricted Subsidiaries | Non- Guarantor Restricted Subsidiaries | HollyFrontier Corp. Before Consolidation of HEP | Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) | Eliminations | Consolidated | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Cash flows from operating activities | $ | 253,123 | $ | (3,657 | ) | $ | (8,928 | ) | $ | 240,538 | $ | 28,223 | $ | (14,856 | ) | $ | 253,905 | |||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||
Additions to properties, plants and equip | (1,019 | ) | (46,114 | ) | (7,927 | ) | (55,060 | ) | — | — | (55,060 | ) | ||||||||||||||||
Additions to properties, plants and equip – HEP | — | — | — | — | (6,327 | ) | — | (6,327 | ) | |||||||||||||||||||
Investment in Sabine Biofuels | — | (1,200 | ) | — | (1,200 | ) | — | — | (1,200 | ) | ||||||||||||||||||
Purchases of marketable securities | (106,573 | ) | — | — | (106,573 | ) | — | — | (106,573 | ) | ||||||||||||||||||
Sales and maturities of marketable securities | 100,480 | — | — | 100,480 | — | — | 100,480 | |||||||||||||||||||||
(7,112 | ) | (47,314 | ) | (7,927 | ) | (62,353 | ) | (6,327 | ) | — | (68,680 | ) | ||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||
Net repayments under credit agreement – HEP | — | — | — | — | (45,000 | ) | — | (45,000 | ) | |||||||||||||||||||
Repayment of promissory notes | — | 72,900 | — | 72,900 | (72,900 | ) | — | — | ||||||||||||||||||||
Net proceeds from issuance of senior notes - HEP | — | — | — | — | 294,750 | — | 294,750 | |||||||||||||||||||||
Principal tender on senior notes - HEP | — | — | — | — | (157,761 | ) | — | (157,761 | ) | |||||||||||||||||||
Purchase of treasury stock | (62,532 | ) | — | — | (62,532 | ) | — | — | (62,532 | ) | ||||||||||||||||||
Contribution from joint venture partner | — | (9,000 | ) | 14,500 | 5,500 | — | — | 5,500 | ||||||||||||||||||||
Dividends | (126,018 | ) | (1 | ) | — | (126,019 | ) | — | — | (126,019 | ) | |||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | (29,716 | ) | 15,325 | (14,391 | ) | |||||||||||||||||||
Excess tax benefit from equity-based compensation | 3,792 | — | — | 3,792 | — | — | 3,792 | |||||||||||||||||||||
Purchase of units for restricted grants - HEP | — | — | — | — | (1,283 | ) | — | (1,283 | ) | |||||||||||||||||||
Deferred financing costs | — | — | — | — | (1,123 | ) | — | (1,123 | ) | |||||||||||||||||||
Other | — | (313 | ) | — | (313 | ) | 270 | (469 | ) | (512 | ) | |||||||||||||||||
(184,758 | ) | 63,586 | 14,500 | (106,672 | ) | (12,763 | ) | 14,856 | (104,579 | ) | ||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||
Increase (decrease) for the period | 61,253 | 12,615 | (2,355 | ) | 71,513 | 9,133 | — | 80,646 | ||||||||||||||||||||
Beginning of period | 1,575,891 | (3,358 | ) | 3,102 | 1,575,635 | 3,269 | — | 1,578,904 | ||||||||||||||||||||
End of period | $ | 1,637,144 | $ | 9,257 | $ | 747 | $ | 1,647,148 | $ | 12,402 | $ | — | $ | 1,659,550 |
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2011 | Parent | Guarantor Restricted Subsidiaries | Non- Guarantor Restricted Subsidiaries | HollyFrontier Corp. Before Consolidation of HEP | Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) | Eliminations | Consolidated | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Cash flows from operating activities | $ | 51,090 | $ | 57,174 | $ | 16,776 | $ | 125,040 | $ | 15,222 | $ | (9,720 | ) | $ | 130,542 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||
Additions to properties, plants and equip | (1,043 | ) | (22,995 | ) | (38,525 | ) | (62,563 | ) | — | — | (62,563 | ) | ||||||||||||||||
Additions to properties, plants and equip – HEP | — | — | — | — | (11,475 | ) | — | (11,475 | ) | |||||||||||||||||||
Purchases of marketable securities | (98,937 | ) | — | — | (98,937 | ) | — | — | (98,937 | ) | ||||||||||||||||||
Sales and maturities of marketable securities | 31,925 | — | — | 31,925 | — | — | 31,925 | |||||||||||||||||||||
(68,055 | ) | (22,995 | ) | (38,525 | ) | (129,575 | ) | (11,475 | ) | — | (141,050 | ) | ||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||
Net borrowings under credit agreement – HEP | — | — | — | — | 23,000 | — | 23,000 | |||||||||||||||||||||
Purchase of treasury stock | (2,051 | ) | — | — | (2,051 | ) | — | — | (2,051 | ) | ||||||||||||||||||
Contribution from joint venture partner | — | (25,500 | ) | 34,000 | 8,500 | — | — | 8,500 | ||||||||||||||||||||
Dividends | (7,984 | ) | — | — | (7,984 | ) | — | — | (7,984 | ) | ||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | (22,205 | ) | 9,720 | (12,485 | ) | |||||||||||||||||||
Excess tax benefit from equity-based compensation | 261 | — | — | 261 | — | — | 261 | |||||||||||||||||||||
Purchase of units for restricted grants - HEP | — | — | — | — | (399 | ) | — | (399 | ) | |||||||||||||||||||
Deferred financing costs | — | — | — | — | (3,044 | ) | — | (3,044 | ) | |||||||||||||||||||
Other | — | (277 | ) | — | (277 | ) | — | — | (277 | ) | ||||||||||||||||||
(9,774 | ) | (25,777 | ) | 34,000 | (1,551 | ) | (2,648 | ) | 9,720 | 5,521 | ||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||
Increase (decrease) for the period: | (26,739 | ) | 8,402 | 12,251 | (6,086 | ) | 1,099 | — | (4,987 | ) | ||||||||||||||||||
Beginning of period | 230,082 | (9,035 | ) | 7,651 | 228,698 | 403 | — | 229,101 | ||||||||||||||||||||
End of period | $ | 203,343 | $ | (633 | ) | $ | 19,902 | $ | 222,612 | $ | 1,502 | $ | — | $ | 224,114 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended March 31, | Change from 2011 | ||||||||||||||
2012 | 2011 (1) | Change | Percent | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Sales and other revenues | $ | 4,931,738 | $ | 2,326,585 | $ | 2,605,153 | 112.0 | % | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of products sold (exclusive of depreciation and amortization) | 4,186,917 | 1,984,617 | 2,202,300 | 111.0 | |||||||||||
Operating expenses (exclusive of depreciation and amortization) | 241,627 | 134,743 | 106,884 | 79.3 | |||||||||||
General and administrative expenses (exclusive of depreciation and amortization) | 27,528 | 16,818 | 10,710 | 63.7 | |||||||||||
Depreciation and amortization | 56,102 | 31,308 | 24,794 | 79.2 | |||||||||||
Total operating costs and expenses | 4,512,174 | 2,167,486 | 2,344,688 | 108.2 | |||||||||||
Income from operations | 419,564 | 159,099 | 260,465 | 163.7 | |||||||||||
Other income (expense): | |||||||||||||||
Equity in earnings of SLC Pipeline | 717 | 740 | (23 | ) | (3.1 | ) | |||||||||
Interest income | 460 | 85 | 375 | 441.2 | |||||||||||
Interest expense | (33,315 | ) | (16,204 | ) | (17,111 | ) | 105.6 | ||||||||
Merger transaction costs | — | (3,698 | ) | 3,698 | (100.0 | ) | |||||||||
(32,138 | ) | (19,077 | ) | (13,061 | ) | 68.5 | |||||||||
Income before income taxes | 387,426 | 140,022 | 247,404 | 176.7 | |||||||||||
Income tax provision | 140,406 | 49,011 | 91,395 | 186.5 | |||||||||||
Net income | 247,020 | 91,011 | 156,009 | 171.4 | |||||||||||
Less net income attributable to noncontrolling interest | 5,324 | 6,317 | (993 | ) | (15.7 | ) | |||||||||
Net income attributable to HollyFrontier stockholders | $ | 241,696 | $ | 84,694 | $ | 157,002 | 185.4 | % | |||||||
Earnings per share attributable to HollyFrontier stockholders: | |||||||||||||||
Basic | $ | 1.16 | $ | 0.79 | $ | 0.37 | 46.8 | % | |||||||
Diluted | $ | 1.16 | $ | 0.79 | $ | 0.37 | 46.8 | % | |||||||
Cash dividends declared per common share | $ | 0.60 | $ | 0.075 | $ | 0.525 | 700.0 | % | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 208,531 | 106,614 | 101,917 | 95.6 | % | ||||||||||
Diluted | 209,138 | 107,266 | 101,872 | 95.0 | % |
Three Months Ended March 31, 2011 | ||||
(In thousands) | ||||
Sales and other revenues | $ | 4,235,239 | ||
Net income attributable to HollyFrontier stockholders | $ | 234,066 |
March 31, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
Cash, cash equivalents and investments in marketable securities | $ | 1,927,536 | $ | 1,840,610 | ||||
Working capital | $ | 2,009,220 | $ | 2,030,063 | ||||
Total assets | $ | 9,785,750 | $ | 9,576,243 | ||||
Long-term debt, including current portion | $ | 1,312,042 | $ | 1,214,742 | ||||
Total equity | $ | 5,789,579 | $ | 5,835,900 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(In thousands) | ||||||||
Net cash provided by operating activities | $ | 253,905 | $ | 130,542 | ||||
Net cash used for investing activities | $ | (68,680 | ) | $ | (141,050 | ) | ||
Net cash provided by (used for) financing activities | $ | (104,579 | ) | $ | 5,521 | |||
Capital expenditures | $ | 61,387 | $ | 74,038 | ||||
EBITDA (1) | $ | 471,059 | $ | 181,132 |
(1) | Earnings before interest, taxes, depreciation and amortization, which we refer to as "EBITDA", is calculated as net income plus (i) interest expense, net of interest income, (ii) income tax provision, and (iii) depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to net income or operating income as an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants. EBITDA presented above is reconciled to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q. |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(In thousands) | ||||||||
Sales and other revenues | ||||||||
Refining (1) | $ | 4,919,731 | $ | 2,315,092 | ||||
HEP (2) | 63,515 | 45,005 | ||||||
Corporate and Other | 4,224 | 648 | ||||||
Eliminations | (55,732 | ) | (34,160 | ) | ||||
Consolidated | $ | 4,931,738 | $ | 2,326,585 | ||||
Operating income (loss) | ||||||||
Refining (1) | $ | 415,126 | $ | 152,104 | ||||
HEP (2) | 34,629 | 23,611 | ||||||
Corporate and Other | (29,749 | ) | (16,098 | ) | ||||
Eliminations | (442 | ) | (518 | ) | ||||
Consolidated | $ | 419,564 | $ | 159,099 |
(1) | The Refining segment includes the operations of our El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and NK Asphalt and involves the purchase and refining of crude oil and wholesale and branded marketing of refined products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. The petroleum products are primarily marketed in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and northern Mexico. Additionally, specialty lubricant products produced at our Tulsa West facility are marketed throughout North America and are distributed in Central and South America. NK Asphalt manufactures and markets asphalt and asphalt products in Arizona, New Mexico, Oklahoma, Kansas, Missouri, Texas and northern Mexico. |
(2) | The HEP segment involves all of the operations of HEP, which owns and operates logistic assets consisting of petroleum product and crude oil pipelines and terminal, tankage and loading rack facilities in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. Revenues are generated by charging tariffs for transporting petroleum products and crude oil through its pipelines and by charging fees for terminalling petroleum products and other hydrocarbons, and storing and providing other services at its storage tanks and terminals. Additionally, HEP owns a 25% interest in the SLC Pipeline that serves refineries in the Salt Lake City, Utah area. Revenues from the HEP segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations as well as revenues relating to pipeline transportation services provided for our refining operations. |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||
Crude charge (BPD) (1) | 256,270 | 105,600 | ||||||
Refinery throughput (BPD) (2) | 272,790 | 106,690 | ||||||
Refinery production (BPD) (3) | 268,260 | 106,160 | ||||||
Sales of produced refined products (BPD) | 259,060 | 100,010 | ||||||
Sales of refined products (BPD) (4) | 264,390 | 100,400 | ||||||
Refinery utilization (5) | 98.6 | % | 84.5 | % | ||||
Average per produced barrel (6) | ||||||||
Net sales | $ | 119.99 | $ | 115.29 | ||||
Cost of products (7) | 102.20 | 100.50 | ||||||
Refinery gross margin | 17.79 | 14.79 | ||||||
Refinery operating expenses (8) | 4.81 | 5.98 | ||||||
Net operating margin | $ | 12.98 | $ | 8.81 | ||||
Refinery operating expenses per throughput barrel (9) | $ | 4.57 | $ | 5.61 | ||||
Feedstocks: | ||||||||
Sweet crude oil | 70 | % | 97 | % | ||||
Sour crude oil | 9 | % | — | % | ||||
Heavy sour crude oil | 15 | % | 2 | % | ||||
Other feedstocks and blends | 6 | % | 1 | % | ||||
Total | 100 | % | 100 | % | ||||
Sales of produced refined products: | ||||||||
Gasolines | 47 | % | 37 | % | ||||
Diesel fuels | 32 | % | 31 | % | ||||
Jet fuels | 9 | % | 8 | % | ||||
Asphalt | 1 | % | 4 | % | ||||
Lubricants | 5 | % | 11 | % | ||||
Gas oil / intermediates | 1 | % | 7 | % | ||||
LPG and other | 5 | % | 2 | % | ||||
Total | 100 | % | 100 | % |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Southwest Region (Navajo Refinery) | ||||||||
Crude charge (BPD) (1) | 81,140 | 69,980 | ||||||
Refinery throughput (BPD) (2) | 90,400 | 78,930 | ||||||
Refinery production (BPD) (3) | 87,060 | 76,720 | ||||||
Sales of produced refined products (BPD) | 87,250 | 79,840 | ||||||
Sales of refined products (BPD) (4) | 93,130 | 86,700 | ||||||
Refinery utilization (5) | 81.1 | % | 70.0 | % | ||||
Average per produced barrel (6) | ||||||||
Net sales | $ | 125.91 | $ | 110.99 | ||||
Cost of products (7) | 106.37 | 95.60 | ||||||
Refinery gross margin | 19.54 | 15.39 | ||||||
Refinery operating expenses (8) | 6.67 | 6.34 | ||||||
Net operating margin | $ | 12.87 | $ | 9.05 | ||||
Refinery operating expenses per throughput barrel (9) | $ | 6.44 | $ | 6.42 | ||||
Feedstocks: | ||||||||
Sweet crude oil | — | % | 5 | % | ||||
Sour crude oil | 81 | % | 73 | % | ||||
Heavy sour crude oil | 9 | % | 11 | % | ||||
Other feedstocks and blends | 10 | % | 11 | % | ||||
Total | 100 | % | 100 | % | ||||
Sales of produced refined products: | ||||||||
Gasolines | 54 | % | 51 | % | ||||
Diesel fuels | 36 | % | 35 | % | ||||
Jet fuels | — | % | 1 | % | ||||
Fuel oil | 5 | % | 5 | % | ||||
Asphalt | 2 | % | 5 | % | ||||
LPG and other | 3 | % | 3 | % | ||||
Total | 100 | % | 100 | % |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Rocky Mountain Region (Cheyenne and Woods Cross Refineries) | ||||||||
Crude charge (BPD) (1) | 70,240 | 25,770 | ||||||
Refinery throughput (BPD) (2) | 78,740 | 27,900 | ||||||
Refinery production (BPD) (3) | 77,200 | 26,620 | ||||||
Sales of produced refined products (BPD) | 76,640 | 26,650 | ||||||
Sales of refined products (BPD) (4) | 79,320 | 26,740 | ||||||
Refinery utilization (5) | 84.6 | % | 83.1 | % | ||||
Average per produced barrel (6) | ||||||||
Net sales | $ | 110.76 | $ | 108.77 | ||||
Cost of products (7) | 96.79 | 89.87 | ||||||
Refinery gross margin | 13.97 | 18.90 | ||||||
Refinery operating expenses (8) | 6.57 | 6.43 | ||||||
Net operating margin | $ | 7.40 | $ | 12.47 | ||||
Refinery operating expenses per throughput barrel (9) | $ | 6.39 | $ | 6.14 | ||||
Feedstocks: | ||||||||
Sweet crude oil | 45 | % | 57 | % | ||||
Sour crude oil | 2 | % | — | % | ||||
Heavy sour crude oil | 31 | % | 4 | % | ||||
Black wax crude oil | 11 | % | 31 | % | ||||
Other feedstocks and blends | 11 | % | 8 | % | ||||
Total | 100 | % | 100 | % | ||||
Sales of produced refined products: | ||||||||
Gasolines | 56 | % | 61 | % | ||||
Diesel fuels | 30 | % | 29 | % | ||||
Jet fuels | 1 | % | 2 | % | ||||
Fuel oil | 2 | % | 2 | % | ||||
Asphalt | 5 | % | 3 | % | ||||
LPG and other | 6 | % | 3 | % | ||||
Total | 100 | % | 100 | % |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Consolidated | ||||||||
Crude charge (BPD) (1) | 407,650 | 201,350 | ||||||
Refinery throughput (BPD) (2) | 441,930 | 213,520 | ||||||
Refinery production (BPD) (3) | 432,520 | 209,500 | ||||||
Sales of produced refined products (BPD) | 422,950 | 206,500 | ||||||
Sales of refined products (BPD) (4) | 436,840 | 213,840 | ||||||
Refinery utilization (5) | 92.0 | % | 78.7 | % | ||||
Average per produced barrel (6) | ||||||||
Net sales | $ | 119.54 | $ | 113.28 | ||||
Cost of products (7) | 102.08 | 97.56 | ||||||
Refinery gross margin | 17.46 | 15.72 | ||||||
Refinery operating expenses (8) | 5.51 | 6.24 | ||||||
Net operating margin | $ | 11.95 | $ | 9.48 | ||||
Refinery operating expenses per throughput barrel (9) | $ | 5.28 | $ | 5.98 | ||||
Feedstocks: | ||||||||
Sweet crude oil | 52 | % | 58 | % | ||||
Sour crude oil | 22 | % | 27 | % | ||||
Heavy sour crude oil | 16 | % | 5 | % | ||||
Black wax crude oil | 2 | % | 4 | % | ||||
Other feedstocks and blends | 8 | % | 6 | % | ||||
Total | 100 | % | 100 | % | ||||
Sales of produced refined products: | ||||||||
Gasolines | 50 | % | 45 | % | ||||
Diesel fuels | 32 | % | 33 | % | ||||
Jet fuels | 6 | % | 4 | % | ||||
Fuel oil | 2 | % | 2 | % | ||||
Asphalt | 2 | % | 4 | % | ||||
Lubricants | 3 | % | 6 | % | ||||
Gas oil / intermediates | — | % | 3 | % | ||||
LPG and other | 5 | % | 3 | % | ||||
Total | 100 | % | 100 | % |
(1) | Crude charge represents the barrels per day of crude oil processed at our refineries. |
(2) | Refinery throughput represents the barrels per day of crude and other refinery feedstocks input to the crude units and other conversion units at our refineries. |
(3) | Refinery production represents the barrels per day of refined products yielded from processing crude and other refinery feedstocks through the crude units and other conversion units at our refineries. |
(4) | Includes refined products purchased for resale. |
(5) | Represents crude charge divided by total crude capacity (BPSD). As a result of our merger effective July 1, 2011, our consolidated crude capacity increased from 256,000 BPSD to 443,000 BPSD. |
(6) | Represents average per barrel amount for produced refined products sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q. |
(7) | Transportation, terminal and refinery storage costs billed from HEP are included in cost of products. |
(8) | Represents operating expenses of our refineries, exclusive of depreciation and amortization. |
(9) | Represents refinery operating expenses, exclusive of depreciation and amortization, divided by refinery throughput. |
• | 9.875% Senior Notes ($291.8 million principal amount maturing June 2017) |
• | 6.875% Senior Notes ($150 million principal amount maturing November 2018) |
• | 8.5% Senior Notes ($200 million principal amount maturing September 2016) |
• | 6.25% Senior Notes ($27.3 million principal amount outstanding at March 31, 2012 and redeemed in April 2012) |
• | 6.5% Senior Notes ($300 million principal amount maturing March 2020) |
• | 8.25% Senior Notes ($150 million principal amount maturing March 2018) |
• | our inventory positions; |
• | natural gas purchases; |
• | costs of crude oil; |
• | prices of refined products; and |
• | our refining margins. |
Outstanding Principal | Estimated Fair Value | Estimated Change in Fair Value | ||||||||||
(In thousands) | ||||||||||||
HollyFrontier Senior Notes | $ | 641,797 | $ | 699,834 | $ | 19,725 | ||||||
HEP Senior Notes | $ | 477,254 | $ | 494,062 | $ | 16,762 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(In thousands) | ||||||||
Net income attributable to HollyFrontier stockholders | $ | 241,696 | $ | 84,694 | ||||
Add income tax provision | 140,406 | 49,011 | ||||||
Add interest expense | 33,315 | 16,204 | ||||||
Subtract interest income | (460 | ) | (85 | ) | ||||
Add depreciation and amortization | 56,102 | 31,308 | ||||||
EBITDA | $ | 471,059 | $ | 181,132 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(Dollars in thousands, except per barrel amounts) | ||||||||
Consolidated | ||||||||
Average sales price per produced barrel sold | $ | 119.54 | $ | 113.28 | ||||
Times sales of produced refined products sold (BPD) | 422,950 | 206,500 | ||||||
Times number of days in period | 91 | 90 | ||||||
Refined product sales from produced products sold | $ | 4,600,909 | $ | 2,105,309 | ||||
Total refined product sales | $ | 4,600,909 | $ | 2,105,309 | ||||
Add refined product sales from purchased products and rounding (1) | 155,613 | 66,624 | ||||||
Total refined product sales | 4,756,522 | 2,171,933 | ||||||
Add direct sales of excess crude oil (2) | 158,282 | 135,409 | ||||||
Add other refining segment revenue (3) | 4,927 | 7,750 | ||||||
Total refining segment revenue | 4,919,731 | 2,315,092 | ||||||
Add HEP segment sales and other revenues | 63,515 | 45,005 | ||||||
Add corporate and other revenues | 4,224 | 648 | ||||||
Subtract consolidations and eliminations | (55,732 | ) | (34,160 | ) | ||||
Sales and other revenues | $ | 4,931,738 | $ | 2,326,585 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(Dollars in thousands, except per barrel amounts) | ||||||||
Consolidated | ||||||||
Average cost of products per produced barrel sold | $ | 102.08 | $ | 97.56 | ||||
Times sales of produced refined products sold (BPD) | 422,950 | 206,500 | ||||||
Times number of days in period | 91 | 90 | ||||||
Cost of products for produced products sold | $ | 3,928,901 | $ | 1,813,153 | ||||
Total cost of products for produced products sold | $ | 3,928,901 | $ | 1,813,153 | ||||
Add refined product costs from purchased products sold and rounding (1) | 156,672 | 69,555 | ||||||
Total cost of refined products sold | 4,085,573 | 1,882,708 | ||||||
Add crude oil cost of direct sales of excess crude oil (2) | 155,810 | 132,880 | ||||||
Add other refining segment cost of products sold (4) | 409 | 2,338 | ||||||
Total refining segment cost of products sold | 4,241,792 | 2,017,926 | ||||||
Subtract consolidations and eliminations | (54,875 | ) | (33,309 | ) | ||||
Costs of products sold (exclusive of depreciation and amortization) | $ | 4,186,917 | $ | 1,984,617 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(Dollars in thousands, except per barrel amounts) | ||||||||
Consolidated | ||||||||
Average refinery operating expenses per produced barrel sold | $ | 5.51 | $ | 6.24 | ||||
Times sales of produced refined products sold (BPD) | 422,950 | 206,500 | ||||||
Times number of days in period | 91 | 90 | ||||||
Refinery operating expenses for produced products sold | $ | 212,071 | $ | 115,970 | ||||
Total refinery operating expenses per produced products sold | $ | 212,071 | $ | 115,970 | ||||
Add other refining segment operating expenses and rounding (5) | 9,210 | 6,109 | ||||||
Total refining segment operating expenses | 221,281 | 122,079 | ||||||
Add HEP segment operating expenses | 16,988 | 12,796 | ||||||
Add corporate and other costs | 3,566 | (6 | ) | |||||
Subtract consolidations and eliminations | (208 | ) | (126 | ) | ||||
Operating expenses (exclusive of depreciation and amortization) | $ | 241,627 | $ | 134,743 |
Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
(Dollars in thousands, except per barrel amounts) | ||||||||
Consolidated | ||||||||
Net operating margin per barrel | $ | 11.95 | $ | 9.48 | ||||
Add average refinery operating expenses per produced barrel | 5.51 | 6.24 | ||||||
Refinery gross margin per barrel | 17.46 | 15.72 | ||||||
Add average cost of products per produced barrel sold | 102.08 | 97.56 | ||||||
Average sales price per produced barrel sold | $ | 119.54 | $ | 113.28 | ||||
Times sales of produced refined products sold (BPD) | 422,950 | 206,500 | ||||||
Times number of days in period | 91 | 90 | ||||||
Refined product sales from produced products sold | $ | 4,600,909 | $ | 2,105,309 | ||||
Total refined product sales from produced products sold | $ | 4,600,909 | $ | 2,105,309 | ||||
Add refined product sales from purchased products and rounding (1) | 155,613 | 66,624 | ||||||
Total refined product sales | 4,756,522 | 2,171,933 | ||||||
Add direct sales of excess crude oil (2) | 158,282 | 135,409 | ||||||
Add other refining segment revenue (3) | 4,927 | 7,750 | ||||||
Total refining segment revenue | 4,919,731 | 2,315,092 | ||||||
Add HEP segment sales and other revenues | 63,515 | 45,005 | ||||||
Add corporate and other revenues | 4,224 | 648 | ||||||
Subtract consolidations and eliminations | (55,732 | ) | (34,160 | ) | ||||
Sales and other revenues | $ | 4,931,738 | $ | 2,326,585 |
(1) | We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments. |
(2) | We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as inventory and then upon sale as cost of products sold. Additionally, at times we enter into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at carryover cost. |
(3) | Other refining segment revenue includes the incremental revenues associated with NK Asphalt and miscellaneous revenue. |
(4) | Other refining segment cost of products sold includes the incremental cost of products for NK Asphalt and miscellaneous costs. |
(5) | Other refining segment operating expenses include the marketing costs associated with our refining segment and the operating expenses of NK Asphalt. |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased | Average price Paid Per Share | Total Number of Shares Purchased under Approved Stock Repurchase Program | Maximum Dollar Value of Shares Yet to be Purchased under Approved Stock Repurchase Program | ||||||||||
January 2012 | 1,105,000 | $ | 27.50 | 1,105,000 | $ | 319,615,697 | ||||||||
February 2012 | 253,845 | $ | 29.67 | 253,845 | $ | 312,084,506 | ||||||||
March 2012 | 787,502 | $ | 33.34 | 787,502 | $ | 285,832,700 | ||||||||
Total for January to March 2012 | 2,146,347 | 2,146,347 |
Item 6. | Exhibits |
HOLLYFRONTIER CORPORATION | |||
(Registrant) | |||
Date: May 7, 2012 | /s/ Douglas S. Aron | ||
Douglas S. Aron | |||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||
/s/ Scott C. Surplus | |||
Scott C. Surplus | |||
Vice President and Controller (Principal Accounting Officer) |
Exhibit Number | Description | |
3.1 | Amended and Restated Certificate of Incorporation of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant's Form 8-K Current Report filed July 8, 2011, File No. 1-03876). | |
3.2 | Amended and Restated Bylaws of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant's Form 8-K Current Report filed November 8, 2011, File No. 1-03876). | |
10.1 | HollyFrontier Corporation Form of Change in Control Agreement (incorporated by reference to Exhibit 10.1 of Registrant's Form 8-K Current Report filed February 23, 2012, File No. 1-03876). | |
10.2 | HollyFrontier Corporation Form of Change in Control Agreement (Legacy Holly Officers) (incorporated by reference to Exhibit 10.1 of Registrant's Form 8-K Current Report filed March 30, 2012, File No. 1-03876). | |
10.3 | HollyFrontier Corporation Form of Change in Control Agreement (New Hires and Promoted Officers) (incorporated by reference to Exhibit 10.2 of Registrant's Form 8-K Current Report filed March 30, 2012, File No. 1-03876). | |
18+ | Preferability Letter from Independent Registered Public Accounting Firm. | |
31.1+ | Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2+ | Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1+ | Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2+ | Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002. | |
101* | The following financial information from HollyFrontier Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements. |
1. | I have reviewed this quarterly report on Form 10-Q of HollyFrontier Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting |
Date: May 7, 2012 | /s/ Michael C. Jennings | |
Michael C. Jennings | ||
Chief Executive Officer and President |
1. | I have reviewed this quarterly report on Form 10-Q of HollyFrontier Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's most recent fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 7, 2012 | /s/ Douglas S. Aron | |
Douglas S. Aron | ||
Executive Vice President and Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 7, 2012 | /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: May 7, 2012 | /s/ Douglas S. Aron | |
Douglas S. Aron | ||
Executive Vice President and Chief Financial Officer |
Retirement Plan (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2012
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Pension and Other Postretirement Benefit Expense [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Pension Expense | The net periodic pension expense consisted of the following components:
The net periodic benefit expense consisted of the following components:
|
Cash and Cash Equivalents and Investments in Marketable Securities (Narrative) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2012
Y
|
Mar. 31, 2011
|
|
Cash And Cash Equivalents And Investments In Marketable Securities [Abstract] | ||
Shares of Connacher Oil and Gas Limited held | 1,000,000 | |
Maximum term to maturity from date of purchase (years) | 2 | |
Purchases of marketable debt securities | $ 106,573 | $ 98,937 |
Proceeds from sale and maturity of marketable debt securities | $ 100,480 | $ 31,925 |
Financial Instruments (Estimated Fair Values Of Debt Instruments) (Details) (USD $)
|
3 Months Ended | 3 Months Ended | |||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2012
Level 1 [Member]
|
Mar. 31, 2012
Level 2 [Member]
|
Mar. 31, 2012
Level 2 [Member]
Carrying Amount [Member]
Holly Frontier [Member]
|
Dec. 31, 2011
Level 2 [Member]
Carrying Amount [Member]
Holly Frontier [Member]
|
Mar. 31, 2012
Level 2 [Member]
Carrying Amount [Member]
HEP [Member]
|
Dec. 31, 2011
Level 2 [Member]
Carrying Amount [Member]
HEP [Member]
|
Mar. 31, 2012
Level 2 [Member]
Fair Value [Member]
Holly Frontier [Member]
|
Dec. 31, 2011
Level 2 [Member]
Fair Value [Member]
Holly Frontier [Member]
|
Mar. 31, 2012
Level 2 [Member]
Fair Value [Member]
HEP [Member]
|
Dec. 31, 2011
Level 2 [Member]
Fair Value [Member]
HEP [Member]
|
Mar. 31, 2012
Level 3 [Member]
|
Mar. 31, 2012
Equity Securities [Member]
Level 1 [Member]
Carrying Amount [Member]
|
Dec. 31, 2011
Equity Securities [Member]
Level 1 [Member]
Carrying Amount [Member]
|
Mar. 31, 2012
Equity Securities [Member]
Level 1 [Member]
Fair Value [Member]
|
Dec. 31, 2011
Equity Securities [Member]
Level 1 [Member]
Fair Value [Member]
|
Mar. 31, 2012
Marketable Debt Securities [Member]
Level 2 [Member]
Carrying Amount [Member]
|
Dec. 31, 2011
Marketable Debt Securities [Member]
Level 2 [Member]
Carrying Amount [Member]
|
Mar. 31, 2012
Marketable Debt Securities [Member]
Level 2 [Member]
Fair Value [Member]
|
Dec. 31, 2011
Marketable Debt Securities [Member]
Level 2 [Member]
Fair Value [Member]
|
Mar. 31, 2012
Nymex Futures Contracts [Member]
Level 1 [Member]
Carrying Amount [Member]
|
Dec. 31, 2011
Nymex Futures Contracts [Member]
Level 1 [Member]
Carrying Amount [Member]
|
Mar. 31, 2012
Nymex Futures Contracts [Member]
Level 1 [Member]
Fair Value [Member]
|
Dec. 31, 2011
Nymex Futures Contracts [Member]
Level 1 [Member]
Fair Value [Member]
|
Mar. 31, 2012
Commodity Price Swaps [Member]
Level 2 [Member]
Carrying Amount [Member]
|
Dec. 31, 2011
Commodity Price Swaps [Member]
Level 2 [Member]
Carrying Amount [Member]
|
Mar. 31, 2012
Commodity Price Swaps [Member]
Level 2 [Member]
Fair Value [Member]
|
Dec. 31, 2011
Commodity Price Swaps [Member]
Level 2 [Member]
Fair Value [Member]
|
Mar. 31, 2012
Commodity Price Swaps [Member]
Level 3 [Member]
Carrying Amount [Member]
|
Dec. 31, 2011
Commodity Price Swaps [Member]
Level 3 [Member]
Carrying Amount [Member]
|
Mar. 31, 2012
Commodity Price Swaps [Member]
Level 3 [Member]
Fair Value [Member]
|
Dec. 31, 2011
Commodity Price Swaps [Member]
Level 3 [Member]
Fair Value [Member]
|
Mar. 31, 2012
Interest Rate Swap [Member]
Level 2 [Member]
Carrying Amount [Member]
HEP [Member]
|
Dec. 31, 2011
Interest Rate Swap [Member]
Level 2 [Member]
Carrying Amount [Member]
HEP [Member]
|
Mar. 31, 2012
Interest Rate Swap [Member]
Level 2 [Member]
Fair Value [Member]
HEP [Member]
|
Dec. 31, 2011
Interest Rate Swap [Member]
Level 2 [Member]
Fair Value [Member]
HEP [Member]
|
|
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Fair value of assets and liabilities measured on recurring basis, gain (loss) included in earnings | $ 6,400,000 | $ 27,400,000 | |||||||||||||||||||||||||||||||||
Investments in marketable securities | 967,000 | 753,000 | 967,000 | 753,000 | 267,019,000 | 260,953,000 | 267,019,000 | 260,953,000 | |||||||||||||||||||||||||||
Derivative instruments | 8,480,000 | (1,252,000) | 8,480,000 | (1,252,000) | 145,212,000 | 144,038,000 | 145,212,000 | 144,038,000 | (149,278,000) | 31,616,000 | (149,278,000) | 31,616,000 | 873,000 | (520,000) | 873,000 | (520,000) | |||||||||||||||||||
Senior notes | 650,497,000 | 651,262,000 | 469,237,000 | 325,860,000 | 699,834,000 | 693,979,000 | 494,062,000 | 344,350,000 | |||||||||||||||||||||||||||
Charge to earnings, commodity price swaps | $ 35,500,000 |
Cash and Cash Equivalents and Investments in Marketable Securities (Available-For-Sale Securities) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Available-for-Sale Securities, Amortized Cost | $ 267,581 | $ 261,489 |
Available-for-Sale Securities, Gross Unrealized Gain | 405 | 217 |
Available-for-Sale Securities, Estimated Fair Value (Net Carrying Amount) | 267,986 | 261,706 |
Marketable Debt Securities (State And Political Subdivisions) [Member]
|
||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Available-for-Sale Securities, Amortized Cost | 266,971 | 260,879 |
Available-for-Sale Securities, Gross Unrealized Gain | 48 | 74 |
Available-for-Sale Securities, Estimated Fair Value (Net Carrying Amount) | 267,019 | 260,953 |
Equity Securities [Member]
|
||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Available-for-Sale Securities, Amortized Cost | 610 | 610 |
Available-for-Sale Securities, Gross Unrealized Gain | 357 | 143 |
Available-for-Sale Securities, Estimated Fair Value (Net Carrying Amount) | $ 967 | $ 753 |
Holly-Frontier Merger (Schedule Of Pro Forma Revenues And Net Income) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2012
|
|
Business Combination, Description [Abstract] | |
Sales and other revenues | $ 4,235,239 |
Net income attributable to HollyFrontier stockholders | $ 234,066 |
Basic earnings per share | $ 1.12 |
Diluted earnings per share | $ 1.11 |
Inventories (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2012
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Inventory, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Components | Inventory consists of the following components:
|
Supplemental Guarantor/Non-Guarantor Financial Information Consolidating Statement of Income (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2012
|
Mar. 31, 2011
|
|
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | $ 4,931,738 | $ 2,326,585 |
Cost of products sold | 4,186,917 | 1,984,617 |
Operating expenses | 241,627 | 134,743 |
General and administrative | 27,528 | 16,818 |
Depreciation and amortization | 56,102 | 31,308 |
Total operating costs and expenses | 4,512,174 | 2,167,486 |
Income (loss) from operations | 419,564 | 159,099 |
Earnings of equity method investments | 717 | 740 |
Interest income (expense) | (32,855) | (16,119) |
Merger transaction costs | 0 | (3,698) |
Nonoperating Income (Expense) | (32,138) | (19,077) |
Income before income taxes | 387,426 | 140,022 |
Income tax provision | 140,406 | 49,011 |
Net income | 247,020 | 91,011 |
Less net income attributable to noncontrolling interest | 5,324 | 6,317 |
Net income attributable to HollyFrontier stockholders | 241,696 | 84,694 |
Parent [Member]
|
||
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | 99 | 648 |
Cost of products sold | 0 | 0 |
Operating expenses | 0 | 0 |
General and administrative | 24,973 | 15,353 |
Depreciation and amortization | 1,103 | 940 |
Total operating costs and expenses | 26,076 | 16,293 |
Income (loss) from operations | (25,977) | (15,645) |
Earnings of equity method investments | 424,651 | 158,957 |
Interest income (expense) | (14,023) | (6,808) |
Merger transaction costs | (3,698) | |
Nonoperating Income (Expense) | 410,628 | 148,451 |
Income before income taxes | 384,651 | 132,806 |
Income tax provision | 140,331 | 48,783 |
Net income | 244,320 | 84,023 |
Less net income attributable to noncontrolling interest | 0 | 0 |
Net income attributable to HollyFrontier stockholders | 244,320 | 84,023 |
Guarantor Restricted Subsidiaries [Member]
|
||
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | 4,916,794 | 2,315,092 |
Cost of products sold | 4,238,848 | 2,017,926 |
Operating expenses | 221,716 | 121,685 |
General and administrative | 516 | 102 |
Depreciation and amortization | 41,811 | 23,161 |
Total operating costs and expenses | 4,502,891 | 2,162,874 |
Income (loss) from operations | 413,903 | 152,218 |
Earnings of equity method investments | 11,204 | 7,563 |
Interest income (expense) | (456) | (824) |
Merger transaction costs | 0 | |
Nonoperating Income (Expense) | 10,748 | 6,739 |
Income before income taxes | 424,651 | 158,957 |
Income tax provision | 0 | 0 |
Net income | 424,651 | 158,957 |
Less net income attributable to noncontrolling interest | 0 | 0 |
Net income attributable to HollyFrontier stockholders | 424,651 | 158,957 |
Non Guarantor Restricted Subsidiaries [Member]
|
||
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | 4,118 | 0 |
Cost of products sold | 0 | 0 |
Operating expenses | 3,056 | 388 |
General and administrative | 0 | 0 |
Depreciation and amortization | 3,536 | 179 |
Total operating costs and expenses | 6,592 | 567 |
Income (loss) from operations | (2,474) | (567) |
Earnings of equity method investments | 12,964 | 8,020 |
Interest income (expense) | 199 | 13 |
Merger transaction costs | 0 | |
Nonoperating Income (Expense) | 13,163 | 8,033 |
Income before income taxes | 10,689 | 7,466 |
Income tax provision | 0 | 0 |
Net income | 10,689 | 7,466 |
Less net income attributable to noncontrolling interest | 0 | 0 |
Net income attributable to HollyFrontier stockholders | 10,689 | 7,466 |
Eliminations From Consolidation Of Restricted Subsidiaries [Member]
|
||
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | 0 | 0 |
Cost of products sold | 0 | 0 |
Operating expenses | 0 | 0 |
General and administrative | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Total operating costs and expenses | 0 | 0 |
Income (loss) from operations | 0 | 0 |
Earnings of equity method investments | (435,969) | (166,520) |
Interest income (expense) | 0 | 0 |
Merger transaction costs | 0 | |
Nonoperating Income (Expense) | (435,969) | (166,520) |
Income before income taxes | (435,969) | (166,520) |
Income tax provision | 0 | 0 |
Net income | (435,969) | (166,520) |
Less net income attributable to noncontrolling interest | (629) | (97) |
Net income attributable to HollyFrontier stockholders | (435,340) | (166,423) |
Holly Frontier Corp. Before Consolidation Of HEP [Member]
|
||
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | 4,921,011 | 2,315,740 |
Cost of products sold | 4,238,848 | 2,017,926 |
Operating expenses | 224,772 | 122,073 |
General and administrative | 25,489 | 15,455 |
Depreciation and amortization | 46,450 | 24,280 |
Total operating costs and expenses | 4,535,559 | 2,179,734 |
Income (loss) from operations | 385,452 | 136,006 |
Earnings of equity method investments | 12,850 | 8,020 |
Interest income (expense) | (14,280) | (7,619) |
Merger transaction costs | (3,698) | |
Nonoperating Income (Expense) | (1,430) | (3,297) |
Income before income taxes | 384,022 | 132,709 |
Income tax provision | 140,331 | 48,783 |
Net income | 243,691 | 83,926 |
Less net income attributable to noncontrolling interest | (629) | (97) |
Net income attributable to HollyFrontier stockholders | 244,320 | 84,023 |
Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) [Member]
|
||
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | 63,515 | 45,005 |
Cost of products sold | 0 | 0 |
Operating expenses | 16,988 | 12,796 |
General and administrative | 2,039 | 1,363 |
Depreciation and amortization | 9,859 | 7,235 |
Total operating costs and expenses | 28,886 | 21,394 |
Income (loss) from operations | 34,629 | 23,611 |
Earnings of equity method investments | 831 | 740 |
Interest income (expense) | (19,170) | (9,112) |
Merger transaction costs | 0 | |
Nonoperating Income (Expense) | (18,339) | (8,372) |
Income before income taxes | 16,290 | 15,239 |
Income tax provision | 75 | 228 |
Net income | 16,215 | 15,011 |
Less net income attributable to noncontrolling interest | 0 | 0 |
Net income attributable to HollyFrontier stockholders | 16,215 | 15,011 |
Eliminations [Member]
|
||
Condensed Financial Statements, Captions [Line Items] | ||
Sales and other revenues | (52,788) | (34,160) |
Cost of products sold | (51,931) | (33,309) |
Operating expenses | (133) | (126) |
General and administrative | 0 | 0 |
Depreciation and amortization | (207) | (207) |
Total operating costs and expenses | (52,271) | (33,642) |
Income (loss) from operations | (517) | (518) |
Earnings of equity method investments | (12,964) | (8,020) |
Interest income (expense) | 595 | 612 |
Merger transaction costs | 0 | |
Nonoperating Income (Expense) | (12,369) | (7,408) |
Income before income taxes | (12,886) | (7,926) |
Income tax provision | 0 | 0 |
Net income | (12,886) | (7,926) |
Less net income attributable to noncontrolling interest | 5,953 | 6,414 |
Net income attributable to HollyFrontier stockholders | $ (18,839) | $ (14,340) |
Goodwill (Schedule Of Changes By Segment To The Carrying Amount Of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2012
|
|
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 2,336,510 |
Goodwill attributable to merger with Frontier | (1,980) |
Goodwill, Ending Balance | 2,334,530 |
Refining [Member]
|
|
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 2,047,519 |
Goodwill attributable to merger with Frontier | (1,980) |
Goodwill, Ending Balance | 2,045,539 |
HEP [Member]
|
|
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 288,991 |
Goodwill attributable to merger with Frontier | 0 |
Goodwill, Ending Balance | $ 288,991 |
Supplemental Guarantor/Non-Guarantor Financial Information (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2012
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Mar. 31, 2011
|
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Guarantor Obligations [Line Items] | ||
Other Comprehensive Income (Loss), Net of Tax | $ (94,757) | $ 1,221 |
HEP [Member]
|
||
Guarantor Obligations [Line Items] | ||
Percentage of ownership in variable interest entity | 42.00% | |
Guarantor Restricted Subsidiaries [Member]
|
||
Guarantor Obligations [Line Items] | ||
Other Comprehensive Income (Loss), Net of Tax | 95,700 | 0 |
Non-Guarantor Non-Restricted Subsidiaries [Member]
|
||
Guarantor Obligations [Line Items] | ||
Other Comprehensive Income (Loss), Net of Tax | $ 400 |
Supplemental Guarantor/Non-Guarantor Financial Information
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2012
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Supplemental Guarantor / Non-Guarantor Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor/Non-Guarantor Financial Information | Supplemental Guarantor/Non-Guarantor Financial Information Our obligations under the HollyFrontier Senior Notes have been jointly and severally guaranteed by the substantial majority of our existing and future restricted subsidiaries (“Guarantor Restricted Subsidiaries”). These guarantees are full and unconditional. HEP, in which we have a 42% ownership interest, and its subsidiaries (collectively, “Non-Guarantor Non-Restricted Subsidiaries”), and certain of our other subsidiaries (“Non-Guarantor Restricted Subsidiaries”) have not guaranteed these obligations. The following financial information presents condensed consolidating balance sheets, statements of income, and statements of cash flows of HollyFrontier Corporation (the “Parent”), the Guarantor Restricted Subsidiaries, the Non-Guarantor Restricted Subsidiaries and the Non-Guarantor Non-Restricted Subsidiaries. The information has been presented as if the Parent accounted for its ownership in the Guarantor Restricted Subsidiaries, and the Guarantor Restricted Subsidiaries accounted for the ownership of the Non-Guarantor Restricted Subsidiaries and Non-Guarantor Non-Restricted Subsidiaries, using the equity method of accounting. The Guarantor Restricted Subsidiaries and the Non-Guarantor Restricted Subsidiaries are collectively the “Restricted Subsidiaries.” Additionally, the following financial information does not include condensed consolidating statements of comprehensive income. Our consolidated statements of comprehensive income include an other comprehensive loss of $95.7 million (net of tax) attributable to our Guarantor Restricted Subsidiaries for the three months ended March 31, 2012 and zero for the three months ended March 31, 2011. Other comprehensive income attributable to Non-Guarantor Non-Restricted Subsidiaries was $0.4 million for the three months ended March 31, 2012 and 2011. Our revaluation of HEP’s assets and liabilities at March 1, 2008 (date of reconsolidation) resulted in basis adjustments to our consolidated HEP balances. Therefore, our reported amounts for the HEP segment may not agree to amounts reported in HEP’s periodic public filings.
|
Earnings Per Share (Schedule Of Earnings Per Share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2012
|
Mar. 31, 2011
|
|
Earnings Per Share [Abstract] | ||
Earnings attributable to HollyFrontier stockholders | $ 241,696 | $ 84,694 |
Average number of shares of common stock outstanding | 208,531 | 106,614 |
Effect of dilutive stock options, variable restricted shares and performance share units | 607 | 652 |
Average number of shares of common stock outstanding assuming dilution | 209,138 | 107,266 |
Basic earnings per share | $ 1.16 | $ 0.79 |
Diluted earnings per share | $ 1.16 | $ 0.79 |
Description of Business and Presentation of Financial Statements (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2012
mi
Petroleum_Refineries
|
Dec. 31, 2011
|
|
Ownership Interest By Project Type [Line Items] | ||
Number of refineries located in Tulsa, Oklahoma | 2 | |
Refinery distance from main city (miles) | 65 | |
Allowance for doubtful accounts reserve | $ 3.5 | $ 3.5 |
12-Inch Refined Products Pipeline Project [Member]
|
||
Ownership Interest By Project Type [Line Items] | ||
Percentage of interest owned in pipeline project | 75.00% | |
Description of pipeline acquired (inches) | 12 | |
Sabine Biofuels [Member]
|
||
Ownership Interest By Project Type [Line Items] | ||
Percentage of interest owned in development stage biodiesel production facility | 50.00% | |
HEP [Member]
|
||
Ownership Interest By Project Type [Line Items] | ||
Percentage of ownership in variable interest entity | 42.00% | |
Percentage of general partner interest | 2.00% | |
HEP [Member] | SLC Pipeline Project [Member]
|
||
Ownership Interest By Project Type [Line Items] | ||
Percentage of interest owned in pipeline project | 25.00% | |
Length of pipeline (miles) | 95 |
Equity (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2012
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes To Equity | Changes to equity during the three months ended March 31, 2012 are presented below:
|
Stock-Based Compensation (Summary Of Restricted Stock Activity) (Details) (Restricted Stock [Member], USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2012
|
|
Restricted Stock [Member]
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at January 1, 2012 (non-vested), Grants | 1,122,350 |
Granted, Grants | 404,577 |
Vesting and transfer of ownership to recipients, Grants | (503,327) |
Outstanding at March 31, 2012 (non-vested), Grants | 1,023,600 |
Outstanding at January 1, 2012 (non-vested), Weighted Average Grant Date Fair Value | $ 25.48 |
Granted, Weighted Average Grant Date Fair Value | $ 33.81 |
Vesting and transfer of ownership to recipients, Weighted Average Grant Date Fair Value | $ 24.24 |
Outstanding at March 31, 2012 (non-vested), Weighted Average Grant Date Fair Value | $ 29.38 |
Outstanding at March 31, 2012 (non-vested), Aggregate Intrinsic Value | $ 32,909 |
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