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; and |
• | other financial, operational and legal risks and uncertainties detailed from time to time in our SEC filings. |
Item 1. | Financial Statements |
June 30, 2012 | December 31, 2011 | ||||||
(Unaudited) | As Adjusted (see Note 2) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents (HEP: $4,216 and $3,269, respectively) | $ | 1,372,198 | $ | 1,578,904 | |||
Marketable securities | 266,483 | 211,639 | |||||
Accounts receivable: Product and transportation (HEP: $30,169 and $34,071, respectively) | 578,024 | 703,691 | |||||
Crude oil resales | 25,702 | 5,166 | |||||
603,726 | 708,857 | ||||||
Inventories: Crude oil and refined products | 1,253,807 | 1,052,084 | |||||
Materials and supplies (HEP: $1,326 and $1,483, respectively) | 56,012 | 62,535 | |||||
1,309,819 | 1,114,619 | ||||||
Income taxes receivable | 93,648 | 87,277 | |||||
Prepayments and other (HEP: $2,084 and $1,161, respectively) | 59,818 | 219,450 | |||||
Total current assets | 3,705,692 | 3,920,746 | |||||
Properties, plants and equipment, at cost (HEP: $689,381 and $679,852, respectively) | 3,751,384 | 3,631,787 | |||||
Less accumulated depreciation (HEP: $(104,679) and $(89,609), respectively) | (663,078 | ) | (578,882 | ) | |||
3,088,306 | 3,052,905 | ||||||
Marketable securities (long-term) | 9,765 | 50,067 | |||||
Other assets: Turnaround costs | 72,460 | 57,060 | |||||
Goodwill (HEP: $288,991 and $288,991, respectively) | 2,338,302 | 2,336,510 | |||||
Intangibles and other (HEP: $77,182 and $75,902, respectively) | 168,007 | 158,955 | |||||
2,578,769 | 2,552,525 | ||||||
Total assets | $ | 9,382,532 | $ | 9,576,243 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable (HEP: $9,695 and $11,406, respectively) | $ | 1,096,216 | $ | 1,504,694 | |||
Income taxes payable | 162,265 | 40,366 | |||||
Accrued liabilities (HEP: $17,749 and $16,285, respectively) | 133,818 | 169,940 | |||||
Deferred income tax liabilities | 169,386 | 175,683 | |||||
Total current liabilities | 1,561,685 | 1,890,683 | |||||
Long-term debt (HEP: $613,195 and $598,761, respectively) | 1,295,163 | 1,214,742 | |||||
Deferred income taxes | 416,028 | 463,721 | |||||
Other long-term liabilities (HEP: $6,195 and $4,000, respectively) | 162,031 | 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 June 30, 2012 and December 31, 2011 | 2,560 | 2,563 | |||||
Additional capital | 3,765,963 | 3,859,367 | |||||
Retained earnings | 2,440,448 | 1,964,656 | |||||
Accumulated other comprehensive income | 5,575 | 77,873 | |||||
Common stock held in treasury, at cost – 52,346,837 and 46,630,220 shares as of June 30, 2012 and December 31, 2011, respectively | (885,085 | ) | (700,449 | ) | |||
Total HollyFrontier stockholders’ equity | 5,329,461 | 5,204,010 | |||||
Noncontrolling interest | 618,164 | 631,890 | |||||
Total equity | 5,947,625 | 5,835,900 | |||||
Total liabilities and equity | $ | 9,382,532 | $ | 9,576,243 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Sales and other revenues | $ | 4,806,681 | $ | 2,967,133 | $ | 9,738,419 | $ | 5,293,718 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of products sold (exclusive of depreciation and amortization) | 3,681,764 | 2,447,095 | 7,868,681 | 4,431,712 | ||||||||||||
Operating expenses (exclusive of depreciation and amortization) | 222,726 | 139,345 | 464,353 | 274,088 | ||||||||||||
General and administrative expenses (exclusive of depreciation and amortization) | 32,106 | 18,682 | 59,634 | 35,500 | ||||||||||||
Depreciation and amortization | 56,948 | 31,832 | 113,050 | 63,140 | ||||||||||||
Total operating costs and expenses | 3,993,544 | 2,636,954 | 8,505,718 | 4,804,440 | ||||||||||||
Income from operations | 813,137 | 330,179 | 1,232,701 | 489,278 | ||||||||||||
Other income (expense): | ||||||||||||||||
Earnings of equity method investments | 886 | 467 | 1,603 | 1,207 | ||||||||||||
Interest income | 681 | 657 | 1,141 | 742 | ||||||||||||
Interest expense | (26,942 | ) | (15,193 | ) | (60,257 | ) | (31,397 | ) | ||||||||
Gain on sale of marketable equity securities | 326 | — | 326 | — | ||||||||||||
Merger transaction costs | — | (2,316 | ) | — | (6,014 | ) | ||||||||||
(25,049 | ) | (16,385 | ) | (57,187 | ) | (35,462 | ) | |||||||||
Income before income taxes | 788,088 | 313,794 | 1,175,514 | 453,816 | ||||||||||||
Income tax provision: | ||||||||||||||||
Current | 285,937 | 115,051 | 428,807 | 164,540 | ||||||||||||
Deferred | (219 | ) | (3,090 | ) | (2,683 | ) | (3,568 | ) | ||||||||
285,718 | 111,961 | 426,124 | 160,972 | |||||||||||||
Net income | 502,370 | 201,833 | 749,390 | 292,844 | ||||||||||||
Less net income attributable to noncontrolling interest | 8,871 | 9,598 | 14,195 | 15,915 | ||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 493,499 | $ | 192,235 | $ | 735,195 | $ | 276,929 | ||||||||
Earnings per share attributable to HollyFrontier stockholders: | ||||||||||||||||
Basic | $ | 2.40 | $ | 1.80 | $ | 3.55 | $ | 2.60 | ||||||||
Diluted | $ | 2.39 | $ | 1.79 | $ | 3.54 | $ | 2.58 | ||||||||
Cash dividends declared per common share | $ | 0.65 | $ | 0.075 | $ | 1.25 | $ | 0.15 | ||||||||
Average number of common shares outstanding: | ||||||||||||||||
Basic | 205,727 | 106,730 | 207,129 | 106,672 | ||||||||||||
Diluted | 206,481 | 107,340 | 207,938 | 107,286 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net income | $ | 502,370 | $ | 201,833 | $ | 749,390 | $ | 292,844 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Net unrealized loss on available-for-sale securities | (404 | ) | (459 | ) | (216 | ) | (317 | ) | ||||||||
Unrealized gain (loss), net of reclassifications from contract settlements on hedging instruments | 30,801 | 271 | (124,814 | ) | 1,592 | |||||||||||
Pension curtailment adjustment | 7,102 | — | 7,102 | — | ||||||||||||
Other comprehensive income (loss) before income taxes | 37,499 | (188 | ) | (117,928 | ) | 1,275 | ||||||||||
Income tax expense (benefit) | 14,640 | (144 | ) | (46,030 | ) | 98 | ||||||||||
Other comprehensive income (loss) | 22,859 | (44 | ) | (71,898 | ) | 1,177 | ||||||||||
Total comprehensive income | 525,229 | 201,789 | 677,492 | 294,021 | ||||||||||||
Less noncontrolling interest in comprehensive income | 8,734 | 9,776 | 14,595 | 16,935 | ||||||||||||
Comprehensive income attributable to HollyFrontier stockholders | $ | 516,495 | $ | 192,013 | $ | 662,897 | $ | 277,086 |
Six Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
As Adjusted (See Note 2) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 749,390 | $ | 292,844 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 113,050 | 63,140 | ||||||
Earnings of equity method investments, net of distributions | (104 | ) | (82 | ) | ||||
Gain on sale of marketable equity securities | (326 | ) | — | |||||
Deferred income taxes | (2,683 | ) | (3,568 | ) | ||||
Equity-based compensation expense | 17,491 | 5,562 | ||||||
Change in fair value – derivative instruments | 10,289 | 7,155 | ||||||
(Increase) decrease in current assets: | ||||||||
Accounts receivable | 103,674 | (38,017 | ) | |||||
Inventories | (195,200 | ) | (94,933 | ) | ||||
Income taxes receivable | 365 | 51,034 | ||||||
Prepayments and other | 17,928 | (13,088 | ) | |||||
Increase (decrease) in current liabilities: | ||||||||
Accounts payable | (418,937 | ) | 160,760 | |||||
Income taxes payable | 121,899 | 23,002 | ||||||
Accrued liabilities | (34,870 | ) | 16,712 | |||||
Turnaround expenditures | (46,995 | ) | (19,824 | ) | ||||
Other, net | (5,468 | ) | 7,299 | |||||
Net cash provided by operating activities | 429,503 | 457,996 | ||||||
Cash flows from investing activities: | ||||||||
Additions to properties, plants and equipment | (116,012 | ) | (133,405 | ) | ||||
Additions to properties, plants and equipment – HEP | (12,008 | ) | (22,900 | ) | ||||
Investment in Sabine Biofuels | (2,000 | ) | (9,125 | ) | ||||
Purchases of marketable securities | (166,429 | ) | (157,782 | ) | ||||
Sales and maturities of marketable securities | 151,996 | 68,150 | ||||||
Net cash used for investing activities | (144,453 | ) | (255,062 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under credit agreement – HEP | 99,000 | 64,000 | ||||||
Repayments under credit agreement – HEP | (129,000 | ) | (37,000 | ) | ||||
Net proceeds from issuance of senior notes – HEP | 294,750 | — | ||||||
Repurchase of senior notes – HFC | (5,000 | ) | — | |||||
Principal tender on senior notes – HEP | (185,000 | ) | — | |||||
Purchase of treasury stock | (189,771 | ) | (2,996 | ) | ||||
Net prepayment related to structured stock repurchase arrangement | (100,000 | ) | — | |||||
Contribution from joint venture partner | 6,000 | 16,500 | ||||||
Dividends | (249,958 | ) | (15,984 | ) | ||||
Distributions to noncontrolling interest | (28,944 | ) | (25,133 | ) | ||||
Excess tax benefit from equity-based compensation | 4,762 | 498 | ||||||
Purchase of units for incentive grants – HEP | (4,533 | ) | (1,379 | ) | ||||
Deferred financing costs | (3,229 | ) | (3,289 | ) | ||||
Other | (833 | ) | (563 | ) | ||||
Net cash used for financing activities | (491,756 | ) | (5,346 | ) | ||||
Cash and cash equivalents: | ||||||||
Increase (decrease) for the period | (206,706 | ) | 197,588 | |||||
Beginning of period | 1,578,904 | 229,101 | ||||||
End of period | $ | 1,372,198 | $ | 426,689 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 48,928 | $ | 34,264 | ||||
Income taxes | $ | 301,854 | $ | 89,935 |
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”). On July 12, 2012, we sold our 75% ownership interest in the UNEV Pipeline to HEP (see Note 4); |
• | 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 | $ | (10,411 | ) | $ | (38,017 | ) | $ | (27,606 | ) | ||
Increase (decrease) in current liabilities: | |||||||||||
Accounts payable | $ | 133,154 | $ | 160,760 | $ | 27,606 |
NOTE 3: | Holly-Frontier Merger |
Three Months Ended June 30, 2011 | Six Months Ended June 30, 2011 | |||||||
(In thousands, except per share amounts) | ||||||||
Sales and other revenues | $ | 5,037,660 | $ | 9,272,899 | ||||
Net income attributable to HollyFrontier stockholders | $ | 369,039 | $ | 603,105 | ||||
Basic earnings per share | $ | 1.76 | $ | 2.88 | ||||
Diluted earnings per share | $ | 1.75 | $ | 2.87 |
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. |
Fair Value by Input Level | ||||||||||||||||||||
Financial Instrument | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
(In thousands) | ||||||||||||||||||||
June 30, 2012 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Marketable debt securities | $ | 276,248 | $ | 276,248 | $ | — | $ | 276,248 | $ | — | ||||||||||
NYMEX futures contracts | 3,683 | 3,683 | 3,683 | — | — | |||||||||||||||
Commodity price swaps | 119,461 | 119,461 | — | — | 119,461 | |||||||||||||||
Total assets | $ | 399,392 | $ | 399,392 | $ | 3,683 | $ | 276,248 | $ | 119,461 | ||||||||||
Liabilities: | ||||||||||||||||||||
Commodity price swaps | $ | 89,194 | $ | 89,194 | — | $ | 89,194 | $ | — | |||||||||||
HollyFrontier senior notes | 644,982 | 686,628 | — | 686,628 | — | |||||||||||||||
HEP senior notes | 443,195 | 461,625 | — | 461,625 | — | |||||||||||||||
HEP interest rate swap | 2,382 | 2,382 | — | 2,382 | — | |||||||||||||||
Total liabilities | $ | 1,179,753 | $ | 1,239,829 | $ | — | $ | 1,239,829 | $ | — |
December 31, 2011 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Equity securities | $ | 753 | $ | 753 | $ | 753 | $ | — | $ | — | ||||||||||
Marketable debt securities | 260,953 | 260,953 | — | 260,953 | — | |||||||||||||||
Commodity price swaps | 175,654 | 175,654 | — | 144,038 | 31,616 | |||||||||||||||
Total assets | $ | 437,360 | $ | 437,360 | $ | 753 | $ | 404,991 | $ | 31,616 | ||||||||||
Liabilities: | ||||||||||||||||||||
NYMEX futures contracts | $ | 1,252 | $ | 1,252 | $ | 1,252 | $ | — | $ | — | ||||||||||
HollyFrontier senior notes | 651,262 | 693,979 | — | 693,979 | — | |||||||||||||||
HEP senior notes | 325,860 | 344,350 | — | 344,350 | — | |||||||||||||||
HEP interest rate swap | 520 | 520 | — | 520 | — | |||||||||||||||
Total liabilities | $ | 978,894 | $ | 1,040,101 | $ | 1,252 | $ | 1,038,849 | $ | — |
Level 3 Financial Instruments | Three Months Ended June 30, 2012 | Six Months Ended June 30, 2012 | |||||
(In thousands) | |||||||
Asset (liability) balance at beginning of period | $ | (149,278 | ) | $ | 31,616 | ||
Change in fair value | 248,572 | 33,553 | |||||
Fair value on date of settlement of open contracts at beginning of period | 20,167 | 54,292 | |||||
Asset balance at end of period | $ | 119,461 | $ | 119,461 |
NOTE 6: | Earnings Per Share |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Earnings attributable to HollyFrontier stockholders | $ | 493,499 | $ | 192,235 | $ | 735,195 | $ | 276,929 | ||||||||
Average number of shares of common stock outstanding | 205,727 | 106,730 | 207,129 | 106,672 | ||||||||||||
Effect of dilutive variable restricted shares and performance share units | 754 | 610 | 809 | 614 | ||||||||||||
Average number of shares of common stock outstanding assuming dilution | 206,481 | 107,340 | 207,938 | 107,286 | ||||||||||||
Basic earnings per share | $ | 2.40 | $ | 1.80 | $ | 3.55 | $ | 2.60 | ||||||||
Diluted earnings per share | $ | 2.39 | $ | 1.79 | $ | 3.54 | $ | 2.58 |
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 | 407,037 | 33.81 | |||||||||
Vesting and transfer of ownership to recipients | (571,238 | ) | 23.40 | ||||||||
Forfeited | (3,975 | ) | 33.06 | ||||||||
Outstanding at June 30, 2012 (non-vested) | 954,174 | $ | 30.25 | $ | 33,806 |
Performance Share Units | Grants | ||
Outstanding at January 1, 2012 (non-vested) | 774,788 | ||
Granted | 293,559 | ||
Vesting and transfer of ownership to recipients | (240,019 | ) | |
Forfeited | (5,057 | ) | |
Outstanding at June 30, 2012 (non-vested) | 823,271 |
NOTE 8: | Cash and Cash Equivalents and Investments in Marketable Securities |
Available-for-Sale Securities | ||||||||||||||||
Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value (Net Carrying Amount) | |||||||||||||
(In thousands) | ||||||||||||||||
June 30, 2012 | ||||||||||||||||
Marketable debt securities (state and political subdivisions) | $ | 276,248 | $ | 1 | $ | (1 | ) | $ | 276,248 | |||||||
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 |
June 30, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
Crude oil | $ | 471,228 | $ | 400,952 | ||||
Other raw materials and unfinished products(1) | 164,730 | 137,356 | ||||||
Finished products(2) | 617,849 | 513,776 | ||||||
Process chemicals(3) | 2,943 | 1,180 | ||||||
Repairs and maintenance supplies and other | 53,069 | 61,355 | ||||||
Total inventory | $ | 1,309,819 | $ | 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 | 1,792 | — | 1,792 | ||||||||
Balance at June 30, 2012 | $ | 2,049,311 | $ | 288,991 | $ | 2,338,302 |
NOTE 11: | Environmental |
NOTE 12: | Debt |
• | 9.875% senior notes ($286.8 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) |
• | 6.5% HEP senior notes ($300 million principal amount maturing March 2020) |
• | 8.25% HEP senior notes ($150 million principal amount maturing March 2018) |
June 30, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
9.875% Senior Notes | ||||||||
Principal | $ | 286,812 | $ | 291,812 | ||||
Unamortized discount | (8,100 | ) | (8,930 | ) | ||||
278,712 | 282,882 | |||||||
6.875% Senior Notes | ||||||||
Principal | 150,000 | 150,000 | ||||||
Unamortized premium | 5,901 | 6,490 | ||||||
155,901 | 156,490 | |||||||
8.5% Senior Notes | ||||||||
Principal | 199,985 | 199,985 | ||||||
Unamortized premium | 10,384 | 11,905 | ||||||
210,369 | 211,890 | |||||||
Financing Obligation | 36,986 | 37,620 | ||||||
Total HollyFrontier long-term debt | 681,968 | 688,882 | ||||||
HEP Credit Agreement | 170,000 | 200,000 | ||||||
HEP 8.25% Senior Notes | ||||||||
Principal | 150,000 | 150,000 | ||||||
Unamortized discount | (1,754 | ) | (1,907 | ) | ||||
148,246 | 148,093 | |||||||
HEP 6.5% Senior Notes | ||||||||
Principal | 300,000 | — | ||||||
Unamortized discount | (5,051 | ) | — | |||||
294,949 | — | |||||||
HEP 6.25% Senior Notes | ||||||||
Principal | — | 185,000 | ||||||
Unamortized discount | — | (8,331 | ) | |||||
Unamortized premium – designated fair value hedge | — | 1,098 | ||||||
— | 177,767 | |||||||
Total HEP long-term debt | 613,195 | 525,860 | ||||||
Total long-term debt | $ | 1,295,163 | $ | 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. |
Unrealized Gain (Loss) Recognized in OCI | Gain (Loss) Recognized in Earnings Due to Settlements | Gain (Loss) Attributable to Hedge Ineffectiveness Recognized in Earnings | |||||||||||||
Location | Amount | Location | Amount | ||||||||||||
(In thousands) | |||||||||||||||
Three Months Ended June 30, 2012 | |||||||||||||||
Commodity price swaps | |||||||||||||||
Change in fair value | $ | 27,044 | Sales and other revenues | $ | (20,167 | ) | Sales and other revenues | $ | 2,984 | ||||||
Loss reclassified to earnings due to settlements | 3,992 | Cost of products sold | 16,175 | Cost of products sold | (6,317 | ) | |||||||||
Total | $ | 31,036 | $ | (3,992 | ) | $ | (3,333 | ) | |||||||
Three Months Ended June 30, 2011 | |||||||||||||||
Commodity price swaps | $ | — | Operating expenses | $ | — | Operating expenses | $ | — | |||||||
Six Months Ended June 30, 2012 | |||||||||||||||
Commodity price swaps | |||||||||||||||
Change in fair value | $ | (113,076 | ) | Sales and other revenues | $ | (54,292 | ) | Sales and other revenues | $ | 1,655 | |||||
Gain reclassified to earnings due to settlements | (12,423 | ) | Cost of products sold | 66,715 | Cost of products sold | (6,317 | ) | ||||||||
Total | $ | (125,499 | ) | $ | 12,423 | $ | (4,662 | ) | |||||||
Six Months Ended June 30, 2011 | |||||||||||||||
Commodity price swaps | |||||||||||||||
Change in fair value | $ | (128 | ) | ||||||||||||
Loss reclassified to earnings due to settlements | 166 | Operating expenses | $ | (166 | ) | Operating expenses | $ | — | |||||||
Total | $ | 38 | $ | (166 | ) | $ | — |
Notional Contract Volumes by Year of Maturity | |||||||||||
Commodity Price Swaps | Total Outstanding Notional | 2012 | 2013 | Unit of Measure | |||||||
WTI crude oil - long | 10,096,000 | 9,016,000 | 1,080,000 | Barrels | |||||||
Ultra-low sulfur diesel - short | 5,048,000 | 4,508,000 | 540,000 | Barrels | |||||||
Conventional unleaded gasoline - short | 5,048,000 | 4,508,000 | 540,000 | Barrels |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Location of Gain (Loss) Recognized in Income | 2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands) | ||||||||||||||||
Cost of products sold | $ | 50,863 | $ | 3,045 | $ | 35,869 | $ | (652 | ) | |||||||
Operating expenses | 1,543 | — | (158 | ) | — | |||||||||||
Total | $ | 52,406 | $ | 3,045 | $ | 35,711 | $ | (652 | ) |
Notional Contract Volumes by Year of Maturity | |||||||||||
Derivative Instrument | Total Outstanding Notional | 2012 | 2013 | Unit of Measure | |||||||
Commodity price swap (natural gas) - long | 6,624,000 | 6,624,000 | — | MMBTU | |||||||
Commodity price swap (WCS spread) - long | 6,422,500 | 765,000 | 5,657,500 | Barrels | |||||||
Commodity price swap (WTI) - short | 150,000 | — | 150,000 | Barrels | |||||||
Commodity price swap (gasoline) - short | 630,000 | 150,000 | 480,000 | Barrels | |||||||
Commodity price swap (butane) - long | 540,000 | 540,000 | — | Barrels | |||||||
NYMEX futures (WTI) - long | 380,000 | 146,000 | 234,000 | Barrels | |||||||
NYMEX futures (WTI)- short | 1,008,000 | 1,008,000 | — | Barrels |
Unrealized Gain (Loss) Recognized in OCI | Gain (Loss) Recognized in Earnings Due to Settlements | ||||||||
Location | Amount | ||||||||
(In thousands) | |||||||||
Three Months Ended June 30, 2012 | |||||||||
Interest rate swap | |||||||||
Change in fair value | $ | (1,802 | ) | ||||||
Loss reclassified to earnings due to settlements | 1,567 | Interest expense | $ | (1,567 | ) | ||||
Total | $ | (235 | ) | $ | (1,567 | ) | |||
Three Months Ended June 30, 2011 | |||||||||
Interest rate swap | |||||||||
Change in fair value | $ | (1,110 | ) | ||||||
Loss reclassified to earnings due to settlements | 1,381 | Interest expense | $ | (1,381 | ) | ||||
Total | $ | 271 | $ | (1,381 | ) | ||||
Six Months Ended June 30, 2012 | |||||||||
Interest rate swap | |||||||||
Change in fair value | $ | (2,438 | ) | ||||||
Loss reclassified to earnings due to settlements | 3,123 | Interest expense | $ | (3,123 | ) | ||||
Total | $ | 685 | $ | (3,123 | ) | ||||
Six Months Ended June 30, 2011 | |||||||||
Interest rate swap | |||||||||
Change in fair value | $ | (1,175 | ) | ||||||
Loss reclassified to earnings due to settlements | 2,729 | Interest expense | $ | (2,729 | ) | ||||
Total | $ | 1,554 | $ | (2,729 | ) |
Asset Derivatives | Liability Derivatives | |||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||
(In thousands) | ||||||||||||
June 30, 2012 | ||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 119,461 | Prepayments and other current assets | $ | 75,840 | ||||||
Variable-to-fixed interest rate swap contract | Other long-term liabilities | 2,382 | ||||||||||
Total | $ | 119,461 | $ | 78,222 | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 6,372 | Prepayments and other current assets | $ | 16,043 | ||||||
December 31, 2011 | ||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 173,784 | |||||||||
Variable-to-fixed interest rate swap contract | Other long-term liabilities | $ | 520 | |||||||||
Total | $ | 173,784 | $ | 520 | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Commodity price swap contracts | Prepayments and other current assets | $ | 1,870 | Accrued liabilities | $ | 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 | 735,195 | 14,195 | 749,390 | |||||||||
Other comprehensive income (loss) | (72,298 | ) | 400 | (71,898 | ) | |||||||
Dividends | (259,403 | ) | — | (259,403 | ) | |||||||
Distributions to noncontrolling interest holders | — | (28,944 | ) | (28,944 | ) | |||||||
Contribution from joint venture partner | — | 3,000 | 3,000 | |||||||||
Equity-based compensation | 15,862 | 1,629 | 17,491 | |||||||||
Excess tax benefit attributable to equity-based compensation | 4,762 | — | 4,762 | |||||||||
Purchase of treasury stock (1) | (198,667 | ) | — | (198,667 | ) | |||||||
Net prepayment related to structured share repurchase arrangement | (100,000 | ) | — | (100,000 | ) | |||||||
Purchase of HEP units for restricted grants | — | (4,006 | ) | (4,006 | ) | |||||||
Balance at June 30, 2012 | $ | 5,329,461 | $ | 618,164 | $ | 5,947,625 |
(1) | Includes 305,037 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 June 30, 2012 | ||||||||||||
Unrealized loss, net of reclassifications from sale or maturity, on available-for-sale securities | $ | (404 | ) | $ | (158 | ) | $ | (246 | ) | |||
Unrealized gain on hedging activities | 30,801 | 12,035 | 18,766 | |||||||||
Pension plan curtailment | 7,102 | 2,763 | 4,339 | |||||||||
Other comprehensive income | 37,499 | 14,640 | 22,859 | |||||||||
Less other comprehensive loss attributable to noncontrolling interest | (137 | ) | — | (137 | ) | |||||||
Other comprehensive income attributable to HollyFrontier stockholders | $ | 37,636 | $ | 14,640 | $ | 22,996 | ||||||
Three Months Ended June 30, 2011 | ||||||||||||
Unrealized loss on available-for-sale securities | $ | (459 | ) | $ | (179 | ) | $ | (280 | ) | |||
Unrealized gain on hedging activities | 271 | 35 | 236 | |||||||||
Other comprehensive loss | (188 | ) | (144 | ) | (44 | ) | ||||||
Less other comprehensive income attributable to noncontrolling interest | 178 | — | 178 | |||||||||
Other comprehensive loss attributable to HollyFrontier stockholders | $ | (366 | ) | $ | (144 | ) | $ | (222 | ) | |||
Six Months Ended June 30, 2012 | ||||||||||||
Unrealized loss, net of reclassifications from sale or maturity, on available-for-sale securities | $ | (216 | ) | $ | (84 | ) | $ | (132 | ) | |||
Unrealized loss on hedging activities | (124,814 | ) | (48,709 | ) | (76,105 | ) | ||||||
Pension plan curtailment | 7,102 | 2,763 | 4,339 | |||||||||
Other comprehensive loss | (117,928 | ) | (46,030 | ) | (71,898 | ) | ||||||
Less other comprehensive income attributable to noncontrolling interest | 400 | — | 400 | |||||||||
Other comprehensive loss attributable to HollyFrontier stockholders | $ | (118,328 | ) | $ | (46,030 | ) | $ | (72,298 | ) | |||
Six Months Ended June 30, 2011 | ||||||||||||
Unrealized loss on available-for-sale securities | $ | (317 | ) | $ | (124 | ) | $ | (193 | ) | |||
Unrealized gain on hedging activities | 1,592 | 222 | 1,370 | |||||||||
Other comprehensive income | 1,275 | 98 | 1,177 | |||||||||
Less other comprehensive income attributable to noncontrolling interest | 1,020 | — | 1,020 | |||||||||
Other comprehensive income attributable to HollyFrontier stockholders | $ | 255 | $ | 98 | $ | 157 |
June 30, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
Pension obligation adjustment | $ | (18,376 | ) | $ | (22,715 | ) | ||
Retiree medical obligation adjustment | (4,042 | ) | (4,042 | ) | ||||
Unrealized gain on available-for-sale securities | 2 | 134 | ||||||
Unrealized gain on hedging activities, net of noncontrolling interest | 27,991 | 104,496 | ||||||
Accumulated other comprehensive income | $ | 5,575 | $ | 77,873 |
NOTE 16: | Retirement Plan |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(In thousands) | ||||||||||||||||
Service cost – benefit earned during the period | $ | 509 | $ | 1,268 | $ | 679 | $ | 2,535 | ||||||||
Interest cost on projected benefit obligations | 1,061 | 1,281 | 2,052 | 2,562 | ||||||||||||
Expected return on plan assets | (949 | ) | (1,339 | ) | (1,899 | ) | (2,678 | ) | ||||||||
Amortization of prior service cost | 50 | 97 | 67 | 195 | ||||||||||||
Amortization of net loss | 620 | 533 | 1,103 | 1,066 | ||||||||||||
Estimated effect of curtailment | 674 | — | 899 | — | ||||||||||||
Net periodic pension expense | $ | 1,965 | $ | 1,840 | $ | 2,901 | $ | 3,680 |
Three Months Ended June 30, 2012 | Six Months Ended June 30, 2012 | |||||||
(In thousands) | ||||||||
Service cost – benefit earned during the period | $ | 475 | $ | 950 | ||||
Interest cost on projected benefit obligations | 875 | 1,750 | ||||||
Amortization of prior service credit | (550 | ) | (1,100 | ) | ||||
Amortization of net loss | 75 | 150 | ||||||
Net periodic pension expense | $ | 875 | $ | 1,750 |
NOTE 17: | Contingencies |
NOTE 18: | Segment Information |
Refining (1) | HEP | Corporate and Other | Consolidations and Eliminations | Consolidated Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months Ended June 30, 2012 | ||||||||||||||||||||
Sales and other revenues | $ | 4,795,469 | $ | 63,692 | $ | 4,411 | $ | (56,891 | ) | $ | 4,806,681 | |||||||||
Depreciation and amortization | $ | 43,665 | $ | 8,728 | $ | 4,762 | $ | (207 | ) | $ | 56,948 | |||||||||
Income (loss) from operations | $ | 812,936 | $ | 34,554 | $ | (33,756 | ) | $ | (597 | ) | $ | 813,137 | ||||||||
Capital expenditures | $ | 56,262 | $ | 5,681 | $ | 4,690 | $ | — | $ | 66,633 | ||||||||||
Three Months Ended June 30, 2011 | ||||||||||||||||||||
Sales and other revenues | $ | 2,953,226 | $ | 50,940 | $ | 153 | $ | (37,186 | ) | $ | 2,967,133 | |||||||||
Depreciation and amortization | $ | 23,478 | $ | 7,309 | $ | 1,252 | $ | (207 | ) | $ | 31,832 | |||||||||
Income (loss) from operations | $ | 321,032 | $ | 27,692 | $ | (18,040 | ) | $ | (505 | ) | $ | 330,179 | ||||||||
Capital expenditures | $ | 25,152 | $ | 11,425 | $ | 45,690 | $ | — | $ | 82,267 | ||||||||||
Six Months Ended June 30, 2012 | ||||||||||||||||||||
Sales and other revenues | $ | 9,715,200 | $ | 127,207 | $ | 8,635 | $ | (112,623 | ) | $ | 9,738,419 | |||||||||
Depreciation and amortization | $ | 85,197 | $ | 18,587 | $ | 9,680 | $ | (414 | ) | $ | 113,050 | |||||||||
Income (loss) from operations | $ | 1,228,062 | $ | 69,183 | $ | (63,505 | ) | $ | (1,039 | ) | $ | 1,232,701 | ||||||||
Capital expenditures | $ | 101,796 | $ | 12,008 | $ | 14,216 | $ | — | $ | 128,020 | ||||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||||||
Sales and other revenues | $ | 5,268,318 | $ | 95,945 | $ | 801 | $ | (71,346 | ) | $ | 5,293,718 | |||||||||
Depreciation and amortization | $ | 46,461 | $ | 14,544 | $ | 2,549 | $ | (414 | ) | $ | 63,140 | |||||||||
Income (loss) from operations | $ | 473,136 | $ | 51,303 | $ | (34,138 | ) | $ | (1,023 | ) | $ | 489,278 | ||||||||
Capital expenditures | $ | 45,784 | $ | 22,900 | $ | 87,621 | $ | — | $ | 156,305 |
Refining (1) | HEP | Corporate and Other | Consolidations and Eliminations | Consolidated Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
June 30, 2012 | ||||||||||||||||||||
Cash, cash equivalents and investments in marketable securities | $ | 19 | $ | 4,216 | $ | 1,644,211 | $ | — | $ | 1,648,446 | ||||||||||
Total assets | $ | 7,213,749 | $ | 988,670 | $ | 1,222,787 | $ | (42,674 | ) | $ | 9,382,532 | |||||||||
Long-term debt | $ | — | $ | 613,195 | $ | 698,156 | $ | (16,188 | ) | $ | 1,295,163 | |||||||||
December 31, 2011 | ||||||||||||||||||||
Cash, cash equivalents and investments in marketable securities | $ | — | $ | 3,269 | $ | 1,837,341 | $ | — | $ | 1,840,610 | ||||||||||
Total assets | $ | 6,280,426 | $ | 995,120 | $ | 2,421,140 | $ | (120,443 | ) | $ | 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 | ||||||||||||||||||||||||||||||||
June 30, 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 | $ | 1,366,416 | $ | 1,564 | $ | 2 | $ | — | $ | 1,367,982 | $ | 4,216 | $ | — | $ | 1,372,198 | ||||||||||||||||
Marketable securities | 266,477 | 6 | — | — | 266,483 | — | — | 266,483 | ||||||||||||||||||||||||
Accounts receivable, net | 2,771 | 600,822 | 1,051 | — | 604,644 | 30,169 | (31,087 | ) | 603,726 | |||||||||||||||||||||||
Intercompany accounts receivable (payable) | 2,378,862 | (2,686,908 | ) | 308,046 | — | — | — | — | — | |||||||||||||||||||||||
Inventories | — | 1,308,493 | — | — | 1,308,493 | 1,326 | — | 1,309,819 | ||||||||||||||||||||||||
Income taxes receivable | 93,644 | — | 4 | — | 93,648 | — | — | 93,648 | ||||||||||||||||||||||||
Prepayments and other | 13,396 | 47,437 | 1,043 | — | 61,876 | 2,084 | (4,142 | ) | 59,818 | |||||||||||||||||||||||
Total current assets | 4,121,566 | (728,586 | ) | 310,146 | — | 3,703,126 | 37,795 | (35,229 | ) | 3,705,692 | ||||||||||||||||||||||
Properties, plants and equip, net | 20,116 | 2,085,903 | 403,452 | — | 2,509,471 | 584,702 | (5,867 | ) | 3,088,306 | |||||||||||||||||||||||
Marketable securities (long-term) | 9,765 | — | — | — | 9,765 | — | — | 9,765 | ||||||||||||||||||||||||
Investment in subsidiaries | 2,331,322 | 629,603 | (244,218 | ) | (2,716,707 | ) | — | — | — | — | ||||||||||||||||||||||
Intangibles and other assets | 9,804 | 2,204,370 | 25,000 | (25,000 | ) | 2,214,174 | 366,173 | (1,578 | ) | 2,578,769 | ||||||||||||||||||||||
Total assets | $ | 6,492,573 | $ | 4,191,290 | $ | 494,380 | $ | (2,741,707 | ) | $ | 8,436,536 | $ | 988,670 | $ | (42,674 | ) | $ | 9,382,532 | ||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 28,972 | $ | 1,086,102 | $ | 2,534 | $ | — | $ | 1,117,608 | $ | 9,695 | $ | (31,087 | ) | $ | 1,096,216 | |||||||||||||||
Income taxes payable | 13,712 | 148,553 | — | — | 162,265 | — | — | 162,265 | ||||||||||||||||||||||||
Accrued liabilities | 67,237 | 48,259 | 4,715 | — | 120,211 | 17,749 | (4,142 | ) | 133,818 | |||||||||||||||||||||||
Deferred income tax liabilities | 185,777 | (16,381 | ) | (10 | ) | — | 169,386 | — | — | 169,386 | ||||||||||||||||||||||
Total current liabilities | 295,698 | 1,266,533 | 7,239 | — | 1,569,470 | 27,444 | (35,229 | ) | 1,561,685 | |||||||||||||||||||||||
Long-term debt | 669,983 | 28,173 | — | — | 698,156 | 613,195 | (16,188 | ) | 1,295,163 | |||||||||||||||||||||||
Deferred income tax liabilities | 163,090 | 247,020 | 967 | — | 411,077 | — | 4,951 | 416,028 | ||||||||||||||||||||||||
Other long-term liabilities | 90,426 | 93,132 | — | (25,000 | ) | 158,558 | 6,195 | (2,722 | ) | 162,031 | ||||||||||||||||||||||
Investment in HEP | — | 225,110 | — | — | 225,110 | — | (225,110 | ) | — | |||||||||||||||||||||||
Equity – HollyFrontier | 5,273,376 | 2,331,322 | 486,174 | (2,817,496 | ) | 5,273,376 | 341,836 | (285,751 | ) | 5,329,461 | ||||||||||||||||||||||
Equity – noncontrolling interest | — | — | — | 100,789 | 100,789 | — | 517,375 | 618,164 | ||||||||||||||||||||||||
Total liabilities and equity | $ | 6,492,573 | $ | 4,191,290 | $ | 494,380 | $ | (2,741,707 | ) | $ | 8,436,536 | $ | 988,670 | $ | (42,674 | ) | $ | 9,382,532 |
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 and Comprehensive Income | ||||||||||||||||||||||||||||||||
Three Months Ended June 30, 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 | $ | 100 | $ | 4,795,719 | $ | 4,061 | $ | (2,670 | ) | $ | 4,797,210 | $ | 63,692 | $ | (54,221 | ) | $ | 4,806,681 | ||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of products sold | — | 3,737,717 | — | (2,596 | ) | 3,735,121 | — | (53,357 | ) | 3,681,764 | ||||||||||||||||||||||
Operating expenses | — | 201,876 | 3,061 | — | 204,937 | 17,923 | (134 | ) | 222,726 | |||||||||||||||||||||||
General and administrative | 29,451 | 146 | 22 | — | 29,619 | 2,487 | — | 32,106 | ||||||||||||||||||||||||
Depreciation and amortization | 876 | 43,963 | 3,588 | — | 48,427 | 8,728 | (207 | ) | 56,948 | |||||||||||||||||||||||
Total operating costs and expenses | 30,327 | 3,983,702 | 6,671 | (2,596 | ) | 4,018,104 | 29,138 | (53,698 | ) | 3,993,544 | ||||||||||||||||||||||
Income (loss) from operations | (30,227 | ) | 812,017 | (2,610 | ) | (74 | ) | 779,106 | 34,554 | (523 | ) | 813,137 | ||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Earnings of equity method investments | 823,251 | 11,927 | 13,613 | (835,086 | ) | 13,705 | 794 | (13,613 | ) | 886 | ||||||||||||||||||||||
Interest income (expense) | (13,424 | ) | (944 | ) | 176 | — | (14,192 | ) | (12,665 | ) | 596 | (26,261 | ) | |||||||||||||||||||
Gain on sale of marketable securities | — | 326 | — | — | 326 | — | — | 326 | ||||||||||||||||||||||||
809,827 | 11,309 | 13,789 | (835,086 | ) | (161 | ) | (11,871 | ) | (13,017 | ) | (25,049 | ) | ||||||||||||||||||||
Income before income taxes | 779,600 | 823,326 | 11,179 | (835,160 | ) | 778,945 | 22,683 | (13,540 | ) | 788,088 | ||||||||||||||||||||||
Income tax provision | 285,643 | — | — | — | 285,643 | 75 | — | 285,718 | ||||||||||||||||||||||||
Net income | 493,957 | 823,326 | 11,179 | (835,160 | ) | 493,302 | 22,608 | (13,540 | ) | 502,370 | ||||||||||||||||||||||
Less net income attributable to noncontrolling interest | — | — | — | (656 | ) | (656 | ) | — | 9,527 | 8,871 | ||||||||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 493,957 | $ | 823,326 | $ | 11,179 | $ | (834,504 | ) | $ | 493,958 | $ | 22,608 | $ | (23,067 | ) | $ | 493,499 | ||||||||||||||
Comprehensive income attributable to HollyFrontier stockholders | $ | 509,400 | $ | 830,977 | $ | 11,179 | $ | (834,504 | ) | $ | 517,052 | $ | 22,373 | $ | (22,930 | ) | $ | 516,495 |
Condensed Consolidating Statement of Income and Comprehensive Income | ||||||||||||||||||||||||||||||||
Three Months Ended June 30, 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 | $ | 153 | $ | 2,953,226 | $ | — | $ | — | $ | 2,953,379 | $ | 50,940 | $ | (37,186 | ) | $ | 2,967,133 | |||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of products sold | — | 2,483,435 | — | — | 2,483,435 | — | (36,340 | ) | 2,447,095 | |||||||||||||||||||||||
Operating expenses | — | 124,992 | 121 | — | 125,113 | 14,366 | (134 | ) | 139,345 | |||||||||||||||||||||||
General and administrative | 16,976 | 133 | — | — | 17,109 | 1,573 | — | 18,682 | ||||||||||||||||||||||||
Depreciation and amortization | 907 | 23,644 | 179 | — | 24,730 | 7,309 | (207 | ) | 31,832 | |||||||||||||||||||||||
Total operating costs and expenses | 17,883 | 2,632,204 | 300 | — | 2,650,387 | 23,248 | (36,681 | ) | 2,636,954 | |||||||||||||||||||||||
Income (loss) from operations | (17,730 | ) | 321,022 | (300 | ) | — | 302,992 | 27,692 | (505 | ) | 330,179 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Earnings of equity method investments | 329,496 | 9,268 | 9,480 | (338,764 | ) | 9,480 | 467 | (9,480 | ) | 467 | ||||||||||||||||||||||
Interest income (expense) | (5,063 | ) | (795 | ) | 13 | — | (5,845 | ) | (9,286 | ) | 595 | (14,536 | ) | |||||||||||||||||||
Merger transaction costs | (2,316 | ) | — | — | — | (2,316 | ) | — | — | (2,316 | ) | |||||||||||||||||||||
322,117 | 8,473 | 9,493 | (338,764 | ) | 1,319 | (8,819 | ) | (8,885 | ) | (16,385 | ) | |||||||||||||||||||||
Income before income taxes | 304,387 | 329,495 | 9,193 | (338,764 | ) | 304,311 | 18,873 | (9,390 | ) | 313,794 | ||||||||||||||||||||||
Income tax provision | 111,943 | — | — | — | 111,943 | 18 | — | 111,961 | ||||||||||||||||||||||||
Net income | 192,444 | 329,495 | 9,193 | (338,764 | ) | 192,368 | 18,855 | (9,390 | ) | 201,833 | ||||||||||||||||||||||
Less net income attributable to noncontrolling interest | — | — | — | (75 | ) | (75 | ) | — | 9,673 | 9,598 | ||||||||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 192,444 | $ | 329,495 | $ | 9,193 | $ | (338,689 | ) | $ | 192,443 | $ | 18,855 | $ | (19,063 | ) | $ | 192,235 | ||||||||||||||
Comprehensive income attributable to HollyFrontier stockholders | $ | 192,510 | $ | 329,113 | $ | 9,193 | $ | (338,689 | ) | $ | 192,127 | $ | 19,126 | $ | (19,240 | ) | $ | 192,013 |
Condensed Consolidating Statement of Income and Comprehensive Income | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 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 | $ | 199 | $ | 9,715,457 | $ | 8,179 | $ | (5,614 | ) | $ | 9,718,221 | $ | 127,207 | $ | (107,009 | ) | $ | 9,738,419 | ||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of products sold | — | 7,979,509 | — | (5,540 | ) | 7,973,969 | — | (105,288 | ) | 7,868,681 | ||||||||||||||||||||||
Operating expenses | — | 423,667 | 6,117 | (75 | ) | 429,709 | 34,911 | (267 | ) | 464,353 | ||||||||||||||||||||||
General and administrative | 54,424 | 662 | 22 | — | 55,108 | 4,526 | — | 59,634 | ||||||||||||||||||||||||
Depreciation and amortization | 1,979 | 85,774 | 7,124 | — | 94,877 | 18,587 | (414 | ) | 113,050 | |||||||||||||||||||||||
Total operating costs and expenses | 56,403 | 8,489,612 | 13,263 | (5,615 | ) | 8,553,663 | 58,024 | (105,969 | ) | 8,505,718 | ||||||||||||||||||||||
Income (loss) from operations | (56,204 | ) | 1,225,845 | (5,084 | ) | 1 | 1,164,558 | 69,183 | (1,040 | ) | 1,232,701 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Earnings of equity method investments | 1,247,902 | 23,131 | 26,577 | (1,271,055 | ) | 26,555 | 1,625 | (26,577 | ) | 1,603 | ||||||||||||||||||||||
Interest income (expense) | (27,447 | ) | (1,400 | ) | 375 | — | (28,472 | ) | (31,835 | ) | 1,191 | (59,116 | ) | |||||||||||||||||||
Gain on sale of marketable securities | — | 326 | — | — | 326 | — | — | 326 | ||||||||||||||||||||||||
1,220,455 | 22,057 | 26,952 | (1,271,055 | ) | (1,591 | ) | (30,210 | ) | (25,386 | ) | (57,187 | ) | ||||||||||||||||||||
Income before income taxes | 1,164,251 | 1,247,902 | 21,868 | (1,271,054 | ) | 1,162,967 | 38,973 | (26,426 | ) | 1,175,514 | ||||||||||||||||||||||
Income tax provision | 425,974 | — | — | — | 425,974 | 150 | — | 426,124 | ||||||||||||||||||||||||
Net income | 738,277 | 1,247,902 | 21,868 | (1,271,054 | ) | 736,993 | 38,823 | (26,426 | ) | 749,390 | ||||||||||||||||||||||
Less net income attributable to noncontrolling interest | — | — | — | (1,285 | ) | (1,285 | ) | — | 15,480 | 14,195 | ||||||||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 738,277 | $ | 1,247,902 | $ | 21,868 | $ | (1,269,769 | ) | $ | 738,278 | $ | 38,823 | $ | (41,906 | ) | $ | 735,195 | ||||||||||||||
Comprehensive income attributable to HollyFrontier stockholders | $ | 673,129 | $ | 1,240,467 | $ | 21,868 | $ | (1,269,769 | ) | $ | 665,695 | $ | 39,508 | $ | (42,306 | ) | $ | 662,897 |
Condensed Consolidating Statement of Income and Comprehensive Income | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 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 | $ | 801 | $ | 5,268,318 | $ | — | $ | — | $ | 5,269,119 | $ | 95,945 | $ | (71,346 | ) | $ | 5,293,718 | |||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of products sold | — | 4,501,361 | — | — | 4,501,361 | — | (69,649 | ) | 4,431,712 | |||||||||||||||||||||||
Operating expenses | — | 246,677 | 509 | — | 247,186 | 27,162 | (260 | ) | 274,088 | |||||||||||||||||||||||
General and administrative | 32,329 | 235 | — | — | 32,564 | 2,936 | — | 35,500 | ||||||||||||||||||||||||
Depreciation and amortization | 1,847 | 46,805 | 358 | — | 49,010 | 14,544 | (414 | ) | 63,140 | |||||||||||||||||||||||
Total operating costs and expenses | 34,176 | 4,795,078 | 867 | — | 4,830,121 | 44,642 | (70,323 | ) | 4,804,440 | |||||||||||||||||||||||
Income (loss) from operations | (33,375 | ) | 473,240 | (867 | ) | — | 438,998 | 51,303 | (1,023 | ) | 489,278 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Earnings of equity method investments | 488,453 | 16,831 | 17,500 | (505,284 | ) | 17,500 | 1,207 | (17,500 | ) | 1,207 | ||||||||||||||||||||||
Interest income (expense) | (11,872 | ) | (1,618 | ) | 26 | — | (13,464 | ) | (18,398 | ) | 1,207 | (30,655 | ) | |||||||||||||||||||
Merger transaction costs | (6,014 | ) | — | — | — | (6,014 | ) | — | — | (6,014 | ) | |||||||||||||||||||||
470,567 | 15,213 | 17,526 | (505,284 | ) | (1,978 | ) | (17,191 | ) | (16,293 | ) | (35,462 | ) | ||||||||||||||||||||
Income before income taxes | 437,192 | 488,453 | 16,659 | (505,284 | ) | 437,020 | 34,112 | (17,316 | ) | 453,816 | ||||||||||||||||||||||
Income tax provision | 160,726 | — | — | — | 160,726 | 246 | — | 160,972 | ||||||||||||||||||||||||
Net income | 276,466 | 488,453 | 16,659 | (505,284 | ) | 276,294 | 33,866 | (17,316 | ) | 292,844 | ||||||||||||||||||||||
Less net income attributable to noncontrolling interest | — | — | — | (172 | ) | (172 | ) | — | 16,087 | 15,915 | ||||||||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 276,466 | $ | 488,453 | $ | 16,659 | $ | (505,112 | ) | $ | 276,466 | $ | 33,866 | $ | (33,403 | ) | $ | 276,929 | ||||||||||||||
Comprehensive income attributable to HollyFrontier stockholders | $ | 276,337 | $ | 488,204 | $ | 16,659 | $ | (505,111 | ) | $ | 276,089 | $ | 36,440 | $ | (35,443 | ) | $ | 277,086 |
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||||||||||||||
Six Months Ended June 30, 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 | $ | 347,534 | $ | 45,516 | $ | (6,489 | ) | $ | 386,561 | $ | 73,500 | $ | (30,558 | ) | $ | 429,503 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||
Additions to properties, plants and equip | (1,679 | ) | (102,722 | ) | (11,611 | ) | (116,012 | ) | — | — | (116,012 | ) | ||||||||||||||||
Additions to properties, plants and equip – HEP | — | — | — | — | (12,008 | ) | — | (12,008 | ) | |||||||||||||||||||
Investment in Sabine Biofuels | — | (2,000 | ) | — | (2,000 | ) | — | — | (2,000 | ) | ||||||||||||||||||
Purchases of marketable securities | (166,429 | ) | — | — | (166,429 | ) | — | — | (166,429 | ) | ||||||||||||||||||
Sales and maturities of marketable securities | 151,066 | 930 | — | 151,996 | — | — | 151,996 | |||||||||||||||||||||
(17,042 | ) | (103,792 | ) | (11,611 | ) | (132,445 | ) | (12,008 | ) | — | (144,453 | ) | ||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||
Net repayments under credit agreement – HEP | — | — | — | — | (30,000 | ) | — | (30,000 | ) | |||||||||||||||||||
Repayment of promissory notes | — | 72,900 | — | 72,900 | (72,900 | ) | — | — | ||||||||||||||||||||
Net proceeds from issuance of senior notes - HEP | — | — | — | — | 294,750 | — | 294,750 | |||||||||||||||||||||
Repayment of senior notes - HFC | (5,000 | ) | — | — | (5,000 | ) | — | — | (5,000 | ) | ||||||||||||||||||
Principal tender on senior notes - HEP | — | — | — | — | (185,000 | ) | — | (185,000 | ) | |||||||||||||||||||
Purchase of treasury stock | (189,771 | ) | — | — | (189,771 | ) | — | — | (189,771 | ) | ||||||||||||||||||
Net prepayment related to structured stock repurchase agreement | (100,000 | ) | — | — | (100,000 | ) | — | — | (100,000 | ) | ||||||||||||||||||
Contribution from joint venture partner | — | (9,000 | ) | 15,000 | 6,000 | — | — | 6,000 | ||||||||||||||||||||
Dividends | (249,958 | ) | — | — | (249,958 | ) | — | — | (249,958 | ) | ||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | (59,977 | ) | 31,033 | (28,944 | ) | |||||||||||||||||||
Excess tax benefit from equity-based compensation | 4,762 | — | — | 4,762 | — | — | 4,762 | |||||||||||||||||||||
Purchase of units for restricted grants - HEP | — | — | — | — | (4,533 | ) | — | (4,533 | ) | |||||||||||||||||||
Deferred financing costs | — | (67 | ) | — | (67 | ) | (3,162 | ) | — | (3,229 | ) | |||||||||||||||||
Other | — | (635 | ) | — | (635 | ) | 277 | (475 | ) | (833 | ) | |||||||||||||||||
(539,967 | ) | 63,198 | 15,000 | (461,769 | ) | (60,545 | ) | 30,558 | (491,756 | ) | ||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||
Increase (decrease) for the period | (209,475 | ) | 4,922 | (3,100 | ) | (207,653 | ) | 947 | — | (206,706 | ) | |||||||||||||||||
Beginning of period | 1,575,891 | (3,358 | ) | 3,102 | 1,575,635 | 3,269 | — | 1,578,904 | ||||||||||||||||||||
End of period | $ | 1,366,416 | $ | 1,564 | $ | 2 | $ | 1,367,982 | $ | 4,216 | $ | — | $ | 1,372,198 |
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||||||||||||||
Six Months Ended June 30, 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 | $ | 304,061 | $ | 122,324 | $ | 5,051 | $ | 431,436 | $ | 46,289 | $ | (19,729 | ) | $ | 457,996 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||
Additions to properties, plants and equip | (2,623 | ) | (51,382 | ) | (79,400 | ) | (133,405 | ) | — | — | (133,405 | ) | ||||||||||||||||
Additions to properties, plants and equip – HEP | — | — | — | — | (22,900 | ) | — | (22,900 | ) | |||||||||||||||||||
Investment in Sabine Biofuels | (9,125 | ) | — | — | (9,125 | ) | — | — | (9,125 | ) | ||||||||||||||||||
Purchases of marketable securities | (157,782 | ) | — | — | (157,782 | ) | — | — | (157,782 | ) | ||||||||||||||||||
Sales and maturities of marketable securities | 68,150 | — | — | 68,150 | — | — | 68,150 | |||||||||||||||||||||
(101,380 | ) | (51,382 | ) | (79,400 | ) | (232,162 | ) | (22,900 | ) | — | (255,062 | ) | ||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||
Net borrowings under credit agreement – HEP | — | — | — | — | 27,000 | — | 27,000 | |||||||||||||||||||||
Purchase of treasury stock | (2,996 | ) | — | — | (2,996 | ) | — | — | (2,996 | ) | ||||||||||||||||||
Contribution from joint venture partner | — | (63,000 | ) | 79,500 | 16,500 | — | — | 16,500 | ||||||||||||||||||||
Dividends | (15,984 | ) | — | — | (15,984 | ) | — | — | (15,984 | ) | ||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | (44,862 | ) | 19,729 | (25,133 | ) | |||||||||||||||||||
Excess tax benefit from equity-based compensation | 498 | — | — | 498 | — | — | 498 | |||||||||||||||||||||
Purchase of units for restricted grants - HEP | — | — | — | — | (1,379 | ) | — | (1,379 | ) | |||||||||||||||||||
Deferred financing costs | (140 | ) | — | — | (140 | ) | (3,149 | ) | — | (3,289 | ) | |||||||||||||||||
Other | — | (563 | ) | — | (563 | ) | — | — | (563 | ) | ||||||||||||||||||
(18,622 | ) | (63,563 | ) | 79,500 | (2,685 | ) | (22,390 | ) | 19,729 | (5,346 | ) | |||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||
Increase (decrease) for the period: | 184,059 | 7,379 | 5,151 | 196,589 | 999 | — | 197,588 | |||||||||||||||||||||
Beginning of period | 230,082 | (9,035 | ) | 7,651 | 228,698 | 403 | — | 229,101 | ||||||||||||||||||||
End of period | $ | 414,141 | $ | (1,656 | ) | $ | 12,802 | $ | 425,287 | $ | 1,402 | $ | — | $ | 426,689 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended June 30, | Change from 2011 | ||||||||||||||
2012 | 2011 (1) | Change | Percent | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Sales and other revenues | $ | 4,806,681 | $ | 2,967,133 | $ | 1,839,548 | 62.0 | % | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of products sold (exclusive of depreciation and amortization) | 3,681,764 | 2,447,095 | 1,234,669 | 50.5 | |||||||||||
Operating expenses (exclusive of depreciation and amortization) | 222,726 | 139,345 | 83,381 | 59.8 | |||||||||||
General and administrative expenses (exclusive of depreciation and amortization) | 32,106 | 18,682 | 13,424 | 71.9 | |||||||||||
Depreciation and amortization | 56,948 | 31,832 | 25,116 | 78.9 | |||||||||||
Total operating costs and expenses | 3,993,544 | 2,636,954 | 1,356,590 | 51.4 | |||||||||||
Income from operations | 813,137 | 330,179 | 482,958 | 146.3 | |||||||||||
Other income (expense): | |||||||||||||||
Equity in earnings of SLC Pipeline | 886 | 467 | 419 | 89.7 | |||||||||||
Interest income | 681 | 657 | 24 | 3.7 | |||||||||||
Interest expense | (26,942 | ) | (15,193 | ) | (11,749 | ) | 77.3 | ||||||||
Gain on sale of marketable securities | 326 | — | 326 | — | |||||||||||
Merger transaction costs | — | (2,316 | ) | 2,316 | (100.0 | ) | |||||||||
(25,049 | ) | (16,385 | ) | (8,664 | ) | 52.9 | |||||||||
Income before income taxes | 788,088 | 313,794 | 474,294 | 151.1 | |||||||||||
Income tax provision | 285,718 | 111,961 | 173,757 | 155.2 | |||||||||||
Net income | 502,370 | 201,833 | 300,537 | 148.9 | |||||||||||
Less net income attributable to noncontrolling interest | 8,871 | 9,598 | (727 | ) | (7.6 | ) | |||||||||
Net income attributable to HollyFrontier stockholders | $ | 493,499 | $ | 192,235 | $ | 301,264 | 156.7 | % | |||||||
Earnings per share attributable to HollyFrontier stockholders: | |||||||||||||||
Basic | $ | 2.40 | $ | 1.80 | $ | 0.60 | 33.3 | % | |||||||
Diluted | $ | 2.39 | $ | 1.79 | $ | 0.60 | 33.5 | % | |||||||
Cash dividends declared per common share | $ | 0.65 | $ | 0.075 | $ | 0.575 | 766.7 | % | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 205,727 | 106,730 | 98,997 | 92.8 | % | ||||||||||
Diluted | 206,481 | 107,340 | 99,141 | 92.4 | % |
Six Months Ended June 30, | Change from 2011 | ||||||||||||||
2012 | 2011 (1) | Change | Percent | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Sales and other revenues | $ | 9,738,419 | $ | 5,293,718 | $ | 4,444,701 | 84.0 | % | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of products sold (exclusive of depreciation and amortization) | 7,868,681 | 4,431,712 | 3,436,969 | 77.6 | |||||||||||
Operating expenses (exclusive of depreciation and amortization) | 464,353 | 274,088 | 190,265 | 69.4 | |||||||||||
General and administrative expenses (exclusive of depreciation and amortization) | 59,634 | 35,500 | 24,134 | 68.0 | |||||||||||
Depreciation and amortization | 113,050 | 63,140 | 49,910 | 79.0 | |||||||||||
Total operating costs and expenses | 8,505,718 | 4,804,440 | 3,701,278 | 77.0 | |||||||||||
Income from operations | 1,232,701 | 489,278 | 743,423 | 151.9 | |||||||||||
Other income (expense): | |||||||||||||||
Equity in earnings of SLC Pipeline | 1,603 | 1,207 | 396 | 32.8 | |||||||||||
Interest income | 1,141 | 742 | 399 | 53.8 | |||||||||||
Interest expense | (60,257 | ) | (31,397 | ) | (28,860 | ) | 91.9 | ||||||||
Gain on sale of marketable securities | 326 | — | 326 | — | |||||||||||
Merger transaction costs | — | (6,014 | ) | 6,014 | (100.0 | ) | |||||||||
(57,187 | ) | (35,462 | ) | (21,725 | ) | 61.3 | |||||||||
Income before income taxes | 1,175,514 | 453,816 | 721,698 | 159.0 | |||||||||||
Income tax provision | 426,124 | 160,972 | 265,152 | 164.7 | |||||||||||
Net income | 749,390 | 292,844 | 456,546 | 155.9 | |||||||||||
Less net income attributable to noncontrolling interest | 14,195 | 15,915 | (1,720 | ) | (10.8 | ) | |||||||||
Net income attributable to HollyFrontier stockholders | $ | 735,195 | $ | 276,929 | $ | 458,266 | 165.5 | % | |||||||
Earnings per share attributable to HollyFrontier stockholders: | |||||||||||||||
Basic | $ | 3.55 | $ | 2.60 | $ | 0.95 | 36.5 | % | |||||||
Diluted | $ | 3.54 | $ | 2.58 | $ | 0.96 | 37.2 | % | |||||||
Cash dividends declared per common share | $ | 1.25 | $ | 0.15 | $ | 1.10 | 733.3 | % | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 207,129 | 106,672 | 100,457 | 94.2 | % | ||||||||||
Diluted | 207,938 | 107,286 | 100,652 | 93.8 | % |
Three Months Ended June 30, 2011 | Six Months Ended June 30, 2011 | |||||||
(In thousands) | ||||||||
Sales and other revenues | $ | 5,037,660 | $ | 9,272,899 | ||||
Net income attributable to HollyFrontier stockholders | $ | 369,039 | $ | 603,105 |
June 30, 2012 | December 31, 2011 | |||||||
(In thousands) | ||||||||
Cash, cash equivalents and investments in marketable securities | $ | 1,648,446 | $ | 1,840,610 | ||||
Working capital | $ | 2,144,007 | $ | 2,030,063 | ||||
Total assets | $ | 9,382,532 | $ | 9,576,243 | ||||
Long-term debt | $ | 1,295,163 | $ | 1,214,742 | ||||
Total equity | $ | 5,947,625 | $ | 5,835,900 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(In thousands) | ||||||||||||||||
Net cash provided by operating activities | $ | 175,598 | $ | 327,454 | $ | 429,503 | $ | 457,996 | ||||||||
Net cash used for investing activities | $ | (75,773 | ) | $ | (114,012 | ) | $ | (144,453 | ) | $ | (255,062 | ) | ||||
Net cash used for financing activities | $ | (387,177 | ) | $ | (10,867 | ) | $ | (491,756 | ) | $ | (5,346 | ) | ||||
Capital expenditures | $ | 66,633 | $ | 82,267 | $ | 128,020 | $ | 156,305 | ||||||||
EBITDA (1) | $ | 862,426 | $ | 350,564 | $ | 1,333,485 | $ | 531,696 |
(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 June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||||||||||
Crude charge (BPD) (1) | 243,150 | 110,100 | 249,710 | 107,860 | ||||||||||||
Refinery throughput (BPD) (2) | 259,250 | 111,850 | 266,020 | 109,290 | ||||||||||||
Refinery production (BPD) (3) | 251,870 | 110,110 | 260,070 | 107,050 | ||||||||||||
Sales of produced refined products (BPD) | 242,560 | 112,710 | 250,810 | 106,400 | ||||||||||||
Sales of refined products (BPD) (4) | 246,130 | 114,300 | 255,260 | 107,390 | ||||||||||||
Refinery utilization (5) | 93.5 | % | 88.1 | % | 96.0 | % | 86.3 | % | ||||||||
Average per produced barrel (6) | ||||||||||||||||
Net sales | $ | 118.72 | $ | 129.11 | $ | 119.38 | $ | 122.65 | ||||||||
Cost of products (7) | 94.16 | 109.94 | 98.31 | 105.53 | ||||||||||||
Refinery gross margin | 24.56 | 19.17 | 21.07 | 17.12 | ||||||||||||
Refinery operating expenses (8) | 4.63 | 5.56 | 4.73 | 5.76 | ||||||||||||
Net operating margin | $ | 19.93 | $ | 13.61 | $ | 16.34 | $ | 11.36 | ||||||||
Refinery operating expenses per throughput barrel (9) | $ | 4.33 | $ | 5.60 | $ | 4.46 | $ | 5.61 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 71 | % | 93 | % | 71 | % | 95 | % | ||||||||
Sour crude oil | 7 | % | — | % | 8 | % | — | % | ||||||||
Heavy sour crude oil | 16 | % | 5 | % | 15 | % | 4 | % | ||||||||
Other feedstocks and blends | 6 | % | 2 | % | 6 | % | 1 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||||||
Sales of produced refined products: | ||||||||||||
Gasolines | 46 | % | 38 | % | 46 | % | 37 | % | ||||
Diesel fuels | 28 | % | 30 | % | 30 | % | 30 | % | ||||
Jet fuels | 10 | % | 8 | % | 9 | % | 8 | % | ||||
Asphalt | 2 | % | 5 | % | 2 | % | 5 | % | ||||
Lubricants | 5 | % | 10 | % | 5 | % | 11 | % | ||||
Gas oil / intermediates | — | % | 6 | % | — | % | 6 | % | ||||
LPG and other | 9 | % | 3 | % | 8 | % | 3 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Southwest Region (Navajo Refinery) | ||||||||||||||||
Crude charge (BPD) (1) | 92,960 | 86,080 | 87,050 | 78,070 | ||||||||||||
Refinery throughput (BPD) (2) | 101,090 | 94,190 | 95,740 | 86,600 | ||||||||||||
Refinery production (BPD) (3) | 100,960 | 93,620 | 94,010 | 85,220 | ||||||||||||
Sales of produced refined products (BPD) | 98,680 | 94,340 | 92,970 | 87,130 | ||||||||||||
Sales of refined products (BPD) (4) | 103,380 | 98,120 | 98,250 | 92,440 | ||||||||||||
Refinery utilization (5) | 93.0 | % | 86.1 | % | 87.1 | % | 78.1 | % | ||||||||
Average per produced barrel (6) | ||||||||||||||||
Net sales | $ | 123.25 | $ | 126.36 | $ | 124.50 | $ | 119.35 | ||||||||
Cost of products (7) | 94.98 | 104.24 | 100.33 | 100.30 | ||||||||||||
Refinery gross margin | 28.27 | 22.12 | 24.17 | 19.05 | ||||||||||||
Refinery operating expenses (8) | 5.06 | 5.17 | 5.81 | 5.71 | ||||||||||||
Net operating margin | $ | 23.21 | $ | 16.95 | $ | 18.36 | $ | 13.34 | ||||||||
Refinery operating expenses per throughput barrel (9) | $ | 4.94 | $ | 5.18 | $ | 5.64 | $ | 5.74 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 4 | % | 4 | % | 2 | % | 4 | % | ||||||||
Sour crude oil | 80 | % | 71 | % | 80 | % | 72 | % | ||||||||
Heavy sour crude oil | 8 | % | 16 | % | 9 | % | 14 | % | ||||||||
Other feedstocks and blends | 8 | % | 9 | % | 9 | % | 10 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Sales of produced refined products: | ||||||||||||||||
Gasolines | 49 | % | 52 | % | 51 | % | 52 | % | ||||||||
Diesel fuels | 40 | % | 32 | % | 38 | % | 33 | % | ||||||||
Jet fuels | — | % | 1 | % | — | % | 1 | % | ||||||||
Fuel oil | 6 | % | 7 | % | 6 | % | 6 | % | ||||||||
Asphalt | 2 | % | 4 | % | 2 | % | 4 | % | ||||||||
LPG and other | 3 | % | 4 | % | 3 | % | 4 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Rocky Mountain Region (Cheyenne and Woods Cross Refineries) | ||||||||||||
Crude charge (BPD) (1) | 75,680 | 26,840 | 72,960 | 26,310 | ||||||||
Refinery throughput (BPD) (2) | 83,860 | 28,740 | 81,300 | 28,320 | ||||||||
Refinery production (BPD) (3) | 82,270 | 28,320 | 79,730 | 27,480 | ||||||||
Sales of produced refined products (BPD) | 80,230 | 27,600 | 78,440 | 27,130 | ||||||||
Sales of refined products (BPD) (4) | 82,360 | 27,600 | 80,840 | 27,170 | ||||||||
Refinery utilization (5) | 91.2 | % | 86.6 | % | 87.9 | % | 84.9 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Rocky Mountain Region (Cheyenne and Woods Cross Refineries) | ||||||||||||||||
Average per produced barrel (6) | ||||||||||||||||
Net sales | $ | 120.97 | $ | 128.02 | $ | 115.98 | $ | 118.62 | ||||||||
Cost of products (7) | 85.93 | 99.79 | 91.24 | 94.95 | ||||||||||||
Refinery gross margin | 35.04 | 28.23 | 24.74 | 23.67 | ||||||||||||
Refinery operating expenses (8) | 6.05 | 6.16 | 6.30 | 6.29 | ||||||||||||
Net operating margin | $ | 28.99 | $ | 22.07 | $ | 18.44 | $ | 17.38 | ||||||||
Refinery operating expenses per throughput barrel (9) | $ | 5.79 | $ | 5.92 | $ | 6.08 | $ | 6.03 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 43 | % | 61 | % | 44 | % | 59 | % | ||||||||
Sour crude oil | 2 | % | — | % | 2 | % | — | % | ||||||||
Heavy sour crude oil | 34 | % | 5 | % | 33 | % | 5 | % | ||||||||
Black wax crude oil | 11 | % | 28 | % | 11 | % | 29 | % | ||||||||
Other feedstocks and blends | 10 | % | 6 | % | 10 | % | 7 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Sales of produced refined products: | ||||||||||||||||
Gasolines | 54 | % | 61 | % | 55 | % | 61 | % | ||||||||
Diesel fuels | 33 | % | 31 | % | 32 | % | 30 | % | ||||||||
Jet fuels | — | % | 1 | % | — | % | 1 | % | ||||||||
Fuel oil | 1 | % | 3 | % | 2 | % | 3 | % | ||||||||
Asphalt | 6 | % | 2 | % | 5 | % | 3 | % | ||||||||
LPG and other | 6 | % | 2 | % | 6 | % | 2 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Consolidated | ||||||||||||||||
Crude charge (BPD) (1) | 411,790 | 223,020 | 409,720 | 212,240 | ||||||||||||
Refinery throughput (BPD) (2) | 444,200 | 234,780 | 443,060 | 224,210 | ||||||||||||
Refinery production (BPD) (3) | 435,100 | 232,050 | 433,810 | 219,750 | ||||||||||||
Sales of produced refined products (BPD) | 421,470 | 234,650 | 422,220 | 220,660 | ||||||||||||
Sales of refined products (BPD) (4) | 431,870 | 240,020 | 434,350 | 227,000 | ||||||||||||
Refinery utilization (5) | 93.0 | % | 87.1 | % | 92.5 | % | 82.9 | % | ||||||||
Average per produced barrel (6) | ||||||||||||||||
Net sales | $ | 120.21 | $ | 127.87 | $ | 119.87 | $ | 120.85 | ||||||||
Cost of products (7) | 92.78 | 106.45 | 97.44 | 102.16 | ||||||||||||
Refinery gross margin | 27.43 | 21.42 | 22.43 | 18.69 | ||||||||||||
Refinery operating expenses (8) | 5.00 | 5.48 | 5.26 | 5.80 | ||||||||||||
Net operating margin | $ | 22.43 | $ | 15.94 | $ | 17.17 | $ | 12.89 | ||||||||
Refinery operating expenses per throughput barrel (9) | $ | 4.75 | $ | 5.47 | $ | 5.01 | $ | 5.71 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 51 | % | 54 | % | 51 | % | 55 | % | ||||||||
Sour crude oil | 22 | % | 29 | % | 22 | % | 28 | % | ||||||||
Heavy sour crude oil | 18 | % | 9 | % | 17 | % | 8 | % | ||||||||
Black wax crude oil | 2 | % | 3 | % | 2 | % | 4 | % | ||||||||
Other feedstocks and blends | 7 | % | 5 | % | 8 | % | 5 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Consolidated | ||||||||||||
Sales of produced refined products: | ||||||||||||
Gasolines | 48 | % | 46 | % | 49 | % | 46 | % | ||||
Diesel fuels | 32 | % | 31 | % | 32 | % | 32 | % | ||||
Jet fuels | 6 | % | 4 | % | 6 | % | 4 | % | ||||
Fuel oil | 2 | % | 3 | % | 2 | % | 3 | % | ||||
Asphalt | 3 | % | 5 | % | 2 | % | 4 | % | ||||
Lubricants | 3 | % | 5 | % | 3 | % | 5 | % | ||||
Gas oil / intermediates | — | % | 3 | % | — | % | 3 | % | ||||
LPG and other | 6 | % | 3 | % | 6 | % | 3 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
(1) | Crude charge represents the barrels per day of crude oil processed at our refineries. |
(2) | Refinery throughput represents the barrels per day of crude and other refinery feedstocks input to the crude units and other conversion units at our refineries. |
(3) | Refinery production represents the barrels per day of refined products yielded from processing crude and other refinery feedstocks through the crude units and other conversion units at our refineries. |
(4) | Includes refined products purchased for resale. |
(5) | Represents crude charge divided by total crude capacity (BPSD). 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 ($286.8 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) |
• | 6.5% HEP senior notes ($300 million principal amount maturing March 2020) |
• | 8.25% HEP senior notes ($150 million principal amount maturing March 2018) |
• | our inventory positions; |
• | natural gas purchases; |
• | costs of crude oil and related grade differentials; |
• | prices of refined products; and |
• | our refining margins. |
Notional Contract Volumes by Year of Maturity | |||||||||||
Commodity Price Swaps | Total Outstanding Notional | 2012 | 2013 | Unit of Measure | |||||||
WTI crude oil - long | 10,096,000 | 9,016,000 | 1,080,000 | Barrels | |||||||
Ultra-low sulfur diesel - short | 5,048,000 | 4,508,000 | 540,000 | Barrels | |||||||
Conventional unleaded gasoline - short | 5,048,000 | 4,508,000 | 540,000 | Barrels |
Notional Contract Volumes by Year of Maturity | |||||||||||
Derivative Instrument | Total Outstanding Notional | 2012 | 2013 | Unit of Measure | |||||||
Commodity price swap (natural gas) - long | 6,624,000 | 6,624,000 | — | MMBTU | |||||||
Commodity price swap (WCS spread) - long | 6,422,500 | 765,000 | 5,657,500 | Barrels | |||||||
Commodity price swap (WTI) - short | 150,000 | — | 150,000 | Barrels | |||||||
Commodity price swap (gasoline) - short | 630,000 | 150,000 | 480,000 | Barrels | |||||||
Commodity price swap (butane) - long | 540,000 | 540,000 | — | Barrels | |||||||
NYMEX futures (WTI) - long | 380,000 | 146,000 | 234,000 | Barrels | |||||||
NYMEX futures (WTI)- short | 1,008,000 | 1,008,000 | — | Barrels |
Outstanding Principal | Estimated Fair Value | Estimated Change in Fair Value | |||||||||||
(In thousands) | |||||||||||||
HollyFrontier Senior Notes | $ | 636,797 | $ | 686,628 | 19,108,000 | $ | 19,108 | ||||||
HEP Senior Notes | $ | 450,000 | $ | 461,625 | 16,557,000 | $ | 16,557 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(In thousands) | ||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 493,499 | $ | 192,235 | $ | 735,195 | $ | 276,929 | ||||||||
Add income tax provision | 285,718 | 111,961 | 426,124 | 160,972 | ||||||||||||
Add interest expense | 26,942 | 15,193 | 60,257 | 31,397 | ||||||||||||
Subtract interest income | (681 | ) | (657 | ) | (1,141 | ) | (742 | ) | ||||||||
Add depreciation and amortization | 56,948 | 31,832 | 113,050 | 63,140 | ||||||||||||
EBITDA | $ | 862,426 | $ | 350,564 | $ | 1,333,485 | $ | 531,696 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Average sales price per produced barrel sold | $ | 120.21 | $ | 127.87 | $ | 119.87 | $ | 120.85 | ||||||||
Times sales of produced refined products sold (BPD) | 421,470 | 234,650 | 422,220 | 220,660 | ||||||||||||
Times number of days in period | 91 | 91 | 182 | 181 | ||||||||||||
Refined product sales from produced products sold | $ | 4,610,507 | $ | 2,730,427 | $ | 9,211,295 | $ | 4,826,684 | ||||||||
Total refined product sales | $ | 4,610,507 | $ | 2,730,427 | $ | 9,211,295 | $ | 4,826,684 | ||||||||
Add refined product sales from purchased products and rounding (1) | 120,676 | 63,170 | 276,066 | 138,718 | ||||||||||||
Total refined product sales | 4,731,183 | 2,793,597 | 9,487,361 | 4,965,402 | ||||||||||||
Add direct sales of excess crude oil (2) | 32,558 | 138,492 | 190,840 | 273,901 | ||||||||||||
Add other refining segment revenue (3) | 31,728 | 21,137 | 36,999 | 29,015 | ||||||||||||
Total refining segment revenue | 4,795,469 | 2,953,226 | 9,715,200 | 5,268,318 | ||||||||||||
Add HEP segment sales and other revenues | 63,692 | 50,940 | 127,207 | 95,945 | ||||||||||||
Add corporate and other revenues | 4,411 | 153 | 8,635 | 801 | ||||||||||||
Subtract consolidations and eliminations | (56,891 | ) | (37,186 | ) | (112,623 | ) | (71,346 | ) | ||||||||
Sales and other revenues | $ | 4,806,681 | $ | 2,967,133 | $ | 9,738,419 | $ | 5,293,718 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Average cost of products per produced barrel sold | $ | 92.78 | $ | 106.45 | $ | 97.44 | $ | 102.16 | ||||||||
Times sales of produced refined products sold (BPD) | 421,470 | 234,650 | 422,220 | 220,660 | ||||||||||||
Times number of days in period | 91 | 91 | 182 | 181 | ||||||||||||
Cost of products for produced products sold | $ | 3,558,463 | $ | 2,273,043 | $ | 7,487,683 | $ | 4,080,215 | ||||||||
Total cost of products for produced products sold | $ | 3,558,463 | $ | 2,273,043 | $ | 7,487,683 | $ | 4,080,215 | ||||||||
Add refined product costs from purchased products sold and rounding (1) | 121,872 | 64,206 | 278,196 | 139,746 | ||||||||||||
Total cost of refined products sold | 3,680,335 | 2,337,249 | 7,765,879 | 4,219,961 | ||||||||||||
Add crude oil cost of direct sales of excess crude oil (2) | 29,733 | 135,981 | 185,543 | 268,861 | ||||||||||||
Add other refining segment cost of products sold (4) | 27,649 | 10,205 | 28,087 | 12,539 | ||||||||||||
Total refining segment cost of products sold | 3,737,717 | 2,483,435 | 7,979,509 | 4,501,361 | ||||||||||||
Subtract consolidations and eliminations | (55,953 | ) | (36,340 | ) | (110,828 | ) | (69,649 | ) | ||||||||
Costs of products sold (exclusive of depreciation and amortization) | $ | 3,681,764 | $ | 2,447,095 | $ | 7,868,681 | $ | 4,431,712 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Average refinery operating expenses per produced barrel sold | $ | 5.00 | $ | 5.48 | $ | 5.26 | $ | 5.80 | ||||||||
Times sales of produced refined products sold (BPD) | 421,470 | 234,650 | 422,220 | 220,660 | ||||||||||||
Times number of days in period | 91 | 91 | 182 | 181 | ||||||||||||
Refinery operating expenses for produced products sold | $ | 191,769 | $ | 117,015 | $ | 404,200 | $ | 231,649 | ||||||||
Total refinery operating expenses per produced products sold | $ | 191,769 | $ | 117,015 | $ | 404,200 | $ | 231,649 | ||||||||
Add other refining segment operating expenses and rounding (5) | 9,382 | 8,266 | 18,232 | 15,711 | ||||||||||||
Total refining segment operating expenses | 201,151 | 125,281 | 422,432 | 247,360 | ||||||||||||
Add HEP segment operating expenses | 17,923 | 14,366 | 34,911 | 27,162 | ||||||||||||
Add corporate and other costs | 3,786 | (168 | ) | 7,352 | (174 | ) | ||||||||||
Subtract consolidations and eliminations | (134 | ) | (134 | ) | (342 | ) | (260 | ) | ||||||||
Operating expenses (exclusive of depreciation and amortization) | $ | 222,726 | $ | 139,345 | $ | 464,353 | $ | 274,088 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Net operating margin per barrel | $ | 22.43 | $ | 15.94 | $ | 17.17 | $ | 12.89 | ||||||||
Add average refinery operating expenses per produced barrel | 5.00 | 5.48 | 5.26 | 5.80 | ||||||||||||
Refinery gross margin per barrel | 27.43 | 21.42 | 22.43 | 18.69 | ||||||||||||
Add average cost of products per produced barrel sold | 92.78 | 106.45 | 97.44 | 102.16 | ||||||||||||
Average sales price per produced barrel sold | $ | 120.21 | $ | 127.87 | $ | 119.87 | $ | 120.85 | ||||||||
Times sales of produced refined products sold (BPD) | 421,470 | 234,650 | 422,220 | 220,660 | ||||||||||||
Times number of days in period | 91 | 91 | 182 | 181 | ||||||||||||
Refined product sales from produced products sold | $ | 4,610,507 | $ | 2,730,427 | $ | 9,211,295 | $ | 4,826,684 | ||||||||
Total refined product sales from produced products sold | $ | 4,610,507 | $ | 2,730,427 | $ | 9,211,295 | $ | 4,826,684 | ||||||||
Add refined product sales from purchased products and rounding (1) | 120,676 | 63,170 | 276,066 | 138,718 | ||||||||||||
Total refined product sales | 4,731,183 | 2,793,597 | 9,487,361 | 4,965,402 | ||||||||||||
Add direct sales of excess crude oil (2) | 32,558 | 138,492 | 190,840 | 273,901 | ||||||||||||
Add other refining segment revenue (3) | 31,728 | 21,137 | 36,999 | 29,015 | ||||||||||||
Total refining segment revenue | 4,795,469 | 2,953,226 | 9,715,200 | 5,268,318 | ||||||||||||
Add HEP segment sales and other revenues | 63,692 | 50,940 | 127,207 | 95,945 | ||||||||||||
Add corporate and other revenues | 4,411 | 153 | 8,635 | 801 | ||||||||||||
Subtract consolidations and eliminations | (56,891 | ) | (37,186 | ) | (112,623 | ) | (71,346 | ) | ||||||||
Sales and other revenues | $ | 4,806,681 | $ | 2,967,133 | $ | 9,738,419 | $ | 5,293,718 |
(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 Programs | Maximum Dollar Value of Shares Yet to be Purchased under Approved Stock Repurchase Programs | ||||||||||
April 2012 | 1,021,543 | $ | 29.57 | 1,021,543 | $ | 255,625,172 | ||||||||
May 2012 | 2,216,227 | $ | 29.50 | 2,216,227 | $ | 190,235,554 | ||||||||
June 2012 | 967,381 | $ | 31.02 | 967,381 | $ | 510,228,860 | ||||||||
Total for April to June 2012 | 4,205,151 | 4,205,151 |
Item 6. | Exhibits |
HOLLYFRONTIER CORPORATION | |||
(Registrant) | |||
Date: August 8, 2012 | /s/ Douglas S. Aron | ||
Douglas S. Aron | |||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||
/s/ J. W. Gann, Jr. | |||
J. W. Gann, Jr. | |||
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 By-Laws of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant's Form 8-K Current Report filed November 21, 2011, File No. 1-03876). | |
10.1 | HollyFrontier Corporation Form of Amendment to Change in Control Agreement for Chief Executive Officer and Chief Financial Officer (incorporated by reference to Exhibit 10.1 of Registrant's Form 8-K Current Report filed May 10, 2012, File No. 1-03876). | |
10.2+ | LLC Interest Purchase Agreement, dated July 12, 2012, by and among HollyFrontier Corporation, Holly Energy Partners, L.P. and HEP UNEV Holdings LLC. | |
10.3+ | Seventh Amended and Restated Omnibus Agreement, dated July 12, 2012, by and among HollyFrontier Corporation, Holly Energy Partners, L.P. and certain of their respective subsidiaries. | |
10.4+ | Limited Partial Waiver of Incentive Distribution Rights under the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P., dated as of July 12, 2012. | |
10.5+ | Amended and Restated Limited Liability Company Agreement of HEP UNEV Holdings LLC, dated July 12, 2012, by and among HEP UNEV Holdings LLC, HollyFrontier Holdings LLC and Holly Energy Partners, L.P. | |
10.6+ | Termination of Option Agreement, dated July 12, 2012, by and among HollyFrontier Corporation, HEP UNEV Pipeline LLC (f/k/a Holly UNEV Pipeline Company), Navajo Pipeline Co., L.P., Holly Logistic Services, L.L.C., HEP Logistics Holdings, L.P., Holly Energy Partners, L.P., HEP Logistics GP, L.L.C. and Holly Energy Partners - Operating, L.P. | |
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 June 30, 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. |
ARTICLE I | DEFINED TERMS 2 |
1.1 | Defined Terms 2 |
ARTICLE II | PURCHASE OF LLC INTERESTS 9 |
2.1 | Transfer of LLC Interests 9 |
2.2 | Consideration 9 |
2.3 | Purchase Price Adjustment 9 |
ARTICLE III | CLOSING 11 |
3.1 | Closing 11 |
3.2 | Deliveries by Seller 11 |
3.3 | Deliveries by Buyer 12 |
3.4 | Closing Costs; Transfer Taxes and Fees 13 |
ARTICLE IV | REPRESENTATIONS AND WARRANTIES OF SELLER 13 |
4.1 | Organization 13 |
4.2 | Authorization 13 |
4.3 | Status of Company and UNEV Pipeline 14 |
4.4 | No Conflicts or Violations; No Consents or Approvals Required 15 |
4.5 | Absence of Litigation 15 |
4.6 | Title to LLC Interests; Capitalization 15 |
4.7 | No Undisclosed Liabilities 16 |
4.8 | No Employees 17 |
4.9 | Taxes 17 |
4.10 | Brokers and Finders 17 |
4.11 | Condition of Pipeline 17 |
4.12 | Title to Assets 17 |
4.13 | Permits 17 |
4.14 | Banking Relationships 18 |
4.15 | Representations Relating to the Unit Consideration 18 |
4.16 | Compliance with Law 18 |
4.17 | Material Contracts 18 |
4.18 | Seller Security 18 |
4.19 | Insurance 18 |
4.20 | Legends 19 |
4.21 | WAIVERS AND DISCLAIMERS 19 |
ARTICLE V | REPRESENTATIONS AND WARRANTIES OF THE BUYER 20 |
5.1 | Organization 20 |
5.2 | Authorization 20 |
5.3 | No Conflicts or Violations; No Consents or Approvals Required 21 |
5.4 | Absence of Litigation 21 |
5.5 | Brokers and Finders 21 |
5.6 | Validity of Profits Interest 21 |
ARTICLE VI | REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP 21 |
6.1 | Organization 21 |
6.2 | Authorization 21 |
6.3 | No Conflicts or Violations; No Consents or Approvals Required 22 |
6.4 | Absence of Litigation 22 |
6.5 | Brokers and Finders 22 |
6.6 | Validity of Aggregate Units 22 |
6.7 | No Knowledge of Breach 22 |
ARTICLE VII | COVENANTS 23 |
7.1 | Cooperation 23 |
7.2 | Additional Agreements 23 |
7.3 | Listing of Unit Consideration on New York Stock Exchange 23 |
ARTICLE VIII | ADDITIONAL AGREEMENTS 23 |
8.1 | Further Assurances 23 |
8.2 | Tariff Increases 23 |
8.3 | Future Capacity Expansion 24 |
ARTICLE IX | INDEMNIFICATION 24 |
9.1 | Indemnification of Buyer and Seller 24 |
9.2 | Defense of Third-Party Claims 24 |
9.3 | Direct Claims 26 |
9.4 | Limitations 26 |
9.5 | Tax Related Adjustments 27 |
ARTICLE X | MISCELLANEOUS 27 |
10.1 | Expenses 27 |
10.2 | Notices 27 |
10.3 | Severability 28 |
10.4 | Governing Law; Jurisdiction; Waiver of Jury Trial 29 |
10.5 | Arbitration Provision 29 |
10.6 | Parties in Interest 30 |
10.7 | Assignment of Agreement 30 |
10.8 | Captions 30 |
10.9 | Counterparts 30 |
10.10 | Director and Officer Liability 30 |
10.11 | Integration 30 |
10.12 | Effect of Agreement 30 |
10.13 | Amendment; Waiver 30 |
ARTICLE XI | INTERPRETATION 31 |
11.1 | Interpretation 31 |
11.2 | References, Gender, Number 32 |
Title: | Chief Executive Officer and President |
SEVENTH AMENDED AND RESTATED OMNIBUS AGREEMENT among HOLLYFRONTIER CORPORATION HOLLY ENERGY PARTNERS, L.P. and CERTAIN OF THEIR RESPECTIVE SUBSIDIARIES |
Article I | Definitions 3 |
1.1 | Definitions 3 |
Article II | Business Opportunities 10 |
2.1 | Restricted Businesses 10 |
2.2 | Permitted Exceptions 10 |
2.3 | Procedures 11 |
2.4 | Scope of Prohibition 13 |
2.5 | Enforcement 13 |
2.6 | Limitation on Acquisitions of Subject Assets by Partnership Group Members 13 |
Article III | Indemnification 13 |
3.1 | Environmental Indemnification 13 |
3.2 | Limitations Regarding Environmental Indemnification 15 |
3.3 | Right of Way Indemnification 15 |
3.4 | Additional Indemnification 16 |
3.5 | Indemnification Procedures 17 |
3.6 | Limitation on Indemnification Obligations 18 |
3.7 | Exclusion from Indemnification 18 |
Article IV | General and Administrative Expenses 19 |
4.1 | General 19 |
Article V | Right of First Refusal 19 |
5.1 | Holly Right of First Refusal: Prohibition on Transfer of Refinery Related Assets 19 |
5.2 | Procedures 20 |
Article VI | Holly Purchase Option 22 |
6.1 | Option to Purchase Tulsa Transferred Assets 22 |
Article VII | Miscellaneous 22 |
7.1 | Choice of Law 22 |
7.2 | Arbitration Provision 22 |
7.3 | Notice 23 |
7.4 | Entire Agreement 24 |
7.5 | Termination of Article II 24 |
7.6 | Amendment or Modification 24 |
7.7 | Assignment 25 |
7.8 | Additional Partnership Entities 25 |
7.9 | Counterparts 25 |
7.10 | Severability 25 |
7.11 | Further Assurances 25 |
7.12 | Rights of Limited Partners 25 |
7.13 | Headings 25 |
7.14 | [Intentionally omitted] 26 |
7.15 | Limitation of Damages 26 |
Title: | Chief Executive Officer and President |
Title: | Chief Executive Officer and President |
Amount of Annual Administrative Fee | |
Years beginning July 13, 2004 through June 30, 2007 | $2,000,000 |
Years beginning July 1, 2007 through February 29, 2008 | $2,100,000 |
Years beginning March 1, 2008 | $2,300,000 |
a. | Notwithstanding anything to the contrary in Section 6.4 of the Partnership Agreement, the General Partner hereby waives its rights to its distributions |
b. | Notwithstanding anything to the contrary in the Partnership Agreement, the Partnership shall not allocate any income to the IDR Holders with respect to the distributions waived in this Section 2. |
c. | For the avoidance of doubt, in the event the Partnership is liquidated prior to that point in time by which there has been a completion of the waiver of distributions with respect to the Incentive Distribution Rights contemplated by this Section 2, the distributions with respect to the Incentive Distribution Rights to be received by the IDR Holders in connection with such liquidation, if any, shall not be reduced by the amount of any distributions to be waived in accordance with this Section 2 but not yet declared and paid at the time of such liquidation. |
Exhibit 1 | ||||||||||||||||
Example Profits Interest Balance Amount Calculations | ||||||||||||||||
Example Profits Interest Balance Amount Calculations (all amounts are in millions; assumes WX expansion completed by end of year 3; assumes 1x annual payment in subsequent year) | ||||||||||||||||
Contract Year | Profits Interest Balance Amount applciable for this Contract Year* | Hypothetical Profits Interest payment made in this Contract Year (with respect to prior Contract Year EBITDA)* | Total of all Profits Interest payments (after payment in this Contract Year) | Profits Interest Balance Amount after payment in this Contract Year (and before accrual of 7% applicable rate) | Profits Interest Balance Amount for next Contract Year (including accrual of 7% applicable rate) | |||||||||||
4* | N/A* | $ | — | $ | — | N/A | $ | 33.82 | ||||||||
5 | $ | 33.82 | $ | 5 | $ | 5 | $ | 28.82 | $ | 30.84 | ||||||
6 | $ | 30.84 | $ | 5 | $ | 10 | $ | 25.84 | $ | 27.65 | ||||||
7 | $ | 27.65 | $ | 5 | $ | 15 | $ | 22.65 | $ | 24.23 | ||||||
8 | $ | 24.23 | $ | 5 | $ | 20 | $ | 19.23 | $ | 20.58 | ||||||
9 | $ | 20.58 | $ | 5 | $ | 25 | $ | 15.58 | $ | 16.67 | ||||||
10 | $ | 16.67 | $ | 5 | $ | 30 | $ | 11.67 | $ | 12.48 | ||||||
11 | $ | 12.48 | $ | 5 | $ | 35 | $ | 7.48 | $ | 8.01 | ||||||
12 | $ | 8.01 | $ | 5 | $ | 40 | $ | 3.01 | $ | 3.22 | ||||||
13 | $ | 3.22 | $ | 3.22 | $ | 43.22 | $ | — | $ | — | ||||||
14 | $ | — | $ | — | $ | 43.22 | $ | — | $ | — | ||||||
15 | $ | — | $ | — | $ | 43.22 | $ | — | $ | — | ||||||
16 | $ | — | $ | — | $ | 43.22 | $ | — | $ | — | ||||||
17 | $ | — | $ | — | $ | 43.22 | $ | — | $ | — | ||||||
18 | $ | — | $ | — | $ | 43.22 | $ | — | $ | — | ||||||
19 | $ | — | $ | — | $ | 43.22 | $ | — | $ | — | ||||||
20 | $ | — | $ | — | $ | 43.22 | $ | — | $ | — | ||||||
* * * Profits Interest Amount fully paid in Year 13. | ||||||||||||||||
Formula for Determining Profits Interest Balance Amount for Contract Year n+1: | ||||||||||||||||
Variables: | ||||||||||||||||
PI(n) | >> Profits Interest payments made in Contract Year n (with respect to | |||||||||||||||
prior Contract Year EBITDA) | ||||||||||||||||
BA(n) | >> Profits Interest Balance Amount applciable for Contract Year n | |||||||||||||||
Formula: | ||||||||||||||||
BA(n+1) = | [ BA(n) - PI(n) ] + ( [ BA(n) - PI(n) ] * .07 ) | |||||||||||||||
BA(n+1) = | [ BA(n) - PI(n) ] * 1 .07 | >>> Column G in above spreadsheet uses | ||||||||||||||
this reduced formula. | ||||||||||||||||
Notes and Data Inputs: | ||||||||||||||||
* Profits Interest amounts begin to accrue during Contract Year 4; Payment of | ||||||||||||||||
Profits Interest amount for Contract Year 4 occurs in Contract Year 5. | ||||||||||||||||
Assumed hypothetical Profits Interest payment amount: | $5 | |||||||||||||||
Initial Profits Interest Balance Amount (for Contract Year 5): | $33.82 | |||||||||||||||
GP giveback | Purchase price gap | Profits Interest Balance Amount | |||
6/30/2012 | 12.2 | 12.2 | |||
Year 1 | Q1 | 9/30/2012 | 1.25 | 13.66 | |
Q2 | 12/31/2012 | 1.25 | 15.15 | ||
Q3 | 3/31/2013 | 1.25 | 16.67 | ||
Q4 | 6/30/2013 | 1.25 | 18.21 | ||
Year 2 | Q1 | 9/30/2013 | 1.25 | 19.78 | |
Q2 | 12/31/2013 | 1.25 | 21.37 | ||
Q3 | 3/31/2014 | 1.25 | 23.00 | ||
Q4 | 6/30/2014 | 1.25 | 24.65 | ||
Year 3 | Q1 | 9/30/2014 | 1.25 | 26.33 | |
Q2 | 12/31/2014 | 1.25 | 28.04 | ||
Q3 | 3/31/2015 | 1.25 | 29.78 | ||
Q4 | 6/30/2015 | 1.25 | 31.55 | ||
Year 4 | Q1 | 9/30/2015 | - | 32.11 | |
Q2 | 12/31/2015 | - | 32.67 | ||
Q3 | 3/31/2016 | - | 33.24 | ||
Q4 | 6/30/2016 | - | 33.82 |
GP giveback | Purchase price gap | Profits Interest Balance Amount | |||
6/30/2012 | 12.2 | 12.2 | |||
Year 1 | Q1 | 9/30/2012 | 1.25 | 13.66 | |
Q2 | 12/31/2012 | 1.25 | 15.15 | ||
Q3 | 3/31/2013 | 1.25 | 16.67 | ||
Q4 | 6/30/2013 | 1.25 | 18.21 | ||
Year 2 | Q1 | 9/30/2013 | 1.25 | 19.78 | |
Q2 | 12/31/2013 | 1.25 | 21.37 | ||
Q3 | 3/31/2014 | 1.25 | 23.00 | ||
Q4 | 6/30/2014 | 1.25 | 24.65 | ||
Year 3 | Q1 | 9/30/2014 | 1.25 | 26.33 | |
Q2 | 12/31/2014 | 1.25 | 28.04 | ||
Q3 | 3/31/2015 | 1.25 | 29.78 | ||
Q4 | 6/30/2015 | 1.25 | 31.55 | ||
Year 4 | Q1 | 9/30/2015 | 1.25 | 33.36 | |
Q2 | 12/31/2015 | 1.25 | 35.19 | ||
Q3 | 3/31/2016 | 1.25 | 37.06 | ||
Q4 | 6/30/2016 | 1.25 | 38.96 |
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: August 8, 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: August 8, 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: August 8, 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: August 8, 2012 | /s/ Douglas S. Aron | |
Douglas S. Aron | ||
Executive Vice President and Chief Financial Officer |
Retirement Plan (Tables)
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Jun. 30, 2012
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Jun. 30, 2012
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Pension and Other Postretirement Benefit Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Pension Expense | The net periodic benefit expense of this plan consisted of the following components:
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The net periodic pension expense consisted of the following components:
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Financial Instruments (Changes in Level 3 Inputs) (Details) (USD $)
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3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2012
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Jun. 30, 2012
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Hypothetical change to estimated future cash flows attributable to commodity price swaps, percent | 10.00% | |
Estimated change in fair value resulting from hypothetical percentage change in future cash flows attributable to commodity price swaps | $ 12,000,000 | |
Commodity Contract [Member] | Level 3 [Member]
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance, January 1, 2012 | (149,278,000) | 31,616,000 |
Unrealized losses included in other comprehensive income | 248,572,000 | 33,553,000 |
Settlements | 20,167,000 | 54,292,000 |
Ending balance, March 31, 2012 | 119,461,000 | $ 119,461,000 |
Retirement Plan (Narrative) (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
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Defined Benefit Plan Disclosure [Line Items] | ||||
Pension curtailment adjustment | $ 7,102,000 | $ 0 | $ 7,102,000 | $ 0 |
Other Comprehensive Income (Loss), Finalization of Pension and Non-Pension Postretirement Plan Valuation, before Tax | 7,102,000 | 7,102,000 | ||
Expected long-term annual rate of return on plan assets | 6.50% | |||
Maximum [Member]
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Defined Benefit Plan Disclosure [Line Items] | ||||
Estimated contributions in 2012 | 22,400,000 | 22,400,000 | ||
Pension Plans, Defined Benefit [Member]
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Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Amendments | 3,500,000 | 6,900,000 | ||
Estimated effect of curtailment | $ 674,000 | $ 0 | $ 899,000 | $ 0 |
Inventories (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
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Dec. 31, 2011
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---|---|---|---|---|---|---|---|---|---|---|
Inventories | ||||||||||
Crude oil | $ 471,228 | $ 400,952 | ||||||||
Other raw materials and unfinished products | 164,730 | [1] | 137,356 | [1] | ||||||
Finished products | 617,849 | [2] | 513,776 | [2] | ||||||
Process chemicals | 2,943 | [3] | 1,180 | [3] | ||||||
Repairs and maintenance supplies and other | 53,069 | 61,355 | ||||||||
Inventories, total | $ 1,309,819 | $ 1,114,619 | ||||||||
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Holly Energy Partners (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 12, 2012
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Jun. 30, 2012
HEP [Member]
Customers
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Jun. 30, 2012
HEP [Member]
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Jun. 30, 2012
Securities Pledged As Collateral [Member]
HEP [Member]
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Jun. 30, 2012
UNEV Pipeline [Member]
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Variable Interest Entity [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 75.00% | ||||
Business Acquisition, cash paid | $ 260.0 | ||||
Ownership Percentage by Parent, Controlling Interest | 44.00% | ||||
Percentage of general partner interest | 2.00% | ||||
Number of primary customers | 2 | ||||
Percentage of revenue Holly Corp represents | 84.00% | 84.00% | |||
Percentage of ownership in variable interest entity | 42.00% | 21.00% | |||
Common HEP units collateralized for crude oil | 6,000,000 | ||||
Annual contract payment | $ 200.3 |
Inventories (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
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Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Components | Inventory consists of the following components:
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Segment Information (Schedule Of Segment Reporting Information) (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
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Dec. 31, 2011
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Segment Reporting Information [Line Items] | ||||||||||||
Sales and other revenues | $ 4,806,681,000 | $ 2,967,133,000 | $ 9,738,419,000 | $ 5,293,718,000 | ||||||||
Depreciation and amortization | 56,948,000 | 31,832,000 | 113,050,000 | 63,140,000 | ||||||||
Income (loss) from operations | 813,137,000 | 330,179,000 | 1,232,701,000 | 489,278,000 | ||||||||
Capital expenditures | 66,633,000 | 82,267,000 | 128,020,000 | 156,305,000 | ||||||||
Cash, cash equivalents and investments in marketable securities | 1,648,446,000 | 1,648,446,000 | 1,840,610,000 | |||||||||
Total assets | 9,382,532,000 | 9,382,532,000 | 9,576,243,000 | |||||||||
Long-term debt, including current portion | 1,295,163,000 | 1,295,163,000 | 1,214,742,000 | |||||||||
Refining [Member]
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Segment Reporting Information [Line Items] | ||||||||||||
Sales and other revenues | 4,795,469,000 | [1] | 2,953,226,000 | [1] | 9,715,200,000 | [1] | 5,268,318,000 | [1] | ||||
Depreciation and amortization | 43,665,000 | [1] | 23,478,000 | [1] | 85,197,000 | [1] | 46,461,000 | [1] | ||||
Income (loss) from operations | 812,936,000 | [1] | 321,032,000 | [1] | 1,228,062,000 | [1] | 473,136,000 | [1] | ||||
Capital expenditures | 56,262,000 | [1] | 25,152,000 | [1] | 101,796,000 | [1] | 45,784,000 | [1] | ||||
Cash, cash equivalents and investments in marketable securities | 19,000 | [1] | 19,000 | [1] | 0 | [1] | ||||||
Total assets | 7,213,749,000 | [1] | 7,213,749,000 | [1] | 6,280,426,000 | [1] | ||||||
Long-term debt, including current portion | 0 | [1] | 0 | [1] | 0 | [1] | ||||||
Corporate And Other [Member]
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Segment Reporting Information [Line Items] | ||||||||||||
Sales and other revenues | 4,411,000 | 153,000 | 8,635,000 | 801,000 | ||||||||
Depreciation and amortization | 4,762,000 | 1,252,000 | 9,680,000 | 2,549,000 | ||||||||
Income (loss) from operations | (33,756,000) | (18,040,000) | (63,505,000) | (34,138,000) | ||||||||
Capital expenditures | 4,690,000 | 45,690,000 | 14,216,000 | 87,621,000 | ||||||||
Cash, cash equivalents and investments in marketable securities | 1,644,211,000 | 1,644,211,000 | 1,837,341,000 | |||||||||
Total assets | 1,222,787,000 | 1,222,787,000 | 2,421,140,000 | |||||||||
Long-term debt, including current portion | 698,156,000 | 698,156,000 | 705,331,000 | |||||||||
Consolidations And Eliminations [Member]
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Segment Reporting Information [Line Items] | ||||||||||||
Sales and other revenues | (56,891,000) | (37,186,000) | (112,623,000) | (71,346,000) | ||||||||
Depreciation and amortization | (207,000) | (207,000) | (414,000) | (414,000) | ||||||||
Income (loss) from operations | (597,000) | (505,000) | (1,039,000) | (1,023,000) | ||||||||
Capital expenditures | 0 | 0 | 0 | 0 | ||||||||
Cash, cash equivalents and investments in marketable securities | 0 | 0 | 0 | |||||||||
Total assets | (42,674,000) | (42,674,000) | (120,443,000) | |||||||||
Long-term debt, including current portion | (16,188,000) | (16,188,000) | (89,350,000) | |||||||||
HEP [Member]
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Segment Reporting Information [Line Items] | ||||||||||||
Sales and other revenues | 63,692,000 | 50,940,000 | 127,207,000 | 95,945,000 | ||||||||
Depreciation and amortization | 8,728,000 | 7,309,000 | 18,587,000 | 14,544,000 | ||||||||
Income (loss) from operations | 34,554,000 | 27,692,000 | 69,183,000 | 51,303,000 | ||||||||
Capital expenditures | 5,681,000 | 11,425,000 | 12,008,000 | 22,900,000 | ||||||||
Cash, cash equivalents and investments in marketable securities | 4,216,000 | 4,216,000 | 3,269,000 | |||||||||
Total assets | 988,670,000 | 988,670,000 | 995,120,000 | |||||||||
Long-term debt, including current portion | 613,195,000 | 613,195,000 | 598,761,000 | |||||||||
Segment revenues from external customers | $ 9,500,000 | $ 13,800,000 | $ 20,200,000 | $ 24,700,000 | ||||||||
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Environmental (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
|
Dec. 31, 2011
|
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Loss Contingencies [Line Items] | |||||
Environmental remediation costs | $ 1.0 | $ 0.1 | $ 15.2 | $ 0.1 | |
Accrued environmental liability | 61.4 | 61.4 | 42.2 | ||
Other Long-Term Liabilities [Member]
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Loss Contingencies [Line Items] | |||||
Accrued environmental liability | 48.7 | 48.7 | 31.7 | ||
Frontier [Member]
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Loss Contingencies [Line Items] | |||||
Accrued environmental liability | $ 15.6 | $ 15.6 |
Supplemental Guarantor/Non-Guarantor Financial Information Consolidating Statement of Cash Flows (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
Parent [Member]
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Jun. 30, 2011
Parent [Member]
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Jun. 30, 2012
Guarantor Restricted Subsidiaries [Member]
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Jun. 30, 2011
Guarantor Restricted Subsidiaries [Member]
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Jun. 30, 2012
Non Guarantor Restricted Subsidiaries [Member]
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Jun. 30, 2011
Non Guarantor Restricted Subsidiaries [Member]
|
Jun. 30, 2012
Holly Frontier Corp. Before Consolidation Of HEP [Member]
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Jun. 30, 2011
Holly Frontier Corp. Before Consolidation Of HEP [Member]
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Jun. 30, 2012
Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) [Member]
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Jun. 30, 2011
Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) [Member]
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Jun. 30, 2012
Eliminations [Member]
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Jun. 30, 2011
Eliminations [Member]
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Jun. 30, 2012
HEP [Member]
|
Jun. 30, 2011
HEP [Member]
|
Jun. 30, 2012
HEP [Member]
Parent [Member]
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Jun. 30, 2011
HEP [Member]
Parent [Member]
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Jun. 30, 2012
HEP [Member]
Guarantor Restricted Subsidiaries [Member]
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Jun. 30, 2011
HEP [Member]
Guarantor Restricted Subsidiaries [Member]
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Jun. 30, 2012
HEP [Member]
Non Guarantor Restricted Subsidiaries [Member]
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Jun. 30, 2011
HEP [Member]
Non Guarantor Restricted Subsidiaries [Member]
|
Jun. 30, 2012
HEP [Member]
Holly Frontier Corp. Before Consolidation Of HEP [Member]
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Jun. 30, 2011
HEP [Member]
Holly Frontier Corp. Before Consolidation Of HEP [Member]
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Jun. 30, 2012
HEP [Member]
Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) [Member]
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Jun. 30, 2011
HEP [Member]
Non-Guarantor Non-Restricted Subsidiaries (HEP Segment) [Member]
|
Jun. 30, 2012
HEP [Member]
Eliminations [Member]
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Jun. 30, 2011
HEP [Member]
Eliminations [Member]
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Condensed Financial Statements, Captions [Line Items] | ||||||||||||||||||||||||||||
Cash flows from operating activities | $ 429,503 | $ 457,996 | $ 347,534 | $ 304,061 | $ 45,516 | $ 122,324 | $ (6,489) | $ 5,051 | $ 386,561 | $ 431,436 | $ 73,500 | $ 46,289 | $ (30,558) | $ (19,729) | ||||||||||||||
Additions to properties, plants and equipment | (116,012) | (133,405) | (1,679) | (2,623) | (102,722) | (51,382) | (11,611) | (79,400) | (116,012) | (133,405) | 0 | 0 | 0 | 0 | (12,008) | (22,900) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (12,008) | (22,900) | 0 | 0 |
Investment in Sabine Biofuels | (2,000) | (9,125) | 0 | (9,125) | (2,000) | 0 | 0 | 0 | (2,000) | (9,125) | 0 | 0 | 0 | 0 | ||||||||||||||
Purchases of marketable securities | (166,429) | (157,782) | (166,429) | (157,782) | 0 | 0 | 0 | 0 | (166,429) | (157,782) | 0 | 0 | 0 | 0 | ||||||||||||||
Sales and maturities of marketable securities | 151,996 | 68,150 | 151,066 | 68,150 | 930 | 0 | 0 | 0 | 151,996 | 68,150 | 0 | 0 | 0 | 0 | ||||||||||||||
Net cash used for investing activities | (144,453) | (255,062) | (17,042) | (101,380) | (103,792) | (51,382) | (11,611) | (79,400) | (132,445) | (232,162) | (12,008) | (22,900) | 0 | 0 | ||||||||||||||
Net borrowings under credit agreement – HEP | 27,000 | 0 | 0 | 0 | 0 | 27,000 | 0 | |||||||||||||||||||||
Net repayments under credit agreement – HEP | (30,000) | 0 | 0 | 0 | 0 | (30,000) | 0 | |||||||||||||||||||||
Repayment of promissory notes | 0 | 0 | 72,900 | 0 | 72,900 | (72,900) | 0 | |||||||||||||||||||||
Net proceeds from issuance of senior notes - HEP | 294,750 | 0 | 0 | 0 | 0 | 0 | 294,750 | 0 | ||||||||||||||||||||
Principal tender on senior notes - HEP | 5,000 | 5,000 | 0 | 0 | 5,000 | 0 | 0 | (185,000) | 0 | 0 | 0 | 0 | (185,000) | 0 | ||||||||||||||
Purchase of treasury stock | (189,771) | (2,996) | (189,771) | (2,996) | 0 | 0 | 0 | 0 | (189,771) | (2,996) | 0 | 0 | 0 | 0 | ||||||||||||||
Net prepayment related to structured share repurchase arrangement | (100,000) | 0 | (100,000) | 0 | 0 | (100,000) | 0 | 0 | ||||||||||||||||||||
Contribution from joint venture partner | 6,000 | 16,500 | 0 | 0 | (9,000) | (63,000) | 15,000 | 79,500 | 6,000 | 16,500 | 0 | 0 | 0 | 0 | ||||||||||||||
Dividends | (249,958) | (15,984) | (249,958) | (15,984) | 0 | 0 | 0 | 0 | (249,958) | (15,984) | 0 | 0 | 0 | 0 | ||||||||||||||
Distributions to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (28,944) | (25,133) | (59,977) | (44,862) | 31,033 | 19,729 | ||||||||||||||
Excess tax benefit from equity based compensation | 4,762 | 498 | 4,762 | 498 | 0 | 0 | 0 | 0 | 4,762 | 498 | 0 | 0 | 0 | 0 | ||||||||||||||
Purchase of units for restricted grants - HEP | (4,533) | (1,379) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (4,533) | (1,379) | 0 | 0 | ||||||||||||||
Deferred financing costs | (3,229) | (3,289) | 0 | (140) | (67) | 0 | 0 | 0 | (67) | (140) | (3,162) | (3,149) | 0 | 0 | ||||||||||||||
Other | (833) | (563) | 0 | 0 | (635) | (563) | 0 | 0 | (635) | (563) | 277 | 0 | (475) | 0 | ||||||||||||||
Net cash provided by (used for) financing activities | (491,756) | (5,346) | (539,967) | (18,622) | 63,198 | (63,563) | 15,000 | 79,500 | (461,769) | (2,685) | (60,545) | (22,390) | 30,558 | 19,729 | ||||||||||||||
Increase (decrease) for the period | (206,706) | 197,588 | (209,475) | 184,059 | 4,922 | 7,379 | (3,100) | 5,151 | (207,653) | 196,589 | 947 | 999 | 0 | 0 | ||||||||||||||
Beginning of period | 1,578,904 | 229,101 | 1,575,891 | 230,082 | (3,358) | (9,035) | 3,102 | 7,651 | 1,575,635 | 228,698 | 3,269 | 403 | 0 | 0 | 3,269 | |||||||||||||
End of period | $ 1,372,198 | $ 426,689 | $ 1,366,416 | $ 414,141 | $ 1,564 | $ (1,656) | $ 2 | $ 12,802 | $ 1,367,982 | $ 425,287 | $ 4,216 | $ 1,402 | $ 0 | $ 0 | $ 4,216 |
Retirement Plan (Net Periodic Pension Expense) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
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Defined Benefit Retirement Plan [Member]
|
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Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost - benefit earned during the period | $ 509 | $ 1,268 | $ 679 | $ 2,535 |
Interest cost on projected benefit obligations | 1,061 | 1,281 | 2,052 | 2,562 |
Expected return on plan assets | (949) | (1,339) | (1,899) | (2,678) |
Amortization of prior service cost | 50 | 97 | 67 | 195 |
Amortization of net loss | 620 | 533 | 1,103 | 1,066 |
Estimated effect of curtailment | 674 | 0 | 899 | 0 |
Net periodic pension expense | 1,965 | 1,840 | 2,901 | 3,680 |
Other Post-Retirement Healthcare and Other Benefits Plan [Member]
|
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Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost - benefit earned during the period | 475 | 950 | ||
Interest cost on projected benefit obligations | 875 | 1,750 | ||
Amortization of prior service cost | (550) | (1,100) | ||
Amortization of net loss | 75 | 150 | ||
Net periodic pension expense | $ 875 | $ 1,750 |
Supplemental Guarantor/Non-Guarantor Financial Information
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 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 at June 30, 2012, 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 condensed consolidating financial information is provided for 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.” 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.
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Equity (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes To Equity | Changes to equity during the six months ended June 30, 2012 are presented below:
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Stock-Based Compensation (Summary Of Performance Share Unit Activity) (Details) (Performance Share Units [Member])
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Performance Share Units [Member]
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share based compensation arrangement by share based payment award, euity instruments othe than options, vested in period, percentage payout | 192.00% |
Outstanding at January 1, 2012 (non-vested), Grants | 774,788 |
Granted, Grants | 293,559 |
Vesting and transfer of ownership to recipients, Grants | (240,019) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (5,057) |
Outstanding at June 30, 2012 (non-vested), Grants | 823,271 |
Derivative Instruments And Hedging Activities (Summary Of Balance Sheet Locations And Related Fair Values Of Outstanding Derivative Instruments) (Details) (USD $)
|
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2012
|
Dec. 31, 2011
|
|
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 119,461,000 | |
Derivative Assets, Current | 75,840,000 | |
Commodity price swap contracts, Fair Value | 119,461,000 | 173,784,000 |
Interest Rate Derivatives, at Fair Value, Net | 78,222,000 | 520,000 |
Interest Rate Cash Flow Hedge Liability at Fair Value | 2,382,000 | 520,000 |
Variable-to-fixed interest rate swap contract, Offsetting Amount | 41,200,000 | |
Derivatives not designated as hedge liability, Fair Value | 6,372,000 | 1,870,000 |
Derivatives not designated as hedge liability, Offsetting Amount | $ 16,043,000 | $ 1,252,000 |
Financial Instruments (Estimated Fair Values Of Debt Instruments) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 119,461 | |
Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 399,392 | 437,360 |
Derivative Liability, Fair Value, Gross Liability | 1,179,753 | 978,894 |
Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 399,392 | 437,360 |
Derivative Liability, Fair Value, Gross Liability | 1,239,829 | |
Notes Payable, Fair Value Disclosure | 1,040,101 | |
Fair Value [Member] | HEP [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 2,382 | 520 |
Level 1 [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | |
Level 1 [Member] | Carrying Amount [Member] | Holly Frontier [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 |
Level 1 [Member] | Carrying Amount [Member] | HEP [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 |
Level 1 [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 3,683 | 753 |
Notes Payable, Fair Value Disclosure | 1,252 | |
Level 2 [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Notes Payable, Fair Value Disclosure | 1,038,849 | |
Level 2 [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 276,248 | 404,991 |
Derivative Liability, Fair Value, Gross Liability | 1,239,829 | |
Level 2 [Member] | Fair Value [Member] | HEP [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 2,382 | 520 |
Level 3 [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 119,461 | 31,616 |
Equity Securities [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 753 | |
Equity Securities [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 753 | |
Marketable Debt Securities [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 276,248 | 260,953 |
Marketable Debt Securities [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 276,248 | 260,953 |
Marketable Debt Securities [Member] | Level 2 [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 276,248 | 260,953 |
Nymex Futures Contracts [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 3,683 | |
Nymex Futures Contracts [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 3,683 | |
Nymex Futures Contracts [Member] | Level 1 [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 3,683 | |
Nymex Futures Contracts [Member] | Level 2 [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 0 | |
Nymex Futures Contracts [Member] | Level 3 [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 0 | |
Commodity Price Swaps [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 119,461 | 175,654 |
Derivative Liability, Fair Value, Gross Liability | 89,194 | 1,252 |
Commodity Price Swaps [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 119,461 | 175,654 |
Derivative Liability, Fair Value, Gross Liability | 89,194 | 1,252 |
Commodity Price Swaps [Member] | Level 1 [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | 1,252 |
Commodity Price Swaps [Member] | Level 2 [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 144,038 |
Commodity Price Swaps [Member] | Level 2 [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 89,194 | 0 |
Commodity Price Swaps [Member] | Level 3 [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 119,461 | 31,616 |
Interest Rate Swap [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 644,982 | 651,262 |
Interest Rate Swap [Member] | Carrying Amount [Member] | HEP [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 2,382 | 520 |
Interest Rate Swap [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 686,628 | 693,979 |
Interest Rate Swap [Member] | Level 1 [Member] | Carrying Amount [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 |
Interest Rate Swap [Member] | Level 2 [Member] | Fair Value [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 686,628 | 693,979 |
Senior Notes [Member] | Carrying Amount [Member] | HEP [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 443,195 | 325,860 |
Senior Notes [Member] | Fair Value [Member] | HEP [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 461,625 | 344,350 |
Senior Notes [Member] | Level 2 [Member] | Fair Value [Member] | HEP [Member]
|
||
Debt Instrument [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | $ 461,625 | $ 344,350 |
Holly-Frontier Merger
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
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Business Combination, Description [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holly-Frontier Merger | Holly-Frontier Merger On February 21, 2011, we entered into a merger agreement providing for a “merger of equals” business combination between us and Frontier. The legacy Frontier business operations consist of crude oil refining and the wholesale marketing of refined petroleum products produced at the El Dorado and Cheyenne Refineries and serve markets in the Rocky Mountain and Plains States regions of the United States. On July 1, 2011, North Acquisition, Inc., a direct wholly-owned subsidiary of Holly, merged with and into Frontier, with Frontier surviving as a wholly-owned subsidiary of Holly. Subsequent to the merger and following approval by the post-closing board of directors of HollyFrontier, Frontier merged with and into HollyFrontier, with HollyFrontier continuing as the surviving corporation. In accordance with the merger agreement, we issued approximately 102.8 million shares of HollyFrontier common stock in exchange for outstanding shares of Frontier common stock to former Frontier stockholders. Each outstanding share of Frontier common stock was converted into 0.4811 shares of HollyFrontier common stock with any fractional shares paid in cash. The aggregate consideration paid in connection with the merger was approximately $3.7 billion. This is based on our July 1, 2011 market closing price of $35.93 and includes a portion of the fair value of the outstanding equity-based awards assumed from Frontier that relates to pre-merger services. The merger has been accounted for using the acquisition method of accounting with Holly being considered the acquirer of Frontier for accounting purposes. Therefore, the purchase price was allocated to the fair value of the acquired assets and assumed liabilities at the acquisition date, with the excess purchase price being recorded as goodwill. The goodwill resulting from the merger is primarily due to the favorable location of the acquired refining facilities and the expected synergies to be gained from our combined business operations. Goodwill related to this merger is not deductible for income tax purposes. Our consolidated financial and operating results reflect the operations of the merged Frontier businesses beginning July 1, 2011. Assuming the merger had been consummated on January 1, 2011, pro forma revenues, net income and basic and diluted earnings per share are as follows:
Adjustments made to derive pro forma net income primarily relate to depreciation and amortization expense to reflect our new basis in the legacy Frontier refining facilities. |
Derivative Instruments And Hedging Activities Notional Contracts by Derivative Type (Details)
|
Jun. 30, 2013
bbl
|
Jun. 30, 2012
bbl
|
---|---|---|
economic hedges by derivative type [Line Items] | ||
Nonmonetary Notional Amount of Price Risk Cash Flow Hedge Derivatives | 5,048,000 | |
Derivative, Nonmonetary Notional Amount | 540,000 | 4,508,000 |
Natural Gas [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 6,624,000 | |
Nonmonetary Notional Amount of Price Risk Derivatives | 6,624,000 | |
Commodity WCS Spread [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 5,657,500 | 765,000 |
Nonmonetary Notional Amount of Price Risk Derivatives | 6,422,500 | |
Commodity WTI Long [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 150,000 | |
Nonmonetary Notional Amount of Price Risk Derivatives | 150,000 | |
WTI Crude Oil [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Nonmonetary Notional Amount of Price Risk Cash Flow Hedge Derivatives | 10,096,000 | |
Derivative, Nonmonetary Notional Amount | 1,080,000 | 9,016,000 |
Commodity Gasoline [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 480,000 | 150,000 |
Nonmonetary Notional Amount of Price Risk Derivatives | 630,000 | |
Commodity Butane [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 540,000 | |
Nonmonetary Notional Amount of Price Risk Derivatives | 540,000 | |
NYMEX WTI Long [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 234,000 | 146,000 |
Nonmonetary Notional Amount of Price Risk Derivatives | 380,000 | |
NYMEX WTI Short [Member]
|
||
economic hedges by derivative type [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 1,008,000 | |
Nonmonetary Notional Amount of Price Risk Derivatives | 1,008,000 |