Supplemental Guarantor/Non-Guarantor Financial Information

3 Months Ended

Mar. 31, 2014

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 39% ownership interest at March 31, 2014, 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.”

We have made certain revisions to our prior year condensed statements of cash flows to reclassify intercompany lending and distribution activity between operating, investing and financing activities.

Condensed Consolidating Balance Sheet
March 31, 2014	Parent		Guarantor Restricted Subsidiaries		Non- Guarantor Restricted Subsidiaries		Eliminations			HollyFrontier Corp. Before Consolidation of HEP		Non-Guarantor Non-Restricted Subsidiaries (HEP Segment)		Consolidations and Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	1,067,578	$	2,055	$	123	$	—		$	1,069,756	$	4,879	$	—		$	1,074,635
Marketable securities	709,468		—		—		—			709,468		—		—			709,468
Accounts receivable, net	5,855		676,984		4,724		—			687,563		34,425		(33,650		)	688,338
Intercompany accounts receivable	—		446,024		337,691		(783,715		)	—		—		—			—
Inventories	—		1,588,698		—		—			1,588,698		1,594		—			1,590,292
Income taxes receivable	12,431		—		—		—			12,431		—		—			12,431
Prepayments and other	16,940		95,930		—		—			112,870		1,905		(4,430		)	110,345
Total current assets	1,812,272		2,809,691		342,538		(783,715		)	4,180,786		42,803		(38,080		)	4,185,509
Properties, plants and equip, net	31,381		2,676,401		56		—			2,707,838		1,005,077		(270,616		)	3,442,299
Marketable securities (long-term)	6,050		—		—		—			6,050		—		—			6,050
Investment in subsidiaries	6,071,959		234,594		—		(6,306,553		)	—		—		—			—
Intangibles and other assets	24,432		2,360,973		25,000		(25,000		)	2,385,405		362,655		(1,360		)	2,746,700
Total assets	$	7,946,094	$	8,081,659	$	367,594	$	(7,115,268	)	$	9,280,079	$	1,410,535	$	(310,056	)	$	10,380,558
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	4,479	$	1,584,007	$	384	$	—		$	1,588,870	$	15,753	$	(33,650	)	$	1,570,973
Intercompany accounts payable	783,715		—		—		(783,715		)	—		—		—			—
Accrued liabilities	38,164		71,934		1,228		—			111,326		14,107		(4,430		)	121,003
Deferred income tax liabilities	224,534		—		—		—			224,534		—		—			224,534
Total current liabilities	1,050,892		1,655,941		1,612		(783,715		)	1,924,730		29,860		(38,080		)	1,916,510
Long-term debt	179,831		34,436		—		(25,000		)	189,267		833,790		—			1,023,057
Liability to HEP	—		242,463		—		—			242,463		—		(242,463		)	—
Deferred income tax liabilities	639,021		—		—		—			639,021		5,312		—			644,333
Other long-term liabilities	36,406		76,860		—		—			113,266		37,395		(2,504		)	148,157
Investment in HEP	—		—		131,388		—			131,388		—		(131,388		)	—
Equity – HollyFrontier	6,039,944		6,071,959		234,594		(6,306,553		)	6,039,944		405,427		(400,285		)	6,045,086
Equity – noncontrolling interest	—		—		—		—			—		98,751		504,664			603,415
Total liabilities and equity	$	7,946,094	$	8,081,659	$	367,594	$	(7,115,268	)	$	9,280,079	$	1,410,535	$	(310,056	)	$	10,380,558

Condensed Consolidating Balance Sheet
December 31, 2013	Parent		Guarantor Restricted Subsidiaries		Non- Guarantor Restricted Subsidiaries		Eliminations			HollyFrontier Corp. Before Consolidation of HEP		Non-Guarantor Non-Restricted Subsidiaries (HEP Segment)		Consolidations and Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	931,920	$	1,817	$	14	$	—		$	933,751	$	6,352	$	—		$	940,103
Marketable securities	725,160		—		—		—			725,160		—		—			725,160
Accounts receivable, net	6,095		698,109		8,075		—			712,279		34,736		(38,213		)	708,802
Intercompany accounts receivable	—		149,907		313,623		(463,530		)	—		—		—			—
Inventories	—		1,352,656		—		—			1,352,656		1,591		—			1,354,247
Income taxes receivable	109,376		—		—		—			109,376		—		—			109,376
Prepayments and other	21,843		45,413		—		—			67,256		2,283		(10,783		)	58,756
Total current assets	1,794,394		2,247,902		321,712		(463,530		)	3,900,478		44,962		(48,996		)	3,896,444
Properties, plants and equip, net	30,007		2,633,739		24		—			2,663,770		1,004,975		(274,149		)	3,394,596
Investment in subsidiaries	5,722,025		216,687		—		(5,938,712		)	—		—		—			—
Intangibles and other assets	23,034		2,380,268		25,000		(25,000		)	2,403,302		363,970		(1,573		)	2,765,699
Total assets	$	7,569,460	$	7,478,596	$	346,736	$	(6,427,242	)	$	8,967,550	$	1,413,907	$	(324,718	)	$	10,056,739
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	16,704	$	1,323,603	$	383	$	—		$	1,340,690	$	22,898	$	(38,212	)	$	1,325,376
Intercompany accounts payable	463,530		—		—		(463,530		)	—		—		—			—
Accrued liabilities	43,254		63,181		795		—			107,230		28,668		(10,783		)	125,115
Deferred income tax liabilities	223,999		—		—		—			223,999		—		—			223,999
Total current liabilities	747,487		1,386,784		1,178		(463,530		)	1,671,919		51,566		(48,995		)	1,674,490
Long-term debt	180,054		34,835		—		(25,000		)	189,889		807,630		—			997,519
Liability to HEP	—		245,536		—		—			245,536		—		(245,536		)	—
Deferred income tax liabilities	611,555		—		—		—			611,555		5,287		—			616,842
Other long-term liabilities	35,874		89,416		—		—			125,290		35,918		(2,718		)	158,490
Investment in HEP	—		—		128,871		—			128,871		—		(128,871		)	—
Equity – HollyFrontier	5,994,490		5,722,025		216,687		(5,938,712		)	5,994,490		416,018		(410,888		)	5,999,620
Equity – noncontrolling interest	—		—		—		—			—		97,488		512,290			609,778
Total liabilities and equity	$	7,569,460	$	7,478,596	$	346,736	$	(6,427,242	)	$	8,967,550	$	1,413,907	$	(324,718	)	$	10,056,739

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended March 31, 2014	Parent			Guarantor Restricted Subsidiaries		Non- Guarantor Restricted Subsidiaries		Eliminations			HollyFrontier Corp. Before Consolidation of HEP		Non-Guarantor Non-Restricted Subsidiaries (HEP Segment)			Consolidations and Eliminations			Consolidated
	(In thousands)
Sales and other revenues	$	101		$	4,775,123	$	971	$	—		$	4,776,195	$	87,012		$	(72,154	)	$	4,791,053
Operating costs and expenses:
Cost of products sold	—			4,209,722		—		—			4,209,722		—			(71,102		)	4,138,620
Operating expenses	—			251,476		—		—			251,476		22,812			(322		)	273,966
General and administrative	21,107			2,626		39		—			23,772		3,151			—			26,923
Depreciation and amortization	1,790			67,107		—		—			68,897		15,184			(3,533		)	80,548
Total operating costs and expenses	22,897			4,530,931		39		—			4,553,867		41,147			(74,957		)	4,520,057
Income (loss) from operations	(22,796		)	244,192		932		—			222,328		45,865			2,803			270,996
Other income (expense):
Earnings (loss) of equity method investments	262,359			16,022		16,283		(279,704		)	14,960		522			(16,283		)	(801		)
Interest income (expense)	(424		)	2,145		130		—			1,851		(10,451		)	(2,342		)	(10,942		)
Loss on early extinguishment of debt	—			—		—		—			—		(7,677		)	—			(7,677		)
	261,935			18,167		16,413		(279,704		)	16,811		(17,606		)	(18,625		)	(19,420		)
Income before income taxes	239,139			262,359		17,345		(279,704		)	239,139		28,259			(15,822		)	251,576
Income tax provision	87,539			—		—		—			87,539		75			—			87,614
Net income	151,600			262,359		17,345		(279,704		)	151,600		28,184			(15,822		)	163,962
Less net income attributable to noncontrolling interest	—			—		—		—			—		3,637			8,264			11,901
Net income attributable to HollyFrontier stockholders	$	151,600		$	262,359	$	17,345	$	(279,704	)	$	151,600	$	24,547		$	(24,086	)	$	152,061
Comprehensive income attributable to HollyFrontier stockholders	$	204,842		$	349,384	$	17,382	$	(366,766	)	$	204,842	$	24,585		$	(24,124	)	$	205,303

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended March 31, 2013	Parent			Guarantor Restricted Subsidiaries		Non- Guarantor Restricted Subsidiaries			Eliminations			HollyFrontier Corp. Before Consolidation of HEP			Non-Guarantor Non-Restricted Subsidiaries (HEP Segment)			Consolidations and Eliminations			Consolidated
	(In thousands)
Sales and other revenues	$	531		$	4,692,426	$	32		$	—		$	4,692,989		$	76,484		$	(61,684	)	$	4,707,789
Operating costs and expenses:
Cost of products sold	—			3,853,128		41			—			3,853,169			—			(60,634		)	3,792,535
Operating expenses	—			239,423		(19		)	—			239,404			26,029			(334		)	265,099
General and administrative	24,131			1,775		60			—			25,966			3,232			—			29,198
Depreciation and amortization	926			60,620		—			—			61,546			13,749			(3,533		)	71,762
Total operating costs and expenses	25,057			4,154,946		82			—			4,180,085			43,010			(64,501		)	4,158,594
Income (loss) from operations	(24,526		)	537,480		(50		)	—			512,904			33,474			2,817			549,195
Other income (expense):
Earnings of equity method investments	550,910			11,633		11,992			(563,141		)	11,394			657			(11,992		)	59
Interest income (expense)	(7,221		)	1,797		289			—			(5,135		)	(12,382		)	(2,272		)	(19,789		)
	543,689			13,430		12,281			(563,141		)	6,259			(11,725		)	(14,264		)	(19,730		)
Income before income taxes	519,163			550,910		12,231			(563,141		)	519,163			21,749			(11,447		)	529,465
Income tax provision	186,039			—		—			—			186,039			55			—			186,094
Net income	333,124			550,910		12,231			(563,141		)	333,124			21,694			(11,447		)	343,371
Less net income attributable to noncontrolling interest	—			—		—			—			—			2,890			6,812			9,702
Net income attributable to HollyFrontier stockholders	$	333,124		$	550,910	$	12,231		$	(563,141	)	$	333,124		$	18,804		$	(18,259	)	$	333,669
Comprehensive income attributable to HollyFrontier stockholders	$	344,883		$	568,415	$	12,850		$	(581,265	)	$	344,883		$	19,423		$	(18,878	)	$	345,428

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2014	Parent			Guarantor Restricted Subsidiaries			Non- Guarantor Restricted Subsidiaries			Eliminations			HollyFrontier Corp. Before Consolidation of HEP			Non-Guarantor Non-Restricted Subsidiaries (HEP Segment)			Consolidations and Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities	$	(23,564	)	$	381,180		$	17,477		$	—		$	375,093		$	39,047		$	(19,211	)	$	394,929
Cash flows from investing activities
Additions to properties, plants and equipment	(3,163		)	(100,483		)	(31		)	—			(103,677		)	—			—			(103,677		)
Additions to properties, plants and equipment – HEP	—			—			—			—			—			(20,604		)	—			(20,604		)
Investment in Sabine Biofuels	—			(1,000		)	—			—			(1,000		)	—			—			(1,000		)
Net advances to Sabine Biofuels	—			2,586			—			—			2,586			—			—			2,586
Purchases of marketable securities	(244,030		)	—			—			—			(244,030		)	—			—			(244,030		)
Sales and maturities of marketable securities	253,676			—			—			—			253,676			—			—			253,676
Net advances to Parent	—			(302,773		)	(17,412		)	320,185			—			—			—			—
	6,483			(401,670		)	(17,443		)	320,185			(92,445		)	(20,604		)	—			(113,049		)
Cash flows from financing activities
Net repayments under credit agreement – HEP	—			—			—			—			—			174,700			—			174,700
Redemption of senior notes - HEP	—			—			—			—			—			(156,188		)	—			(156,188		)
Inventory repurchase obligation	—			21,126			—			—			21,126			—			—			21,126
Purchase of treasury stock	(13,988		)	—			—			—			(13,988		)	—			—			(13,988		)
Dividends	(158,614		)	—			—			—			(158,614		)	—			—			(158,614		)
Distributions to noncontrolling interest	—			—			—			—			—			(38,092		)	19,211			(18,881		)
Excess tax benefit from equity-based compensation	5,156			—			—			—			5,156			—			—			5,156
Purchase of units for incentive grants - HEP	—			—			—			—			—			(336		)	—			(336		)
Deferred financing costs and other	—			(398		)	75			—			(323		)	—			—			(323		)
Net advances from subsidiaries	320,185			—			—			(320,185		)	—			—			—			—
	152,739			20,728			75			(320,185		)	(146,643		)	(19,916		)	19,211			(147,348		)
Cash and cash equivalents
Increase (decrease) for the period	135,658			238			109			—			136,005			(1,473		)	—			134,532
Beginning of period	931,920			1,817			14			—			933,751			6,352			—			940,103
End of period	$	1,067,578		$	2,055		$	123		$	—		$	1,069,756		$	4,879		$	—		$	1,074,635

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2013	Parent			Guarantor Restricted Subsidiaries			Non- Guarantor Restricted Subsidiaries			Eliminations			HollyFrontier Corp. Before Consolidation of HEP			Non-Guarantor Non-Restricted Subsidiaries (HEP Segment)			Consolidations and Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities	$	(56,933	)	$	282,983		$	10,496		$	—		$	236,546		$	29,438		$	(17,421	)	$	248,563
Cash flows from investing activities:
Additions to properties, plants and equipment	(1,736		)	(65,215		)	—			—			(66,951		)	—			—			(66,951		)
Additions to properties, plants and equipment – HEP	—			—			—			—			—			(5,013		)	—			(5,013		)
Proceeds from sale of property	—			—			—			—			—			2,290			—			2,290
Purchases of marketable securities	(178,251		)	—			—			—			(178,251		)	—			—			(178,251		)
Sales and maturities of marketable securities	143,280			—			—			—			143,280			—			—			143,280
Net advances to Parent	—			(224,667		)	(8,997		)	233,664			—			—			—			—
	(36,707		)	(289,882		)	(8,997		)	233,664			(101,922		)	(2,723		)	—			(104,645		)
Cash flows from financing activities:
Net borrowings under credit agreement – HEP	—			—			—			—			—			(53,000		)	—			(53,000		)
Proceeds from common unit offerings - HEP	73,444			—			—			—			73,444			73,444			—			146,888
Purchase of treasury stock	(6,610		)	—			—			—			(6,610		)	—			—			(6,610		)
Contribution from general partner	—			—			(1,499		)	—			(1,499		)	1,499			—			—
Dividends	(102,163		)	—			—			—			(102,163		)	—			—			(102,163		)
Distributions to noncontrolling interest	—			—			—			—			—			(32,709		)	17,421			(15,288		)
Excess tax benefit from equity-based compensation	744			—			—			—			744			—			—			744
Purchase of units for incentive grants - HEP	—			—			—			—			—			(2,719		)	—			(2,719		)
Deferred financing costs and other	—			3,247			—			—			3,247			(274		)	—			2,973
Net advances from subsidiaries	233,664			—			—			(233,664		)	—			—			—			—
	199,079			3,247			(1,499		)	(233,664		)	(32,837		)	(13,759		)	17,421			(29,175		)
Cash and cash equivalents
Increase (decrease) for the period:	105,439			(3,652		)	—			—			101,787			12,956			—			114,743
Beginning of period	1,748,808			3,652			2			—			1,752,462			5,237			—			1,757,699
End of period	$	1,854,247		$	—		$	2		$	—		$	1,854,249		$	18,193		$	—		$	1,872,442