Supplemental Guarantor/Non-Guarantor Financial Information

6 Months Ended

Jun. 30, 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 June 30, 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
June 30, 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	$	1,108,232	$	3,777	$	227	$	—		$	1,112,236	$	6,066	$	—		$	1,118,302
Marketable securities	679,668		—		—		—			679,668		—		—			679,668
Accounts receivable, net	6,070		768,504		3,087		—			777,661		34,359		(31,840		)	780,180
Intercompany accounts receivable	—		726,278		359,183		(1,085,461		)	—		—		—			—
Inventories	—		1,503,250		—		—			1,503,250		1,582		—			1,504,832
Income taxes receivable	18,875		—		—		—			18,875		—		—			18,875
Prepayments and other	16,345		122,130		—		—			138,475		2,164		(6,365		)	134,274
Total current assets	1,829,190		3,123,939		362,497		(1,085,461		)	4,230,165		44,171		(38,205		)	4,236,131
Properties, plants and equip, net	32,537		2,714,741		551		—			2,747,829		1,011,961		(267,047		)	3,492,743
Marketable securities (long-term)	—		—		—		—			—		—		—			—
Investment in subsidiaries	6,410,993		250,981		—		(6,661,974		)	—		—		—			—
Intangibles and other assets	24,535		2,345,299		25,000		(25,000		)	2,369,834		360,820		(1,145		)	2,729,509
Total assets	$	8,297,255	$	8,434,960	$	388,048	$	(7,772,435	)	$	9,347,828	$	1,416,952	$	(306,397	)	$	10,458,383
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	14,406	$	1,624,681	$	—	$	—		$	1,639,087	$	17,706	$	(31,840	)	$	1,624,953
Intercompany accounts payable	1,085,461		—		—		(1,085,461		)	—		—		—			—
Accrued liabilities	43,581		60,441		1,577		—			105,599		26,527		(6,365		)	125,761
Deferred income tax liabilities	216,981		—		—		—			216,981		—		—			216,981
Total current liabilities	1,360,429		1,685,122		1,577		(1,085,461		)	1,961,667		44,233		(38,205		)	1,967,695
Long-term debt	179,606		34,026		—		(25,000		)	188,632		839,253		—			1,027,885
Liability to HEP	—		239,387		—		—			239,387		—		(239,387		)	—
Deferred income tax liabilities	652,153		—		—		—			652,153		5,312		—			657,465
Other long-term liabilities	36,993		65,432		—		—			102,425		38,585		(2,291		)	138,719
Investment in HEP	—		—		135,490		—			135,490		—		(135,490		)	—
Equity – HollyFrontier	6,068,074		6,410,993		250,981		(6,661,974		)	6,068,074		392,304		(386,846		)	6,073,532
Equity – noncontrolling interest	—		—		—		—			—		97,265		495,822			593,087
Total liabilities and equity	$	8,297,255	$	8,434,960	$	388,048	$	(7,772,435	)	$	9,347,828	$	1,416,952	$	(306,397	)	$	10,458,383

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 June 30, 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	$	179		$	5,362,277	$	(36	)	$	—		$	5,362,420	$	75,024		$	(64,844	)	$	5,372,600
Operating costs and expenses:
Cost of products sold	—			4,738,586		—			—			4,738,586		—			(63,740		)	4,674,846
Operating expenses	—			247,451		—			—			247,451		24,567			(364		)	271,654
General and administrative	24,343			1,469		37			—			25,849		2,516			—			28,365
Depreciation and amortization	2,010			87,473		—			—			89,483		15,477			(3,570		)	101,390
Total operating costs and expenses	26,353			5,074,979		37			—			5,101,369		42,560			(67,674		)	5,076,255
Income (loss) from operations	(26,174		)	287,298		(73		)	—			261,051		32,464			2,830			296,345
Other income (expense):
Earnings (loss) of equity method investments	303,788			14,546		16,132			(319,990		)	14,476		748			(16,132		)	(908		)
Interest income (expense)	(373		)	1,944		143			—			1,714		(8,329		)	(2,337		)	(8,952		)
	303,415			16,490		16,275			(319,990		)	16,190		(7,581		)	(18,469		)	(9,860		)
Income before income taxes	277,241			303,788		16,202			(319,990		)	277,241		24,883			(15,639		)	286,485
Income tax provision	101,304			—		—			—			101,304		28			—			101,332
Net income	175,937			303,788		16,202			(319,990		)	175,937		24,855			(15,639		)	185,153
Less net income attributable to noncontrolling interest	—			—		—			—			—		1,416			7,308			8,724
Net income attributable to HollyFrontier stockholders	$	175,937		$	303,788	$	16,202		$	(319,990	)	$	175,937	$	23,439		$	(22,947	)	$	176,429
Comprehensive income attributable to HollyFrontier stockholders	$	197,313		$	338,556	$	15,909		$	(354,465	)	$	197,313	$	23,145		$	(22,653	)	$	197,805

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended June 30, 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	$	100		$	5,286,984	$	31		$	—		$	5,287,115		$	75,121		$	(63,388	)	$	5,298,848
Operating costs and expenses:
Cost of products sold	—			4,518,737		92			282			4,519,111			—			(62,303		)	4,456,808
Operating expenses	—			255,874		19			—			255,893			22,010			(361		)	277,542
General and administrative	30,242			630		28			—			30,900			3,100			—			34,000
Depreciation and amortization	1,400			57,043		—			—			58,443			15,619			(3,570		)	70,492
Total operating costs and expenses	31,642			4,832,284		139			282			4,864,347			40,729			(66,234		)	4,838,842
Income (loss) from operations	(31,542		)	454,700		(108		)	(282		)	422,768			34,392			2,846			460,006
Other income (expense):
Earnings (loss) of equity method investments	469,228			12,592		14,401			(483,655		)	12,566			746			(14,401		)	(1,089		)
Interest income (expense)	(7,456		)	1,936		134			294			(5,092		)	(11,624		)	(2,300		)	(19,016		)
Loss on early extinguishment of debt	(22,109		)	—		—			—			(22,109		)	—			—			(22,109		)
	439,663			14,528		14,535			(483,361		)	(14,635		)	(10,878		)	(16,701		)	(42,214		)
Income before income taxes	408,121			469,228		14,427			(483,643		)	408,133			23,514			(13,855		)	417,792
Income tax provision	151,698			—		—			—			151,698			345			—			152,043
Net income	256,423			469,228		14,427			(483,643		)	256,435			23,169			(13,855		)	265,749
Less net income attributable to noncontrolling interest	—			—		—			—			—			1,130			7,638			8,768
Net income attributable to HollyFrontier stockholders	$	256,423		$	469,228	$	14,427		$	(483,643	)	$	256,435		$	22,039		$	(21,493	)	$	256,981
Comprehensive income attributable to HollyFrontier stockholders	$	286,296		$	489,146	$	15,900		$	(505,034	)	$	286,308		$	23,512		$	(22,966	)	$	286,854

Condensed Consolidating Statement of Income and Comprehensive Income
Six Months Ended June 30, 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	$	280		$	10,137,400	$	935	$	—		$	10,138,615	$	162,036		$	(136,998	)	$	10,163,653
Operating costs and expenses:
Cost of products sold	—			8,948,308		—		—			8,948,308		—			(134,842		)	8,813,466
Operating expenses	—			498,927		—		—			498,927		47,379			(686		)	545,620
General and administrative	45,450			4,095		76		—			49,621		5,667			—			55,288
Depreciation and amortization	3,800			154,580		—		—			158,380		30,661			(7,103		)	181,938
Total operating costs and expenses	49,250			9,605,910		76		—			9,655,236		83,707			(142,631		)	9,596,312
Income (loss) from operations	(48,970		)	531,490		859		—			483,379		78,329			5,633			567,341
Other income (expense):
Earnings (loss) of equity method investments	566,147			30,568		32,415		(599,694		)	29,436		1,270			(32,415		)	(1,709		)
Interest income (expense)	(797		)	4,089		273		—			3,565		(18,780		)	(4,679		)	(19,894		)
Loss on early extinguishment of debt	—			—		—		—			—		(7,677		)	—			(7,677		)
	565,350			34,657		32,688		(599,694		)	33,001		(25,187		)	(37,094		)	(29,280		)
Income before income taxes	516,380			566,147		33,547		(599,694		)	516,380		53,142			(31,461		)	538,061
Income tax provision	188,843			—		—		—			188,843		103			—			188,946
Net income	327,537			566,147		33,547		(599,694		)	327,537		53,039			(31,461		)	349,115
Less net income attributable to noncontrolling interest	—			—		—		—			—		5,053			15,572			20,625
Net income attributable to HollyFrontier stockholders	$	327,537		$	566,147	$	33,547	$	(599,694	)	$	327,537	$	47,986		$	(47,033	)	$	328,490
Comprehensive income attributable to HollyFrontier stockholders	$	402,155		$	687,940	$	33,291	$	(721,231	)	$	402,155	$	47,730		$	(46,777	)	$	403,108

Condensed Consolidating Statement of Income and Comprehensive Income
Six Months Ended June 30, 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	$	631		$	9,979,410	$	63		$	—		$	9,980,104		$	151,605		$	(125,072	)	$	10,006,637
Operating costs and expenses:
Cost of products sold	—			8,371,865		—			415			8,372,280			—			(122,937		)	8,249,343
Operating expenses	—			495,297		—			—			495,297			48,039			(695		)	542,641
General and administrative	54,373			2,405		88			—			56,866			6,332			—			63,198
Depreciation and amortization	2,326			117,663		—			—			119,989			29,368			(7,103		)	142,254
Total operating costs and expenses	56,699			8,987,230		88			415			9,044,432			83,739			(130,735		)	8,997,436
Income (loss) from operations	(56,068		)	992,180		(25		)	(415		)	935,672			67,866			5,663			1,009,201
Other income (expense):
Earnings (loss)of equity method investments	1,020,119			24,206		26,393			(1,046,758		)	23,960			1,403			(26,393		)	(1,030		)
Interest income (expense)	(14,677		)	3,733		271			446			(10,227		)	(24,006		)	(4,572		)	(38,805		)
Loss on early extinguishment of debt	(22,109		)	—		—			—			(22,109		)	—			—			(22,109		)
	983,333			27,939		26,664			(1,046,312		)	(8,376		)	(22,603		)	(30,965		)	(61,944		)
Income before income taxes	927,265			1,020,119		26,639			(1,046,727		)	927,296			45,263			(25,302		)	947,257
Income tax provision	337,737			—		—			—			337,737			400			—			338,137
Net income	589,528			1,020,119		26,639			(1,046,727		)	589,559			44,863			(25,302		)	609,120
Less net income attributable to noncontrolling interest	—			—		—			—			—			4,020			14,450			18,470
Net income attributable to HollyFrontier stockholders	$	589,528		$	1,020,119	$	26,639		$	(1,046,727	)	$	589,559		$	40,843		$	(39,752	)	$	590,650
Comprehensive income attributable to HollyFrontier stockholders	$	631,160		$	1,057,542	$	28,731		$	(1,086,242	)	$	631,191		$	42,935		$	(41,844	)	$	632,282

Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 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	$	(144,972	)	$	773,845		$	38,968		$	—		$	667,841		$	92,667		$	(39,029	)	$	721,479
Cash flows from investing activities
Additions to properties, plants and equipment	(6,329		)	(199,132		)	(526		)	—			(205,987		)	—			—			(205,987		)
Additions to properties, plants and equipment – HEP	—			—			—			—			—			(38,782		)	—			(38,782		)
Investment in Sabine Biofuels	—			(5,000		)	—			—			(5,000		)	—			—			(5,000		)
Repayment of advances to Sabine Biofuels	—			10,021			—			—			10,021			—			—			10,021
Purchases of marketable securities	(498,080		)	—			—			—			(498,080		)	—			—			(498,080		)
Sales and maturities of marketable securities	543,604			—			—			—			543,604			—			—			543,604
Net advances to Parent	—			(582,930		)	(38,604		)	621,534			—			—			—			—
	39,195			(777,041		)	(39,130		)	621,534			(155,442		)	(38,782		)	—			(194,224		)
Cash flows from financing activities
Net borrowings under credit agreement – HEP	—			—			—			—			—			180,000			—			180,000
Redemption of senior notes - HEP	—			—			—			—			—			(156,188		)	—			(156,188		)
Inventory repurchase obligation	—			5,964			—			—			5,964			—			—			5,964
Purchase of treasury stock	(20,135		)	—			—			—			(20,135		)	—			—			(20,135		)
Dividends	(323,088		)	—			—			—			(323,088		)	—			—			(323,088		)
Distributions to noncontrolling interest	—			—			—			—			—			(77,577		)	39,029			(38,548		)
Excess tax benefit from equity-based compensation	3,778			—			—			—			3,778			—			—			3,778
Purchase of units for incentive grants - HEP	—			—			—			—			—			(406		)	—			(406		)
Deferred financing costs and other	—			(808		)	375			—			(433		)	—			—			(433		)
Net advances from subsidiaries	621,534			—			—			(621,534		)	—			—			—			—
	282,089			5,156			375			(621,534		)	(333,914		)	(54,171		)	39,029			(349,056		)
Cash and cash equivalents
Increase (decrease) for the period	176,312			1,960			213			—			178,485			(286		)	—			178,199
Beginning of period	931,920			1,817			14			—			933,751			6,352			—			940,103
End of period	$	1,108,232		$	3,777		$	227		$	—		$	1,112,236		$	6,066		$	—		$	1,118,302

Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 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	$	(374,074	)	$	758,289		$	20,573		$	—		$	404,788		$	81,542		$	(34,815	)	$	451,515
Cash flows from investing activities:
Additions to properties, plants and equipment	(5,025		)	(148,917		)	—			—			(153,942		)	—			—			(153,942		)
Additions to properties, plants and equipment – HEP	—			—			—			—			—			(16,861		)	—			(16,861		)
Proceeds from sale of property	—			3,321			—			—			3,321			2,481			—			5,802
Investment in Sabine Biofuels	—			(2,000		)	—			—			(2,000		)	—			—			(2,000		)
Advances to Sabine biofuels	—			(13,700		)	—			—			(13,700		)	—			—			(13,700		)
Purchases of marketable securities	(399,154		)	—			—			—			(399,154		)	—			—			(399,154		)
Sales and maturities of marketable securities	398,762			—			—			—			398,762			—			—			398,762
Net advances to Parent	—			(596,004		)	(19,074		)	615,078			—			—			—			—
	(5,417		)	(757,300		)	(19,074		)	615,078			(166,713		)	(14,380		)	—			(181,093		)
Cash flows from financing activities:
Net repayments under credit agreement – HEP	—			—			—			—			—			(66,000		)	—			(66,000		)
Redemption of senior notes	(300,973		)	—			—			—			(300,973		)	—			—			(300,973		)
Proceeds from common unit offerings - HEP	73,444			—			—			—			73,444			73,444			—			146,888
Purchase of treasury stock	(159,432		)	—			—			—			(159,432		)	—			—			(159,432		)
Contribution from general partner	—			—			(1,499		)	—			(1,499		)	1,499			—			—
Dividends	(264,867		)	—			—			—			(264,867		)	—			—			(264,867		)
Distributions to noncontrolling interest	—			—			—			—			—			(69,419		)	34,815			(34,604		)
Excess tax benefit from equity-based compensation	1,037			—			—			—			1,037			—			—			1,037
Purchase of units for incentive grants - HEP	—			—			—			—			—			(2,934		)	—			(2,934		)
Deferred financing costs and other	—			2,457			—			—			2,457			(273		)	—			2,184
Net advances from subsidiaries	615,078			—			—			(615,078		)	—			—			—			—
	(35,713		)	2,457			(1,499		)	(615,078		)	(649,833		)	(63,683		)	34,815			(678,701		)
Cash and cash equivalents
Increase (decrease) for the period:	(415,204		)	3,446			—			—			(411,758		)	3,479			—			(408,279		)
Beginning of period	1,748,808			3,652			2			—			1,752,462			5,237			—			1,757,699
End of period	$	1,333,604		$	7,098		$	2		$	—		$	1,340,704		$	8,716		$	—		$	1,349,420