Supplemental Guarantor/Non-Guarantor Financial Information

9 Months Ended

Sep. 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 September 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
September 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	$	850,727	$	3,474	$	158	$	—		$	854,359	$	1,667	$	—		$	856,026
Marketable securities	623,480		—		—		—			623,480		—		—			623,480
Accounts receivable, net	9,752		675,673		3,358		—			688,783		35,972		(34,504		)	690,251
Intercompany accounts receivable	—		788,868		379,045		(1,167,913		)	—		—		—			—
Inventories	—		1,577,672		—		—			1,577,672		1,793		—			1,579,465
Income taxes receivable	32,888		—		—		—			32,888		—		—			32,888
Prepayments and other	9,920		107,367		—		—			117,287		2,626		(8,290		)	111,623
Total current assets	1,526,767		3,153,054		382,561		(1,167,913		)	3,894,469		42,058		(42,794		)	3,893,733
Properties, plants and equip, net	32,525		2,774,100		855		—			2,807,480		1,016,223		(263,438		)	3,560,265
Investment in subsidiaries	6,707,737		270,685		—		(6,978,422		)	—		—		—			—
Intangibles and other assets	23,823		2,344,385		25,000		(25,000		)	2,368,208		360,499		(935		)	2,727,772
Total assets	$	8,290,852	$	8,542,224	$	408,416	$	(8,171,335	)	$	9,070,157	$	1,418,780	$	(307,167	)	$	10,181,770
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	15,748	$	1,444,787	$	—	$	—		$	1,460,535	$	15,084	$	(34,504	)	$	1,441,115
Intercompany accounts payable	1,167,913		—		—		(1,167,913		)	—		—		—			—
Accrued liabilities	51,334		53,302		1,161		—			105,797		25,426		(8,290		)	122,933
Deferred income tax liabilities	222,701		—		—		—			222,701		—		—			222,701
Total current liabilities	1,457,696		1,498,089		1,161		(1,167,913		)	1,789,033		40,510		(42,794		)	1,786,749
Long-term debt	179,377		33,603		—		(25,000		)	187,980		851,416		—			1,039,396
Liability to HEP	—		236,305		—		—			236,305		—		(236,305		)	—
Deferred income tax liabilities	654,355		—		—		—			654,355		5,311		—			659,666
Other long-term liabilities	31,253		66,490		—		—			97,743		39,446		(2,078		)	135,111
Investment in HEP	—		—		136,570		—			136,570		—		(136,570		)	—
Equity – HollyFrontier	5,968,171		6,707,737		270,685		(6,978,422		)	5,968,171		386,255		(380,269		)	5,974,157
Equity – noncontrolling interest	—		—		—		—			—		95,842		490,849			586,691
Total liabilities and equity	$	8,290,852	$	8,542,224	$	408,416	$	(8,171,335	)	$	9,070,157	$	1,418,780	$	(307,167	)	$	10,181,770

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 September 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	$	103		$	5,303,131		$	—		$	—		$	5,303,234		$	82,141		$	(67,820	)	$	5,317,555
Operating costs and expenses:
Cost of products sold	—			4,692,587			—			—			4,692,587			—			(66,694		)	4,625,893
Operating expenses	—			255,871			—			—			255,871			25,456			(370		)	280,957
General and administrative	24,904			530			36			(587		)	24,883			2,266			—			27,149
Depreciation and amortization	2,055			66,832			—			587			69,474			15,078			(3,607		)	80,945
Total operating costs and expenses	26,959			5,015,820			36			—			5,042,815			42,800			(70,671		)	5,014,944
Income (loss) from operations	(26,856		)	287,311			(36		)	—			260,419			39,341			2,851			302,611
Other income (expense):
Earnings (loss) of equity method investments	305,736			17,021			19,040			(324,884		)	16,913			880			(19,040		)	(1,247		)
Interest income (expense)	(1,227		)	1,962			144			—			879			(8,585		)	(2,328		)	(10,034		)
Loss on sale of assets	—			(556		)	—			—			(556		)	—			—			(556		)
	304,509			18,427			19,184			(324,884		)	17,236			(7,705		)	(21,368		)	(11,837		)
Income before income taxes	277,653			305,738			19,148			(324,884		)	277,655			31,636			(18,517		)	290,774
Income tax provision	103,174			—			—			—			103,174			42			—			103,216
Net income	174,479			305,738			19,148			(324,884		)	174,481			31,594			(18,517		)	187,558
Less net income attributable to noncontrolling interest	—			—			—			—			—			1,509			11,043			12,552
Net income attributable to HollyFrontier stockholders	$	174,479		$	305,738		$	19,148		$	(324,884	)	$	174,481		$	30,085		$	(29,560	)	$	175,006
Comprehensive income attributable to HollyFrontier stockholders	$	169,050		$	296,622		$	19,584		$	(316,206	)	$	169,050		$	30,520		$	(29,993	)	$	169,577

Condensed Consolidating Statement of Income and Comprehensive Income
Three Months Ended September 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	$	146		$	5,315,037	$	28		$	—		$	5,315,211	$	77,625		$	(65,714	)	$	5,327,122
Operating costs and expenses:
Cost of products sold	—			4,874,603		—			—			4,874,603		—			(64,613		)	4,809,990
Operating expenses	—			234,987		—			—			234,987		21,687			(356		)	256,318
General and administrative	25,995			422		105			—			26,522		2,415			—			28,937
Depreciation and amortization	1,496			65,195		—			—			66,691		19,042			(3,606		)	82,127
Total operating costs and expenses	27,491			5,175,207		105			—			5,202,803		43,144			(68,575		)	5,177,372
Income (loss) from operations	(27,345		)	139,830		(77		)	—			112,408		34,481			2,861			149,750
Other income (expense):
Earnings of equity method investments	158,437			16,207		16,822			(175,320		)	16,146		835			(16,822		)	159
Interest income (expense)	(782		)	2,400		138			—			1,756		(11,812		)	(2,416		)	(12,472		)
	157,655			18,607		16,960			(175,320		)	17,902		(10,977		)	(19,238		)	(12,313		)
Income before income taxes	130,310			158,437		16,883			(175,320		)	130,310		23,504			(16,377		)	137,437
Income tax provision	48,488			—		—			—			48,488		40			—			48,528
Net income	81,822			158,437		16,883			(175,320		)	81,822		23,464			(16,377		)	88,909
Less net income attributable to noncontrolling interest	—			—		—			—			—		1,172			5,447			6,619
Net income attributable to HollyFrontier stockholders	$	81,822		$	158,437	$	16,883		$	(175,320	)	$	81,822	$	22,292		$	(21,824	)	$	82,290
Comprehensive income attributable to HollyFrontier stockholders	$	84,790		$	163,317	$	16,450		$	(179,767	)	$	84,790	$	21,859		$	(21,391	)	$	85,258

Condensed Consolidating Statement of Income and Comprehensive Income
Nine Months Ended September 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	$	383		$	15,440,531		$	935	$	—		$	15,441,849		$	244,177		$	(204,818	)	$	15,481,208
Operating costs and expenses:
Cost of products sold	—			13,640,897			—		—			13,640,897			—			(201,538		)	13,439,359
Operating expenses	—			754,798			—		—			754,798			72,835			(1,056		)	826,577
General and administrative	70,354			4,038			112		—			74,504			7,933			—			82,437
Depreciation and amortization	5,855			221,999			—		—			227,854			45,739			(10,710		)	262,883
Total operating costs and expenses	76,209			14,621,732			112		—			14,698,053			126,507			(213,304		)	14,611,256
Income (loss) from operations	(75,826		)	818,799			823		—			743,796			117,670			8,486			869,952
Other income (expense):
Earnings (loss) of equity method investments	871,883			47,589			51,455		(924,578		)	46,349			2,150			(51,455		)	(2,956		)
Interest income (expense)	(2,024		)	6,051			417		—			4,444			(27,365		)	(7,007		)	(29,928		)
Loss on early extinguishment of debt	—			—			—		—			—			(7,677		)	—			(7,677		)
Loss on sale of assets	—			(556		)	—		—			(556		)	—			—			(556		)
	869,859			53,084			51,872		(924,578		)	50,237			(32,892		)	(58,462		)	(41,117		)
Income before income taxes	794,033			871,883			52,695		(924,578		)	794,033			84,778			(49,976		)	828,835
Income tax provision	292,017			—			—		—			292,017			145			—			292,162
Net income	502,016			871,883			52,695		(924,578		)	502,016			84,633			(49,976		)	536,673
Less net income attributable to noncontrolling interest	—			—			—		—			—			6,562			26,615			33,177
Net income attributable to HollyFrontier stockholders	$	502,016		$	871,883		$	52,695	$	(924,578	)	$	502,016		$	78,071		$	(76,591	)	$	503,496
Comprehensive income attributable to HollyFrontier stockholders	$	571,205		$	984,562		$	52,875	$	(1,037,437	)	$	571,205		$	78,250		$	(76,770	)	$	572,685

Condensed Consolidating Statement of Income and Comprehensive Income
Nine Months Ended September 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	$	777		$	15,294,447	$	91		$	—		$	15,295,315		$	229,230		$	(190,786	)	$	15,333,759
Operating costs and expenses:
Cost of products sold	—			13,246,883		—			—			13,246,883			—			(187,550		)	13,059,333
Operating expenses	—			730,284		—			—			730,284			69,726			(1,051		)	798,959
General and administrative	80,368			2,827		193			—			83,388			8,747			—			92,135
Depreciation and amortization	3,822			182,858		—			—			186,680			48,410			(10,709		)	224,381
Total operating costs and expenses	84,190			14,162,852		193			—			14,247,235			126,883			(199,310		)	14,174,808
Income (loss) from operations	(83,413		)	1,131,595		(102		)	—			1,048,080			102,347			8,524			1,158,951
Other income (expense):
Earnings (loss) of equity method investments	1,178,587			40,413		43,215			(1,222,109		)	40,106			2,238			(43,215		)	(871		)
Interest income (expense)	(15,459		)	6,579		409			—			(8,471		)	(35,818		)	(6,988		)	(51,277		)
Loss on early extinguishment of debt	(22,109		)	—		—			—			(22,109		)	—			—			(22,109		)
	1,141,019			46,992		43,624			(1,222,109		)	9,526			(33,580		)	(50,203		)	(74,257		)
Income before income taxes	1,057,606			1,178,587		43,522			(1,222,109		)	1,057,606			68,767			(41,679		)	1,084,694
Income tax provision	386,225			—		—			—			386,225			440			—			386,665
Net income	671,381			1,178,587		43,522			(1,222,109		)	671,381			68,327			(41,679		)	698,029
Less net income attributable to noncontrolling interest	—			—		—			—			—			5,192			19,897			25,089
Net income attributable to HollyFrontier stockholders	$	671,381		$	1,178,587	$	43,522		$	(1,222,109	)	$	671,381		$	63,135		$	(61,576	)	$	672,940
Comprehensive income attributable to HollyFrontier stockholders	$	715,981		$	1,220,890	$	45,181		$	(1,266,071	)	$	715,981		$	64,794		$	(63,235	)	$	717,540

Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 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	$	(260,533	)	$	930,722		$	55,047		$	—		$	725,236		$	140,154		$	(59,457	)	$	805,933
Cash flows from investing activities
Additions to properties, plants and equipment	(8,373		)	(298,272		)	(831		)	—			(307,476		)	—			—			(307,476		)
Additions to properties, plants and equipment – HEP	—			—			—			—			—			(61,657		)	—			(61,657		)
Proceeds from sale of assets	—			14,711			—			—			14,711			—			—			14,711
Investment in Sabine Biofuels	—			(5,000		)	—			—			(5,000		)	—			—			(5,000		)
Repayments from Sabine Biofuels	—			10,021			—			—			10,021			—			—			10,021
Purchases of marketable securities	(762,224		)	—			—			—			(762,224		)	—			—			(762,224		)
Sales and maturities of marketable securities	863,769			—			—			—			863,769			—			—			863,769
Net advances to Parent	—			(649,294		)	(54,565		)	703,859			—			—			—			—
	93,172			(927,834		)	(55,396		)	703,859			(186,199		)	(61,657		)	—			(247,856		)
Cash flows from financing activities
Net borrowings under credit agreement – HEP	—			—			—			—			—			192,000			—			192,000
Redemption of senior notes - HEP	—			—			—			—			—			(156,188		)	—			(156,188		)
Purchase of treasury stock	(133,150		)	—			—			—			(133,150		)	—			—			(133,150		)
Dividends	(485,766		)	—			—			—			(485,766		)	—			—			(485,766		)
Distributions to noncontrolling interest	—			—			—			—			—			(117,930		)	59,457			(58,473		)
Excess tax benefit from equity-based compensation	4,482			—			—			—			4,482			—			—			4,482
Purchase of units for incentive grants - HEP	—			—			—			—			—			(1,064		)	—			(1,064		)
Deferred financing costs and other	(3,257		)	(1,231		)	493			—			(3,995		)	—			—			(3,995		)
Net advances from subsidiaries	703,859			—			—			(703,859		)	—			—			—			—
	86,168			(1,231		)	493			(703,859		)	(618,429		)	(83,182		)	59,457			(642,154		)
Cash and cash equivalents
Increase (decrease) for the period	(81,193		)	1,657			144			—			(79,392		)	(4,685		)	—			(84,077		)
Beginning of period	931,920			1,817			14			—			933,751			6,352			—			940,103
End of period	$	850,727		$	3,474		$	158		$	—		$	854,359		$	1,667		$	—		$	856,026

Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 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	$	(377,762	)	$	1,066,429		$	41,380		$	—		$	730,047		$	124,922		$	(52,806	)	$	802,163
Cash flows from investing activities:
Additions to properties, plants and equipment	(8,056		)	(247,034		)	—			—			(255,090		)	—			—			(255,090		)
Additions to properties, plants and equipment – HEP	—			—			—			—			—			(31,099		)	—			(31,099		)
Acquisition of trucking operations	—			(11,301		)	—			—			(11,301		)	—			—			(11,301		)
Proceeds from sale of assets	—			3,321			—			—			3,321			2,481			—			5,802
Investment in Sabine Biofuels	—			(3,000		)	—			—			(3,000		)	—			—			(3,000		)
Net advances to Sabine biofuels	—			(11,040		)	—			—			(11,040		)	—			—			(11,040		)
Purchases of marketable securities	(672,701		)	—			—			—			(672,701		)	—			—			(672,701		)
Sales and maturities of marketable securities	646,301			—			—			—			646,301			—			—			646,301
Net advances to Parent	—			(801,939		)	(39,882		)	841,821			—			—			—			—
	(34,456		)	(1,070,993		)	(39,882		)	841,821			(303,510		)	(28,618		)	—			(332,128		)
Cash flows from financing activities:
Net repayments under credit agreement – HEP	—			—			—			—			—			(56,000		)	—			(56,000		)
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	(184,947		)	—			—			—			(184,947		)	—			—			(184,947		)
Contribution from general partner	—			—			(1,499		)	—			(1,499		)	1,499			—			—
Dividends	(485,411		)	—			—			—			(485,411		)	—			—			(485,411		)
Distributions to noncontrolling interest	—			—			—			—			—			(105,641		)	52,806			(52,835		)
Excess tax benefit from equity-based compensation	2,739			—			—			—			2,739			—			—			2,739
Purchase of units for incentive grants - HEP	—			—			—			—			—			(3,379		)	—			(3,379		)
Deferred financing costs and other	—			912			—			—			912			(244		)	—			668
Net advances from subsidiaries	841,821			—			—			(841,821		)	—			—			—			—
	(53,327		)	912			(1,499		)	(841,821		)	(895,735		)	(90,321		)	52,806			(933,250		)
Cash and cash equivalents
Increase (decrease) for the period:	(465,545		)	(3,652		)	(1		)	—			(469,198		)	5,983			—			(463,215		)
Beginning of period	1,748,808			3,652			2			—			1,752,462			5,237			—			1,757,699
End of period	$	1,283,263		$	—		$	1		$	—		$	1,283,264		$	11,220		$	—		$	1,294,484