10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________________

FORM 10-Q

_________________________________________________________________

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from    __________   to   ____________         

Commission File Number 1-3876

 _________________________________________________________________

HOLLYFRONTIER CORPORATION

(Exact name of registrant as specified in its charter)

_________________________________________________________________

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)

(214) 871-3555

(Registrant’s telephone number, including area code)

_________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

_________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨	Non-accelerated filer	¨	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

173,272,653 shares of Common Stock, par value $.01 per share, were outstanding on October 26, 2018.

HOLLYFRONTIER CORPORATION

INDEX

	Page
Forward-Looking Statements	3
PART I. FINANCIAL INFORMATION
Definitions	4
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 2018 (Unaudited) and December 31, 2017	6
Consolidated Statements of Income (Unaudited)
Three and Nine Months Ended September 30, 2018 and 2017	7
Consolidated Statements of Comprehensive Income (Unaudited)
Three and Nine Months Ended September 30, 2018 and 2017	8
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2018 and 2017	9
Notes to Consolidated Financial Statements (Unaudited)	10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3. Quantitative and Qualitative Disclosures About Market Risk	53
Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles	53
Item 4. Controls and Procedures	55
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	56
Item 1A. Risk Factors	56
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 6. Exhibits	57
Index to Exhibits	58
Signatures	59

FORWARD-LOOKING STATEMENTS

References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Quarterly Report on Form 10-Q has been written in the first person. In this document, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. This document contains certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries.

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. All statements, other than statements of historical fact included in this Form 10-Q, including, but not limited to, those under “Results of Operations,” “Liquidity and Capital Resources” and “Risk Management” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and those in Part II, Item 1 “Legal Proceedings” are forward-looking statements. Forward-looking statements use words such as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “intend,” “should,” “would,” “could,” “believe,” “may,” and similar expressions and statements regarding our plans and objectives for future operations. These statements are based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties. All statements concerning our expectations for future results of operations are based on forecasts for our existing operations and do not include the potential impact of any future acquisitions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove to be correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in these statements. Any differences could be caused by a number of factors including, but not limited to:

• 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 or cyber 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.

Cautionary statements identifying important factors that could cause actual results to differ materially from our expectations are set forth in this Form 10-Q, including without limitation, the forward-looking statements that are referred to above. This summary discussion should be read in conjunction with the discussion of the known material risk factors and other cautionary statements under the heading “Risk Factors” included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017 and in conjunction with the discussion in this Form 10-Q in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Liquidity and Capital Resources.” All forward-looking statements included in this Form 10-Q and all subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3

PART I. FINANCIAL INFORMATION

DEFINITIONS

Within this report, the following terms have these specific meanings:

“BPD” means the number of barrels per calendar day of crude oil or petroleum products.

“BPSD” means the number of barrels per stream day (barrels of capacity in a 24 hour period) of crude oil or petroleum products.

“Base oil” is a lubricant grade oil initially produced from refining crude oil or through chemical synthesis that is used in producing lubricant products such as lubricating greases, motor oil and metal processing fluids.

“Biodiesel” means a clean alternative fuel produced from renewable biological resources.

“Black wax crude oil” is a low sulfur, low gravity crude oil produced in the Uintah Basin in Eastern Utah that has certain characteristics that require specific facilities to transport, store and refine into transportation fuels.

“Cracking” means the process of breaking down larger, heavier and more complex hydrocarbon molecules into simpler and lighter molecules.

“Crude oil distillation” means the process of distilling vapor from liquid crudes, usually by heating, and condensing the vapor slightly above atmospheric pressure turning it back to liquid in order to purify, fractionate or form the desired products.

“Ethanol” means a high octane gasoline blend stock that is used to make various grades of gasoline.

“FCC,” or fluid catalytic cracking, means a refinery process that breaks down large complex hydrocarbon molecules into smaller more useful ones using a circulating bed of catalyst at relatively high temperatures.

“Hydrodesulfurization” means to remove sulfur and nitrogen compounds from oil or gas in the presence of hydrogen and a catalyst at relatively high temperatures.

“Hydrogen plant” means a refinery unit that converts natural gas and steam to high purity hydrogen, which is then used in the hydrodesulfurization, hydrocracking and isomerization processes.

“Isomerization” means a refinery process for rearranging the structure of C5/C6 molecules without changing their size or chemical composition and is used to improve the octane of C5/C6 gasoline blendstocks.

“LPG” means liquid petroleum gases.

“Lubricant” or “lube” means a solvent neutral paraffinic product used in commercial heavy duty engine oils, passenger car oils and specialty products for industrial applications such as heat transfer, metalworking, rubber and other general process oil.

“MSAT2” means Control of Hazardous Air Pollutants from Mobile Sources, a rule issued by the U.S. Environmental Protection Agency to reduce hazardous emissions from motor vehicles and motor vehicle fuels.

“MMBTU” means one million British thermal units.

“Rack back” represents the portion of our Lubricants and Specialty Products business operations that entails the processing of feedstocks into base oils.

“Rack forward” represents the portion of our Lubricants and Specialty Products business operations that entails the processing of base oils into finished lubricants and the packaging, distribution and sale to customers.

“Refinery gross margin” means the difference between average net sales price and average cost per barrel sold. This does not include the associated depreciation and amortization costs.

“RINs” means renewable identification numbers and refers to serial numbers assigned to credits generated from renewable fuel production under the Environmental Protection Agency’s Renewable Fuel Standard (“RFS”) regulations, which require blending renewable fuels into the nation’s fuel supply. In lieu of blending, refiners may purchase these transferable credits in order to comply with the regulations.

“Sour crude oil” means crude oil containing quantities of sulfur greater than 0.4 percent by weight, while “sweet crude oil” means crude oil containing quantities of sulfur equal to or less than 0.4 percent by weight.

“Vacuum distillation” means the process of distilling vapor from liquid crudes, usually by heating, and condensing the vapor below atmospheric pressure turning it back to a liquid in order to purify, fractionate or form the desired products.

“White oil” is an extremely pure, highly-refined petroleum product that has a wide variety of applications ranging from pharmaceutical to cosmetic products.

“WTI” means West Texas Intermediate and is a grade of crude oil used as a common benchmark in oil pricing. WTI is a sweet crude oil and has a relatively low density.

5

Item 1. Financial Statements

HOLLYFRONTIER CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	September 30, 2018			December 31, 2017
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (HEP: $6,375 and $7,776, respectively)	$	1,075,677		$	630,757
Accounts receivable: Product and transportation (HEP: $10,301 and $12,803, respectively)	828,629			659,530
Crude oil resales	18,967			61,203
	847,596			720,733
Inventories: Crude oil and refined products	1,635,861			1,409,538
Materials, supplies and other (HEP: $918 and $916, respectively)	226,639			220,554
	1,862,500			1,630,092
Income taxes receivable	14,886			44,337
Prepayments and other (HEP: $1,794 and $1,395, respectively)	57,066			36,909
Total current assets	3,857,725			3,062,828
Properties, plants and equipment, at cost (HEP: $2,039,922 and $2,011,915, respectively)	6,704,162			6,523,789
Less accumulated depreciation (HEP: $(467,862) and $(408,599), respectively)	(2,030,719		)	(1,810,515		)
	4,673,443			4,713,274
Other assets: Turnaround costs	272,601			231,319
Goodwill (HEP: $314,229 and $310,610, respectively)	2,255,541			2,244,744
Intangibles and other (HEP: $183,288 and $206,167, respectively)	435,816			439,989
	2,963,958			2,916,052
Total assets	$	11,495,126		$	10,692,154
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable (HEP: $9,987 and $14,637, respectively)	$	1,176,417		$	1,220,795
Income taxes payable	78,316			3,159
Accrued liabilities (HEP: $29,182 and $33,214, respectively)	285,902			198,756
Total current liabilities	1,540,635			1,422,710
Long-term debt (HEP: $1,416,748 and $1,507,308, respectively)	2,409,148			2,498,993
Deferred income taxes (HEP: $558 and $525, respectively)	755,561			647,785
Other long-term liabilities (HEP: $63,106 and $62,590, respectively)	226,270			225,726
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; 256,015,579 and 256,015,550 shares issued as of September 30, 2018 and December 31, 2017, respectively	2,560			2,560
Additional capital	4,199,938			4,132,696
Retained earnings	4,112,629			3,346,615
Accumulated other comprehensive income	25,906			29,869
Common stock held in treasury, at cost – 81,558,916 and 78,607,928 shares as of September 30, 2018 and December 31, 2017, respectively	(2,328,747		)	(2,140,911		)
Total HollyFrontier stockholders’ equity	6,012,286			5,370,829
Noncontrolling interest	551,226			526,111
Total equity	6,563,512			5,896,940
Total liabilities and equity	$	11,495,126		$	10,692,154

Parenthetical amounts represent asset and liability balances attributable to Holly Energy Partners, L.P. (“HEP”) as of September 30, 2018 and December 31, 2017. HEP is a variable interest entity.

See accompanying notes.

6

HOLLYFRONTIER CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Sales and other revenues	$	4,770,799		$	3,719,247		$	13,370,462		$	10,258,594
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization):
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	3,752,234			2,888,549			10,695,275			8,283,183
Lower of cost or market inventory valuation adjustment	17,837			(111,128		)	(192,927		)	(15,323		)
	3,770,071			2,777,421			10,502,348			8,267,860
Operating expenses (exclusive of depreciation and amortization)	317,196			322,277			933,699			946,264
Selling, general and administrative expenses (exclusive of depreciation and amortization)	71,130			68,252			204,469			185,303
Depreciation and amortization	108,885			102,884			323,605			304,206
Long-lived asset impairment	—			—			—			19,247
Total operating costs and expenses	4,267,282			3,270,834			11,964,121			9,722,880
Income from operations	503,517			448,413			1,406,341			535,714
Other income (expense):
Earnings of equity method investments	1,114			5,072			4,127			10,965
Interest income	5,136			1,074			10,660			2,069
Interest expense	(32,399		)	(28,731		)	(97,446		)	(85,534		)
Loss on early extinguishment of debt	—			—			—			(12,225		)
Gain on foreign currency transactions	281			19,122			5,516			19,517
Gain on foreign currency swap contracts	—			—			—			24,545
Other, net	741			1,153			3,451			2,550
	(25,127		)	(2,310		)	(73,692		)	(38,113		)
Income before income taxes	478,390			446,103			1,332,649			497,601
Income tax expense (benefit):
Current	70,595			72,307			216,529			80,242
Deferred	45,663			86,079			102,213			93,351
	116,258			158,386			318,742			173,593
Net income	362,132			287,717			1,013,907			324,008
Less net income attributable to noncontrolling interest	19,666			15,703			57,843			39,695
Net income attributable to HollyFrontier stockholders	$	342,466		$	272,014		$	956,064		$	284,313
Earnings per share attributable to HollyFrontier stockholders:
Basic	$	1.95		$	1.53		$	5.42		$	1.60
Diluted	$	1.93		$	1.53		$	5.37		$	1.60
Cash dividends declared per common share	$	0.33		$	0.33		$	0.99		$	0.99
Average number of common shares outstanding:
Basic	175,097			176,149			175,865			176,143
Diluted	176,927			176,530			177,557			176,616

See accompanying notes.

7

HOLLYFRONTIER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017			2018			2017
Net income	$	362,132	$	287,717		$	1,013,907		$	324,008
Other comprehensive income (loss):
Foreign currency translation adjustment	8,325		16,702			(15,118		)	24,287
Unrealized loss on marketable securities available for sale	—		—			—			(4		)
Hedging instruments:
Change in fair value of cash flow hedging instruments	4,161		(2,094		)	(4,296		)	2,708
Reclassification adjustments to net income on settlement of cash flow hedging instruments	1,631		5,115			6,038			5,049
Amortization of unrealized loss attributable to discontinued cash flow hedges	—		270			—			810
Net unrealized gain on hedging instruments	5,792		3,291			1,742			8,567
Other comprehensive income (loss) before income taxes	14,117		19,993			(13,376		)	32,850
Income tax expense (benefit)	124		7,140			(9,413		)	11,841
Other comprehensive income (loss)	13,993		12,853			(3,963		)	21,009
Total comprehensive income	376,125		300,570			1,009,944			345,017
Less noncontrolling interest in comprehensive income	19,666		15,663			57,843			39,638
Comprehensive income attributable to HollyFrontier stockholders	$	356,459	$	284,907		$	952,101		$	305,379

See accompanying notes.

8

HOLLYFRONTIER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	1,013,907		$	324,008
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	323,605			304,206
Long-lived asset impairment	—			19,247
Lower of cost or market inventory valuation adjustment	(192,927		)	(15,323		)
Earnings of equity method investments, inclusive of distributions	463			816
(Gain) loss on sale of assets	(52		)	540
Loss on early extinguishment of debt attributable to unamortized discount	—			2,475
Deferred income taxes	102,213			93,351
Equity-based compensation expense	26,096			26,430
Change in fair value – derivative instruments	(3,007		)	2,073
(Increase) decrease in current assets:
Accounts receivable	(136,764		)	(116,986		)
Inventories	(33,856		)	(43,822		)
Income taxes receivable	27,792			68,371
Prepayments and other	(14,089		)	(5,268		)
Increase (decrease) in current liabilities:
Accounts payable	(37,160		)	88,010
Income taxes payable	76,277			60,661
Accrued liabilities	84,328			83,918
Turnaround expenditures	(114,593		)	(111,513		)
Other, net	7,664			4,219
Net cash provided by operating activities	1,129,897			785,413
Cash flows from investing activities:
Additions to properties, plants and equipment	(167,967		)	(162,442		)
Additions to properties, plants and equipment – HEP	(41,111		)	(30,675		)
Purchase of PCLI, net of cash acquired	—			(870,627		)
Purchase of Red Giant Oil, net of cash acquired	(54,088		)	—
Purchases of marketable securities	—			(41,565		)
Sales and maturities of marketable securities	—			465,716
Other, net	3,999			2,297
Net cash used for investing activities	(259,167		)	(637,296		)
Cash flows from financing activities:
Borrowings under credit agreements	256,000			654,000
Repayments under credit agreements	(347,000		)	(457,000		)
Proceeds from issuance of senior notes - HEP	—			101,750
Redemption of senior notes - HEP	—			(309,750		)
Proceeds from issuance of common units - HEP	114,887			52,285
Purchase of treasury stock	(177,710		)	—
Dividends	(175,921		)	(176,519		)
Distributions to noncontrolling interest	(93,128		)	(81,797		)
Shares withheld for tax withholding obligations	(544		)	(290		)
Other, net	—			(13,131		)
Net cash used for financing activities	(423,416		)	(230,452		)
Effect of exchange rate on cash flow	(2,394		)	2,498
Cash and cash equivalents:
Increase (decrease) for the period	444,920			(79,837		)
Beginning of period	630,757			710,579
End of period	$	1,075,677		$	630,742
Supplemental disclosure of cash flow information:
Cash (paid) received during the period for:
Interest	$	(89,553	)	$	(84,380	)
Income taxes, net	$	(112,520	)	$	50,957

See accompanying notes.

9

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1: Description of Business and Presentation of Financial Statements

References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Quarterly Report on Form 10-Q has been written in the first person. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries.

We are principally an independent petroleum refiner that produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. We own and operate petroleum refineries that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain regions of the United States. In addition, we own and operate a lubricant production facility with retail and wholesale marketing of its products through a global sales network with locations in Canada, United States, Europe and China. As of September 30, 2018, we:

• 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 Petro-Canada Lubricants Inc. (“PCLI”) located in Mississauga, Ontario, which produces base oils and other specialized lubricant products;

• owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil with storage facilities in Idaho, Utah and Wyoming, along with a blending and packaging facility in Texas;

• owned and operated HollyFrontier Asphalt Company LLC (“HFC Asphalt”), which operates various asphalt terminals in Arizona, New Mexico and Oklahoma; and

• owned a 57% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”).

On July 10, 2018, we entered into a definitive agreement to acquire Red Giant Oil, a privately-owned lubricants company. Red Giant Oil is one of the largest suppliers of locomotive engine oil in North America and is headquartered in Council Bluffs, Iowa. The acquisition closed on August 1, 2018. Cash consideration paid of $54.1 million was allocated to the acquisition date fair value of assets and liabilities acquired, with the excess purchase price recorded as goodwill. Preliminary fair values are as follows: current assets $12.6 million, properties and equipment $21.3 million, intangible assets $9.7 million, goodwill $11.2 million and current liabilities $0.7 million.

On October 29, 2016, our wholly-owned subsidiary, 9952110 Canada Inc., entered into a share purchase agreement with Suncor Energy Inc. (“Suncor”) to acquire 100% of the outstanding capital stock of PCLI. The acquisition closed on February 1, 2017. Cash consideration paid was $862.1 million, or $1.125 billion in Canadian dollars.

We have prepared these consolidated financial statements without audit. In management’s opinion, these consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our consolidated financial position as of September 30, 2018, the consolidated results of operations and comprehensive income for the three and nine months ended September 30, 2018 and 2017 and consolidated cash flows for the nine months ended September 30, 2018 and 2017 in accordance with the rules and regulations of the SEC. Although certain notes and other information required by generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017 that has been filed with the SEC.

10

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Our results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results of operations to be realized for the year ending December 31, 2018.

Accounts Receivable: Our accounts receivable consist of amounts due from customers that are primarily companies in the petroleum industry. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for doubtful accounts based on our historical loss experience as well as specific accounts identified as high risk, which historically have been minimal. Credit losses are charged to the allowance for doubtful accounts when an account is deemed uncollectible. Our allowance for doubtful accounts was $3.6 million at both September 30, 2018 and December 31, 2017.

Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

Inventories of our Petro-Canada Lubricants business are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value.

Inventories consisting of process chemicals, materials and maintenance supplies and renewable identification numbers (“RINs”) are stated at the lower of weighted-average cost or net realizable value.

Goodwill and Long-lived Assets: As of September 30, 2018, our goodwill balance was $2.3 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1.7 billion, $0.2 billion and $0.3 billion, respectively. See Note 15 for additional information on our segments. The carrying amount of our goodwill may fluctuate from period to period due to the effects of foreign currency translation adjustments on goodwill assigned to our Lubricants and Specialty Products segment. Goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing first entails a comparison of our reporting units fair values relative to their respective carrying values. If carrying value exceeds fair value for a reporting unit, we measure goodwill impairment as the excess of the carrying amount of reporting unit goodwill over the implied fair value of that goodwill based on estimates of the fair value of all assets and liabilities in the reporting unit.

We performed our annual goodwill impairment testing as of July 1, 2018 and determined there was no impairment of goodwill attributable to our reporting units.

Our long-lived assets principally consist of our refining assets that are organized as refining asset groups and our lubricants and specialty products business. Our long-lived assets are evaluated for impairment by identifying whether indicators of impairment exist and if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss measured, if any, is equal to the amount by which the asset group’s carrying value exceeds its fair value.

During the second quarter of 2017, we incurred long-lived asset impairment charges totaling $23.2 million, including $19.2 million of construction-in-progress consisting primarily of engineering work for a planned expansion of our Woods Cross refinery to add lubricants production capabilities. During the second quarter of 2017, we concluded to no longer pursue this expansion for various reasons including our acquisition of PCLI. The remaining $4.0 million in charges relate to property, plant and equipment that we expensed in the form of accelerated depreciation in the income statement.

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HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Foreign Currency Translation: The functional currency of PCLI and its affiliated non-U.S. Petro-Canada Lubricants entities includes the Canadian dollar, the euro and Chinese renminbi. Balance sheet accounts are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income.

In connection with our PCLI acquisition on February 1, 2017, we issued intercompany notes to initially fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of such intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the income statement. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to corporate and other. See Note 15 for additional information on our segments.

Income Taxes: Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized.

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and creates new taxes on certain foreign-sourced earnings. At December 31, 2017 and through June 30, 2018, we had not completed our accounting for the tax effects of enactment of the Act; however in certain cases, we made a reasonable estimate of the effects on our existing deferred tax balances, the one-time transition tax and related matters.

During the three months ended September 30, 2018, we completed analysis of a significant portion of the accounting for the tax effects for which provisional adjustments were made during the fourth quarter of 2017 resulting in our recording in the third quarter of 2018 an additional tax benefit of $6.1 million. These adjustments to the previously recorded provisional amounts included the effects on existing deferred tax balances, the one-time transition tax and deferred U.S. taxes on foreign subsidiaries earnings and profits. Some states have not yet publicly commented and other state effects from the changes in the Act are still being analyzed, and the estimated value of the state deferred tax balances are based on existing law and state guidance.

Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.

Inventory Repurchase Obligations:We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. For the nine months ended September 30,2018 and 2017, we received proceeds of $38.4 million and $36.7 million, respectively, and repaid $39.3 million and $37.9 million, respectively, under these sell / buy transactions.

Accounting Pronouncements - Recently Adopted

Accumulated Other Comprehensive Income

In February 2018, Accounting Standard Update (“ASU”) 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”),” was issued permitting a reclassification of stranded tax effects caused by the Tax Cuts and Jobs Act enacted on December 22, 2017 between AOCI and retained earnings. We adopted this standard effective in the first quarter of 2018 and recorded a cumulative effect adjustment of $3.6 million as an increase to AOCI and a decrease to retained earnings. During the three months ended September 30, 2018, we completed analysis of the accounting for the stranded tax effects on AOCI and recorded an additional $3.1 million as an increase to AOCI and a decrease to retained earnings.

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HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Hedge Accounting

In August 2017, ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” was issued amending hedge accounting recognition and presentation requirements, including elimination of the requirement to separately measure and report hedge ineffectiveness, and eases certain documentation and assessment requirements. We adopted this standard effective January 1, 2018 and recorded a cumulative effect adjustment of $0.1 million as a decrease to AOCI and an increase to retained earnings to eliminate the separate measurement of hedge ineffectiveness existing at the date of adoption. Our amended presentation and disclosures have been applied prospectively in Note 10.

Stock Compensation

In May 2017, ASU 2017-09, “Stock Compensation: Scope of Modification Accounting,” was issued to provide clarity to accounting for share-based payment awards in the event of a modification in the terms or conditions. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Post-retirement Benefit Cost

In March 2017, ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost,” was issued amending current GAAP related to the income statement presentation of the components of net periodic pension cost and net periodic post-retirement cost (credit). We adopted this standard effective January 1, 2018 on a retrospective basis with the presentation of service cost separate from the other components of net periodic costs. The interest cost, expected return on plan assets and amortization of prior service credit have been reclassified from selling, general and administrative expenses to other, net. The adoption of this standard had no impact on our financial condition, results of operations or cash flows.

The effect of the retrospective presentation change related to the net periodic cost / benefit of our defined benefit pension and other post-retirement plans on our consolidated income statement was as follows:

	Three Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	2,888,530	$	19	$	2,888,549
Operating expenses	$	321,668	$	609	$	322,277
Selling, general and administrative expenses	$	68,013	$	239	$	68,252
Other, net	$	286	$	867	$	1,153

	Nine Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	8,283,127	$	56	$	8,283,183
Operating expenses	$	944,437	$	1,827	$	946,264
Selling, general and administrative expenses	$	184,659	$	644	$	185,303
Other, net	$	23	$	2,527	$	2,550

Business Combinations

In January 2017, ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business,” was issued clarifying the definition of a business with the objective of providing guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Cash Flow Presentation

In August 2016, ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” was issued clarifying how entities should classify certain cash receipts and cash payments in the statements of cash flows and amends certain disclosure requirements. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Revenue Recognition

In May 2014, ASU 2014-09 “Revenue from Contracts with Customers” was issued requiring revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the expected consideration for these goods or services. We adopted this standard effective January 1, 2018, and therefore, conformed our revenue recognition policies for certain lubricant product sales agreements with U.S. and European marketers and distributors that provide rights of return provisions under which we repurchase such products and sell directly to end customers. Prior to January 1, 2018, we recognized revenues and costs, net of allowances for expected returns under such agreements when such products were shipped to U.S. and European distributors. Effective with the adoption of ASU 2014-09, revenues and related product costs are no longer recognized when products are shipped to distributors, but rather, revenues and costs are recognized in earnings only when such products are ultimately sold to end customers.

We adopted this standard using the modified retrospective method, whereby the cumulative effect of applying the new standard was recorded as an adjustment to the opening balance of retained earnings as well as the carrying amounts of assets and liabilities as of January 1, 2018, which had no impact on our cash flows. The following reflects the cumulative effect of adoption as of January 1, 2018.

	Prior to Adoption		Increase (Decrease)			As Adjusted
	(In thousands)
Accounts receivable: Product and transportation	$	659,530	$	(8,198	)	$	651,332
Inventories: Crude oil and refined products	$	1,409,538	$	5,124		$	1,414,662
Accounts payable	$	1,220,795	$	7,336		$	1,228,131
Deferred income taxes	$	647,785	$	(2,963	)	$	644,822
Retained earnings	$	3,346,615	$	(7,447	)	$	3,339,168

See Note 3 for disclosure of revenues from contracts with customers.

Accounting Pronouncements - Not Yet Adopted

Leases

In February 2016, ASU 2016-02, “Leases,” was issued requiring leases to be measured and recognized as a lease liability, with a corresponding right-of-use asset on the balance sheet. This standard has an effective date of January 1, 2019, and we are evaluating the impact of this standard. We plan to apply practical expedients provided in the standards update that allow us, among other things, not to reassess contracts that commenced prior to adoption. In preparing for adoption, we have identified, reviewed and evaluated contracts containing lease and embedded lease arrangements. Additionally, we have acquired and are finalizing implementation of software and systems to facilitate lease capture and related accounting treatment.

NOTE 2: Holly Energy Partners

HEP is a publicly held master limited partnership that owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Delek’s refinery in Big Spring, Texas. Additionally, HEP owns a 75% interest in UNEV Pipeline, LLC (“UNEV”), the owner of a pipeline running from Woods Cross, Utah to Las Vegas, Nevada (the “UNEV Pipeline”) and associated product terminals, and a 50% ownership interest in each of Osage Pipe Line Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas (the “Osage Pipeline”) and Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”).

As of September 30, 2018, we owned a 57% limited partner interest and a non-economic general partner interest in HEP. As the general partner of HEP, we have the sole ability to direct the activities that most significantly impact HEP’s financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

HEP has two primary customers (including us) and generates revenues by charging tariffs for transporting petroleum products and crude oil through its pipelines, by charging fees for terminalling refined products and other hydrocarbons, and storing and providing other services at its storage tanks and terminals. Under our long-term transportation agreements with HEP (discussed further below), we accounted for 79% of HEP’s total revenues for the nine months ended September 30, 2018. We do not provide financial or equity support through any liquidity arrangements and / or debt guarantees to HEP.

HEP has outstanding debt under a senior secured revolving credit agreement and its senior notes. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. See Note 9 for a description of HEP’s debt obligations.

HEP has risk associated with its operations. If a major customer of HEP were to terminate its contracts or fail to meet desired shipping or throughput levels for an extended period of time, revenue would be reduced and HEP could suffer substantial losses to the extent that a new customer is not found. In the event that HEP incurs a loss, our operating results will reflect HEP’s loss, net of intercompany eliminations, to the extent of our ownership interest in HEP at that point in time.

SLC Pipeline and Frontier Pipeline

On October 31, 2017, HEP acquired the remaining 75% interest in SLC Pipeline LLC, the owner of a pipeline that serves refineries in the Salt Lake City, Utah area (the “SLC Pipeline”), and the remaining 50% interest in Frontier Aspen LLC, the owner of a pipeline running from Wyoming to Frontier Station, Utah (the “Frontier Pipeline”), from subsidiaries of Plains All American Pipeline, L.P. (“Plains”) for cash consideration of $250.0 million.

These acquisitions were accounted for as a business combination achieved in stages. HEP’s preexisting equity method investments in SLC Pipeline LLC and Frontier Aspen LLC were remeasured at an acquisition date fair value of $112.0 million, since HEP acquired a controlling interest, and a gain was recognized on the remeasurement of $36.3 million in the fourth quarter of 2017. The fair value of HEP's preexisting equity method investments in SLC Pipeline LLC and Frontier Aspen LLC was estimated using Level 3 inputs under the income method for these entities, adjusted for lack of control and marketability.

The total consideration of $363.8 million, consisting of cash consideration of $250.0 million, the fair value of HEP's preexisting equity method investments in SLC Pipeline LLC and Frontier Aspen LLC of $112.0 million, and working capital adjustments of $1.8 million, was allocated to the acquisition date fair value of assets and liabilities acquired as of the October 31, 2017 acquisition date, with the excess purchase price recorded as goodwill. Fair values were as follows: cash and cash equivalents $4.6 million, current assets $5.2 million, properties and equipment $275.0 million, intangible assets $70.2 million, goodwill $13.8 million and current liabilities $5.0 million.

HEP Private Placement Agreements

On January 25, 2018, HEP entered into a common unit purchase agreement in which certain purchasers agreed to purchase in a private placement 3,700,000 HEP common units, representing limited partner interests, at a price of $29.73 per common unit. The private placement closed on February 6, 2018, at which time HEP received proceeds of $110.0 million, which were used to repay indebtedness under the HEP Credit Agreement.

HEP Common Unit Continuous Offering Program

In May 2016, HEP established a continuous offering program under which HEP may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million. During the nine months ended September 30, 2018, HEP issued 171,246 common units under this program, providing $5.2 million in gross proceeds. As of September 30, 2018, HEP has issued 2,413,153 common units under this program, providing $82.3 million in gross proceeds.

HEP intends to use the net proceeds for general partnership purposes, which may include funding working capital, repayment of debt, acquisitions and capital expenditures. Amounts repaid under HEP’s credit facility may be reborrowed from time to time.

As a result of these transactions and resulting HEP ownership changes, we adjusted additional capital and equity attributable to HEP's noncontrolling interest holders to reallocate HEP's equity among its unitholders.

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HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Transportation Agreements

HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2019 through 2036. Under these agreements, we pay HEP fees to transport, store and process throughput volumes of refined products, crude oil and feedstocks on HEP’s pipeline, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to HEP including UNEV (a consolidated subsidiary of HEP). Under these agreements, the agreed upon tariff rates are subject to annual tariff rate adjustments on July 1 at a rate based upon the percentage change in Producer Price Index or Federal Energy Regulatory Commission index. As of September 30, 2018, these agreements result in minimum annualized payments to HEP of $335.0 million.

Our transactions with HEP and fees paid under our transportation agreements with HEP and UNEV are eliminated and have no impact on our consolidated financial statements.

NOTE 3: Revenues from Contracts with Customers

Substantially all revenue-generating activities relate to sales of refined product and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to HEP logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties.

Disaggregated revenues are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	3,598,815	$	2,839,543	$	10,193,218	$	7,910,289
Specialty lubricant products (2)	422,760		369,822		1,237,002		1,054,161
Asphalt, fuel oil and other products (3)	288,013		201,596		741,139		539,526
Total refined product revenues	4,309,588		3,410,961		12,171,359		9,503,976
Excess crude oil revenues (4)	422,122		277,810		1,074,928		658,117
Transportation and logistic services	25,596		15,227		77,799		47,826
Other revenues (5)	13,493		15,249		46,376		48,675
Total sales and other revenues	$	4,770,799	$	3,719,247	$	13,370,462	$	10,258,594

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Refined product revenues by market
North America
Mid-Continent	$	2,337,689	$	1,748,044	$	6,458,935	$	5,111,301
Southwest	1,016,771		842,347		2,865,324		2,100,850
Rocky Mountains	627,542		528,380		1,869,414		1,489,203
Northeast	85,344		66,467		261,380		189,039
Canada	190,727		177,767		563,088		486,380
Europe and Asia	51,515		47,956		153,218		127,203
Total refined product revenues	$	4,309,588	$	3,410,961	$	12,171,359	$	9,503,976

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

(1) Transportation fuels consist of gasoline, diesel and jet fuel.

(2) Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

(3) Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of $234,887 and $53,126, respectively, for the three months ended September 30, 2018, $158,344 and $43,252, respectively, for the three months ended September 30, 2017, $589,726 and $151,413, respectively, for the nine months ended September 30, 2018, and $415,344 and $124,182, respectively, for the nine months ended September 30, 2017.

(4) Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.

(5) Other revenues are principally attributable to our Refining segment.

Revenue on refined product and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold. HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain long-term transportation contracts that specify minimum volume requirements, whereby, HEP bills a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. A customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.

Our consolidated balance sheet reflects contract liabilities related to unearned revenues attributable to future service obligations under HEP’s third-party transportation agreements. The following table presents changes to our contract liabilities during the nine months ended September 30, 2018.

	January 1, 2018		Increase		Recognized as Revenue			September 30, 2018
	(In thousands)
Accrued liabilities	$	179	$	5,269	$	(1,746	)	$	3,702

As of September 30, 2018, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialty products to be sold ratably at market prices through 2020. Such volumes are typically nominated in the month preceding delivery and delivered ratably throughout the following month. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under Accounting Standards Codification 606-10-50-14A. Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:

	Remainder of 2018	2019	2020	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	6,546	20,013	777	164	27,500

Additionally, HEP has long-term contracts with third-party customers that specify minimum volumes of product to be transported through its pipelines and terminals that result in fixed-minimum annual of revenues through 2022. Annual minimum revenues attributable to HEP’s third-party contracts as of September 30, 2018 are presented below:

	Remainder of 2018		2019		2020		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	10,437	$	41,863	$	18,040	$	12,553	$	82,893

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 4: Fair Value Measurements

Our financial instruments measured at fair value on a recurring basis consist of derivative instruments and RINs credit obligations.

Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability, including assumptions about risk). GAAP categorizes inputs used in fair value measurements into three broad levels as follows:

• (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.

The carrying amounts of derivative instruments and RINs credit obligations at September 30, 2018 and December 31, 2017 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
September 30, 2018
Assets:
Foreign currency forward contracts	$	9,137	$	—	$	9,137	$	—
Commodity price swaps	1,565		—		1,565		—
Commodity forward contracts	25		—		25		—
Total assets	$	10,727	$	—	$	10,727	$	—
Liabilities:
NYMEX futures contracts	$	8,854	$	8,854	$	—	$	—
Commodity price swaps	1,615		—		1,615		—
Commodity forward contracts	4		—		4		—
RINs credit obligations (1)	5,221		—		5,221		—
Total liabilities	$	15,694	$	8,854	$	6,840	$	—

December 31, 2017
Assets:
Commodity forward contracts	$	3,840	$	—	$	3,840	$	—
Total assets	$	3,840	$	—	$	3,840	$	—
Liabilities:
NYMEX futures contracts	$	3,360	$	3,360	$	—	$	—
Commodity price swaps	2,424		—		2,424		—
Commodity forward contracts	1,020		—		1,020		—
RINs credit obligations (1)	8,931		—		8,931		—
Total liabilities	$	15,735	$	3,360	$	12,375	$	—

(1) Represent obligations for RINs credits for which we do not have sufficient quantities at September 30, 2018 and December 31, 2017 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.

Level 1 Instruments

Our NYMEX futures contracts are exchange traded and are measured and recorded at fair value using quoted market prices, a Level 1 input.

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HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Level 2 Instruments

Derivative instruments consisting of foreign currency forward contracts, commodity price swaps and forward sales and purchase contracts are measured and recorded at fair value using Level 2 inputs. The fair value of the commodity price swap contracts is based on the net present value of expected future cash flows related to both variable and fixed rate legs of the respective swap agreements. The measurements are computed using market-based observable inputs, quoted forward commodity prices with respect to our commodity price swaps. RINs credit obligations are valued based on current market RINs prices. The fair value of foreign currency forward contracts are based on values provided by a third party, which were derived using market quotes for similar type instruments, a Level 2 input.

NOTE 5: Earnings Per Share

Basic earnings per share is calculated as net income attributable to HollyFrontier stockholders divided by the average number of shares of common stock outstanding. Diluted earnings per share assumes, when dilutive, the issuance of the net incremental shares from restricted shares and performance share units. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HollyFrontier stockholders:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands, except per share data)
Net income attributable to HollyFrontier stockholders	$	342,466	$	272,014	$	956,064	$	284,313
Participating securities’ (restricted stock) share in earnings	1,171		1,735		3,321		1,822
Net income attributable to common shares	$	341,295	$	270,279	$	952,743	$	282,491
Average number of shares of common stock outstanding	175,097		176,149		175,865		176,143
Effect of dilutive variable restricted shares andperformance share units (1)	1,830		381		1,692		473
Average number of shares of common stock outstanding assuming dilution	176,927		176,530		177,557		176,616
Basic earnings per share	$	1.95	$	1.53	$	5.42	$	1.60
Diluted earnings per share	$	1.93	$	1.53	$	5.37	$	1.60
(1) Excludes anti-dilutive restricted and performance share units of:	—		104		2		120

NOTE 6: Stock-Based Compensation

As of September 30, 2018, we have two principal share-based compensation plans (collectively, the “Long-Term Incentive Compensation Plan”).

The compensation cost charged against income for these plans was $8.1 million and $9.1 million for the three months ended September 30, 2018 and 2017, respectively, and $23.8 million and $24.5 million for the nine months ended September 30, 2018 and 2017, respectively. Our accounting policy for the recognition of compensation expense for awards with pro-rata vesting is to expense the costs ratably over the vesting periods.

Additionally, HEP maintains a share-based compensation plan for Holly Logistic Services, L.L.C.’s non-employee directors and certain executives and employees. Compensation cost attributable to HEP’s share-based compensation plan was $0.7 million and $0.8 million for the three months ended September 30, 2018 and 2017, respectively, and $2.3 million and $1.9 million for the nine months ended September 30, 2018 and 2017, respectively.

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HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Restricted Stock and Restricted Stock Units

Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees restricted stock unit awards with awards generally vesting over a period of two to three years. We previously granted restricted stock to certain officers and key employees with awards vesting over a period of three years. Certain restricted stock unit award recipients have the right to receive dividends, however, restricted stock units do not have any other rights of absolute ownership. Restricted stock award recipients are generally entitled to all the rights of absolute ownership of the restricted shares from the date of grant including the right to vote the shares and to receive dividends. Upon vesting, restrictions on the restricted shares and restricted share units lapse at which time they convert to common shares. In addition, we grant non-employee directors restricted stock unit awards, which typically vest over a period of one year and are payable in stock. The fair value of each restricted stock and restricted stock unit award is measured based on the grant date market price of our common shares and is amortized over the respective vesting period.

A summary of restricted stock and restricted stock unit activity and changes during the nine months ended September 30, 2018 is presented below:

Restricted Stock and Restricted Stock Units	Grants		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2018 (non-vested)	1,726,188		$	33.51
Granted	32,583		55.85
Vesting (transfer/conversion to common stock)	(29,656	)	31.49
Forfeited	(103,488	)	34.45
Outstanding at September 30, 2018 (non-vested)	1,625,627		33.94		$	113,631

For the nine months ended September 30, 2018, restricted stock and restricted stock units vested having a grant date fair value of $0.9 million. As of September 30, 2018, there was $15.9 million of total unrecognized compensation cost related to non-vested restricted stock and restricted stock unit grants. That cost is expected to be recognized over a weighted-average period of 1.0 years.

Performance Share Units

Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees performance share units, which are payable in stock upon meeting certain criteria over the service period, and generally vest over a period of three years. Under the terms of our performance share unit grants, awards are subject to “financial performance” and “market performance” criteria. Financial performance is based on our financial performance compared to a peer group of independent refining companies, while market performance is based on the relative standing of total shareholder return achieved by HollyFrontier compared to peer group companies. The number of shares ultimately issued under these awards can range from zero to 200% of target award amounts.

A summary of performance share unit activity and changes during the nine months ended September 30, 2018 is presented below:

Performance Share Units	Grants
Outstanding at January 1, 2018 (non-vested)	692,661
Forfeited	(44,008	)
Outstanding at September 30, 2018 (non-vested)	648,653

As of September 30, 2018, there was $9.1 million of total unrecognized compensation cost related to non-vested performance share units having a grant date fair value of $33.91 per unit. That cost is expected to be recognized over a weighted-average period of 1.3 years.

20

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 7: Inventories

Inventory consists of the following components:

	September 30, 2018			December 31, 2017
	(In thousands)
Crude oil	$	529,252		$	581,417
Other raw materials and unfinished products(1)	383,953			396,618
Finished products(2)	753,562			655,336
Lower of cost or market reserve	(30,906		)	(223,833		)
Process chemicals(3)	35,259			24,792
Repair and maintenance supplies and other (4)	191,380			195,762
Total inventory	$	1,862,500		$	1,630,092

(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.

(4) Includes RINs.

Inventories, which are valued at the lower of LIFO cost or market, reflect a valuation reserve of $30.9 million and $223.8 million at September 30, 2018 and December 31, 2017, respectively. The December 31, 2017 market reserve of $223.8 million was reversed due to the sale of inventory quantities that gave rise to the 2017 reserve. A new market reserve of $30.9 million was established as of September 30, 2018 based on market conditions and prices at that time. The effect of the change in lower of cost or market reserve was an increase to cost of products sold totaling $17.8 million for the three months ended September 30, 2018 and a decrease of $111.1 million for the three months ended September 30, 2017, and a decrease to cost of products sold totaling $192.9 million and $15.3 million for the nine months ended September 30, 2018 and 2017, respectively.

During the three months ended June 30, 2018, the EPA granted the Woods Cross Refinery a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2017 calendar year end. As a result, the Woods Cross Refinery’s gasoline and diesel production are not subject to the percentage of production that must satisfy a Renewable Volume Obligation (“RVO”) for 2017. In the second quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $25.3 million, representing the net cost of the Woods Cross Refinery’s RINs charge to cost of products sold in 2017, less the loss incurred for selling 2017 vintage RINs in excess of those which we can use subject to the 20% carryover limit.

During the three months ended March 31, 2018, the EPA granted the Cheyenne Refinery a one-year small refinery exemption from the RFS program requirements for the 2015 and 2017 calendar years end. As a result, the Cheyenne Refinery’s gasoline and diesel production are not subject to the percentage of production that must satisfy an RVO for those years. At the date we received the 2017 Cheyenne Refinery exemption, we had not yet submitted RINs to the EPA to satisfy this 2017 RVO, which we intended to satisfy, in part, with 2016 vintage RINs subject to the 20% carryover limit. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $37.9 million, representing the net cost of the Cheyenne Refinery’s RINs charged to cost of products sold in 2017, less the loss incurred from selling 2016 vintage RINs prior to their expiration in 2018.

In the first quarter of 2018, the EPA allowed us to generate new 2018 vintage RINs to replace the RINs previously submitted to meet the Cheyenne Refinery’s 2015 RVO. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $33.8 million representing the fair value of the 2018 RINs generated because of the Cheyenne Refinery’s exemption of its 2015 RVO.

During the second quarter of 2018, the Renewable Fuel Association and three other associations sought judicial review of three hardship waivers granted by the EPA under the RFS provisions of the Clean Air Act by filing a lawsuit in the United States Court of Appeals for the Tenth Circuit (“Tenth Circuit”) that alleges the EPA erred in granting the waivers. This challenge includes two hardship waivers granted to our subsidiaries for the 2016 compliance year. The Tenth Circuit granted our motion to intervene in the case, thereby making us a party to this case. It is too early to assess whether the case is expected to have any impact on us.

21

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 8: Environmental

Environmental costs are charged to operating expenses if they relate to an existing condition caused by past operations and do not contribute to current or future revenue generation. We have ongoing investigations of environmental matters at various locations and routinely assess our recorded environmental obligations, if any, with respect to such matters. Liabilities are recorded when site restoration and environmental remediation, cleanup and other obligations are either known or considered probable and can be reasonably estimated. Such estimates are undiscounted and require judgment with respect to costs, time frame and extent of required remedial and cleanup activities and are subject to periodic adjustments based on currently available information. Recoveries of environmental costs through insurance, indemnification arrangements or other sources are included in other assets to the extent such recoveries are considered probable.

We incurred expense of $3.3 million and $4.9 million for the three and nine months ended September 30, 2018, respectively, and incurred expense of $0.1 million for the three months ended September 30, 2017 and reduced expense by $0.8 million for the nine months ended September 30, 2017, for environmental remediation obligations. The accrued environmental liability reflected in our consolidated balance sheets was $102.9 million and $103.7 million at September 30, 2018 and December 31, 2017, respectively, of which $86.5 million and $89.6 million, respectively, were classified as other long-term liabilities. These accruals include remediation and monitoring costs expected to be incurred over an extended period of time (up to 30 years for certain projects). Estimated liabilities could increase in the future when the results of ongoing investigations become known, are considered probable and can be reasonably estimated.

NOTE 9: Debt

HollyFrontier Credit Agreement

We have a $1.35 billion senior unsecured revolving credit facility maturing in February 2022 (the “HollyFrontier Credit Agreement”). The HollyFrontier Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. During the nine months ended September 30, 2018, there was no activity under the HollyFrontier Credit Agreement. At September 30, 2018, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.4 million under the HollyFrontier Credit Agreement.

HEP Credit Agreement

HEP has a $1.4 billion senior secured revolving credit facility maturing in July 2022 (the “HEP Credit Agreement”) and is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has a $300 million accordion. During the nine months ended September 30, 2018, HEP received advances totaling $256.0 million and repaid $347.0 million under the HEP Credit Agreement. At September 30, 2018, HEP was in compliance with all of its covenants, had outstanding borrowings of $921.0 million and no outstanding letters of credit under the HEP Credit Agreement.

HEP’s obligations under the HEP Credit Agreement are collateralized by substantially all of HEP’s assets and are guaranteed by HEP’s material wholly-owned subsidiaries. Any recourse to the general partner would be limited to the extent of HEP Logistics Holdings, L.P.’s assets, which other than its investment in HEP are not significant. HEP’s creditors have no recourse to our other assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

HollyFrontier Senior Notes

Our 5.875% senior notes ($1 billion aggregate principal amount maturing April 2026) (the “HollyFrontier Senior Notes”) are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness.

22

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

HEP Senior Notes

In September 2017, HEP issued an additional $100 million in aggregate principal amount of 6.0% HEP senior notes maturing in August 2024 in a private placement. HEP used the net proceeds of $101.8 million to repay indebtedness under the HEP Credit Agreement.

HEP’s 6.0% senior notes ($500 million aggregate principal amount maturing August 2024) (the “HEP Senior Notes”) are unsecured and impose certain restrictive covenants, including limitations on HEP’s ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates, and enter into mergers. At any time when the HEP Senior Notes are rated investment grade by both Moody’s and Standard & Poor’s and no default or event of default exists, HEP will not be subject to many of the foregoing covenants. Additionally, HEP has certain redemption rights under the HEP Senior Notes.

In January 2017, HEP redeemed its $300 million aggregate principal amount of 6.5% senior notes maturing March 2020 at a redemption cost of $309.8 million, at which time HEP recognized a $12.2 million early extinguishment loss consisting of a $9.8 million debt redemption premium and unamortized discount and financing costs of $2.4 million. HEP funded the redemption with borrowings under the HEP Credit Agreement.

Indebtedness under the HEP Senior Notes is guaranteed by HEP’s wholly-owned subsidiaries. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

The carrying amounts of long-term debt are as follows:

	September 30, 2018			December 31, 2017
	(In thousands)
HollyFrontier 5.875% Senior Notes
Principal	$	1,000,000		$	1,000,000
Unamortized discount and debt issuance costs	(7,600		)	(8,315		)
	992,400			991,685
HEP Credit Agreement	921,000			1,012,000
HEP 6% Senior Notes
Principal	500,000			500,000
Unamortized discount and debt issuance costs	(4,252		)	(4,692		)
	495,748			495,308
Total HEP long-term debt	1,416,748			1,507,308
Total long-term debt	$	2,409,148		$	2,498,993

The fair values of the senior notes are as follows:

	September 30, 2018		December 31, 2017
	(In thousands)
HollyFrontier senior notes	$	1,065,980	$	1,113,470
HEP senior notes	$	512,840	$	525,120

These fair values are based on estimates provided by a third party using market quotes for similar type instruments, a Level 2 input. See Note 4 for additional information on Level 2 inputs.

23

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

We capitalized interest attributable to construction projects of $1.3 million and $1.0 million for the three months ended September 30, 2018 and 2017, respectively, and $3.3 million and $4.2 million for the nine months ended September 30, 2018 and 2017, respectively.

NOTE 10: Derivative Instruments and Hedging Activities

Commodity Price Risk Management

Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

Foreign Currency Risk Management

We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward and foreign exchange swap contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.

Accounting Hedges

We have swap contracts serving as cash flow hedges against price risk on forecasted purchases of natural gas and to lock in basis spread differentials on forecasted purchases of crude oil. We also periodically have forward sales contracts that lock in the prices of future sales of crude oil and refined product and swap contracts serving as cash flow hedges against price risk on forecasted purchases of WTI crude oil and forecasted sales of refined product. These contracts have been designated as accounting hedges and are measured at fair value with offsetting adjustments (gains/losses) recorded directly to other comprehensive income. These fair value adjustments are later reclassified to earnings as the hedging instruments mature.

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of derivatives designated as hedging instruments under hedge accounting:

	Unrealized Gain (Loss) Recognized in OCI					Gain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Three Months Ended September 30,					Income Statement Location	Three Months Ended September 30,
	2018		2017				2018			2017
	(In thousands)
Commodity contracts	$	5,792	$	3,354		Sales and other revenues	$	(1,422	)	$	(488	)
						Operating expenses	(209		)	(4,961		)
Interest rate contracts (1)	—		(63		)	Interest expense	—			64
Total	$	5,792	$	3,291			$	(1,631	)	$	(5,385	)

	Unrealized Gain (Loss) Recognized in OCI					Gain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Nine Months Ended September 30,					Income Statement Location	Nine Months Ended September 30,
	2018		2017				2018			2017
	(In thousands)
Commodity contracts	$	1,742	$	8,658		Sales and other revenues	$	(5,093	)	$	7,937
						Cost of products sold	—			(299		)
						Operating expenses	(945		)	(13,676		)
Interest rate contracts (1)	—		(91		)	Interest expense	—			179
Total	$	1,742	$	8,567			$	(6,038	)	$	(5,859	)

(1) HEP used interest rate swap contracts to manage its exposure to interest rate risk, which matured in July 2017.

24

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

Economic Hedges

We have commodity contracts including forward purchase and sell contracts and swap contracts to lock in the crack spread of WTI and sub-octane gasoline and NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory that serve as economic hedges (derivatives used for risk management, but not designated as accounting hedges). We also have forward currency contracts to fix the rate of foreign currency. These contracts are measured at fair value with offsetting adjustments (gains/losses) recorded directly to income.

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
		(In thousands)
Commodity contracts	Cost of products sold	$	(8,252	)	$	(10,632	)	$	(20,580	)	$	3,403
	Operating expenses	—			(629		)	—			(6,392		)
Foreign currency contracts	Gain on foreign currency transactions	(7,052		)	—			18,504			—
	Gain on foreign currency swap contracts (1)	—			—			—			24,545
	Total	$	(15,304	)	$	(11,261	)	$	(2,076	)	$	21,556

(1) Relates to Canadian currency swap contracts that settled on February 1, 2017 and effectively fixed the conversion rate on our PCLI purchase price.

As of September 30, 2018, we have the following notional contract volumes related to outstanding derivative instruments:

			Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional		2018		2019		2020	2021	Unit of Measure
Derivatives Designated as Hedging Instruments
Natural gas price swaps - long	5,850,000		450,000		1,800,000		1,800,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	4,388,000		—		1,460,000		2,928,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	2,303,000		2,102,000		201,000		—	—	Barrels
WTI and sub-octane gasoline crack spread swaps - short	400,000		400,000		—		—	—	Barrels
Forward gasoline contracts - long	25,000		25,000		—		—	—	Barrels
Foreign currency forward contracts	$	446,361,369	$	113,632,223	$	332,729,146	—	—	U.S. Dollar

25

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet			Net Liabilities Recognized in Balance Sheet
			(In thousands)
September 30, 2018
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	1,565	$	—	$	1,565	$	3,243	$	(2,114	)	$	1,129
	$	1,565	$	—	$	1,565	$	3,243	$	(2,114	)	$	1,129
Derivatives not designated as cash flow hedging instruments:
Foreign exchange forward contracts	$	9,137	$	—	$	9,137	$	—	$	—		$	—
NYMEX futures contracts	—		—		—		8,854		—			8,854
Commodity price swap contracts	—		—		—		1,288		(802		)	486
Commodity forward contracts	25		—		25		4		—			4
	$	9,162	$	—	$	9,162	$	10,146	$	(802	)	$	9,344
Total net balance					$	10,727						$	10,473
Balance sheet classification:	Prepayment and other				$	9,162	Accrued liabilities					$	10,332
	Intangibles and other				1,565		Other long-term liabilities					141
					$	10,727						$	10,473

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2017
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	2,424	$	—	$	2,424
Commodity forward contracts	3,067		—		3,067		418		—		418
	$	3,067	$	—	$	3,067	$	2,842	$	—	$	2,842
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	3,360	$	—	$	3,360
Commodity forward contracts	773		—		773		602		—		602
	$	773	$	—	$	773	$	3,962	$	—	$	3,962
Total net balance					$	3,840					$	6,804
Balance sheet classification:							Accrued liabilities				$	5,365
							Other long-term liabilities				1,439
	Prepayment and other				$	3,840					$	6,804

26

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

At September 30, 2018, we had a pre-tax net unrealized gain of $0.4 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2021. Assuming commodity prices remain unchanged, an unrealized loss of $1.0 million will be effectively transferred from accumulated other comprehensive income into the statement of income as the hedging instruments contractually mature over the next twelve-month period.

NOTE 11: Equity

Changes to equity during the nine months ended September 30, 2018 are presented below:

	HollyFrontier Stockholders’ Equity			Noncontrolling Interest			Total Equity
	(In thousands)
Balance at December 31, 2017	$	5,370,829		$	526,111		$	5,896,940
Net income	956,064			57,843			1,013,907
Dividends	(175,921		)	—			(175,921		)
Distributions to noncontrolling interest holders	—			(93,128		)	(93,128		)
Other comprehensive loss, net of tax	(3,963		)	—			(3,963		)
Allocated equity on HEP common unit issuances, net of tax	42,198			58,202			100,400
Equity-based compensation	23,840			2,256			26,096
Purchase of treasury stock (1)	(186,632		)	—			(186,632		)
Purchase of HEP units for restricted grants	—			(58		)	(58		)
Adoption of accounting standards	(14,129		)	—			(14,129		)
Balance at September 30, 2018	$	6,012,286		$	551,226		$	6,563,512

(1) Includes 12,593 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.

In September 2018, our Board of Directors approved a $1 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. The timing and amount of stock repurchases will depend on market conditions and corporate, regulatory and other relevant considerations. This program may be discontinued at any time by the Board of Directors. As of September 30, 2018, we had remaining authorization to repurchase up to $949.3 million under this stock repurchase program. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs.

27

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

NOTE 12: Other Comprehensive Income

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax			Tax Expense (Benefit)			After-Tax
	(In thousands)
Three Months Ended September 30, 2018
Net change in foreign currency translation adjustment	$	8,325		$	(1,354	)	$	9,679
Net unrealized gain on hedging instruments	5,792			1,478			4,314
Other comprehensive income attributable to HollyFrontier stockholders	$	14,117		$	124		$	13,993
Three Months Ended September 30, 2017
Net change in foreign currency translation adjustment	$	16,702		$	5,851		$	10,851
Net unrealized gain on hedging instruments	3,291			1,289			2,002
Other comprehensive income	19,993			7,140			12,853
Less other comprehensive loss attributable to noncontrolling interest	(40		)	—			(40		)
Other comprehensive income attributable to HollyFrontier stockholders	$	20,033		$	7,140		$	12,893
Nine Months Ended September 30, 2018
Net change in foreign currency translation adjustment	$	(15,118	)	$	(6,304	)	$	(8,814	)
Net unrealized gain on hedging instruments	1,742			625			1,117
Net change in pension and other post-retirement benefit obligations	—			(3,734		)	3,734
Other comprehensive loss attributable to HollyFrontier stockholders	$	(13,376	)	$	(9,413	)	$	(3,963	)
Nine Months Ended September 30, 2017
Net change in foreign currency translation adjustment	$	24,287		$	8,505		$	15,782
Net unrealized loss on marketable securities	(4		)	(1		)	(3		)
Net unrealized gain on hedging instruments	8,567			3,337			5,230
Other comprehensive income	32,850			11,841			21,009
Less other comprehensive loss attributable to noncontrolling interest	(57		)	—			(57		)
Other comprehensive income attributable to HollyFrontier stockholders	$	32,907		$	11,841		$	21,066

28

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

The following table presents the income statement line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI						Income Statement Line Item
	(In thousands)
	Three Months Ended September 30,
	2018			2017
Hedging instruments:
Commodity price swaps	$	(1,422	)	$	(488	)	Sales and other revenues
	(209		)	(4,961		)	Operating expenses
Interest rate swaps	—			64			Interest expense
	(1,631		)	(5,385		)
	(416		)	(2,100		)	Income tax benefit
	(1,215		)	(3,285		)	Net of tax
	—			(41		)	Noncontrolling interest
Total reclassifications for the period	$	(1,215	)	$	(3,326	)	Net of tax and noncontrolling interest
	Nine Months Ended September 30,
	2018			2017
Hedging instruments:
Commodity price swaps	$	(5,093	)	$	7,937		Sales and other revenues
	—			(299		)	Cost of products sold
	(945		)	(13,676		)	Operating expenses
Interest rate swaps	—			179			Interest expense
	(6,038		)	(5,859		)
	(1,540		)	(2,312		)	Income tax benefit
	(4,498		)	(3,547		)	Net of tax
	—			(114		)	Noncontrolling interest
Total reclassifications for the period	$	(4,498	)	$	(3,661	)	Net of tax and noncontrolling interest

Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes:

	September 30, 2018			December 31, 2017
	(In thousands)
Foreign currency translation adjustment	$	5,563		$	14,377
Unrealized loss on pension obligation	(692		)	(654		)
Unrealized gain on post-retirement benefit obligations	20,711			16,939
Unrealized gain (loss) on hedging instruments	324			(793		)
Accumulated other comprehensive income	$	25,906		$	29,869

NOTE 13: Post-retirement Plans

In connection with our PCLI acquisition, we agreed to establish employee benefit plans including union and non-union pension plans and a post-retirement healthcare plan for PCLI employees that were previously covered under legacy Suncor plans.

Our agreement with Suncor also provides that pension assets related to the union and non-union pension plans are transferred to a pension trust which we established and are computed in accordance with the share purchase agreement, subject to regulatory approval. The actual asset transfer to our PCLI pension plan trust was a cash transfer that occurred in September 2018.

29

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

The net periodic pension expense of these plans consisted of the following components:

	Three Months Ended September 30,						Nine Months Ended September 30,			February 1 to September 30,
	2018			2017			2018			2017
	(in thousands)
Service cost - benefit earned during the period	$	1,093		$	1,013		$	3,337		$	2,596
Interest cost on projected benefit obligations	556			556			1,698			1,424
Expected return on plan assets	(856		)	(802		)	(2,615		)	(2,053		)
Net periodic pension expense	$	793		$	767		$	2,420		$	1,967

The expected long-term annual rate of return on plan assets is 5.75%. This rate was used in measuring 2018 net periodic benefit costs. We expect to contribute $6.4 million to the PCLI pension plans in 2018.

We have a post-retirement healthcare and other benefits plan that is available to certain of our employees who satisfy certain age and service requirements. In addition, we have a post-retirement healthcare and other benefits plan for our PCLI employees. The net periodic benefit credit of these plans consisted of the following components:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Service cost – benefit earned during the period	$	411		$	380		$	1,238		$	1,106
Interest cost on projected benefit obligations	234			250			705			714
Amortization of prior service credit	(870		)	(870		)	(2,611		)	(2,610		)
Net periodic post-retirement credit	$	(225	)	$	(240	)	$	(668	)	$	(790	)

NOTE 14: Contingencies

We are a party to various litigation and legal proceedings which we believe, based on advice of counsel, will not either individually or in the aggregate have a material adverse effect on our financial condition, results of operations or cash flows.

We have a crude oil supply contract that requires the supplier to deliver a specified volume of crude oil or pay a shortfall fee for the difference in the actual barrels delivered to us less the specified barrels per the supply contract. For the contract year ended August 31, 2017, the actual number of barrels delivered to us was substantially less than the specified barrels, and we recorded a reduction to cost of products sold and accumulated a shortfall fee receivable of $26.0 million during this period. In September 2017, the supplier notified us they are disputing the shortfall fee owed and in October 2017 notified us of their demand for arbitration. We offset the receivable with payments of invoices for deliveries of crude oil received subsequent to August 31, 2017, which is permitted under the supply contract. We believe the disputes and claims made by the supplier are without merit. For the second contract year ended August 31, 2018, the actual number of barrels delivered to us was less than the specified barrels, and we recorded a reduction to cost of products sold and accumulated a shortfall fee receivable of $8.0 million during this period. We offset the receivable with payments of invoices for deliveries of crude oil received subsequent to August 31, 2018, which is permitted under the supply contract. The shortfall fees owed for the second contract year are now also part of the arbitration proceedings.

30

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

In March 2006, a subsidiary of ours sold the assets of Montana Refining Company under an Asset Purchase Agreement (“APA”). Calumet Montana Refining LLC, the current owner of the assets, has submitted requests for reimbursement of approximately $20.0 million pursuant to contractual indemnity provisions under the APA for various costs incurred. Calumet has also asserted claims related to environmental matters. We have rejected all of the currently pending claims for payment, and selected issues were arbitrated in July 2018. In September 2018, the arbitration panel ruled on the selected issues and held that the APA places a number of important limitations on claims advanced by Calumet. We have accrued appropriate costs for this matter, and we believe that any reasonably possible losses beyond the amounts accrued are not material.

NOTE 15: Segment Information

In the fourth quarter of 2017, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. Accordingly, our Tulsa Refineries’ lubricants operations, previously reported in the Refining segment, are now combined with the operations of our Petro-Canada Lubricants business (acquired February 1, 2017) and reported in the Lubricants and Specialty Products segment. Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

Our operations are organized into three reportable segments, Refining, Lubricants and Specialty Products and HEP. Our operations that are not included in the Refining, Lubricants and Specialty Products and HEP segments are included in Corporate and Other. Intersegment transactions are eliminated in our consolidated financial statements and are included in Eliminations. Corporate and

Other and Eliminations are aggregated and presented under Corporate, Other and Eliminations column.

The Refining segment represents the operations of the El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and HFC Asphalt (aggregated as a reportable segment). Refining activities involve the purchase and refining of crude oil and wholesale and branded marketing of refined products, such as gasoline, diesel fuel and jet fuel. These petroleum products are primarily marketed in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. HFC Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma.

The Lubricants and Specialty Products segment involves PCLI’s production operations, located in Mississauga, Ontario, that includes lubricant products such as base oils, white oils, specialty products and finished lubricants, and the operations of our Petro- Canada Lubricants business that includes the marketing of products to both retail and wholesale outlets through a global sales network with locations in Canada, the United States, Europe and China. Additionally, the Lubricants and Specialty Products segment includes specialty lubricant products produced at our Tulsa Refineries that are marketed throughout North America and are distributed in Central and South America. Also, effective with our acquisition that closed August 1, 2018, the Lubricants and Specialty Products segment includes Red Giant Oil, one of the largest suppliers of locomotive engine oil in North America.

The HEP segment includes all of the operations of HEP, which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and processing units in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. The HEP segment also includes a 75% ownership interest in UNEV (a consolidated subsidiary of HEP); and 50% ownership interests in each of the Osage Pipeline and the Cheyenne Pipeline. Revenues from the HEP segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations as well as revenues relating to pipeline transportation services provided for our refining operations. Due to certain basis differences, our reported amounts for the HEP segment may not agree to amounts reported in HEP’s periodic public filings.

The accounting policies for our segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2017.

31

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Three Months Ended September 30, 2018
Sales and other revenues:
Revenues from external customers	$	4,270,835		$	474,260		$	25,596	$	108		$	4,770,799
Intersegment revenues	101,334			1,626			100,188		(203,148		)	—
	$	4,372,169		$	475,886		$	125,784	$	(203,040	)	$	4,770,799
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,572,593		$	359,742		$	—	$	(180,101	)	$	3,752,234
Lower of cost or market inventory valuation adjustment	$	17,837		$	—		$	—	$	—		$	17,837
Operating expenses	$	262,010		$	40,288		$	35,995	$	(21,097	)	$	317,196
Selling, general and administrative expenses	$	30,394		$	33,514		$	2,498	$	4,724		$	71,130
Depreciation and amortization	$	70,793		$	11,139		$	24,367	$	2,586		$	108,885
Income (loss) from operations	$	418,542		$	31,203		$	62,924	$	(9,152	)	$	503,517
Earnings of equity method investments	$	—		$	—		$	1,114	$	—		$	1,114
Capital expenditures	$	47,088		$	8,094		$	9,541	$	5,214		$	69,937
Three Months Ended September 30, 2017
Sales and other revenues:
Revenues from external customers	$	3,291,417		$	413,074		$	15,227	$	(471	)	$	3,719,247
Intersegment revenues	82,705			—			95,137		(177,842		)	—
	$	3,374,122		$	413,074		$	110,364	$	(178,313	)	$	3,719,247
Cost of products sold (exclusive of lower of cost or market inventory)	$	2,774,722		$	270,279		$	—	$	(156,452	)	$	2,888,549
Lower of cost or market inventory valuation adjustment	$	(109,690	)	$	(1,438	)	$	—	$	—		$	(111,128	)
Operating expenses	$	246,409		$	59,726		$	36,061	$	(19,919	)	$	322,277
Selling, general and administrative expenses	$	26,582		$	30,796		$	3,626	$	7,248		$	68,252
Depreciation and amortization	$	74,070		$	7,734		$	18,601	$	2,479		$	102,884
Income (loss) from operations	$	362,029		$	45,977		$	52,076	$	(11,669	)	$	448,413
Earnings of equity method investments	$	—		$	—		$	5,072	$	—		$	5,072
Capital expenditures	$	30,979		$	9,815		$	10,151	$	5,122		$	56,067

32

HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) Continued

	Refining			Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Nine Months Ended September 30, 2018
Sales and other revenues:
Revenues from external customers	$	11,915,797		$	1,376,531	$	77,799	$	335		$	13,370,462
Intersegment revenues	284,538			11,884		295,629		(592,051		)	—
	$	12,200,335		$	1,388,415	$	373,428	$	(591,716	)	$	13,370,462
Cost of products sold (exclusive of lower of cost or market inventory)	$	10,179,509		$	1,040,414	$	—	$	(524,648	)	$	10,695,275
Lower of cost or market inventory valuation adjustment	$	(192,927	)	$	—	$	—	$	—		$	(192,927	)
Operating expenses	$	764,415		$	125,101	$	106,731	$	(62,548	)	$	933,699
Selling, general and administrative expenses	$	82,966		$	99,425	$	8,293	$	13,785		$	204,469
Depreciation and amortization	$	210,957		$	30,023	$	74,117	$	8,508		$	323,605
Income (loss) from operations	$	1,155,415		$	93,452	$	184,287	$	(26,813	)	$	1,406,341
Earnings of equity method investments	$	—		$	—	$	4,127	$	—		$	4,127
Capital expenditures	$	132,050		$	23,138	$	41,111	$	12,779		$	209,078
Nine Months Ended September 30, 2017
Sales and other revenues:
Revenues from external customers	$	9,033,148		$	1,178,343	$	47,826	$	(723	)	$	10,258,594
Intersegment revenues	268,208			—		277,315		(545,523		)	—
	$	9,301,356		$	1,178,343	$	325,141	$	(546,246	)	$	10,258,594
Cost of products sold (exclusive of lower of cost or market inventory)	$	7,949,813		$	818,981	$	—	$	(485,611	)	$	8,283,183
Lower of cost or market inventory valuation adjustment	$	(15,365	)	$	42	$	—	$	—		$	(15,323	)
Operating expenses	$	743,493		$	154,795	$	102,773	$	(54,797	)	$	946,264
Selling, general and administrative expenses	$	71,591		$	71,877	$	8,882	$	32,953		$	185,303
Depreciation and amortization	$	218,934		$	20,570	$	56,515	$	8,187		$	304,206
Asset impairment	$	19,247		$	—	$	—	$	—		$	19,247
Income (loss) from operations	$	313,643		$	112,078	$	156,971	$	(46,978	)	$	535,714
Earnings of equity method investments	$	—		$	—	$	10,965	$	—		$	10,965
Capital expenditures	$	130,238		$	20,772	$	30,675	$	11,432		$	193,117

	Refining		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
September 30, 2018
Cash and cash equivalents	$	6,915	$	72,652	$	6,375	$	989,735	$	1,075,677
Total assets	$	7,044,358	$	1,498,586	$	2,146,124	$	806,058	$	11,495,126
Long-term debt	$	—	$	—	$	1,416,748	$	992,400	$	2,409,148
December 31, 2017
Cash and cash equivalents	$	7,488	$	41,756	$	7,776	$	573,737	$	630,757
Total assets	$	6,474,666	$	1,610,472	$	2,191,984	$	415,032	$	10,692,154
Long-term debt	$	—	$	—	$	1,507,308	$	991,685	$	2,498,993

33

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Item 2 contains “forward-looking” statements. See “Forward-Looking Statements” at the beginning of Part I of this Quarterly Report on Form 10-Q. References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Quarterly Report on Form 10-Q has been written in the first person. In this document, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. This document contains certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries.

OVERVIEW

We are principally an independent petroleum refiner that produces high-value refined products such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. We own and operate refineries having a combined nameplate crude oil processing capacity of 457,000 barrels per day that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain regions of the United States. Our refineries are located in El Dorado, Kansas (the “El Dorado Refinery”), Tulsa, Oklahoma (the “Tulsa Refineries”), which comprise two production facilities, the Tulsa West and East facilities, Artesia, New Mexico, which operates in conjunction with crude, vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”), Cheyenne, Wyoming (the “Cheyenne Refinery”) and Woods Cross, Utah (the “Woods Cross Refinery”).

On July 10, 2018, we entered into a definitive agreement to acquire Red Giant Oil Company LLC (“Red Giant Oil”), a privately-owned lubricants company, for $54.1 million. Red Giant Oil is one of the largest suppliers of locomotive engine oil in North America and is headquartered in Council Bluffs, Iowa with storage facilities in Idaho, Utah and Wyoming, along with a blending and packaging facility in Texas. The acquisition closed on August 1, 2018.

On October 29, 2016, our wholly-owned subsidiary, 9952110 Canada Inc., entered into a share purchase agreement with Suncor to acquire 100% of the outstanding capital stock of Petro-Canada Lubricants Inc. (“PCLI”). The acquisition closed on February 1, 2017. Cash consideration paid was $862.1 million, or $1.125 billion in Canadian dollars.

PCLI is a Canadian-based producer of base oils with a plant having 15,600 BPD of lubricant production capacity that is located in Mississauga, Ontario. The facility is downstream integrated from base oils to finished lubricants and produces a broad spectrum of specialty lubricants and white oils that are distributed to end customers worldwide through a global sales network with locations in Canada, the United States, Europe and China.

For the three months ended September 30, 2018, net income attributable to HollyFrontier stockholders was $342.5 million compared to $272.0 million for the three months ended September 30, 2017. For the nine months ended September 30, 2018, net income attributable to HollyFrontier stockholders was $956.1 million compared to $284.3 million for the nine months ended September 30, 2017. Overall gross refining margins per produced barrel sold for the three months ended September 30, 2018 increased 38% over the same period of 2017 due to higher 2018 crack spreads and crude oil basis differentials. Included in our financial results for the third quarter was an inventory reserve adjustment that decreased pre-tax earnings by $17.8 million. Crude oil charge averaged 441,990 BPD compared to 454,790 BPD for the third quarter of 2017. The lower crude charge is due to the planned turnaround at the El Dorado Refinery that commenced in the last week of September 2018, combined with reduced production rates at our Woods Cross Refinery throughout July and August.

Pursuant to the 2007 Energy Independence and Security Act, the Environmental Protection Agency (“EPA”) promulgated the Renewable Fuel Standard (“RFS”) regulations, which increased the volume of renewable fuels mandated to be blended into the nation’s fuel supply. The regulations, in part, require refiners to add annually increasing amounts of “renewable fuels” to their petroleum products or purchase credits, known as renewable identification numbers (“RINs”), in lieu of such blending. Compliance with RFS significantly increases our cost of products sold, with RINs costs totaling $72.5 million for the three months ended September 30, 2018.

34

OUTLOOK

For the remainder of 2018, we expect favorable diesel market fundamentals, combined with favorable basis differentials for the Midland and Canadian crude oil we process, will continue to support strong earnings in our refining business. Operationally, our El Dorado and Mississauga refineries plan to return from planned maintenance in November, and we expect to run between 410,000 and 420,000 barrels per day of crude oil for the fourth quarter.

In our lubricants business, strong macroeconomic conditions continue to support demand and pricing for finished products, underpinning the Rack Forward portion of our business. The base oil markets continue to experience cyclical weakness, and we expect weak Rack Back earnings into 2019.

At HEP, we anticipate higher earnings and distributable cash flow in the fourth quarterdue to the normal seasonality around the UNEV pipeline as well as higher crude gathering volumes in the Permian Basin. HEP remains on track to report a distribution coverage ratio of 1.0x for the full year 2018.

A more detailed discussion of our financial and operating results for the three and nine months ended September 30, 2018 and 2017 is presented in the following sections.

35

RESULTS OF OPERATIONS

Financial Data

	Three Months Ended September 30,						Change from 2017
	2018			2017			Change			Percent
	(In thousands, except per share data)
Sales and other revenues	$	4,770,799		$	3,719,247		$	1,051,552		28	%
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization):
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	3,752,234			2,888,549			863,685			30
Lower of cost or market inventory valuation adjustment	17,837			(111,128		)	128,965			(116	)
	3,770,071			2,777,421			992,650			36
Operating expenses (exclusive of depreciation and amortization)	317,196			322,277			(5,081		)	(2	)
Selling, general and administrative expenses (exclusive of depreciation and amortization)	71,130			68,252			2,878			4
Depreciation and amortization	108,885			102,884			6,001			6
Total operating costs and expenses	4,267,282			3,270,834			996,448			30
Income from operations	503,517			448,413			55,104			12
Other income (expense):
Earnings of equity method investments	1,114			5,072			(3,958		)	(78	)
Interest income	5,136			1,074			4,062			378
Interest expense	(32,399		)	(28,731		)	(3,668		)	13
Gain on foreign currency transactions	281			19,122			(18,841		)	(99	)
Other, net	741			1,153			(412		)	(36	)
	(25,127		)	(2,310		)	(22,817		)	988
Income before income taxes	478,390			446,103			32,287			7
Income tax expense	116,258			158,386			(42,128		)	(27	)
Net income	362,132			287,717			74,415			26
Less net income attributable to noncontrolling interest	19,666			15,703			3,963			25
Net income attributable to HollyFrontier stockholders	$	342,466		$	272,014		$	70,452		26	%
Earnings per share attributable to HollyFrontier stockholders:
Basic	$	1.95		$	1.53		$	0.42		27	%
Diluted	$	1.93		$	1.53		$	0.40		26	%
Cash dividends declared per common share	$	0.33		$	0.33		$	—		—	%
Average number of common shares outstanding:
Basic	175,097			176,149			(1,052		)	(1	)%
Diluted	176,927			176,530			397			—	%

36

	Nine Months Ended September 30,						Change from 2017
	2018			2017			Change			Percent
	(In thousands, except per share data)
Sales and other revenues	$	13,370,462		$	10,258,594		$	3,111,868		30	%
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization):
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	10,695,275			8,283,183			2,412,092			29
Lower of cost or market inventory valuation adjustment	(192,927		)	(15,323		)	(177,604		)	1,159
	10,502,348			8,267,860			2,234,488			27
Operating expenses (exclusive of depreciation and amortization)	933,699			946,264			(12,565		)	(1	)
Selling, general and administrative expenses (exclusive of depreciation and amortization)	204,469			185,303			19,166			10
Depreciation and amortization	323,605			304,206			19,399			6
Long-lived asset impairment	—			19,247			(19,247		)	(100	)
Total operating costs and expenses	11,964,121			9,722,880			2,241,241			23
Income from operations	1,406,341			535,714			870,627			163
Other income (expense):
Earnings of equity method investments	4,127			10,965			(6,838		)	(62	)
Interest income	10,660			2,069			8,591			415
Interest expense	(97,446		)	(85,534		)	(11,912		)	14
Loss on early extinguishment of debt	—			(12,225		)	12,225			(100	)
Gain on foreign currency transactions	5,516			19,517			(14,001		)	(72	)
Gain on foreign currency swap contracts	—			24,545			(24,545		)	(100	)
Other, net	3,451			2,550			901			35
	(73,692		)	(38,113		)	(35,579		)	93
Income before income taxes	1,332,649			497,601			835,048			168
Income tax expense	318,742			173,593			145,149			84
Net income	1,013,907			324,008			689,899			213
Less net income attributable to noncontrolling interest	57,843			39,695			18,148			46
Net income attributable to HollyFrontier stockholders	$	956,064		$	284,313		$	671,751		236	%
Earnings per share attributable to HollyFrontier stockholders:
Basic	$	5.42		$	1.60		$	3.82		239	%
Diluted	$	5.37		$	1.60		$	3.77		236	%
Cash dividends declared per common share	$	0.99		$	0.99		$	—		—	%
Average number of common shares outstanding:
Basic	175,865			176,143			(278		)	—	%
Diluted	177,557			176,616			941			1	%

Balance Sheet Data

	September 30, 2018		December 31, 2017
	(Unaudited)
	(In thousands)
Cash and cash equivalents	$	1,075,677	$	630,757
Working capital	$	2,317,090	$	1,640,118
Total assets	$	11,495,126	$	10,692,154
Long-term debt	$	2,409,148	$	2,498,993
Total equity	$	6,563,512	$	5,896,940

37

Other Financial Data

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Net cash provided by operating activities	$	401,752		$	312,015		$	1,129,897		$	785,413
Net cash used for investing activities	$	(113,089	)	$	(56,787	)	$	(259,167	)	$	(637,296	)
Net cash used for financing activities	$	(193,701	)	$	(86,986	)	$	(423,416	)	$	(230,452	)
Capital expenditures	$	59,601		$	56,067		$	209,078		$	193,117
EBITDA (1)	$	594,872		$	560,941		$	1,685,197		$	845,577

(1) Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as net income attributable to HollyFrontier stockholders 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.

Segment Operating Data

Effective in the fourth quarter of 2017, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. Accordingly, our Tulsa Refineries’ lubricants operations, previously reported in the Refining segment, are now combined with the operations of our Petro-Canada Lubricants business and reported in the Lubricants and Specialty Products segment. Segment information for the three and nine months ended September 30, 2017 has been retrospectively adjusted to reflect our current segment presentation.

Our operations are organized into three reportable segments, Refining, Lubricants and Specialty Products and HEP. See Note 15 “Segment Information” in the Notes to Consolidated Financial Statements for additional information on our reportable segments.

Refining Segment Operating Data

Our refinery operations include the El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries.The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations. The cost of products and refinery gross and net operating margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments and depreciation and amortization. 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.

In the fourth quarter of 2017, we revised the following refining segment operating data computations: refinery gross margin; net operating margin; and operating expenses to better align with similar measurements provided by other companies in our industry and to facilitate comparison of our refining performance relative to our peers. Effective with this change, these measurements are now inclusive of all refining segment activities including HFC Asphalt operations and revenues and costs related to products purchased for resale and excess crude oil sales. Refining segment operating data for the three and nine months ended September 30, 2017 has been retrospectively adjusted to reflect our current presentation.

38

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Mid-Continent Region (El Dorado and Tulsa Refineries)
Crude charge (BPD) (1)	262,550			262,470			260,150			258,420
Refinery throughput (BPD) (2)	276,560			275,270			274,330			274,200
Sales of produced refined products (BPD) (3)	255,840			253,700			259,890			255,160
Refinery utilization (4)	101.0		%	101.0		%	100.1		%	99.4		%
Average per produced barrel (5)
Refinery gross margin (6)	$	16.43		$	12.60		$	12.99		$	9.36
Refinery operating expenses (7)	5.48			5.02			5.18			5.17
Net operating margin	$	10.95		$	7.58		$	7.81		$	4.19
Refinery operating expenses per throughput barrel (8)	$	5.07		$	4.63		$	4.90		$	4.81

Feedstocks:
Sweet crude oil	59	%	65	%	54	%	62	%
Sour crude oil	21	%	14	%	24	%	17	%
Heavy sour crude oil	15	%	16	%	17	%	15	%
Other feedstocks and blends	5	%	5	%	5	%	6	%
Total	100	%	100	%	100	%	100	%
Sales of produced refined products:
Gasolines	49	%	50	%	51	%	50	%
Diesel fuels	34	%	34	%	33	%	33	%
Jet fuels	6	%	6	%	6	%	7	%
Fuel oil	1	%	1	%	1	%	1	%
Asphalt	4	%	3	%	3	%	3	%
Base oils	4	%	4	%	4	%	4	%
LPG and other	2	%	2	%	2	%	2	%
Total	100	%	100	%	100	%	100	%

39

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Southwest Region (Navajo Refinery)
Crude charge (BPD) (1)	109,560			112,060			109,200			96,350
Refinery throughput (BPD) (2)	117,880			122,890			118,300			105,190
Sales of produced refined products (BPD) (3)	122,210			130,740			120,900			107,890
Refinery utilization (4)	109.6		%	112.1		%	109.2		%	96.4		%
Average per produced barrel (5)
Refinery gross margin (6)	$	22.60		$	14.64		$	17.84		$	12.21
Refinery operating expenses (7)	4.53			4.34			4.63			5.38
Net operating margin	$	18.07		$	10.30		$	13.21		$	6.83
Refinery operating expenses per throughput barrel (8)	$	4.69		$	4.62		$	4.73		$	5.52
Feedstocks:
Sweet crude oil	28		%	25		%	31		%	23		%
Sour crude oil	65		%	66		%	61		%	68		%
Other feedstocks and blends	7		%	9		%	8		%	9		%
Total	100		%	100		%	100		%	100		%
Sales of produced refined products:
Gasolines	49		%	49		%	50		%	50		%
Diesel fuels	41		%	40		%	40		%	40		%
Fuel oil	3		%	4		%	3		%	3		%
Asphalt	5		%	5		%	4		%	4		%
LPG and other	2		%	2		%	3		%	3		%
Total	100		%	100		%	100		%	100		%

Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
Crude charge (BPD) (1)	69,880		80,260		71,000		76,510
Refinery throughput (BPD) (2)	76,120		87,620		78,410		84,050
Sales of produced refined products (BPD) (3)	69,720		79,310		74,850		78,910
Refinery utilization (4)	72.0	%	82.7	%	73.2	%	78.9	%

Average per produced barrel (5)
Refinery gross margin (6)	$	24.75		$	17.71		$	24.95		$	15.78
Refinery operating expenses (7)	12.80			10.47			11.97			10.36
Net operating margin	$	11.95		$	7.24		$	12.98		$	5.42
Refinery operating expenses per throughput barrel (8)	$	11.72		$	9.48		$	11.42		$	9.72
Feedstocks:
Sweet crude oil	24		%	32		%	25		%	34		%
Heavy sour crude oil	44		%	37		%	44		%	36		%
Black wax crude oil	24		%	23		%	22		%	21		%
Other feedstocks and blends	8		%	8		%	9		%	9		%
Total	100		%	100		%	100		%	100		%
Sales of produced refined products:
Gasolines	54		%	58		%	56		%	58		%
Diesel fuels	34		%	32		%	33		%	33		%
Fuel oil	2		%	3		%	3		%	2		%
Asphalt	7		%	4		%	5		%	5		%
LPG and other	3		%	3		%	3		%	2		%
Total	100		%	100		%	100		%	100		%

40

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Consolidated
Crude charge (BPD) (1)	441,990			454,790			440,350			431,280
Refinery throughput (BPD) (2)	470,560			485,780			471,040			463,440
Sales of produced refined products (BPD) (3)	447,770			463,750			455,640			441,960
Refinery utilization (4)	96.7		%	99.5		%	96.4		%	94.4		%
Average per produced barrel (5)
Refinery gross margin (6)	$	19.41		$	14.05		$	16.25		$	11.20
Refinery operating expenses (7)	6.36			5.78			6.15			6.16
Net operating margin	$	13.05		$	8.27		$	10.10		$	5.04
Refinery operating expenses per throughput barrel (8)	$	6.05		$	5.51		$	5.94		$	5.88
Feedstocks:
Sweet crude oil	45		%	49		%	43		%	48		%
Sour crude oil	29		%	25		%	30		%	25		%
Heavy sour crude oil	16		%	16		%	17		%	16		%
Black wax crude oil	4		%	4		%	4		%	4		%
Other feedstocks and blends	6		%	6		%	6		%	7		%
Total	100		%	100		%	100		%	100		%

Sales of produced refined products:
Gasolines	50	%	51	%	52	%	51	%
Diesel fuels	36	%	36	%	35	%	34	%
Jet fuels	3	%	3	%	3	%	4	%
Fuel oil	2	%	2	%	2	%	2	%
Asphalt	5	%	4	%	4	%	4	%
Base oils	2	%	2	%	2	%	3	%
LPG and other	2	%	2	%	2	%	2	%
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) Represents barrels sold of refined products produced at our refineries (including HFC Asphalt) and does not include volumes

of refined products purchased for resale or volumes of excess crude oil sold.

(4) Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 457,000 BPSD.

(5) Represents average amount per produced barrel 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.

(6) Excludes lower of cost or market inventory valuation adjustments that decreased gross margin by $17.8 million and increased gross margin by $111.1 million for the three months ended September 30, 2018 and 2017, respectively, and increased gross margin by $192.9 million and $15.3 million for the nine months ended September 30, 2018 and 2017, respectively.

(7) Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes

of refined products produced at our refineries.

(8) Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.

41

Lubricants and Specialty Products Operating Data

The following table sets forth information about our lubricants and specialty products operations and includes our Petro-Canada Lubricants business from the date of acquisition (February 1, 2017).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Lubricants and Specialty Products
Throughput (BPD)	21,410		22,360		20,530		21,980
Sales of produced refined products (BPD)	31,970		30,440		21,340		34,790
Sales of produced refined products:
Finished products	49	%	49	%	48	%	44	%
Base oils	28	%	28	%	31	%	33	%
Other	23	%	23	%	21	%	23	%
Total	100	%	100	%	100	%	100	%

Supplemental financial data attributable to our Lubricants and Specialty Products segment is presented below.

	Rack Back (1)			Rack Forward (2)			Eliminations (3)			Total Lubricants and Specialty Products
	(In thousands)
Three months ended September 30, 2018
Sales and other revenues	$	197,226		$	424,386		$	(145,726	)	$	475,886
Cost of products sold	177,748			327,720			(145,726		)	359,742
Operating expenses	26,748			13,540			—			40,288
Selling, general and administrative expenses	7,439			26,075			—			33,514
Depreciation and amortization	6,345			4,794			—			11,139
Income (loss) from operations	$	(21,054	)	$	52,257		$	—		$	31,203
Three months ended September 30, 2017
Sales and other revenues	$	166,851		$	369,822		$	(123,599	)	$	413,074
Cost of products sold	127,371			266,507			(123,599		)	270,279
Lower of cost or market inventory valuation adjustment	—			(1,438		)	—			(1,438		)
Operating expenses	26,691			33,035			—			59,726
Selling, general and administrative expenses	6,847			23,949			—			30,796
Depreciation and amortization	5,388			2,346			—			7,734
Income (loss) from operations	$	554		$	45,423		$	—		$	45,977

42

	Rack Back (1)			Rack Forward (2)		Eliminations (3)			Total Lubricants and Specialty Products
	(In thousands)
Nine months ended September 30, 2018
Sales and other revenues	$	546,300		$	1,248,886	$	(406,771	)	$	1,388,415
Cost of products sold	482,842			964,343		(406,771		)	1,040,414
Operating expenses	82,729			42,372		—			125,101
Selling, general and administrative expenses	22,146			77,279		—			99,425
Depreciation and amortization	17,986			12,037		—			30,023
Income (loss) from operations	$	(59,403	)	$	152,855	$	—		$	93,452
Nine months ended September 30, 2017
Sales and other revenues	$	434,675		$	1,054,161	$	(310,493	)	$	1,178,343
Cost of products sold	351,641			777,833		(310,493		)	818,981
Lower of cost or market inventory valuation adjustment	—			42		—			42
Operating expenses	65,252			89,543		—			154,795
Selling, general and administrative expenses	15,905			55,972		—			71,877
Depreciation and amortization	14,475			6,095		—			20,570
Income (loss) from operations	$	(12,598	)	$	124,676	$	—		$	112,078

(1) Rack back consists of our PCLI base oil production activities, by-product sales to third parties and intra-segment base oil sales to rack forward.

(2) Rack forward activities include the purchase of base oils from rack back and the blending, packaging, marketing and distribution and sales of finished lubricants and specialty products to third parties.

(3) Intra-segment sales of rack back produced base oils to rack forward are eliminated under the “Eliminations” column.

Results of Operations – Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017

Summary

Net income attributable to HollyFrontier stockholders for the three months ended September 30, 2018 was $342.5 million ($1.95 per basic and $1.93 per diluted share), a $70.5 million increase compared to net income of $272.0 million ($1.53 per basic and diluted share) for the three months ended September 30, 2017. Net income increased due principally to an increase in gross refining margins, partially offset by a decrease in refining segment sales volumes. For the three months ended September 30, 2018, lower of cost or market inventory reserve adjustments decreased pre-tax earnings by $17.8 million compared to an increase of $111.1 million for the three months ended September 30, 2017. Refinery gross margins for the three months ended September 30, 2018 increased to $19.41 per barrel sold from $14.05 for the three months ended September 30, 2017.

Sales and Other Revenues

Sales and other revenues increased 28% from $3,719.2 million for the three months ended September 30, 2017 to $4,770.8 million for the three months ended September 30, 2018 due to a year-over-year increase in third quarter sales prices, partially offset by lower refined product sales volumes. Sales and other revenues for the three months ended September 30, 2018 and 2017 included $25.6 million and $15.2 million, respectively, in HEP revenues attributable to pipeline and transportation services provided to unaffiliated parties. Additionally, sales and other revenues included $474.3 million and $413.1 million in unaffiliated revenues related to our Lubricants and Specialty Products segment for the three months ended September 30, 2018 and 2017, respectively.

Cost of Products Sold

Total cost of products sold increased 36% from $2,777.4 million for the three months ended September 30, 2017 to $3,770.1 million for the three months ended September 30, 2018, due principally to higher crude oil costs, partially offset by lower refined product sales volumes. Additionally during the third quarter of 2018, we recognized a $17.8 million lower of cost or market inventory valuation charge compared to a $111.1 million benefit for the same period of 2017, resulting in a new $30.9 million inventory reserve at September 30, 2018. The reserve at September 30, 2018 is based on market conditions and prices at that time.

43

Gross Refinery Margins

Gross refinery margin per barrel sold increased 38% from $14.05 for the three months ended September 30, 2017 to $19.41 for the three months ended September 30, 2018. This was due to the effects of an increase in the average per barrel sold sales price, partially offset by increased crude oil and feedstock prices during the current year quarter. Gross refinery margin does not include the non-cash effects of lower of cost or market inventory valuation adjustments or depreciation and amortization. See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q for a reconciliation to the income statement of sale prices of products sold and cost of products purchased.

Operating Expenses

Operating expenses, exclusive of depreciation and amortization, decreased 2% from $322.3 million for the three months ended September 30, 2017 to $317.2 million for the three months ended September 30, 2018 due principally to the effects of reclassification of transportation costs to cost of products sold that were classified as operating expenses during 2017. Additionally, operating expenses include higher repair and maintenance costs as a result of the Woods Cross Refinery fire and resulting damage in March 2018.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 4% from $68.3 million for the three months ended September 30, 2017 to $71.1 million for the three months ended September 30, 2018 due principally to higher legal and professional fees and salary costs. Additionally, we incurred $4.2 million in direct acquisition and integration costs of our PCLI business during the three months ended September 30, 2017.

Depreciation and Amortization Expenses

Depreciation and amortization increased 6% from $102.9 million for the three months ended September 30, 2017 to $108.9 million for the three months ended September 30, 2018. This increase was due principally to depreciation and amortization attributable to capitalized improvement projects and capitalized refinery turnaround costs.

Interest Income

Interest income for the three months ended September 30, 2018 was $5.1 million compared to $1.1 million for the three months ended September 30, 2017. This increase was due to higher interest rates and higher cash balances during the current year quarter.

Interest Expense

Interest expense was $32.4 million for the three months ended September 30, 2018 compared to $28.7 million for the three months ended September 30, 2017. This increase was due to interest attributable to higher HEP debt levels and market interest rate increases during the current year quarter relative to the same period of 2017. For the three months ended September 30, 2018 and 2017, interest expense included $18.0 million and $14.1 million, respectively, in interest costs attributable to HEP operations.

Gain on Foreign Currency Transactions

Remeasurement adjustments resulting from the conversion of the intercompany financing structure on our PCLI acquisition from local currencies to the U.S. dollar resulted in a $0.3 million gain for the three months ended September 30, 2018, and a $19.1 million gain for the three months ended September 30, 2017.

Income Taxes

For the three months ended September 30, 2018, we recorded income tax expense of $116.3 million compared to $158.4 million for the three months ended September 30, 2017. This decrease was due principally to effects of a lower federal tax rate, partially offset by higher pre-tax income during the three months ended September 30, 2018 compared to the same period of 2017. Our effective tax rates, before consideration of earnings attributable to the noncontrolling interest, were 24.3% and 35.5% for the three months ended September 30, 2018 and 2017, respectively. The Tax Cuts and Jobs Act was enacted on December 22, 2017, reducing the U.S. federal tax rate from 35% to 21%.

44

Results of Operations – Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017

Summary

Net income attributable to HollyFrontier stockholders for the nine months ended September 30, 2018 was $956.1 million ($5.42 per basic and $5.37 per diluted share), a $671.8 million increase compared to net income attributable to HollyFrontier stockholders of $284.3 million ($1.60 per basic and diluted share) for the nine months ended September 30, 2017. Net income increased due principally to an increase in gross refining margins and refining segment sales volumes. For the nine months ended September 30, 2018, lower of cost or market inventory reserve adjustments increased pre-tax earnings by $192.9 million compared to $15.3 million for the nine months ended September 30, 2017. Refinery gross margins for the nine months ended September 30, 2018 increased to $16.25 per produced barrel from $11.20 for the nine months ended September 30, 2017. During the nine months ended September 30, 2018, our Cheyenne Refinery was granted a one-year small refinery exemption from the EPA for the 2015 and 2017 calendar years and our Woods Cross Refinery was granted a one-year small refinery exemption for 2017. As a result of these exemptions, we recorded reductions totaling $97.0 million to our cost of products sold. Additionally, we recorded long-lived asset impairment charges totaling $23.2 million for the nine months ended September 30, 2017.

Sales and Other Revenues

Sales and other revenues increased 30% from $10,258.6 million for the nine months ended September 30, 2017 to $13,370.5 million for the nine months ended September 30, 2018 due to a year-over-year increase in sales prices and higher refined product sales volumes. Sales and other revenues for the nine months ended September 30, 2018 and 2017 include $77.8 million and $47.8 million, respectively, in HEP revenues attributable to pipeline and transportation services provided to unaffiliated parties. Additionally, sales and other revenues included $1,376.5 million and $1,178.3 million in unaffiliated revenues related to our Lubricants and Specialty Products segment for the nine months ended September 30, 2018 and 2017, respectively.

Cost of Products Sold

Total cost of products sold increased 27% from $8,267.9 million for the nine months ended September 30, 2017 to $10,502.3 million for the nine months ended September 30, 2018, due principally to higher crude oil costs and higher refined product sales volumes. Additionally, during the nine months ended September 30, 2018, we recognized a $192.9 million lower of cost or market inventory valuation benefit compared to $15.3 million for the same period of last year, resulting in a new $30.9 million inventory reserve at September 30, 2018. The reserve at September 30, 2018 is based on market conditions and prices at that time. During the nine months ended September 30, 2018 and 2017, we recorded $97.0 million and $30.5 million, respectively, RINs cost reduction as a result of our Cheyenne Refinery and Woods Cross Refinery small refinery exemptions.

Gross Refinery Margins

Gross refinery margin per barrel sold increased 45% from $11.20 for the nine months ended September 30, 2017 to $16.25 for the nine months ended September 30, 2018. This was due to the effects of an increase in the average per barrel sold sales price, partially offset by increased crude oil and feedstock prices during the current year-to-date period. Gross refinery margin does not include the non-cash effects of lower of cost or market inventory valuation adjustments, asset impairment charges or depreciation and amortization. See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q for a reconciliation to the income statement of sales prices of products sold and cost of products purchased.

Operating Expenses

Operating expenses, exclusive of depreciation and amortization, decreased 1% from $946.3 million for the nine months ended September 30, 2017 to $933.7 million for the nine months ended September 30, 2018 due principally to lower purchased fuel costs, net of higher repair and maintenance costs as a result of a fire and resulting damage at our Woods Cross Refinery in March 2018. Also contributing to the decrease was the current year reclassification to cost of products sold of transportation costs that were classified as operating expenses during 2017.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 10% from $185.3 million for the nine months ended September 30, 2017 to $204.5 million for the nine months ended September 30, 2018 due principally to higher legal and professional fees and salary costs. Additionally, we incurred $3.6 million in integration costs of our PCLI business during the nine months ended September 30, 2018 compared to $23.5 million in direct acquisition and integration costs during the same period of 2017.

Depreciation and Amortization Expenses

Depreciation and amortization increased 6% from $304.2 million for the nine months ended September 30, 2017 to $323.6 million for the nine months ended September 30, 2018. This increase was due principally to depreciation and amortization attributable to capitalized improvement projects and capitalized refinery turnaround costs.

45

Long-lived Asset Impairment

During the nine months ended September 30, 2017, we recorded a $19.2 million long-lived asset impairment charge resulting from management’s plan to cease further expansion of our Woods Cross Refinery to add lubricants production.

Interest Income

Interest income for the nine months ended September 30, 2018 was $10.7 million compared to $2.1 million for the nine months ended September 30, 2017. This increase was due to higher interest rates and higher cash balances during the current year-to-date period.

Interest Expense

Interest expense was $97.4 million for the nine months ended September 30, 2018 compared to $85.5 million for the nine months ended September 30, 2017. This increase was due to interest attributable to higher debt levels and market interest rate increases during the current year relative to the same period of 2017. For the nine months ended September 30, 2018 and 2017, interest expense included $53.2 million and $41.4 million, respectively, in interest costs attributable to HEP operations.

Loss on Early Extinguishment of Debt

For the nine months ended September 30, 2017, a $12.2 million loss was recorded upon HEP’s redemption of its $300 million aggregate principal amount of 6.5% senior notes maturing March 2020 at a cost of $309.8 million.

Gain on Foreign Currency Transactions

Remeasurement adjustments resulting from the conversion of the intercompany financing structure on our PCLI acquisition from local currencies to the U.S. dollar resulted in a $5.5 million gain for the nine months ended September 30, 2018, and a $19.5 million gain for the nine months ended September 30, 2017. The $5.5 million gain for the nine months ended September 30, 2018 consists of a $18.5 million gain on foreign exchange forward contracts (utilized as an economic hedge), net of a $13.0 million remeasurement loss on our intercompany financing structure.

Gain on Foreign Currency Swap Contracts

During the nine months ended September 30, 2017, we recorded a $24.5 million gain on currency swap contracts that effectively fixed the conversion rate on $1.125 billion Canadian dollars (the PCLI purchase price), which were settled on February 1, 2017, in connection with the closing of the PCLI acquisition.

Income Taxes

For the nine months ended September 30, 2018, we recorded income tax expense of $318.7 million compared to $173.6 million for the nine months ended September 30, 2017. This increase was due principally to higher pre-tax income during the nine months ended September 30, 2018 compared to the same period of 2017. Our effective tax rates, before consideration of earnings attributable to the noncontrolling interest, were 23.9% and 34.9% for the nine months ended September 30, 2018 and 2017, respectively. The Tax Cuts and Jobs Act was enacted on December 22, 2017, reducing the U.S. federal tax rate from 35% to 21%.

LIQUIDITY AND CAPITAL RESOURCES

HollyFrontier Credit Agreement

We have a $1.35 billion senior unsecured revolving credit facility maturing in February 2022 (the “HollyFrontier Credit Agreement”). The HollyFrontier Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. During the nine months ended September 30, 2018, there was no activity under the HollyFrontier Credit Agreement. At September 30, 2018, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.4 million under the HollyFrontier Credit Agreement.

HEP Credit Agreement

HEP has a $1.4 billion senior secured revolving credit facility maturing in July 2022 (the “HEP Credit Agreement”) and is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has a $300 million accordion. During the nine months ended September 30, 2018, HEP received advances totaling $256.0 million and repaid $347.0 million under the HEP Credit Agreement. At September 30, 2018, HEP was in compliance with all of its covenants, had outstanding borrowings of $921.0 million and no outstanding letters of credit under the HEP Credit Agreement.

See Note 9 “Debt” in the Notes to Consolidated Financial Statements for additional information on our debt instruments.

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HEP Common Unit Continuous Offering Program

In May 2016, HEP established a continuous offering program under which HEP may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million. During the nine months ended September 30, 2018, HEP issued 171,246 common units under this program, providing $5.2 million in gross proceeds. As of September 30, 2018, HEP has issued 2,413,153 units under this program, providing $82.3 million in gross proceeds.

HEP intends to use the net proceeds for general partnership purposes, which may include funding working capital, repayment of debt, acquisitions and capital expenditures. Amounts repaid under HEP’s credit facility may be reborrowed from time to time.

HEP Private Placement Agreement

On January 25, 2018, HEP entered into a common unit purchase agreement in which certain purchasers agreed to purchase in a private placement 3,700,000 HEP common units, representing limited partner interests, at a price of $29.73 per common unit. The private placement closed on February 6, 2018, at which time HEP received proceeds of $110.0 million, which were used to repay indebtedness under the HEP Credit Agreement.

Liquidity

We believe our current cash and cash equivalents, along with future internally generated cash flow and funds available under our credit facilities, will provide sufficient resources to fund currently planned capital projects and our liquidity needs for the foreseeable future. In addition, components of our growth strategy include construction of new refinery processing units and the expansion of existing units at our facilities and selective acquisition of complementary assets for our refining operations intended to increase earnings and cash flow.

As of September 30, 2018, our cash and cash equivalents totaled $1,075.7 million. We consider all highly-liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. These primarily consist of investments in conservative, highly-rated instruments issued by financial institutions, government and corporate entities with strong credit standings and money market funds.

In September 2018, our Board of Directors approved a $1 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. The timing and amount of stock repurchases will depend on market conditions and corporate, regulatory and other relevant considerations. This program may be discontinued at any time by the Board of Directors. As of September 30, 2018, we had remaining authorization to repurchase up to $949.3 million under this stock repurchase program. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs.

Cash and cash equivalents increased $444.9 million for the nine months ended September 30, 2018. Net cash provided by operating activities of $1,129.9 million exceeded net cash used by financing and investing activities of $423.4 million and $259.2 million, respectively.

Cash Flows – Operating Activities

Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017

Net cash flows provided by operating activities were $1,129.9 million for the nine months ended September 30, 2018 compared to $785.4 million for the nine months ended September 30, 2017, an increase of $344.5 million. Net income for the nine months ended September 30, 2018 was $1,013.9 million, an increase of $689.9 million compared to $324.0 million for the nine months ended September 30, 2017. Non-cash adjustments to net income consisting of depreciation and amortization, long-lived asset impairment charges, lower of cost or market inventory valuation adjustment, earnings of equity method investments, inclusive of distributions, gain / loss on sale of assets, loss on extinguishment of debt, deferred income taxes, equity-based compensation expense and fair value changes to derivative instruments totaled $256.4 million for the nine months ended September 30, 2018 compared to $433.8 million for the same period in 2017. Adjusted for non-cash items, changes in working capital decreased operating cash flows by $33.5 million for the nine months ended September 30, 2018 and increased operating cash flows by $134.9 million for the nine months ended September 30, 2017. Additionally, for the nine months ended September 30, 2018, turnaround expenditures increased to $114.6 million from $111.5 million from the same period of 2017.

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Cash Flows – Investing Activities and Planned Capital Expenditures

Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017

Net cash flows used for investing activities were $259.2 million for the nine months ended September 30, 2018 compared to $637.3 million for the nine months ended September 30, 2017, a decrease of $378.1 million. Current year investing activities reflect a net cash outflow of $54.1 million upon the acquisition of Red Giant Oil, and prior year investing activities reflect a net cash outflow of $870.6 million upon the acquisition of PCLI. Cash expenditures for properties, plants and equipment for the first nine months of 2018 increased to $209.1 million from $193.1 million for the same period in 2017. These include HEP capital expenditures of $41.1 million and $30.7 million for the nine months ended September 30, 2018 and 2017, respectively. Also for the nine months ended September 30, 2017, we invested $41.6 million, in marketable securities and received proceeds of $465.7 million, from the sale or maturity of marketable securities.

Planned Capital Expenditures

HollyFrontier Corporation

Each year our Board of Directors approves our annual capital budget, which includes specific projects that management is authorized to undertake. Additionally, when conditions warrant or as new opportunities arise, additional projects may be approved. The funds appropriated for a particular capital project may be expended over a period of several years, depending on the time required to complete the project. Therefore, our planned capital expenditures for a given year consist of expenditures appropriated in that year’s capital budget plus expenditures for projects appropriated in prior years which have not yet been completed. During 2018, we expect to spend approximately $475.0 million to $530.0 million in cash for capital projects and refinery turnarounds appropriated in 2018 and prior years. Refinery turnaround spending is amortized over the useful life of the turnaround. Our expected capital and turnaround cash spending for 2018 is as follows:

	Expected Cash Spending Range
	(In millions)
Type:
Capital	$	240.0	-	$	270.0
Turnarounds	235.0		-	260.0
Total	$	475.0	-	$	530.0

The refining industry is capital intensive and requires on-going investments to sustain our refining operations. This includes replacement of, or rebuilding, refinery units and components that extend the useful life. We also invest in projects that improve operational reliability and profitability via enhancements that improve refinery processing capabilities as well as production yield and flexibility. Our capital expenditures also include projects related to environmental, health and safety compliance and include initiatives as a result of federal and state mandates.

A significant portion of our current capital spending is associated with compliance-oriented capital improvements. This spending is required due to existing consent decrees (for projects including FCC unit flue gas scrubbers and tail gas treatment units), federal fuels regulations (particularly Tier3, which mandates a reduction in the sulfur content of blended gasoline), refinery waste water treatment improvements and other similar initiatives. Our refinery operations and related emissions are highly regulated at both federal and state levels, and we invest in our facilities as needed to remain in compliance with these standards. Additionally, when faced with new emissions or fuels standards, we seek to execute projects that facilitate compliance and also improve the operating costs and / or yields of associated refining processes.

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HEP

Each year the Holly Logistic Services, L.L.C. board of directors approves HEP’s annual capital budget, which specifies capital projects that HEP management is authorized to undertake. Additionally, at times when conditions warrant or as new opportunities arise, special projects may be approved. The funds allocated for a particular capital project may be expended over a period in excess of a year, depending on the time required to complete the project. Therefore, HEP’s planned capital expenditures for a given year consist of expenditures approved for capital projects included in its current year capital budget as well as, in certain cases, expenditures approved for capital projects in capital budgets for prior years. HEP is forecasting to spend $8.0 million for maintenance capital expenditures, $5.0 million to $10.0 million for reimbursable capital expenditures and approximately $45.0 million to $55.0 million for expansion capital expenditures in 2018. HEP expects the majority of the expansion capital budget to be invested in refined product pipeline expansions, crude system enhancements, new storage tanks and enhanced blending capabilities at its racks. In addition to the capital budget, HEP may spend funds periodically to perform capital upgrades or additions to its assets where a customer reimburses HEP for such costs. The upgrades or additions would generally benefit the customer over the remaining live of the related service agreements.

Cash Flows – Financing Activities

Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017

Net cash flows used for financing activities were $423.4 million for the nine months ended September 30, 2018 compared to $230.5 million for the nine months ended September 30, 2017, an increase of $193.0 million. During the nine months ended September 30, 2018, we purchased $177.7 million in common stock and paid $175.9 million in dividends. Also during this period, HEP received $256.0 million and repaid $347.0 million under the HEP Credit Agreement, received $114.9 million in net proceeds from the issuance of its common units and paid distributions of $93.1 million to noncontrolling interests. During the nine months ended September 30, 2017, we received $26.0 million and repaid $26.0 million under the HollyFrontier Credit Agreement and paid $176.5 million in dividends. Also during this period, HEP received $628.0 million and repaid $431.0 million under the HEP Credit Agreement, received $101.8 million in net proceeds from the issuance of an additional $100 million aggregate principal amount of HEP 6.0% senior notes, paid $309.8 million upon the redemption of HEP’s 6.5% senior notes, received $52.3 million in proceeds from the issuance of common units and paid distributions of $81.8 million to noncontrolling interests.

Contractual Obligations and Commitments

HollyFrontier Corporation

There were no significant changes to our long-term contractual obligations during the nine months ended September 30, 2018.

HEP

During the nine months ended September 30, 2018, HEP repaid net borrowings of $91.0 million resulting in $921.0 million of outstanding borrowings under the HEP Credit Agreement at September 30, 2018. There were no other significant changes to HEP’s long-term contractual obligations during this period.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2017. Certain critical accounting policies that materially affect the amounts recorded in our consolidated financial statements include the use of the last-in, first-out (“LIFO”) method of valuing certain inventories, assessing the possible impairment of certain long-lived assets and goodwill, and assessing contingent liabilities for probable losses.

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Inventory Valuation: Inventories related to our refining operations are stated at the lower of cost, using the LIFO method for crude oil and unfinished and finished refined products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

At September 30, 2018, our lower of cost or market inventory valuation reserve was $30.9 million. This amount, or a portion thereof, is subject to reversal as a reduction to cost of products sold in subsequent periods as inventories giving rise to the reserve are sold, and a new reserve is established.

Inventories consisting of process chemicals, materials and maintenance supplies and RINs are stated at the lower of weighted-average cost or net realizable value. Inventories of our Petro-Canada Lubricants business are stated at the lower of cost, using the FIFO method, or net realizable value.

Goodwill and Long-lived Assets: As of September 30, 2018, our goodwill balance was $2.3 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1.7 billion, $0.2 billion and $0.3 billion, respectively. Goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing first entails a comparison of our reporting units fair values relative to their respective carrying values. If carrying value exceeds fair value for a reporting unit, we measure goodwill impairment as the excess of the carrying amount of reporting unit goodwill over the implied fair value of that goodwill based on estimates of the fair value of all assets and liabilities in the reporting unit.

Our long-lived assets principally consist of our refining assets that are organized as refining asset groups and the assets of our Lubricants and Specialty Products business. The refinery asset groups also constitute our individual refinery reporting units that are used for testing and measuring goodwill impairments. Our long-lived assets are evaluated for impairment by identifying whether indicators of impairment exist and if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss measured, if any, is equal to the amount by which the asset group’s carrying value exceeds its fair value.

We performed our annual goodwill impairment testing as of July 1, 2018 and determined there was no impairment of goodwill attributable to our reporting units.

Contingencies

We are subject to proceedings, lawsuits and other claims related to environmental, labor, product and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.

RISK MANAGEMENT

We use certain strategies to reduce some commodity price and operational risks. We do not attempt to eliminate all market risk exposures when we believe that the exposure relating to such risk would not be significant to our future earnings, financial position, capital resources or liquidity or that the cost of eliminating the exposure would outweigh the benefit.

Commodity Price Risk Management

Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

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Foreign Currency Risk Management

We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward and foreign exchange swap contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.

As of September 30, 2018, we have the following notional contract volumes related to all outstanding derivative contracts used to mitigate commodity price risk:

			Notional Contract Volumes by Year of Maturity
Contract Description	Total Outstanding Notional		2018		2019		2020	2021	Unit of Measure
Natural gas price swaps - long	5,850,000		450,000		1,800,000		1,800,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	4,388,000		—		1,460,000		2,928,000	—	Barrels
NYMEX futures (WTI) - short	2,303,000		2,102,000		201,000		—	—	Barrels
WTI and sub-octane gasoline crack spread swaps - short	400,000		400,000		—		—	—	Barrels
Forward gasoline contracts - long	25,000		25,000		—		—	—	Barrels
Foreign currency forward contracts	$	446,361,369	$	113,632,223	$	332,729,146	—	—	U.S. Dollar

The following sensitivity analysis provides the hypothetical effects of market price fluctuations to the commodity positions hedged under our derivative contracts:

	Estimated Change in Fair Value at
	September 30,
Commodity-based Derivative Contracts	2018		2017
	(In thousands)
Hypothetical 10% change in underlying commodity prices	$	14,837	$	7,360

Interest Rate Risk Management

The market risk inherent in our fixed-rate debt is the potential change arising from increases or decreases in interest rates as discussed below.

For the fixed rate HollyFrontier Senior Notes and HEP Senior Notes, changes in interest rates will generally affect fair value of the debt, but not earnings or cash flows. The outstanding principal, estimated fair value and estimated change in fair value (assuming a hypothetical 10% change in the yield-to-maturity rates) for this debt as of September 30, 2018 is presented below:

	Outstanding Principal		Estimated Fair Value		Estimated Change in Fair Value
	(In thousands)
HollyFrontier Senior Notes	$	1,000,000	$	1,065,980	$	31,244
HEP Senior Notes	$	500,000	$	512,840	$	13,824

For the variable rate HEP Credit Agreement, changes in interest rates would affect cash flows, but not the fair value. At September 30, 2018, outstanding borrowings under the HEP Credit Agreement were $921.0 million. A hypothetical 10% change in interest rates applicable to the HEP Credit Agreement would not materially affect cash flows.

Our operations are subject to hazards of petroleum processing operations, including fire, explosion and weather-related perils. We maintain various insurance coverages, including business interruption insurance, subject to certain deductibles. We are not fully insured against certain risks because such risks are not fully insurable, coverage is unavailable, or premium costs, in our judgment, do not justify such expenditures.

Financial information is reviewed on the counterparties in order to review and monitor their financial stability and assess their ongoing ability to honor their commitments under the derivative contracts. We have not experienced, nor do we expect to experience, any difficulty in the counterparties honoring their commitments.

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We have a risk management oversight committee consisting of members from our senior management. This committee oversees our risk enterprise program, monitors our risk environment and provides direction for activities to mitigate identified risks that may adversely affect the achievement of our goals.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

See “Risk Management” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles

Reconciliations of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to amounts reported under generally accepted accounting principles in financial statements.

Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA, is calculated as net income attributable to HollyFrontier stockholders 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.

Set forth below is our calculation of EBITDA.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Net income attributable to HollyFrontier stockholders	$	342,466		$	272,014		$	956,064		$	284,313
Add income tax expense	116,258			158,386			318,742			173,593
Add interest expense	32,399			28,731			97,446			85,534
Subtract interest income	(5,136		)	(1,074		)	(10,660		)	(2,069		)
Add depreciation and amortization	108,885			102,884			323,605			304,206
EBITDA	$	594,872		$	560,941		$	1,685,197		$	845,577

Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.

Refinery gross margin and net operating margin are non-GAAP performance measures that are used by our management and others to compare our refining performance to that of other companies in our industry. We believe these margin measures are helpful to investors in evaluating our refining performance on a relative and absolute basis. Refinery gross margin per produced barrel sold is total refining segment revenues less total refining segment cost of products sold, exclusive of lower of cost or market inventory valuation adjustments, divided by sales volumes of produced refined products sold. Net operating margin per barrel sold is the difference between refinery gross margin and refinery operating expenses per produced barrel sold. These two margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments or depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of income. Other companies in our industry may not calculate these performance measures in the same manner.

Below are reconciliations to our consolidated statements of income for refinery net operating and gross margin and operating expenses, in each case averaged per produced barrel sold. Due to rounding of reported numbers, some amounts may not calculate exactly.

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Reconciliation of average refining segment net operating margin per produced barrel sold to refinery gross margin to total sales

and other revenues

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Dollars in thousands, except per barrel amounts)
Consolidated
Net operating margin per produced barrel sold	$	13.05		$	8.27		$	10.10		$	5.04
Add average refinery operating expenses per produced barrel sold	6.36			5.78			6.15			6.16
Refinery gross margin per produced barrel sold	19.41			14.05			16.25			11.20
Times produced barrels sold (BPD)	447,770			463,750			455,640			441,960
Times number of days in period	92			92			273			273
Refining segment gross margin	799,592			599,443			2,021,333			1,351,337
Add (subtract) rounding	(16		)	(43		)	(507		)	206
Total refining segment gross margin	799,576			599,400			2,020,826			1,351,543
Add refining segment cost of products sold	3,572,593			2,774,722			10,179,509			7,949,813
Refining segment sales and other revenues	4,372,169			3,374,122			12,200,335			9,301,356
Add lubricants and specialty products segment sales and other revenues	475,886			413,074			1,388,415			1,178,343
Add HEP segment sales and other revenues	125,784			110,364			373,428			325,141
Subtract corporate, other and eliminations	(203,040		)	(178,313		)	(591,716		)	(546,246		)
Sales and other revenues	$	4,770,799		$	3,719,247		$	13,370,462		$	10,258,594

Reconciliation of average refining segment operating expenses per produced barrel sold to total operating expenses

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Dollars in thousands, except per barrel amounts)
Consolidated
Average refinery operating expenses per produced barrel sold	$	6.36		$	5.78		$	6.15		$	6.16
Times produced barrels sold (BPD)	447,770			463,750			455,640			441,960
Times number of days in period	92			92			273			273
Refinery operating expenses	261,999			246,604			764,997			743,235
Add (subtract) rounding	11			(195		)	(582		)	258
Total refining segment operating expenses	262,010			246,409			764,415			743,493
Add lubricants and specialty products segment operating expenses	40,288			59,726			125,101			154,795
Add HEP segment operating expenses	35,995			36,061			106,731			102,773
Subtract corporate, other and eliminations	(21,097		)	(19,919		)	(62,548		)	(54,797		)
Operating expenses (exclusive of depreciation and amortization)	$	317,196		$	322,277		$	933,699		$	946,264

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Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures. Our principal executive officer and principal financial officer have evaluated, as required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2018.

Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may become party to legal, regulatory or administrative proceedings or governmental investigations, including environmental and other matters. Damages or penalties may be sought from us in some matters and certain matters may require years to resolve. While the outcome and impact of these proceedings and investigations on us cannot be predicted with certainty, based on advice of counsel, management believes that the resolution of these proceedings and investigations through settlement or adverse judgment will not either individually or in the aggregate have a material adverse effect on our financial condition, results of operations or cash flows.

Environmental Matters

We are reporting the following proceedings to comply with SEC regulations which require us to disclose proceedings arising under federal, state or local provisions regulating the discharge of materials into the environment or protecting the environment if we reasonably believe that such proceedings may result in monetary sanctions of $100,000 or more. Our respective subsidiaries have or will develop corrective action plans regarding these disclosures that will be implemented in consultation with the respective federal and state agencies. It is not possible to predict the ultimate outcome of these proceedings, although none are currently expected to have a material effect on our financial condition, results of operations or cash flows.

Cheyenne

HollyFrontier Cheyenne Refining LLC (“HFCR”) has been engaged in discussions with the Wyoming Department of Environmental Quality (“WDEQ”) relating to Notices of Violations issued in late 2016 and 2018 for possible violations of air quality standards related to operation of certain refinery units at the Cheyenne Refinery in 2016 and 2017. HFCR and the WDEQ are working towards settlement of these matters.

El Dorado

HollyFrontier El Dorado Refining LLC (“HFEDR”) is engaged in discussions with, and has responded to document requests from, the EPA and the U.S. Department of Justice (“DOJ”) regarding potential Clean Air Act violations relating to flaring devices and other equipment at the refinery. Topics of the discussions include (a) three information requests for activities occurring January 1, 2009 through May 31, 2014 and a September 2017 incident, (b) Risk Management Program compliance issues relating to a November 2014 inspection and (c) a Notice of Violation issued by the EPA in August 2017. HFEDR will continue to work with the EPA and DOJ to resolve these matters.

Tulsa

HollyFrontier Tulsa Refining LLC (“HFTR”) operates under two Consent Decrees with the EPA and the Oklahoma Department of Environmental Quality (“ODEQ”). On December 13, 2017, during a meeting between the parties, ODEQ proposed stipulated penalties related to violations of the two Consent Decrees. The violations relate to Clean Air Act regulated fuel gas and flare operations. HFTR is currently negotiating with the ODEQ and the EPA to resolve these matters.

Other

We are a party to various other litigation and proceedings that we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse impact on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes in our risk factors as previously disclosed in Part 1, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. You should carefully consider the risk factors discussed in our 2017 Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Common Stock Repurchases Made in the Quarter

Under our common stock repurchase programs, repurchases are being made from time to time in the open market or privately negotiated transactions based on market conditions, securities law limitations and other factors. The following table includes repurchases made under these programs during the third quarter of 2018.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 2018	155,000	$	69.91	155,000	$	112,867,060
August 2018	675,000	$	70.70	675,000	$	65,147,830
September 2018 (1)	1,030,000	$	70.41	1,030,000	$	949,330,686
Total for July to September 2018	1,860,000			1,860,000

(1) On September 13, 2018, our Board of Directors approved a $1 billion share repurchase program, which replaced all existing share repurchase programs, including $43.3 million remaining under the previously existing $1 billion share repurchase program. The timing and amount of stock repurchases will depend on market conditions and corporate, regulatory and other relevant considerations. This program may be discontinued at any time by the Board of Directors.

Item 6. Exhibits

The Exhibit Index on page 58 of this Quarterly Report on Form 10-Q lists the exhibits that are filed or furnished, as applicable, as part of the Quarterly Report on Form 10-Q.

57

Exhibit Index

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K 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 Current Report on Form 8-K filed February 20, 2014, File No. 1-03876).
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 September 30, 2018, 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.

* Filed herewith.

** Furnished herewith.

+ Filed electronically herewith.

58

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HOLLYFRONTIER CORPORATION
	(Registrant)
Date: October 31, 2018		/s/ Richard L. Voliva III
		Richard L.Voliva III
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: October 31, 2018		/s/ J. W. Gann, Jr.
		J. W. Gann, Jr.
		Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)

59

EX-31.1

Exhibit 31.1

CERTIFICATION

I, George J. Damiris, certify that:

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

October 31, 2018	/s/ George J. Damiris
	George J. Damiris
	Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Richard L. Voliva III, certify that:

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: October 31, 2018	/s/ Richard L. Voliva III
	Richard L. Voliva III
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE

OFFICER UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the quarterly period ended September 30, 2018 and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George J. Damiris, Chief Executive Officer of HollyFrontier Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

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: October 31, 2018	/s/ George J. Damiris
	George J. Damiris
	Chief Executive Officer and President

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL

OFFICER UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the quarterly period ended September 30, 2018 and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard L. Voliva III, Chief Financial Officer of HollyFrontier Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

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: October 31, 2018	/s/ Richard L. Voliva III
	Richard L. Voliva III
	Executive Vice President and Chief Financial Officer

XML

Document And Entity Information - USD ($) $ in Billions	9 Months Ended
	Sep. 30, 2018	Oct. 26, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	HollyFrontier Corp
Entity Central Index Key	0000048039
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		173,272,653
Entity Public Float			$ 4.5

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents (HEP: $6,375 and $7,776, respectively)	$ 1,075,677	$ 630,757
Total cash, cash equivalents and short-term marketable securities	1,075,677	630,757
Accounts receivable: Product and transportation (HEP: $10,301 and $12,803, respectively)	828,629	659,530
Crude oil resales	18,967	61,203
Accounts receivable, total	847,596	720,733
Inventories: Crude oil and refined products	1,635,861	1,409,538
Materials, supplies and other (HEP: $918 and $916, respectively)	226,639	220,554
Inventories, total	1,862,500	1,630,092
Income taxes receivable	14,886	44,337
Prepayments and other (HEP: $1,794 and $1,395, respectively)	57,066	36,909
Total current assets	3,857,725	3,062,828
Properties, plants and equipment, at cost (HEP: $2,039,922 and $2,011,915, respectively)	6,704,162	6,523,789
Less accumulated depreciation (HEP: $(467,862) and $(408,599), respectively)	(2,030,719)	(1,810,515)
Properties, plants and equipment, net	4,673,443	4,713,274
Other assets: Turnaround costs	272,601	231,319
Goodwill (HEP: $314,229 and $310,610, respectively)	2,255,541	2,244,744
Intangibles and other (HEP: $183,288 and $206,167, respectively)	435,816	439,989
Other assets, total	2,963,958	2,916,052
Total assets	11,495,126	10,692,154
Current liabilities:
Accounts payable (HEP $9,987 and $14,637, respectively)	1,176,417	1,220,795
Income taxes payable	78,316	3,159
Accrued liabilities (HEP: $29,182 and $33,214, respectively)	285,902	198,756
Total current liabilities	1,540,635	1,422,710
Long-term debt (HEP: $1,416,748 and $1,507,308, respectively)	2,409,148	2,498,993
Deferred income taxes (HEP: $558 and $525, respectively)	755,561	647,785
Other long-term liabilities (HEP: $63,106 and $62,590, respectively)	226,270	225,726
HollyFrontier stockholders' equity:
Preferred stock, $1.00 par value - 5,000,000 shares authorized; none issued	0	0
Common stock $.01 par value - 320,000,000 shares authorized; 256,015,579 and 256,015,550 shares issued as of June 30, 2018 and December 31, 2017, respectively	2,560	2,560
Additional capital	4,199,938	4,132,696
Retained earnings	4,112,629	3,346,615
Accumulated other comprehensive income	25,906	29,869
Common stock held in treasury, at cost - 81,558,916 and 78,607,928 shares as of September 30, 2018 and December 31, 2017, respectively	(2,328,747)	(2,140,911)
Total HollyFrontier stockholders' equity	6,012,286	5,370,829
Noncontrolling interest	551,226	526,111
Total equity	6,563,512	5,896,940
Total liabilities and equity	$ 11,495,126	$ 10,692,154

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Cash and cash equivalents (HEP: $6,375 and $7,776, respectively)	$ 1,075,677	$ 630,757
Accounts receivable: Product and transportation (HEP: $10,301 and $12,803, respectively)	828,629	659,530
Materials, supplies and other (HEP: $918 and $916, respectively)	226,639	220,554
Prepayments and other (HEP: $1,794 and $1,395, respectively)	57,066	36,909
Properties, plants and equipment, at cost (HEP: $2,039,922 and $2,011,915, respectively)	6,704,162	6,523,789
Less accumulated depreciation (HEP: $(467,862) and $(408,599), respectively)	(2,030,719)	(1,810,515)
Goodwill (HEP: $314,229 and $310,610, respectively)	2,255,541	2,244,744
Intangibles and other (HEP: $183,288 and $206,167, respectively)	435,816	439,989
Accounts payable (HEP $9,987 and $14,637, respectively)	1,176,417	1,220,795
Accrued liabilities (HEP: $29,182 and $33,214, respectively)	285,902	198,756
Long-term debt (HEP: $1,416,748 and $1,507,308, respectively)	2,409,148	2,498,993
Deferred income taxes (HEP: $558 and $525, respectively)	755,561	647,785
Other long-term liabilities (HEP: $63,106 and $62,590, respectively)	$ 226,270	$ 225,726
HollyFrontier Stockholders' Equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	320,000,000	320,000,000
Common stock, shares issued	256,015,579	256,015,550
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Treasury stock, shares	81,558,916	78,607,928
HEP
Cash and cash equivalents (HEP: $6,375 and $7,776, respectively)	$ 6,375	$ 7,776
Accounts receivable: Product and transportation (HEP: $10,301 and $12,803, respectively)	10,301	12,803
Materials, supplies and other (HEP: $918 and $916, respectively)	918	916
Prepayments and other (HEP: $1,794 and $1,395, respectively)	1,794	1,395
Properties, plants and equipment, at cost (HEP: $2,039,922 and $2,011,915, respectively)	2,039,922	2,011,915
Less accumulated depreciation (HEP: $(467,862) and $(408,599), respectively)	(467,862)	(408,599)
Goodwill (HEP: $314,229 and $310,610, respectively)	314,229	310,610
Intangibles and other (HEP: $183,288 and $206,167, respectively)	183,288	206,167
Accounts payable (HEP $9,987 and $14,637, respectively)	9,987	14,637
Accrued liabilities (HEP: $29,182 and $33,214, respectively)	29,182	33,214
Long-term debt (HEP: $1,416,748 and $1,507,308, respectively)	1,416,748	1,507,308
Deferred income taxes (HEP: $558 and $525, respectively)	558	525
Other long-term liabilities (HEP: $63,106 and $62,590, respectively)	$ 63,106	$ 62,590

XML

Consolidated Statements Of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Sales and other revenues	$ 4,770,799		$ 3,719,247	$ 13,370,462	$ 10,258,594
Operating costs and expenses:
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	3,752,234	[1]	2,888,549	10,695,275	8,283,183
Lower of cost or market inventory valuation adjustment	17,837		(111,128)	(192,927)	(15,323)
Costs of products sold, net	3,770,071		2,777,421	10,502,348	8,267,860
Operating expenses (exclusive of depreciation and amortization)	317,196	[1]	322,277	933,699	946,264
Selling, general and administrative expenses (exclusive of depreciation and amortization)	71,130		68,252	204,469	185,303
Depreciation and amortization	108,885		102,884	323,605	304,206
Long-lived asset impairment	0		0	0	19,247
Total operating costs and expenses	4,267,282		3,270,834	11,964,121	9,722,880
Income from operations	503,517		448,413	1,406,341	535,714
Other income (expense):
Earnings of equity method investments	1,114		5,072	4,127	10,965
Interest income	5,136		1,074	10,660	2,069
Interest expense	(32,399)		(28,731)	(97,446)	(85,534)
Loss on early extinguishment of debt	0		0	0	(12,225)
Gain (loss) on foreign currency transactions	281		19,122	5,516	19,517
Gain on foreign currency swap contracts	0		0	0	24,545
Other, net	741		1,153	3,451	2,550
Other income (expense) total	(25,127)		(2,310)	(73,692)	(38,113)
Income before income taxes	478,390		446,103	1,332,649	497,601
Income tax expense (benefit):
Current	70,595		72,307	216,529	80,242
Deferred	45,663		86,079	102,213	93,351
Income tax expense (benefit)	116,258		158,386	318,742	173,593
Net income	362,132		287,717	1,013,907	324,008
Less net income attributable to noncontrolling interest	19,666		15,703	57,843	39,695
Net income attributable to HollyFrontier stockholders	$ 342,466		$ 272,014	$ 956,064	$ 284,313
Earnings per share attributable to HollyFrontier stockholders:
Basic	$ 1.95		$ 1.53	$ 5.42	$ 1.60
Diluted	1.93		1.53	5.37	1.60
Cash dividends declared per common share	$ 0.33		$ 0.33	$ 0.99	$ 0.99
Average number of common shares outstanding:
Basic	175,097		176,149	175,865	176,143
Diluted	176,927		176,530	177,557	176,616

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XML

Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net income	$ 362,132	$ 287,717	$ 1,013,907	$ 324,008
Other comprehensive income (loss)
Foreign Currency Translation Adjustment	8,325	16,702	(15,118)	24,287
Unrealized loss on marketable securities available for sale	0	0	0	(4)
Change in fair value of cash flow hedging instruments	4,161	(2,094)	(4,296)	2,708
Reclassification adjustments to net income on settlement of cash flow hedging instruments	1,631	5,115	6,038	5,049
Amortization of unrealized loss attributable to discontinued cash flow hedges	0	270	0	810
Net unrealized gain (loss) on hedging instruments	5,792	3,291	1,742	8,567
Other comprehensive income (loss) before income taxes	14,117	19,993	(13,376)	32,850
Income tax expense (benefit)	124	7,140	(9,413)	11,841
Other comprehensive (income) loss	13,993	12,853	(3,963)	21,009
Total comprehensive income	376,125	300,570	1,009,944	345,017
Less noncontrolling interest in comprehensive income	19,666	15,663	57,843	39,638
Comprehensive income attributable to HollyFrontier stockholders	$ 356,459	$ 284,907	$ 952,101	$ 305,379

XML

Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		29 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018
Cash flows from operating activities:
Net income	$ 362,132	$ 1,013,907	$ 324,008
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	108,885	323,605	304,206
Long-lived asset impairment	0	0	19,247
Lower of cost or market inventory valuation adjustment	17,837	(192,927)	(15,323)
Earnings of equity method investments, inclusive of distributions		463	816
(Gain) loss on sale of assets		(52)	540
Loss on early extinguishment of debt attributable to unamortized discount		0	2,475
Deferred income taxes	45,663	102,213	93,351
Equity-based compensation expense		26,096	26,430
Change in fair value - derivative instruments		(3,007)	2,073
(Increase) decrease in current assets:
Accounts receivable		(136,764)	(116,986)
Inventories		(33,856)	(43,822)
Income taxes receivable		27,792	68,371
Prepayments and other		(14,089)	(5,268)
Increase (decrease) in current liabilities:
Accounts payable		(37,160)	88,010
Income taxes payable		76,277	60,661
Accrued liabilities		84,328	83,918
Turnaround expenditures		(114,593)	(111,513)
Other, net		7,664	4,219
Net cash provided by (used for) operating activities		1,129,897	785,413
Cash flows from investing activities:
Additions to properties, plants and equipment		(167,967)	(162,442)
Purchases of marketable securities		0	(41,565)
Sales and maturities of marketable securities		0	465,716
Other, net		3,999	2,297
Net cash used for investing activities		(259,167)	(637,296)
Cash flows from financing activities:
Borrowings under credit agreement		256,000	654,000
Repayments under credit agreement		(347,000)	(457,000)
Proceeds from Issuance of Senior Long-term Debt		0	101,750
Redemption of senior notes - HEP		0	(309,750)
Proceeds from issuance of common units - HEP		114,887	52,285	$ 82,300
Purchase of treasury stock		(177,710)	0
Dividends		(175,921)	(176,519)
Distributions to noncontrolling interest		(93,128)
Shares withheld for tax withholding obligations		(544)	(290)
Other, net		0	(13,131)
Net cash used for financing activities		(423,416)	(230,452)
Effect of exchange rate on cash flow		(2,394)	2,498
Cash and cash equivalents:
Increase (decrease) for the period		444,920	(79,837)
Beginning of period		630,757	710,579
End of period	1,075,677	1,075,677		1,075,677
Cash paid during the period for:
Interest		(89,553)	(84,380)
Income taxes, net		(112,520)	50,957
PCLI
Cash flows from investing activities:
Purchase of business, net of cash acquired		0	(870,627)
Red Giant Oil
Cash flows from investing activities:
Purchase of business, net of cash acquired		(54,088)	0
HEP
Cash flows from investing activities:
Additions to properties, plants and equipment		(41,111)	(30,675)
Cash flows from financing activities:
Distributions to noncontrolling interest		(93,128)	$ (81,797)
Cash and cash equivalents:
Beginning of period		7,776
End of period	$ 6,375	$ 6,375		$ 6,375

XML

Description of Business and Presentation of Financial Statements

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description Of Business And Presentation Of Financial Statements

Description of Business and Presentation of Financial Statements

References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Quarterly Report on Form 10-Q has been written in the first person. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries.

We are principally an independent petroleum refiner that produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. We own and operate petroleum refineries that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain regions of the United States. In addition, we own and operate a lubricant production facility with retail and wholesale marketing of its products through a global sales network with locations in Canada, United States, Europe and China. As of September 30, 2018, we:

• 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 Petro-Canada Lubricants Inc. (“PCLI”) located in Mississauga, Ontario, which produces base oils and other specialized lubricant products;

• owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil with storage facilities in Idaho, Utah and Wyoming, along with a blending and packaging facility in Texas;

• owned and operated HollyFrontier Asphalt Company LLC (“HFC Asphalt”), which operates various asphalt terminals in Arizona, New Mexico and Oklahoma; and

• owned a 57% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”).

On July 10, 2018, we entered into a definitive agreement to acquire Red Giant Oil, a privately-owned lubricants company. Red Giant Oil is one of the largest suppliers of locomotive engine oil in North America and is headquartered in Council Bluffs, Iowa. The acquisition closed on August 1, 2018. Cash consideration paid of $54.1 million was allocated to the acquisition date fair value of assets and liabilities acquired, with the excess purchase price recorded as goodwill. Preliminary fair values are as follows: current assets $12.6 million, properties and equipment $21.3 million, intangible assets $9.7 million, goodwill $11.2 million and current liabilities $0.7 million.

On October 29, 2016, our wholly-owned subsidiary, 9952110 Canada Inc., entered into a share purchase agreement with Suncor Energy Inc. (“Suncor”) to acquire 100% of the outstanding capital stock of PCLI. The acquisition closed on February 1, 2017. Cash consideration paid was $862.1 million, or $1.125 billion in Canadian dollars.

We have prepared these consolidated financial statements without audit. In management’s opinion, these consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our consolidated financial position as of September 30, 2018, the consolidated results of operations and comprehensive income for the three and nine months ended September 30, 2018 and 2017 and consolidated cash flows for the nine months ended September 30, 2018 and 2017 in accordance with the rules and regulations of the SEC. Although certain notes and other information required by generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017 that has been filed with the SEC.

Our results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results of operations to be realized for the year ending December 31, 2018.

Accounts Receivable: Our accounts receivable consist of amounts due from customers that are primarily companies in the petroleum industry. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for doubtful accounts based on our historical loss experience as well as specific accounts identified as high risk, which historically have been minimal. Credit losses are charged to the allowance for doubtful accounts when an account is deemed uncollectible. Our allowance for doubtful accounts was $3.6 million at both September 30, 2018 and December 31, 2017.

Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

Inventories of our Petro-Canada Lubricants business are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value.

Inventories consisting of process chemicals, materials and maintenance supplies and renewable identification numbers (“RINs”) are stated at the lower of weighted-average cost or net realizable value.

Goodwill and Long-lived Assets: As of September 30, 2018, our goodwill balance was $2.3 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1.7 billion, $0.2 billion and $0.3 billion, respectively. See Note 15 for additional information on our segments. The carrying amount of our goodwill may fluctuate from period to period due to the effects of foreign currency translation adjustments on goodwill assigned to our Lubricants and Specialty Products segment. Goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing first entails a comparison of our reporting units fair values relative to their respective carrying values. If carrying value exceeds fair value for a reporting unit, we measure goodwill impairment as the excess of the carrying amount of reporting unit goodwill over the implied fair value of that goodwill based on estimates of the fair value of all assets and liabilities in the reporting unit.

We performed our annual goodwill impairment testing as of July 1, 2018 and determined there was no impairment of goodwill attributable to our reporting units.

Our long-lived assets principally consist of our refining assets that are organized as refining asset groups and our lubricants and specialty products business. Our long-lived assets are evaluated for impairment by identifying whether indicators of impairment exist and if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss measured, if any, is equal to the amount by which the asset group’s carrying value exceeds its fair value.

During the second quarter of 2017, we incurred long-lived asset impairment charges totaling $23.2 million, including $19.2 million of construction-in-progress consisting primarily of engineering work for a planned expansion of our Woods Cross refinery to add lubricants production capabilities. During the second quarter of 2017, we concluded to no longer pursue this expansion for various reasons including our acquisition of PCLI. The remaining $4.0 million in charges relate to property, plant and equipment that we expensed in the form of accelerated depreciation in the income statement.

Foreign Currency Translation: The functional currency of PCLI and its affiliated non-U.S. Petro-Canada Lubricants entities includes the Canadian dollar, the euro and Chinese renminbi. Balance sheet accounts are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income.

In connection with our PCLI acquisition on February 1, 2017, we issued intercompany notes to initially fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of such intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the income statement. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to corporate and other. See Note 15 for additional information on our segments.

Income Taxes: Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized.

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and creates new taxes on certain foreign-sourced earnings. At December 31, 2017 and through June 30, 2018, we had not completed our accounting for the tax effects of enactment of the Act; however in certain cases, we made a reasonable estimate of the effects on our existing deferred tax balances, the one-time transition tax and related matters.

During the three months ended September 30, 2018, we completed analysis of a significant portion of the accounting for the tax effects for which provisional adjustments were made during the fourth quarter of 2017 resulting in our recording in the third quarter of 2018 an additional tax benefit of $6.1 million. These adjustments to the previously recorded provisional amounts included the effects on existing deferred tax balances, the one-time transition tax and deferred U.S. taxes on foreign subsidiaries earnings and profits. Some states have not yet publicly commented and other state effects from the changes in the Act are still being analyzed, and the estimated value of the state deferred tax balances are based on existing law and state guidance.

Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.

Inventory Repurchase Obligations:We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. For the nine months ended September 30,2018 and 2017, we received proceeds of $38.4 million and $36.7 million, respectively, and repaid $39.3 million and $37.9 million, respectively, under these sell / buy transactions.

Accounting Pronouncements - Recently Adopted

Accumulated Other Comprehensive Income

In February 2018, Accounting Standard Update (“ASU”) 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”),” was issued permitting a reclassification of stranded tax effects caused by the Tax Cuts and Jobs Act enacted on December 22, 2017 between AOCI and retained earnings. We adopted this standard effective in the first quarter of 2018 and recorded a cumulative effect adjustment of $3.6 million as an increase to AOCI and a decrease to retained earnings. During the three months ended September 30, 2018, we completed analysis of the accounting for the stranded tax effects on AOCI and recorded an additional $3.1 million as an increase to AOCI and a decrease to retained earnings.

Hedge Accounting

In August 2017, ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” was issued amending hedge accounting recognition and presentation requirements, including elimination of the requirement to separately measure and report hedge ineffectiveness, and eases certain documentation and assessment requirements. We adopted this standard effective January 1, 2018 and recorded a cumulative effect adjustment of $0.1 million as a decrease to AOCI and an increase to retained earnings to eliminate the separate measurement of hedge ineffectiveness existing at the date of adoption. Our amended presentation and disclosures have been applied prospectively in Note 10.

Stock Compensation

In May 2017, ASU 2017-09, “Stock Compensation: Scope of Modification Accounting,” was issued to provide clarity to accounting for share-based payment awards in the event of a modification in the terms or conditions. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Post-retirement Benefit Cost

In March 2017, ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost,” was issued amending current GAAP related to the income statement presentation of the components of net periodic pension cost and net periodic post-retirement cost (credit). We adopted this standard effective January 1, 2018 on a retrospective basis with the presentation of service cost separate from the other components of net periodic costs. The interest cost, expected return on plan assets and amortization of prior service credit have been reclassified from selling, general and administrative expenses to other, net. The adoption of this standard had no impact on our financial condition, results of operations or cash flows.

The effect of the retrospective presentation change related to the net periodic cost / benefit of our defined benefit pension and other post-retirement plans on our consolidated income statement was as follows:

	Three Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	2,888,530	$	19	$	2,888,549
Operating expenses	$	321,668	$	609	$	322,277
Selling, general and administrative expenses	$	68,013	$	239	$	68,252
Other, net	$	286	$	867	$	1,153

	Nine Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	8,283,127	$	56	$	8,283,183
Operating expenses	$	944,437	$	1,827	$	946,264
Selling, general and administrative expenses	$	184,659	$	644	$	185,303
Other, net	$	23	$	2,527	$	2,550

Business Combinations

In January 2017, ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business,” was issued clarifying the definition of a business with the objective of providing guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Cash Flow Presentation

In August 2016, ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” was issued clarifying how entities should classify certain cash receipts and cash payments in the statements of cash flows and amends certain disclosure requirements. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Revenue Recognition

In May 2014, ASU 2014-09 “Revenue from Contracts with Customers” was issued requiring revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the expected consideration for these goods or services. We adopted this standard effective January 1, 2018, and therefore, conformed our revenue recognition policies for certain lubricant product sales agreements with U.S. and European marketers and distributors that provide rights of return provisions under which we repurchase such products and sell directly to end customers. Prior to January 1, 2018, we recognized revenues and costs, net of allowances for expected returns under such agreements when such products were shipped to U.S. and European distributors. Effective with the adoption of ASU 2014-09, revenues and related product costs are no longer recognized when products are shipped to distributors, but rather, revenues and costs are recognized in earnings only when such products are ultimately sold to end customers.

We adopted this standard using the modified retrospective method, whereby the cumulative effect of applying the new standard was recorded as an adjustment to the opening balance of retained earnings as well as the carrying amounts of assets and liabilities as of January 1, 2018, which had no impact on our cash flows. The following reflects the cumulative effect of adoption as of January 1, 2018.

	Prior to Adoption		Increase (Decrease)			As Adjusted
	(In thousands)
Accounts receivable: Product and transportation	$	659,530	$	(8,198	)	$	651,332
Inventories: Crude oil and refined products	$	1,409,538	$	5,124		$	1,414,662
Accounts payable	$	1,220,795	$	7,336		$	1,228,131
Deferred income taxes	$	647,785	$	(2,963	)	$	644,822
Retained earnings	$	3,346,615	$	(7,447	)	$	3,339,168

See Note 3 for disclosure of revenues from contracts with customers.

Accounting Pronouncements - Not Yet Adopted

Leases

In February 2016, ASU 2016-02, “Leases,” was issued requiring leases to be measured and recognized as a lease liability, with a corresponding right-of-use asset on the balance sheet. This standard has an effective date of January 1, 2019, and we are evaluating the impact of this standard. We plan to apply practical expedients provided in the standards update that allow us, among other things, not to reassess contracts that commenced prior to adoption. In preparing for adoption, we have identified, reviewed and evaluated contracts containing lease and embedded lease arrangements. Additionally, we have acquired and are finalizing implementation of software and systems to facilitate lease capture and related accounting treatment.

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Holly Energy Partners

9 Months Ended

Sep. 30, 2018

Holly Energy Partners [Abstract]

Holly Energy Partners

Holly Energy Partners

HEP is a publicly held master limited partnership that owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Delek’s refinery in Big Spring, Texas. Additionally, HEP owns a 75% interest in UNEV Pipeline, LLC (“UNEV”), the owner of a pipeline running from Woods Cross, Utah to Las Vegas, Nevada (the “UNEV Pipeline”) and associated product terminals, and a 50% ownership interest in each of Osage Pipe Line Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas (the “Osage Pipeline”) and Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”).

As of September 30, 2018, we owned a 57% limited partner interest and a non-economic general partner interest in HEP. As the general partner of HEP, we have the sole ability to direct the activities that most significantly impact HEP’s financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP.

HEP has two primary customers (including us) and generates revenues by charging tariffs for transporting petroleum products and crude oil through its pipelines, by charging fees for terminalling refined products and other hydrocarbons, and storing and providing other services at its storage tanks and terminals. Under our long-term transportation agreements with HEP (discussed further below), we accounted for 79% of HEP’s total revenues for the nine months ended September 30, 2018. We do not provide financial or equity support through any liquidity arrangements and / or debt guarantees to HEP.

HEP has outstanding debt under a senior secured revolving credit agreement and its senior notes. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. See Note 9 for a description of HEP’s debt obligations.

HEP has risk associated with its operations. If a major customer of HEP were to terminate its contracts or fail to meet desired shipping or throughput levels for an extended period of time, revenue would be reduced and HEP could suffer substantial losses to the extent that a new customer is not found. In the event that HEP incurs a loss, our operating results will reflect HEP’s loss, net of intercompany eliminations, to the extent of our ownership interest in HEP at that point in time.

SLC Pipeline and Frontier Pipeline

On October 31, 2017, HEP acquired the remaining 75% interest in SLC Pipeline LLC, the owner of a pipeline that serves refineries in the Salt Lake City, Utah area (the “SLC Pipeline”), and the remaining 50% interest in Frontier Aspen LLC, the owner of a pipeline running from Wyoming to Frontier Station, Utah (the “Frontier Pipeline”), from subsidiaries of Plains All American Pipeline, L.P. (“Plains”) for cash consideration of $250.0 million.

These acquisitions were accounted for as a business combination achieved in stages. HEP’s preexisting equity method investments in SLC Pipeline LLC and Frontier Aspen LLC were remeasured at an acquisition date fair value of $112.0 million, since HEP acquired a controlling interest, and a gain was recognized on the remeasurement of $36.3 million in the fourth quarter of 2017. The fair value of HEP's preexisting equity method investments in SLC Pipeline LLC and Frontier Aspen LLC was estimated using Level 3 inputs under the income method for these entities, adjusted for lack of control and marketability.

The total consideration of $363.8 million, consisting of cash consideration of $250.0 million, the fair value of HEP's preexisting equity method investments in SLC Pipeline LLC and Frontier Aspen LLC of $112.0 million, and working capital adjustments of $1.8 million, was allocated to the acquisition date fair value of assets and liabilities acquired as of the October 31, 2017 acquisition date, with the excess purchase price recorded as goodwill. Fair values were as follows: cash and cash equivalents $4.6 million, current assets $5.2 million, properties and equipment $275.0 million, intangible assets $70.2 million, goodwill $13.8 million and current liabilities $5.0 million.

HEP Private Placement Agreements

On January 25, 2018, HEP entered into a common unit purchase agreement in which certain purchasers agreed to purchase in a private placement 3,700,000 HEP common units, representing limited partner interests, at a price of $29.73 per common unit. The private placement closed on February 6, 2018, at which time HEP received proceeds of $110.0 million, which were used to repay indebtedness under the HEP Credit Agreement.

HEP Common Unit Continuous Offering Program

In May 2016, HEP established a continuous offering program under which HEP may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million. During the nine months ended September 30, 2018, HEP issued 171,246 common units under this program, providing $5.2 million in gross proceeds. As of September 30, 2018, HEP has issued 2,413,153 common units under this program, providing $82.3 million in gross proceeds.

HEP intends to use the net proceeds for general partnership purposes, which may include funding working capital, repayment of debt, acquisitions and capital expenditures. Amounts repaid under HEP’s credit facility may be reborrowed from time to time.

As a result of these transactions and resulting HEP ownership changes, we adjusted additional capital and equity attributable to HEP's noncontrolling interest holders to reallocate HEP's equity among its unitholders.

Transportation Agreements

HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2019 through 2036. Under these agreements, we pay HEP fees to transport, store and process throughput volumes of refined products, crude oil and feedstocks on HEP’s pipeline, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to HEP including UNEV (a consolidated subsidiary of HEP). Under these agreements, the agreed upon tariff rates are subject to annual tariff rate adjustments on July 1 at a rate based upon the percentage change in Producer Price Index or Federal Energy Regulatory Commission index. As of September 30, 2018, these agreements result in minimum annualized payments to HEP of $335.0 million.

Our transactions with HEP and fees paid under our transportation agreements with HEP and UNEV are eliminated and have no impact on our consolidated financial statements.

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Revenues from Contracts with Customers

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

Revenues from Contracts with Customers

Substantially all revenue-generating activities relate to sales of refined product and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to HEP logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties.

Disaggregated revenues are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	3,598,815	$	2,839,543	$	10,193,218	$	7,910,289
Specialty lubricant products (2)	422,760		369,822		1,237,002		1,054,161
Asphalt, fuel oil and other products (3)	288,013		201,596		741,139		539,526
Total refined product revenues	4,309,588		3,410,961		12,171,359		9,503,976
Excess crude oil revenues (4)	422,122		277,810		1,074,928		658,117
Transportation and logistic services	25,596		15,227		77,799		47,826
Other revenues (5)	13,493		15,249		46,376		48,675
Total sales and other revenues	$	4,770,799	$	3,719,247	$	13,370,462	$	10,258,594

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Refined product revenues by market
North America
Mid-Continent	$	2,337,689	$	1,748,044	$	6,458,935	$	5,111,301
Southwest	1,016,771		842,347		2,865,324		2,100,850
Rocky Mountains	627,542		528,380		1,869,414		1,489,203
Northeast	85,344		66,467		261,380		189,039
Canada	190,727		177,767		563,088		486,380
Europe and Asia	51,515		47,956		153,218		127,203
Total refined product revenues	$	4,309,588	$	3,410,961	$	12,171,359	$	9,503,976

(1) Transportation fuels consist of gasoline, diesel and jet fuel.

(2) Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

(3) Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of $234,887 and $53,126, respectively, for the three months ended September 30, 2018, $158,344 and $43,252, respectively, for the three months ended September 30, 2017, $589,726 and $151,413, respectively, for the nine months ended September 30, 2018, and $415,344 and $124,182, respectively, for the nine months ended September 30, 2017.

(4) Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.

(5) Other revenues are principally attributable to our Refining segment.

Revenue on refined product and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold. HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain long-term transportation contracts that specify minimum volume requirements, whereby, HEP bills a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. A customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.

Our consolidated balance sheet reflects contract liabilities related to unearned revenues attributable to future service obligations under HEP’s third-party transportation agreements. The following table presents changes to our contract liabilities during the nine months ended September 30, 2018.

	January 1, 2018		Increase		Recognized as Revenue			September 30, 2018
	(In thousands)
Accrued liabilities	$	179	$	5,269	$	(1,746	)	$	3,702

As of September 30, 2018, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialty products to be sold ratably at market prices through 2020. Such volumes are typically nominated in the month preceding delivery and delivered ratably throughout the following month. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under Accounting Standards Codification 606-10-50-14A. Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:

	Remainder of 2018	2019	2020	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	6,546	20,013	777	164	27,500

Additionally, HEP has long-term contracts with third-party customers that specify minimum volumes of product to be transported through its pipelines and terminals that result in fixed-minimum annual of revenues through 2022. Annual minimum revenues attributable to HEP’s third-party contracts as of September 30, 2018 are presented below:

	Remainder of 2018		2019		2020		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	10,437	$	41,863	$	18,040	$	12,553	$	82,893

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Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Financial Instruments, Owned, at Fair Value [Abstract]

Fair Value Measurements

Fair Value Measurements

Our financial instruments measured at fair value on a recurring basis consist of derivative instruments and RINs credit obligations.

Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability, including assumptions about risk). GAAP categorizes inputs used in fair value measurements into three broad levels as follows:

• (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.

The carrying amounts of derivative instruments and RINs credit obligations at September 30, 2018 and December 31, 2017 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
September 30, 2018
Assets:
Foreign currency forward contracts	$	9,137	$	—	$	9,137	$	—
Commodity price swaps	1,565		—		1,565		—
Commodity forward contracts	25		—		25		—
Total assets	$	10,727	$	—	$	10,727	$	—
Liabilities:
NYMEX futures contracts	$	8,854	$	8,854	$	—	$	—
Commodity price swaps	1,615		—		1,615		—
Commodity forward contracts	4		—		4		—
RINs credit obligations (1)	5,221		—		5,221		—
Total liabilities	$	15,694	$	8,854	$	6,840	$	—

December 31, 2017
Assets:
Commodity forward contracts	$	3,840	$	—	$	3,840	$	—
Total assets	$	3,840	$	—	$	3,840	$	—
Liabilities:
NYMEX futures contracts	$	3,360	$	3,360	$	—	$	—
Commodity price swaps	2,424		—		2,424		—
Commodity forward contracts	1,020		—		1,020		—
RINs credit obligations (1)	8,931		—		8,931		—
Total liabilities	$	15,735	$	3,360	$	12,375	$	—

(1) Represent obligations for RINs credits for which we do not have sufficient quantities at September 30, 2018 and December 31, 2017 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.

Level 1 Instruments

Our NYMEX futures contracts are exchange traded and are measured and recorded at fair value using quoted market prices, a Level 1 input.

Level 2 Instruments

Derivative instruments consisting of foreign currency forward contracts, commodity price swaps and forward sales and purchase contracts are measured and recorded at fair value using Level 2 inputs. The fair value of the commodity price swap contracts is based on the net present value of expected future cash flows related to both variable and fixed rate legs of the respective swap agreements. The measurements are computed using market-based observable inputs, quoted forward commodity prices with respect to our commodity price swaps. RINs credit obligations are valued based on current market RINs prices. The fair value of foreign currency forward contracts are based on values provided by a third party, which were derived using market quotes for similar type instruments, a Level 2 input.

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Earnings Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated as net income attributable to HollyFrontier stockholders divided by the average number of shares of common stock outstanding. Diluted earnings per share assumes, when dilutive, the issuance of the net incremental shares from restricted shares and performance share units. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HollyFrontier stockholders:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands, except per share data)
Net income attributable to HollyFrontier stockholders	$	342,466	$	272,014	$	956,064	$	284,313
Participating securities’ (restricted stock) share in earnings	1,171		1,735		3,321		1,822
Net income attributable to common shares	$	341,295	$	270,279	$	952,743	$	282,491
Average number of shares of common stock outstanding	175,097		176,149		175,865		176,143
Effect of dilutive variable restricted shares andperformance share units (1)	1,830		381		1,692		473
Average number of shares of common stock outstanding assuming dilution	176,927		176,530		177,557		176,616
Basic earnings per share	$	1.95	$	1.53	$	5.42	$	1.60
Diluted earnings per share	$	1.93	$	1.53	$	5.37	$	1.60
(1) Excludes anti-dilutive restricted and performance share units of:	—		104		2		120

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

As of September 30, 2018, we have two principal share-based compensation plans (collectively, the “Long-Term Incentive Compensation Plan”).

The compensation cost charged against income for these plans was $8.1 million and $9.1 million for the three months ended September 30, 2018 and 2017, respectively, and $23.8 million and $24.5 million for the nine months ended September 30, 2018 and 2017, respectively. Our accounting policy for the recognition of compensation expense for awards with pro-rata vesting is to expense the costs ratably over the vesting periods.

Additionally, HEP maintains a share-based compensation plan for Holly Logistic Services, L.L.C.’s non-employee directors and certain executives and employees. Compensation cost attributable to HEP’s share-based compensation plan was $0.7 million and $0.8 million for the three months ended September 30, 2018 and 2017, respectively, and $2.3 million and $1.9 million for the nine months ended September 30, 2018 and 2017, respectively.

Restricted Stock and Restricted Stock Units

Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees restricted stock unit awards with awards generally vesting over a period of two to three years. We previously granted restricted stock to certain officers and key employees with awards vesting over a period of three years. Certain restricted stock unit award recipients have the right to receive dividends, however, restricted stock units do not have any other rights of absolute ownership. Restricted stock award recipients are generally entitled to all the rights of absolute ownership of the restricted shares from the date of grant including the right to vote the shares and to receive dividends. Upon vesting, restrictions on the restricted shares and restricted share units lapse at which time they convert to common shares. In addition, we grant non-employee directors restricted stock unit awards, which typically vest over a period of one year and are payable in stock. The fair value of each restricted stock and restricted stock unit award is measured based on the grant date market price of our common shares and is amortized over the respective vesting period.

A summary of restricted stock and restricted stock unit activity and changes during the nine months ended September 30, 2018 is presented below:

Restricted Stock and Restricted Stock Units	Grants		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2018 (non-vested)	1,726,188		$	33.51
Granted	32,583		55.85
Vesting (transfer/conversion to common stock)	(29,656	)	31.49
Forfeited	(103,488	)	34.45
Outstanding at September 30, 2018 (non-vested)	1,625,627		33.94		$	113,631

For the nine months ended September 30, 2018, restricted stock and restricted stock units vested having a grant date fair value of $0.9 million. As of September 30, 2018, there was $15.9 million of total unrecognized compensation cost related to non-vested restricted stock and restricted stock unit grants. That cost is expected to be recognized over a weighted-average period of 1.0 years.

Performance Share Units

Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees performance share units, which are payable in stock upon meeting certain criteria over the service period, and generally vest over a period of three years. Under the terms of our performance share unit grants, awards are subject to “financial performance” and “market performance” criteria. Financial performance is based on our financial performance compared to a peer group of independent refining companies, while market performance is based on the relative standing of total shareholder return achieved by HollyFrontier compared to peer group companies. The number of shares ultimately issued under these awards can range from zero to 200% of target award amounts.

A summary of performance share unit activity and changes during the nine months ended September 30, 2018 is presented below:

Performance Share Units	Grants
Outstanding at January 1, 2018 (non-vested)	692,661
Forfeited	(44,008	)
Outstanding at September 30, 2018 (non-vested)	648,653

As of September 30, 2018, there was $9.1 million of total unrecognized compensation cost related to non-vested performance share units having a grant date fair value of $33.91 per unit. That cost is expected to be recognized over a weighted-average period of 1.3 years.

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Inventories

9 Months Ended

Sep. 30, 2018

Inventory, Net [Abstract]

Inventories

Inventories

Inventory consists of the following components:

	September 30, 2018			December 31, 2017
	(In thousands)
Crude oil	$	529,252		$	581,417
Other raw materials and unfinished products(1)	383,953			396,618
Finished products(2)	753,562			655,336
Lower of cost or market reserve	(30,906		)	(223,833		)
Process chemicals(3)	35,259			24,792
Repair and maintenance supplies and other (4)	191,380			195,762
Total inventory	$	1,862,500		$	1,630,092

(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.

(4) Includes RINs.

Inventories, which are valued at the lower of LIFO cost or market, reflect a valuation reserve of $30.9 million and $223.8 million at September 30, 2018 and December 31, 2017, respectively. The December 31, 2017 market reserve of $223.8 million was reversed due to the sale of inventory quantities that gave rise to the 2017 reserve. A new market reserve of $30.9 million was established as of September 30, 2018 based on market conditions and prices at that time. The effect of the change in lower of cost or market reserve was an increase to cost of products sold totaling $17.8 million for the three months ended September 30, 2018 and a decrease of $111.1 million for the three months ended September 30, 2017, and a decrease to cost of products sold totaling $192.9 million and $15.3 million for the nine months ended September 30, 2018 and 2017, respectively.

During the three months ended June 30, 2018, the EPA granted the Woods Cross Refinery a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2017 calendar year end. As a result, the Woods Cross Refinery’s gasoline and diesel production are not subject to the percentage of production that must satisfy a Renewable Volume Obligation (“RVO”) for 2017. In the second quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $25.3 million, representing the net cost of the Woods Cross Refinery’s RINs charge to cost of products sold in 2017, less the loss incurred for selling 2017 vintage RINs in excess of those which we can use subject to the 20% carryover limit.

During the three months ended March 31, 2018, the EPA granted the Cheyenne Refinery a one-year small refinery exemption from the RFS program requirements for the 2015 and 2017 calendar years end. As a result, the Cheyenne Refinery’s gasoline and diesel production are not subject to the percentage of production that must satisfy an RVO for those years. At the date we received the 2017 Cheyenne Refinery exemption, we had not yet submitted RINs to the EPA to satisfy this 2017 RVO, which we intended to satisfy, in part, with 2016 vintage RINs subject to the 20% carryover limit. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $37.9 million, representing the net cost of the Cheyenne Refinery’s RINs charged to cost of products sold in 2017, less the loss incurred from selling 2016 vintage RINs prior to their expiration in 2018.

In the first quarter of 2018, the EPA allowed us to generate new 2018 vintage RINs to replace the RINs previously submitted to meet the Cheyenne Refinery’s 2015 RVO. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $33.8 million representing the fair value of the 2018 RINs generated because of the Cheyenne Refinery’s exemption of its 2015 RVO.

During the second quarter of 2018, the Renewable Fuel Association and three other associations sought judicial review of three hardship waivers granted by the EPA under the RFS provisions of the Clean Air Act by filing a lawsuit in the United States Court of Appeals for the Tenth Circuit (“Tenth Circuit”) that alleges the EPA erred in granting the waivers. This challenge includes two hardship waivers granted to our subsidiaries for the 2016 compliance year. The Tenth Circuit granted our motion to intervene in the case, thereby making us a party to this case. It is too early to assess whether the case is expected to have any impact on us.

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Environmental

9 Months Ended

Sep. 30, 2018

Environmental Expense and Liabilities [Abstract]

Environmental

Environmental

Environmental costs are charged to operating expenses if they relate to an existing condition caused by past operations and do not contribute to current or future revenue generation. We have ongoing investigations of environmental matters at various locations and routinely assess our recorded environmental obligations, if any, with respect to such matters. Liabilities are recorded when site restoration and environmental remediation, cleanup and other obligations are either known or considered probable and can be reasonably estimated. Such estimates are undiscounted and require judgment with respect to costs, time frame and extent of required remedial and cleanup activities and are subject to periodic adjustments based on currently available information. Recoveries of environmental costs through insurance, indemnification arrangements or other sources are included in other assets to the extent such recoveries are considered probable.

We incurred expense of $3.3 million and $4.9 million for the three and nine months ended September 30, 2018, respectively, and incurred expense of $0.1 million for the three months ended September 30, 2017 and reduced expense by $0.8 million for the nine months ended September 30, 2017, for environmental remediation obligations. The accrued environmental liability reflected in our consolidated balance sheets was $102.9 million and $103.7 million at September 30, 2018 and December 31, 2017, respectively, of which $86.5 million and $89.6 million, respectively, were classified as other long-term liabilities. These accruals include remediation and monitoring costs expected to be incurred over an extended period of time (up to 30 years for certain projects). Estimated liabilities could increase in the future when the results of ongoing investigations become known, are considered probable and can be reasonably estimated.

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Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

HollyFrontier Credit Agreement

We have a $1.35 billion senior unsecured revolving credit facility maturing in February 2022 (the “HollyFrontier Credit Agreement”). The HollyFrontier Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. During the nine months ended September 30, 2018, there was no activity under the HollyFrontier Credit Agreement. At September 30, 2018, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.4 million under the HollyFrontier Credit Agreement.

HEP Credit Agreement

HEP has a $1.4 billion senior secured revolving credit facility maturing in July 2022 (the “HEP Credit Agreement”) and is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has a $300 million accordion. During the nine months ended September 30, 2018, HEP received advances totaling $256.0 million and repaid $347.0 million under the HEP Credit Agreement. At September 30, 2018, HEP was in compliance with all of its covenants, had outstanding borrowings of $921.0 million and no outstanding letters of credit under the HEP Credit Agreement.

HEP’s obligations under the HEP Credit Agreement are collateralized by substantially all of HEP’s assets and are guaranteed by HEP’s material wholly-owned subsidiaries. Any recourse to the general partner would be limited to the extent of HEP Logistics Holdings, L.P.’s assets, which other than its investment in HEP are not significant. HEP’s creditors have no recourse to our other assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

HollyFrontier Senior Notes

Our 5.875% senior notes ($1 billion aggregate principal amount maturing April 2026) (the “HollyFrontier Senior Notes”) are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness.

HEP Senior Notes

In September 2017, HEP issued an additional $100 million in aggregate principal amount of 6.0% HEP senior notes maturing in August 2024 in a private placement. HEP used the net proceeds of $101.8 million to repay indebtedness under the HEP Credit Agreement.

HEP’s 6.0% senior notes ($500 million aggregate principal amount maturing August 2024) (the “HEP Senior Notes”) are unsecured and impose certain restrictive covenants, including limitations on HEP’s ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates, and enter into mergers. At any time when the HEP Senior Notes are rated investment grade by both Moody’s and Standard & Poor’s and no default or event of default exists, HEP will not be subject to many of the foregoing covenants. Additionally, HEP has certain redemption rights under the HEP Senior Notes.

In January 2017, HEP redeemed its $300 million aggregate principal amount of 6.5% senior notes maturing March 2020 at a redemption cost of $309.8 million, at which time HEP recognized a $12.2 million early extinguishment loss consisting of a $9.8 million debt redemption premium and unamortized discount and financing costs of $2.4 million. HEP funded the redemption with borrowings under the HEP Credit Agreement.

Indebtedness under the HEP Senior Notes is guaranteed by HEP’s wholly-owned subsidiaries. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries.

The carrying amounts of long-term debt are as follows:

	September 30, 2018			December 31, 2017
	(In thousands)
HollyFrontier 5.875% Senior Notes
Principal	$	1,000,000		$	1,000,000
Unamortized discount and debt issuance costs	(7,600		)	(8,315		)
	992,400			991,685
HEP Credit Agreement	921,000			1,012,000
HEP 6% Senior Notes
Principal	500,000			500,000
Unamortized discount and debt issuance costs	(4,252		)	(4,692		)
	495,748			495,308
Total HEP long-term debt	1,416,748			1,507,308
Total long-term debt	$	2,409,148		$	2,498,993

The fair values of the senior notes are as follows:

	September 30, 2018		December 31, 2017
	(In thousands)
HollyFrontier senior notes	$	1,065,980	$	1,113,470
HEP senior notes	$	512,840	$	525,120

These fair values are based on estimates provided by a third party using market quotes for similar type instruments, a Level 2 input. See Note 4 for additional information on Level 2 inputs.

We capitalized interest attributable to construction projects of $1.3 million and $1.0 million for the three months ended September 30, 2018 and 2017, respectively, and $3.3 million and $4.2 million for the nine months ended September 30, 2018 and 2017, respectively.

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Derivative Instruments And Hedging Activities

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities

Derivative Instruments and Hedging Activities

Commodity Price Risk Management

Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs.

Foreign Currency Risk Management

We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward and foreign exchange swap contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar.

Accounting Hedges

We have swap contracts serving as cash flow hedges against price risk on forecasted purchases of natural gas and to lock in basis spread differentials on forecasted purchases of crude oil. We also periodically have forward sales contracts that lock in the prices of future sales of crude oil and refined product and swap contracts serving as cash flow hedges against price risk on forecasted purchases of WTI crude oil and forecasted sales of refined product. These contracts have been designated as accounting hedges and are measured at fair value with offsetting adjustments (gains/losses) recorded directly to other comprehensive income. These fair value adjustments are later reclassified to earnings as the hedging instruments mature.

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of derivatives designated as hedging instruments under hedge accounting:

	Unrealized Gain (Loss) Recognized in OCI					Gain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Three Months Ended September 30,					Income Statement Location	Three Months Ended September 30,
	2018		2017				2018			2017
	(In thousands)
Commodity contracts	$	5,792	$	3,354		Sales and other revenues	$	(1,422	)	$	(488	)
						Operating expenses	(209		)	(4,961		)
Interest rate contracts (1)	—		(63		)	Interest expense	—			64
Total	$	5,792	$	3,291			$	(1,631	)	$	(5,385	)

	Unrealized Gain (Loss) Recognized in OCI					Gain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Nine Months Ended September 30,					Income Statement Location	Nine Months Ended September 30,
	2018		2017				2018			2017
	(In thousands)
Commodity contracts	$	1,742	$	8,658		Sales and other revenues	$	(5,093	)	$	7,937
						Cost of products sold	—			(299		)
						Operating expenses	(945		)	(13,676		)
Interest rate contracts (1)	—		(91		)	Interest expense	—			179
Total	$	1,742	$	8,567			$	(6,038	)	$	(5,859	)

(1) HEP used interest rate swap contracts to manage its exposure to interest rate risk, which matured in July 2017.

Economic Hedges

We have commodity contracts including forward purchase and sell contracts and swap contracts to lock in the crack spread of WTI and sub-octane gasoline and NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory that serve as economic hedges (derivatives used for risk management, but not designated as accounting hedges). We also have forward currency contracts to fix the rate of foreign currency. These contracts are measured at fair value with offsetting adjustments (gains/losses) recorded directly to income.

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
		(In thousands)
Commodity contracts	Cost of products sold	$	(8,252	)	$	(10,632	)	$	(20,580	)	$	3,403
	Operating expenses	—			(629		)	—			(6,392		)
Foreign currency contracts	Gain on foreign currency transactions	(7,052		)	—			18,504			—
	Gain on foreign currency swap contracts (1)	—			—			—			24,545
	Total	$	(15,304	)	$	(11,261	)	$	(2,076	)	$	21,556

(1) Relates to Canadian currency swap contracts that settled on February 1, 2017 and effectively fixed the conversion rate on our PCLI purchase price.

As of September 30, 2018, we have the following notional contract volumes related to outstanding derivative instruments:

			Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional		2018		2019		2020	2021	Unit of Measure
Derivatives Designated as Hedging Instruments
Natural gas price swaps - long	5,850,000		450,000		1,800,000		1,800,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	4,388,000		—		1,460,000		2,928,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	2,303,000		2,102,000		201,000		—	—	Barrels
WTI and sub-octane gasoline crack spread swaps - short	400,000		400,000		—		—	—	Barrels
Forward gasoline contracts - long	25,000		25,000		—		—	—	Barrels
Foreign currency forward contracts	$	446,361,369	$	113,632,223	$	332,729,146	—	—	U.S. Dollar

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet			Net Liabilities Recognized in Balance Sheet
			(In thousands)
September 30, 2018
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	1,565	$	—	$	1,565	$	3,243	$	(2,114	)	$	1,129
	$	1,565	$	—	$	1,565	$	3,243	$	(2,114	)	$	1,129
Derivatives not designated as cash flow hedging instruments:
Foreign exchange forward contracts	$	9,137	$	—	$	9,137	$	—	$	—		$	—
NYMEX futures contracts	—		—		—		8,854		—			8,854
Commodity price swap contracts	—		—		—		1,288		(802		)	486
Commodity forward contracts	25		—		25		4		—			4
	$	9,162	$	—	$	9,162	$	10,146	$	(802	)	$	9,344
Total net balance					$	10,727						$	10,473
Balance sheet classification:	Prepayment and other				$	9,162	Accrued liabilities					$	10,332
	Intangibles and other				1,565		Other long-term liabilities					141
					$	10,727						$	10,473

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2017
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	2,424	$	—	$	2,424
Commodity forward contracts	3,067		—		3,067		418		—		418
	$	3,067	$	—	$	3,067	$	2,842	$	—	$	2,842
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	3,360	$	—	$	3,360
Commodity forward contracts	773		—		773		602		—		602
	$	773	$	—	$	773	$	3,962	$	—	$	3,962
Total net balance					$	3,840					$	6,804
Balance sheet classification:							Accrued liabilities				$	5,365
							Other long-term liabilities				1,439
	Prepayment and other				$	3,840					$	6,804

At September 30, 2018, we had a pre-tax net unrealized gain of $0.4 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2021. Assuming commodity prices remain unchanged, an unrealized loss of $1.0 million will be effectively transferred from accumulated other comprehensive income into the statement of income as the hedging instruments contractually mature over the next twelve-month period.

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Equity

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Equity

Equity

Changes to equity during the nine months ended September 30, 2018 are presented below:

	HollyFrontier Stockholders’ Equity			Noncontrolling Interest			Total Equity
	(In thousands)
Balance at December 31, 2017	$	5,370,829		$	526,111		$	5,896,940
Net income	956,064			57,843			1,013,907
Dividends	(175,921		)	—			(175,921		)
Distributions to noncontrolling interest holders	—			(93,128		)	(93,128		)
Other comprehensive loss, net of tax	(3,963		)	—			(3,963		)
Allocated equity on HEP common unit issuances, net of tax	42,198			58,202			100,400
Equity-based compensation	23,840			2,256			26,096
Purchase of treasury stock (1)	(186,632		)	—			(186,632		)
Purchase of HEP units for restricted grants	—			(58		)	(58		)
Adoption of accounting standards	(14,129		)	—			(14,129		)
Balance at September 30, 2018	$	6,012,286		$	551,226		$	6,563,512

(1) Includes 12,593 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.

In September 2018, our Board of Directors approved a $1 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. The timing and amount of stock repurchases will depend on market conditions and corporate, regulatory and other relevant considerations. This program may be discontinued at any time by the Board of Directors. As of September 30, 2018, we had remaining authorization to repurchase up to $949.3 million under this stock repurchase program. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs.

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Other Comprehensive Income

9 Months Ended

Sep. 30, 2018

Other Comprehensive Income (Loss) [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax			Tax Expense (Benefit)			After-Tax
	(In thousands)
Three Months Ended September 30, 2018
Net change in foreign currency translation adjustment	$	8,325		$	(1,354	)	$	9,679
Net unrealized gain on hedging instruments	5,792			1,478			4,314
Other comprehensive income attributable to HollyFrontier stockholders	$	14,117		$	124		$	13,993
Three Months Ended September 30, 2017
Net change in foreign currency translation adjustment	$	16,702		$	5,851		$	10,851
Net unrealized gain on hedging instruments	3,291			1,289			2,002
Other comprehensive income	19,993			7,140			12,853
Less other comprehensive loss attributable to noncontrolling interest	(40		)	—			(40		)
Other comprehensive income attributable to HollyFrontier stockholders	$	20,033		$	7,140		$	12,893
Nine Months Ended September 30, 2018
Net change in foreign currency translation adjustment	$	(15,118	)	$	(6,304	)	$	(8,814	)
Net unrealized gain on hedging instruments	1,742			625			1,117
Net change in pension and other post-retirement benefit obligations	—			(3,734		)	3,734
Other comprehensive loss attributable to HollyFrontier stockholders	$	(13,376	)	$	(9,413	)	$	(3,963	)
Nine Months Ended September 30, 2017
Net change in foreign currency translation adjustment	$	24,287		$	8,505		$	15,782
Net unrealized loss on marketable securities	(4		)	(1		)	(3		)
Net unrealized gain on hedging instruments	8,567			3,337			5,230
Other comprehensive income	32,850			11,841			21,009
Less other comprehensive loss attributable to noncontrolling interest	(57		)	—			(57		)
Other comprehensive income attributable to HollyFrontier stockholders	$	32,907		$	11,841		$	21,066

The following table presents the income statement line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI						Income Statement Line Item
	(In thousands)
	Three Months Ended September 30,
	2018			2017
Hedging instruments:
Commodity price swaps	$	(1,422	)	$	(488	)	Sales and other revenues
	(209		)	(4,961		)	Operating expenses
Interest rate swaps	—			64			Interest expense
	(1,631		)	(5,385		)
	(416		)	(2,100		)	Income tax benefit
	(1,215		)	(3,285		)	Net of tax
	—			(41		)	Noncontrolling interest
Total reclassifications for the period	$	(1,215	)	$	(3,326	)	Net of tax and noncontrolling interest
	Nine Months Ended September 30,
	2018			2017
Hedging instruments:
Commodity price swaps	$	(5,093	)	$	7,937		Sales and other revenues
	—			(299		)	Cost of products sold
	(945		)	(13,676		)	Operating expenses
Interest rate swaps	—			179			Interest expense
	(6,038		)	(5,859		)
	(1,540		)	(2,312		)	Income tax benefit
	(4,498		)	(3,547		)	Net of tax
	—			(114		)	Noncontrolling interest
Total reclassifications for the period	$	(4,498	)	$	(3,661	)	Net of tax and noncontrolling interest

Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes:

	September 30, 2018			December 31, 2017
	(In thousands)
Foreign currency translation adjustment	$	5,563		$	14,377
Unrealized loss on pension obligation	(692		)	(654		)
Unrealized gain on post-retirement benefit obligations	20,711			16,939
Unrealized gain (loss) on hedging instruments	324			(793		)
Accumulated other comprehensive income	$	25,906		$	29,869

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Post-retirement Plan

9 Months Ended

Sep. 30, 2018

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Post-retirement Plans

Post-retirement Plans

In connection with our PCLI acquisition, we agreed to establish employee benefit plans including union and non-union pension plans and a post-retirement healthcare plan for PCLI employees that were previously covered under legacy Suncor plans.

Our agreement with Suncor also provides that pension assets related to the union and non-union pension plans are transferred to a pension trust which we established and are computed in accordance with the share purchase agreement, subject to regulatory approval. The actual asset transfer to our PCLI pension plan trust was a cash transfer that occurred in September 2018.

The net periodic pension expense of these plans consisted of the following components:

	Three Months Ended September 30,						Nine Months Ended September 30,			February 1 to September 30,
	2018			2017			2018			2017
	(in thousands)
Service cost - benefit earned during the period	$	1,093		$	1,013		$	3,337		$	2,596
Interest cost on projected benefit obligations	556			556			1,698			1,424
Expected return on plan assets	(856		)	(802		)	(2,615		)	(2,053		)
Net periodic pension expense	$	793		$	767		$	2,420		$	1,967

The expected long-term annual rate of return on plan assets is 5.75%. This rate was used in measuring 2018 net periodic benefit costs. We expect to contribute $6.4 million to the PCLI pension plans in 2018.

We have a post-retirement healthcare and other benefits plan that is available to certain of our employees who satisfy certain age and service requirements. In addition, we have a post-retirement healthcare and other benefits plan for our PCLI employees. The net periodic benefit credit of these plans consisted of the following components:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Service cost – benefit earned during the period	$	411		$	380		$	1,238		$	1,106
Interest cost on projected benefit obligations	234			250			705			714
Amortization of prior service credit	(870		)	(870		)	(2,611		)	(2,610		)
Net periodic post-retirement credit	$	(225	)	$	(240	)	$	(668	)	$	(790	)

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Contingencies

9 Months Ended

Sep. 30, 2018

Loss Contingency [Abstract]

Contingencies

Contingencies

We are a party to various litigation and legal proceedings which we believe, based on advice of counsel, will not either individually or in the aggregate have a material adverse effect on our financial condition, results of operations or cash flows.

We have a crude oil supply contract that requires the supplier to deliver a specified volume of crude oil or pay a shortfall fee for the difference in the actual barrels delivered to us less the specified barrels per the supply contract. For the contract year ended August 31, 2017, the actual number of barrels delivered to us was substantially less than the specified barrels, and we recorded a reduction to cost of products sold and accumulated a shortfall fee receivable of $26.0 million during this period. In September 2017, the supplier notified us they are disputing the shortfall fee owed and in October 2017 notified us of their demand for arbitration. We offset the receivable with payments of invoices for deliveries of crude oil received subsequent to August 31, 2017, which is permitted under the supply contract. We believe the disputes and claims made by the supplier are without merit. For the second contract year ended August 31, 2018, the actual number of barrels delivered to us was less than the specified barrels, and we recorded a reduction to cost of products sold and accumulated a shortfall fee receivable of $8.0 million during this period. We offset the receivable with payments of invoices for deliveries of crude oil received subsequent to August 31, 2018, which is permitted under the supply contract. The shortfall fees owed for the second contract year are now also part of the arbitration proceedings.

In March 2006, a subsidiary of ours sold the assets of Montana Refining Company under an Asset Purchase Agreement (“APA”). Calumet Montana Refining LLC, the current owner of the assets, has submitted requests for reimbursement of approximately $20.0 million pursuant to contractual indemnity provisions under the APA for various costs incurred. Calumet has also asserted claims related to environmental matters. We have rejected all of the currently pending claims for payment, and selected issues were arbitrated in July 2018. In September 2018, the arbitration panel ruled on the selected issues and held that the APA places a number of important limitations on claims advanced by Calumet. We have accrued appropriate costs for this matter, and we believe that any reasonably possible losses beyond the amounts accrued are not material.

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Segment Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment Information

Segment Information

In the fourth quarter of 2017, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. Accordingly, our Tulsa Refineries’ lubricants operations, previously reported in the Refining segment, are now combined with the operations of our Petro-Canada Lubricants business (acquired February 1, 2017) and reported in the Lubricants and Specialty Products segment. Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

Our operations are organized into three reportable segments, Refining, Lubricants and Specialty Products and HEP. Our operations that are not included in the Refining, Lubricants and Specialty Products and HEP segments are included in Corporate and Other. Intersegment transactions are eliminated in our consolidated financial statements and are included in Eliminations. Corporate and

Other and Eliminations are aggregated and presented under Corporate, Other and Eliminations column.

The Refining segment represents the operations of the El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and HFC Asphalt (aggregated as a reportable segment). Refining activities involve the purchase and refining of crude oil and wholesale and branded marketing of refined products, such as gasoline, diesel fuel and jet fuel. These petroleum products are primarily marketed in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. HFC Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma.

The Lubricants and Specialty Products segment involves PCLI’s production operations, located in Mississauga, Ontario, that includes lubricant products such as base oils, white oils, specialty products and finished lubricants, and the operations of our Petro- Canada Lubricants business that includes the marketing of products to both retail and wholesale outlets through a global sales network with locations in Canada, the United States, Europe and China. Additionally, the Lubricants and Specialty Products segment includes specialty lubricant products produced at our Tulsa Refineries that are marketed throughout North America and are distributed in Central and South America. Also, effective with our acquisition that closed August 1, 2018, the Lubricants and Specialty Products segment includes Red Giant Oil, one of the largest suppliers of locomotive engine oil in North America.

The HEP segment includes all of the operations of HEP, which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and processing units in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. The HEP segment also includes a 75% ownership interest in UNEV (a consolidated subsidiary of HEP); and 50% ownership interests in each of the Osage Pipeline and the Cheyenne Pipeline. Revenues from the HEP segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations as well as revenues relating to pipeline transportation services provided for our refining operations. Due to certain basis differences, our reported amounts for the HEP segment may not agree to amounts reported in HEP’s periodic public filings.

The accounting policies for our segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2017.

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Three Months Ended September 30, 2018
Sales and other revenues:
Revenues from external customers	$	4,270,835		$	474,260		$	25,596	$	108		$	4,770,799
Intersegment revenues	101,334			1,626			100,188		(203,148		)	—
	$	4,372,169		$	475,886		$	125,784	$	(203,040	)	$	4,770,799
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,572,593		$	359,742		$	—	$	(180,101	)	$	3,752,234
Lower of cost or market inventory valuation adjustment	$	17,837		$	—		$	—	$	—		$	17,837
Operating expenses	$	262,010		$	40,288		$	35,995	$	(21,097	)	$	317,196
Selling, general and administrative expenses	$	30,394		$	33,514		$	2,498	$	4,724		$	71,130
Depreciation and amortization	$	70,793		$	11,139		$	24,367	$	2,586		$	108,885
Income (loss) from operations	$	418,542		$	31,203		$	62,924	$	(9,152	)	$	503,517
Earnings of equity method investments	$	—		$	—		$	1,114	$	—		$	1,114
Capital expenditures	$	47,088		$	8,094		$	9,541	$	5,214		$	69,937
Three Months Ended September 30, 2017
Sales and other revenues:
Revenues from external customers	$	3,291,417		$	413,074		$	15,227	$	(471	)	$	3,719,247
Intersegment revenues	82,705			—			95,137		(177,842		)	—
	$	3,374,122		$	413,074		$	110,364	$	(178,313	)	$	3,719,247
Cost of products sold (exclusive of lower of cost or market inventory)	$	2,774,722		$	270,279		$	—	$	(156,452	)	$	2,888,549
Lower of cost or market inventory valuation adjustment	$	(109,690	)	$	(1,438	)	$	—	$	—		$	(111,128	)
Operating expenses	$	246,409		$	59,726		$	36,061	$	(19,919	)	$	322,277
Selling, general and administrative expenses	$	26,582		$	30,796		$	3,626	$	7,248		$	68,252
Depreciation and amortization	$	74,070		$	7,734		$	18,601	$	2,479		$	102,884
Income (loss) from operations	$	362,029		$	45,977		$	52,076	$	(11,669	)	$	448,413
Earnings of equity method investments	$	—		$	—		$	5,072	$	—		$	5,072
Capital expenditures	$	30,979		$	9,815		$	10,151	$	5,122		$	56,067

	Refining			Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Nine Months Ended September 30, 2018
Sales and other revenues:
Revenues from external customers	$	11,915,797		$	1,376,531	$	77,799	$	335		$	13,370,462
Intersegment revenues	284,538			11,884		295,629		(592,051		)	—
	$	12,200,335		$	1,388,415	$	373,428	$	(591,716	)	$	13,370,462
Cost of products sold (exclusive of lower of cost or market inventory)	$	10,179,509		$	1,040,414	$	—	$	(524,648	)	$	10,695,275
Lower of cost or market inventory valuation adjustment	$	(192,927	)	$	—	$	—	$	—		$	(192,927	)
Operating expenses	$	764,415		$	125,101	$	106,731	$	(62,548	)	$	933,699
Selling, general and administrative expenses	$	82,966		$	99,425	$	8,293	$	13,785		$	204,469
Depreciation and amortization	$	210,957		$	30,023	$	74,117	$	8,508		$	323,605
Income (loss) from operations	$	1,155,415		$	93,452	$	184,287	$	(26,813	)	$	1,406,341
Earnings of equity method investments	$	—		$	—	$	4,127	$	—		$	4,127
Capital expenditures	$	132,050		$	23,138	$	41,111	$	12,779		$	209,078
Nine Months Ended September 30, 2017
Sales and other revenues:
Revenues from external customers	$	9,033,148		$	1,178,343	$	47,826	$	(723	)	$	10,258,594
Intersegment revenues	268,208			—		277,315		(545,523		)	—
	$	9,301,356		$	1,178,343	$	325,141	$	(546,246	)	$	10,258,594
Cost of products sold (exclusive of lower of cost or market inventory)	$	7,949,813		$	818,981	$	—	$	(485,611	)	$	8,283,183
Lower of cost or market inventory valuation adjustment	$	(15,365	)	$	42	$	—	$	—		$	(15,323	)
Operating expenses	$	743,493		$	154,795	$	102,773	$	(54,797	)	$	946,264
Selling, general and administrative expenses	$	71,591		$	71,877	$	8,882	$	32,953		$	185,303
Depreciation and amortization	$	218,934		$	20,570	$	56,515	$	8,187		$	304,206
Asset impairment	$	19,247		$	—	$	—	$	—		$	19,247
Income (loss) from operations	$	313,643		$	112,078	$	156,971	$	(46,978	)	$	535,714
Earnings of equity method investments	$	—		$	—	$	10,965	$	—		$	10,965
Capital expenditures	$	130,238		$	20,772	$	30,675	$	11,432		$	193,117

	Refining		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
September 30, 2018
Cash and cash equivalents	$	6,915	$	72,652	$	6,375	$	989,735	$	1,075,677
Total assets	$	7,044,358	$	1,498,586	$	2,146,124	$	806,058	$	11,495,126
Long-term debt	$	—	$	—	$	1,416,748	$	992,400	$	2,409,148
December 31, 2017
Cash and cash equivalents	$	7,488	$	41,756	$	7,776	$	573,737	$	630,757
Total assets	$	6,474,666	$	1,610,472	$	2,191,984	$	415,032	$	10,692,154
Long-term debt	$	—	$	—	$	1,507,308	$	991,685	$	2,498,993

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Description of Business and Presentation of Financial Statements (Policy)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Accounts Receivable

Accounts Receivable: Our accounts receivable consist of amounts due from customers that are primarily companies in the petroleum industry. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for doubtful accounts based on our historical loss experience as well as specific accounts identified as high risk, which historically have been minimal. Credit losses are charged to the allowance for doubtful accounts when an account is deemed uncollectible. Our allowance for doubtful accounts was $3.6 million at both September 30, 2018 and December 31, 2017.

Inventories

Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation.

Inventories of our Petro-Canada Lubricants business are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value.

Inventories consisting of process chemicals, materials and maintenance supplies and renewable identification numbers (“RINs”) are stated at the lower of weighted-average cost or net realizable value.

Goodwill and Long-lived Assets

Goodwill and Long-lived Assets: As of September 30, 2018, our goodwill balance was $2.3 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1.7 billion, $0.2 billion and $0.3 billion, respectively. See Note 15 for additional information on our segments. The carrying amount of our goodwill may fluctuate from period to period due to the effects of foreign currency translation adjustments on goodwill assigned to our Lubricants and Specialty Products segment. Goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing first entails a comparison of our reporting units fair values relative to their respective carrying values. If carrying value exceeds fair value for a reporting unit, we measure goodwill impairment as the excess of the carrying amount of reporting unit goodwill over the implied fair value of that goodwill based on estimates of the fair value of all assets and liabilities in the reporting unit.

We performed our annual goodwill impairment testing as of July 1, 2018 and determined there was no impairment of goodwill attributable to our reporting units.

Our long-lived assets principally consist of our refining assets that are organized as refining asset groups and our lubricants and specialty products business. Our long-lived assets are evaluated for impairment by identifying whether indicators of impairment exist and if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss measured, if any, is equal to the amount by which the asset group’s carrying value exceeds its fair value.

During the second quarter of 2017, we incurred long-lived asset impairment charges totaling $23.2 million, including $19.2 million of construction-in-progress consisting primarily of engineering work for a planned expansion of our Woods Cross refinery to add lubricants production capabilities. During the second quarter of 2017, we concluded to no longer pursue this expansion for various reasons including our acquisition of PCLI. The remaining $4.0 million in charges relate to property, plant and equipment that we expensed in the form of accelerated depreciation in the income statement.

Foreign Currency Translation

Foreign Currency Translation: The functional currency of PCLI and its affiliated non-U.S. Petro-Canada Lubricants entities includes the Canadian dollar, the euro and Chinese renminbi. Balance sheet accounts are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income.

In connection with our PCLI acquisition on February 1, 2017, we issued intercompany notes to initially fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of such intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the income statement. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to corporate and other. See Note 15 for additional information on our segments.

Income Taxes

Income Taxes: Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized.

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and creates new taxes on certain foreign-sourced earnings. At December 31, 2017 and through June 30, 2018, we had not completed our accounting for the tax effects of enactment of the Act; however in certain cases, we made a reasonable estimate of the effects on our existing deferred tax balances, the one-time transition tax and related matters.

During the three months ended September 30, 2018, we completed analysis of a significant portion of the accounting for the tax effects for which provisional adjustments were made during the fourth quarter of 2017 resulting in our recording in the third quarter of 2018 an additional tax benefit of $6.1 million. These adjustments to the previously recorded provisional amounts included the effects on existing deferred tax balances, the one-time transition tax and deferred U.S. taxes on foreign subsidiaries earnings and profits. Some states have not yet publicly commented and other state effects from the changes in the Act are still being analyzed, and the estimated value of the state deferred tax balances are based on existing law and state guidance.

Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.

Inventory Repurchase Obligations

Inventory Repurchase Obligations:We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. For the nine months ended September 30,2018 and 2017, we received proceeds of $38.4 million and $36.7 million, respectively, and repaid $39.3 million and $37.9 million, respectively, under these sell / buy transactions.

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

In February 2018, Accounting Standard Update (“ASU”) 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”),” was issued permitting a reclassification of stranded tax effects caused by the Tax Cuts and Jobs Act enacted on December 22, 2017 between AOCI and retained earnings. We adopted this standard effective in the first quarter of 2018 and recorded a cumulative effect adjustment of $3.6 million as an increase to AOCI and a decrease to retained earnings. During the three months ended September 30, 2018, we completed analysis of the accounting for the stranded tax effects on AOCI and recorded an additional $3.1 million as an increase to AOCI and a decrease to retained earnings.

Hedge Accounting

Hedge Accounting

In August 2017, ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” was issued amending hedge accounting recognition and presentation requirements, including elimination of the requirement to separately measure and report hedge ineffectiveness, and eases certain documentation and assessment requirements. We adopted this standard effective January 1, 2018 and recorded a cumulative effect adjustment of $0.1 million as a decrease to AOCI and an increase to retained earnings to eliminate the separate measurement of hedge ineffectiveness existing at the date of adoption. Our amended presentation and disclosures have been applied prospectively in Note 10.

Stock Compensation

Stock Compensation

In May 2017, ASU 2017-09, “Stock Compensation: Scope of Modification Accounting,” was issued to provide clarity to accounting for share-based payment awards in the event of a modification in the terms or conditions. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Post-retirement Benefit Cost

Post-retirement Benefit Cost

In March 2017, ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost,” was issued amending current GAAP related to the income statement presentation of the components of net periodic pension cost and net periodic post-retirement cost (credit). We adopted this standard effective January 1, 2018 on a retrospective basis with the presentation of service cost separate from the other components of net periodic costs. The interest cost, expected return on plan assets and amortization of prior service credit have been reclassified from selling, general and administrative expenses to other, net. The adoption of this standard had no impact on our financial condition, results of operations or cash flows.

The effect of the retrospective presentation change related to the net periodic cost / benefit of our defined benefit pension and other post-retirement plans on our consolidated income statement was as follows:

	Three Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	2,888,530	$	19	$	2,888,549
Operating expenses	$	321,668	$	609	$	322,277
Selling, general and administrative expenses	$	68,013	$	239	$	68,252
Other, net	$	286	$	867	$	1,153

	Nine Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	8,283,127	$	56	$	8,283,183
Operating expenses	$	944,437	$	1,827	$	946,264
Selling, general and administrative expenses	$	184,659	$	644	$	185,303
Other, net	$	23	$	2,527	$	2,550

Business Combinations

Business Combinations

In January 2017, ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business,” was issued clarifying the definition of a business with the objective of providing guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Cash Flow Presentation

Cash Flow Presentation

In August 2016, ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” was issued clarifying how entities should classify certain cash receipts and cash payments in the statements of cash flows and amends certain disclosure requirements. We adopted this standard effective January 1, 2018, which did not affect our financial position, results of operations or cash flows.

Revenue Recognition

Revenue Recognition

In May 2014, ASU 2014-09 “Revenue from Contracts with Customers” was issued requiring revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the expected consideration for these goods or services. We adopted this standard effective January 1, 2018, and therefore, conformed our revenue recognition policies for certain lubricant product sales agreements with U.S. and European marketers and distributors that provide rights of return provisions under which we repurchase such products and sell directly to end customers. Prior to January 1, 2018, we recognized revenues and costs, net of allowances for expected returns under such agreements when such products were shipped to U.S. and European distributors. Effective with the adoption of ASU 2014-09, revenues and related product costs are no longer recognized when products are shipped to distributors, but rather, revenues and costs are recognized in earnings only when such products are ultimately sold to end customers.

We adopted this standard using the modified retrospective method, whereby the cumulative effect of applying the new standard was recorded as an adjustment to the opening balance of retained earnings as well as the carrying amounts of assets and liabilities as of January 1, 2018, which had no impact on our cash flows. The following reflects the cumulative effect of adoption as of January 1, 2018.

	Prior to Adoption		Increase (Decrease)			As Adjusted
	(In thousands)
Accounts receivable: Product and transportation	$	659,530	$	(8,198	)	$	651,332
Inventories: Crude oil and refined products	$	1,409,538	$	5,124		$	1,414,662
Accounts payable	$	1,220,795	$	7,336		$	1,228,131
Deferred income taxes	$	647,785	$	(2,963	)	$	644,822
Retained earnings	$	3,346,615	$	(7,447	)	$	3,339,168

See Note 3 for disclosure of revenues from contracts with customers.

New Accounting Pronouncements

Accounting Pronouncements - Not Yet Adopted

Leases

In February 2016, ASU 2016-02, “Leases,” was issued requiring leases to be measured and recognized as a lease liability, with a corresponding right-of-use asset on the balance sheet. This standard has an effective date of January 1, 2019, and we are evaluating the impact of this standard. We plan to apply practical expedients provided in the standards update that allow us, among other things, not to reassess contracts that commenced prior to adoption. In preparing for adoption, we have identified, reviewed and evaluated contracts containing lease and embedded lease arrangements. Additionally, we have acquired and are finalizing implementation of software and systems to facilitate lease capture and related accounting treatment.

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Revenues from Contracts with Customers Revenue Recognition (Policies)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition, Deferred Revenue [Policy Text Block]

Revenue on refined product and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold. HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain long-term transportation contracts that specify minimum volume requirements, whereby, HEP bills a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. A customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.

Our consolidated balance sheet reflects contract liabilities related to unearned revenues attributable to future service obligations under HEP’s third-party transportation agreements.

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Description of Business and Presentation of Financial Statements (Tables)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Costs of Retirement Plans

The effect of the retrospective presentation change related to the net periodic cost / benefit of our defined benefit pension and other post-retirement plans on our consolidated income statement was as follows:

	Three Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	2,888,530	$	19	$	2,888,549
Operating expenses	$	321,668	$	609	$	322,277
Selling, general and administrative expenses	$	68,013	$	239	$	68,252
Other, net	$	286	$	867	$	1,153

	Nine Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	8,283,127	$	56	$	8,283,183
Operating expenses	$	944,437	$	1,827	$	946,264
Selling, general and administrative expenses	$	184,659	$	644	$	185,303
Other, net	$	23	$	2,527	$	2,550

The net periodic pension expense of these plans consisted of the following components:

	Three Months Ended September 30,						Nine Months Ended September 30,			February 1 to September 30,
	2018			2017			2018			2017
	(in thousands)
Service cost - benefit earned during the period	$	1,093		$	1,013		$	3,337		$	2,596
Interest cost on projected benefit obligations	556			556			1,698			1,424
Expected return on plan assets	(856		)	(802		)	(2,615		)	(2,053		)
Net periodic pension expense	$	793		$	767		$	2,420		$	1,967

Schedule of Adoption of Revenue Recognition Accounting Policy on Financial Statements

The following reflects the cumulative effect of adoption as of January 1, 2018.

	Prior to Adoption		Increase (Decrease)			As Adjusted
	(In thousands)
Accounts receivable: Product and transportation	$	659,530	$	(8,198	)	$	651,332
Inventories: Crude oil and refined products	$	1,409,538	$	5,124		$	1,414,662
Accounts payable	$	1,220,795	$	7,336		$	1,228,131
Deferred income taxes	$	647,785	$	(2,963	)	$	644,822
Retained earnings	$	3,346,615	$	(7,447	)	$	3,339,168

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Revenues from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregated Revenues

Disaggregated revenues are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	3,598,815	$	2,839,543	$	10,193,218	$	7,910,289
Specialty lubricant products (2)	422,760		369,822		1,237,002		1,054,161
Asphalt, fuel oil and other products (3)	288,013		201,596		741,139		539,526
Total refined product revenues	4,309,588		3,410,961		12,171,359		9,503,976
Excess crude oil revenues (4)	422,122		277,810		1,074,928		658,117
Transportation and logistic services	25,596		15,227		77,799		47,826
Other revenues (5)	13,493		15,249		46,376		48,675
Total sales and other revenues	$	4,770,799	$	3,719,247	$	13,370,462	$	10,258,594

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Refined product revenues by market
North America
Mid-Continent	$	2,337,689	$	1,748,044	$	6,458,935	$	5,111,301
Southwest	1,016,771		842,347		2,865,324		2,100,850
Rocky Mountains	627,542		528,380		1,869,414		1,489,203
Northeast	85,344		66,467		261,380		189,039
Canada	190,727		177,767		563,088		486,380
Europe and Asia	51,515		47,956		153,218		127,203
Total refined product revenues	$	4,309,588	$	3,410,961	$	12,171,359	$	9,503,976

(1) Transportation fuels consist of gasoline, diesel and jet fuel.

(2) Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

(3) Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of $234,887 and $53,126, respectively, for the three months ended September 30, 2018, $158,344 and $43,252, respectively, for the three months ended September 30, 2017, $589,726 and $151,413, respectively, for the nine months ended September 30, 2018, and $415,344 and $124,182, respectively, for the nine months ended September 30, 2017.

(4) Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.

(5) Other revenues are principally attributable to our Refining segment.

Schedule of Changes to Contract Liabilities

The following table presents changes to our contract liabilities during the nine months ended September 30, 2018.

	January 1, 2018		Increase		Recognized as Revenue			September 30, 2018
	(In thousands)
Accrued liabilities	$	179	$	5,269	$	(1,746	)	$	3,702

Schedules of Future Performance Obligations and Minimum Revenue Obligations

Annual minimum revenues attributable to HEP’s third-party contracts as of September 30, 2018 are presented below:

	Remainder of 2018		2019		2020		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	10,437	$	41,863	$	18,040	$	12,553	$	82,893

Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:

	Remainder of 2018	2019	2020	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	6,546	20,013	777	164	27,500

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Financial Instruments, Owned, at Fair Value [Abstract]

Fair Value Measurements Of Asset and Liability Instruments

The carrying amounts of derivative instruments and RINs credit obligations at September 30, 2018 and December 31, 2017 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
September 30, 2018
Assets:
Foreign currency forward contracts	$	9,137	$	—	$	9,137	$	—
Commodity price swaps	1,565		—		1,565		—
Commodity forward contracts	25		—		25		—
Total assets	$	10,727	$	—	$	10,727	$	—
Liabilities:
NYMEX futures contracts	$	8,854	$	8,854	$	—	$	—
Commodity price swaps	1,615		—		1,615		—
Commodity forward contracts	4		—		4		—
RINs credit obligations (1)	5,221		—		5,221		—
Total liabilities	$	15,694	$	8,854	$	6,840	$	—

December 31, 2017
Assets:
Commodity forward contracts	$	3,840	$	—	$	3,840	$	—
Total assets	$	3,840	$	—	$	3,840	$	—
Liabilities:
NYMEX futures contracts	$	3,360	$	3,360	$	—	$	—
Commodity price swaps	2,424		—		2,424		—
Commodity forward contracts	1,020		—		1,020		—
RINs credit obligations (1)	8,931		—		8,931		—
Total liabilities	$	15,735	$	3,360	$	12,375	$	—

(1) Represent obligations for RINs credits for which we do not have sufficient quantities at September 30, 2018 and December 31, 2017 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share

The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HollyFrontier stockholders:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands, except per share data)
Net income attributable to HollyFrontier stockholders	$	342,466	$	272,014	$	956,064	$	284,313
Participating securities’ (restricted stock) share in earnings	1,171		1,735		3,321		1,822
Net income attributable to common shares	$	341,295	$	270,279	$	952,743	$	282,491
Average number of shares of common stock outstanding	175,097		176,149		175,865		176,143
Effect of dilutive variable restricted shares andperformance share units (1)	1,830		381		1,692		473
Average number of shares of common stock outstanding assuming dilution	176,927		176,530		177,557		176,616
Basic earnings per share	$	1.95	$	1.53	$	5.42	$	1.60
Diluted earnings per share	$	1.93	$	1.53	$	5.37	$	1.60
(1) Excludes anti-dilutive restricted and performance share units of:	—		104		2		120

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Share-based Compensation [Abstract]

Summary Of Restricted Stock Activity

A summary of restricted stock and restricted stock unit activity and changes during the nine months ended September 30, 2018 is presented below:

Restricted Stock and Restricted Stock Units	Grants		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2018 (non-vested)	1,726,188		$	33.51
Granted	32,583		55.85
Vesting (transfer/conversion to common stock)	(29,656	)	31.49
Forfeited	(103,488	)	34.45
Outstanding at September 30, 2018 (non-vested)	1,625,627		33.94		$	113,631

Summary Of Performance Share Unit Activity

A summary of performance share unit activity and changes during the nine months ended September 30, 2018 is presented below:

Performance Share Units	Grants
Outstanding at January 1, 2018 (non-vested)	692,661
Forfeited	(44,008	)
Outstanding at September 30, 2018 (non-vested)	648,653

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Inventories (Tables)

9 Months Ended

Sep. 30, 2018

Inventory, Net [Abstract]

Inventory Components

Inventory consists of the following components:

	September 30, 2018			December 31, 2017
	(In thousands)
Crude oil	$	529,252		$	581,417
Other raw materials and unfinished products(1)	383,953			396,618
Finished products(2)	753,562			655,336
Lower of cost or market reserve	(30,906		)	(223,833		)
Process chemicals(3)	35,259			24,792
Repair and maintenance supplies and other (4)	191,380			195,762
Total inventory	$	1,862,500		$	1,630,092

(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.

(4) Includes RINs.

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Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Carrying Amounts Of Long-Term Debt

The carrying amounts of long-term debt are as follows:

	September 30, 2018			December 31, 2017
	(In thousands)
HollyFrontier 5.875% Senior Notes
Principal	$	1,000,000		$	1,000,000
Unamortized discount and debt issuance costs	(7,600		)	(8,315		)
	992,400			991,685
HEP Credit Agreement	921,000			1,012,000
HEP 6% Senior Notes
Principal	500,000			500,000
Unamortized discount and debt issuance costs	(4,252		)	(4,692		)
	495,748			495,308
Total HEP long-term debt	1,416,748			1,507,308
Total long-term debt	$	2,409,148		$	2,498,993

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The fair values of the senior notes are as follows:

	September 30, 2018		December 31, 2017
	(In thousands)
HollyFrontier senior notes	$	1,065,980	$	1,113,470
HEP senior notes	$	512,840	$	525,120

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Derivative Instruments And Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of derivatives designated as hedging instruments under hedge accounting:

	Unrealized Gain (Loss) Recognized in OCI					Gain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Three Months Ended September 30,					Income Statement Location	Three Months Ended September 30,
	2018		2017				2018			2017
	(In thousands)
Commodity contracts	$	5,792	$	3,354		Sales and other revenues	$	(1,422	)	$	(488	)
						Operating expenses	(209		)	(4,961		)
Interest rate contracts (1)	—		(63		)	Interest expense	—			64
Total	$	5,792	$	3,291			$	(1,631	)	$	(5,385	)

	Unrealized Gain (Loss) Recognized in OCI					Gain (Loss) Reclassified into Earnings
Derivatives Designated as Cash Flow Hedging Instruments	Nine Months Ended September 30,					Income Statement Location	Nine Months Ended September 30,
	2018		2017				2018			2017
	(In thousands)
Commodity contracts	$	1,742	$	8,658		Sales and other revenues	$	(5,093	)	$	7,937
						Cost of products sold	—			(299		)
						Operating expenses	(945		)	(13,676		)
Interest rate contracts (1)	—		(91		)	Interest expense	—			179
Total	$	1,742	$	8,567			$	(6,038	)	$	(5,859	)

(1) HEP used interest rate swap contracts to manage its exposure to interest rate risk, which matured in July 2017.

Schedule of Realized Gain (Loss)

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
		(In thousands)
Commodity contracts	Cost of products sold	$	(8,252	)	$	(10,632	)	$	(20,580	)	$	3,403
	Operating expenses	—			(629		)	—			(6,392		)
Foreign currency contracts	Gain on foreign currency transactions	(7,052		)	—			18,504			—
	Gain on foreign currency swap contracts (1)	—			—			—			24,545
	Total	$	(15,304	)	$	(11,261	)	$	(2,076	)	$	21,556

(1) Relates to Canadian currency swap contracts that settled on February 1, 2017 and effectively fixed the conversion rate on our PCLI purchase price.

Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges

As of September 30, 2018, we have the following notional contract volumes related to outstanding derivative instruments:

			Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional		2018		2019		2020	2021	Unit of Measure
Derivatives Designated as Hedging Instruments
Natural gas price swaps - long	5,850,000		450,000		1,800,000		1,800,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	4,388,000		—		1,460,000		2,928,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	2,303,000		2,102,000		201,000		—	—	Barrels
WTI and sub-octane gasoline crack spread swaps - short	400,000		400,000		—		—	—	Barrels
Forward gasoline contracts - long	25,000		25,000		—		—	—	Barrels
Foreign currency forward contracts	$	446,361,369	$	113,632,223	$	332,729,146	—	—	U.S. Dollar

Schedule of Fair Value and Balance Sheet Location of Outstanding Derivatives

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet			Net Liabilities Recognized in Balance Sheet
			(In thousands)
September 30, 2018
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	1,565	$	—	$	1,565	$	3,243	$	(2,114	)	$	1,129
	$	1,565	$	—	$	1,565	$	3,243	$	(2,114	)	$	1,129
Derivatives not designated as cash flow hedging instruments:
Foreign exchange forward contracts	$	9,137	$	—	$	9,137	$	—	$	—		$	—
NYMEX futures contracts	—		—		—		8,854		—			8,854
Commodity price swap contracts	—		—		—		1,288		(802		)	486
Commodity forward contracts	25		—		25		4		—			4
	$	9,162	$	—	$	9,162	$	10,146	$	(802	)	$	9,344
Total net balance					$	10,727						$	10,473
Balance sheet classification:	Prepayment and other				$	9,162	Accrued liabilities					$	10,332
	Intangibles and other				1,565		Other long-term liabilities					141
					$	10,727						$	10,473

	Derivatives in Net Asset Position						Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet		Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2017
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	2,424	$	—	$	2,424
Commodity forward contracts	3,067		—		3,067		418		—		418
	$	3,067	$	—	$	3,067	$	2,842	$	—	$	2,842
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—	$	—	$	3,360	$	—	$	3,360
Commodity forward contracts	773		—		773		602		—		602
	$	773	$	—	$	773	$	3,962	$	—	$	3,962
Total net balance					$	3,840					$	6,804
Balance sheet classification:							Accrued liabilities				$	5,365
							Other long-term liabilities				1,439
	Prepayment and other				$	3,840					$	6,804

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Equity (Tables)

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Changes To Equity

Changes to equity during the nine months ended September 30, 2018 are presented below:

	HollyFrontier Stockholders’ Equity			Noncontrolling Interest			Total Equity
	(In thousands)
Balance at December 31, 2017	$	5,370,829		$	526,111		$	5,896,940
Net income	956,064			57,843			1,013,907
Dividends	(175,921		)	—			(175,921		)
Distributions to noncontrolling interest holders	—			(93,128		)	(93,128		)
Other comprehensive loss, net of tax	(3,963		)	—			(3,963		)
Allocated equity on HEP common unit issuances, net of tax	42,198			58,202			100,400
Equity-based compensation	23,840			2,256			26,096
Purchase of treasury stock (1)	(186,632		)	—			(186,632		)
Purchase of HEP units for restricted grants	—			(58		)	(58		)
Adoption of accounting standards	(14,129		)	—			(14,129		)
Balance at September 30, 2018	$	6,012,286		$	551,226		$	6,563,512

(1) Includes 12,593 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.

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Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2018

Other Comprehensive Income (Loss) [Abstract]

Components And Allocated Tax Effects Of Other Comprehensive Income (Loss)

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax			Tax Expense (Benefit)			After-Tax
	(In thousands)
Three Months Ended September 30, 2018
Net change in foreign currency translation adjustment	$	8,325		$	(1,354	)	$	9,679
Net unrealized gain on hedging instruments	5,792			1,478			4,314
Other comprehensive income attributable to HollyFrontier stockholders	$	14,117		$	124		$	13,993
Three Months Ended September 30, 2017
Net change in foreign currency translation adjustment	$	16,702		$	5,851		$	10,851
Net unrealized gain on hedging instruments	3,291			1,289			2,002
Other comprehensive income	19,993			7,140			12,853
Less other comprehensive loss attributable to noncontrolling interest	(40		)	—			(40		)
Other comprehensive income attributable to HollyFrontier stockholders	$	20,033		$	7,140		$	12,893
Nine Months Ended September 30, 2018
Net change in foreign currency translation adjustment	$	(15,118	)	$	(6,304	)	$	(8,814	)
Net unrealized gain on hedging instruments	1,742			625			1,117
Net change in pension and other post-retirement benefit obligations	—			(3,734		)	3,734
Other comprehensive loss attributable to HollyFrontier stockholders	$	(13,376	)	$	(9,413	)	$	(3,963	)
Nine Months Ended September 30, 2017
Net change in foreign currency translation adjustment	$	24,287		$	8,505		$	15,782
Net unrealized loss on marketable securities	(4		)	(1		)	(3		)
Net unrealized gain on hedging instruments	8,567			3,337			5,230
Other comprehensive income	32,850			11,841			21,009
Less other comprehensive loss attributable to noncontrolling interest	(57		)	—			(57		)
Other comprehensive income attributable to HollyFrontier stockholders	$	32,907		$	11,841		$	21,066

Reclassifications from Other Comprehensive Income to Income Statement

The following table presents the income statement line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI						Income Statement Line Item
	(In thousands)
	Three Months Ended September 30,
	2018			2017
Hedging instruments:
Commodity price swaps	$	(1,422	)	$	(488	)	Sales and other revenues
	(209		)	(4,961		)	Operating expenses
Interest rate swaps	—			64			Interest expense
	(1,631		)	(5,385		)
	(416		)	(2,100		)	Income tax benefit
	(1,215		)	(3,285		)	Net of tax
	—			(41		)	Noncontrolling interest
Total reclassifications for the period	$	(1,215	)	$	(3,326	)	Net of tax and noncontrolling interest
	Nine Months Ended September 30,
	2018			2017
Hedging instruments:
Commodity price swaps	$	(5,093	)	$	7,937		Sales and other revenues
	—			(299		)	Cost of products sold
	(945		)	(13,676		)	Operating expenses
Interest rate swaps	—			179			Interest expense
	(6,038		)	(5,859		)
	(1,540		)	(2,312		)	Income tax benefit
	(4,498		)	(3,547		)	Net of tax
	—			(114		)	Noncontrolling interest
Total reclassifications for the period	$	(4,498	)	$	(3,661	)	Net of tax and noncontrolling interest

Accumulated Other Comprehensive Loss In Equity

Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes:

	September 30, 2018			December 31, 2017
	(In thousands)
Foreign currency translation adjustment	$	5,563		$	14,377
Unrealized loss on pension obligation	(692		)	(654		)
Unrealized gain on post-retirement benefit obligations	20,711			16,939
Unrealized gain (loss) on hedging instruments	324			(793		)
Accumulated other comprehensive income	$	25,906		$	29,869

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Post-retirement Plan (Tables)

9 Months Ended

Sep. 30, 2018

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Schedule of Costs of Retirement Plans

The effect of the retrospective presentation change related to the net periodic cost / benefit of our defined benefit pension and other post-retirement plans on our consolidated income statement was as follows:

	Three Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	2,888,530	$	19	$	2,888,549
Operating expenses	$	321,668	$	609	$	322,277
Selling, general and administrative expenses	$	68,013	$	239	$	68,252
Other, net	$	286	$	867	$	1,153

	Nine Months Ended September 30, 2017
Income Statement	Prior to Adoption		Increase		As Adjusted
	(In thousands)
Cost of products sold	$	8,283,127	$	56	$	8,283,183
Operating expenses	$	944,437	$	1,827	$	946,264
Selling, general and administrative expenses	$	184,659	$	644	$	185,303
Other, net	$	23	$	2,527	$	2,550

The net periodic pension expense of these plans consisted of the following components:

	Three Months Ended September 30,						Nine Months Ended September 30,			February 1 to September 30,
	2018			2017			2018			2017
	(in thousands)
Service cost - benefit earned during the period	$	1,093		$	1,013		$	3,337		$	2,596
Interest cost on projected benefit obligations	556			556			1,698			1,424
Expected return on plan assets	(856		)	(802		)	(2,615		)	(2,053		)
Net periodic pension expense	$	793		$	767		$	2,420		$	1,967

Net Periodic Pension Expense

The net periodic benefit credit of these plans consisted of the following components:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands)
Service cost – benefit earned during the period	$	411		$	380		$	1,238		$	1,106
Interest cost on projected benefit obligations	234			250			705			714
Amortization of prior service credit	(870		)	(870		)	(2,611		)	(2,610		)
Net periodic post-retirement credit	$	(225	)	$	(240	)	$	(668	)	$	(790	)

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule Of Segment Reporting Information

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Three Months Ended September 30, 2018
Sales and other revenues:
Revenues from external customers	$	4,270,835		$	474,260		$	25,596	$	108		$	4,770,799
Intersegment revenues	101,334			1,626			100,188		(203,148		)	—
	$	4,372,169		$	475,886		$	125,784	$	(203,040	)	$	4,770,799
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,572,593		$	359,742		$	—	$	(180,101	)	$	3,752,234
Lower of cost or market inventory valuation adjustment	$	17,837		$	—		$	—	$	—		$	17,837
Operating expenses	$	262,010		$	40,288		$	35,995	$	(21,097	)	$	317,196
Selling, general and administrative expenses	$	30,394		$	33,514		$	2,498	$	4,724		$	71,130
Depreciation and amortization	$	70,793		$	11,139		$	24,367	$	2,586		$	108,885
Income (loss) from operations	$	418,542		$	31,203		$	62,924	$	(9,152	)	$	503,517
Earnings of equity method investments	$	—		$	—		$	1,114	$	—		$	1,114
Capital expenditures	$	47,088		$	8,094		$	9,541	$	5,214		$	69,937
Three Months Ended September 30, 2017
Sales and other revenues:
Revenues from external customers	$	3,291,417		$	413,074		$	15,227	$	(471	)	$	3,719,247
Intersegment revenues	82,705			—			95,137		(177,842		)	—
	$	3,374,122		$	413,074		$	110,364	$	(178,313	)	$	3,719,247
Cost of products sold (exclusive of lower of cost or market inventory)	$	2,774,722		$	270,279		$	—	$	(156,452	)	$	2,888,549
Lower of cost or market inventory valuation adjustment	$	(109,690	)	$	(1,438	)	$	—	$	—		$	(111,128	)
Operating expenses	$	246,409		$	59,726		$	36,061	$	(19,919	)	$	322,277
Selling, general and administrative expenses	$	26,582		$	30,796		$	3,626	$	7,248		$	68,252
Depreciation and amortization	$	74,070		$	7,734		$	18,601	$	2,479		$	102,884
Income (loss) from operations	$	362,029		$	45,977		$	52,076	$	(11,669	)	$	448,413
Earnings of equity method investments	$	—		$	—		$	5,072	$	—		$	5,072
Capital expenditures	$	30,979		$	9,815		$	10,151	$	5,122		$	56,067

	Refining			Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Nine Months Ended September 30, 2018
Sales and other revenues:
Revenues from external customers	$	11,915,797		$	1,376,531	$	77,799	$	335		$	13,370,462
Intersegment revenues	284,538			11,884		295,629		(592,051		)	—
	$	12,200,335		$	1,388,415	$	373,428	$	(591,716	)	$	13,370,462
Cost of products sold (exclusive of lower of cost or market inventory)	$	10,179,509		$	1,040,414	$	—	$	(524,648	)	$	10,695,275
Lower of cost or market inventory valuation adjustment	$	(192,927	)	$	—	$	—	$	—		$	(192,927	)
Operating expenses	$	764,415		$	125,101	$	106,731	$	(62,548	)	$	933,699
Selling, general and administrative expenses	$	82,966		$	99,425	$	8,293	$	13,785		$	204,469
Depreciation and amortization	$	210,957		$	30,023	$	74,117	$	8,508		$	323,605
Income (loss) from operations	$	1,155,415		$	93,452	$	184,287	$	(26,813	)	$	1,406,341
Earnings of equity method investments	$	—		$	—	$	4,127	$	—		$	4,127
Capital expenditures	$	132,050		$	23,138	$	41,111	$	12,779		$	209,078
Nine Months Ended September 30, 2017
Sales and other revenues:
Revenues from external customers	$	9,033,148		$	1,178,343	$	47,826	$	(723	)	$	10,258,594
Intersegment revenues	268,208			—		277,315		(545,523		)	—
	$	9,301,356		$	1,178,343	$	325,141	$	(546,246	)	$	10,258,594
Cost of products sold (exclusive of lower of cost or market inventory)	$	7,949,813		$	818,981	$	—	$	(485,611	)	$	8,283,183
Lower of cost or market inventory valuation adjustment	$	(15,365	)	$	42	$	—	$	—		$	(15,323	)
Operating expenses	$	743,493		$	154,795	$	102,773	$	(54,797	)	$	946,264
Selling, general and administrative expenses	$	71,591		$	71,877	$	8,882	$	32,953		$	185,303
Depreciation and amortization	$	218,934		$	20,570	$	56,515	$	8,187		$	304,206
Asset impairment	$	19,247		$	—	$	—	$	—		$	19,247
Income (loss) from operations	$	313,643		$	112,078	$	156,971	$	(46,978	)	$	535,714
Earnings of equity method investments	$	—		$	—	$	10,965	$	—		$	10,965
Capital expenditures	$	130,238		$	20,772	$	30,675	$	11,432		$	193,117

	Refining		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
September 30, 2018
Cash and cash equivalents	$	6,915	$	72,652	$	6,375	$	989,735	$	1,075,677
Total assets	$	7,044,358	$	1,498,586	$	2,146,124	$	806,058	$	11,495,126
Long-term debt	$	—	$	—	$	1,416,748	$	992,400	$	2,409,148
December 31, 2017
Cash and cash equivalents	$	7,488	$	41,756	$	7,776	$	573,737	$	630,757
Total assets	$	6,474,666	$	1,610,472	$	2,191,984	$	415,032	$	10,692,154
Long-term debt	$	—	$	—	$	1,507,308	$	991,685	$	2,498,993

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Description of Business and Presentation of Financial Statements (Details) $ in Thousands			3 Months Ended				9 Months Ended
	Aug. 01, 2018 USD ($)	Feb. 01, 2017 USD ($)	Sep. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Petroleum_Refineries mi	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Oct. 31, 2017 USD ($)
Ownership Interest By Project Type [Line Items]
Effective Income Tax Rate Under The Tax Cuts and Jobs Act of 2017									21.00%
Tax Cuts And Jobs Act Of 2017, Reclassification From AOCI To Retained Earnings			$ 3,100	$ 3,600
Tangible Asset Impairment Charges						$ 4,000
Number of refineries located in Tulsa, Oklahoma | Petroleum_Refineries							2
Refinery Distance From Main City [Miles] | mi							65
Business Acquisition, Percentage of Voting Interests Acquired			100.00%				100.00%
Payments to Acquire Businesses, Gross	$ 54,100	$ 862,100
Assets Acquired - Current Assets	12,600									$ 5,200
Assets Acquired - Property, Plant, and Equipment	21,300									$ 275,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	9,700
Business Acquisition, Goodwill, Expected Tax Deductible Amount	11,200
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable	$ 700
Purchase Price Canadian Dollars		$ 1,125,000
Allowance for doubtful accounts reserve			$ 3,600				$ 3,600		$ 3,600
Goodwill			$ 2,255,541				2,255,541		2,244,744
Other Asset Impairment Charges						23,200
Proceeds from inventory repurchase agreements							38,400	$ 36,700
Payments under inventory repurchase agreements							(39,300)	(37,900)
Cash Flow Hedge Ineffectiveness Adjustment			54
Asset Impairment Charges						$ 19,200		19,247
Goodwill and Intangible Asset Impairment			$ 0		$ 0		$ 0	19,247
Unrecognized Tax Benefits, Period Increase (Decrease)			6,100
HEP
Ownership Interest By Project Type [Line Items]
Percentage of ownership in variable interest entity							57.00%
Goodwill			314,229				$ 314,229		$ 310,610
Refining
Ownership Interest By Project Type [Line Items]
Goodwill			1,700,000				1,700,000
Asset Impairment Charges								19,247
Lubricants and other specialty products
Ownership Interest By Project Type [Line Items]
Goodwill			200,000				200,000
Asset Impairment Charges								0
HEP
Ownership Interest By Project Type [Line Items]
Goodwill			$ 300,000				$ 300,000
Asset Impairment Charges								$ 0

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Description of Business and Presentation of Financials Statements - Impact of Adoption on Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cost of products sold	$ 3,752,234	[1]	$ 2,888,549	$ 10,695,275	$ 8,283,183
Operating expenses	317,196	[1]	322,277	933,699	946,264
Selling, general and administrative expenses	71,130		68,252	204,469	185,303
Other, net	$ 741		1,153	$ 3,451	2,550
Prior to Adoption
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cost of products sold			2,888,530		8,283,127
Operating expenses			321,668		944,437
Selling, general and administrative expenses			68,013		184,659
Other, net			286		23
Restatement Adjustment | Accounting Standards Update 2017-07
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cost of products sold			19		56
Operating expenses			609		1,827
Selling, general and administrative expenses			239		644
Other, net			$ 867		$ 2,527

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Description of Business and Presentation of Financial Statements - Impact of Adoption, Cumulative Effect on Financials (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable: Product and transportation	$ 828,629	$ 651,332	$ 659,530
Inventories: Crude oil and refined products	1,635,861	1,414,662	1,409,538
Accounts payable	1,176,417	1,228,131	1,220,795
Deferred income taxes (HEP: $558 and $525, respectively)	755,561	644,822	647,785
Retained earnings	$ 4,112,629	$ 3,339,168	3,346,615
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable: Product and transportation			(8,198)
Inventories: Crude oil and refined products			5,124
Accounts payable			7,336
Deferred income taxes (HEP: $558 and $525, respectively)			(2,963)
Retained earnings			(7,447)
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable: Product and transportation			659,530
Inventories: Crude oil and refined products			1,409,538
Accounts payable			1,220,795
Deferred income taxes (HEP: $558 and $525, respectively)			647,785
Retained earnings			$ 3,346,615

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Holly Energy Partners (Details) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended		29 Months Ended
	Oct. 31, 2017 USD ($)	Sep. 30, 2018 USD ($) yr $ / shares shares	Sep. 30, 2018 USD ($) yr Customers $ / shares shares	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) yr $ / shares shares	Aug. 01, 2018 USD ($)
Holly Energy Partners Entity [Line Items]
Equity Method Investment, Ownership Percentage		50.00%	50.00%		50.00%
Business Acquisition Purchase Price	$ 250,000
Step Acquisition, Equity Interest in Acquiree	112,000
Contingency, Amount of Settlement		$ 1,800	$ 1,800		$ 1,800
Business Combination Remeasurement Gain	36,300
Business Combination, Consideration Transferred	363,800
Assets Acquired - Cash and Equivalents	4,600
Assets Acquired - Current Assets	5,200					$ 12,600
Assets Acquired - Property, Plant, and Equipment	275,000					$ 21,300
Assets Acquired - Intangible Assets	70,200
Goodwill, Gross	13,800
Liabilities Assumed - Current Liabilities	$ 5,000
Partners' Capital Account, Units, Sold in Private Placement | shares		3,700,000
Common Unit Issuance Program			$ 200,000
Common Stock, Shares, Issued | shares			171,246		2,413,153
Proceeds from Issuance of Common Stock		$ 5,200
Proceeds from issuance of common units - HEP			$ 114,887	$ 52,285	$ 82,300
Shares Issued, Price Per Share | $ / shares		$ 29.73	$ 29.73		$ 29.73
Proceeds from Issuance of Private Placement		$ 110,000
HEP
Holly Energy Partners Entity [Line Items]
Percentage of ownership in variable interest entity			57.00%
HEP number of significant customers | Customers			2
HFC Percentage of HEP Revenues			79.00%
Long-term Purchase Commitment with HEP, Amount			$ 335,000
UNEV Pipeline [Member]
Holly Energy Partners Entity [Line Items]
Equity Method Investment, Ownership Percentage		75.00%	75.00%		75.00%
Osage Pipeline [Member] [Member]
Holly Energy Partners Entity [Line Items]
Equity Method Investment, Ownership Percentage		50.00%	50.00%		50.00%
Frontier Pipeline [Member]
Holly Energy Partners Entity [Line Items]
Equity Method Investment, Ownership Percentage		50.00%	50.00%		50.00%
Minimum [Member]
Holly Energy Partners Entity [Line Items]
Purchase Commitments Expiration Dates | yr		2,019	2,019		2,019
Maximum [Member]
Holly Energy Partners Entity [Line Items]
Purchase Commitments Expiration Dates | yr		2,036	2,036		2,036

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Revenues from Contracts with Customers - Schedule of Disaggregated Revenues (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Sales and other revenues		$ 4,770,799	$ 3,719,247	$ 13,370,462	$ 10,258,594
Mid-Continent
Disaggregation of Revenue [Line Items]
Sales and other revenues		2,337,689	1,748,044	6,458,935	5,111,301
Southwest
Disaggregation of Revenue [Line Items]
Sales and other revenues		1,016,771	842,347	2,865,324	2,100,850
Rocky Mountains
Disaggregation of Revenue [Line Items]
Sales and other revenues		627,542	528,380	1,869,414	1,489,203
Northeast
Disaggregation of Revenue [Line Items]
Sales and other revenues		85,344	66,467	261,380	189,039
Canada
Disaggregation of Revenue [Line Items]
Sales and other revenues		190,727	177,767	563,088	486,380
Europe and Asia
Disaggregation of Revenue [Line Items]
Sales and other revenues		51,515	47,956	153,218	127,203
Transportation fuels
Disaggregation of Revenue [Line Items]
Sales and other revenues	[1]	3,598,815	2,839,543	10,193,218	7,910,289
Specialty lubricant products
Disaggregation of Revenue [Line Items]
Sales and other revenues	[2]	422,760	369,822	1,237,002	1,054,161
Asphalt, fuel oil and other products (3)
Disaggregation of Revenue [Line Items]
Sales and other revenues	[3]	288,013	201,596	741,139	539,526
Total refined product revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues		4,309,588	3,410,961	12,171,359	9,503,976
Excess crude oil revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues	[4]	422,122	277,810	1,074,928	658,117
Transportation and logistic services
Disaggregation of Revenue [Line Items]
Sales and other revenues		25,596	15,227	77,799	47,826
Other revenues (5)
Disaggregation of Revenue [Line Items]
Sales and other revenues	[5]	13,493	15,249	46,376	48,675
Refining
Disaggregation of Revenue [Line Items]
Sales and other revenues		4,270,835	3,291,417	11,915,797	9,033,148
Refining | Asphalt, fuel oil and other products (3)
Disaggregation of Revenue [Line Items]
Sales and other revenues		234,887	158,344	589,726	415,344
Lubricants and other specialty products
Disaggregation of Revenue [Line Items]
Sales and other revenues		474,260	413,074	1,376,531	1,178,343
Lubricants and other specialty products | Asphalt, fuel oil and other products (3)
Disaggregation of Revenue [Line Items]
Sales and other revenues		$ 53,126	$ 43,252	$ 151,413	$ 124,182

[1] Transportation fuels consist of gasoline, diesel and jet fuel.

[2] Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

[3] Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of $234,887 and $53,126, respectively, for the three months ended September 30, 2018, $158,344 and $43,252, respectively, for the three months ended September 30, 2017, $589,726 and $151,413, respectively, for the nine months ended September 30, 2018, and $415,344 and $124,182, respectively, for the nine months ended September 30, 2017.

[4] Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.

[5] Other revenues are principally attributable to our Refining segment.

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Revenues from Contracts with Customers - Contract Liabilities Rollforward (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Change In Contract With Customer, Liability [Roll Forward]
Accrued liabilities, Beginning of Period	$ 179
Increase	5,269
Recognized as Revenue	(1,746)
Accrued liabilities, End of Period	$ 3,702

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Revenues from Contracts with Customers - HEP Future Performance Obligations (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Refined product sales volumes, performance obligations expected to be satisfied, expected timing	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Refined product sales volumes, performance obligations expected to be satisfied	$ 6,546
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Refined product sales volumes, performance obligations expected to be satisfied	$ 20,013
Refined product sales volumes, performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Refined product sales volumes, performance obligations expected to be satisfied	$ 777
Refined product sales volumes, performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Refined product sales volumes, performance obligations expected to be satisfied	$ 164
Refined product sales volumes, performance obligations expected to be satisfied, expected timing
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Refined product sales volumes, performance obligations expected to be satisfied	$ 27,500

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Revenues from Contracts with Customers - HEP Third-Party Customer Minimum Revenues (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 6,546
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	10,437
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 20,013
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 41,863
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 777
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 18,040
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 164
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 12,553
HEP contractual minimum revenues, performance obligations expected to be satisfied, expected timing
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 27,500
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 82,893

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Fair Value Measurements (Estimated Fair Values Of Debt Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Level 1 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	$ 8,854	$ 3,360
Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	6,840	12,375
Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	15,694	15,735
Foreign Exchange Forward [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	9,137
Foreign Exchange Forward [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	9,137
Nymex Futures Contracts [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure		3,360
Nymex Futures Contracts [Member] | Level 1 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	8,854	3,360
Nymex Futures Contracts [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	0	0
Nymex Futures Contracts [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	8,854
Commodity Contract [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	1,565
Financial Liabilities Fair Value Disclosure	1,615	2,424
Commodity Contract [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	1,565
Financial Liabilities Fair Value Disclosure	1,615	2,424
Forward Contracts [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	4	1,020
Forward Contracts [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	4	1,020
Renewable Energy Program [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	5,221	8,931
Renewable Energy Program [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	5,221	8,931
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	10,727	3,840
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	10,727	3,840
Fair Value, Measurements, Recurring [Member] | Forward Contracts [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	25	3,840
Fair Value, Measurements, Recurring [Member] | Forward Contracts [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	$ 25	$ 3,840

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Earnings Per Share (Schedule Of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Net income attributable to HollyFrontier stockholders	$ 342,466	$ 272,014	$ 956,064	$ 284,313
Participating securities’ (restricted stock) share in earnings	1,171	1,735	3,321	1,822
Net income (loss) attributable to common shares	$ 341,295	$ 270,279	$ 952,743	$ 282,491
Average number of shares of common stock outstanding	175,097	176,149	175,865	176,143
Effect of dilutive variable restricted shares and performance share units	1,830	381	1,692	473
Average number of shares of common stock outstanding assuming dilution	176,927	176,530	177,557	176,616
Basic earnings (loss) per share	$ 1.95	$ 1.53	$ 5.42	$ 1.60
Diluted earnings (loss) per share	$ 1.93	$ 1.53	$ 5.37	$ 1.60
Excludes anti-dilutive restricted and performance share units of:	0	104	2	120

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Stock-Based Compensation (Narrative) (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Petroleum_Refineries	Sep. 30, 2017 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Share-based Compensation Plans | Petroleum_Refineries			2
Share-based Compensation Expense	$ 8.1	$ 9.1	$ 23.8	$ 24.5
HEP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Expense	0.7		2.3	$ 1.9
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			0.9
Total unrecognized compensation cost related to non-vested grants	15.9		$ 15.9
Total unrecognized compensation cost, weighted-average period of recognition, years			1 year
Restricted Stock [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement Vesting Period			2 years
Restricted Stock [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement Vesting Period			3 years
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement Vesting Period			3 years
Total unrecognized compensation cost related to non-vested grants	$ 9.1		$ 9.1
Total unrecognized compensation cost, weighted-average period of recognition, years			1 year 4 months

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Stock-Based Compensation (Summary Of Restricted Stock Activity) (Details) - Restricted Stock [Member] $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at January 1, 2018 (non-vested) | shares	1,726,188
Granted | shares	32,583
Vesting (transfer/conversion to common stock) | shares	(29,656)
Forfeited | shares	(103,488)
Outstanding at September 30, 2018 (non-vested) | shares	1,625,627
Outstanding at January 1, 2018 (non-vested), Weighted Average Grant Date Fair Value | $ / shares	$ 33.51
Granted, Weighted Average Grant Date Fair Value | $ / shares	55.85
Vesting and transfer of ownership to recipients, Weighted Average Grant Date Fair Value | $ / shares	31.49
Forfeited, Weighted Average Grant Date Fair Value, per share | $ / shares	34.45
Outstanding at September 30, 2018 (non-vested), Weighted Average Grant Date Fair Value | $ / shares	$ 33.94
Aggregate Intrinsic Value | $	$ 113,631
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement Vesting Period	2 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement Vesting Period	3 years

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Stock-Based Compensation (Summary Of Performance Share Unit Activity) (Details) - Performance Shares [Member] $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Expense	3 years
Outstanding at January 1, 2018 (non-vested)	692,661
Forfeited	(44,008)
Outstanding at September 30, 2018 (non-vested)	648,653
Total unrecognized compensation cost related to non-vested grants | $	$ 9.1
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 33.91
Total unrecognized compensation cost, weighted-average period of recognition, years	1 year 4 months
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage Of Share Units Awarded Ultimately Issued	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage Of Share Units Awarded Ultimately Issued	200.00%

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Inventories (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Inventories
Crude Oil		$ 529,252		$ 529,252		$ 581,417
Other raw materials and unfinished products	[1]	383,953		383,953		396,618
Finished products	[2]	753,562		753,562		655,336
Lower of cost or market reserve		(30,906)		(30,906)		(223,833)
Process chemicals	[3]	35,259		35,259		24,792
Repair and maintenance supplies and other	[4]	191,380		191,380		195,762
Inventories, total		1,862,500		1,862,500		$ 1,630,092
Lower of cost or market inventory valuation adjustment		$ 17,837	$ (111,128)	$ (192,927)	$ (15,323)

[1] (1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude.

[2] (2)Finished products include gasolines, jet fuels, diesels, lubricants, asphalts, LPG’s and residual fuels.

[3] (3)Process chemicals include additives and other chemicals.

[4] (4)Includes RINs.

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Inventories inventories - narrative (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Inventory Disclosure - Narrative [Abstract]
Inventory Valuation Reserves	$ 30,906				$ 30,906		$ 223,833
Lower of cost or market inventory valuation adjustment	17,837		$ (111,128)		$ (192,927)	$ (15,323)
Cost of Sales Reduction	$ 25,300	$ 33,800		$ 37,900

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Environmental (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Loss Contingencies [Line Items]
Environmental remediation costs	$ 3.3	$ 0.1	$ 4.9	$ (0.8)
Accrued environmental liability	102.9		$ 102.9		$ 103.7
Estimated time frame to remediate contigency			30
Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Accrued environmental liability	$ 86.5		$ 86.5		$ 89.6

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Debt (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Debt Instrument [Line Items]
Maximum borrowing capacity under revolving credit agreement		$ 1,350,000		$ 1,350,000
Line of Credit Facility, Expiration Date				Feb. 01, 2022
Letters of Credit Outstanding, Amount		2,400		$ 2,400
Loss on early extinguishment of debt		0	$ 0	0	$ (12,225)
Redemption Premium	$ 9,800
Capitalized Interest Costs		$ 1,300	1,000	$ 3,300	4,200
Five Point Eight Seven Five Percentage Senior Notes Due Two Thousand Twenty-Six [Member] [Member]
Debt Instrument [Line Items]
Stated interest rate, senior notes		5.875%		5.875%
Senior notes		$ 1,000,000		$ 1,000,000		$ 1,000,000
Debt Instrument, Maturity Date				Apr. 01, 2026
6.5% Senior Notes [Member]
Debt Instrument [Line Items]
Stated interest rate, senior notes	6.50%
HEP
Debt Instrument [Line Items]
Maximum borrowing capacity under revolving credit agreement		$ 1,400,000		$ 1,400,000
Line of Credit Facility, Expiration Date		Jul. 01, 2022
Line of Credit Facility, Capacity Available for Trade Purchases		$ 50,000		50,000
Line of credit facility, accordion feature		300,000		300,000
Proceeds from Lines of Credit				256,000
Repayments of Lines of Credit				(347,000)
Borrowings outstanding under revolving credit agreement		921,000		$ 921,000		1,012,000
Debt Instrument, Maturity Date				Aug. 01, 2024
HEP | Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]
Debt Instrument [Line Items]
Senior notes		$ 500,000	$ 100,000	$ 500,000	$ 100,000	$ 500,000
HEP | 6.5% Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes	$ 300,000
Senior Notes Aggregate Redemption Amount	$ 309,800

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Debt (Carrying Amounts Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jan. 31, 2017
Debt Instrument [Line Items]
Unamortized discount				$ (2,400)
Total long-term debt	$ 2,409,148	$ 2,498,993
Long-term debt	2,409,148	2,498,993
Five Point Eight Seven Five Percentage Senior Notes Due Two Thousand Twenty-Six [Member] [Member]
Debt Instrument [Line Items]
Principal	1,000,000	1,000,000
Unamortized discount	(7,600)	(8,315)
Total long-term debt	992,400	991,685
HEP
Debt Instrument [Line Items]
HEP Credit Agreement	921,000	1,012,000
Total long-term debt	1,416,748	1,507,308
Long-term Debt and Capital Lease Obligations	1,416,748	1,507,308
HEP | Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]
Debt Instrument [Line Items]
Principal	500,000	500,000	$ 100,000
Unamortized discount	(4,252)	(4,692)
Total long-term debt	495,748	495,308
Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	6,840	12,375
Level 2 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	1,065,980	1,113,470
Level 2 [Member] | Senior Notes [Member] | HEP
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	$ 512,840	$ 525,120

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Derivative Instruments And Hedging Activities Derivatives and Hedging Instruments Gains Losses due to Settlements Hedge Ineffectiveness (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Trading Activity, Gains and Losses, Net [Line Items]
Cost of products sold	$ 3,752,234	[1]	$ 2,888,549	$ 10,695,275	$ 8,283,183
Sales and other revenues	4,770,799		3,719,247	13,370,462	10,258,594
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	5,792		3,291	1,742	8,567
Reclassification out of Accumulated Other Comprehensive Income [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Other Cost and Expense, Operating	(1,631)		(5,385)	(6,038)	(5,859)
Forward Contracts [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Sales and other revenues	(1,422)		(488)	(5,093)	7,937
Commodity [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Operating Expenses	(209)		(4,961)	(945)	(13,676)
Commodity Contract [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	5,792		3,354	1,742	8,658
Commodity Contract [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Cost of products sold				0	(299)
Interest Rate Swap [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	0		(63)	0	(91)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Commodity Contract [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Cost of products sold				0	(299)
Sales and other revenues	$ (1,422)		$ (488)	$ (5,093)	$ 7,937

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XML

Derivative Instruments And Hedging Activities Schedule of Realized Gain (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	$ 5,792		$ 3,291	$ 1,742	$ 8,567
Sales and other revenues	4,770,799		3,719,247	13,370,462	10,258,594
Gain (Loss) on Price Risk Hedge Ineffectiveness	(15,304)		(11,261)	(2,076)	21,556
Cost of products sold	3,752,234	[1]	2,888,549	10,695,275	8,283,183
Foreign Currency Gain (Loss) [Member] | Other Nonoperating Income (Expense) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Price Risk Hedge Ineffectiveness	(7,052)		0	18,504	0
Commodity Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	5,792		3,354	1,742	8,658
Commodity Contract [Member] | Operating Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Price Risk Hedge Ineffectiveness	0		(629)	0	(6,392)
Commodity Contract [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Price Risk Hedge Ineffectiveness	(8,252)		(10,632)	(20,580)	3,403
Foreign Exchange Contract [Member] | Other Nonoperating Income (Expense) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Price Risk Hedge Ineffectiveness	0		0	0	24,545	[2]
Interest Rate Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	0		(63)	0	(91)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other Cost and Expense, Operating	(1,631)		(5,385)	(6,038)	(5,859)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Forward Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Sales and other revenues	(1,422)		(488)	(5,093)	7,937
Reclassification out of Accumulated Other Comprehensive Income [Member] | Commodity Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Cost of products sold				0	(299)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Operating Expenses	(209)		(4,961)	(945)	(13,676)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Interest Rate Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest Expense, Other	$ 0		$ 64	$ 0	$ 179

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[2] (1) Relates to Canadian currency swap contracts that settled on February 1, 2017 and effectively fixed the conversion rate on our PCLI purchase price.

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Derivative Instruments And Hedging Activities Notional Contracts by Derivative Type (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) MMBTU bbl
Designated as Hedging Instrument [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	5,850,000
Designated as Hedging Instrument [Member] | Price Risk Derivative [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	4,388,000
Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	450,000
Designated as Hedging Instrument [Member] | Maturing in Year Two [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	1,800,000
Designated as Hedging Instrument [Member] | Maturing in Year Two [Member] | Price Risk Derivative [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	1,460,000
Designated as Hedging Instrument [Member] | Maturing in Year Three [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	1,800,000
Designated as Hedging Instrument [Member] | Maturing in Year Three [Member] | Price Risk Derivative [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	2,928,000
Designated as Hedging Instrument [Member] | Maturing in Year Four [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	1,800,000
Not Designated as Hedging Instrument [Member]
Economic hedges by derivative type [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 446,361,369
Not Designated as Hedging Instrument [Member] | NYMEX WTI short [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	2,303,000
Not Designated as Hedging Instrument [Member] | WTI Crude Oil [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	400,000
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	25,000
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member]
Economic hedges by derivative type [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 113,632,223
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | NYMEX WTI short [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	2,102,000
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | WTI Crude Oil [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	400,000
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Commodity Contract [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	25,000
Not Designated as Hedging Instrument [Member] | Maturing in Year Two [Member]
Economic hedges by derivative type [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 332,729,146
Not Designated as Hedging Instrument [Member] | Maturing in Year Two [Member] | NYMEX WTI short [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	201,000

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Derivative Instruments And Hedging Activities (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Derivative [Line Items]
Net unrealized loss in accumulated other comprehensive income related to accounting hedges	$ 0.4
Net unrealized loss to be transferred from accumulated other comprehensive income to statement of income	$ (1.0)

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Derivative Instruments And Hedging Activities Interest Rate Swaps (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative [Line Items]
Interest expense	$ 32,399	$ 28,731	$ 97,446	$ 85,534

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Derivative Instruments And Hedging Activities (Summary Of Balance Sheet Locations And Related Fair Values Of Outstanding Derivative Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Derivative [Line Items]
Derivative Asset Fair Value Net Asset	$ 10,727	$ 3,840
Derivative Liability Fair Value Net Liability	10,473	6,804
Accrued Liabilities [Member]
Derivative [Line Items]
Derivative Liability Fair Value Net Liability	10,332	5,365
Prepayments And Other [Member]
Derivative [Line Items]
Derivative Asset Fair Value Net Asset	10,727
Other Noncurrent Liabilities [Member]
Derivative [Line Items]
Derivative Liability Fair Value Net Liability	141	1,439
Other Intangible Assets [Member]
Derivative [Line Items]
Derivative Asset Fair Value Net Asset		3,840
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,565	3,067
Derivative Asset Fair Value Gross Liability	0	0
Derivative Asset Fair Value Net Asset	1,565	3,067
Derivative Liability Fair Value Gross Liability	3,243	2,842
Derivative Liability Fair Value Gross Asset	(2,114)	0
Derivative Liability Fair Value Net Liability	1,129	2,842
Designated as Hedging Instrument [Member] | Commodity Contract [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,565	0
Derivative Asset Fair Value Gross Liability	0	0
Derivative Asset Fair Value Net Asset	1,565	0
Derivative Liability Fair Value Gross Liability	3,243	2,424
Derivative Liability Fair Value Gross Asset	(2,114)	0
Derivative Liability Fair Value Net Liability	1,129	2,424
Designated as Hedging Instrument [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset		3,067
Derivative Asset Fair Value Net Asset		3,067
Derivative Liability Fair Value Gross Liability		418
Derivative Liability Fair Value Gross Asset		0
Derivative Liability Fair Value Net Liability		418
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	9,162	773
Derivative Asset Fair Value Gross Liability	0	0
Derivative Asset Fair Value Net Asset	9,162	773
Derivative Liability Fair Value Gross Liability	10,146	3,962
Derivative Liability Fair Value Gross Asset	(802)	0
Derivative Liability Fair Value Net Liability	9,344	3,962
Not Designated as Hedging Instrument [Member] | Commodity [Member]
Derivative [Line Items]
Derivative Liability Fair Value Gross Liability	1,288
Derivative Liability Fair Value Gross Asset	802
Derivative Liability Fair Value Net Liability	486
Not Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	9,137
Derivative Asset Fair Value Gross Liability	0
Derivative Asset Fair Value Net Asset	9,137
Derivative Liability Fair Value Gross Liability	0
Derivative Liability Fair Value Gross Asset	0
Derivative Liability Fair Value Net Liability	0
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0
Derivative Asset Fair Value Gross Liability	0
Derivative Asset Fair Value Net Asset	0
Not Designated as Hedging Instrument [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	25	773
Derivative Asset Fair Value Gross Liability	0	0
Derivative Asset Fair Value Net Asset	25	773
Derivative Liability Fair Value Gross Liability	4	602
Derivative Liability Fair Value Net Liability	4	602
Not Designated as Hedging Instrument [Member] | Nymex Futures Contracts [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Asset Fair Value Gross Liability	0
Derivative Asset Fair Value Net Asset	0	0
Derivative Liability Fair Value Gross Liability	8,854	3,360
Derivative Liability Fair Value Net Liability	$ 8,854	$ 3,360

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Equity (Changes To Equity) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance at December 31, 2017			$ 5,370,829
Noncontrolling interest	$ 551,226		551,226		$ 526,111
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	6,563,512		6,563,512		$ 5,896,940
Net income (loss)	362,132	$ 287,717	1,013,907	$ 324,008
Dividends			(175,921)
Distributions to noncontrolling interest holders			(93,128)
Other comprehensive income (loss), net of tax	13,993	$ 12,853	(3,963)	21,009
Allocated equity on common unit issuances, net of tax			100,400
Equity-based compensation			26,096
Purchase of treasury stock			(186,632)
Purchase of units for incentive grants - HEP			(58)
Unrealized Gain (Loss) on Cash Flow Hedging Instruments			(14,129)
Balance at September 30, 2018	$ 6,012,286		$ 6,012,286
Shares Paid for Tax Withholding for Share Based Compensation			12,593
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	1,000,000,000		1,000,000,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 949,300		$ 949,300
Holly Corporation Stockholders' Equity [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance at December 31, 2017			5,370,829
Net income (loss)			956,064
Dividends			(175,921)
Distributions to noncontrolling interest holders			0
Other comprehensive income (loss), net of tax			(3,963)
Allocated equity on common unit issuances, net of tax			42,198
Equity-based compensation			23,840
Purchase of treasury stock			(186,632)	$ 0
Purchase of units for incentive grants - HEP			0
Unrealized Gain (Loss) on Cash Flow Hedging Instruments			(14,129)
Balance at September 30, 2018	6,012,286		6,012,286
Noncontrolling Interest [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Noncontrolling interest	$ 551,226		551,226
Net income (loss)			57,843
Dividends			0
Distributions to noncontrolling interest holders			(93,128)
Other comprehensive income (loss), net of tax			0
Allocated equity on common unit issuances, net of tax			58,202
Equity-based compensation			2,256
Purchase of treasury stock			0
Purchase of units for incentive grants - HEP			(58)
Unrealized Gain (Loss) on Cash Flow Hedging Instruments			$ 0

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Other Comprehensive Income (Loss) (Components And Allocated Tax Effects Of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other Comprehensive Income (Loss) Components and Tax Effects [Line Items]
Net change in foreign currency translation adjustment, before Tax	$ 8,325	$ 16,702	$ (15,118)	$ 24,287
Net unrealized gain (loss) on hedging instruments	5,792	3,291	1,742	8,567
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, before Tax	0	0	0	(4)
Other comprehensive income (loss)	14,117	19,993	(13,376)	32,850
Less other comprehensive income attributable to noncontrolling interest		(40)		(57)
Other comprehensive income (loss) attributable to HollyFrontier stockholders	14,117	20,033	(13,376)	32,907
Net change in foreign currency translation adjustment, tax	(1,354)	5,851	(6,304)	8,505
Net unrealized gain (loss) on hedging instruments, tax expense (benefit)	1,478	1,289	625	3,337
Other comprehensive income (loss), tax expense	124	7,140	(9,413)	11,841
Net change in pension and other post-retirement benefit obligations,Tax			(3,734)
Net unrealized gain (loss) on marketable securities, tax				(1)
Other comprehensive income (loss) attributable to HollyFrontier stockholders, tax expense	124	7,140	(9,413)	11,841
Net change in foreign currency translation, net of tax	9,679	10,851	(8,814)	15,782
Net unrealized gain (loss) on marketable securities, after tax				(3)
Net unrealized gain (loss) on hedging instruments, after tax	4,314	2,002	1,117	5,230
Net change in pension and other post-retirement benefit obligations, after Tax			3,734
Other comprehensive income (loss), net of tax	13,993	12,853	(3,963)	21,009
Less other comprehensive income (loss) attributable to noncontrolling interest, after tax		(40)		(57)
Other comprehensive income (loss) attributable to HollyFrontier stockholders	$ 13,993	$ 12,893	$ (3,963)	$ 21,066

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Other Comprehensive Income (Loss) (Accumulated Other Comprehensive Loss In Equity) (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sales and other revenues	$ 4,770,799		$ 3,719,247	$ 13,370,462	$ 10,258,594
Cost of products sold	3,752,234	[1]	2,888,549	10,695,275	8,283,183
Operating expenses	317,196	[1]	322,277	933,699	946,264
Interest expense	(32,399)		(28,731)	(97,446)	(85,534)
Income before income taxes	478,390		446,103	1,332,649	497,601
Income tax expense (benefit)	116,258		158,386	318,742	173,593
Net of tax and noncontrolling interest	342,466		272,014	956,064	284,313
Other comprehensive income (loss), net of tax	13,993		12,853	(3,963)	21,009
Foreign currency translation adjustment	5,563			5,563		$ 14,377
Unrealized loss on pension obligation	(692)			(692)		(654)
Unrealized gain on post-retirement benefit obligations	20,711			20,711		16,939
Unrealized loss on hedging instruments	324			324		(793)
Accumulated other comprehensive income	25,906			25,906		$ 29,869
Reclassification out of Accumulated Other Comprehensive Income [Member] | Commodity Contract [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of products sold				0	(299)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income taxes	(1,631)		(5,385)	(6,038)	(5,859)
Income tax expense (benefit)	(416)		(2,100)	(1,540)	(2,312)
Net income	(1,215)		(3,285)	(4,498)	(3,547)
Noncontrolling interest	0		(41)	0	(114)
Net of tax and noncontrolling interest	(1,215)		(3,326)	(4,498)	(3,661)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Commodity Contract [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sales and other revenues	(1,422)		(488)	(5,093)	7,937
Cost of products sold				0	(299)
Operating expenses	(209)		(4,961)	(945)	(13,676)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Interest Rate Swap [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	$ 0		$ 64	$ 0	$ 179

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XML

Other Comprehensive Income (Loss) Other Comprehensive Income Balance Components (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Foreign currency translation adjustment	$ 5,563	$ 14,377
Unrealized loss on pension obligation	(692)	(654)
Unrealized gain on post-retirement benefit obligations	20,711	16,939
Unrealized loss on hedging instruments	324	(793)
Accumulated other comprehensive income	$ 25,906	$ 29,869

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Post-retirement Plan (Narrative) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2018 USD ($)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Rate of Return on Plan Assets	5.75%
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year	$ 6.4

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Post-retirement Plan (Net Periodic Pension Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		5 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Service Cost	$ 1,093	$ 1,013	$ 2,596	$ 3,337
Interest cost on projected benefit obligations	556	556	1,424	1,698
Expected return on plan assets	(856)	(802)	(2,053)	(2,615)
Net periodic pension expense	793	767	$ 1,967	2,420
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Service Cost	411	380		1,238	$ 1,106
Interest cost on projected benefit obligations	234	250		705	714
Amortization of prior service credit	(870)	(870)		(2,611)	(2,610)
Net periodic post-retirement credit	$ (225)	$ (240)		$ (668)	$ (790)

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Contingencies Contingencies (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Loss Contingencies [Line Items]
Receivables, Long-term Contracts or Programs	$ 8.0	$ 26.0
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	$ 20.0

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Segment Information (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments	3
Equity Method Investment, Ownership Percentage	50.00%		50.00%
Revenues	$ 4,770,799	$ 3,719,247	$ 13,370,462	$ 10,258,594
UNEV Pipeline [Member]
Segment Reporting Information [Line Items]
Equity Method Investment, Ownership Percentage	75.00%		75.00%

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Segment Information (Schedule Of Segment Reporting Information) (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Segment Reporting Information [Line Items]
Revenues from external customers	$ 4,770,799		$ 3,719,247		$ 13,370,462	$ 10,258,594
Intersegment Revenues	0		0		0	0
Revenues	4,770,799		3,719,247		13,370,462	10,258,594
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	3,752,234	[1]	2,888,549		10,695,275	8,283,183
Lower of cost or market inventory valuation adjustment	17,837		(111,128)		(192,927)	(15,323)
Operating expenses	317,196	[1]	322,277		933,699	946,264
Selling, general and administrative expenses	71,130		68,252		204,469	185,303
Depreciation and amortization	108,885		102,884		323,605	304,206
Asset Impairment Charges				$ 19,200		19,247
Income from operations	503,517		448,413		1,406,341	535,714
Earnings of equity method investments	1,114		5,072		4,127	10,965
Capital expenditures	69,937		56,067		209,078	193,117
Cash, cash equivalents, and total investments in marketable securities	1,075,677				1,075,677		$ 630,757
Total assets	11,495,126				11,495,126		10,692,154
Long-term debt	2,409,148				2,409,148		2,498,993
Refining
Segment Reporting Information [Line Items]
Revenues from external customers	4,270,835		3,291,417		11,915,797	9,033,148
Intersegment Revenues	101,334		82,705		284,538	268,208
Revenues	4,372,169		3,374,122		12,200,335	9,301,356
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	3,572,593		2,774,722		10,179,509	7,949,813
Lower of cost or market inventory valuation adjustment	17,837		(109,690)		(192,927)	(15,365)
Operating expenses	262,010		246,409		764,415	743,493
Selling, general and administrative expenses	30,394		26,582		82,966	71,591
Depreciation and amortization	70,793		74,070		210,957	218,934
Asset Impairment Charges						19,247
Income from operations	418,542		362,029		1,155,415	313,643
Earnings of equity method investments	0		0		0	0
Capital expenditures	47,088		30,979		132,050	130,238
Cash, cash equivalents, and total investments in marketable securities	6,915				6,915		7,488
Total assets	7,044,358				7,044,358		6,474,666
Long-term debt	0				0		0
Lubricants and other specialty products
Segment Reporting Information [Line Items]
Revenues from external customers	474,260		413,074		1,376,531	1,178,343
Intersegment Revenues	1,626		0		11,884	0
Revenues	475,886		413,074		1,388,415	1,178,343
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	359,742	[1]	270,279		1,040,414	818,981
Lower of cost or market inventory valuation adjustment	0		(1,438)		0	42
Operating expenses	40,288	[1]	59,726		125,101	154,795
Selling, general and administrative expenses	33,514		30,796		99,425	71,877
Depreciation and amortization	11,139		7,734		30,023	20,570
Asset Impairment Charges						0
Income from operations	31,203		45,977		93,452	112,078
Earnings of equity method investments	0		0		0	0
Capital expenditures	8,094		9,815		23,138	20,772
Cash, cash equivalents, and total investments in marketable securities	72,652				72,652		41,756
Total assets	1,498,586				1,498,586		1,610,472
Long-term debt	0				0		0
HEP
Segment Reporting Information [Line Items]
Revenues from external customers	25,596		15,227		77,799	47,826
Intersegment Revenues	100,188		95,137		295,629	277,315
Revenues	125,784		110,364		373,428	325,141
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	0		0		0	0
Lower of cost or market inventory valuation adjustment	0		0		0	0
Operating expenses	35,995		36,061		106,731	102,773
Selling, general and administrative expenses	2,498		3,626		8,293	8,882
Depreciation and amortization	24,367		18,601		74,117	56,515
Asset Impairment Charges						0
Income from operations	62,924		52,076		184,287	156,971
Earnings of equity method investments	1,114		5,072		4,127	10,965
Capital expenditures	9,541		10,151		41,111	30,675
Cash, cash equivalents, and total investments in marketable securities	6,375				6,375		7,776
Total assets	2,146,124				2,146,124		2,191,984
Long-term debt	1,416,748				1,416,748		1,507,308
Corporate, Other and Eliminations
Segment Reporting Information [Line Items]
Revenues from external customers	108		(471)		335	(723)
Intersegment Revenues	(203,148)		(177,842)		(592,051)	(545,523)
Revenues	(203,040)		(178,313)		(591,716)	(546,246)
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	(180,101)		(156,452)		(524,648)	(485,611)
Lower of cost or market inventory valuation adjustment	0		0		0	0
Operating expenses	(21,097)		(19,919)		(62,548)	(54,797)
Selling, general and administrative expenses	4,724		7,248		13,785	32,953
Depreciation and amortization	2,586		2,479		8,508	8,187
Asset Impairment Charges						0
Income from operations	(9,152)		(11,669)		(26,813)	(46,978)
Earnings of equity method investments	0		0		0	0
Capital expenditures	5,214		$ 5,122		12,779	$ 11,432
Cash, cash equivalents, and total investments in marketable securities	989,735				989,735		573,737
Total assets	806,058				806,058		415,032
Long-term debt	$ 992,400				$ 992,400		$ 991,685

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