EX-99.1 2 c04406exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
Press Release
(GRAPHIC)
August 5, 2010
Holly Corporation Reports Second Quarter 2010 Results
Announces Regular Quarterly Cash Dividend
Dallas, Texas, August 5, 2010 — Holly Corporation (NYSE-HOC) (“Holly” or the “Company”) today reported second quarter 2010 financial results. For the quarter, net income attributable to Holly stockholders was $66.2 million ($1.24 per basic and diluted share) compared to $14.6 million ($0.29 per basic and diluted share) for the second quarter of 2009. For the six months, net income attributable to Holly stockholders was $38.1 million ($0.72 per basic and $0.71 per diluted share) compared to $36.6 million ($0.73 per basic and diluted share) for the six months ended June 30, 2009.
Holly also announced that its Board of Directors has declared a regular quarterly cash dividend in the amount of $0.15 per share, payable October 4, 2010 to holders of record on September 21, 2010.
For the quarter, net income attributable to our stockholders increased by $51.6 million compared to the same period of 2009. This increase was due principally to significantly higher refinery gross margins during the current year second quarter combined with increased sales volumes of produced refined products sold. Overall refinery gross margins were $11.01 per produced barrel, a 41% increase compared to $7.82 for the second quarter of 2009. For the quarter, our overall refinery production levels averaged 233,460 barrels per day (“BPD”), an increase of 65% over the same period of 2009 due to production from our Tulsa refinery facilities acquired in June and December 2009.
For the six months ended June 30, 2010, net income attributable to our stockholders increased by $1.5 million compared to the same period of 2009. This increase was due principally to increased sales volumes of produced refined products, partially offset by an overall decrease in current year-to-date refinery gross margins. Overall refinery gross margins were $8.43 per produced barrel, a 10% decrease compared to $9.41 for the first six months of 2009. For the current year-to-date period, our overall refinery production levels averaged 225,250 BPD, an increase of 96% over the same period of 2009 due to production from our Tulsa refinery facilities and production increases at our Navajo and Woods Cross refineries.
“We are pleased with our second quarter results,” said Matthew Clifton, Chairman of the Board and Chief Executive Officer of Holly. “Year over year industry-wide increases in distillate cracks and improvements in our Rocky Mountain and Southwest product values relative to benchmark Gulf Coast prices combined with a substantial contribution from our 2009 Tulsa refinery acquisitions drove the strong increase in profitability in the quarter compared to the second quarter of 2009. For the quarter, EBITDA was $155 million, an increase of $99.1 million or 177% over last year’s second quarter.

 

 

 

Our Tulsa refinery, which accounted for a little over 50% of our year over year EBITDA increase, is the combined operation of the two refineries acquired by Holly in June and December 2009. The two facilities operated in an integrated manner during the quarter utilizing an existing third-party pipeline to move intermediates between the facilities for upgrading. This phase one integration process allowed us to capture the bulk of the overall integration benefits, although at slightly higher operating expenses and subject to certain fuel balance and other constraints. Full integration is expected in the first quarter of 2011 when we expect to have installed additional pipelines between the two facilities. During the quarter, the Tulsa facility processed 118,000 barrels per day of crude oil. Strong distillate and lube oil cracks and increased lube volumes led to Tulsa operating income for the quarter of $46.7 million compared to the one month, one refinery second quarter of 2009 operating loss of $4.1 million.
With our lowest crude costs and our highest product values, our Woods Cross refinery continued to contribute nicely to earnings. Second quarter 2010 gross margins for Woods Cross were $22.36 per barrel. Margins at our Navajo and Tulsa refineries also were at good levels averaging over $9 per barrel.
Operationally, at the Navajo Refinery, production was somewhat reduced as we lined out modifications made to our crude and vacuum unit during the first quarter of 2010. In June 2010 we began processing small amounts of heavy Canadian crude to test the various modifications and additions we have made to the facility to allow for a more diverse crude slate. We plan to increase heavy Canadian crude rates over time as new equipment and modifications are lined out and economics dictate.
In July the product margin environment for our refineries remained at approximately the same level as the average for the second quarter. Looking forward, while cautiously optimistic with respect to our nation’s economic recovery, we remain confident that the enhanced capabilities and scale of our assets and the markets we serve, combined with our conservative financial condition, will continue to serve our shareholders well,” Clifton said.
Sales and other revenues for the second quarter of 2010 were $2,145.9 million, a 107% increase compared to the three months ended June 30, 2009. This increase was due to the effects of a 33% year-over-year increase in second quarter refined product sales prices combined with a 67% increase in volumes of produced refined products sold. The volume increase was primarily due to volumes attributable to our Tulsa refinery operations. Also included in revenues and contributing to the earnings increase for the three months ended June 30, 2010 was a final settlement received from SFPP, L.P. in June 2010 of $8.6 million that relates to tariff refunds for shipments of refined products for the period of January 1992 through May 2006. In the 2009 second quarter, we received a settlement payment of $2.9 million also related to tariff refunds. Cost of products sold was $1,848.2 million, a 110% increase compared to the three months ended June 30, 2009 due mainly to higher crude oil acquisition costs and increased volumes of produced refined products sold.

 

 

 

Sales and other revenues for the six months ended June 30, 2010 were $4,020.2 million, a 139% increase compared to the six months ended June 30, 2009. This increase was due to the effects of a 41% year-over-year increase in year-to-date refined product sales prices combined with a 95% increase in volumes of produced refined products sold. The volume increase was attributable to our Tulsa refinery operations and year-to-date production increases at our Navajo and Woods Cross refineries. Cost of products sold was $3,572.1 million, a 157% increase compared to the six months ended June 30, 2009 due mainly to higher crude oil acquisition costs and increased volumes of produced refined products sold.
Operating costs and expenses for the three and the six months ended June 30, 2010 increased mainly due to the inclusion of costs attributable to the operations of our Tulsa refinery facilities. Interest expense for the three and the six months ended June 30, 2010 increased by $13.8 million and $25.3 million, respectively, primarily due to interest incurred on the $300 million Holly senior notes and the $150 million 8.25% senior notes issued by HEP in March 2010.
The Company has scheduled a webcast conference call for today, August 5, 2010 at 4:00 PM Eastern Time to discuss financial results. This webcast may be accessed at: http://www.videonewswire.com/event.asp?id=70657.
An audio archive of this webcast will be available using the above noted link through August 18, 2010.
Holly Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and specialty lubricant products. Holly operates through its subsidiaries a 100,000 BPSD refinery located in Artesia, New Mexico, a 31,000 BPSD refinery in Woods Cross, Utah and a 125,000 BPSD refinery located in Tulsa, Oklahoma. Also, a subsidiary of Holly owns a 34% interest (including the 2% general partner interest) in Holly Energy Partners, L.P., which through subsidiaries owns or leases approximately 2,500 miles of petroleum product and crude oil pipelines in Texas, New Mexico, Utah and Oklahoma and tankage and refined product terminals in several Southwest and Rocky Mountain states.
The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: The statements in this press release relating to matters that are not historical facts are “forward-looking statements” 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, including those contained in our filings with the Securities and Exchange Commission. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such 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 the Company’s 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 financing to the Company, the effectiveness of the Company’s capital investments and marketing strategies, the Company’s efficiency in carrying out construction projects, the ability of the Company to acquire refined product operations or pipeline and terminal operations on acceptable terms and to integrate any future acquired operations, the possibility of terrorist attacks and the consequences of any such attacks, general economic conditions, and other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s Securities and Exchange Commission filings. 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.

 

 

 

RESULTS OF OPERATIONS
Financial Data (all information in this release is unaudited)
                                 
    Three Months Ended        
    June 30,     Change from 2009  
    2010     2009     Change     Percent  
    (In thousands, except per share data)  
 
                                
Sales and other revenues
   $ 2,145,860     $ 1,035,778     $ 1,110,082       107.2 %
Operating costs and expenses:
                                
Cost of products sold (exclusive of depreciation and amortization)
     1,848,212       879,926       968,286       110.0  
Operating expenses (exclusive of depreciation and amortization)
     120,831       78,053       42,778       54.8  
General and administrative expenses (exclusive of depreciation and amortization)
     15,829       15,088       741       4.9  
Depreciation and amortization
     28,824       25,260       3,564       14.1  
 
                          
Total operating costs and expenses
     2,013,696       998,327       1,015,369       101.7  
 
                          
 
                                
Income from operations
     132,164       37,451       94,713       252.9  
Other income (expense):
                                
Equity in earnings of SLC Pipeline
     544       488       56       11.5  
Interest income
     635       134       501       373.9  
Interest expense
     (21,023 )     (7,203 )     (13,820 )     191.9  
Acquisition costs — Tulsa refinery
     —       (1,610 )     1,610       (100.0 )
 
                          
 
     (19,844 )     (8,191 )     (11,653 )     142.3  
 
                          
Income from continuing operations before income taxes
     112,320       29,260       83,060       283.9  
Income tax provision
     39,654       9,322       30,332       325.4  
 
                          
Income from continuing operations
     72,666       19,938       52,728       264.5  
Income from discontinued operations (1)
     —       1,206       (1,206 )     (100.0 )
 
                          
Net income
     72,666       21,144       51,522       243.7  
Less noncontrolling interest in net income
     6,504       6,539       (35 )     (0.5 )
 
                          
Net income attributable to Holly Corporation stockholders
   $ 66,162     $ 14,605     $ 51,557       353.0 %
 
                          
 
                                
Earnings attributable to Holly Corporation stockholders:
                                
Income from continuing operations
   $ 66,162     $ 14,248     $ 51,914       364.4 %
Income from discontinued operations
     —       357       (357 )     (100.0 )
 
                          
Net income
   $ 66,162     $ 14,605     $ 51,557       353.0 %
 
                          
 
                                
Earnings per share attributable to Holly Corporation stockholders — basic:
                                
Income from continuing operations
   $ 1.24     $ 0.28     $ 0.96       342.9 %
Income from discontinued operations (1)
     —       0.01       (0.01 )     (100.0 )
 
                          
Net income
   $ 1.24     $ 0.29     $ 0.95       327.6 %
 
                          
 
                                
Earnings per share attributable to Holly Corporation stockholders — diluted:
                                
Income from continuing operations
   $ 1.24     $ 0.28     $ 0.96       342.9 %
Income from discontinued operations (1)
     —       0.01       (0.01 )     (100.0 )
 
                          
Net income
   $ 1.24     $ 0.29     $ 0.95       327.6 %
 
                          
 
                                
Cash dividends declared per common share
   $ 0.15     $ 0.15     $ —       — %
 
                          
 
                                
Average number of common shares outstanding:
                                
Basic
     53,206       50,170       3,036       6.1 %
Diluted
     53,408       50,226       3,182       6.3 %
 
                                
EBITDA from continuing operations
   $ 155,028     $ 55,899     $ 99,129       177.3 %

 

 

 

                                 
    Six Months Ended        
    June 30,     Change from 2009  
    2010     2009     Change     Percent  
    (In thousands, except per share data)  
 
                                
Sales and other revenues
   $ 4,020,150     $ 1,683,808     $ 2,336,342       138.8 %
Operating costs and expenses:
                                
Cost of products sold (exclusive of depreciation and amortization)
     3,572,076       1,391,580       2,180,496       156.7  
Operating expenses (exclusive of depreciation and amortization)
     248,375       144,801       103,574       71.5  
General and administrative expenses (exclusive of depreciation and amortization)
     33,698       26,844       6,854       25.5  
Depreciation and amortization
     56,581       45,341       11,240       24.8  
 
                          
Total operating costs and expenses
     3,910,730       1,608,566       2,302,164       143.1  
 
                          
 
                                
Income from operations
     109,420       75,242       34,178       45.4  
Other income (expense):
                                
Equity in earnings of SLC Pipeline
     1,025       663       362       54.6  
Interest income
     694       2,330       (1,636 )     (70.2 )
Interest expense
     (38,745 )     (13,442 )     (25,303 )     188.2  
Acquisition costs — Tulsa refinery
     —       (1,610 )     1,610       (100.0 )
 
                          
 
     (37,026 )     (12,059 )     (24,967 )     207.0  
 
                          
Income from continuing operations before income taxes
     72,394       63,183       9,211       14.6  
Income tax provision
     22,982       21,171       1,811       8.6  
 
                          
Income from continuing operations
     49,412       42,012       7,400       17.6  
Income from discontinued operations (1)
     —       2,537       (2,537 )     (100.0 )
 
                          
Net income
     49,412       44,549       4,863       10.9  
Less noncontrolling interest in net income
     11,344       7,999       3,345       41.8  
 
                          
Net income attributable to Holly Corporation stockholders
   $ 38,068     $ 36,550     $ 1,518       4.2 %
 
                          
 
                                
Earnings attributable to Holly Corporation stockholders:
                                
Income from continuing operations
   $ 38,068     $ 35,801     $ 2,267       6.3 %
Income from discontinued operations
     —       749       (749 )     (100.0 )
 
                          
Net income
   $ 38,068     $ 36,550     $ 1,518       4.2 %
 
                          
 
                                
Earnings per share attributable to Holly Corporation stockholders — basic:
                                
Income from continuing operations
   $ 0.72     $ 0.71     $ 0.01       1.4 %
Income from discontinued operations (1)
     —       0.02       (0.02 )     (100.0 )
 
                          
Net income
   $ 0.72     $ 0.73     $ (0.01 )     (1.4 )%
 
                          
 
                                
Earnings per share attributable to Holly Corporation stockholders — diluted:
                                
Income from continuing operations
   $ 0.71     $ 0.71     $ 0.00       — %
Income from discontinued operations (1)
     —       0.02       (0.02 )     (100.0 )
 
                          
Net income
   $ 0.71     $ 0.73     $ (0.02 )     (2.7 )%
 
                          
 
                                
Cash dividends declared per common share
   $ 0.30     $ 0.30     $ —       — %
 
                          
 
                                
Average number of common shares outstanding:
                                
Basic
     53,152       50,106       3,046       6.1 %
Diluted
     53,375       50,189       3,186       6.3 %
 
                                
EBITDA from continuing operations
   $ 155,682     $ 113,425     $ 42,257       37.3 %
     
(1)  
On December 1, 2009, HEP sold its interest in Rio Grande. Results of operations of Rio Grande are presented in discontinued operations.

 

 

 

Balance Sheet Data
                 
    June 30,     December 31,  
    2010     2009  
    (In thousands)  
 
                
Cash, cash equivalents and investments in marketable securities
   $ 141,428     $ 125,819  
Working capital
   $ 319,633     $ 257,899  
Total assets
   $ 3,283,579     $ 3,145,939  
Long-term debt
   $ 805,336     $ 707,458  
Total equity
   $ 1,220,756     $ 1,207,871  
Segment Information
Our operations are currently organized into two reportable segments, Refining and HEP. Our operations that are not included in the Refining and HEP segments are included in Corporate and Other. Intersegment transactions are eliminated in our consolidated financial statements and are included in Consolidations and Eliminations.
The Refining segment includes the operations of our Navajo, Woods Cross and Tulsa refineries and Holly Asphalt Company (“Holly Asphalt”). The Refining segment involves the purchase and refining of crude oil and wholesale and branded marketing of refined products, such as gasoline, diesel fuel, jet fuel and specialty lubricant products. The petroleum products produced by the Refining segment are primarily marketed in the Southwest, Rocky Mountain and Mid-Continent regions of the United States and northern Mexico. Additionally, the Refining segment includes specialty lubricant products produced at our Tulsa refinery that are marketed throughout North America and are distributed in Central and South America. Holly Asphalt manufactures and markets asphalt and asphalt products in Arizona, New Mexico, Texas and northern Mexico.
The HEP segment involves all of the operations of HEP. HEP owns and operates a system of petroleum product and crude gathering pipelines in Texas, New Mexico, Oklahoma and Utah, distribution terminals in Texas, New Mexico, Arizona, Utah, Idaho, and Washington and refinery tankage in New Mexico, Utah and Oklahoma. Revenues are generated by charging tariffs for transporting petroleum products and crude oil through its pipelines, by leasing certain pipeline capacity to Alon USA, Inc., by charging fees for terminalling refined products and other hydrocarbons, and storing and providing other services at its storage tanks and terminals. The HEP segment also includes a 25% interest in SLC Pipeline LLC (“SLC Pipeline”) that services refineries in the Salt Lake City, Utah area. 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.
                                         
                            Consolidations        
                    Corporate     and     Consolidated  
    Refining     HEP     and Other     Eliminations     Total  
    (In thousands)  
 
                                        
Three Months Ended June 30, 2010
                                        
Sales and other revenues
   $ 2,137,360     $ 45,483     $ 151     $ (37,134 )   $ 2,145,860  
Operating expenses
   $ 107,451     $ 13,495     $ 12     $ (127 )   $ 120,831  
General and administrative expenses
   $ —     $ 1,913     $ 13,916     $ —     $ 15,829  
Depreciation and amortization
   $ 20,599     $ 7,187     $ 1,333     $ (295 )   $ 28,824  
Income (loss) from operations
   $ 124,548     $ 22,888     $ (15,110 )   $ (162 )   $ 132,164  
 
                                        
Three Months Ended June 30, 2009
                                        
Sales and other revenues
   $ 1,019,919     $ 37,999     $ 2,979     $ (25,119 )   $ 1,035,778  
Operating expenses
   $ 67,640     $ 10,631     $ 8     $ (226 )   $ 78,053  
General and administrative expenses
   $ —     $ 1,797     $ 13,193     $ 98     $ 15,088  
Depreciation and amortization
   $ 17,832     $ 6,242     $ 1,186     $ —     $ 25,260  
Income (loss) from operations
   $ 29,530     $ 19,329     $ (11,408 )   $ —     $ 37,451  

 

 

 

                                         
                            Consolidations        
                    Corporate     and     Consolidated  
    Refining     HEP     and Other     Eliminations     Total  
    (In thousands)  
 
                                        
Six Months Ended June 30, 2010
                                        
Sales and other revenues
   $ 4,004,534     $ 86,172     $ 217     $ (70,773 )   $ 4,020,150  
Operating expenses
   $ 222,045     $ 26,555     $ 18     $ (243 )   $ 248,375  
General and administrative expenses
   $ —     $ 4,476     $ 29,222     $ —     $ 33,698  
Depreciation and amortization
   $ 41,325     $ 13,992     $ 1,854     $ (590 )   $ 56,581  
Income (loss) from operations
   $ 99,969     $ 41,149     $ (30,877 )   $ (821 )   $ 109,420  
 
                                        
Six Months Ended June 30, 2009
                                        
Sales and other revenues
   $ 1,656,829     $ 67,331     $ 3,078     $ (43,430 )   $ 1,683,808  
Operating expenses
   $ 124,055     $ 20,973     $ 27     $ (254 )   $ 144,801  
General and administrative expenses
   $ —     $ 3,131     $ 23,713     $ —     $ 26,844  
Depreciation and amortization
   $ 29,783     $ 11,820     $ 3,738     $ —     $ 45,341  
Income (loss) from operations
   $ 68,235     $ 31,407     $ (24,400 )   $ —     $ 75,242  
 
                                        
June 30, 2010
                                        
Cash, cash equivalents and investments in marketable securities
   $ —     $ 2,806     $ 138,622     $ —     $ 141,428  
Total assets
   $ 2,267,727     $ 671,555     $ 375,987     $ (31,690 )   $ 3,283,579  
 
                                        
December 31, 2009
                                        
Cash, cash equivalents and investments in marketable securities
   $ —     $ 2,508     $ 123,311     $ —     $ 125,819  
Total assets
   $ 2,142,317     $ 641,775     $ 392,007     $ (30,160 )   $ 3,145,939  
Refining Operating Data
Our refinery operations include the Navajo, Woods Cross and Tulsa refineries. The following tables set forth information, including non-GAAP performance measures about our consolidated refinery operations. The cost of products and refinery gross margin do not include the effect of depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” below.
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Navajo Refinery
                                
Crude charge (BPD) (1)
     82,370       85,756       80,650       71,798  
Refinery production (BPD) (2)
     91,750       96,670       89,650       79,960  
Sales of produced refined products (BPD)
     93,040       95,812       90,000       79,072  
Sales of refined products (BPD) (3)
     96,280       96,342       93,220       83,809  
 
                                
Refinery utilization (4)
     82.4 %     85.8 %     80.7 %     71.8 %
 
                                
Average per produced barrel (5)
                                
Net sales
   $ 91.21     $ 67.93     $ 89.70     $ 63.80  
Cost of products (6)
     82.08       59.54       82.50       53.83  
 
                        
Refinery gross margin
     9.13       8.39       7.20       9.97  
Refinery operating expenses (7)
     4.61       4.56       4.88       5.19  
 
                        
Net operating margin
   $ 4.52     $ 3.83     $ 2.32     $ 4.78  
 
                        
 
                                
Feedstocks:
                                
Sour crude oil
     85 %     83 %     86 %     83 %
Sweet crude oil
     4 %     6 %     4 %     7 %
Other feedstocks and blends
     11 %     11 %     10 %     10 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        

 

 

 

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Sales of produced refined products:
                                
Gasolines
     57 %     57 %     57 %     58 %
Diesel fuels
     31 %     34 %     31 %     33 %
Jet fuels
     5 %     1 %     4 %     1 %
Fuel oil
     3 %     3 %     4 %     3 %
Asphalt
     2 %     3 %     2 %     3 %
LPG and other
     2 %     2 %     2 %     2 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        
 
                                
Woods Cross Refinery
                                
Crude charge (BPD) (1)
     27,450       25,937       26,570       24,631  
Refinery production (BPD) (2)
     28,850       27,699       27,700       25,505  
Sales of produced refined products (BPD)
     29,070       27,059       28,620       27,042  
Sales of refined products (BPD) (3)
     29,140       27,751       28,750       27,708  
 
                                
Refinery utilization (4)
     88.5 %     83.7 %     85.7 %     79.5 %
 
                                
Average per produced barrel (5)
                                
Net sales
   $ 96.62     $ 69.05     $ 93.15     $ 59.74  
Cost of products (6)
     74.26       60.10       74.48       49.90  
 
                        
Refinery gross margin
     22.36       8.95       18.67       9.84  
Refinery operating expenses (7)
     5.30       5.98       5.74       6.45  
 
                        
Net operating margin
   $ 17.06     $ 2.97     $ 12.93     $ 3.39  
 
                        
 
                                
Feedstocks:
                                
Sour crude oil
     5 %     3 %     6 %     3 %
Sweet crude oil
     60 %     62 %     60 %     64 %
Black wax crude oil
     29 %     27 %     29 %     27 %
Other feedstocks and blends
     6 %     8 %     5 %     6 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        
 
                                
Sales of produced refined products:
                                
Gasolines
     62 %     66 %     63 %     67 %
Diesel fuels
     31 %     28 %     29 %     26 %
Jet fuels
     1 %     — %     1 %     — %
Fuel oil
     1 %     3 %     1 %     4 %
Asphalt
     3 %     2 %     3 %     1 %
LPG and other
     2 %     1 %     3 %     2 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        
 
                                
Tulsa Refinery (8)
                                
Crude charge (BPD) (1)
     118,480       17,930       111,080       9,010  
Refinery production (BPD) (2)
     112,860       17,275       107,900       9,685  
Sales of produced refined products (BPD)
     111,880       16,971       105,360       8,532  
Sales of refined products (BPD) (3)
     111,880       17,245       106,280       8,670  
 
                                
Refinery utilization (4)
     94.8 %     64.0 %     88.9 %     64.0 %
 
                                
Average per produced barrel (5)
                                
Net sales
   $ 90.93     $ 76.14     $ 88.74     $ 76.14  
Cost of products (6)
     81.32       73.31       82.05       73.31  
 
                        
Refinery gross margin
     9.61       2.83       6.69       2.83  
Refinery operating expenses (7)
     4.70       5.21       5.26       5.21  
 
                        
Net operating margin
   $ 4.91     $ (2.38 )   $ 1.43     $ (2.38 )
 
                        
 
                                
Feedstocks:
                                
Sour crude oil
     8 %     — %     5 %     — %
Sweet crude oil
     92 %     100 %     95 %     100 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        

 

 

 

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Sales of produced refined products:
                                
Gasolines
     37 %     23 %     39 %     23 %
Diesel fuels
     32 %     28 %     31 %     28 %
Jet fuels
     9 %     9 %     9 %     9 %
Lubricants
     10 %     22 %     10 %     22 %
Gas oil / intermediates
     3 %     16 %     3 %     16 %
Asphalt
     4 %     — %     4 %     — %
LPG and other
     5 %     2 %     4 %     2 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        
 
                                
Consolidated
                                
Crude charge (BPD) (1)
     228,300       129,623       218,300       105,443  
Refinery production (BPD) (2)
     233,460       141,648       225,250       115,150  
Sales of produced refined products (BPD)
     233,990       139,842       223,980       114,646  
Sales of refined products (BPD) (3)
     237,300       141,338       228,250       120,187  
 
                                
Refinery utilization (4)
     89.2 %     81.5 %     85.3 %     77.0 %
 
                                
Average per produced barrel (5)
                                
Net sales
   $ 91.75     $ 69.14     $ 89.69     $ 63.76  
Cost of products (6)
     80.74       61.32       81.26       54.35  
 
                        
Refinery gross margin
     11.01       7.82       8.43       9.41  
Refinery operating expenses (7)
     4.74       4.91       5.17       5.49  
 
                        
Net operating margin
   $ 6.27     $ 2.91     $ 3.26     $ 3.92  
 
                        
 
                                
Feedstocks:
                                
Sour crude oil
     37 %     56 %     37 %     59 %
Sweet crude oil
     54 %     29 %     55 %     27 %
Black wax crude oil
     4 %     5 %     3 %     6 %
Other feedstocks and blends
     5 %     10 %     5 %     8 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        
 
                                
Sales of produced refined products:
                                
Gasolines
     48 %     54 %     49 %     58 %
Diesel fuels
     32 %     32 %     31 %     31 %
Jet fuels
     6 %     1 %     6 %     1 %
Fuel oil
     1 %     3 %     2 %     3 %
Asphalt
     3 %     3 %     3 %     2 %
Lubricants
     5 %     3 %     5 %     2 %
Gas oil / intermediates
     2 %     2 %     1 %     1 %
LPG and other
     3 %     2 %     3 %     2 %
 
                        
Total
     100 %     100 %     100 %     100 %
 
                        
     
(1)  
Crude charge represents the barrels per day of crude oil processed at our refineries.
 
(2)  
Refinery production represents the barrels per day of refined products yielded from processing crude and other refinery feedstocks through the crude units and other conversion units at our refineries.
 
(3)  
Includes refined products purchased for resale.
 
(4)  
Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity was increased by 15,000 BPSD effective April 1, 2009 (our Navajo refinery expansion), 85,000 BPSD effective June 1, 2009 (our Tulsa Refinery west facility acquisition) and 40,000 BPSD effective December 1, 2009 (our Tulsa refinery east facility acquisition), increasing our consolidated crude capacity to 256,000 BPSD.
 
(5)  
Represents average per barrel amount for produced refined products sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” below.
 
(6)  
Transportation, terminal and refinery storage costs billed from HEP are included in cost of products.
 
(7)  
Represents operating expenses of our refineries, exclusive of depreciation and amortization.
 
(8)  
The amounts reported for the Tulsa Refinery for the three and six months ended June 30, 2009 include crude oil processed and products yielded from the Tulsa Refinery west facility for the period from June 1, 2009 (date of Tulsa Refinery west facility acquisition) through June 30, 2009 only, and averaged over the number of days in the periods (91 days and 182 days for the three and six months ended, respectively).

 

 

 

Operating data for the period from June 1, 2009 through June 30, 2009 is as follows:
         
Tulsa Refinery
        
Crude charge (BPD)
     54,390  
Refinery production (BPD)
     52,400  
Sales of produced refined products (BPD)
     51,480  
Sales of refined products (BPD)
     52,310  
 
        
Refinery utilization
     64.0 %
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 Holly Corporation 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 accounting principles generally accepted in the United States; 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 from continuing operations.
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (In thousands)  
 
                                
Income from continuing operations
   $ 72,666     $ 19,938     $ 49,412     $ 42,012  
Subtract noncontrolling interest in income from continuing operations
     (6,504 )     (5,690 )     (11,344 )     (6,211 )
Add income tax provision
     39,654       9,322       22,982       21,171  
Add interest expense
     21,023       7,203       38,745       13,442  
Subtract interest income
     (635 )     (134 )     (694 )     (2,330 )
Add depreciation and amortization
     28,824       25,260       56,581       45,341  
 
                        
EBITDA from continuing operations
   $ 155,028     $ 55,899     $ 155,682     $ 113,425  
 
                        
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.
We calculate refinery gross margin and net operating margin using net sales, cost of products and operating expenses, in each case averaged per produced barrel sold. These two margins do not include the effect of 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.

 

 

 

Refinery Gross Margin
Refinery gross margin per barrel is the difference between average net sales price and average cost of products per barrel of produced refined products. Refinery gross margin for each of our refineries and for all of our refineries on a consolidated basis is calculated as shown below.
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Average per produced barrel:
                                
 
                                
Navajo Refinery
                                
Net sales
   $ 91.21     $ 67.93     $ 89.70     $ 63.80  
Less cost of products
     82.08       59.54       82.50       53.83  
 
                        
Refinery gross margin
   $ 9.13     $ 8.39     $ 7.20     $ 9.97  
 
                        
 
                                
Woods Cross Refinery
                                
Net sales
   $ 96.62     $ 69.05     $ 93.15     $ 59.74  
Less cost of products
     74.26       60.10       74.48       49.90  
 
                        
Refinery gross margin
   $ 22.36     $ 8.95     $ 18.67     $ 9.84  
 
                        
 
                                
Tulsa Refinery
                                
Net sales
   $ 90.93     $ 76.14     $ 88.74     $ 76.14  
Less cost of products
     81.32       73.31       82.05       73.31  
 
                        
Refinery gross margin
   $ 9.61     $ 2.83     $ 6.69     $ 2.83  
 
                        
 
                                
Consolidated
                                
Net sales
   $ 91.75     $ 69.14     $ 89.69     $ 63.76  
Less cost of products
     80.74       61.32       81.26       54.35  
 
                        
Refinery gross margin
   $ 11.01     $ 7.82     $ 8.43     $ 9.41  
 
                        
Net Operating Margin
Net operating margin per barrel is the difference between refinery gross margin and refinery operating expenses per barrel of produced refined products. Net operating margin for each of our refineries and for all of our refineries on a consolidated basis is calculated as shown below.
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Average per produced barrel:
                                
 
                                
Navajo Refinery
                                
Refinery gross margin
   $ 9.13     $ 8.39     $ 7.20     $ 9.97  
Less refinery operating expenses
     4.61       4.56       4.88       5.19  
 
                        
Net operating margin
   $ 4.52     $ 3.83     $ 2.32     $ 4.78  
 
                        
 
                                
Woods Cross Refinery
                                
Refinery gross margin
   $ 22.36     $ 8.95     $ 18.67     $ 9.84  
Less refinery operating expenses
     5.30       5.98       5.74       6.45  
 
                        
Net operating margin
   $ 17.06     $ 2.97     $ 12.93     $ 3.39  
 
                        
 
                                
Tulsa Refinery
                                
Refinery gross margin
   $ 9.61     $ 2.83     $ 6.69     $ 2.83  
Less refinery operating expenses
     4.70       5.21       5.26       5.21  
 
                        
Net operating margin
   $ 4.91     $ (2.38 )   $ 1.43     $ (2.38 )
 
                        
 
                                
Consolidated
                                
Refinery gross margin
   $ 11.01     $ 7.82     $ 8.43     $ 9.41  
Less refinery operating expenses
     4.74       4.91       5.17       5.49  
 
                        
Net operating margin
   $ 6.27     $ 2.91     $ 3.26     $ 3.92  
 
                        

 

 

 

Below are reconciliations to our Consolidated Statements of Income for (i) net sales, cost of products and operating expenses, in each case averaged per produced barrel sold, and (ii) net operating margin and refinery gross margin. Due to rounding of reported numbers, some amounts may not calculate exactly.
Reconciliations of refined product sales from produced products sold to total sales and other revenue
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
 
Navajo Refinery
                                
Average sales price per produced barrel sold
   $ 91.21     $ 67.93     $ 89.70     $ 63.80  
Times sales of produced refined products sold (BPD)
     93,040       95,812       90,000       79,072  
Times number of days in period
     91       91       181       181  
 
                        
Refined product sales from produced products sold
   $ 772,242     $ 592,274     $ 1,461,213     $ 913,108  
 
                        
 
                                
Woods Cross Refinery
                                
Average sales price per produced barrel sold
   $ 96.62     $ 69.05     $ 93.15     $ 59.74  
Times sales of produced refined products sold (BPD)
     29,070       27,059       28,620       27,042  
Times number of days in period
     91       91       181       181  
 
                        
Refined product sales from produced products sold
   $ 255,596     $ 170,027     $ 482,537     $ 292,404  
 
                        
 
                                
Tulsa Refinery
                                
Average sales price per produced barrel sold
   $ 90.93     $ 76.14     $ 88.74     $ 76.14  
Times sales of produced refined products sold (BPD)
     111,880       16,971       105,360       8,532  
Times number of days in period
     91       91       181       181  
 
                        
Refined product sales from produced products sold
   $ 925,766     $ 117,588     $ 1,692,286     $ 117,582  
 
                        
 
                                
Sum of refined products sales from produced products sold from our three refineries (1)
   $ 1,953,604     $ 879,889     $ 3,636,036     $ 1,323,094  
Add refined product sales from purchased products and rounding (2)
     27,296       8,303       68,680       61,984  
 
                        
Total refined products sales
     1,980,900       888,192       3,704,716       1,385,078  
Add direct sales of excess crude oil (3)
     114,155       100,621       249,017       221,876  
Add other refining segment revenue (4)
     42,305       31,106       50,801       49,875  
 
                        
Total refining segment revenue
     2,137,360       1,019,919       4,004,534       1,656,829  
Add HEP segment sales and other revenue
     45,483       37,999       86,172       67,331  
Add corporate and other revenues
     151       2,979       217       3,078  
Subtract consolidations and eliminations
     (37,134 )     (25,119 )     (70,773 )     (43,430 )
 
                        
Sales and other revenues
   $ 2,145,860     $ 1,035,778     $ 4,020,150     $ 1,683,808  
 
                        
     
(1)  
The above calculations of refined product sales from produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.
 
(2)  
We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments.
 
(3)  
We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as inventory and then upon sale as cost of products sold. Additionally, we enter into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at carryover cost.
 
(4)  
Other refining segment revenue includes the revenues associated with Holly Asphalt and revenue derived from feedstock and sulfur credit sales.
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
 
Average sales price per produced barrel sold
   $ 91.75     $ 69.14     $ 89.69     $ 63.76  
Times sales of produced refined products sold (BPD)
     233,990       139,842       223,980       114,646  
Times number of days in period
     91       91       181       181  
 
                        
Refined product sales from produced products sold
   $ 1,953,604     $ 879,889     $ 3,636,036     $ 1,323,094  
 
                        

 

 

 

Reconciliation of average cost of products per produced barrel sold to total cost of products sold
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
 
                                
Navajo Refinery
                                
Average cost of products per produced barrel sold
   $ 82.08     $ 59.54     $ 82.50     $ 53.83  
Times sales of produced refined products sold (BPD)
     93,040       95,812       90,000       79,072  
Times number of days in period
     91       91       181       181  
 
                        
Cost of products for produced products sold
   $ 694,942     $ 519,123     $ 1,343,925     $ 770,417  
 
                        
 
                                
Woods Cross Refinery
                                
Average cost of products per produced barrel sold
   $ 74.26     $ 60.10     $ 74.48     $ 49.90  
Times sales of produced refined products sold (BPD)
     29,070       27,059       28,620       27,042  
Times number of days in period
     91       91       181       181  
 
                        
Cost of products for produced products sold
   $ 196,445     $ 147,988     $ 385,823     $ 244,241  
 
                        
 
                                
Tulsa Refinery
                                
Average cost of products per produced barrel sold
   $ 81.32     $ 73.31     $ 82.05     $ 73.31  
Times sales of produced refined products sold (BPD)
     111,880       16,971       105,360       8,532  
Times number of days in period
     91       91       181       181  
 
                        
Cost of products for produced products sold
   $ 827,925     $ 113,217     $ 1,564,707     $ 113,212  
 
                        
 
                                
Sum of cost of products for produced products sold from our three refineries (1)
   $ 1,719,312     $ 780,328     $ 3,294,455     $ 1,127,870  
Add refined product costs from purchased products sold and rounding (2)
     27,827       9,180       69,329       66,859  
 
                        
Total refined cost of products sold
     1,747,139       789,508       3,363,784       1,194,729  
Add crude oil cost of direct sales of excess crude oil (3)
     112,885       99,872       246,552       220,554  
Add other refining segment costs of products sold (4)
     24,738       15,537       30,859       19,473  
 
                        
Total refining segment cost of products sold
     1,884,762       904,917       3,641,195       1,434,756  
Subtract consolidations and eliminations
     (36,550 )     (24,991 )     (69,119 )     (43,176 )
 
                        
Costs of products sold (exclusive of depreciation and amortization)
   $ 1,848,212     $ 879,926     $ 3,572,076     $ 1,391,580  
 
                        
     
(1)  
The above calculations of cost of products for produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.
 
(2)  
We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments.
 
(3)  
We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as inventory and then upon sale as cost of products sold. Additionally, we enter into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at carryover cost.
 
(4)  
Other refining segment cost of products sold includes the cost of products for Holly Asphalt and costs attributable to feedstock and sulfur credit sales.
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
 
                                
Average cost of products per produced barrel sold
   $ 80.74     $ 61.32     $ 81.26     $ 54.35  
Times sales of produced refined products sold (BPD)
     233,990       139,842       223,980       114,646  
Times number of days in period
     91       91       181       181  
 
                        
Cost of products for produced products sold
   $ 1,719,312     $ 780,328     $ 3,294,455     $ 1,127,870  
 
                        

 

 

 

Reconciliation of average refinery operating expenses per produced barrel sold to total operating expenses
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
Navajo Refinery
                                
Average refinery operating expenses per produced barrel sold
   $ 4.61     $ 4.56     $ 4.88     $ 5.19  
Times sales of produced refined products sold (BPD)
     93,040       95,812       90,000       79,072  
Times number of days in period
     91       91       181       181  
 
                        
Refinery operating expenses for produced products sold
   $ 39,031     $ 39,758     $ 79,495     $ 74,279  
 
                        
 
                                
Woods Cross Refinery
                                
Average refinery operating expenses per produced barrel sold
   $ 5.30     $ 5.98     $ 5.74     $ 6.45  
Times sales of produced refined products sold (BPD)
     29,070       27,059       28,620       27,042  
Times number of days in period
     91       91       181       181  
 
                        
Refinery operating expenses for produced products sold
   $ 14,020     $ 14,725     $ 29,734     $ 31,570  
 
                        
 
                                
Tulsa Refinery
                                
Average refinery operating expenses per produced barrel sold
   $ 4.70     $ 5.21     $ 5.26     $ 5.21  
Times sales of produced refined products sold (BPD)
     111,880       16,971       105,360       8,532  
Times number of days in period
     91       91       181       181  
 
                        
Refinery operating expenses for produced products sold
   $ 47,851     $ 8,046     $ 100,309     $ 8,046  
 
                        
 
                                
Sum of refinery operating expenses per produced products sold from our three refineries (1)
   $ 100,902     $ 62,529     $ 209,538     $ 113,895  
Add other refining segment operating expenses and rounding (2)
     6,549       5,111       12,507       10,160  
 
                        
Total refining segment operating expenses
     107,451       67,640       222,045       124,055  
Add HEP segment operating expenses
     13,495       10,631       26,555       20,973  
Add corporate and other costs
     12       8       18       27  
Subtract consolidations and eliminations
     (127 )     (226 )     (243 )     (254 )
 
                        
Operating expenses (exclusive of depreciation and amortization)
   $ 120,831     $ 78,053     $ 248,375     $ 144,801  
 
                        
     
(1)  
The above calculations of refinery operating expenses from produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.
 
(2)  
Other refining segment operating expenses include the marketing costs associated with our refining segment and the operating expenses of Holly Asphalt.
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
 
                                
Average refinery operating expenses per produced barrel sold
   $ 4.74     $ 4.91     $ 5.17     $ 5.49  
 
                                
Times sales of produced refined products sold (BPD)
     233,990       139,842       223,980       114,646  
Times number of days in period
     91       91       181       181  
 
                        
Refinery operating expenses for produced products sold
   $ 100,902     $ 62,529     $ 209,538     $ 113,895  
 
                        

 

 

 

Reconciliation of net operating margin per barrel to refinery gross margin per barrel to total sales and other revenues
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
Navajo Refinery
                                
Net operating margin per barrel
   $ 4.52     $ 3.83     $ 2.32     $ 4.78  
Add average refinery operating expenses per produced barrel
     4.61       4.56       4.88       5.19  
 
                        
Refinery gross margin per barrel
     9.13       8.39       7.20       9.97  
Add average cost of products per produced barrel sold
     82.08       59.54       82.50       53.83  
 
                        
Average sales price per produced barrel sold
   $ 91.21     $ 67.93     $ 89.70     $ 63.80  
Times sales of produced refined products sold (BPD)
     93,040       95,812       90,000       79,072  
Times number of days in period
     91       91       181       181  
 
                        
Refined products sales from produced products sold
   $ 772,242     $ 592,274     $ 1,461,213     $ 913,108  
 
                        
 
                                
Woods Cross Refinery
                                
Net operating margin per barrel
   $ 17.06     $ 2.97     $ 12.93     $ 3.39  
Add average refinery operating expenses per produced barrel
     5.30       5.98       5.74       6.45  
 
                        
Refinery gross margin per barrel
     22.36       8.95       18.67       9.84  
Add average cost of products per produced barrel sold
     74.26       60.10       74.48       49.90  
 
                        
Average net sales per produced barrel sold
   $ 96.62     $ 69.05     $ 93.15     $ 59.74  
Times sales of produced refined products sold (BPD)
     29,070       27,059       28,620       27,042  
Times number of days in period
     91       91       181       181  
 
                        
Refined products sales from produced products sold
   $ 255,596     $ 170,027     $ 482,537     $ 292,404  
 
                        
 
                                
Tulsa Refinery
                                
Net operating margin per barrel
   $ 4.91     $ (2.38 )   $ 1.43     $ (2.38 )
Add average refinery operating expenses per produced barrel
     4.70       5.21       5.26       5.21  
 
                        
Refinery gross margin per barrel
     9.61       2.83       6.69       2.83  
Add average cost of products per produced barrel sold
     81.32       73.31       82.05       73.31  
 
                        
Average net sales per produced barrel sold
   $ 90.93     $ 76.14     $ 88.74     $ 76.14  
Times sales of produced refined products sold (BPD)
     111,880       16,971       105,360       8,532  
Times number of days in period
     91       91       181       181  
 
                        
Refined products sales from produced products sold
   $ 925,766     $ 117,588     $ 1,692,286     $ 117,582  
 
                        
Sum of refined products sales from produced products sold from our three refineries (1)
   $ 1,953,604     $ 879,889     $ 3,636,036     $ 1,323,094  
Add refined product sales from purchased products and rounding (2)
     27,296       8,303       68,680       61,984  
 
                        
Total refined products sales
     1,980,900       888,192       3,704,716       1,385,078  
Add direct sales of excess crude oil (3)
     114,155       100,621       249,017       221,876  
Add other refining segment revenue (4)
     42,305       31,106       50,801       49,875  
 
                        
Total refining segment revenue
     2,137,360       1,019,919       4,004,534       1,656,829  
Add HEP segment sales and other revenues
     45,483       37,999       86,172       67,331  
Add corporate and other revenues
     151       2,979       217       3,078  
Subtract consolidations and eliminations
     (37,134 )     (25,119 )     (70,773 )     (43,430 )
 
                        
Sales and other revenues
   $ 2,145,860     $ 1,035,778     $ 4,020,150     $ 1,683,808  
 
                        
     
(1)  
The above calculations of refined product sales from produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.
 
(2)  
We purchase finished products when opportunities arise that provide a profit on the sale of such products or to meet delivery commitments.
 
(3)  
We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as inventory and then upon sale as cost of products sold. Additionally, we enter into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at carryover cost.
 
(4)  
Other refining segment revenue includes the revenues associated with Holly Asphalt and revenue derived from feedstock and sulfur credit sales.

 

 

 

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
    (Dollars in thousands, except per barrel amounts)  
 
Net operating margin per barrel
   $ 6.27     $ 2.91     $ 3.26     $ 3.92  
Add average refinery operating expenses per produced barrel
     4.74       4.91       5.17       5.49  
 
                        
Refinery gross margin per barrel
     11.01       7.82       8.43       9.41  
Add average cost of products per produced barrel sold
     80.74       61.32       81.26       54.35  
 
                        
Average sales price per produced barrel sold
   $ 91.75     $ 69.14     $ 89.69     $ 63.76  
Times sales of produced refined products sold (BPD)
     233,990       139,842       223,980       114,646  
Times number of days in period
     91       91       181       181  
 
                        
Refined product sales from produced products sold
   $ 1,953,604     $ 879,889     $ 3,636,036     $ 1,323,094  
 
                        
FOR FURTHER INFORMATION, Contact:
Bruce R, Shaw, Senior Vice President and
   Chief Financial Officer
M. Neale Hickerson, Vice President,
   Investor Relations
Holly Corporation
214/871-3555