NOTE 1: Description of Business and Presentation of Financial Statements

Holly Corporation ("Holly") changed its name to HollyFrontier Corporation ("HollyFrontier" or "HollyFrontier Corporation") in connection with the consummation of its "merger of equals" with Frontier Oil Corporation ("Frontier"), which became effective on July 1, 2011 (see Note 2). References herein to HollyFrontier Corporation with respect to time periods prior to July 1, 2011 include Holly and its consolidated subsidiaries and do not include Frontier and its consolidated subsidiaries. References herein to HollyFrontier with respect to time periods from and after July 1, 2011 include the operations of the merged Frontier businesses. Unless otherwise specified, the financial statements included herein include financial information for the merged Frontier business operations for the period July 1, 2011 to September 30, 2011. 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. Also, the words "we," "our," "ours" and "us" generally include HEP and its subsidiaries as consolidated subsidiaries of HollyFrontier with certain exceptions where there are 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.

As of September 30, 2011, we:

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owned and operated five refineries consisting of a petroleum 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 in Woods Cross, Utah (the "Woods Cross Refinery"), two refinery facilities located in Tulsa, Oklahoma (collectively, the "Tulsa Refinery"), a refinery in El Dorado, Kansas (the "El Dorado Refinery") and a refinery located in Cheyenne, Wyoming (the "Cheyenne Refinery");

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owned and operated NK Asphalt Partners ("NK Asphalt") which operates various asphalt terminals in Arizona, New Mexico and Texas;

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owned a 75% interest in a 12-inch refined products pipeline project, under construction, from Salt Lake City, Utah to Las Vegas, Nevada, together with terminal facilities in the Cedar City, Utah and North Las Vegas areas (the "UNEV Pipeline");

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owned Ethanol Management Company ("EMC"), a products terminal and blending facility near Denver, Colorado and a 50% interest in Sabine Biofuels II, LLC ("Sabine Biofuels") a development stage biodiesel production facility located in Port Arthur, Texas, and

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owned a 34% interest in HEP, a consolidated variable interest entity ("VIE"), which includes our 2% general partner interest. HEP has logistic assets including petroleum product and crude oil pipelines located in Texas, New Mexico, Oklahoma and Utah; ten refined product terminals; a jet fuel terminal; loading rack facilities at each of our three refineries, a refined products tank farm facility and on-site crude oil tankage at our Navajo, Woods Cross and Tulsa Refineries. Additionally, HEP owns a 25% interest in SLC Pipeline LLC ("SLC Pipeline"), a 95-mile intrastate pipeline system that serves refineries in the Salt Lake City area.

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, 2011, the consolidated results of operations and comprehensive income for the three and the nine months ended September 30, 2011 and 2010 and consolidated cash flows for the nine months ended September 30, 2011 and 2010 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, 2010 that has been filed with the SEC.

On August 3, 2011, our Board of Directors declared a two-for-one stock split, payable in the form of a common stock dividend for each issued and outsatnding share of our common stock. The stock dividend was paid August 31, 2011 to all shareholders of record on August 24, 2011. We have retained the current par value of $0.01 per share for all shares of our common stock and have reclassified $763,000 (the amount equal to the par value of the additional stock issued) from additional capital to common stock to reflect this stock split at December 31, 2010. All references to share and per share amounts in these consolidated financial statements and related disclosures have been adjusted to reflect the effect of the stock split for all periods presented.

Beginning July 1, 2011, our business operations reflect the merged Frontier businesses (see Note 2). Our results of operations for the first nine months of 2011 are not necessarily indicative of the results to be expected for the full year

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 a letter of credit or guarantee, is required. Our credit losses, which historically have been minimal, are charged to income when accounts are deemed uncollectible. At September 30, 2011, our allowance for doubtful accounts reserve was $3.5 million.

Inventories

We use the last-in, first-out ("LIFO") method of valuing inventory. Under the LIFO method, an actual valuation of inventory can only be 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.

Goodwill

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 events or circumstances indicate the possibility of impairment. As of September 30, 2011 there have been no impairments to goodwill.

New Accounting Pronouncements

Presentation of Comprehensive Income

In June 2011, an accounting standard update was issued that requires the presentation of net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements and eliminates the option to present the components of other comprehensive income in the statement of stockholders' equity. This accounting standard update is effective January 1, 2012 and will be applied retrospectively. This update will not have an impact on our financial condition, results of operations and cash flows.

Intangibles — Goodwill and Other: Testing Goodwill for Impairment

In September 2011, an accounting standard update was issued that allows entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this option, an entity is no longer required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that the reporting unit's fair value is less than its carrying amount. This accounting standard update is effective for annual and interim goodwill impairment tests performed beginning January 1, 2012. This update will not have an impact on our financial condition, results of operations and cash flows.