Delaware (State or other jurisdiction of incorporation) | 001-03876 (Commission File Number) | 75-1056913 (I.R.S. Employer Identification Number) |
2828 N. Harwood, Suite 1300 Dallas, TX (Address of principal executive offices) | 75201 (Zip code) |
99.1 | — Press Release of the Company issued August 2, 2018.* |
99.1 |
Press Release August 2, 2018 | ![]() |
Three Months Ended June 30, | Change from 2017 | |||||||||||||
2018 | 2017 | Change | Percent | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Sales and other revenues | $ | 4,471,236 | $ | 3,458,864 | $ | 1,012,372 | 29 | % | ||||||
Operating costs and expenses: | ||||||||||||||
Cost of products sold: | ||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 3,595,916 | 2,753,459 | 842,457 | 31 | ||||||||||
Lower of cost or market inventory valuation adjustment | (106,926 | ) | 83,982 | (190,908 | ) | (227 | ) | |||||||
3,488,990 | 2,837,441 | 651,549 | 23 | |||||||||||
Operating expenses | 296,215 | 316,261 | (20,046 | ) | (6 | ) | ||||||||
Selling, general and administrative expenses | 68,675 | 59,803 | 8,872 | 15 | ||||||||||
Depreciation and amortization | 110,379 | 105,282 | 5,097 | 5 | ||||||||||
Asset impairment | — | 19,247 | (19,247 | ) | (100 | ) | ||||||||
Total operating costs and expenses | 3,964,259 | 3,338,034 | 626,225 | 19 | ||||||||||
Income from operations | 506,977 | 120,830 | 386,147 | 320 | ||||||||||
Other income (expense): | ||||||||||||||
Earnings of equity method investments | 1,734 | 4,053 | (2,319 | ) | (57 | ) | ||||||||
Interest income | 2,934 | 176 | 2,758 | 1,567 | ||||||||||
Interest expense | (32,324 | ) | (29,645 | ) | (2,679 | ) | 9 | |||||||
Gain (loss) on foreign currency transactions | (325 | ) | 10,328 | (10,653 | ) | (103 | ) | |||||||
Other, net | 1,364 | 327 | 1,037 | 317 | ||||||||||
(26,617 | ) | (14,761 | ) | (11,856 | ) | 80 | ||||||||
Income before income taxes | 480,360 | 106,069 | 374,291 | 353 | ||||||||||
Income tax expense | 117,447 | 31,996 | 85,451 | 267 | ||||||||||
Net income | 362,913 | 74,073 | 288,840 | 390 | ||||||||||
Less net income attributable to noncontrolling interest | 17,406 | 16,306 | 1,100 | 7 | ||||||||||
Net income attributable to HollyFrontier stockholders | $ | 345,507 | $ | 57,767 | $ | 287,740 | 498 | % | ||||||
Earnings per share attributable to HollyFrontier stockholders: | ||||||||||||||
Basic | $ | 1.96 | $ | 0.33 | $ | 1.63 | 494 | % | ||||||
Diluted | $ | 1.94 | $ | 0.33 | $ | 1.61 | 488 | % | ||||||
Cash dividends declared per common share | $ | 0.33 | $ | 0.33 | $ | — | — | % | ||||||
Average number of common shares outstanding: | ||||||||||||||
Basic | 175,899 | 176,147 | (248 | ) | — | % | ||||||||
Diluted | 177,586 | 176,302 | 1,284 | 1 | % | |||||||||
EBITDA | $ | 602,723 | $ | 224,514 | $ | 378,209 | 168 | % | ||||||
Adjusted EBITDA | $ | 485,256 | $ | 306,069 | $ | 179,187 | 59 | % |
Six Months Ended June 30, | Change from 2017 | |||||||||||||
2018 | 2017 | Change | Percent | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Sales and other revenues | $ | 8,599,663 | $ | 6,539,347 | $ | 2,060,316 | 32 | % | ||||||
Operating costs and expenses: | ||||||||||||||
Cost of products sold: | ||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 6,943,041 | 5,394,634 | 1,548,407 | 29 | ||||||||||
Lower of cost or market inventory valuation adjustment | (210,764 | ) | 95,805 | (306,569 | ) | (320 | ) | |||||||
6,732,277 | 5,490,439 | 1,241,838 | 23 | |||||||||||
Operating expenses | 616,503 | 623,987 | (7,484 | ) | (1 | ) | ||||||||
Selling, general and administrative expenses | 133,339 | 117,051 | 16,288 | 14 | ||||||||||
Depreciation and amortization | 214,720 | 201,322 | 13,398 | 7 | ||||||||||
Asset impairment | — | 19,247 | (19,247 | ) | (100 | ) | ||||||||
Total operating costs and expenses | 7,696,839 | 6,452,046 | 1,244,793 | 19 | ||||||||||
Income from operations | 902,824 | 87,301 | 815,523 | 934 | ||||||||||
Other income (expense): | ||||||||||||||
Earnings of equity method investments | 3,013 | 5,893 | (2,880 | ) | (49 | ) | ||||||||
Interest income | 5,524 | 995 | 4,529 | 455 | ||||||||||
Interest expense | (65,047 | ) | (56,803 | ) | (8,244 | ) | 15 | |||||||
Loss on early extinguishment of debt | — | (12,225 | ) | 12,225 | (100 | ) | ||||||||
Gain on foreign currency transactions | 5,235 | 395 | 4,840 | 1,225 | ||||||||||
Gain on foreign currency swap contracts | — | 24,545 | (24,545 | ) | (100 | ) | ||||||||
Other, net | 2,710 | 1,397 | 1,313 | 94 | ||||||||||
(48,565 | ) | (35,803 | ) | (12,762 | ) | 36 | ||||||||
Income before income taxes | 854,259 | 51,498 | 802,761 | 1,559 | ||||||||||
Income tax expense | 202,484 | 15,207 | 187,277 | 1,232 | ||||||||||
Net income | 651,775 | 36,291 | 615,484 | 1,696 | ||||||||||
Less net income attributable to noncontrolling interest | 38,177 | 23,992 | 14,185 | 59 | ||||||||||
Net income attributable to HollyFrontier stockholders | $ | 613,598 | $ | 12,299 | $ | 601,299 | 4,889 | % | ||||||
Earnings per share attributable to HollyFrontier stockholders: | ||||||||||||||
Basic | $ | 3.47 | $ | 0.07 | $ | 3.40 | 4,857 | % | ||||||
Diluted | $ | 3.44 | $ | 0.07 | $ | 3.37 | 4,814 | % | ||||||
Cash dividends declared per common share | $ | 0.66 | $ | 0.66 | $ | — | — | % | ||||||
Average number of common shares outstanding: | ||||||||||||||
Basic | 176,256 | 176,141 | 115 | — | % | |||||||||
Diluted | 177,820 | 176,490 | 1,330 | 1 | % | |||||||||
EBITDA | $ | 1,090,325 | $ | 284,636 | $ | 805,689 | 283 | % | ||||||
Adjusted EBITDA | $ | 800,911 | $ | 391,529 | $ | 409,382 | 105 | % |
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Cash and cash equivalents | $ | 979,872 | $ | 630,757 | |||
Working capital | $ | 2,146,625 | $ | 1,640,118 | |||
Total assets | $ | 11,281,352 | $ | 10,692,154 | |||
Long-term debt | $ | 2,387,759 | $ | 2,498,993 | |||
Total equity | $ | 6,403,643 | $ | 5,896,940 |
Refining | Lubricants and Specialty Products | HEP | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | 3,987,115 | $ | 459,405 | $ | 24,746 | $ | (30 | ) | $ | 4,471,236 | |||||||||
Intersegment revenues | $ | 91,866 | $ | 8,284 | $ | 94,014 | $ | (194,164 | ) | $ | — | |||||||||
$ | 4,078,981 | $ | 467,689 | $ | 118,760 | $ | (194,194 | ) | $ | 4,471,236 | ||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) | $ | 3,394,853 | $ | 373,141 | $ | — | $ | (172,078 | ) | $ | 3,595,916 | |||||||||
Lower of cost or market inventory valuation adjustment | $ | (106,926 | ) | $ | — | $ | — | $ | — | $ | (106,926 | ) | ||||||||
Operating expenses | $ | 262,558 | $ | 19,905 | $ | 34,533 | $ | (20,781 | ) | $ | 296,215 | |||||||||
Selling, general and administrative expenses | $ | 26,201 | $ | 35,257 | $ | 2,673 | $ | 4,544 | $ | 68,675 | ||||||||||
Depreciation and amortization | $ | 72,989 | $ | 10,020 | $ | 24,609 | $ | 2,761 | $ | 110,379 | ||||||||||
Income (loss) from operations | $ | 429,306 | $ | 29,366 | $ | 56,945 | $ | (8,640 | ) | $ | 506,977 | |||||||||
Earnings of equity method investments | $ | — | $ | — | $ | 1,734 | $ | — | $ | 1,734 | ||||||||||
Capital expenditures | $ | 42,188 | $ | 16,842 | $ | 18,957 | $ | 1,950 | $ | 79,937 | ||||||||||
Three Months Ended June 30, 2017 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | 2,999,054 | $ | 444,000 | $ | 15,990 | $ | (180 | ) | $ | 3,458,864 | |||||||||
Intersegment revenues | $ | 105,545 | $ | — | $ | 93,153 | $ | (198,698 | ) | $ | — | |||||||||
$ | 3,104,599 | $ | 444,000 | $ | 109,143 | $ | (198,878 | ) | $ | 3,458,864 | ||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) | $ | 2,615,937 | $ | 317,921 | $ | — | $ | (180,399 | ) | $ | 2,753,459 | |||||||||
Lower of cost or market inventory valuation adjustment | $ | 82,794 | $ | 1,188 | $ | — | $ | — | $ | 83,982 | ||||||||||
Operating expenses | $ | 242,713 | $ | 55,750 | $ | 34,160 | $ | (16,362 | ) | $ | 316,261 | |||||||||
Selling, general and administrative expenses | $ | 22,654 | $ | 27,769 | $ | 2,618 | $ | 6,762 | $ | 59,803 | ||||||||||
Depreciation and amortization | $ | 75,426 | $ | 7,532 | $ | 19,541 | $ | 2,783 | $ | 105,282 | ||||||||||
Asset impairment | $ | 19,247 | $ | — | $ | — | $ | — | $ | 19,247 | ||||||||||
Income (loss) from operations | $ | 45,828 | $ | 33,840 | $ | 52,824 | $ | (11,662 | ) | $ | 120,830 | |||||||||
Earnings of equity method investments | $ | — | $ | — | $ | 4,053 | $ | — | $ | 4,053 | ||||||||||
Capital expenditures | $ | 51,825 | $ | 9,122 | $ | 12,259 | $ | 4,087 | $ | 77,293 |
Refining | Lubricants and Specialty Products | HEP | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | 7,645,262 | $ | 902,271 | $ | 52,203 | $ | (73 | ) | $ | 8,599,663 | |||||||||
Intersegment revenues | $ | 182,904 | $ | 10,258 | $ | 195,441 | $ | (388,603 | ) | $ | — | |||||||||
$ | 7,828,166 | $ | 912,529 | $ | 247,644 | $ | (388,676 | ) | $ | 8,599,663 | ||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) | $ | 6,606,557 | $ | 680,672 | $ | — | $ | (344,188 | ) | $ | 6,943,041 | |||||||||
Lower of cost or market inventory valuation adjustment | $ | (210,764 | ) | $ | — | $ | — | $ | — | $ | (210,764 | ) | ||||||||
Operating expenses | $ | 502,405 | $ | 84,813 | $ | 70,736 | $ | (41,451 | ) | $ | 616,503 | |||||||||
Selling, general and administrative expenses | $ | 52,572 | $ | 65,911 | $ | 5,795 | $ | 9,061 | $ | 133,339 | ||||||||||
Depreciation and amortization | $ | 140,164 | $ | 18,884 | $ | 49,750 | $ | 5,922 | $ | 214,720 | ||||||||||
Income (loss) from operations | $ | 737,232 | $ | 62,249 | $ | 121,363 | $ | (18,020 | ) | $ | 902,824 | |||||||||
Earnings of equity method investments | $ | — | $ | — | $ | 3,013 | $ | — | $ | 3,013 | ||||||||||
Capital expenditures | $ | 84,962 | $ | 25,380 | $ | 31,570 | $ | 7,565 | $ | 149,477 | ||||||||||
Six Months Ended June 30, 2017 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | 5,741,781 | $ | 765,269 | $ | 32,599 | $ | (302 | ) | $ | 6,539,347 | |||||||||
Intersegment revenues | $ | 185,453 | $ | — | $ | 182,178 | $ | (367,631 | ) | $ | — | |||||||||
$ | 5,927,234 | $ | 765,269 | $ | 214,777 | $ | (367,933 | ) | $ | 6,539,347 | ||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) | $ | 5,175,091 | $ | 548,702 | $ | — | $ | (329,159 | ) | $ | 5,394,634 | |||||||||
Lower of cost or market inventory valuation adjustment | $ | 94,325 | $ | 1,480 | $ | — | $ | — | $ | 95,805 | ||||||||||
Operating expenses | $ | 497,084 | $ | 95,069 | $ | 66,712 | $ | (34,878 | ) | $ | 623,987 | |||||||||
Selling, general and administrative expenses | $ | 45,019 | $ | 41,082 | $ | 5,255 | $ | 25,695 | $ | 117,051 | ||||||||||
Depreciation and amortization | $ | 144,864 | $ | 12,836 | $ | 37,914 | $ | 5,708 | $ | 201,322 | ||||||||||
Asset impairment | $ | 19,247 | $ | — | $ | — | $ | — | $ | 19,247 | ||||||||||
Income (loss) from operations | $ | (48,396 | ) | $ | 66,100 | $ | 104,896 | $ | (35,299 | ) | $ | 87,301 | ||||||||
Earnings of equity method investments | $ | — | $ | — | $ | 5,893 | $ | — | $ | 5,893 | ||||||||||
Capital expenditures | $ | 99,259 | $ | 10,957 | $ | 20,524 | $ | 6,310 | $ | 137,050 |
June 30, 2018 | ||||||||||||||||||||
Cash and cash equivalents | $ | 8,223 | $ | 92,483 | $ | 6,656 | $ | 872,510 | $ | 979,872 | ||||||||||
Total assets | $ | 7,020,880 | $ | 1,402,189 | $ | 2,154,741 | $ | 703,542 | $ | 11,281,352 | ||||||||||
Long-term debt | $ | — | $ | — | $ | 1,395,599 | $ | 992,160 | $ | 2,387,759 | ||||||||||
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 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||||||||||
Crude charge (BPD) (1) | 289,820 | 290,460 | 258,930 | 256,370 | ||||||||||||
Refinery throughput (BPD) (2) | 300,030 | 304,840 | 273,200 | 263,730 | ||||||||||||
Sales of produced refined products (BPD) (3) | 270,710 | 282,950 | 261,950 | 255,900 | ||||||||||||
Refinery utilization (4) | 111.5 | % | 111.7 | % | 99.6 | % | 98.6 | % | ||||||||
Average per produced barrel (5) | ||||||||||||||||
Refinery gross margin (6) | $ | 11.90 | $ | 9.10 | $ | 11.30 | $ | 7.73 | ||||||||
Refinery operating expenses (7) | 4.89 | 4.51 | 5.02 | 5.24 | ||||||||||||
Net operating margin | $ | 7.01 | $ | 4.59 | $ | 6.28 | $ | 2.49 | ||||||||
Refinery operating expenses per throughput barrel (8) | $ | 4.41 | $ | 4.18 | $ | 4.82 | $ | 4.90 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 58 | % | 62 | % | 51 | % | 60 | % | ||||||||
Sour crude oil | 23 | % | 18 | % | 26 | % | 19 | % | ||||||||
Heavy sour crude oil | 16 | % | 15 | % | 18 | % | 15 | % | ||||||||
Other feedstocks and blends | 3 | % | 5 | % | 5 | % | 6 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Sales of produced refined products: | ||||||||||||||||
Gasolines | 49 | % | 50 | % | 51 | % | 50 | % | ||||||||
Diesel fuels | 35 | % | 34 | % | 33 | % | 32 | % | ||||||||
Jet fuels | 6 | % | 6 | % | 6 | % | 7 | % | ||||||||
Fuel oil | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||
Asphalt | 3 | % | 3 | % | 3 | % | 3 | % | ||||||||
Base oils | 4 | % | 4 | % | 4 | % | 5 | % | ||||||||
LPG and other | 2 | % | 2 | % | 2 | % | 2 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Southwest Region (Navajo Refinery) | ||||||||||||||||
Crude charge (BPD) (1) | 111,900 | 102,120 | 109,020 | 88,370 | ||||||||||||
Refinery throughput (BPD) (2) | 120,340 | 112,720 | 118,510 | 96,200 | ||||||||||||
Sales of produced refined products (BPD) (3) | 118,240 | 113,490 | 120,240 | 96,280 | ||||||||||||
Refinery utilization (4) | 111.9 | % | 102.1 | % | 109.0 | % | 88.4 | % | ||||||||
Average per produced barrel (5) | ||||||||||||||||
Refinery gross margin (6) | $ | 21.04 | $ | 11.56 | $ | 15.38 | $ | 10.53 | ||||||||
Refinery operating expenses (7) | 5.34 | 5.20 | 4.68 | 6.10 | ||||||||||||
Net operating margin | $ | 15.70 | $ | 6.36 | $ | 10.70 | $ | 4.43 | ||||||||
Refinery operating expenses per throughput barrel (8) | $ | 5.25 | $ | 5.24 | $ | 4.75 | $ | 6.11 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 34 | % | 25 | % | 32 | % | 22 | % | ||||||||
Sour crude oil | 59 | % | 66 | % | 60 | % | 70 | % | ||||||||
Other feedstocks and blends | 7 | % | 9 | % | 8 | % | 8 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Sales of produced refined products: | ||||||||||||||||
Gasolines | 47 | % | 49 | % | 51 | % | 50 | % | ||||||||
Diesel fuels | 41 | % | 41 | % | 39 | % | 39 | % | ||||||||
Fuel oil | 3 | % | 2 | % | 2 | % | 3 | % | ||||||||
Asphalt | 5 | % | 5 | % | 4 | % | 5 | % | ||||||||
LPG and other | 4 | % | 3 | % | 4 | % | 3 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Rocky Mountain Region (Cheyenne and Woods Cross Refineries) | ||||||||||||||||
Crude charge (BPD) (1) | 61,760 | 74,510 | 71,560 | 74,610 | ||||||||||||
Refinery throughput (BPD) (2) | 69,830 | 80,740 | 79,570 | 82,240 | ||||||||||||
Sales of produced refined products (BPD) (3) | 64,870 | 76,420 | 77,460 | 78,710 | ||||||||||||
Refinery utilization (4) | 63.7 | % | 76.8 | % | 73.8 | % | 76.9 | % | ||||||||
Average per produced barrel (5) | ||||||||||||||||
Refinery gross margin (6) | $ | 27.89 | $ | 19.40 | $ | 25.05 | $ | 14.79 | ||||||||
Refinery operating expenses (7) | 14.34 | 10.41 | 11.58 | 10.30 | ||||||||||||
Net operating margin | $ | 13.55 | $ | 8.99 | $ | 13.47 | $ | 4.49 | ||||||||
Refinery operating expenses per throughput barrel (8) | $ | 13.33 | $ | 9.85 | $ | 11.28 | $ | 9.86 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 18 | % | 32 | % | 26 | % | 35 | % | ||||||||
Heavy sour crude oil | 51 | % | 39 | % | 43 | % | 36 | % | ||||||||
Black wax crude oil | 20 | % | 21 | % | 21 | % | 20 | % | ||||||||
Other feedstocks and blends | 11 | % | 8 | % | 10 | % | 9 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Sales of produced refined products: | ||||||||||||
Gasolines | 57 | % | 59 | % | 57 | % | 58 | % | ||||
Diesel fuels | 32 | % | 33 | % | 33 | % | 33 | % | ||||
Fuel oil | 3 | % | 2 | % | 2 | % | 2 | % | ||||
Asphalt | 5 | % | 4 | % | 4 | % | 5 | % | ||||
LPG and other | 3 | % | 2 | % | 4 | % | 2 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Consolidated | ||||||||||||||||
Crude charge (BPD) (1) | 463,480 | 467,090 | 439,510 | 419,350 | ||||||||||||
Refinery throughput (BPD) (2) | 490,200 | 498,300 | 471,280 | 442,170 | ||||||||||||
Sales of produced refined products (BPD) (3) | 453,830 | 472,870 | 459,640 | 430,890 | ||||||||||||
Refinery utilization (4) | 101.4 | % | 102.2 | % | 96.2 | % | 91.8 | % | ||||||||
Average per produced barrel (5) | ||||||||||||||||
Refinery gross margin (6) | $ | 16.57 | $ | 11.36 | $ | 14.68 | $ | 9.64 | ||||||||
Refinery operating expenses (7) | 6.36 | 5.64 | 6.04 | 6.37 | ||||||||||||
Net operating margin | $ | 10.21 | $ | 5.72 | $ | 8.64 | $ | 3.27 | ||||||||
Refinery operating expenses per throughput barrel (8) | $ | 5.89 | $ | 5.35 | $ | 5.89 | $ | 6.07 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 46 | % | 49 | % | 42 | % | 48 | % | ||||||||
Sour crude oil | 29 | % | 26 | % | 30 | % | 26 | % | ||||||||
Heavy sour crude oil | 17 | % | 16 | % | 18 | % | 15 | % | ||||||||
Black wax crude oil | 3 | % | 3 | % | 3 | % | 4 | % | ||||||||
Other feedstocks and blends | 5 | % | 6 | % | 7 | % | 7 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Consolidated | ||||||||||||
Sales of produced refined products: | ||||||||||||
Gasolines | 50 | % | 51 | % | 52 | % | 51 | % | ||||
Diesel fuels | 36 | % | 35 | % | 35 | % | 34 | % | ||||
Jet fuels | 4 | % | 4 | % | 3 | % | 5 | % | ||||
Fuel oil | 1 | % | 1 | % | 2 | % | 1 | % | ||||
Asphalt | 4 | % | 4 | % | 3 | % | 4 | % | ||||
Base oils | 2 | % | 3 | % | 2 | % | 3 | % | ||||
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 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” below. |
(6) | Excludes lower of cost or market inventory valuation adjustments of $106.9 million and $84.0 million for the three months ended June 30, 2018 and 2017, respectively, and $210.8 million and $95.8 million for the six months ended June 30, 2018 and 2017, respectively. |
(7) | Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Lubricants and Specialty Products | ||||||||||||
Throughput (BPD) | 18,610 | 21,470 | 20,100 | 21,750 | ||||||||
Sales of produced products (BPD) | 31,000 | 36,300 | 31,400 | 36,080 | ||||||||
Sales of produced products: | ||||||||||||
Finished products | 48 | % | 44 | % | 48 | % | 43 | % | ||||
Base oils | 32 | % | 32 | % | 32 | % | 34 | % | ||||
Other | 20 | % | 24 | % | 20 | % | 23 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Rack Back (1) | Rack Forward (2) | Eliminations (3) | Total Lubricants and Specialty Products | |||||||||||||
(In thousands) | ||||||||||||||||
Three months ended June 30, 2018 | ||||||||||||||||
Sales and other revenues | $ | 175,642 | $ | 425,461 | $ | (133,414 | ) | $ | 467,689 | |||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | 153,040 | $ | 353,515 | $ | (133,414 | ) | $ | 373,141 | |||||||
Operating expenses | $ | 27,210 | $ | (7,305 | ) | $ | — | $ | 19,905 | |||||||
Selling, general and administrative expenses | $ | 7,888 | $ | 27,369 | $ | — | $ | 35,257 | ||||||||
Depreciation and amortization | $ | 6,013 | $ | 4,007 | $ | — | $ | 10,020 | ||||||||
Income (loss) from operations | $ | (18,509 | ) | $ | 47,875 | $ | — | $ | 29,366 | |||||||
EBITDA | $ | (12,496 | ) | $ | 51,882 | $ | — | $ | 39,386 | |||||||
Three months ended June 30, 2017 | ||||||||||||||||
Sales and other revenues | $ | 160,786 | $ | 394,485 | $ | (111,271 | ) | $ | 444,000 | |||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | 129,832 | $ | 299,360 | $ | (111,271 | ) | $ | 317,921 | |||||||
Lower of cost or market inventory valuation adjustment | $ | — | $ | 1,188 | $ | — | $ | 1,188 | ||||||||
Operating expenses | $ | 22,934 | $ | 32,816 | $ | — | $ | 55,750 | ||||||||
Selling, general and administrative expenses | $ | 6,237 | $ | 21,532 | $ | — | $ | 27,769 | ||||||||
Depreciation and amortization | $ | 5,288 | $ | 2,244 | $ | — | $ | 7,532 | ||||||||
Income (loss) from operations | $ | (3,505 | ) | $ | 37,345 | $ | — | $ | 33,840 | |||||||
EBITDA | $ | 1,783 | $ | 39,589 | $ | — | $ | 41,372 |
Rack Back (1) | Rack Forward (2) | Eliminations (3) | Total Lubricants and Specialty Products | |||||||||||||
(In thousands) | ||||||||||||||||
Six months ended June 30, 2018 | ||||||||||||||||
Sales and other revenues | $ | 349,074 | $ | 824,500 | $ | (261,045 | ) | $ | 912,529 | |||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | 305,094 | $ | 636,623 | $ | (261,045 | ) | $ | 680,672 | |||||||
Operating expenses | $ | 55,981 | $ | 28,832 | $ | — | $ | 84,813 | ||||||||
Selling, general and administrative expenses | $ | 14,707 | $ | 51,204 | $ | — | $ | 65,911 | ||||||||
Depreciation and amortization | $ | 11,641 | $ | 7,243 | $ | — | $ | 18,884 | ||||||||
Income (loss) from operations | $ | (38,349 | ) | $ | 100,598 | $ | — | $ | 62,249 | |||||||
EBITDA | $ | (26,708 | ) | $ | 107,841 | $ | — | $ | 81,133 | |||||||
Six months ended June 30, 2017 | ||||||||||||||||
Sales and other revenues | $ | 267,825 | $ | 684,338 | $ | (186,894 | ) | $ | 765,269 | |||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | 224,270 | $ | 511,326 | $ | (186,894 | ) | $ | 548,702 | |||||||
Lower of cost or market inventory valuation adjustment | $ | — | $ | 1,480 | $ | — | $ | 1,480 | ||||||||
Operating expenses | $ | 38,561 | $ | 56,508 | $ | — | $ | 95,069 | ||||||||
Selling, general and administrative expenses | $ | 9,058 | $ | 32,024 | $ | — | $ | 41,082 | ||||||||
Depreciation and amortization | $ | 9,087 | $ | 3,749 | $ | — | $ | 12,836 | ||||||||
Income (loss) from operations | $ | (13,151 | ) | $ | 79,251 | $ | — | $ | 66,100 | |||||||
EBITDA | $ | (4,064 | ) | $ | 83,000 | $ | — | $ | 78,936 |
(1) | Rack Back consists of the 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. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(In thousands) | ||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 345,507 | $ | 57,767 | $ | 613,598 | $ | 12,299 | ||||||||
Add interest expense | 32,324 | 29,645 | 65,047 | 56,803 | ||||||||||||
Subtract interest income | (2,934 | ) | (176 | ) | (5,524 | ) | (995 | ) | ||||||||
Add income tax provision | 117,447 | 31,996 | 202,484 | 15,207 | ||||||||||||
Add depreciation and amortization | 110,379 | 105,282 | 214,720 | 201,322 | ||||||||||||
EBITDA | $ | 602,723 | $ | 224,514 | $ | 1,090,325 | $ | 284,636 | ||||||||
Add (subtract) lower of cost or market inventory valuation adjustment | (106,926 | ) | 83,982 | (210,764 | ) | 95,805 | ||||||||||
Subtract RINs cost reduction | (25,267 | ) | (30,456 | ) | (96,971 | ) | (30,456 | ) | ||||||||
Add Woods Cross refinery outage damages | 24,566 | — | 24,566 | — | ||||||||||||
Subtract Woods Cross refinery estimated insurance claims on outage damages | (9,840 | ) | — | (9,840 | ) | — | ||||||||||
Add PCLI acquisition and integration costs | — | 3,693 | 3,595 | 19,290 | ||||||||||||
Add long-lived asset impairment | — | 19,247 | — | 19,247 | ||||||||||||
Add incremental cost of products sold attributable to PCLI inventory value step-up | — | 5,089 | — | 15,327 | ||||||||||||
Add loss on early extinguishment of debt | — | — | — | 12,225 | ||||||||||||
Subtract gain on foreign currency swap contracts | — | — | — | (24,545 | ) | |||||||||||
Adjusted EBITDA | $ | 485,256 | $ | 306,069 | $ | 800,911 | $ | 391,529 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Refining Segment | 2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands) | ||||||||||||||||
Income (loss) from operations (1) | $ | 429,306 | $ | 45,828 | $ | 737,232 | $ | (48,396 | ) | |||||||
Add depreciation and amortization | 72,989 | 75,426 | 140,164 | 144,864 | ||||||||||||
EBITDA | 502,295 | 121,254 | 877,396 | 96,468 | ||||||||||||
Add (subtract) lower of cost or market inventory valuation adjustment | (106,926 | ) | 82,794 | (210,764 | ) | 94,325 | ||||||||||
Subtract RINs cost reduction | (25,267 | ) | (30,456 | ) | (96,971 | ) | (30,456 | ) | ||||||||
Add Woods Cross refinery outage damages | 24,566 | — | 24,566 | — | ||||||||||||
Subtract Woods Cross refinery estimated insurance claims on outage damages | (9,840 | ) | — | (9,840 | ) | — | ||||||||||
Add long-lived asset impairment | — | 19,247 | — | 19,247 | ||||||||||||
Adjusted EBITDA | $ | 384,828 | $ | 192,839 | $ | 584,387 | $ | 179,584 |
Lubricants and Specialty Products Segment | Rack Back | Rack Forward | Total Lubricants and Specialty Products | |||||||||
(In thousands) | ||||||||||||
Three months ended June 30, 2018 | ||||||||||||
Income (loss) from operations (1) | $ | (18,509 | ) | $ | 47,875 | $ | 29,366 | |||||
Add depreciation and amortization | 6,013 | 4,007 | 10,020 | |||||||||
EBITDA | $ | (12,496 | ) | $ | 51,882 | $ | 39,386 | |||||
Three months ended June 30, 2017 | ||||||||||||
Income (loss) from operations (1) | $ | (3,505 | ) | $ | 37,345 | $ | 33,840 | |||||
Add depreciation and amortization | 5,288 | 2,244 | 7,532 | |||||||||
EBITDA | $ | 1,783 | $ | 39,589 | $ | 41,372 | ||||||
Six months ended June 30, 2018 | ||||||||||||
Income (loss) from operations (1) | $ | (38,349 | ) | $ | 100,598 | $ | 62,249 | |||||
Add depreciation and amortization | 11,641 | 7,243 | 18,884 | |||||||||
EBITDA | $ | (26,708 | ) | $ | 107,841 | $ | 81,133 | |||||
Six months ended June 30, 2017 | ||||||||||||
Income (loss) from operations (1) | $ | (13,151 | ) | $ | 79,251 | $ | 66,100 | |||||
Add depreciation and amortization | 9,087 | 3,749 | 12,836 | |||||||||
EBITDA | $ | (4,064 | ) | $ | 83,000 | $ | 78,936 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Net operating margin per produced barrel sold | $ | 10.21 | $ | 5.72 | $ | 8.64 | $ | 3.27 | ||||||||
Add average refinery operating expenses per produced barrel sold | 6.36 | 5.64 | 6.04 | 6.37 | ||||||||||||
Refinery gross margin per produced barrel sold | $ | 16.57 | $ | 11.36 | $ | 14.68 | $ | 9.64 | ||||||||
Times produced barrels sold (BPD) | 453,830 | 472,870 | 459,640 | 430,890 | ||||||||||||
Times number of days in period | 91 | 91 | 181 | 181 | ||||||||||||
Refining segment gross margin | $ | 684,317 | $ | 488,834 | $ | 1,221,300 | $ | 751,834 | ||||||||
Subtract rounding | (189 | ) | (172 | ) | 309 | 309 | ||||||||||
Total refining segment gross margin | 684,128 | 488,662 | 1,221,609 | 752,143 | ||||||||||||
Add refining segment cost of products sold | 3,394,853 | 2,615,937 | 6,606,557 | 5,175,091 | ||||||||||||
Refining segment sales and other revenues | 4,078,981 | 3,104,599 | 7,828,166 | 5,927,234 | ||||||||||||
Add lubricants and specialty products segment sales and other revenues | 467,689 | 444,000 | 912,529 | 765,269 | ||||||||||||
Add HEP segment sales and other revenues | 118,760 | 109,143 | 247,644 | 214,777 | ||||||||||||
Subtract corporate, other and eliminations | (194,194 | ) | (198,878 | ) | (388,676 | ) | (367,933 | ) | ||||||||
Sales and other revenues | $ | 4,471,236 | $ | 3,458,864 | $ | 8,599,663 | $ | 6,539,347 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Average operating expenses per produced barrel sold | $ | 6.36 | $ | 5.64 | $ | 6.04 | $ | 6.37 | ||||||||
Times produced barrels sold (BPD) | 453,830 | 472,870 | 459,640 | 430,890 | ||||||||||||
Times number of days in period | 91 | 91 | 181 | 181 | ||||||||||||
Refining segment operating expenses | $ | 262,659 | $ | 242,696 | $ | 502,497 | $ | 496,803 | ||||||||
Add (subtract) rounding | (101 | ) | 17 | (92 | ) | 281 | ||||||||||
Total refining segment operating expenses | 262,558 | 242,713 | 502,405 | 497,084 | ||||||||||||
Add lubricants and specialty products segment operating expenses | 19,905 | 55,750 | 84,813 | 95,069 | ||||||||||||
Add HEP segment operating expenses | 34,533 | 34,160 | 70,736 | 66,712 | ||||||||||||
Subtract corporate, other and eliminations | (20,781 | ) | (16,362 | ) | (41,451 | ) | (34,878 | ) | ||||||||
Operating expenses (exclusive of depreciation and amortization) | $ | 296,215 | $ | 316,261 | $ | 616,503 | $ | 623,987 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
GAAP: | ||||||||||||||||
Income before income taxes | $ | 480,360 | $ | 106,069 | $ | 854,259 | $ | 51,498 | ||||||||
Income tax expense | 117,447 | 31,996 | 202,484 | 15,207 | ||||||||||||
Net income | 362,913 | 74,073 | 651,775 | 36,291 | ||||||||||||
Less net income attributable to noncontrolling interest | 17,406 | 16,306 | 38,177 | 23,992 | ||||||||||||
Net income attributable to HollyFrontier stockholders | 345,507 | 57,767 | 613,598 | 12,299 | ||||||||||||
Non-GAAP adjustments to arrive at adjusted results: | ||||||||||||||||
Lower of cost or market inventory valuation adjustment | (106,926 | ) | 83,982 | (210,764 | ) | 95,805 | ||||||||||
RINs cost reduction | (25,267 | ) | (30,456 | ) | (96,971 | ) | (30,456 | ) | ||||||||
Woods Cross refinery outage damages | 24,566 | — | 24,566 | — | ||||||||||||
Woods Cross refinery estimated insurance claims on outage damages | (9,840 | ) | — | (9,840 | ) | — | ||||||||||
PCLI acquisition and integration costs | — | 3,693 | 3,595 | 19,290 | ||||||||||||
Long-lived asset impairment | — | 23,249 | — | 23,249 | ||||||||||||
Incremental cost of products sold attributable to PCLI inventory value step up | — | 5,089 | — | 15,327 | ||||||||||||
Loss on early extinguishment of debt | — | — | — | 12,225 | ||||||||||||
Gain on foreign currency swap contracts | — | — | — | (24,545 | ) | |||||||||||
Total adjustments to income before income taxes | (117,467 | ) | 85,557 | (289,414 | ) | 110,895 | ||||||||||
Adjustment to income tax expense (1) | (30,872 | ) | 27,354 | (71,940 | ) | 32,962 | ||||||||||
Adjustment to net income attributable to noncontrolling interest | — | — | — | 7,702 | ||||||||||||
Total adjustments, net of tax | (86,595 | ) | 58,203 | (217,474 | ) | 70,231 | ||||||||||
Adjusted results - Non-GAAP: | ||||||||||||||||
Adjusted income before income taxes | 362,893 | 191,626 | 564,845 | 162,393 | ||||||||||||
Adjusted income tax expense (2) | 86,575 | 59,350 | 130,544 | 48,169 | ||||||||||||
Adjusted net income | 276,318 | 132,276 | 434,301 | 114,224 | ||||||||||||
Less net income attributable to noncontrolling interest | 17,406 | 16,306 | 38,177 | 31,694 | ||||||||||||
Adjusted net income attributable to HollyFrontier stockholders | $ | 258,912 | $ | 115,970 | $ | 396,124 | $ | 82,530 | ||||||||
Adjusted earnings per share attributable to HollyFrontier stockholders - diluted (3) | $ | 1.45 | $ | 0.66 | $ | 2.22 | $ | 0.47 | ||||||||
Average number of common shares outstanding - diluted | 177,586 | 176,302 | 177,820 | 176,490 |
(1) | Represents adjustment to GAAP income tax expense to arrive at adjusted income tax expense, which is computed as follows: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Non-GAAP income tax expense (2) | $ | 86,575 | $ | 59,350 | $ | 130,544 | $ | 48,169 | ||||||||
Subtract GAAP income tax expense | 117,447 | 31,996 | 202,484 | 15,207 | ||||||||||||
Non-GAAP adjustment to income tax expense | $ | (30,872 | ) | $ | 27,354 | $ | (71,940 | ) | $ | 32,962 |
(2) | Non-GAAP income tax expense is computed by a) adjusting HFC's consolidated estimated Annual Effective Tax Rate ("AETR") for GAAP purposes for the effects of the above Non-GAAP adjustments b) applying the resulting Adjusted Non-GAAP AETR to Non-GAAP adjusted income before income taxes and c) adjusting for discrete tax items applicable to the period. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
GAAP: | ||||||||||||||||
Income before income taxes | $ | 480,360 | $ | 106,069 | $ | 854,259 | $ | 51,498 | ||||||||
Income tax expense | $ | 117,447 | $ | 31,996 | $ | 202,484 | $ | 15,207 | ||||||||
Effective tax rate for GAAP financial statements | 24.4 | % | 30.2 | % | 23.7 | % | 29.5 | % | ||||||||
Adjusted - Non-GAAP: | ||||||||||||||||
Effect of Non-GAAP adjustments | (0.5 | )% | 0.7 | % | (0.6 | )% | 0.2 | % | ||||||||
Effective tax rate for adjusted results | 23.9 | % | 30.9 | % | 23.1 | % | 29.7 | % |