HollyFrontier Corporation Reports 2018 Fourth Quarter and Full Year Results
-
Reported net income attributable to HollyFrontier stockholders of $1.1
billion or $6.19 per diluted share and adjusted net income of $1.14
billion or $6.44 per diluted share, for the year -
Reported EBITDA of $2.0 billion and adjusted EBITDA of $2.1 billion,
for the year -
Returned $597.0 million to shareholders through dividends and share
repurchases in the year -
Acquisitions of Red Giant Oil and Sonneborn, further strengthening our
finished lubricants and specialty products business
DALLAS–(BUSINESS WIRE)–HollyFrontier Corporation (NYSE:HFC) (“HollyFrontier” or the “Company”)
today reported fourth quarter net income attributable to HollyFrontier
stockholders of $141.9 million or $0.81 per diluted share for the
quarter ended December 31, 2018, compared to $521.1 million or $2.92 per
diluted share for the quarter ended December 31, 2017.
The fourth quarter results include a lower of cost or market inventory
valuation adjustment that decreased pre-tax earnings by $329.2 million.
Excluding this item, net income for the fourth quarter was $393.9
million ($2.25 per diluted share) compared to $124.6 million ($0.70 per
diluted share) for the fourth quarter of 2017, which excludes certain
items that collectively decreased earnings by $396.5 million for the
three months ended December 31, 2017. A reconciliation of actual to
adjusted earnings is presented in the accompanying reconciliations to
amounts reported under Generally Accepted Accounting Principles (“GAAP”).
HollyFrontier’s President & CEO, George Damiris, commented,
“HollyFrontier achieved strong financial results in 2018 as we were able
to capture the favorable crude discounts and healthy product cracks
across our refining system. We returned approximately $597 million in
cash to shareholders in the form of regular dividends and share
repurchases, while continuing to invest in our assets. Looking to 2019,
despite tightening crude differentials, we are optimistic that strength
in the diesel markets will continue and we will see a seasonal rebound
in gasoline markets. On February 1, 2019, we closed on our previously
announced acquisition of Sonneborn. With the addition of Sonneborn, we
continue to focus on advancing our downward integration strategy into
the high-margin finished lubricants and specialty products market.”
The Refining and Marketing segment reported adjusted EBITDA of $583.4
million compared to $233.1 million for the fourth quarter of 2017. This
increase was primarily driven by lower laid-in crude costs which
resulted in a consolidated refinery gross margin of $22.17 per produced
barrel, a 77% increase compared to $12.54 for the fourth quarter of
2017. Crude oil charge averaged 405,580 barrels per day (“BPD”) for the
fourth quarter compared to 461,110 BPD for the fourth quarter 2017. The
lower crude charge was due to the planned turnaround at our El Dorado
refinery.
Our Lubricants and Specialty Products segment reported EBITDA of $(3.9)
million, driven by negative Rack Back EBITDA. Rack Forward EBITDA was
$48.5 million for the quarter and $213.4 million for the year ended
December 31, 2018. Rack Back EBITDA was negatively impacted by continued
weakness in the base oil markets, coupled with a turnaround at the
Mississauga plant in the fourth quarter.
Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $89.9 million for
the fourth quarter 2018 compared to $124.6 million in the fourth quarter
of 2017, which included a remeasurement gain related to the acquisition
of the remaining interest in the SLC and Frontier Pipelines. HEP EBITDA
was negatively impacted by lower UNEV volumes and unplanned maintenance
on a refinery process unit at Woods Cross in the fourth quarter.
For the fourth quarter of 2018, net cash provided by operations totaled
$424.5 million. During the period, we declared and paid a dividend of
$0.33 per share to shareholders totaling $57.6 million and spent $185.2
million in stock repurchases. At December 31, 2018, our cash and cash
equivalents totaled $1,154.8 million, a $79.1 million increase over cash
and cash equivalents of $1,075.7 million at September 30, 2018.
Additionally, our consolidated long-term debt was $2,411.5 million. Our
debt, exclusive of HEP debt, which is nonrecourse to HollyFrontier, was
$992.6 million at December 31, 2018.
The Company has scheduled a webcast conference call for today,
February 20, 2019, at 8:30 AM Eastern Time to discuss fourth quarter
financial results. This webcast may be accessed at: https://78449.themediaframe.com/dataconf/productusers/hfc/mediaframe/27948/indexl.html.
An audio archive of this webcast will be available using the above noted
link through March 6, 2019.
HollyFrontier 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 other
specialty products. HollyFrontier owns and operates refineries located
in Kansas, Oklahoma, New Mexico, Wyoming and Utah and markets its
refined products principally in the Southwest U.S., the Rocky Mountains
extending into the Pacific Northwest and in other neighboring Plains
states. In addition, HollyFrontier produces base oils and other
specialized lubricants in the U.S., Canada and Netherlands, and exports
products to more than 80 countries. HollyFrontier also owns a 57%
limited partner interest and a non-economic general partner interest in
Holly Energy Partners, L.P., a master limited partnership that provides
petroleum product and crude oil transportation, terminalling, storage
and throughput services to the petroleum industry, including
HollyFrontier Corporation subsidiaries.
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 or lubricant product operations or
pipeline and terminal operations on acceptable terms and to integrate
any future acquired operations, the possibility of terrorist and cyber
attacks and the consequences of any such attacks, general economic
conditions and other financial, operational and legal risks and
uncertainties detailed from time to time in 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 December 31, |
Change from 2017 | |||||||||||||||||||
| 2018 | 2017 | Change | Percent | |||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||
| Sales and other revenues | $ | 4,344,204 | $ | 3,992,705 | $ | 351,499 | 9 | % | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||
| Cost of products sold: | ||||||||||||||||||||
|
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) |
3,245,507 | 3,184,690 | 60,817 | 2 | ||||||||||||||||
| Lower of cost or market inventory valuation adjustment | 329,232 | (93,362 | ) | 422,594 | (453 | ) | ||||||||||||||
| 3,574,739 | 3,091,328 | 483,411 | 16 | |||||||||||||||||
| Operating expenses | 352,139 | 350,405 | 1,734 | — | ||||||||||||||||
| Selling, general and administrative expenses | 85,955 | 80,411 | 5,544 | 7 | ||||||||||||||||
| Depreciation and amortization | 113,719 | 105,731 | 7,988 | 8 | ||||||||||||||||
| Total operating costs and expenses | 4,126,552 | 3,627,875 | 498,677 | 14 | ||||||||||||||||
| Income from operations | 217,652 | 364,830 | (147,178 | ) | (40 | ) | ||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Earnings of equity method investments | 1,698 | 1,545 | 153 | 10 | ||||||||||||||||
| Interest income | 6,232 | 1,667 | 4,565 | 274 | ||||||||||||||||
| Interest expense | (33,917 | ) | (32,063 | ) | (1,854 | ) | 6 | |||||||||||||
| Gain on foreign currency transactions | 681 | (2,596 | ) | 3,277 | (126 | ) | ||||||||||||||
| Remeasurement gain on HEP pipeline interest acquisitions | — | 36,254 | (36,254 | ) | (100 | ) | ||||||||||||||
| Other, net | (528 | ) | 1,625 | (2,153 | ) | (132 | ) | |||||||||||||
| (25,834 | ) | 6,432 | (32,266 | ) | (502 | ) | ||||||||||||||
| Income before income taxes | 191,818 | 371,262 | (179,444 | ) | (48 | ) | ||||||||||||||
| Income tax expense (benefit) | 28,501 | (185,972 | ) | 214,473 | (115 | ) | ||||||||||||||
| Net income | 163,317 | 557,234 | (393,917 | ) | (71 | ) | ||||||||||||||
| Less net income attributable to noncontrolling interest | 21,421 | 36,152 | (14,731 | ) | (41 | ) | ||||||||||||||
| Net income attributable to HollyFrontier stockholders | $ | 141,896 | $ | 521,082 | $ | (379,186 | ) | (73 | )% | |||||||||||
| Earnings per share attributable to HollyFrontier stockholders: | ||||||||||||||||||||
| Basic | $ | 0.82 | $ | 2.94 | $ | (2.12 | ) | (72 | )% | |||||||||||
| Diluted | $ | 0.81 | $ | 2.92 | $ | (2.11 | ) | (72 | )% | |||||||||||
| Cash dividends declared per common share | $ | 0.33 | $ | 0.33 | $ | — | — | % | ||||||||||||
| Average number of common shares outstanding: | ||||||||||||||||||||
| Basic | 172,485 | 176,265 | (3,780 | ) | (2 | )% | ||||||||||||||
| Diluted | 174,259 | 177,457 | (3,198 | ) | (2 | )% | ||||||||||||||
| EBITDA | $ | 311,801 | $ | 471,237 | $ | (159,436 | ) | (34 | )% | |||||||||||
| Adjusted EBITDA | $ | 641,033 | $ | 333,921 | $ | 307,112 | 92 | % | ||||||||||||
|
Years Ended December 31, |
Change from 2017 | |||||||||||||||||||
| 2018 | 2017 | Change | Percent | |||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||
| Sales and other revenues | $ | 17,714,666 | $ | 14,251,299 | $ | 3,463,367 | 24 | % | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||
| Cost of products sold: | ||||||||||||||||||||
|
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) |
13,940,782 | 11,467,873 | 2,472,909 | 22 | ||||||||||||||||
| Lower of cost or market inventory valuation adjustment | 136,305 | (108,685 | ) | 244,990 | (225 | ) | ||||||||||||||
| 14,077,087 | 11,359,188 | 2,717,899 | 24 | |||||||||||||||||
| Operating expenses | 1,285,838 | 1,296,669 | (10,831 | ) | (1 | ) | ||||||||||||||
| Selling, general and administrative expenses | 290,424 | 265,721 | 24,703 | 9 | ||||||||||||||||
| Depreciation and amortization | 437,324 | 409,937 | 27,387 | 7 | ||||||||||||||||
| Asset impairment | — | 19,247 | (19,247 | ) | (100 | ) | ||||||||||||||
| Total operating costs and expenses | 16,090,673 | 13,350,762 | 2,739,911 | 21 | ||||||||||||||||
| Income from operations | 1,623,993 | 900,537 | 723,456 | 80 | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Earnings of equity method investments | 5,825 | 12,510 | (6,685 | ) | (53 | ) | ||||||||||||||
| Interest income | 16,892 | 3,736 | 13,156 | 352 | ||||||||||||||||
| Interest expense | (131,363 | ) | (117,597 | ) | (13,766 | ) | 12 | |||||||||||||
| Loss on early extinguishment of debt | — | (12,225 | ) | 12,225 | (100 | ) | ||||||||||||||
| Gain on foreign currency transactions | 6,197 | 16,921 | (10,724 | ) | (63 | ) | ||||||||||||||
| Gain on foreign currency swap contracts | — | 24,545 | (24,545 | ) | (100 | ) | ||||||||||||||
| Remeasurement gain on HEP pipeline interest acquisitions | — | 36,254 | (36,254 | ) | (100 | ) | ||||||||||||||
| Other, net | 2,923 | 4,182 | (1,259 | ) | (30 | ) | ||||||||||||||
| (99,526 | ) | (31,674 | ) | (67,852 | ) | 214 | ||||||||||||||
| Income before income taxes | 1,524,467 | 868,863 | 655,604 | 75 | ||||||||||||||||
| Income tax expense (benefit) | 347,243 | (12,379 | ) | 359,622 | (2,905 | ) | ||||||||||||||
| Net income | 1,177,224 | 881,242 | 295,982 | 34 | ||||||||||||||||
| Less net income attributable to noncontrolling interest | 79,264 | 75,847 | 3,417 | 5 | ||||||||||||||||
| Net income attributable to HollyFrontier stockholders | $ | 1,097,960 | $ | 805,395 | $ | 292,565 | 36 | % | ||||||||||||
| Earnings per share attributable to HollyFrontier stockholders: | ||||||||||||||||||||
| Basic | $ | 6.25 | $ | 4.54 | $ | 1.71 | 38 | % | ||||||||||||
| Diluted | $ | 6.19 | $ | 4.52 | $ | 1.67 | 37 | % | ||||||||||||
| Cash dividends declared per common share | $ | 1.32 | $ | 1.32 | $ | — | — | % | ||||||||||||
| Average number of common shares outstanding: | ||||||||||||||||||||
| Basic | 175,009 | 176,174 | (1,165 | ) | (1 | )% | ||||||||||||||
| Diluted | 176,661 | 177,196 | (535 | ) | — | % | ||||||||||||||
| EBITDA | $ | 1,996,998 | $ | 1,316,814 | $ | 680,184 | 52 | % | ||||||||||||
| Adjusted EBITDA | $ | 2,054,653 | $ | 1,179,479 | $ | 875,174 | 74 | % | ||||||||||||
Balance Sheet Data
| Years Ended December 31, | |||||||||
| 2018 | 2017 | ||||||||
| (In thousands) | |||||||||
| Cash and cash equivalents | $ | 1,154,752 | $ | 630,757 | |||||
| Working capital | $ | 2,128,224 | $ | 1,640,118 | |||||
| Total assets | $ | 10,994,601 | $ | 10,692,154 | |||||
| Long-term debt | $ | 2,411,540 | $ | 2,498,993 | |||||
| Total equity | $ | 6,459,059 | $ | 5,896,940 | |||||
Segment Information
Our operations are organized into three reportable segments, Refining,
Lubricants and Specialty Products and HEP. Our operations that are not
included in the Refining, Lubricants and Specialty Products and HEP
segments are included in Corporate and Other. Intersegment transactions
are eliminated in our consolidated financial statements and are included
in Eliminations. Corporate and Other and Eliminations are aggregated and
presented under Corporate, Other and Eliminations column. The Refining
segment includes the operations of our El Dorado, Tulsa, Navajo,
Cheyenne and Woods Cross refineries and HFC Asphalt (aggregated as a
reportable segment). Refining activities involve the purchase and
refining of crude oil and wholesale and branded marketing of refined
products, such as gasoline, diesel fuel and jet fuel. These petroleum
products are primarily marketed in the Mid-Continent, Southwest and
Rocky Mountain regions of the United States. HFC Asphalt operates
various terminals in Arizona, New Mexico and Oklahoma.
The Lubricants and Specialty Products segment involves PCLI’s production
operations, located in Mississauga, Ontario, that include lubricant
products such as base oils, white oils, specialty products and finished
lubricants and the operations of our Petro-Canada Lubricants business
that includes the marketing of products to both retail and wholesale
outlets through a global sales network with locations in Canada, the
United States, Europe and China. Additionally, the Lubricants and
Specialty Products segment includes specialty lubricant products
produced at our Tulsa refineries that are marketed throughout North
America and are distributed in Central and South America and the
operations of Red Giant Oil Company LLC, one of the largest suppliers of
locomotive engine oil in North America.
The HEP segment involves all of the operations of HEP, a consolidated
variable interest entity, which owns and operates logistics assets
consisting of petroleum product and crude oil pipelines, terminals,
tankage, loading rack facilities and refinery process units in the
Mid-Continent, Southwest and Rocky Mountain regions of the United
States. The HEP segment also includes a 75% interest in UNEV Pipeline,
LLC (an HEP consolidated subsidiary), and a 50% ownership interest in
each of Osage Pipeline Company, LLC and Cheyenne Pipeline LLC. Revenues
from the HEP segment are earned through transactions with unaffiliated
parties for pipeline transportation, rental and terminalling operations
as well as revenues relating to pipeline transportation services
provided for our refining operations. Due to certain basis differences,
our reported amounts for the HEP segment may not agree to amounts
reported in HEP’s periodic public filings.
| Refining |
Lubricants |
HEP |
Corporate, |
Consolidated |
||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
| Three Months Ended December 31, 2018 | ||||||||||||||||||||||||
| Sales and other revenues: | ||||||||||||||||||||||||
| Revenues from external customers | $ | 3,890,507 | $ | 422,975 | $ | 30,613 | $ | 109 | $ | 4,344,204 | ||||||||||||||
| Intersegment revenues | $ | 85,721 | $ | 1,313 | $ | 102,179 | $ | (189,213 | ) | $ | — | |||||||||||||
| $ | 3,976,228 | $ | 424,288 | $ | 132,792 | $ | (189,104 | ) | $ | 4,344,204 | ||||||||||||||
|
Cost of products sold (exclusive of lower of cost or market inventory adjustment) |
$ | 3,071,340 | $ | 341,126 | $ | — | $ | (166,959 | ) | $ | 3,245,507 | |||||||||||||
| Lower of cost or market inventory valuation adjustment | $ | 329,232 | $ | — | $ | — | $ | — | $ | 329,232 | ||||||||||||||
| Operating expenses | $ | 290,794 | $ | 42,719 | $ | 39,699 | $ | (21,073 | ) | $ | 352,139 | |||||||||||||
| Selling, general and administrative expenses | $ | 30,675 | $ | 44,325 | $ | 2,748 | $ | 8,207 | $ | 85,955 | ||||||||||||||
| Depreciation and amortization | $ | 73,482 | $ | 13,232 | $ | 24,375 | $ | 2,630 | $ | 113,719 | ||||||||||||||
| Income (loss) from operations | $ | 180,705 | $ | (17,114 | ) | $ | 65,970 | $ | (11,909 | ) | $ | 217,652 | ||||||||||||
| Earnings of equity method investments | $ | — | $ | — | $ | 1,698 | $ | — | $ | 1,698 | ||||||||||||||
| Capital expenditures | $ | 70,741 | $ | 14,309 | $ | 13,030 | $ | 3,871 | $ | 101,951 | ||||||||||||||
| Three Months Ended December 31, 2017 | ||||||||||||||||||||||||
| Sales and other revenues: | ||||||||||||||||||||||||
| Revenues from external customers | $ | 3,546,444 | $ | 415,693 | $ | 29,399 | $ | 1,169 | $ | 3,992,705 | ||||||||||||||
| Intersegment revenues | $ | 70,262 | $ | — | $ | 99,822 | $ | (170,084 | ) | $ | — | |||||||||||||
| $ | 3,616,706 | $ | 415,693 | $ | 129,221 | $ | (168,915 | ) | $ | 3,992,705 | ||||||||||||||
|
Cost of products sold (exclusive of lower of cost or market inventory adjustment) |
$ | 3,059,606 | $ | 275,003 | $ | — | $ | (149,919 | ) | $ | 3,184,690 | |||||||||||||
| Lower of cost or market inventory valuation adjustment | $ | (92,114 | ) | $ | (1,248 | ) | $ | — | $ | — | $ | (93,362 | ) | |||||||||||
| Operating expenses | $ | 265,365 | $ | 67,666 | $ | 35,084 | $ | (17,710 | ) | $ | 350,405 | |||||||||||||
| Selling, general and administrative expenses | $ | 31,629 | $ | 33,783 | $ | 5,454 | $ | 9,545 | $ | 80,411 | ||||||||||||||
| Depreciation and amortization | $ | 70,500 | $ | 11,324 | $ | 21,145 | $ | 2,762 | $ | 105,731 | ||||||||||||||
| Income (loss) from operations | $ | 281,720 | $ | 29,165 | $ | 67,538 | $ | (13,593 | ) | $ | 364,830 | |||||||||||||
| Earnings of equity method investments | $ | — | $ | — | $ | 1,545 | $ | — | $ | 1,545 | ||||||||||||||
| Capital expenditures | $ | 46,295 | $ | 10,691 | $ | 14,135 | $ | 8,021 | $ | 79,142 | ||||||||||||||
| Refining |
Lubricants |
HEP |
Corporate, |
Consolidated |
||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
| Year Ended December 31, 2018 | ||||||||||||||||||||||||
| Sales and other revenues: | ||||||||||||||||||||||||
| Revenues from external customers | $ | 15,806,304 | $ | 1,799,506 | $ | 108,412 | $ | 444 | $ | 17,714,666 | ||||||||||||||
| Intersegment revenues | $ | 370,259 | $ | 13,197 | $ | 397,808 | $ | (781,264 | ) | $ | — | |||||||||||||
| $ | 16,176,563 | $ | 1,812,703 | $ | 506,220 | $ | (780,820 | ) | $ | 17,714,666 | ||||||||||||||
|
Cost of products sold (exclusive of lower of cost or market inventory adjustment) |
$ | 13,250,849 | $ | 1,381,540 | $ | — | $ | (691,607 | ) | $ | 13,940,782 | |||||||||||||
| Lower of cost or market inventory valuation adjustment | $ | 136,305 | $ | — | $ | — | $ | — | $ | 136,305 | ||||||||||||||
| Operating expenses | $ | 1,055,209 | $ | 167,820 | $ | 146,430 | $ | (83,621 | ) | $ | 1,285,838 | |||||||||||||
| Selling, general and administrative expenses | $ | 113,641 | $ | 143,750 | $ | 11,041 | $ | 21,992 | $ | 290,424 | ||||||||||||||
| Depreciation and amortization | $ | 284,439 | $ | 43,255 | $ | 98,492 | $ | 11,138 | $ | 437,324 | ||||||||||||||
| Income (loss) from operations | $ | 1,336,120 | $ | 76,338 | $ | 250,257 | $ | (38,722 | ) | $ | 1,623,993 | |||||||||||||
| Earnings of equity method investments | $ | — | $ | — | $ | 5,825 | $ | — | $ | 5,825 | ||||||||||||||
| Capital expenditures | $ | 202,791 | $ | 37,448 | $ | 54,141 | $ | 16,649 | $ | 311,029 | ||||||||||||||
| Year Ended December 31, 2017 | ||||||||||||||||||||||||
| Sales and other revenues: | ||||||||||||||||||||||||
| Revenues from external customers | $ | 12,579,672 | $ | 1,594,036 | $ | 77,225 | $ | 366 | $ | 14,251,299 | ||||||||||||||
| Intersegment revenues | $ | 338,390 | $ | — | $ | 377,137 | $ | (715,527 | ) | $ | — | |||||||||||||
| $ | 12,918,062 | $ | 1,594,036 | $ | 454,362 | $ | (715,161 | ) | $ | 14,251,299 | ||||||||||||||
|
Cost of products sold (exclusive of lower of cost or market inventory adjustment) |
$ | 11,009,419 | $ | 1,093,984 | $ | — | $ | (635,530 | ) | $ | 11,467,873 | |||||||||||||
| Lower of cost or market inventory valuation adjustment | $ | (107,479 | ) | $ | (1,206 | ) | $ | — | $ | — | $ | (108,685 | ) | |||||||||||
| Operating expenses | $ | 1,008,859 | $ | 222,461 | $ | 137,856 | $ | (72,507 | ) | $ | 1,296,669 | |||||||||||||
| Selling, general and administrative expenses | $ | 103,246 | $ | 105,666 | $ | 14,336 | $ | 42,473 | $ | 265,721 | ||||||||||||||
| Depreciation and amortization | $ | 289,434 | $ | 31,894 | $ | 77,660 | $ | 10,949 | $ | 409,937 | ||||||||||||||
| Asset impairment | $ | 19,247 | $ | — | $ | — | $ | — | $ | 19,247 | ||||||||||||||
| Income (loss) from operations | $ | 595,336 | $ | 141,237 | $ | 224,510 | $ | (60,546 | ) | $ | 900,537 | |||||||||||||
| Earnings of equity method investments | $ | — | $ | — | $ | 12,510 | $ | — | $ | 12,510 | ||||||||||||||
| Capital expenditures | $ | 176,533 | $ | 31,464 | $ | 44,810 | $ | 19,452 | $ | 272,259 | ||||||||||||||
| December 31, 2018 | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 7,236 | $ | 80,931 | $ | 3,045 | $ | 1,063,540 | $ | 1,154,752 | ||||||||||||||
| Total assets | $ | 6,465,155 | $ | 1,506,209 | $ | 2,142,027 | $ | 881,210 | $ | 10,994,601 | ||||||||||||||
| Long-term debt | $ | — | $ | — | $ | 1,418,900 | $ | 992,640 | $ | 2,411,540 | ||||||||||||||
| 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 | ||||||||||||||
Refining Segment Operating Data
The following tables set forth information, including non-GAAP
performance measures about our refinery operations. Refinery gross and
net operating margins do not include the non-cash effects of lower of
cost or market inventory valuation adjustments and depreciation and
amortization. Reconciliations to amounts reported under GAAP are
provided below.
|
Three Months Ended December 31, |
Years Ended December 31, |
||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
| Mid-Continent Region (El Dorado and Tulsa Refineries) | |||||||||||||||||||||
| Crude charge (BPD) (1) | 216,870 | 270,180 | 249,240 | 261,380 | |||||||||||||||||
| Refinery throughput (BPD) (2) | 236,240 | 289,050 | 264,730 | 277,940 | |||||||||||||||||
| Sales of produced refined products (BPD) (3) | 243,680 | 277,560 | 255,800 | 260,800 | |||||||||||||||||
| Refinery utilization (4) | 83.4 | % | 103.9 | % | 95.9 | % | 100.5 | % | |||||||||||||
| Average per produced barrel (5) | |||||||||||||||||||||
| Refinery gross margin | $ | 19.01 | $ | 11.42 | $ | 14.44 | $ | 9.91 | |||||||||||||
| Refinery operating expenses (6) | 6.55 | 5.09 | 5.51 | 5.15 | |||||||||||||||||
| Net operating margin | $ | 12.46 | $ | 6.33 | $ | 8.93 | $ | 4.76 | |||||||||||||
| Refinery operating expenses per throughput barrel (7) | $ | 6.76 | $ | 4.89 | $ | 5.32 | $ | 4.83 | |||||||||||||
| Feedstocks: | |||||||||||||||||||||
| Sweet crude oil | 56 | % | 59 | % | 54 | % | 61 | % | |||||||||||||
| Sour crude oil | 25 | % | 19 | % | 24 | % | 17 | % | |||||||||||||
| Heavy sour crude oil | 11 | % | 16 | % | 16 | % | 16 | % | |||||||||||||
| Other feedstocks and blends | 8 | % | 6 | % | 6 | % | 6 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
| Sales of produced refined products: | |||||||||||||||||||||
| Gasolines | 52 | % | 53 | % | 51 | % | 50 | % | |||||||||||||
| Diesel fuels | 30 | % | 32 | % | 33 | % | 33 | % | |||||||||||||
| Jet fuels | 7 | % | 7 | % | 6 | % | 7 | % | |||||||||||||
| Fuel oil | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||||||
| Asphalt | 3 | % | 2 | % | 3 | % | 3 | % | |||||||||||||
| Base oils | 4 | % | 3 | % | 4 | % | 4 | % | |||||||||||||
| LPG and other | 3 | % | 2 | % | 2 | % | 2 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
|
Three Months Ended December 31, |
Years Ended December 31, |
||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
| Southwest Region (Navajo Refinery) | |||||||||||||||||||||
| Crude charge (BPD) (1) | 110,160 | 110,980 | 109,440 | 100,040 | |||||||||||||||||
| Refinery throughput (BPD) (2) | 119,640 | 121,400 | 118,630 | 109,280 | |||||||||||||||||
| Sales of produced refined products (BPD) (3) | 119,390 | 122,710 | 120,520 | 111,630 | |||||||||||||||||
| Refinery utilization (4) | 110.2 | % | 111.0 | % | 109.4 | % | 100.0 | % | |||||||||||||
| Average per produced barrel (5) | |||||||||||||||||||||
| Refinery gross margin | $ | 22.68 | $ | 12.91 | $ | 19.05 | $ | 12.40 | |||||||||||||
| Refinery operating expenses (6) | 5.37 | 4.71 | 4.81 | 5.20 | |||||||||||||||||
| Net operating margin | $ | 17.31 | $ | 8.20 | $ | 14.24 | $ | 7.20 | |||||||||||||
| Refinery operating expenses per throughput barrel (7) | $ | 5.36 | $ | 4.76 | $ | 4.89 | $ | 5.31 | |||||||||||||
| Feedstocks: | |||||||||||||||||||||
| Sweet crude oil | 14 | % | 31 | % | 27 | % | 25 | % | |||||||||||||
| Sour crude oil | 78 | % | 61 | % | 65 | % | 66 | % | |||||||||||||
| Other feedstocks and blends | 8 | % | 8 | % | 8 | % | 9 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
| Sales of produced refined products: | |||||||||||||||||||||
| Gasolines | 51 | % | 51 | % | 50 | % | 51 | % | |||||||||||||
| Diesel fuels | 39 | % | 40 | % | 40 | % | 39 | % | |||||||||||||
| Fuel oil | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||||||
| Asphalt | 4 | % | 3 | % | 4 | % | 4 | % | |||||||||||||
| LPG and other | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
| Rocky Mountain Region (Cheyenne and Woods Cross Refineries) | |||||||||||||||||||||
| Crude charge (BPD) (1) | 78,550 | 79,950 | 72,890 | 77,380 | |||||||||||||||||
| Refinery throughput (BPD) (2) | 84,670 | 87,000 | 79,980 | 84,790 | |||||||||||||||||
| Sales of produced refined products (BPD) (3) | 80,600 | 82,590 | 76,300 | 79,840 | |||||||||||||||||
| Refinery utilization (4) | 81.0 | % | 82.4 | % | 75.1 | % | 79.8 | % | |||||||||||||
| Average per produced barrel (5) | |||||||||||||||||||||
| Refinery gross margin | $ | 30.96 | $ | 15.77 | $ | 26.55 | $ | 15.78 | |||||||||||||
| Refinery operating expenses (6) | 11.45 | 10.75 | 11.83 | 10.46 | |||||||||||||||||
| Net operating margin | $ | 19.51 | $ | 5.02 | $ | 14.72 | $ | 5.32 | |||||||||||||
| Refinery operating expenses per throughput barrel (7) | $ | 10.90 | $ | 10.20 | $ | 11.28 | $ | 9.85 | |||||||||||||
| Feedstocks: | |||||||||||||||||||||
| Sweet crude oil | 34 | % | 35 | % | 28 | % | 34 | % | |||||||||||||
| Heavy sour crude oil | 38 | % | 34 | % | 42 | % | 35 | % | |||||||||||||
| Black wax crude oil | 21 | % | 23 | % | 21 | % | 22 | % | |||||||||||||
| Other feedstocks and blends | 7 | % | 8 | % | 9 | % | 9 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
|
Three Months Ended December 31, |
Years Ended December 31, |
||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
| Sales of produced refined products: | |||||||||||||||||||||
| Gasolines | 52 | % | 59 | % | 55 | % | 58 | % | |||||||||||||
| Diesel fuels | 32 | % | 30 | % | 33 | % | 32 | % | |||||||||||||
| Fuel oil | 4 | % | 3 | % | 3 | % | 3 | % | |||||||||||||
| Asphalt | 6 | % | 4 | % | 5 | % | 4 | % | |||||||||||||
| LPG and other | 6 | % | 4 | % | 4 | % | 3 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
| Consolidated | |||||||||||||||||||||
| Crude charge (BPD) (1) | 405,580 | 461,110 | 431,570 | 438,800 | |||||||||||||||||
| Refinery throughput (BPD) (2) | 440,550 | 497,450 | 463,340 | 472,010 | |||||||||||||||||
| Sales of produced refined products (BPD) (3) | 443,670 | 482,860 | 452,630 | 452,270 | |||||||||||||||||
| Refinery utilization (4) | 88.7 | % | 100.9 | % | 94.4 | % | 96.0 | % | |||||||||||||
| Average per produced barrel (5) | |||||||||||||||||||||
| Refinery gross margin | $ | 22.17 | $ | 12.54 | $ | 17.71 | $ | 11.56 | |||||||||||||
| Refinery operating expenses (6) | 7.12 | 5.97 | 6.39 | 6.11 | |||||||||||||||||
| Net operating margin | $ | 15.05 | $ | 6.57 | $ | 11.32 | $ | 5.45 | |||||||||||||
| Refinery operating expenses per throughput barrel (7) | $ | 7.17 | $ | 5.80 | $ | 6.24 | $ | 5.86 | |||||||||||||
| Feedstocks: | |||||||||||||||||||||
| Sweet crude oil | 40 | % | 48 | % | 43 | % | 48 | % | |||||||||||||
| Sour crude oil | 35 | % | 26 | % | 30 | % | 25 | % | |||||||||||||
| Heavy sour crude oil | 13 | % | 15 | % | 17 | % | 16 | % | |||||||||||||
| Black wax crude oil | 4 | % | 4 | % | 4 | % | 4 | % | |||||||||||||
| Other feedstocks and blends | 8 | % | 7 | % | 6 | % | 7 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
| Consolidated | |||||||||||||||||||||
| Sales of produced refined products: | |||||||||||||||||||||
| Gasolines | 52 | % | 53 | % | 52 | % | 52 | % | |||||||||||||
| Diesel fuels | 33 | % | 34 | % | 34 | % | 34 | % | |||||||||||||
| Jet fuels | 4 | % | 4 | % | 3 | % | 4 | % | |||||||||||||
| Fuel oil | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||||||
| Asphalt | 4 | % | 3 | % | 4 | % | 4 | % | |||||||||||||
| Base oils | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||||||
| LPG and other | 3 | % | 2 | % | 3 | % | 2 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
Contacts
Richard L. Voliva III, Executive Vice President and Chief Financial
Officer
Craig Biery, Director, Investor Relations
HollyFrontier
Corporation
214-954-6510