- Reported net loss attributable to HollyFrontier stockholders of
$(176.7) million, or $(1.09) per diluted share, and adjusted net
loss of $(40.8) million, or $(0.25) per diluted share, for the
second quarter
- Reported EBITDA of $(46.2) million and adjusted EBITDA of $99.7
million for the second quarter
- Returned $57.2 million to shareholders through dividends in the
second quarter
HollyFrontier Corporation (NYSE:HFC) (“HollyFrontier” or the
“Company”) today reported second quarter net loss attributable to
HollyFrontier stockholders of $(176.7) million, or $(1.09) per
diluted share, for the quarter ended June 30, 2020, compared to net
income of $196.9 million, or $1.15 per diluted share, for the
quarter ended June 30, 2019.
The second quarter results reflect special items that
collectively decreased net income by a total of $135.9 million. On
a pre-tax basis, these items include long-lived asset impairments
at the Cheyenne Refinery and PCLI totaling $429.5 million and
corporate restructuring, Cheyenne Refinery severance and
integration charges totaling $5.4 million. These items were
partially offset by a lower of cost or market inventory valuation
adjustment of $269.9 million and HollyFrontier's pro-rata share of
Holly Energy Partners, L.P.’s gain on sales-type leases of $19.1
million. Excluding these items, net loss for the current quarter
was $(40.8) million ($(0.25) per diluted share) compared to $372.3
million ($2.18 per diluted share) for the second quarter of 2019,
which excludes certain items that collectively decreased net income
by $175.4 million.
HollyFrontier’s President & CEO, Michael Jennings,
commented, “During the second quarter, our focus remained on the
safety of our employees, contractors and communities as we all
continue to face the COVID-19 pandemic. Despite this challenging
environment, HollyFrontier demonstrated its financial strength and
we have taken prudent steps to preserve cash. Our strong balance
sheet and the superior quality of our assets provides us with a
competitive advantage through the cycle.
We are capitalizing on these strengths to continue growth in our
renewables business. On June 1, we announced plans to convert the
Cheyenne Refinery to renewable diesel production and to construct a
pre-treatment unit which will provide feedstock flexibility for the
previously announced renewable diesel unit at our Navajo Refinery.
With the completion of these projects, HollyFrontier will become
one of the largest producers of renewable diesel in the U.S.,
allowing us to capitalize on the increasing consumer demand for
renewable fuels.”
The COVID-19 pandemic caused a decline in U.S. and global
economic activity starting in the first quarter of 2020. This
decrease reduced both volumes and unit margins across the Company's
businesses, resulting in lower gross margins and earnings. Over the
course of the second quarter, demand for transportation fuels and
lubricants stabilized and showed incremental improvement late in
the quarter as compared to the end of the first quarter of
2020.
The Refining segment reported adjusted EBITDA of $25.0 million
compared to $556.1 million for the second quarter of 2019. This
decrease was primarily due to weak demand for refined products,
which resulted in lower utilization rates and weaker product
margins across our refining system. Refinery gross margin for the
second quarter of 2020 was $8.44 per produced barrel, a 57%
decrease compared to $19.64 for the second quarter of 2019. Crude
oil charge averaged 349,580 barrels per day (“BPD”) for the current
quarter compared to 453,030 BPD for the second quarter 2019.
The Lubricants and Specialty Products segment reported adjusted
EBITDA of $15.2 million, compared to $28.9 million in the second
quarter 2019. This decrease was primarily due to global weakness in
demand within the industrial and automotive end markets during the
quarter.
Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $112.5
million for the second quarter 2020 compared to $88.6 million in
the second quarter of 2019. The second quarter of 2020 includes a
gain on sales-type leases of $33.8 million
For the second quarter of 2020, net cash provided by operations
totaled $119.2 million. During the period, HollyFrontier declared
and paid a dividend of $0.35 per share to shareholders totaling
$57.2 million. At June 30, 2020, the Company's cash and cash
equivalents totaled $902.5 million, a $6.6 million decrease over
cash and cash equivalents of $909.1 million at March 31, 2020.
Additionally, the Company's consolidated debt was $2,480.7 million.
The Company’s debt, exclusive of HEP debt, which is nonrecourse to
HollyFrontier, was $994.1 million at June 30, 2020.
HollyFrontier also announced today that its Board of Directors
declared a regular quarterly dividend of $0.35 per share. The
dividend will be paid on September 2, 2020 to holders of record of
common stock on August 17, 2020.
The Company has scheduled a webcast conference call for today,
August 6, 2020, at 8:30 AM Eastern Time to discuss second quarter
financial results. This webcast may be accessed at:
https://event.on24.com/wcc/r/2395502/D3710FD67F414A527E9C541851C2AE4B.
An audio archive of this webcast will be available using the above
noted link through August 20, 2020.
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 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 the
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, the extraordinary market environment and effects of the
COVID-19 pandemic, including the continuation of a material decline
in demand for refined petroleum products in markets the Company
serves; risks and uncertainties with respect to the actions of
actual or potential competitive suppliers and transporters of
refined petroleum products or lubricant and specialty products in
the Company’s markets; the spread between market prices for refined
products and market prices for crude oil; the possibility of
constraints on the transportation of refined products or lubricant
and specialty products, the possibility of inefficiencies,
curtailments or shutdowns in refinery operations or pipelines,
whether due to infection in the workforce or in response to
reductions in demand; effects of governmental and environmental
regulations and policies, including the effects of current
restrictions on various commercial and economic activities in
response to the COVID-19 pandemic; 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 and consummating construction projects,
including the Company's ability to complete announced capital
projects, such as the conversion of the Cheyenne Refinery to a
renewable diesel facility and the construction of the Artesia
renewable diesel unit and pretreatment unit, on time and within
budget; the Company's ability to timely obtain or maintain permits,
including those necessary for operations or capital 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 existing or future acquired operations; the
possibility of terrorist or cyberattacks and the consequences of
any such attacks; general economic conditions, including
uncertainty regarding the timing, pace and extent of an economic
recovery in the United States; further deterioration in gross
margins or a prolonged economic slowdown due to COVID-19 could
result in an impairment of goodwill and / or additional long-lived
asset impairments; 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 2019
2020
2019
Change
Percent
(In thousands, except per share
data)
Sales and other revenues
$
2,062,930
$
4,782,615
$
(2,719,685
)
(57
)%
Operating costs and expenses:
Cost of products sold:
Cost of products sold (exclusive of lower
of cost or market inventory valuation adjustment)
1,576,996
3,704,884
(2,127,888
)
(57
)
Lower of cost or market inventory
valuation adjustment
(269,904
)
47,801
(317,705
)
(665
)
1,307,092
3,752,685
(2,445,593
)
(65
)
Operating expenses
303,359
333,252
(29,893
)
(9
)
Selling, general and administrative
expenses
75,369
85,317
(9,948
)
(12
)
Depreciation and amortization
130,178
126,908
3,270
3
Long-lived asset and goodwill
impairments
436,908
152,712
284,196
186
Total operating costs and
expenses
2,252,906
4,450,874
(2,197,968
)
(49
)
Income (loss) from operations
(189,976
)
331,741
(521,717
)
(157
)
Other income (expense):
Earnings of equity method investments
2,156
1,783
373
21
Interest income
1,506
4,588
(3,082
)
(67
)
Interest expense
(32,695
)
(34,264
)
1,569
(5
)
Gain on sales-type leases
33,834
—
33,834
—
Gain on foreign currency transactions
2,285
2,213
72
3
Other, net
1,572
92
1,480
1,609
8,658
(25,588
)
34,246
(134
)
Income (loss) before income
taxes
(181,318
)
306,153
(487,471
)
(159
)
Income tax expense (benefit)
(30,911
)
89,336
(120,247
)
(135
)
Net income (loss)
(150,407
)
216,817
(367,224
)
(169
)
Less net income attributable to
noncontrolling interest
26,270
19,902
6,368
32
Net income (loss) attributable to
HollyFrontier stockholders
$
(176,677
)
$
196,915
$
(373,592
)
(190
)%
Earnings (loss) per share attributable
to HollyFrontier stockholders:
Basic
$
(1.09
)
$
1.16
$
(2.25
)
(194
)%
Diluted
$
(1.09
)
$
1.15
$
(2.24
)
(195
)%
Cash dividends declared per common
share
$
0.35
$
0.33
$
0.02
6
%
Average number of common shares
outstanding:
Basic
161,889
169,356
(7,467
)
(4
)%
Diluted
161,889
170,547
(8,658
)
(5
)%
EBITDA
$
(46,221
)
$
442,835
$
(489,056
)
(110
)%
Adjusted EBITDA
$
99,711
$
646,985
$
(547,274
)
(85
)%
Six Months Ended June
30,
Change from 2019
2020
2019
Change
Percent
(In thousands, except per share
data)
Sales and other revenues
$
5,463,475
$
8,679,862
$
(3,216,387
)
(37
)%
Operating costs and expenses:
Cost of products sold:
Cost of products sold (exclusive of lower
of cost or market inventory valuation adjustment)
4,270,722
6,904,089
(2,633,367
)
(38
)
Lower of cost or market inventory
valuation adjustment
290,560
(184,545
)
475,105
(257
)
4,561,282
6,719,544
(2,158,262
)
(32
)
Operating expenses
631,704
664,844
(33,140
)
(5
)
Selling, general and administrative
expenses
163,106
173,351
(10,245
)
(6
)
Depreciation and amortization
270,753
248,329
22,424
9
Long-lived asset and goodwill
impairments
436,908
152,712
284,196
186
Total operating costs and
expenses
6,063,753
7,958,780
(1,895,027
)
(24
)
Income (loss) from operations
(600,278
)
721,082
(1,321,360
)
(183
)
Other income (expense):
Earnings of equity method investments
3,870
3,883
(13
)
—
Interest income
5,579
10,963
(5,384
)
(49
)
Interest expense
(55,334
)
(70,911
)
15,577
(22
)
Gain on sales-type leases
33,834
—
33,834
—
Loss on early extinguishment of debt
(25,915
)
—
(25,915
)
—
Gain (loss) on foreign currency
transactions
(1,948
)
4,478
(6,426
)
(144
)
Other, net
3,422
649
2,773
427
(36,492
)
(50,938
)
14,446
(28
)
Income (loss) before income
taxes
(636,770
)
670,144
(1,306,914
)
(195
)
Income tax expense (benefit)
(193,077
)
176,841
(369,918
)
(209
)
Net income (loss)
(443,693
)
493,303
(936,996
)
(190
)
Less net income attributable to
noncontrolling interest
37,607
43,333
(5,726
)
(13
)
Net income (loss) attributable to
HollyFrontier stockholders
$
(481,300
)
$
449,970
$
(931,270
)
(207
)%
Earnings (loss) per share attributable
to HollyFrontier stockholders:
Basic
$
(2.97
)
$
2.64
$
(5.61
)
(213
)%
Diluted
$
(2.97
)
$
2.62
$
(5.59
)
(213
)%
Cash dividends declared per common
share
$
0.70
$
0.66
$
0.04
6
%
Average number of common shares
outstanding:
Basic
161,882
170,100
(8,218
)
(5
)%
Diluted
161,882
171,264
(9,382
)
(5
)%
EBITDA
$
(353,869
)
$
935,088
$
(1,288,957
)
(138
)%
Adjusted EBITDA
$
368,480
$
928,782
$
(560,302
)
(60
)%
Balance Sheet Data
June 30,
December 31,
2020
2019
(In thousands)
Cash and cash equivalents
$
902,509
$
885,162
Working capital
$
1,470,492
$
1,620,261
Total assets
$
11,063,820
$
12,164,841
Long-term debt
$
2,480,746
$
2,455,640
Total equity
$
5,914,511
$
6,509,426
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 the
Corporate, Other and Eliminations column.
The Refining segment includes the operations of our El Dorado,
Tulsa, Navajo, Cheyenne and Woods Cross refineries and
HollyFrontier Asphalt Company LLC (“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
Petro-Canada Lubricants Inc.’s (“PCLI”) 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, the operations of Red Giant Oil, one of the
largest suppliers of locomotive engine oil in North America and the
operations of Sonneborn, a producer of specialty hydrocarbon
chemicals such as white oils, petrolatums and waxes with
manufacturing facilities in the United States and Europe.
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
processing 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, Cheyenne Pipeline LLC and Cushing Connect Pipeline &
Terminal 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 and Specialty
Products
HEP
Corporate, Other and
Eliminations
Consolidated Total
(In thousands)
Three Months Ended June 30,
2020
Sales and other revenues:
Revenues from external customers
$
1,690,042
$
353,644
$
19,244
$
—
$
2,062,930
Intersegment revenues
37,462
3,643
95,563
(136,668
)
—
$
1,727,504
$
357,287
$
114,807
$
(136,668
)
$
2,062,930
Cost of products sold (exclusive of lower
of cost or market inventory)
$
1,433,437
$
258,347
$
—
$
(114,788
)
$
1,576,996
Lower of cost or market inventory
valuation adjustment
$
(269,904
)
$
—
$
—
$
—
$
(269,904
)
Operating expenses
$
239,359
$
47,840
$
34,737
$
(18,577
)
$
303,359
Selling, general and administrative
expenses
$
32,811
$
35,919
$
2,535
$
4,104
$
75,369
Depreciation and amortization
$
81,694
$
19,779
$
24,008
$
4,697
$
130,178
Long-lived asset impairment
$
215,242
$
204,708
$
16,958
$
—
$
436,908
Income (loss) from operations
$
(5,135
)
$
(209,306
)
$
36,569
$
(12,104
)
$
(189,976
)
Income (loss) before interest and income
taxes
$
(5,135
)
$
(209,257
)
$
73,028
$
(8,765
)
$
(150,129
)
Net income attributable to noncontrolling
interest
$
—
$
—
$
650
$
25,620
$
26,270
Earnings of equity method investments
$
—
$
—
$
2,156
$
—
$
2,156
Capital expenditures
$
12,102
$
4,311
$
11,798
$
17,776
$
45,987
Three Months Ended June 30,
2019
Sales and other revenues:
Revenues from external customers
$
4,208,776
$
545,346
$
28,382
$
111
$
4,782,615
Intersegment revenues
88,484
—
102,369
(190,853
)
—
$
4,297,260
$
545,346
$
130,751
$
(190,742
)
$
4,782,615
Cost of products sold (exclusive of lower
of cost or market inventory)
$
3,458,832
$
415,353
$
—
$
(169,301
)
$
3,704,884
Lower of cost or market inventory
valuation adjustment
$
47,801
$
—
$
—
$
—
$
47,801
Operating expenses
$
252,715
$
59,122
$
40,608
$
(19,193
)
$
333,252
Selling, general and administrative
expenses
$
29,638
$
42,087
$
1,988
$
11,604
$
85,317
Depreciation and amortization
$
76,225
$
23,020
$
24,241
$
3,422
$
126,908
Goodwill impairment
$
—
$
152,712
$
—
$
—
$
152,712
Income (loss) from operations
$
432,049
$
(146,948
)
$
63,914
$
(17,274
)
$
331,741
Income (loss) before interest and income
taxes
$
432,049
$
(146,848
)
$
65,807
$
(15,179
)
$
335,829
Net income attributable to noncontrolling
interest
$
—
$
—
$
688
$
19,214
$
19,902
Earnings of equity method investments
$
—
$
—
$
1,783
$
—
$
1,783
Capital expenditures
$
33,899
$
9,331
$
7,034
$
6,470
$
56,734
Refining
Lubricants and Specialty
Products
HEP
Corporate, Other and
Eliminations
Consolidated Total
(In thousands)
Six Months Ended June 30, 2020
Sales and other revenues:
Revenues from external customers
$
4,540,662
$
877,143
$
45,670
$
—
$
5,463,475
Intersegment revenues
121,708
6,747
196,991
(325,446
)
—
$
4,662,370
$
883,890
$
242,661
$
(325,446
)
$
5,463,475
Cost of products sold (exclusive of lower
of cost or market inventory)
$
3,902,188
$
649,727
$
—
$
(281,193
)
$
4,270,722
Lower of cost or market inventory
valuation adjustment
$
290,560
$
—
$
—
$
—
$
290,560
Operating expenses
$
498,533
$
101,971
$
69,718
$
(38,518
)
$
631,704
Selling, general and administrative
expenses
$
63,811
$
84,881
$
5,237
$
9,177
$
163,106
Depreciation and amortization
$
171,873
$
41,828
$
47,986
$
9,066
$
270,753
Long-lived asset impairment
$
215,242
$
204,708
$
16,958
$
—
$
436,908
Income (loss) from operations
$
(479,837
)
$
(199,225
)
$
102,762
$
(23,978
)
$
(600,278
)
Income (loss) before interest and income
taxes
$
(479,837
)
$
(198,967
)
$
115,526
$
(23,737
)
$
(587,015
)
Net income attributable to noncontrolling
interest
$
—
$
—
$
1,865
$
35,742
$
37,607
Earnings of equity method investments
$
—
$
—
$
3,870
$
—
$
3,870
Capital expenditures
$
65,116
$
13,392
$
30,740
$
20,488
$
129,736
Six Months Ended June 30, 2019
Sales and other revenues:
Revenues from external customers
$
7,581,442
$
1,038,680
$
59,520
$
220
$
8,679,862
Intersegment revenues
163,228
—
205,728
(368,956
)
—
$
7,744,670
$
1,038,680
$
265,248
$
(368,736
)
$
8,679,862
Cost of products sold (exclusive of lower
of cost or market inventory)
$
6,421,372
$
804,370
$
—
$
(321,653
)
$
6,904,089
Lower of cost or market inventory
valuation adjustment
$
(184,545
)
$
—
$
—
$
—
$
(184,545
)
Operating expenses
$
517,212
$
112,681
$
78,121
$
(43,170
)
$
664,844
Selling, general and administrative
expenses
$
56,615
$
81,806
$
4,608
$
30,322
$
173,351
Depreciation and amortization
$
150,640
$
43,191
$
48,071
$
6,427
$
248,329
Goodwill impairment
$
—
$
152,712
$
—
$
—
$
152,712
Income (loss) from operations
$
783,376
$
(156,080
)
$
134,448
$
(40,662
)
$
721,082
Income (loss) before interest and income
taxes
$
783,376
$
(155,843
)
$
138,132
$
(35,573
)
$
730,092
Net income attributable to noncontrolling
interest
$
—
$
—
$
2,520
$
40,813
$
43,333
Earnings of equity method investments
$
—
$
—
$
3,883
$
—
$
3,883
Capital expenditures
$
75,662
$
17,190
$
17,752
$
9,865
$
120,469
Refining
Lubricants and Specialty
Products
HEP
Corporate, Other and
Eliminations
Consolidated Total
(In thousands)
June 30, 2020
Cash and cash equivalents
$
15,652
$
189,571
$
18,913
$
678,373
$
902,509
Total assets
$
6,327,809
$
1,910,431
$
2,215,053
$
610,527
$
11,063,820
Long-term debt
$
—
$
—
$
1,486,648
$
994,098
$
2,480,746
December 31, 2019
Cash and cash equivalents
$
9,755
$
169,277
$
13,287
$
692,843
$
885,162
Total assets
$
7,189,094
$
2,223,418
$
2,205,437
$
546,892
$
12,164,841
Long-term debt
$
—
$
—
$
1,462,031
$
993,609
$
2,455,640
Refining Segment Operating Data
The following tables set forth information, including non-GAAP
(Generally Accepted Accounting Principles) performance measures
about our refinery operations. Refinery gross and net operating
margins do not include the non-cash effects of long-lived asset
impairment charges, lower of cost or market inventory valuation
adjustments and depreciation and amortization. Reconciliations to
amounts reported under GAAP are provided under “Reconciliations to
Amounts Reported Under Generally Accepted Accounting Principles”
below.
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Mid-Continent Region (El Dorado and
Tulsa Refineries)
Crude charge (BPD) (1)
206,950
264,290
229,670
238,890
Refinery throughput (BPD) (2)
220,010
278,710
245,470
254,520
Sales of produced refined products (BPD)
(3)
216,280
273,010
237,760
245,450
Refinery utilization (4)
79.6
%
101.7
%
88.3
%
91.9
%
Average per produced barrel (5)
Refinery gross margin
$
6.31
$
17.17
$
8.07
$
14.51
Refinery operating expenses (6)
5.68
5.02
5.47
5.74
Net operating margin
$
0.63
$
12.15
$
2.60
$
8.77
Refinery operating expenses per throughput
barrel (7)
$
5.58
$
4.92
$
5.30
$
5.54
Feedstocks:
Sweet crude oil
61
%
57
%
56
%
54
%
Sour crude oil
16
%
22
%
19
%
23
%
Heavy sour crude oil
17
%
16
%
19
%
17
%
Other feedstocks and blends
6
%
5
%
6
%
6
%
Total
100
%
100
%
100
%
100
%
Sales of produced refined products:
Gasolines
54
%
51
%
53
%
52
%
Diesel fuels
36
%
34
%
33
%
31
%
Jet fuels
1
%
6
%
4
%
7
%
Fuel oil
1
%
1
%
1
%
1
%
Asphalt
3
%
2
%
3
%
3
%
Base oils
3
%
4
%
4
%
4
%
LPG and other
2
%
2
%
2
%
2
%
Total
100
%
100
%
100
%
100
%
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Southwest Region (Navajo
Refinery)
Crude charge (BPD) (1)
79,460
109,080
93,130
107,560
Refinery throughput (BPD) (2)
89,470
119,480
103,460
117,860
Sales of produced refined products (BPD)
(3)
101,880
122,090
107,740
122,730
Refinery utilization (4)
79.5
%
109.1
%
93.1
%
107.6
%
Average per produced barrel (5)
Refinery gross margin
$
11.08
$
23.45
$
11.89
$
19.70
Refinery operating expenses (6)
5.12
4.53
5.20
4.73
Net operating margin
$
5.96
$
18.92
$
6.69
$
14.97
Refinery operating expenses per throughput
barrel (7)
$
5.83
$
4.63
$
5.42
$
4.93
Feedstocks:
Sweet crude oil
25
%
24
%
24
%
20
%
Sour crude oil
64
%
67
%
66
%
71
%
Other feedstocks and blends
11
%
9
%
10
%
9
%
Total
100
%
100
%
100
%
100
%
Sales of produced refined products:
Gasolines
53
%
48
%
54
%
51
%
Diesel fuels
34
%
40
%
36
%
38
%
Fuel oil
2
%
4
%
2
%
3
%
Asphalt
8
%
6
%
5
%
5
%
LPG and other
3
%
2
%
3
%
3
%
Total
100
%
100
%
100
%
100
%
Rocky Mountain Region (Cheyenne and
Woods Cross Refineries)
Crude charge (BPD) (1)
63,170
79,660
70,170
80,440
Refinery throughput (BPD) (2)
68,020
86,700
75,610
87,080
Sales of produced refined products (BPD)
(3)
64,750
74,000
72,100
78,000
Refinery utilization (4)
65.1
%
82.1
%
72.3
%
82.9
%
Average per produced barrel (5)
Refinery gross margin
$
11.41
$
22.48
$
13.54
$
17.07
Refinery operating expenses (6)
13.60
11.53
12.17
11.11
Net operating margin
$
(2.19
)
$
10.95
$
1.37
$
5.96
Refinery operating expenses per throughput
barrel (7)
$
12.95
$
9.84
$
11.61
$
9.95
Feedstocks:
Sweet crude oil
37
%
34
%
36
%
35
%
Heavy sour crude oil
41
%
35
%
38
%
35
%
Black wax crude oil
15
%
23
%
19
%
22
%
Other feedstocks and blends
7
%
8
%
7
%
8
%
Total
100
%
100
%
100
%
100
%
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Rocky Mountain Region (Cheyenne and
Woods Cross Refineries)
Sales of produced refined products:
Gasolines
54
%
50
%
55
%
52
%
Diesel fuels
35
%
37
%
33
%
35
%
Fuel oil
2
%
4
%
3
%
4
%
Asphalt
6
%
6
%
6
%
6
%
LPG and other
3
%
3
%
3
%
3
%
Total
100
%
100
%
100
%
100
%
Consolidated
Crude charge (BPD) (1)
349,580
453,030
392,970
426,890
Refinery throughput (BPD) (2)
377,500
484,890
424,540
459,460
Sales of produced refined products (BPD)
(3)
382,910
469,100
417,600
446,190
Refinery utilization (4)
76.5
%
99.1
%
86.0
%
93.4
%
Average per produced barrel (5)
Refinery gross margin
$
8.44
$
19.64
$
10.00
$
16.39
Refinery operating expenses (6)
6.87
5.92
6.56
6.40
Net operating margin
$
1.57
$
13.72
$
3.44
$
9.99
Refinery operating expenses per throughput
barrel (7)
$
6.97
$
5.73
$
6.45
$
6.22
Feedstocks:
Sweet crude oil
48
%
44
%
45
%
42
%
Sour crude oil
25
%
29
%
27
%
31
%
Heavy sour crude oil
17
%
16
%
17
%
16
%
Black wax crude oil
3
%
4
%
4
%
4
%
Other feedstocks and blends
7
%
7
%
7
%
7
%
Total
100
%
100
%
100
%
100
%
Sales of produced refined products:
Gasolines
54
%
50
%
53
%
52
%
Diesel fuels
35
%
36
%
34
%
34
%
Jet fuels
1
%
4
%
3
%
4
%
Fuel oil
1
%
2
%
1
%
2
%
Asphalt
4
%
4
%
4
%
4
%
Base oils
2
%
2
%
2
%
2
%
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)
Represents total refining segment
operating expenses, exclusive of depreciation and amortization,
divided by sales volumes of refined products produced at our
refineries.
(7)
Represents total refining segment
operating expenses, exclusive of depreciation and amortization,
divided by refinery throughput.
Lubricants and Specialty Products Segment Operating
Data
We acquired our Sonneborn business on February 1, 2019. For the
six months ended June 30, 2019 our lubricants and specialty product
operating results reflect the operations of our Sonneborn business
for the period February 1, 2019 through June 30, 2019.
The following table sets forth information about our lubricants
and specialty products operations.
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Lubricants and Specialty
Products
Throughput (BPD)
16,370
16,990
19,060
18,390
Sales of produced products (BPD)
26,990
34,660
31,900
34,050
Sales of produced products:
Finished products
56
%
52
%
51
%
50
%
Base oils
19
%
32
%
23
%
29
%
Other
25
%
16
%
26
%
21
%
Total
100
%
100
%
100
%
100
%
Our Lubricants and Specialty Products segment includes base oil
production activities, by-product sales to third parties and
intra-segment base oil sales to rack forward, referred to as “Rack
Back.” “Rack Forward” includes the purchase of base oils and the
blending, packaging, marketing and distribution and sales of
finished lubricants and specialty products to third parties.
Supplemental financial data attributable to our Lubricants and
Specialty Products segment is presented below:
Rack Back (1)
Rack Forward (2)
Eliminations (3)
Total Lubricants and Specialty
Products
(In thousands)
Three months ended June 30,
2020
Sales and other revenues
$
85,857
$
343,927
$
(72,497
)
$
357,287
Cost of products sold
$
67,210
$
263,634
$
(72,497
)
$
258,347
Operating expenses
$
21,034
$
26,806
$
—
$
47,840
Selling, general and administrative
expenses
$
5,617
$
30,302
$
—
$
35,919
Depreciation and amortization
$
5,877
$
13,902
$
—
$
19,779
Long-lived asset impairment
$
167,017
$
37,691
$
—
$
204,708
Income (loss) from operations
$
(180,898
)
$
(28,408
)
$
—
$
(209,306
)
Income (loss) before interest and income
taxes
$
(180,898
)
$
(28,359
)
$
—
$
(209,257
)
EBITDA
$
(175,021
)
$
(14,457
)
$
—
$
(189,478
)
Three months ended June 30,
2019
Sales and other revenues
$
133,225
$
507,183
$
(95,062
)
$
545,346
Cost of products sold
$
131,725
$
378,690
$
(95,062
)
$
415,353
Operating expenses
$
30,585
$
28,537
$
—
$
59,122
Selling, general and administrative
expenses
$
6,366
$
35,721
$
—
$
42,087
Depreciation and amortization
$
11,075
$
11,945
$
—
$
23,020
Goodwill impairment
$
152,712
$
—
$
—
$
152,712
Income (loss) from operations
$
(199,238
)
$
52,290
$
—
$
(146,948
)
Income (loss) before interest and income
taxes
$
(199,238
)
$
52,390
$
—
$
(146,848
)
EBITDA
$
(188,163
)
$
64,335
$
—
$
(123,828
)
Rack Back (1)
Rack Forward (2)
Eliminations (3)
Total Lubricants and Specialty
Products
(In thousands)
Six months ended June 30, 2020
Sales and other revenues
$
250,686
$
817,984
$
(184,780
)
$
883,890
Cost of products sold
$
247,810
$
586,697
$
(184,780
)
$
649,727
Operating expenses
$
44,303
$
57,668
$
—
$
101,971
Selling, general and administrative
expenses
$
10,980
$
73,901
$
—
$
84,881
Depreciation and amortization
$
16,744
$
25,084
$
—
$
41,828
Long-lived asset impairment
$
167,017
$
37,691
$
—
$
204,708
Income (loss) from operations
$
(236,168
)
$
36,943
$
—
$
(199,225
)
Income (loss) before interest and income
taxes
$
(236,168
)
$
37,201
$
—
$
(198,967
)
EBITDA
$
(219,424
)
$
62,285
$
—
$
(157,139
)
Six months ended June 30, 2019
Sales and other revenues
$
289,680
$
951,525
$
(202,525
)
$
1,038,680
Cost of products sold
$
277,543
$
729,352
$
(202,525
)
$
804,370
Operating expenses
$
60,145
$
52,536
$
—
$
112,681
Selling, general and administrative
expenses
$
19,845
$
61,961
$
—
$
81,806
Depreciation and amortization
$
21,601
$
21,590
$
—
$
43,191
Goodwill impairment
$
152,712
$
—
$
—
$
152,712
Income (loss) from operations
$
(242,166
)
$
86,086
$
—
$
(156,080
)
Income (loss) before interest and income
taxes
$
(242,166
)
$
86,323
$
—
$
(155,843
)
EBITDA
$
(220,565
)
$
107,913
$
—
$
(112,652
)
(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.
Reconciliations to Amounts Reported Under Generally Accepted
Accounting Principles
Reconciliations of earnings before interest, taxes,
depreciation and amortization (“EBITDA”) and EBITDA excluding
special items (“Adjusted EBITDA”) to amounts reported under
generally accepted accounting principles (“GAAP”) in financial
statements.
Earnings before interest, taxes, depreciation and amortization,
referred to as EBITDA, is calculated as net income (loss)
attributable to HollyFrontier stockholders plus (i) interest
expense, net of interest income, (ii) income tax expense, and (iii)
depreciation and amortization. Adjusted EBITDA is calculated as
EBITDA plus or minus (i) lower of cost or market inventory
valuation adjustments, (ii) long-lived asset impairment, inclusive
of pro-rata share of impairment in HEP segment, (iii) goodwill
impairment, (iv) HollyFrontier's pro-rata share of HEP's gain on
sales-type leases, (v) acquisition integration and regulatory
costs, (vi) HollyFrontier's pro-rata share of HEP's loss on early
extinguishment of debt, (vii) severance costs, (viii) restructuring
charges and (ix) incremental cost of products sold attributable to
our Sonneborn inventory value step-up.
EBITDA and Adjusted EBITDA are not calculations provided for
under accounting principles generally accepted in the United
States; however, the amounts included in these calculations are
derived from amounts included in our consolidated financial
statements. EBITDA and Adjusted EBITDA should not be considered as
alternatives 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 and Adjusted EBITDA are not
necessarily comparable to similarly titled measures of other
companies. These are presented here because they are widely used
financial indicators used by investors and analysts to measure
performance. EBITDA and Adjusted EBITDA are also used by our
management for internal analysis and as a basis for financial
covenants.
Set forth below is our calculation of EBITDA and adjusted
EBITDA.
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
(In thousands)
Net income (loss) attributable to
HollyFrontier stockholders
$
(176,677
)
$
196,915
$
(481,300
)
$
449,970
Add interest expense
32,695
34,264
55,334
70,911
Subtract interest income
(1,506
)
(4,588
)
(5,579
)
(10,963
)
Add (subtract) income tax expense
(benefit)
(30,911
)
89,336
(193,077
)
176,841
Add depreciation and amortization
130,178
126,908
270,753
248,329
EBITDA
$
(46,221
)
$
442,835
$
(353,869
)
$
935,088
Add (subtract) lower of cost or market
inventory valuation adjustment
(269,904
)
47,801
290,560
(184,545
)
Add long-lived asset impairment, inclusive
of pro-rata share of impairment in HEP segment
429,540
—
429,540
—
Add goodwill impairment
—
152,712
—
152,712
Subtract HollyFrontier's pro-rata share of
HEP's gain on sales-type leases
(19,134
)
—
(19,134
)
—
Add HollyFrontier's pro-rata share of
HEP's loss on early extinguishment of debt
—
—
14,656
—
Severance costs
1,117
—
1,117
—
Restructuring charge
3,679
—
3,679
—
Add acquisition integration and regulatory
costs
634
3,637
1,931
16,189
Add incremental cost of products sold
attributable to Sonneborn inventory value step-up
—
—
—
9,338
Adjusted EBITDA
$
99,711
$
646,985
$
368,480
$
928,782
EBITDA and Adjusted EBITDA attributable to our Refining segment
is presented below:
Three Months Ended June
30,
Six Months Ended June
30,
Refining Segment
2020
2019
2020
2019
(In thousands)
Income (loss) from operations (1)
$
(5,135
)
$
432,049
$
(479,837
)
$
783,376
Add depreciation and amortization
81,694
76,225
171,873
150,640
EBITDA
76,559
508,274
(307,964
)
934,016
Add (subtract) lower of cost or market
inventory valuation adjustment
(269,904
)
47,801
290,560
(184,545
)
Add long-lived asset impairment
215,242
—
215,242
—
Add severance costs
1,117
—
1,117
—
Add restructuring charges
2,009
—
2,009
—
Adjusted EBITDA
$
25,023
$
556,075
$
200,964
$
749,471
(1)
Income from operations of our Refining
segment represents income plus (i) interest expense net of interest
income and (ii) income tax provision.
EBITDA and Adjusted EBITDA attributable to our Lubricants and
Specialty Products segment is set forth below.
Lubricants and Specialty Products
Segment
Rack Back
Rack Forward
Total Lubricants and Specialty
Products
(In thousands)
Three months ended June 30,
2020
Income (loss) before interest and income
taxes (1)
$
(180,898
)
$
(28,359
)
$
(209,257
)
Add depreciation and amortization
5,877
13,902
19,779
EBITDA
(175,021
)
(14,457
)
(189,478
)
Add long-lived asset impairment
167,017
37,691
204,708
Adjusted EBITDA
$
(8,004
)
$
23,234
$
15,230
Three months ended June 30,
2019
Income (loss) before interest and income
taxes (1)
$
(199,238
)
$
52,390
$
(146,848
)
Add depreciation and amortization
11,075
11,945
23,020
EBITDA
(188,163
)
64,335
(123,828
)
Add goodwill impairment
152,712
—
152,712
Adjusted EBITDA
$
(35,451
)
$
64,335
$
28,884
Six months ended June 30, 2020
Income (loss) before interest and income
taxes (1)
$
(236,168
)
$
37,201
$
(198,967
)
Add depreciation and amortization
16,744
25,084
41,828
EBITDA
$
(219,424
)
$
62,285
$
(157,139
)
Add long-lived asset impairment
167,017
37,691
204,708
Adjusted EBITDA
$
(52,407
)
$
99,976
$
47,569
Six months ended June 30, 2019
Income (loss) before interest and income
taxes (1)
$
(242,166
)
$
86,323
$
(155,843
)
Add depreciation and amortization
21,601
21,590
43,191
EBITDA
(220,565
)
107,913
(112,652
)
Add goodwill impairment
152,712
—
152,712
Add incremental cost of products sold
attributable to Sonneborn inventory value step-up
—
9,338
9,338
Adjusted EBITDA
$
(67,853
)
$
117,251
$
49,398
(1)
Income (loss) before interest and income
taxes of our Lubricants and Specialty Products segment represents
income (loss) plus (i) interest expense, net of interest income and
(ii) income tax provision.
Reconciliations of refinery operating information (non-GAAP
performance measures) to amounts reported under generally accepted
accounting principles in financial statements.
Refinery gross margin and net operating margin are non-GAAP
performance measures that are used by our management and others to
compare our refining performance to that of other companies in our
industry. We believe these margin measures are helpful to investors
in evaluating our refining performance on a relative and absolute
basis. Refinery gross margin per produced barrel sold is total
refining segment revenues less total refining segment cost of
products sold, exclusive of lower of cost or market inventory
valuation adjustments, divided by sales volumes of produced refined
products sold. Net operating margin per barrel sold is the
difference between refinery gross margin and refinery operating
expenses per produced barrel sold. These two margins do not include
the non-cash effects of long-lived asset impairment charges, lower
of cost or market inventory valuation adjustments or depreciation
and amortization. Each of these component performance measures can
be reconciled directly to our consolidated statements of income.
Other companies in our industry may not calculate these performance
measures in the same manner.
Below are reconciliations to our consolidated statements of
income for refinery net operating and gross margin and operating
expenses, in each case averaged per produced barrel sold. Due to
rounding of reported numbers, some amounts may not calculate
exactly.
Reconciliation of average refining segment
net operating margin per produced barrel sold to refinery gross
margin to total sales and other revenues
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
(Dollars in thousands, except per
barrel amounts)
Consolidated
Net operating margin per produced barrel
sold
$
1.57
$
13.72
$
3.44
$
9.99
Add average refinery operating expenses
per produced barrel sold
6.87
5.92
6.56
6.40
Refinery gross margin per produced barrel
sold
$
8.44
$
19.64
$
10.00
$
16.39
Times produced barrels sold (BPD)
382,910
469,100
417,600
446,190
Times number of days in period
91
91
182
181
Refining segment gross margin
$
294,090
$
838,394
$
760,032
$
1,323,663
Add (subtract) rounding
(23
)
34
150
(365
)
Total refining segment gross margin
294,067
838,428
760,182
1,323,298
Add refining segment cost of products
sold
1,433,437
3,458,832
3,902,188
6,421,372
Refining segment sales and other
revenues
1,727,504
4,297,260
4,662,370
7,744,670
Add lubricants and specialty products
segment sales and other revenues
357,287
545,346
883,890
1,038,680
Add HEP segment sales and other
revenues
114,807
130,751
242,661
265,248
Subtract corporate, other and
eliminations
(136,668
)
(190,742
)
(325,446
)
(368,736
)
Sales and other revenues
$
2,062,930
$
4,782,615
$
5,463,475
$
8,679,862
Reconciliation of average refining segment
operating expenses per produced barrel sold to total operating
expenses
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
(Dollars in thousands, except per
barrel amounts)
Consolidated
Average operating expenses per produced
barrel sold
$
6.87
$
5.92
$
6.56
$
6.40
Times produced barrels sold (BPD)
382,910
469,100
417,600
446,190
Times number of days in period
91
91
182
181
Refining segment operating expenses
$
239,384
$
252,714
$
498,581
$
516,866
Add (subtract) rounding
(25
)
1
(48
)
346
Total refining segment operating
expenses
239,359
252,715
498,533
517,212
Add lubricants and specialty products
segment operating expenses
47,840
59,122
101,971
112,681
Add HEP segment operating expenses
34,737
40,608
69,718
78,121
Subtract corporate, other and
eliminations
(18,577
)
(19,193
)
(38,518
)
(43,170
)
Operating expenses (exclusive of
depreciation and amortization)
$
303,359
$
333,252
$
631,704
$
664,844
Reconciliation of net income (loss)
attributable to HollyFrontier stockholders to adjusted net income
attributable to HollyFrontier stockholders
Adjusted net income attributable to HollyFrontier stockholders
is a non-GAAP financial measure that excludes non-cash lower of
cost or market inventory valuation adjustments, long-lived asset
and goodwill impairments, acquisition integration and regulatory
costs, severance costs, restructuring charges, HEP's gain on
sales-type leases, HEP's loss on early extinguishment of debt and
incremental cost of products sold due to Sonneborn inventory value
step-up. We believe this measure is helpful to investors and others
in evaluating our financial performance and to compare our results
to that of other companies in our industry. Similarly titled
performance measures of other companies may not be calculated in
the same manner.
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
(In thousands, except per share
amounts)
Consolidated
GAAP:
Income (loss) before income taxes
$
(181,318
)
$
306,153
$
(636,770
)
$
670,144
Income tax expense (benefit)
(30,911
)
89,336
(193,077
)
176,841
Net income (loss)
(150,407
)
216,817
(443,693
)
493,303
Less net income attributable to
noncontrolling interest
26,270
19,902
37,607
43,333
Net income (loss) attributable to
HollyFrontier stockholders
(176,677
)
196,915
(481,300
)
449,970
Non-GAAP adjustments to arrive at
adjusted results:
Lower of cost or market inventory
valuation adjustment
(269,904
)
47,801
290,560
(184,545
)
HEP's gain on sales-type leases
(33,834
)
—
(33,834
)
—
HEP's loss on early extinguishment of
debt
—
—
25,915
—
Acquisition integration and regulatory
costs
634
3,637
1,931
16,189
Long-lived asset and goodwill
impairments
436,908
152,712
436,908
152,712
Severance costs
1,117
—
1,117
—
Restructuring charges
3,679
—
3,679
—
Incremental cost of products sold
attributable to Sonneborn inventory value step-up
—
—
—
9,338
Total adjustments to income (loss) before
income taxes
138,600
204,150
726,276
(6,306
)
Adjustment to income tax expense (1)
10,065
28,748
195,404
(21,769
)
Adjustment to net income attributable to
noncontrolling interest
(7,332
)
—
3,927
—
Total adjustments, net of tax
135,867
175,402
526,945
15,463
Adjusted results - Non-GAAP:
Adjusted income before income taxes
(42,718
)
510,303
89,506
663,838
Adjusted income tax expense (2)
(20,846
)
118,084
2,327
155,072
Adjusted net income
(21,872
)
392,219
87,179
508,766
Adjusted net income attributable to
noncontrolling interest
18,938
19,902
41,534
43,333
Adjusted net income attributable to
HollyFrontier stockholders
$
(40,810
)
$
372,317
$
45,645
$
465,433
Adjusted earnings per share attributable
to HollyFrontier stockholders - diluted (3)
$
(0.25
)
$
2.18
$
0.28
$
2.71
Average number of common shares
outstanding - diluted
161,889
170,547
162,556
171,264
(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,
2020
2019
2020
2019
(In thousands)
Non-GAAP income tax expense (2)
$
(20,846
)
$
118,084
$
2,327
$
155,072
Subtract GAAP income tax expense
(benefit)
(30,911
)
89,336
(193,077
)
176,841
Non-GAAP adjustment to income tax
expense
$
10,065
$
28,748
$
195,404
$
(21,769
)
(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.
(3)
Adjusted earnings per share attributable
to HollyFrontier stockholders - diluted is calculated as adjusted
net income attributable to HollyFrontier stockholders divided by
the average number of shares of common stock outstanding assuming
dilution.
Reconciliation of effective tax rate to
adjusted effective tax rate
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
(Dollars in thousands)
GAAP:
Income (loss) before income taxes
$
(181,318
)
$
306,153
$
(636,770
)
$
670,144
Income tax expense (benefit)
$
(30,911
)
$
89,336
$
(193,077
)
$
176,841
Effective tax rate for GAAP financial
statements
17.0
%
29.2
%
30.3
%
26.4
%
Adjusted - Non-GAAP:
Effect of Non-GAAP adjustments
31.8
%
(6.0
)%
(27.7
)%
(3.0
)%
Effective tax rate for adjusted
results
48.8
%
23.2
%
2.6
%
23.4
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005193/en/
Richard L. Voliva III, Executive Vice President and Chief
Financial Officer Craig Biery, Director, Investor Relations
HollyFrontier Corporation 214-954-6510
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