- Reported net loss attributable to HollyFrontier stockholders of
$(601.4) million or $(3.72) per diluted share and adjusted net loss
of $(139.9) million or $(0.87) per diluted share, for the year
- Reported EBITDA of $(193.8) million and adjusted EBITDA of
$412.2 million, for the year
- Committed additional $400.0 million toward renewables expansion
at Cheyenne and Artesia in 2020
HollyFrontier Corporation (NYSE:HFC) (“HollyFrontier” or the
“Company”) today reported fourth quarter net loss attributable to
HollyFrontier stockholders of $(117.7) million or $(0.73) per
diluted share for the quarter ended December 31, 2020, compared to
net income of $60.6 million or $0.37 per diluted share for the
quarter ended December 31, 2019.
The fourth quarter results reflect special items that
collectively increased net loss by a total of $0.9 million. On a
pre-tax basis, these items include goodwill and long-lived asset
impairment charges totaling $108.4 million and charges related to
the Cheyenne Refinery conversion to renewable diesel production,
including decommissioning charges of $12.4 million, last-in,
first-out (“LIFO”) inventory liquidation costs of $3.1 million and
severance charges totaling $0.3 million; partially offset by a
lower of cost or market inventory valuation adjustment of $149.2
million. Excluding these items, adjusted net loss for the fourth
quarter was $(118.6) million ($(0.74) per diluted share) compared
to adjusted net income of $78.0 million ($0.48 per diluted share)
for the fourth quarter of 2019, which excludes certain items that
collectively decreased net income by $17.4 million for the three
months ended December 31, 2019.
HollyFrontier’s President & CEO, Michael Jennings,
commented, “Despite the challenging environment, HollyFrontier
preserved our industry-leading balance sheet thanks to a resilient
set of results led by HEP and our Lubricants businesses. Looking
forward, we expect demand for transportation fuels will strengthen
as COVID-19 vaccines are distributed and the global economy
recovers from the pandemic. Our focus for 2021 is on operating
safely and reliably while executing our ambitious capital and
turnaround plans.”
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. During
the fourth quarter of 2020, demand for transportation fuels
remained challenged while lubricants and specialties continued to
show strength in the second half of the year due to improvement in
industrial and transportation-related markets and increased global
demand for base oils.
The Refining segment reported adjusted EBITDA of $(111.5)
million compared to $171.6 million for the fourth quarter of 2019.
This decrease was primarily due to continued weak demand for
gasoline and diesel coupled with compressed crude differentials.
Refinery gross margin for the fourth quarter of 2020 was $4.02 per
produced barrel, a 71% decrease compared to $13.66 for the fourth
quarter of 2019. Crude oil charge averaged 379,910 barrels per day
(“BPD”) for the fourth quarter of 2020 compared to 359,500 BPD for
the fourth quarter of 2019.
Our Lubricants and Specialty Products segment reported EBITDA of
$(32.7) million, compared to $34.6 million in the fourth quarter of
2019. This decrease was driven by a goodwill impairment charge of
$81.9 million related to Sonneborn. Excluding the impairment, our
Lubricants and Specialties segment reported adjusted EBITDA of
$49.2 million due to strengthening base oil margins in the fourth
quarter of 2020.
Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $86.8
million for the fourth quarter of 2020 compared to $87.8 million in
the fourth quarter of 2019. Despite lower volumes year over year,
HEP delivered strong fourth quarter 2020 earnings which were
supported by long-term minimum volume commitment contracts.
For the fourth quarter of 2020, net cash provided by operations
totaled $66.9 million. During the period, HollyFrontier declared
and paid a dividend of $0.35 per share to shareholders totaling
$57.9 million. At December 31, 2020, the Company's cash and cash
equivalents totaled $1,368.3 million, a $156.6 million decrease
over cash and cash equivalents of $1,524.9 million at September 30,
2020. Additionally, the Company's consolidated debt was $3,142.7
million. The Company's debt, exclusive of HEP debt, which is
nonrecourse to HollyFrontier, was $1,737.1 million at December 31,
2020.
The Company has scheduled a webcast conference call for today,
February 24, 2021, at 8:30 AM Eastern Time to discuss fourth
quarter financial results. This webcast may be accessed at:
https://event.on24.com/wcc/r/2950760/AF27087C3232DF9D1112AE68A106191D.
An audio archive of this webcast will be available using the above
noted link through March 10, 2021.
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 a significant 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;
the effects of current and future governmental and environmental
regulations and policies, including the effects of current and
future 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; continued 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
December 31,
Change from 2019
2020
2019
Change
Percent
(In thousands, except per share
data)
Sales and other revenues
$
2,900,768
$
4,381,888
$
(1,481,120
)
(34
)%
Operating costs and expenses:
Cost of products sold:
Cost of products sold (exclusive of lower
of cost or market inventory valuation adjustment)
2,510,845
3,610,528
(1,099,683
)
(30
)
Lower of cost or market inventory
valuation adjustment
(149,212
)
30,708
(179,920
)
(586
)
2,361,633
3,641,236
(1,279,603
)
(35
)
Operating expenses
336,077
383,630
(47,553
)
(12
)
Selling, general and administrative
expenses
76,041
93,259
(17,218
)
(18
)
Depreciation and amortization
124,879
134,580
(9,701
)
(7
)
Goodwill and long-lived asset
impairments
108,385
—
108,385
—
Total operating costs and
expenses
3,007,015
4,252,705
(1,245,690
)
(29
)
Income (loss) from operations
(106,247
)
129,183
(235,430
)
(182
)
Other income (expense):
Earnings of equity method investments
1,461
(37
)
1,498
(4,049
)
Interest income
1,043
5,012
(3,969
)
(79
)
Interest expense
(40,604
)
(36,383
)
(4,221
)
12
Gain on foreign currency transactions
3,119
576
2,543
441
Other, net
3,034
2,008
1,026
51
(31,947
)
(28,824
)
(3,123
)
11
Income (loss) before income
taxes
(138,194
)
100,359
(238,553
)
(238
)
Income tax expense (benefit)
(43,643
)
19,290
(62,933
)
(326
)
Net income (loss)
(94,551
)
81,069
(175,620
)
(217
)
Less net income attributable to
noncontrolling interest
23,196
20,464
2,732
13
Net income (loss) attributable to
HollyFrontier stockholders
$
(117,747
)
$
60,605
$
(178,352
)
(294
)%
Earnings (loss) per share:
Basic
$
(0.73
)
$
0.38
$
(1.11
)
(292
)%
Diluted
$
(0.73
)
$
0.37
$
(1.10
)
(297
)%
Cash dividends declared per common
share
$
0.35
$
0.35
$
—
—
%
Average number of common shares
outstanding:
Basic
162,151
161,398
753
—
%
Diluted
162,151
162,898
(747
)
—
%
EBITDA
$
3,050
$
245,846
$
(242,796
)
(99
)%
Adjusted EBITDA
$
(21,898
)
$
262,660
$
(284,558
)
(108
)%
Years Ended December
31,
Change from 2019
2020
2019
Change
Percent
(In thousands, except per share
data)
Sales and other revenues
$
11,183,643
$
17,486,578
$
(6,302,935
)
(36
)%
Operating costs and expenses:
Cost of products sold:
Cost of products sold (exclusive of lower
of cost or market inventory valuation adjustment)
9,158,805
13,918,384
(4,759,579
)
(34
)
Lower of cost or market inventory
valuation adjustment
78,499
(119,775
)
198,274
(166
)
9,237,304
13,798,609
(4,561,305
)
(33
)
Operating expenses
1,300,277
1,394,052
(93,775
)
(7
)
Selling, general and administrative
expenses
313,600
354,236
(40,636
)
(11
)
Depreciation and amortization
520,912
509,925
10,987
2
Goodwill and long-lived asset
impairments
545,293
152,712
392,581
257
Total operating costs and
expenses
11,917,386
16,209,534
(4,292,148
)
(26
)
Income (loss) from operations
(733,743
)
1,277,044
(2,010,787
)
(157
)
Other income (expense):
Earnings of equity method investments
6,647
5,180
1,467
28
Interest income
7,633
22,139
(14,506
)
(66
)
Interest expense
(126,527
)
(143,321
)
16,794
(12
)
Gain on business interruption insurance
settlement
81,000
—
81,000
—
%
Gain on sales-type lease
33,834
—
33,834
—
%
Loss on early extinguishment of debt
(25,915
)
—
(25,915
)
—
%
Gain on foreign currency transactions
2,201
5,449
(3,248
)
(60
)
Other, net
7,824
5,013
2,811
56
(13,303
)
(105,540
)
92,237
(87
)
Income (loss) before income
taxes
(747,046
)
1,171,504
(1,918,550
)
(164
)
Income tax expense (benefit)
(232,147
)
299,152
(531,299
)
(178
)
Net income (loss)
(514,899
)
872,352
(1,387,251
)
(159
)
Less net income attributable to
noncontrolling interest
86,549
99,964
(13,415
)
(13
)
Net income (loss) attributable to
HollyFrontier stockholders
$
(601,448
)
$
772,388
$
(1,373,836
)
(178
)%
Earnings (loss) per share:
Basic
$
(3.72
)
$
4.64
$
(8.36
)
(180
)%
Diluted
$
(3.72
)
$
4.61
$
(8.33
)
(181
)%
Cash dividends declared per common
share
$
1.40
$
1.34
$
0.06
4
%
Average number of common shares
outstanding:
Basic
161,983
166,287
(4,304
)
(3
)%
Diluted
161,983
167,385
(5,402
)
(3
)%
EBITDA
$
(193,789
)
$
1,702,647
$
(1,896,436
)
(111
)%
Adjusted EBITDA
$
412,220
$
1,714,524
$
(1,302,304
)
(76
)%
Balance Sheet Data
Years Ended December
31,
2020
2019
(In thousands)
Cash and cash equivalents
$
1,368,318
$
885,162
Working capital
$
1,935,605
$
1,620,261
Total assets
$
11,506,864
$
12,164,841
Long-term debt
$
3,142,718
$
2,455,640
Total equity
$
5,722,203
$
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 represents the operations of our El Dorado,
Tulsa, Navajo, 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 geographic regions of the United States. HFC Asphalt
operates various asphalt terminals in Arizona, New Mexico and
Oklahoma. The Refining segment also included the operations of the
Cheyenne Refinery until it permanently ceased petroleum refining
operations during the third quarter of 2020.
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
geographic 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 December 31,
2020
Sales and other revenues:
Revenues from external customers
$
2,406,214
$
462,724
$
25,629
$
6,201
$
2,900,768
Intersegment revenues
74,492
1,554
101,827
(177,873
)
—
$
2,480,706
$
464,278
$
127,456
$
(171,672
)
$
2,900,768
Cost of products sold (exclusive of lower
of cost or market inventory adjustment)
$
2,326,150
$
318,857
$
—
$
(134,162
)
$
2,510,845
Lower of cost or market inventory
valuation adjustment
$
(145,497
)
$
—
$
—
$
(3,715
)
$
(149,212
)
Operating expenses
$
233,433
$
59,609
$
37,971
$
5,064
$
336,077
Selling, general and administrative
expenses
$
32,621
$
36,162
$
2,420
$
4,838
$
76,041
Depreciation and amortization
$
73,598
$
21,396
$
23,350
$
6,535
$
124,879
Goodwill and long-lived asset
impairments
$
26,518
$
81,867
$
—
$
—
$
108,385
Income (loss) from operations
$
(66,117
)
$
(53,613
)
$
63,715
$
(50,232
)
$
(106,247
)
Income (loss) before interest and income
taxes
$
(66,117
)
$
(54,056
)
$
65,428
$
(43,888
)
$
(98,633
)
Net income attributable to noncontrolling
interest
$
—
$
—
$
1,124
$
22,072
$
23,196
Earnings of equity method investments
$
—
$
—
$
1,461
$
—
$
1,461
Capital expenditures
$
45,870
$
12,086
$
20,641
$
38,555
$
117,152
Three Months Ended December 31,
2019
Sales and other revenues:
Revenues from external customers
$
3,837,269
$
512,980
$
31,639
$
—
$
4,381,888
Intersegment revenues
67,879
3,150
99,995
(171,024
)
—
$
3,905,148
$
516,130
$
131,634
$
(171,024
)
$
4,381,888
Cost of products sold (exclusive of lower
of cost or market inventory adjustment)
$
3,381,967
$
377,740
$
—
$
(149,179
)
$
3,610,528
Lower of cost or market inventory
valuation adjustment
$
30,708
$
—
$
—
$
—
$
30,708
Operating expenses
$
301,407
$
60,868
$
38,951
$
(17,596
)
$
383,630
Selling, general and administrative
expenses
$
32,196
$
42,914
$
2,929
$
15,220
$
93,259
Depreciation and amortization
$
82,527
$
22,890
$
24,514
$
4,649
$
134,580
Income (loss) from operations
$
76,343
$
11,718
$
65,240
$
(24,118
)
$
129,183
Income (loss) before interest and income
taxes
$
76,343
$
11,681
$
65,532
$
(21,826
)
$
131,730
Net income attributable to noncontrolling
interest
$
—
$
—
$
1,457
$
19,007
$
20,464
Earnings of equity method investments
$
—
$
—
$
(37
)
$
—
$
(37
)
Capital expenditures
$
69,835
$
15,110
$
6,284
$
7,477
$
98,706
Refining
Lubricants and Specialty
Products
HEP
Corporate, Other and
Eliminations
Consolidated Total
(In thousands)
Year Ended December 31, 2020
Sales and other revenues:
Revenues from external customers
$
9,286,658
$
1,792,745
$
98,039
$
6,201
$
11,183,643
Intersegment revenues
252,531
10,465
399,809
(662,805
)
—
$
9,539,189
$
1,803,210
$
497,848
$
(656,604
)
$
11,183,643
Cost of products sold (exclusive of lower
of cost or market inventory adjustment)
$
8,439,680
$
1,271,287
$
—
$
(552,162
)
$
9,158,805
Lower of cost or market inventory
valuation adjustment
$
82,214
$
—
$
—
$
(3,715
)
$
78,499
Operating expenses
$
988,045
$
216,068
$
147,692
$
(51,528
)
$
1,300,277
Selling, general and administrative
expenses
$
127,298
$
157,816
$
9,989
$
18,497
$
313,600
Depreciation and amortization
$
324,617
$
80,656
$
95,445
$
20,194
$
520,912
Goodwill and long-lived asset
impairments
$
241,760
$
286,575
$
16,958
$
—
$
545,293
Income (loss) from operations
$
(664,425
)
$
(209,192
)
$
227,764
$
(87,890
)
$
(733,743
)
Income (loss) before interest and income
taxes
$
(664,425
)
$
(209,903
)
$
251,021
$
(4,845
)
$
(628,152
)
Net income attributable to noncontrolling
interest
$
—
$
—
$
5,282
$
81,267
$
86,549
Earnings of equity method investments
$
—
$
—
$
6,647
$
—
$
6,647
Capital expenditures
$
152,726
$
32,473
$
59,283
$
85,678
$
330,160
Year Ended December 31, 2019
Sales and other revenues:
Revenues from external customers
$
15,284,110
$
2,081,221
$
121,027
$
220
$
17,486,578
Intersegment revenues
312,678
11,307
411,750
(735,735
)
—
$
15,596,788
$
2,092,528
$
532,777
$
(735,515
)
$
17,486,578
Cost of products sold (exclusive of lower
of cost or market inventory adjustment)
$
12,980,506
$
1,580,036
$
—
$
(642,158
)
$
13,918,384
Lower of cost or market inventory
valuation adjustment
$
(119,775
)
$
—
$
—
$
—
$
(119,775
)
Operating expenses
$
1,095,488
$
231,523
$
161,996
$
(94,955
)
$
1,394,052
Selling, general and administrative
expenses
$
120,518
$
168,595
$
10,251
$
54,872
$
354,236
Depreciation and amortization
$
309,932
$
88,781
$
96,706
$
14,506
$
509,925
Goodwill impairment
$
—
$
152,712
$
—
$
—
$
152,712
Income (loss) from operations
$
1,210,119
$
(129,119
)
$
263,824
$
(67,780
)
$
1,277,044
Income (loss) before interest and income
taxes
$
1,210,119
$
(128,837
)
$
304,442
$
(93,038
)
$
1,292,686
Net income attributable to noncontrolling
interest
$
—
$
—
$
4,981
$
94,983
$
99,964
Earnings of equity method investments
$
—
$
—
$
5,180
$
—
$
5,180
Capital expenditures
$
199,002
$
40,997
$
30,112
$
23,652
$
293,763
Refining
Lubricants and Specialty
Products
HEP
Corporate, Other and
Eliminations
Consolidated Total
(In thousands)
December 31, 2020
Cash and cash equivalents
$
3,106
$
163,729
$
21,990
$
1,179,493
$
1,368,318
Total assets
$
6,203,847
$
1,864,313
$
2,198,478
$
1,240,226
$
11,506,864
Long-term debt
$
—
$
—
$
1,405,603
$
1,737,115
$
3,142,718
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.
As of December 31, 2020, our refinery operations included the El
Dorado, Tulsa, Navajo and Woods Cross Refineries. In the third
quarter of 2020, we permanently ceased petroleum refining
operations at our Cheyenne Refinery and subsequently began
converting certain assets at our Cheyenne Refinery to renewable
diesel production. The disaggregation of the Company's refining
geographic operating data is presented in two regions,
Mid-Continent and West, to best reflect the economic drivers of our
refining operations. The Mid-Continent region will continue to be
comprised of the El Dorado and Tulsa Refineries, and the new West
region will be comprised of the Navajo and Woods Cross Refineries.
All prior period geographic operating data included below has been
retrospectively adjusted to reflect the revised regional
groupings.
Three Months Ended
December 31,
Years Ended December
31,
2020
2019
2020
2019
Mid-Continent Region (El Dorado and
Tulsa Refineries)
Crude charge (BPD) (1)
260,780
243,400
241,140
254,010
Refinery throughput (BPD) (2)
279,670
256,790
257,030
268,500
Sales of produced refined products (BPD)
(3)
273,710
254,950
248,320
259,310
Refinery utilization (4)
100.3
%
93.6
%
92.7
%
97.7
%
Average per produced barrel (5)
Refinery gross margin
$
1.93
$
11.15
$
5.17
$
13.71
Refinery operating expenses (6)
5.42
6.66
5.46
5.77
Net operating margin
$
(3.49
)
$
4.49
$
(0.29
)
$
7.94
Refinery operating expenses per throughput
barrel (7)
$
5.30
$
6.61
$
5.27
$
5.58
Feedstocks:
Sweet crude oil
59
%
54
%
58
%
55
%
Sour crude oil
19
%
26
%
19
%
24
%
Heavy sour crude oil
15
%
15
%
17
%
16
%
Other feedstocks and blends
7
%
5
%
6
%
5
%
Total
100
%
100
%
100
%
100
%
Sales of produced refined products:
Gasolines
54
%
53
%
52
%
51
%
Diesel fuels
33
%
30
%
34
%
32
%
Jet fuels
4
%
6
%
4
%
7
%
Fuel oil
1
%
1
%
1
%
1
%
Asphalt
3
%
4
%
3
%
3
%
Base oils
4
%
3
%
4
%
4
%
LPG and other
1
%
3
%
2
%
2
%
Total
100
%
100
%
100
%
100
%
Three Months Ended
December 31,
Years Ended December
31,
2020
2019
2020
2019
West Region (Navajo and Wood Cross
Refineries)
Crude charge (BPD) (1)
119,130
116,100
124,050
134,850
Refinery throughput (BPD) (2)
133,110
128,983
138,050
149,070
Sales of produced refined products (BPD)
(3)
144,280
143,410
143,350
155,060
Refinery utilization (4)
82.2
%
80.1
%
85.6
%
93.0
%
Average per produced barrel (5)
Refinery gross margin
$
7.98
$
18.12
$
10.97
$
19.62
Refinery operating expenses (6)
7.31
7.39
7.07
6.69
Net operating margin
$
0.67
$
10.73
$
3.90
$
12.93
Refinery operating expenses per throughput
barrel (7)
$
7.93
$
8.22
$
7.34
$
6.96
Feedstocks:
Sweet crude oil
29
%
28
%
30
%
26
%
Sour crude oil
48
%
49
%
49
%
52
%
Black wax crude oil
12
%
13
%
11
%
12
%
Other feedstocks and blends
11
%
10
%
10
%
10
%
Total
100
%
100
%
100
%
100
%
Sales of produced refined products:
Gasolines
57
%
55
%
56
%
53
%
Diesel fuels
34
%
33
%
35
%
37
%
Fuel oil
3
%
3
%
3
%
3
%
Asphalt
3
%
4
%
4
%
4
%
LPG and other
3
%
5
%
2
%
3
%
Total
100
%
100
%
100
%
100
%
Consolidated
Crude charge (BPD) (1)
379,910
359,500
365,190
388,860
Refinery throughput (BPD) (2)
412,780
385,773
395,080
417,570
Sales of produced refined products (BPD)
(3)
417,990
398,360
391,670
414,370
Refinery utilization (4)
93.8
%
88.8
%
90.2
%
96.0
%
Average per produced barrel (5)
Refinery gross margin
$
4.02
$
13.66
$
7.29
$
15.92
Refinery operating expenses (6)
6.07
6.92
6.05
6.12
Net operating margin
$
(2.05
)
$
6.74
$
1.24
$
9.80
Refinery operating expenses per throughput
barrel (7)
$
6.15
$
7.15
$
6.00
$
6.07
Feedstocks:
Sweet crude oil
49
%
45
%
48
%
45
%
Sour crude oil
29
%
34
%
29
%
34
%
Heavy sour crude oil
10
%
10
%
11
%
10
%
Black wax crude oil
4
%
4
%
4
%
4
%
Other feedstocks and blends
8
%
7
%
8
%
7
%
Total
100
%
100
%
100
%
100
%
Consolidated
Sales of produced refined products:
Gasolines
55
%
53
%
54
%
52
%
Diesel fuels
33
%
31
%
34
%
34
%
Jet fuels
3
%
4
%
3
%
4
%
Fuel oil
2
%
2
%
1
%
2
%
Asphalt
3
%
4
%
4
%
3
%
Base oils
2
%
2
%
2
%
2
%
LPG and other
2
%
4
%
2
%
3
%
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 405,000
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 Mid-Continent and West
regions operating expenses, exclusive of long-lived asset
impairment charges and depreciation and amortization, divided by
sales volumes of refined products produced at our refineries.
(7)
Represents total Mid-Continent and West
regions operating expenses, exclusive of long-lived asset
impairment charges and 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
year ended December 31, 2019, our lubricants and specialty product
operating results reflect the operations of our Sonneborn business
for the period February 1, 2019 through December 31, 2019.
The following table sets forth information about our lubricants
and specialty products operations.
Three Months Ended
December 31,
Years Ended December
31,
2020
2019
2020
2019
Lubricants and Specialty
Products
Throughput (BPD)
21,425
21,229
19,645
20,251
Sales of produced products (BPD)
33,559
34,392
32,902
34,827
Sales of produced products:
Finished products
49
%
47
%
49
%
49
%
Base oils
28
%
25
%
26
%
27
%
Other
23
%
28
%
25
%
24
%
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 December 31,
2020
Sales and other revenues
$
143,786
$
426,407
$
(105,915
)
$
464,278
Cost of products sold
$
110,351
$
314,421
$
(105,915
)
$
318,857
Operating expenses
$
26,760
$
32,849
$
—
$
59,609
Selling, general and administrative
expenses
$
5,680
$
30,482
$
—
$
36,162
Depreciation and amortization
$
6,908
$
14,488
$
—
$
21,396
Goodwill impairment
$
—
$
81,867
$
—
$
81,867
Income (loss) from operations
$
(5,913
)
$
(47,700
)
$
—
$
(53,613
)
Income (loss) before interest and income
taxes
$
(5,913
)
$
(48,143
)
$
—
$
(54,056
)
EBITDA
$
995
$
(33,655
)
$
—
$
(32,660
)
Three Months Ended December 31,
2019
Sales and other revenues
$
175,488
$
455,134
$
(114,492
)
$
516,130
Cost of products sold
$
167,141
$
325,091
$
(114,492
)
$
377,740
Operating expenses
$
29,014
$
31,854
$
—
$
60,868
Selling, general and administrative
expenses
$
6,147
$
36,767
$
—
$
42,914
Depreciation and amortization
$
4,010
$
18,880
$
—
$
22,890
Income (loss) from operations
$
(30,824
)
$
42,542
$
—
$
11,718
Income (loss) before interest and income
taxes
$
(30,824
)
$
42,505
$
—
$
11,681
EBITDA
$
(26,814
)
$
61,385
$
—
$
34,571
Rack Back (1)
Rack Forward (2)
Eliminations (3)
Total Lubricants and Specialty
Products
(In thousands)
Year Ended December 31, 2020
Sales and other revenues
$
505,424
$
1,667,809
$
(370,023
)
$
1,803,210
Cost of products sold
$
456,194
$
1,185,116
$
(370,023
)
$
1,271,287
Operating expenses
$
96,463
$
119,605
$
—
$
216,068
Selling, general and administrative
expenses
$
22,276
$
135,540
$
—
$
157,816
Depreciation and amortization
$
29,071
$
51,585
$
—
$
80,656
Goodwill and long-lived asset
impairments
$
167,017
$
119,558
$
—
$
286,575
Income (loss) from operations
$
(265,597
)
$
56,405
$
—
$
(209,192
)
Income (loss) before interest and income
taxes
$
(265,597
)
$
55,694
$
—
$
(209,903
)
EBITDA
$
(236,526
)
$
107,279
$
—
$
(129,247
)
Year Ended December 31, 2019
Sales and other revenues
$
661,523
$
1,883,920
$
(452,915
)
$
2,092,528
Cost of products sold
$
620,660
$
1,412,291
$
(452,915
)
$
1,580,036
Operating expenses
$
116,984
$
114,539
$
—
$
231,523
Selling, general and administrative
expenses
$
31,854
$
136,741
$
—
$
168,595
Depreciation and amortization
$
37,001
$
51,780
$
—
$
88,781
Goodwill impairment
$
152,712
$
—
$
—
$
152,712
Income (loss) from operations
$
(297,688
)
$
168,569
$
—
$
(129,119
)
Income (loss) before interest and income
taxes
$
(297,688
)
$
168,851
$
—
$
(128,837
)
EBITDA
$
(260,687
)
$
220,631
$
—
$
(40,056
)
(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 provision and
(iii) depreciation and amortization. Adjusted EBITDA is calculated
as EBITDA plus or minus (i) lower of cost or market inventory
valuation adjustments, (ii) HollyFrontier's pro-rata share of gain
on business interruption insurance settlement, (iii) long-lived
asset impairment, inclusive of pro-rata share of impairment in HEP
segment, (iv) goodwill impairment, (v) HollyFrontier's pro-rata
share of HEP's gain on sales-type leases, (vi) HollyFrontier's
pro-rata share of HEP's loss on early extinguishment of debt, (vii)
severance costs, (viii) restructuring charges, (ix) Cheyenne
Refinery LIFO inventory liquidation costs, (x) decommissioning
costs, (xi) acquisition integration and regulatory costs, (xii)
incremental cost of products sold attributable to our Sonneborn
inventory value step-up (xiii) RINs cost reductions and (xiv)
biodiesel blender's tax credit.
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
December 31,
Years Ended December
31,
2020
2019
2020
2019
(In thousands)
Net income (loss) attributable to
HollyFrontier stockholders
$
(117,747
)
$
60,605
$
(601,448
)
$
772,388
Add (subtract) income tax expense
(benefit)
(43,643
)
19,290
(232,147
)
299,152
Add interest expense
40,604
36,383
126,527
143,321
Subtract interest income
(1,043
)
(5,012
)
(7,633
)
(22,139
)
Add depreciation and amortization
124,879
134,580
520,912
509,925
EBITDA
$
3,050
$
245,846
$
(193,789
)
$
1,702,647
Add (subtract) lower of cost or market
inventory valuation adjustment
(149,212
)
30,708
78,499
(119,775
)
Add goodwill impairment
81,867
—
81,867
152,712
Subtract HollyFrontier's pro-rata share of
gain on business interruption insurance settlement
—
—
(77,143
)
—
Add long-lived asset impairment, inclusive
of pro-rata share of impairment in HEP segment
26,518
—
456,058
—
Subtract HollyFrontier's pro-rata share of
HEP's gain on sales-type leases
—
—
(19,134
)
—
Add HollyFrontier's pro-rata share of
HEP's loss on early extinguishment of debt
—
—
14,656
—
Add severance costs
296
—
3,842
—
Add restructuring charges
—
—
3,679
—
Add Cheyenne Refinery LIFO inventory
liquidation costs
3,129
—
36,943
—
Add decommissioning costs
12,439
—
24,748
—
Add acquisition integration and regulatory
costs
15
4,118
1,994
24,194
Add incremental cost of products sold
attributable to Sonneborn inventory value step-up
—
—
—
9,338
Subtract RINs cost reduction
—
—
—
(36,580
)
Subtract biodiesel blender's tax
credit
—
(18,012
)
—
(18,012
)
Adjusted EBITDA
$
(21,898
)
$
262,660
$
412,220
$
1,714,524
EBITDA and Adjusted EBITDA attributable to our Refining segment
is presented below:
Three Months Ended
December 31,
Years Ended December
31,
Refining Segment
2020
2019
2020
2019
(In thousands)
Income (loss) from operations (1)
$
(66,117
)
$
76,343
$
(664,425
)
$
1,210,119
Add depreciation and amortization
73,598
82,527
324,617
309,932
EBITDA
$
7,481
$
158,870
$
(339,808
)
$
1,520,051
Add (subtract) lower of cost or market
inventory valuation adjustment
(145,497
)
30,708
82,214
(119,775
)
Add long-lived asset impairment
26,518
—
241,760
—
Add severance costs
—
—
3,546
—
Add restructuring charges
—
—
2,009
—
Subtract RINs cost reduction
—
—
—
(36,580
)
Subtract biodiesel blender's tax
credit
—
(18,012
)
—
(18,012
)
Add Cheyenne Refinery LIFO inventory
liquidation costs
—
—
33,814
—
Add decommissioning costs
—
—
12,309
—
Adjusted EBITDA
$
(111,498
)
$
171,566
$
35,844
$
1,345,684
(1)
Income (loss) 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 December 31,
2020
Loss before interest and income taxes
(1)
$
(5,913
)
$
(48,143
)
$
(54,056
)
Add depreciation and amortization
6,908
14,488
21,396
EBITDA
995
(33,655
)
(32,660
)
Add goodwill impairment
—
81,867
81,867
Adjusted EBITDA
$
995
$
48,212
$
49,207
Three Months Ended December 31,
2019
Income (loss) before interest and income
taxes (1)
$
(30,824
)
$
42,505
$
11,681
Add depreciation and amortization
4,010
18,880
22,890
EBITDA
$
(26,814
)
$
61,385
$
34,571
Year Ended December 31, 2020
Income (loss) before interest and income
taxes (1)
$
(265,597
)
$
55,694
$
(209,903
)
Add depreciation and amortization
29,071
51,585
80,656
EBITDA
(236,526
)
107,279
(129,247
)
Add goodwill and long-lived asset
impairments
167,017
119,558
286,575
Adjusted EBITDA
$
(69,509
)
$
226,837
$
157,328
Year Ended December 31, 2019
Income (loss) before interest and income
taxes (1)
$
(297,688
)
$
168,851
$
(128,837
)
Add depreciation and amortization
37,001
51,780
88,781
EBITDA
(260,687
)
220,631
(40,056
)
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
$
(107,975
)
$
229,969
$
121,994
(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
December 31,
Years Ended December
31,
2020
2019
2020
2019
(Dollars in thousands, except per
barrel amounts)
Consolidated
Net operating margin per produced barrel
sold
$
(2.05
)
$
6.74
$
1.24
$
9.80
Add average refinery operating expenses
per produced barrel sold
6.07
6.92
6.05
6.12
Refinery gross margin per produced barrel
sold
$
4.02
$
13.66
$
7.29
$
15.92
Times produced barrels sold (BPD)
417,990
398,360
391,670
414,370
Times number of days in period
92
92
366
365
Refining gross margin
$
154,589
$
500,627
$
1,045,030
$
2,407,821
Add (subtract) rounding
(33
)
41
523
215
West and Mid-Continent regions gross
margin
154,556
500,668
1,045,553
2,408,036
Add West and Mid-Continent regions cost of
products sold
2,326,150
3,198,238
7,992,047
12,062,661
Add Cheyenne Refinery sales and other
revenues
—
206,242
501,589
1,126,091
Refining segment sales and other
revenues
2,480,706
3,905,148
9,539,189
15,596,788
Add lubricants and specialty products
segment sales and other revenues
464,278
516,130
1,803,210
2,092,528
Add HEP segment sales and other
revenues
127,456
131,634
497,848
532,777
Subtract corporate, other and
eliminations
(171,672
)
(171,024
)
(656,604
)
(735,515
)
Sales and other revenues
$
2,900,768
$
4,381,888
$
11,183,643
$
17,486,578
Reconciliation of average refining segment
operating expenses per produced barrel sold to total operating
expenses
Three Months Ended
December 31,
Years Ended December
31,
2020
2019
2020
2019
(Dollars in thousands, except per
barrel amounts)
Consolidated
Average operating expenses per produced
barrel sold
$
6.07
$
6.92
$
6.05
$
6.12
Times produced barrels sold (BPD)
417,990
398,360
391,670
414,370
Times number of days in period
92
92
366
365
Refining operating expenses
$
233,422
$
253,612
$
867,275
$
925,620
Add (subtract) rounding
11
88
(381
)
(338
)
West and Mid-Continent regions operating
expenses
233,433
253,700
866,894
925,282
Add Cheyenne Refinery operating
expenses
—
47,707
121,151
170,206
Total refining segment operating
expenses
233,433
301,407
988,045
1,095,488
Add lubricants and specialty products
segment operating expenses
59,609
60,868
216,068
231,523
Add HEP segment operating expenses
37,971
38,951
147,692
161,996
Add (subtract) corporate, other and
eliminations
5,064
(17,596
)
(51,528
)
(94,955
)
Operating expenses (exclusive of
depreciation and amortization)
$
336,077
$
383,630
$
1,300,277
$
1,394,052
Reconciliation of net income (loss)
attributable to HollyFrontier stockholders to adjusted net income
(loss) attributable to HollyFrontier stockholders
Adjusted net income (loss) attributable to HollyFrontier
stockholders is a non-GAAP financial measure that excludes non-cash
lower of cost or market inventory valuation adjustments, goodwill
and long-lived asset impairments, gain on business interruption
insurance settlement, HEP's gain on sales-type leases, HEP's loss
on early extinguishment of debt, severance costs, restructuring
charges, Cheyenne Refinery LIFO inventory liquidation costs,
decommissioning costs, RINs cost reductions, biodiesel blender's
tax credit, acquisition integration and regulatory costs 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
December 31,
Years Ended December
31,
2020
2019
2020
2019
(Dollars in thousands, except per
share amounts)
Consolidated
GAAP:
Income (loss) before income taxes
$
(138,194
)
$
100,359
$
(747,046
)
$
1,171,504
Income tax expense (benefit)
(43,643
)
19,290
(232,147
)
299,152
Net income (loss)
(94,551
)
81,069
(514,899
)
872,352
Less net income attributable to
noncontrolling interest
23,196
20,464
86,549
99,964
Net income (loss) attributable to
HollyFrontier stockholders
(117,747
)
60,605
(601,448
)
772,388
Non-GAAP adjustments to arrive at
adjusted results:
Lower of cost or market inventory
valuation adjustment
(149,212
)
30,708
78,499
(119,775
)
Goodwill and long-lived asset
impairments
108,385
—
545,293
152,712
Gain on business interruption insurance
settlement
—
—
(81,000
)
—
HEP's gain on sales-type lease
—
—
(33,834
)
—
HEP's loss on early extinguishment of
debt
—
—
25,915
—
Severance costs
296
—
3,842
—
Restructuring charges
—
—
3,679
—
Cheyenne Refinery LIFO inventory
liquidation costs
3,129
—
36,943
—
Decommissioning costs
12,439
—
24,748
—
RINs cost reduction
—
—
—
(36,580
)
Biodiesel blender's tax credit
—
(18,012
)
—
(18,012
)
Acquisition integration and regulatory
costs
15
4,118
1,994
24,194
Incremental cost of products sold
attributable to Sonneborn inventory value step up
—
—
—
9,338
Total adjustments to income (loss) before
income taxes
(24,948
)
16,814
606,079
11,877
Adjustment to income tax expense (1)
(24,077
)
(566
)
144,424
(37,270
)
Adjustment to net income attributable to
noncontrolling interest
—
—
70
—
Total adjustments, net of tax
(871
)
17,380
461,585
49,147
Adjusted results - Non-GAAP:
Adjusted income (loss) before income
taxes
(163,142
)
117,173
(140,967
)
1,183,381
Adjusted income tax expense (benefit)
(2)
(67,720
)
18,724
(87,723
)
261,882
Adjusted net income (loss)
(95,422
)
98,449
(53,244
)
921,499
Less net income attributable to
noncontrolling interest
23,196
20,464
86,619
99,964
Adjusted net income (loss) attributable to
HollyFrontier stockholders
$
(118,618
)
$
77,985
$
(139,863
)
$
821,535
Adjusted earnings (loss) per share -
diluted (3)
$
(0.74
)
$
0.48
$
(0.87
)
$
4.90
(1)
Represents adjustment to GAAP income tax
expense to arrive at adjusted income tax expense, which is computed
as follows:
Three Months Ended
December 31,
Years Ended December
31,
2020
2019
2020
2019
(Dollars in thousands)
Non-GAAP income tax expense (benefit)
(2)
$
(67,720
)
$
18,724
$
(87,723
)
$
261,882
Subtract GAAP income tax expense
(benefit)
(43,643
)
19,290
(232,147
)
299,152
Non-GAAP adjustment to income tax
expense
$
(24,077
)
$
(566
)
$
144,424
$
(37,270
)
(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 - diluted is
calculated as adjusted net income attributable to HollyFrontier
stockholders divided by the average number of shares of common
stock outstanding assuming dilution, which is based on
weighted-average diluted shares outstanding as that used in the
GAAP diluted earnings per share calculation. Income allocated to
participating securities, if applicable, in the adjusted earnings
per share calculation is the same as that used in GAAP diluted
earnings per share calculation..
Reconciliation of effective tax rate to
adjusted effective tax rate
Three Months Ended
December 31,
Years Ended December
31,
2020
2019
2020
2019
(Dollars in thousands)
GAAP:
Income before income taxes
$
(138,194
)
$
100,359
$
(747,046
)
$
1,171,504
Income tax expense
$
(43,643
)
$
19,290
$
(232,147
)
$
299,152
Effective tax rate for GAAP financial
statements
31.6
%
19.2
%
31.1
%
25.5
%
Adjusted - Non-GAAP:
Effect of Non-GAAP adjustments
9.9
%
(3.2)
%
31.1
%
(3.4)
%
Effective tax rate for adjusted
results
41.5
%
16.0
%
62.2
%
22.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210224005278/en/
Richard L. Voliva III, Executive Vice President and Chief
Financial Officer Craig Biery, Vice President, Investor Relations
HollyFrontier Corporation 214-954-6510
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