HollyFrontier 2013 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2013 HollyFrontier annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

38
Results of Operations – Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Summary
Net income attributable to HollyFrontier stockholders for the year ended December 31, 2013 was $735.8 million ($3.66 per basic
and $3.64 per diluted share), a $991.4 million decrease compared to $1,727.2 million ($8.41 per basic and $8.38 per diluted share)
for the year ended December 31, 2012. Net income decreased due principally to a year-over-year decrease in refining margins,
refinery downtime and pension settlement and debt extinguishment charges. Refinery gross margins for the year ended
December 31, 2013 decreased to $15.99 per produced barrel from $24.89 for the year ended December 31, 2012.
Sales and Other Revenues
Sales and other revenues increased slightly from $20,090.7 million for the year ended December 31, 2012 to $20,160.6 million
for the year ended December 31, 2013 due to higher refined product sales volumes, partially offset by a decrease in year-over-
year sales prices. The average sales price we received per produced barrel sold decreased 3% from $119.48 for the year ended
December 31, 2012 to $115.60 for the year ended December 31, 2013. Refined product sales volumes for the current period reflect
higher volumes of purchased products, comprising 8% of total refined products sales compared to 3% for the year ended
December 31, 2012 due to a decrease in refinery production and corresponding sales volumes of produced product as a result of
planned turnaround and maintenance projects at our refineries and other unplanned refinery outages during the current year. Sales
and other revenues for the years ended December 31, 2013 and 2012 include $53.4 million and $47.6 million, respectively, in
HEP revenues attributable to pipeline and transportation services provided to unaffiliated parties.
Cost of Products Sold
Cost of products sold increased 10% from $15,840.6 million for the year ended December 31, 2012 to $17,392.2 million for the
year ended December 31, 2013, due principally to higher refined product sales volumes and crude costs for the current year. The
sales volume increase is attributable to higher sales volumes of purchased products caused in part, by planned turnaround projects
and unplanned refinery outages during the year ended December 31, 2013. The average price we paid per barrel for crude oil and
feedstocks and the transportation costs of moving the finished products to the market place increased 5% from $94.59 for the year
ended December 31, 2012 to $99.61 for the year ended December 31, 2013.
Gross Refinery Margins
Gross refinery margin per produced barrel decreased 36% from $24.89 for the year ended December 31, 2012 to $15.99 for the
year ended December 31, 2013. This was due to a decrease in average per barrel sales prices for refined products sold combined
with increased crude oil and feedstock prices for the current year. Gross refinery margin does not include the effects of depreciation
and amortization. See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A
of Part II of this Form 10-K for a reconciliation to the income statement of prices of refined products sold and cost of products
purchased.
Operating Expenses
Operating expenses, exclusive of depreciation and amortization, increased 10% from $995.0 million for the year ended
December 31, 2012 to $1,090.9 million for the year ended December 31, 2013 due principally to higher repair and maintenance
and fuel costs during the current year period and $31.7 million in pension settlement costs, partially offset by a decrease in
environmental remediation costs. For the years ended December 31, 2013 and 2012, operating expenses include $95.7 million
and $88.9 million, respectively, in costs attributable to HEP operations.
General and Administrative Expenses
General and administrative expenses were $128.0 million and $128.1 million for the years ended December 31, 2013 and 2012,
respectively. For the years ended December 31, 2013 and 2012, general and administrative expenses include $9.4 million and $5.3
million, respectively, in costs attributable to HEP operations.
Depreciation and Amortization Expenses
Depreciation and amortization increased 25% from $242.9 million for the year ended December 31, 2012 to $303.4 million for
the year ended December 31, 2013. The increase was due principally to depreciation and amortization attributable to capitalized
improvement projects and capitalized refinery turnaround costs. For the years ended December 31, 2013 and 2012, depreciation
and amortization expenses include $64.7 million and $57.8 million, respectively, in costs attributable to HEP operations.
Interest Income
Interest income for the year ended December 31, 2013 was $5.6 million compared to $4.8 million for the year ended December 31,
2012. This increase was due to interest received on increased investments in marketable debt securities during the current year
period.
Table of Content