HollyFrontier 2013 Annual Report Download - page 6

SOLID FINANCIAL RESULTS DRIVEN BY UNDERLYING STRENGTHS
The geographic proximity of our refining assets to lower cost feedstocks, and our ability
to process both light and heavy crudes continue to be key dierentiators for HollyFrontier.
While the narrowing of the WTI / Brent crude dierential and the market impact of the
government’s Renewable Fuel Standard aected our results in 2013, our margins remained
strong and we are optimistic about our forward outlook.
In 2013 we achieved:
• Net Income attributable to HFC stockholders of $735.8 million
• Gross refining margins of $15.99 per produced barrel
• Operating cash flow of $869 million
• As of December 31, 2013, we had $1.7 billion in cash and short-term investments
and approximately $190 million in long-term debt (excluding HEP debt of $808 million)
These 2013 financial results demonstrate HollyFrontier’s ability to successfully execute,
deliver solid financial performance, and create value for stockholders. We expect contin-
uedgrowth in North American crude oil production, consistent customer demand for our
products and we believe that our Company’s fundamental strengths will continue to create
attractive opportunities.
STRONG TRACK RECORD OF RETURNING CAPITAL TO STOCKHOLDERS
In 2013, HollyFrontier returned over $825 million to stockholders through regular quarterly
dividends, special dividends and share repurchases. During the year, the Board of Directors
increased the Company’s regular quarterly dividend by 50% and approved four special divi-
dends. On an annualized basis, the Company’s cash dividend yield is now approximately 7%.
Inaddition, we completed the repurchase of more than $180 million worth of shares under our
$700 million share repurchase plan previously approved by the Board. Since completing the
HollyFrontier merger in July 2011, the Board has increased the regular dividend by 300% and
the Company has returned nearly $2.0 billion in capital to stockholders.
Over the last two and half years, we believe we have proven our commitment to returning a
significant portion of cash we generate to shareholders. Looking forward, our structural advan-
tages should continue to drive strong free cash flow, allowing us to continue with significant
dividend and share repurchase distributions driving superior total shareholder returns.
INVESTING IN OUR OPERATIONS
This was a year of investment and transition for HollyFrontier, as we completed planned
turnaround projects at four of our five refineries. While these projects were planned prior to
our merger in 2011, moving forward we anticipate staggering these types of projects to better
balance production downtime and project management needs across our system.
We invested more than $370 million in our facilities in 2013, with the goal of expanding our
refining capabilities, improving eciency of our operations and minimizing environmental
impacts by reducing waste, emissions and other releases. We are confident that the invest-
ments we are making in our facilities will enable us to achieve stronger margins and drive
sustainable long-term value creation. Our 2013 capital investment projects included:
• Woods Cross Refinery Expansion Our multi-year expansion program at our facility
near Salt Lake City, Utah will increase our capacity to serve the important Las Vegas
market through the UNEV Pipeline, as well as Salt Lake City and other markets across
2 HollyFrontier Corporation 2013 Annual Report
TO OUR SHAREHOLDERS
I am pleased to report that 2013
wasanother strong year for
HollyFrontier, a year that included
significant financial and operational
accomplishments as we delivered
healthy earnings results, continued
to return capital to stockholders,
and successfully completed
major turnaround projects at our
refineries. We are proud of what
weaccomplished in a volatile
market and are confident that we
are well positioned to continue
building on HollyFrontier’s success.