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70
Level 3 Financial Instruments
We have commodity price swap contracts that relate to forecasted sales of diesel and unleaded gasoline and forecasted purchases
of WCS for which quoted forward market prices are not readily available. The forward rate used to value these price swaps is
derived using a projected forward rate using quoted market rates for similar products, adjusted for regional pricing and grade
differentials, a Level 3 input.
The following table presents the changes in fair value of our Level 3 assets and liabilities (all related to derivative instruments)
for the years ended December 31, 2013 and 2012:
Years Ended December 31,
Level 3 Financial Instruments 2013 2012
(In thousands)
Asset (liability) balance at beginning of period $ (33,658) $ 31,616
Change in fair value:
Recognized in other comprehensive income (71,751)(120,966)
Recognized in cost of products sold 35,236 (39,463)
Settlement date fair value of contractual maturities:
Recognized in sales and other revenues 20,060 98,750
Recognized in cost of products sold 14,795 (3,595)
Liability balance at end of period $ (35,318) $ (33,658)
A hypothetical change of 10% to the estimated future cash flows attributable to our Level 3 commodity price swaps would result
in an estimated fair value change of $3.5 million.
NOTE 5: Earnings Per Share
Basic earnings per share is calculated as net income attributable to HollyFrontier stockholders divided by the average number of
shares of common stock outstanding. Diluted earnings per share assumes, when dilutive, the issuance of the net incremental shares
from variable restricted and variable performance shares. The following is a reconciliation of the denominators of the basic and
diluted per share computations for net income attributable to HollyFrontier stockholders:
Years Ended December 31,
2013 2012 2011
(In thousands, except per share data)
Earnings attributable to HollyFrontier stockholders $ 735,842 $ 1,727,172 $ 1,023,397
Participating securities' share in earnings 2,754 7,648 3,474
Net income attributable to common shares 733,088 1,719,524 1,019,923
Average number of shares of common stock outstanding 200,419 204,379 157,948
Effect of dilutive variable restricted shares and performance
share units (1) 815 895 808
Average number of shares of common stock outstanding
assuming dilution 201,234 205,274 158,756
Basic earnings per share $ 3.66 $ 8.41 $ 6.46
Diluted earnings per share $ 3.64 $ 8.38 $ 6.42
(1) Excludes anti-dilutive restricted and performance share units of: 166 166 —
Table of Contents HOLLYFRONTIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued