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Table of Content
7
REFINERY OPERATIONS
Our refinery operations serve the Mid-Continent, Southwest and Rocky Mountain regions of the United States. We own and operate
five complex refineries having a combined crude oil processing capacity of 443,000 barrels per stream day. Each of our refineries
has the complexity to convert discounted, heavy and sour crude oils into a high percentage of gasoline, diesel and other high-value
refined products. For 2015, gasoline, diesel fuel, jet fuel and specialty lubricants (excluding volumes purchased for resale)
represented 52%, 35%, 4% and 3%, respectively, of our total refinery sales volumes.
The tables presented below and elsewhere in this discussion of our refinery operations set forth information, including non-GAAP
performance measures, about our refinery operations. The cost of products and refinery gross and net operating margins do not
include the non-cash effects of 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” following Item 7A of Part II of this Form 10-K.
Years Ended December 31,
2015 2014 2013
Consolidated
Crude charge (BPD) (1) 432,560 406,180 387,520
Refinery throughput (BPD) (2) 463,580 436,400 424,780
Refinery production (BPD) (3) 446,560 425,010 413,820
Sales of produced refined products (BPD) 438,000 420,990 410,730
Sales of refined products (BPD) (4) 488,350 461,640 446,390
Refinery utilization (5) 97.6% 91.7% 87.5%
Average per produced barrel (6)
Net sales $ 71.32 $ 110.19 $ 115.60
Cost of products (7) 55.25 96.21 99.61
Refinery gross margin (8) 16.07 13.98 15.99
Refinery operating expenses (9) 5.71 6.38 6.15
Net operating margin (8) $ 10.36 $ 7.60 $ 9.84
Refinery operating expenses per throughput barrel (10) $ 5.39 $ 6.16 $ 5.95
Feedstocks:
Sweet crude oil 51% 53% 52%
Sour crude oil 25% 23% 21%
Heavy sour crude oil 15% 15% 17%
Black wax crude oil 2% 2% 2%
Other feedstocks and blends 7% 7% 8%
Total 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) Refinery production represents the barrels per day of refined products yielded from processing crude and other refinery
feedstocks through the crude units and other conversion units at our refineries.
(4) Includes refined products purchased for resale.
(5) Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 443,000 BPSD.
(6) Represents average per barrel amount for produced refined products 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” following Item 7A of Part II of this Form 10-K.
(7) Transportation, terminal and refinery storage costs billed from HEP are included in cost of products.
(8) Excludes lower of cost or market inventory valuation adjustment of $227.0 million and $397.5 million for the years ended
December 31, 2015 and 2014, respectively.
(9) Represents operating expenses of our refineries, exclusive of depreciation and amortization and pension settlement costs.
(10) Represents refinery operating expenses, exclusive of depreciation and amortization and pension settlement costs, divided
by refinery throughput.