HollyFrontier 2015 Annual Report Download - page 51

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Table of Content
43
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Net cash flows provided by operating activities were $758.6 million for the year ended December 31, 2014 compared to $869.2
million for the year ended December 31, 2013, a decrease of $110.6 million. Net income for the year ended December 31, 2014
was $326.3 million, a decrease of $441.5 million compared to $767.8 million for the year ended December 31, 2013. Non-cash
adjustments to net income consisting of lower of cost or market inventory valuation adjustment, depreciation and amortization,
net loss of equity method investments, inclusive of distributions, unamortized discount on the early extinguishments of debt, gain
on sale of assets, deferred income taxes, equity-based compensation expense, fair value changes to derivative instruments and
loss on settlement of retirement benefit obligations, net of contributions totaled $580.0 million for the year ended December 31,
2014 compared to $430.4 million for the same period in 2013. Changes in working capital items decreased cash flows by $64.1
million for the year ended December 31, 2014 compared to $157.0 million for the year ended December 31, 2013. Additionally,
for the year ended December 31, 2014, turnaround expenditures decreased to $96.8 million from $193.9 million for the same
period of 2013.
Cash Flows – Investing Activities and Planned Capital Expenditures
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Net cash flows used for investing activities were $381.7 million for the year ended December 31, 2015 compared to $292.3 million
for the year ended December 31, 2014, an increase of $89.4 million. Cash expenditures for properties, plants and equipment for
2015 increased to $676.2 million from $564.8 million for the same period in 2014. These include HEP capital expenditures of
$94.5 million and $109.7 million for the years ended December 31, 2015 and 2014, respectively. We received proceeds of $19.3
million and $16.6 million from the sale of assets during the years ended December 31, 2015 and 2014, respectively. For the years
ended December 31, 2015 and 2014, we invested $509.3 million and $1,025.6 million, respectively, in marketable securities and
received proceeds of $839.5 million and $1,276.4 million, respectively, from the sale or maturity of marketable securities.
Additionally, HEP purchased a 50% interest in Frontier Pipeline for $55.0 million.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Net cash flows used for investing activities were $292.3 million for the year ended December 31, 2014 compared to $526.7 million
for the year ended December 31, 2013, a decrease of $234.4 million. Cash expenditures for properties, plants and equipment for
2014 increased to $564.8 million from $425.1 million for the same period in 2013. These include HEP capital expenditures of
$109.7 million and $56.6 million for the years ended December 31, 2014 and 2013, respectively. We received proceeds of $16.6
million and $7.8 million from the sale of assets during the years ended December 31, 2014 and 2013, respectively. For the year
ended December 31, 2013, we acquired trucking operations for $11.3 million. Also for the years ended December 31, 2014 and
2013, we invested $1,025.6 million and $935.5 million, respectively, in marketable securities and received proceeds of $1,276.4
million and $846.1 million, respectively, from the sale or maturity of marketable securities.
Planned Capital Expenditures
HollyFrontier Corporation
Each year our Board of Directors approves our annual capital budget which includes specific projects that management is authorized
to undertake. Additionally, when conditions warrant or as new opportunities arise, additional projects may be approved. The funds
appropriated for a particular capital project may be expended over a period of several years, depending on the time required to
complete the project. Therefore, our planned capital expenditures for a given year consist of expenditures appropriated in that
year’s capital budget plus expenditures for projects appropriated in prior years which have not yet been completed. During 2016,
we expect to spend approximately $475.0 million to $500.0 million in cash for capital projects appropriated in 2016 and prior
years. In addition, we expect to spend approximately $110.0 million to $120.0 million on refinery turnarounds. Refinery turnaround
spending is amortized over the useful life of the turnaround. Our expected capital and turnaround cash spending for 2016 is as
follows: