HollyFrontier 2015 Annual Report Download - page 53

Table of Content
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Woods Cross Refinery
Construction continues on our existing expansion project to increase planned processing capacity to 45,000 BPSD and includes
new refining facilities and a new rail loading rack for intermediates and finished products associated with refining waxy crude
oil. This initial phase of the project is expected to cost $420.0 million and is planned to be put into operation during the first quarter
of 2016. An additional investment of $20.0 million is being made to allow for greater crude slate flexibility, which we believe will
increase capacity utilization and improve overall economic returns during periods when wax crudes are in short supply.
On November 18, 2013, the Utah Division of Air Quality issued a revised air quality permit (the “Approval Order”) authorizing
the expansion. On December 18, 2013, two local environmental groups filed an administrative appeal challenging the issuance
of the Approval Order and seeking a stay of the Approval Order. Following an extended appeal process, the Executive Director
of the Utah Department of Environmental Quality issued a final order in favor of Woods Cross on all claims on March 31, 2015
and dismissed the project opponents' arguments with prejudice. On April 27, 2015, the opponents filed a petition for review and
notice of appeal with the Utah Court of Appeals challenging the agency's decision to uphold the permit and dismiss the project
opponents' arguments. This appeal is now pending before the Utah Court of Appeals. The final legal briefs were submitted in
December 2015. The expansion, and expected completion timeline and cost, are subject to the Woods Cross Refinery successfully
defending the Approval Order on appeal at the Utah Court of Appeals.
Regulatory compliance items or other presently existing or future environmental regulations / consent decrees could cause us to
make additional capital investments beyond those described above and incur additional operating costs to meet applicable
requirements, including those related to recently promulgated Federal Tier 3 gasoline standards.
HEP
Each year the Holly Logistic Services, L.L.C. board of directors approves HEP’s annual capital budget, which specifies capital
projects that HEP management is authorized to undertake. Additionally, at times when conditions warrant or as new opportunities
arise, special projects may be approved. The funds allocated for a particular capital project may be expended over a period of
several years, depending on the time required to complete the project. Therefore, HEP’s planned capital expenditures for a given
year consist of expenditures approved for capital projects included in its current year capital budget as well as, in certain cases,
expenditures approved for capital projects in capital budgets for prior years. The 2016 HEP capital budget is comprised of $13.0
million for maintenance capital expenditures and $57.0 million for expansion capital expenditures.
Cash Flows – Financing Activities
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Net cash flows used for financing activities were $1,099.3 million for the year ended December 31, 2015 compared to $838.4
million for the year ended December 31, 2014, an increase of $260.9 million. During the year ended December 31, 2015, we
purchased $742.8 million in common stock, paid $246.9 million in dividends and paid $155.2 million upon the redemption of our
6.875% senior notes. Also during this period, HEP received $973.9 million and repaid $832.9 million under the HEP Credit
Agreement and paid distributions of $83.3 million to noncontrolling interests. During the year ended December 31, 2014, we
purchased $158.8 million in common stock, paid $647.2 million in dividends and recognized $2.0 million excess tax benefits on
our equity-based compensation. Also during this period, HEP received $642.3 million and repaid $434.3 million under the HEP
Credit Agreement, paid $156.2 million upon the redemption of HEP's 8.25% senior notes and paid distributions of $78.2 million
to noncontrolling interests.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Net cash flows used for financing activities were $838.4 million for the year ended December 31, 2014 compared to $1,160.0
million for the year ended December 31, 2013, a decrease of $321.6 million. During the year ended December 31, 2014, we
purchased $158.8 million in common stock, paid $647.2 million in dividends and recognized $2.0 million excess tax benefits on
our equity-based compensation. Also during this period, HEP received $642.3 million and repaid $434.3 million under the HEP
Credit Agreement, paid $156.2 million upon the redemption of HEP's 8.25% senior notes and paid distributions of $78.2 million
to noncontrolling interests. During the year ended December 31, 2013, we received $73.4 million from the sale of HEP common
units, purchased $225.0 million in common stock, paid $645.9 million in dividends, paid $301.0 million upon the redemption of
our 9.875% senior notes and recognized $2.6 million excess tax benefits on our equity-based compensation. Also during this
period, HEP received $310.6 million and repaid $368.6 million under the HEP Credit Agreement, paid distributions of $71.2
million to noncontrolling interests and received proceeds of $73.4 million upon its March 2013 common unit offering.