HollyFrontier 2015 Annual Report Download - page 54

Table of Content
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Contractual Obligations and Commitments
The following table presents our long-term contractual obligations as of December 31, 2015 in total and by period due beginning
in 2016. The table below does not include our contractual obligations to HEP under our long-term transportation agreements as
these related-party transactions are eliminated in the Consolidated Financial Statements. A description of these agreements is
provided under “Holly Energy Partners, L.P.” under Items 1 and 2, “Business and Properties.” Also, the table below does not
reflect renewal options on our operating leases that are likely to be exercised.
Payments Due by Period
Contractual Obligations and Commitments Total Less than 1
Year 1-3 Years 3-5 Years Over 5 Years
(In thousands)
HollyFrontier Corporation
Long-term debt - principal (1) $ 31,288 $ 2,121 $ 5,093 $ 6,483 $ 17,591
Long-term debt - interest (2) 19,754 3,679 6,507 5,117 4,451
Supply agreements (3) 1,971,134 279,076 558,264 346,472 787,322
Transportation and storage agreements (4) 989,521 113,914 186,639 140,958 548,010
Other long-term obligations 23,517 13,934 7,234 2,349 —
Operating leases 456,895 63,078 114,417 102,227 177,173
3,492,109 475,802 878,154 603,606 1,534,547
Holly Energy Partners
Long-term debt - principal (5) 1,012,000 — 712,000 300,000 —
Long-term debt - interest (6) 140,755 37,168 74,337 29,250 —
Pipeline operating and right of way leases 79,088 7,434 13,754 13,484 44,416
Other agreements 74,123 2,768 5,316 3,031 63,008
1,305,966 47,370 805,407 345,765 107,424
Total $ 4,798,075 $ 523,172 $ 1,683,561 $ 949,371 $ 1,641,971
(1) Our long-term debt consists of a long-term financing obligation having a principal balance of $31.3 million at December 31, 2015.
(2) Interest payments consist of interest on our long-term financing obligation.
(3) We have long-term supply agreements to secure certain quantities of crude oil, feedstock and other resources used in the production
process at market prices. We have estimated future payments under these fixed-quantity agreements expiring between 2016 and
2030 using current market rates. Additionally, commitments include purchases of 20,000 BPD of crude oil under a 10-year agreement
to supply our Woods Cross Refinery that is expected to commence upon completion of our expansion project in the first quarter of
2016.
(4) Consists of contractual obligations under agreements with third parties for the transportation of crude oil, natural gas and feedstocks
to our refineries and for terminal and storage services under contracts expiring between 2016 and 2033.
(5) HEP's long-term debt consists of the $300.0 million principal balance on the 6.5% HEP senior notes and $712.0 million of outstanding
borrowings under the HEP Credit Agreement. The HEP Credit Agreement expires in 2018.
(6) Interest payments consist of interest on the 6.5% HEP senior notes and interest on long-term debt under the HEP Credit Agreement.
Interest on the HEP Credit Agreement debt is based on the weighted average rate of 2.57% at December 31, 2015.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of
these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and liabilities as of the date of the financial statements. Actual
results may differ from these estimates under different assumptions or conditions. We consider the following policies to be the
most critical to understanding the judgments that are involved and the uncertainties that could impact our results of operations,
financial condition and cash flows. For additional information, see Note 1 “Description of Business and Summary of Significant
Accounting Policies” in the Notes to Consolidated Financial Statements.