HollyFrontier 2014 Annual Report Download - page 15

Table of Content
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• owned a 39% interest in HEP which includes our 2% general partner interest. HEP owns and operates logistic assets
consisting of petroleum product and crude oil pipelines and terminal, tankage and loading rack facilities that principally
support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the
United States and Alon USA, Inc.'s (“Alon”) refinery in Big Spring, Texas. Additionally, HEP owns a 75% interest in
UNEV Pipeline, LLC (“UNEV”), which owns a 12-inch refined products pipeline from Salt Lake City, Utah to Las Vegas,
Nevada, together with terminal facilities in the Cedar City, Utah and North Las Vegas areas (the “UNEV Pipeline”), and
a 25% interest in SLC Pipeline LLC (the “SLC Pipeline”), which owns a 95-mile intrastate pipeline system that serves
refineries in the Salt Lake City area.
HEP is a consolidated variable interest entity ("VIE") as defined under U.S. generally accepted accounting principles ("GAAP").
Information on HEP's assets and acquisitions completed between 2010 and 2012 can be found under the “Holly Energy Partners,
L.P.” section provided later in this discussion of Items 1 and 2, “Business and Properties.”
Our operations are currently organized into two reportable segments, Refining and HEP. The Refining segment includes the
operations of our El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and NK Asphalt. The HEP segment involves
all of the operations of HEP. See Note 19 “Segment Information” in the Notes to Consolidated Financial Statements for additional
information on our reportable segments.
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 2014, gasoline, diesel fuel, jet fuel and specialty lubricants (excluding volumes purchased for resale)
represented 50%, 34%, 4% and 2%, 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,
2014 2013 2012
Consolidated
Crude charge (BPD) (1) 406,180 387,520 415,210
Refinery throughput (BPD) (2) 436,400 424,780 453,740
Refinery production (BPD) (3) 425,010 413,820 442,730
Sales of produced refined products (BPD) 420,990 410,730 431,060
Sales of refined products (BPD) (4) 461,640 446,390 443,620
Refinery utilization (5) 91.7% 87.5% 93.7%
Average per produced barrel (6)
Net sales $ 110.19 $ 115.60 $ 119.48
Cost of products (7) 96.21 99.61 94.59
Refinery gross margin (8) 13.98 15.99 24.89
Refinery operating expenses (9) 6.38 6.15 5.49
Net operating margin (8) $ 7.60 $ 9.84 $ 19.40
Refinery operating expenses per throughput barrel (10) $ 6.16 $ 5.95 $ 5.22
Feedstocks:
Sweet crude oil 53% 52% 51%
Sour crude oil 23% 21% 22%
Heavy sour crude oil 15% 17% 17%
Black wax crude oil 2% 2% 2%
Other feedstocks and blends 7% 8% 8%
Total 100% 100% 100%