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Table of Content
36
to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following
Item 7A of Part II of this Form 10-K.
Our operations are organized into two reportable segments, Refining and HEP. See Note 19 “Segment Information” in the Notes
to Consolidated Financial Statements for additional information on our reportable segments.
Refining Operating Data
Our refinery operations include the El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries. The following tables set
forth information, including non-GAAP performance measures about our consolidated 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
(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 $397.5 million for the year ended December 31, 2014.
(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.
Results of Operations – Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Summary
Net income attributable to HollyFrontier stockholders for the year ended December 31, 2014 was $281.3 million ($1.42 per basic
and diluted share), a $454.6 million decrease compared to $735.8 million ($3.66 per basic and $3.64 per diluted share) for the
year ended December 31, 2013. Net income decreased due principally to a non-cash lower of cost or market inventory valuation
charge of $244.0 million, net of tax, and a year-over-year decrease in refining margins. Refinery gross margins for the year ended
December 31, 2014 decreased to $13.98 per produced barrel from $15.99 for the year ended December 31, 2013.