HollyFrontier 2014 Annual Report Download - page 48

Table of Content
40
Liquidity
We believe our current cash and cash equivalents, along with future internally generated cash flow and funds available under our
credit facilities will provide sufficient resources to fund currently planned capital projects and our liquidity needs for the foreseeable
future. In addition, components of our growth strategy include construction of new refinery processing units and the expansion
of existing units at our facilities and selective acquisition of complementary assets for our refining operations intended to increase
earnings and cash flow.
As of December 31, 2014, our cash, cash equivalents and investments in marketable securities totaled $1.0 billion. We consider
all highly-liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents
are stated at cost, which approximates market value. These primarily consist of investments in conservative, highly-rated
instruments issued by financial institutions, government and corporate entities with strong credit standings and money market
funds.
In September 2014, our Board of Directors approved a $500 million share repurchase program authorizing us to repurchase common
stock in the open market or through privately negotiated transactions. As of December 31, 2014, we had remaining authorization
to repurchase up to $444.4 million under this stock repurchase program.
In February 2015, our Board of Directors approved a $500 million share repurchase program, which replaced all existing share
repurchase programs including approximately $425.0 million remaining under the existing $500 million share repurchase program.
The timing and amount of stock repurchases will depend on market conditions, corporate, regulatory and other relevant
considerations. This program may be discontinued at any time by our Board of Directors. In addition, we are authorized by our
Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs.
Cash and cash equivalents decreased $372.1 million for the year ended December 31, 2014. Net cash used for investing and
financing activities of $292.3 million and $838.4 million, respectively, exceeded net cash provided by operating activities of $758.6
million. Working capital decreased by $690.4 million during the year ended December 31, 2014.
Cash Flows – Operating Activities
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,
loss of equity method investments, inclusive of distributions, write-offs of unamortized discounts 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.
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Net cash flows provided by operating activities were $869.2 million for the year ended December 31, 2013 compared to $1,662.7
million for the year ended December 31, 2012, a decrease of $793.5 million. Net income for the year ended December 31, 2013
was $767.8 million, a decrease of $992.2 million compared to $1,760.0 million for the year ended December 31, 2012. Non-cash
adjustments to net income consisting of depreciation and amortization, loss of equity method investments, inclusive of distributions,
the write-off of an unamortized discount on the early extinguishment 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 $430.4 million for the year ended December 31, 2013 compared to $410.7 million for the same period
in 2012. Changes in working capital items decreased cash flows by $157.0 million for the year ended December 31, 2013 compared
to $398.0 million for the year ended December 31, 2012. Additionally, for the year ended December 31, 2013, turnaround
expenditures increased to $193.9 million from $159.7 million for the same period of 2012.