HollyFrontier Corporation Reports Quarterly Net Income
For the fourth quarter, net income attributable to our stockholders
increased by
HollyFrontier's President & CEO,
For the fourth quarter of 2012, net cash provided by operations totaled
Included in our fourth quarter 2012 results were charges totaling
The Company has scheduled a webcast conference call for today,
The following is a "safe harbor" statement under the Private Securities
Litigation Reform Act of 1995: The statements in this press release
relating to matters that are not historical facts are "forward-looking
statements" based on management's beliefs and assumptions using
currently available information and expectations as of the date hereof,
are not guarantees of future performance and involve certain risks and
uncertainties, including those contained in our filings with the
RESULTS OF OPERATIONS
Financial Data (all information in this release is unaudited) |
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Three Months Ended |
Change from 2011 | |||||||||||||||
2012 | 2011 | Change | Percent | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Sales and other revenues |
$ | 5,147,507 | $ | 4,972,412 | $ | 175,095 | 3.5 | % | ||||||||
Operating costs and expenses: |
||||||||||||||||
Cost of products sold | 4,073,226 | 4,258,439 | (185,213 | ) | (4.3 | ) | ||||||||||
Operating expenses | 296,754 | 246,110 | 50,644 | 20.6 | ||||||||||||
General and administrative expenses | 39,680 | 41,473 | (1,793 | ) | (4.3 | ) | ||||||||||
Depreciation and amortization | 64,706 | 53,327 | 11,379 | 21.3 | ||||||||||||
Total operating costs and expenses | 4,474,366 | 4,599,349 | (124,983 | ) | (2.7 | ) | ||||||||||
Income from operations | 673,141 | 373,063 | 300,078 | 80.4 | ||||||||||||
Other income (expense): | ||||||||||||||||
Earnings of equity method investments | 468 | 561 | (93 | ) | (16.6 | ) | ||||||||||
Interest income | 1,426 | 338 | 1,088 | 321.9 | ||||||||||||
Interest expense | (22,826 | ) | (21,852 | ) | (974 | ) | 4.5 | |||||||||
(20,932 | ) | (20,953 | ) | 21 | (0.1 | ) | ||||||||||
Income before income taxes | 652,209 | 352,110 | 300,099 | 85.2 | ||||||||||||
Income tax provision | 252,216 | 116,261 | 135,955 | 116.9 | ||||||||||||
Net income | 399,993 | 235,849 | 164,144 | 69.6 | ||||||||||||
Less net income attributable to noncontrolling interest | 8,389 | 12,469 | (4,080 | ) | (32.7 | ) | ||||||||||
Net income attributable to |
$ | 391,604 | $ | 223,380 | $ | 168,224 | 75.3 | % | ||||||||
Earnings per share attributable to |
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Basic | $ | 1.92 | $ | 1.07 | $ | 0.85 | 79.4 | % | ||||||||
Diluted | $ | 1.92 | $ | 1.06 | $ | 0.86 | 81.1 | % | ||||||||
Cash dividends declared per common share | $ | 0.70 | $ | 0.60 | $ | 0.10 | 16.7 | % | ||||||||
Average number of common shares outstanding: | ||||||||||||||||
Basic | 203,458 | 209,319 | (5,861 | ) | (2.8 | )% | ||||||||||
Diluted | 204,453 | 210,159 | (5,706 | ) | (2.7 | )% | ||||||||||
EBITDA | $ | 729,926 | $ | 414,482 | $ | 315,444 | 76.1 | % | ||||||||
Years Ended |
Change from 2011 | |||||||||||||||
2012 | 2011(1) | Change | Percent | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Sales and other revenues | $ | 20,090,724 | $ | 15,439,528 | $ | 4,651,196 | 30.1 | % | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of products sold | 15,840,643 | 12,680,078 | 3,160,565 | 24.9 | ||||||||||||
Operating expenses | 994,966 | 748,081 | 246,885 | 33.0 | ||||||||||||
General and administrative expenses | 128,101 | 120,114 | 7,987 | 6.6 | ||||||||||||
Depreciation and amortization | 242,868 | 159,707 | 83,161 | 52.1 | ||||||||||||
Total operating costs and expenses | 17,206,578 | 13,707,980 | 3,498,598 | 25.5 | ||||||||||||
Income from operations | 2,884,146 | 1,731,548 | 1,152,598 | 66.6 | ||||||||||||
Other income (expense): | ||||||||||||||||
Earnings of equity method investments | 2,923 | 2,300 | 623 | 27.1 | ||||||||||||
Interest income | 4,786 | 1,284 | 3,502 | 272.7 | ||||||||||||
Interest expense | (104,186 | ) | (78,323 | ) | (25,863 | ) | 33.0 | |||||||||
Gain on sale of marketable securities | 326 | — | 326 | — | ||||||||||||
Merger transaction costs | — | (15,114 | ) | 15,114 | (100.0 | ) | ||||||||||
(96,151 | ) | (89,853 | ) | (6,298 | ) | 7.0 | ||||||||||
Income before income taxes | 2,787,995 | 1,641,695 | 1,146,300 | 69.8 | ||||||||||||
Income tax provision | 1,027,962 | 581,991 | 445,971 | 76.6 | ||||||||||||
Net income | 1,760,033 | 1,059,704 | 700,329 | 66.1 | ||||||||||||
Less net income attributable to noncontrolling interest | 32,861 | 36,307 | (3,446 | ) | (9.5 | ) | ||||||||||
Net income attributable to |
$ | 1,727,172 | $ | 1,023,397 | $ | 703,775 | 68.8 | % | ||||||||
Earnings per share attributable to |
||||||||||||||||
Basic | $ | 8.41 | $ | 6.46 | $ | 1.95 | 30.2 | % | ||||||||
Diluted | $ | 8.38 | $ | 6.42 | $ | 1.96 | 30.5 | % | ||||||||
Cash dividends declared per common share | $ | 3.10 | $ | 1.34 | $ | 1.76 | 131.3 | % | ||||||||
Average number of common shares outstanding: | ||||||||||||||||
Basic | 205,289 | 158,486 | 46,803 | 29.5 | % | |||||||||||
Diluted | 206,184 | 159,294 | 46,890 | 29.4 | % | |||||||||||
EBITDA | $ | 3,097,402 | $ | 1,842,134 | $ | 1,255,268 | 68.1 | % | ||||||||
(1) Our consolidated financial and operating results reflect the
operations of the merged Frontier businesses beginning
Balance Sheet Data |
||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
(In thousands) | ||||||||
Cash, cash equivalents and investments in marketable securities | $ | 2,393,401 | $ | 1,840,610 | ||||
Working capital | $ | 2,815,821 | $ | 2,030,063 | ||||
Total assets | $ | 10,328,997 | $ | 9,576,243 | ||||
Long-term debt | $ | 1,336,238 | $ | 1,214,742 | ||||
Total equity | $ | 6,642,658 | $ | 5,835,900 | ||||
Segment Information
Our operations are organized into two reportable segments, Refining and
HEP. Our operations that are not included in the Refining and HEP
segments are included in Corporate and Other. Intersegment transactions
are eliminated in our consolidated financial statements and are included
in Consolidations and Eliminations. The Refining segment includes the
operations of our
The HEP segment involves all of the operations of HEP, a consolidated
variable interest entity, which owns and operates logistics assets
consisting of petroleum product and crude oil pipelines and terminal,
tankage and loading rack facilities in the Mid-Continent, Southwest and
Refining(1) |
HEP |
Corporate |
Consolidations |
Consolidated |
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(In thousands) | ||||||||||||||||||||
Three Months Ended |
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Sales and other revenues | $ | 5,135,106 | $ | 81,251 | $ | 136 | $ | (68,986 | ) | $ | 5,147,507 | |||||||||
Depreciation and amortization | $ | 48,160 | $ | 15,500 | $ | 1,253 | $ | (207 | ) | $ | 64,706 | |||||||||
Income (loss) from operations | $ | 677,735 | $ | 32,880 | $ | (36,941 | ) | $ | (533 | ) | $ | 673,141 | ||||||||
Capital expenditures | $ | 106,840 | $ | 15,627 | $ | 5,259 | $ | — | $ | 127,726 | ||||||||||
Three Months Ended |
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Sales and other revenues | $ | 4,960,008 | $ | 68,079 | $ | — | $ | (55,675 | ) | $ | 4,972,412 | |||||||||
Depreciation and amortization | $ | 41,623 | $ | 10,881 | $ | 1,030 | $ | (207 | ) | $ | 53,327 | |||||||||
Income (loss) from operations | $ | 378,566 | $ | 34,402 | $ | (41,225 | ) | $ | 1,320 | $ | 373,063 | |||||||||
Capital expenditures | $ | 56,621 | $ | 40,420 | $ | 2,977 | $ | — | $ | 100,018 | ||||||||||
Year Ended |
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Sales and other revenues | $ | 20,042,955 | $ | 288,501 | $ | 1,048 | $ | (241,780 | ) | $ | 20,090,724 | |||||||||
Depreciation and amortization | $ | 181,247 | $ | 57,789 | $ | 4,660 | $ | (828 | ) | $ | 242,868 | |||||||||
Income (loss) from operations | $ | 2,879,383 | $ | 133,723 | $ | (126,840 | ) | $ | (2,120 | ) | $ | 2,884,146 | ||||||||
Capital expenditures | $ | 278,705 | $ | 44,929 | $ | 11,629 | $ | — | $ | 335,263 | ||||||||||
Year Ended |
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Sales and other revenues | $ | 15,392,430 | $ | 212,995 | $ | 1,098 | $ | (166,995 | ) | $ | 15,439,528 | |||||||||
Depreciation and amortization | $ | 122,437 | $ | 33,288 | $ | 4,810 | $ | (828 | ) | $ | 159,707 | |||||||||
Income (loss) from operations | $ | 1,739,068 | $ | 110,102 | $ | (117,677 | ) | $ | 55 | $ | 1,731,548 | |||||||||
Capital expenditures | $ | 148,699 | $ | 216,215 | $ | 9,327 | $ | — | $ | 374,241 | ||||||||||
|
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Cash, cash equivalents and investments in marketable securities | $ | 2,101 | $ | 5,237 | $ | 2,386,063 | $ | — | $ | 2,393,401 | ||||||||||
Total assets | $ | 6,702,872 | $ | 1,426,800 | $ | 2,531,967 | $ | (332,642 | ) | $ | 10,328,997 | |||||||||
Long-term debt | $ | — | $ | 864,673 | $ | 471,565 | $ | — | $ | 1,336,238 | ||||||||||
|
||||||||||||||||||||
Cash, cash equivalents and investments in marketable securities | $ | — | $ | 6,369 | $ | 1,834,241 | $ | — | $ | 1,840,610 | ||||||||||
Total assets | $ | 6,576,966 | $ | 1,418,660 | $ | 1,997,600 | $ | (416,983 | ) | $ | 9,576,243 | |||||||||
Long-term debt | $ | — | $ | 598,761 | $ | 688,881 | $ | (72,900 | ) | $ | 1,214,742 | |||||||||
(1) The Refining segment reflects the operations of the
Refining Operating Data
The following tables set forth information, including non-GAAP performance measures about our refinery operations. The cost of products and refinery gross margin do not include the effect of depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" below.
Three Months Ended |
Years Ended |
||||||||||||||||
2012 | 2011 | 2012 | 2011 (10) | ||||||||||||||
|
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Crude charge (BPD) (1) | 237,190 | 250,840 | 248,360 | 183,070 | |||||||||||||
Refinery throughput (BPD) (2) | 267,970 | 271,940 | 269,760 | 194,310 | |||||||||||||
Refinery production (BPD) (3) | 264,740 | 265,480 | 263,310 | 188,760 | |||||||||||||
Sales of produced refined products (BPD) | 269,350 | 273,460 | 254,350 | 188,020 | |||||||||||||
Sales of refined products (BPD) (4) | 272,790 | 275,210 | 258,020 | 190,340 | |||||||||||||
Refinery utilization (5) | 91.2 | % | 96.5 | % | 95.5 | % | 94.8 | % | |||||||||
Average per produced barrel (6) | |||||||||||||||||
Net sales | $ | 116.42 | $ | 113.94 | $ | 119.19 | $ | 119.51 | |||||||||
Cost of products (7) | 93.77 | 99.23 | 95.77 | 99.92 | |||||||||||||
Refinery gross margin | 22.65 | 14.71 | 23.42 | 19.59 | |||||||||||||
Refinery operating expenses (8) | 5.12 | 4.94 | 4.83 | 5.04 | |||||||||||||
Net operating margin | $ | 17.53 | $ | 9.77 | $ | 18.59 | $ | 14.55 | |||||||||
Refinery operating expenses per throughput barrel (9) | $ | 5.15 | $ | 4.97 | $ | 4.55 | $ | 4.88 | |||||||||
Feedstocks: | |||||||||||||||||
Sweet crude oil | 70 | % | 77 | % | 70 | % | 82 | % | |||||||||
Sour crude oil | 6 | % | 5 | % | 8 | % | 4 | % | |||||||||
Heavy sour crude oil | 13 | % | 10 | % | 14 | % | 8 | % | |||||||||
Other feedstocks and blends | 11 | % | 8 | % | 8 | % | 6 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Sales of produced refined products: | |||||||||||||||||
Gasolines | 51 | % | 49 | % | 48 | % | 44 | % | |||||||||
Diesel fuels | 30 | % | 29 | % | 29 | % | 32 | % | |||||||||
Jet fuels | 8 | % | 7 | % | 9 | % | 7 | % | |||||||||
Fuel oil | 1 | % | — | 1 | % | — | |||||||||||
Asphalt | 3 | % | 4 | % | 2 | % | 4 | % | |||||||||
Lubricants | 3 | % | 4 | % | 5 | % | 6 | % | |||||||||
Gas oil/intermediates | — | 2 | % | — | 3 | % | |||||||||||
LPG and other | 4 | % | 5 | % | 6 | % | 4 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Three Months Ended |
Years Ended |
||||||||||||||||
2012 | 2011 | 2012 | 2011 (10) | ||||||||||||||
|
|||||||||||||||||
Crude charge (BPD) (1) | 99,610 | 86,190 | 93,830 | 83,700 | |||||||||||||
Refinery throughput (BPD) (2) | 110,740 | 99,310 | 103,120 | 93,260 | |||||||||||||
Refinery production (BPD) (3) | 106,280 | 96,490 | 100,810 | 91,810 | |||||||||||||
Sales of produced refined products (BPD) | 104,220 | 101,780 | 99,160 | 93,950 | |||||||||||||
Sales of refined products (BPD) (4) | 111,100 | 106,140 | 104,620 | 98,540 | |||||||||||||
Refinery utilization (5) | 99.6 | % | 86.2 | % | 93.8 | % | 83.7 | % | |||||||||
Average per produced barrel (6) | |||||||||||||||||
Net sales | $ | 119.77 | $ | 115.90 | $ | 122.62 | $ | 118.76 | |||||||||
Cost of products (7) | 91.06 | 101.14 | 95.70 | 98.40 | |||||||||||||
Refinery gross margin | 28.71 | 14.76 | 26.92 | 20.36 | |||||||||||||
Refinery operating expenses (8) | 7.48 | 5.14 | 6.07 | 5.44 | |||||||||||||
Net operating margin | $ | 21.23 | $ | 9.62 | $ | 20.85 | $ | 14.92 | |||||||||
Refinery operating expenses per throughput barrel (9) | $ | 7.04 | $ | 5.27 | $ | 5.84 | $ | 5.48 | |||||||||
Feedstocks: | |||||||||||||||||
Sweet crude oil | 3 | % | — | 2 | % | 3 | % | ||||||||||
Sour crude oil | 72 | % | 86 | % | 77 | % | 75 | % | |||||||||
Heavy sour crude oil | 15 | % | 1 | % | 12 | % | 11 | % | |||||||||
Other feedstocks and blends | 10 | % | 13 | % | 9 | % | 11 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Sales of produced refined products: | |||||||||||||||||
Gasolines | 51 | % | 56 | % | 51 | % | 52 | % | |||||||||
Diesel fuels | 39 | % | 33 | % | 38 | % | 34 | % | |||||||||
Jet fuels | — | 1 | % | — | 1 | % | |||||||||||
Fuel oil | 6 | % | 4 | % | 6 | % | 6 | % | |||||||||
Asphalt | 1 | % | 4 | % | 2 | % | 4 | % | |||||||||
LPG and other | 3 | % | 2 | % | 3 | % | 3 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
|
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Crude charge (BPD) (1) | 71,100 | 69,500 | 73,020 | 48,230 | |||||||||||||
Refinery throughput (BPD) (2) | 78,830 | 77,210 | 80,860 | 52,630 | |||||||||||||
Refinery production (BPD) (3) | 75,500 | 75,950 | 78,610 | 51,320 | |||||||||||||
Sales of produced refined products (BPD) | 72,130 | 75,570 | 77,550 | 50,750 | |||||||||||||
Sales of refined products (BPD) (4) | 79,150 | 77,430 | 80,980 | 51,750 | |||||||||||||
Refinery utilization (5) | 85.7 | % | 83.7 | % | 88.0 | % | 84.3 | % | |||||||||
Three Months Ended |
Years Ended |
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2012 | 2011 | 2012 | 2011 (10) | ||||||||||||||
|
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Average per produced barrel (6) | |||||||||||||||||
Net sales | $ | 112.94 | $ | 111.88 | $ | 116.44 | $ | 116.37 | |||||||||
Cost of products (7) | 90.69 | 93.55 | 89.29 | 91.33 | |||||||||||||
Refinery gross margin | 22.25 | 18.33 | 27.15 | 25.04 | |||||||||||||
Refinery operating expenses (8) | 8.92 | 6.34 | 6.91 | 6.41 | |||||||||||||
Net operating margin | $ | 13.33 | $ | 11.99 | $ | 20.24 | $ | 18.63 | |||||||||
Refinery operating expenses per throughput barrel (9) | $ | 8.16 | $ | 6.21 | $ | 6.63 | $ | 6.18 | |||||||||
Feedstocks: | |||||||||||||||||
Sweet crude oil | 49 | % | 48 | % | 47 | % | 52 | % | |||||||||
Sour crude oil | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||
Heavy sour crude oil | 31 | % | 30 | % | 31 | % | 24 | % | |||||||||
Black wax crude oil | 9 | % | 11 | % | 11 | % | 15 | % | |||||||||
Other feedstocks and blends | 10 | % | 10 | % | 10 | % | 8 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Sales of produced refined products: | |||||||||||||||||
Gasolines | 53 | % | 58 | % | 55 | % | 56 | % | |||||||||
Diesel fuels | 36 | % | 30 | % | 32 | % | 31 | % | |||||||||
Jet fuels | — | 1 | % | — | 1 | % | |||||||||||
Fuel oil | 2 | % | 1 | % | 2 | % | 1 | % | |||||||||
Asphalt | 3 | % | 5 | % | 5 | % | 6 | % | |||||||||
LPG and other | 6 | % | 5 | % | 6 | % | 5 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Consolidated | |||||||||||||||||
Crude charge (BPD) (1) | 407,900 | 406,530 | 415,210 | 315,000 | |||||||||||||
Refinery throughput (BPD) (2) | 457,540 | 448,460 | 453,740 | 340,200 | |||||||||||||
Refinery production (BPD) (3) | 446,520 | 437,920 | 442,730 | 331,890 | |||||||||||||
Sales of produced refined products (BPD) | 445,700 | 450,810 | 431,060 | 332,720 | |||||||||||||
Sales of refined products (BPD) (4) | 463,040 | 458,780 | 443,620 | 340,630 | |||||||||||||
Refinery utilization (5) | 92.1 | % | 91.8 | % | 93.7 | % | 89.9 | % | |||||||||
Average per produced barrel (6) | |||||||||||||||||
Net sales | $ | 116.64 | $ | 114.03 | $ | 119.48 | $ | 118.82 | |||||||||
Cost of products (7) | 92.64 | 98.71 | 94.59 | 98.18 | |||||||||||||
Refinery gross margin | 24.00 | 15.32 | 24.89 | 20.64 | |||||||||||||
Refinery operating expenses (8) | 6.29 | 5.22 | 5.49 | 5.36 | |||||||||||||
Net operating margin | $ | 17.71 | $ | 10.10 | $ | 19.40 | $ | 15.28 | |||||||||
Refinery operating expenses per throughput barrel (9) | $ | 6.12 | $ | 5.25 | $ | 5.22 | $ | 5.24 | |||||||||
Feedstocks: | |||||||||||||||||
Sweet crude oil | 50 | % | 55 | % | 51 | % | 56 | % | |||||||||
Sour crude oil | 21 | % | 22 | % | 22 | % | 23 | % | |||||||||
Heavy sour crude oil | 16 | % | 12 | % | 17 | % | 12 | % | |||||||||
Black wax crude oil | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||
Other feedstocks and blends | 11 | % | 9 | % | 8 | % | 7 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Three Months Ended |
Years Ended |
||||||||||||
2012 | 2011 | 2012 | 2011 (10) | ||||||||||
Consolidated | |||||||||||||
Sales of produced refined products: | |||||||||||||
Gasolines | 51 | % | 52 | % | 50 | % | 48 | % | |||||
Diesel fuels | 33 | % | 31 | % | 31 | % | 32 | % | |||||
Jet fuels | 5 | % | 5 | % | 6 | % | 5 | % | |||||
Fuel oil | 2 | % | 1 | % | 2 | % | 2 | % | |||||
Asphalt | 3 | % | 4 | % | 3 | % | 4 | % | |||||
Lubricants | 2 | % | 2 | % | 3 | % | 3 | % | |||||
Gas oil / intermediates | — | 1 | % | — | 2 | % | |||||||
LPG and other | 4 | % | 4 | % | 5 | % | 4 | % | |||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||
(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). As
a result of our merger effective |
|
(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" below. |
|
(7) |
Transportation, terminal and refinery storage costs billed from HEP are included in cost of products. |
|
(8) | Represents operating expenses of our refineries, exclusive of depreciation and amortization. | |
(9) | Represents refinery operating expenses, exclusive of depreciation and amortization divided by refinery throughput. | |
(10) |
We merged with Frontier effective |
Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles
Reconciliations of earnings before interest, taxes, depreciation and amortization ("EBITDA") to amounts reported under generally accepted accounting principles in financial statements.
Earnings before interest, taxes, depreciation and amortization, which we
refer to as EBITDA, is calculated as net income attributable to
Set forth below is our calculation of EBITDA.
Three Months Ended |
Years Ended |
||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
(In thousands) | |||||||||||||||||
Net income attributable to |
$ | 391,604 | $ | 223,380 | $ | 1,727,172 | $ | 1,023,397 | |||||||||
Add income tax provision | 252,216 | 116,261 | 1,027,962 | 581,991 | |||||||||||||
Add interest expense | 22,826 | 21,852 | 104,186 | 78,323 | |||||||||||||
Subtract interest income | (1,426 | ) | (338 | ) | (4,786 | ) | (1,284 | ) | |||||||||
Add depreciation and amortization | 64,706 | 53,327 | 242,868 | 159,707 | |||||||||||||
EBITDA | $ | 729,926 | $ | 414,482 | $ | 3,097,402 | $ | 1,842,134 | |||||||||
Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.
Refinery gross margin and net operating margin are non-GAAP performance measures that are used by our management and others to compare our refining performance to that of other companies in our industry. We believe these margin measures are helpful to investors in evaluating our refining performance on a relative and absolute basis.
Refinery gross margin per barrel is the difference between average net sales price and average cost of products per barrel of produced refined products. Net operating margin per barrel is the difference between refinery gross margin and refinery operating expenses per barrel of produced refined products. These two margins do not include the effect of depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of income.
Other companies in our industry may not calculate these performance measures in the same manner.
Refinery Gross and Net Operating Margins
Below are reconciliations to our consolidated statements of income for (i) net sales, cost of products and operating expenses, in each case averaged per produced barrel sold, and (ii) net operating margin and refinery gross margin. Due to rounding of reported numbers, some amounts may not calculate exactly.
Reconciliations of refined product sales from produced products sold to total sales and other revenues
Three Months Ended |
Years Ended |
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2012 | 2011 | 2012 | 2011 | ||||||||||||||
(Dollars in thousands, except per barrel amounts) | |||||||||||||||||
Consolidated | |||||||||||||||||
Average sales price per produced barrel sold | $ | 116.64 | $ | 114.03 | $ | 119.48 | $ | 118.82 | |||||||||
Times sales of produced refined products (BPD) | 445,700 | 450,810 | 431,060 | 332,720 | |||||||||||||
Times number of days in period | 92 | 92 | 366 | 365 | |||||||||||||
Refined product sales from produced products sold | $ | 4,782,753 | $ | 4,729,340 | $ | 18,850,116 | $ | 14,429,833 | |||||||||
Total refined product sales | $ | 4,782,753 | $ | 4,729,340 | $ | 18,850,116 | $ | 14,429,833 | |||||||||
Add refined product sales from purchased products and rounding (1) | 194,364 | 84,132 | 572,206 | 350,843 | |||||||||||||
Total refined product sales | 4,977,117 | 4,813,472 | 19,422,322 | 14,780,676 | |||||||||||||
Add direct sales of excess crude oil (2) | 127,935 | 135,965 | 505,971 | 558,855 | |||||||||||||
Add other refining segment revenue (3) | 30,054 | 10,571 | 114,662 | 52,899 | |||||||||||||
Total refining segment revenue | 5,135,106 | 4,960,008 | 20,042,955 | 15,392,430 | |||||||||||||
Add HEP segment sales and other revenues | 81,251 | 68,079 | 288,501 | 212,995 | |||||||||||||
Add corporate and other revenues | 136 | — | 1,048 | 1,098 | |||||||||||||
Subtract consolidations and eliminations | (68,986 | ) | (55,675 | ) | (241,780 | ) | (166,995 | ) | |||||||||
Sales and other revenues | $ | 5,147,507 | $ | 4,972,412 | $ | 20,090,724 | $ | 15,439,528 | |||||||||
Reconciliation of average cost of products per produced barrel sold to total cost of products sold
Three Months Ended |
Years Ended |
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2012 | 2011 | 2012 | 2011 | ||||||||||||||
(Dollars in thousands, except per barrel amounts) | |||||||||||||||||
Consolidated | |||||||||||||||||
Average cost of products per produced barrel sold | $ | 92.64 | $ | 98.71 | $ | 94.59 | $ | 98.18 | |||||||||
Times sales of produced refined products (BPD) | 445,700 | 450,810 | 431,060 | 332,720 | |||||||||||||
Times number of days in period | 92 | 92 | 366 | 365 | |||||||||||||
Cost of products for produced products sold | $ | 3,798,648 | $ | 4,093,950 | $ | 14,923,271 | $ | 11,923,254 | |||||||||
Total cost of products for produced products sold | $ | 3,798,648 | $ | 4,093,950 | $ | 14,923,271 | $ | 11,923,254 | |||||||||
Add refined product costs from purchased products sold and rounding (1) | 194,459 | 83,012 | 572,755 | 351,788 | |||||||||||||
Total cost of refined products sold | 3,993,107 | 4,176,962 | 15,496,026 | 12,275,042 | |||||||||||||
Add crude oil cost of direct sales of excess crude oil (2) | 124,995 | 134,535 | 492,790 | 550,619 | |||||||||||||
Add other refining segment cost of products sold (4) | 23,011 | 1,478 | 90,132 | 18,672 | |||||||||||||
Total refining segment cost of products sold | 4,141,113 | 4,312,975 | 16,078,948 | 12,844,333 | |||||||||||||
Subtract consolidations and eliminations | (67,887 | ) | (54,536 | ) | (238,305 | ) | (164,255 | ) | |||||||||
Costs of products sold (exclusive of depreciation and amortization) | $ | 4,073,226 | $ | 4,258,439 | $ | 15,840,643 | $ | 12,680,078 | |||||||||
Reconciliation of average refinery operating expenses per produced barrel sold to total operating expenses
Three Months Ended |
Years Ended |
||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
(Dollars in thousands, except per barrel amounts) | |||||||||||||||||
Consolidated | |||||||||||||||||
Average refinery operating expenses per produced barrel sold | $ | 6.29 | $ | 5.22 | $ | 5.49 | $ | 5.36 | |||||||||
Times sales of produced refined products (BPD) | 445,700 | 450,810 | 431,060 | 332,720 | |||||||||||||
Times number of days in period | 92 | 92 | 366 | 365 | |||||||||||||
Refinery operating expenses for produced products sold | $ | 257,918 | $ | 216,497 | $ | 866,146 | $ | 650,933 | |||||||||
Total refinery operating expenses for produced products sold | $ | 257,918 | $ | 216,497 | $ | 866,146 | $ | 650,933 | |||||||||
Add other refining segment operating expenses and rounding (5) | 10,180 | 10,347 | 37,231 | 35,659 | |||||||||||||
Total refining segment operating expenses | 268,098 | 226,844 | 903,377 | 686,592 | |||||||||||||
Add HEP segment operating expenses | 27,596 | 21,208 | 89,395 | 63,029 | |||||||||||||
Add corporate and other costs | 1,419 | 310 | 2,721 | 427 | |||||||||||||
Subtract consolidations and eliminations | (359 | ) | (2,252 | ) | (527 | ) | (1,967 | ) | |||||||||
Operating expenses (exclusive of depreciation and amortization) | $ | 296,754 | $ | 246,110 | $ | 994,966 | $ | 748,081 | |||||||||
Reconciliation of net operating margin per barrel to refinery gross margin per barrel to total sales and other revenues
Three Months Ended |
Years Ended |
||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
(Dollars in thousands, except per barrel amounts) | |||||||||||||||||
Consolidated | |||||||||||||||||
Net operating margin per barrel | $ | 17.71 | $ | 10.10 | $ | 19.40 | $ | 15.28 | |||||||||
Add average refinery operating expenses per produced barrel | 6.29 | 5.22 | 5.49 | 5.36 | |||||||||||||
Refinery gross margin per barrel | 24.00 | 15.32 | 24.89 | 20.64 | |||||||||||||
Add average cost of products per produced barrel sold | 92.64 | 98.71 | 94.59 | 98.18 | |||||||||||||
Average sales price per produced barrel sold | $ | 116.64 | $ | 114.03 | $ | 119.48 | $ | 118.82 | |||||||||
Times sales of produced refined products (BPD) | 445,700 | 450,810 | 431,060 | 332,720 | |||||||||||||
Times number of days in period | 92 | 92 | 366 | 365 | |||||||||||||
Refined product sales from produced products sold | $ | 4,782,753 | $ | 4,729,340 | $ | 18,850,116 | $ | 14,429,833 | |||||||||
Total refined product sales from produced products sold | $ | 4,782,753 | $ | 4,729,340 | $ | 18,850,116 | $ | 14,429,833 | |||||||||
Add refined product sales from purchased products and rounding (1) | 194,364 | 84,132 | 572,206 | 350,843 | |||||||||||||
Total refined product sales | 4,977,117 | 4,813,472 | 19,422,322 | 14,780,676 | |||||||||||||
Add direct sales of excess crude oil (2) | 127,935 | 135,965 | 505,971 | 558,855 | |||||||||||||
Add other refining segment revenue (3) | 30,054 | 10,571 | 114,662 | 52,899 | |||||||||||||
Total refining segment revenue | 5,135,106 | 4,960,008 | 20,042,955 | 15,392,430 | |||||||||||||
Add HEP segment sales and other revenues | 81,251 | 68,079 | 288,501 | 212,995 | |||||||||||||
Add corporate and other revenues | 136 | — | 1,048 | 1,098 | |||||||||||||
Subtract consolidations and eliminations | (68,986 | ) | (55,675 | ) | (241,780 | ) | (166,995 | ) | |||||||||
Sales and other revenues | $ | 5,147,507 | $ | 4,972,412 | $ | 20,090,724 | $ | 15,439,528 | |||||||||
(1) |
We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments. |
|
(2) |
We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as inventory and then upon sale as cost of products sold. Additionally, at times we enter into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at carryover cost. |
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(3) | Other refining segment revenue includes the incremental revenues associated with NK Asphalt and miscellaneous revenue. | |
(4) | Other refining segment cost of products sold includes the incremental cost of products for NK Asphalt and miscellaneous costs. | |
(5) | Other refining segment operating expenses include the marketing costs associated with our refining segment and the operating expenses of NK Asphalt. |
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