Document


__________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 1, 2018
HOLLYFRONTIER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
001-03876
75-1056913
(State of Incorporation)
(Commission File Number)
(I.R.S. Employer
Identification Number)
2828 N. Harwood, Suite 1300, Dallas, Texas 75201
(Address of Principal Executive Offices)

(214) 871-3555
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company        [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        [ ]
__________________





Item 2.02    Results of Operations and Financial Condition.
As previously announced, beginning with the fourth quarter of 2017, HollyFrontier Corporation (“HollyFrontier”) operations are organized into three reportable segments, Refining, Lubricants and Specialty Products and HEP. The Refining segment includes the operations of HollyFrontier’s El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and HollyFrontier Asphalt. The Lubricants and Specialty Products segment includes the operations of HollyFrontier’s Petro-Canada Lubricants business in addition to specialty lubricant products produced at HollyFrontier’s Tulsa Refinery. The HEP segment involves all of the operations of Holly Energy Partners, L.P.
HollyFrontier revised the following refining segment operating data computations: refinery gross margin; net operating margin; and operating expenses to better align with similar measurements provided by other companies in its industry and to facilitate comparison of its refining performance relative to its peers. Effective with this change, these measurements are now inclusive of all refining segment activities, including HollyFrontier asphalt operations and revenues and costs related to products purchased for resale and excess crude oil sales.
In order to provide historical refining segment operating data on a basis consistent with its new measurement structure, HollyFrontier revised its refining segment operating data for the fiscal years ended December 31, 2015 and 2016 and the three months ended December 31, 2016 in HollyFrontier’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2017 and/or in HollyFrontier’s Earnings Release issued February 21, 2018, to conform to its new measurement structure. This revised data has no impact on HollyFrontier’s earnings or earnings per share in any period.
Furnished as Exhibit 99.1 is a supplemental schedule containing unaudited refining segment operating data for each of the three months ended March 31, 2017, June 30, 2017 and September 30, 2017. The operating data contained in Exhibit 99.1 does not represent a restatement or reissuance of previously issued financial statements.
The information in this Item 2.02, including the exhibits in Item 9.01, should be read in conjunction with HollyFrontier’s Annual Report on Form 10-K for the year ended December 31, 2017 and HollyFrontier’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017.
Item 7.01     Regulation FD Disclosure.
Furnished as Exhibit 99.1 and incorporated by reference into this Item 7.01 in its entirety is a copy of the supplemental schedule containing unaudited refining segment information for each of the three months ended March 31, 2017, June 30, 2017 and September 30, 2017.

The information contained in, or incorporated into, this Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference to such filing.
Item 9.01    Financial Statements and Exhibits.
(d)    Exhibits
Exhibit No.
Description
99.1

*    Furnished herewith.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
                
HOLLYFRONTIER CORPORATION

By:    /s/ Richard L. Voliva III 
Name:    Richard L. Voliva III
Title:     Executive Vice President and Chief Financial Officer
 
Date:    March 1, 2018






EXHIBIT INDEX
Exhibit No.
Description

99.1

* Furnished herewith.



Exhibit
Exhibit 99.1

Revised Refining Segment Operating Data
During the fourth quarter of 2017, we revised the following refining segment operating data computations: refinery gross margin; net operating margin; and operating expenses to better align with similar measurements provided by other companies in our industry and to facilitate comparison of our refining performance relative to our peers. Effective with this change, these measurements are now inclusive of all refining segment activities including HFC asphalt operations and revenues and costs related to products purchased for resale and excess crude oil sales. All prior period data included below has been retrospectively adjusted to reflect our current presentation.

 
FY 2015
FY 2016
 
Q1 2017
Q2 2017
Q3 2017
Q4 2017
 
FY 2017
Southwest Region (Navajo Refinery)
 
 
 
 
 
 
 
 
 
Crude charge (BPD) (1)
100,450
98,090
 
74,470
102,120
112,060
110,980
 
100,040
Refinery throughput (BPD) (2)
111,840
107,690
 
79,490
112,720
122,890
121,400
 
109,280
Sales of produced refined products (BPD) (3)
114,790
111,390
 
78,870
113,490
130,740
122,710
 
111,630
 
 
 
 
 
 
 
 
 
 
Average per produced barrel sold (5)
 
 
 
 
 
 
 
 
 
  Refinery gross margin (6)
16.34
9.49
 
9.03
11.56
14.64
12.91
 
12.40
  Refinery operating expenses (7)
5.24
5.05
 
7.41
5.20
4.34
4.71
 
5.20
Net operating margin
11.10
4.44
 
1.62
6.36
10.30
8.20
 
7.20
 
 
 
 
 
 
 
 
 
 
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
 
 
 
 
 
 
 
 
 
Crude charge (BPD) (1)
68,770
63,650
 
74,710
74,510
80,260
79,950
 
77,380
Refinery throughput (BPD) (2)
74,480
68,870
 
83,750
80,740
87,620
87,000
 
84,790
Sales of produced refined products (BPD) (3)
68,570
66,950
 
81,030
76,420
79,310
82,590
 
79,840
 
 
 
 
 
 
 
 
 
 
Average per produced barrel sold (5)
 
 
 
 
 
 
 
 
 
  Refinery gross margin (6)
18.43
8.80
 
10.40
19.40
17.71
15.77
 
15.78
  Refinery operating expenses (7)
9.90
10.17
 
10.20
10.41
10.47
10.75
 
10.46
Net operating margin
8.53
(1.370)
 
0.20
8.99
7.24
5.02
 
5.32
 
 
 
 
 
 
 
 
 
 
Mid-Continent Region (El Dorado and Tulsa Refineries)
 
 
 
 
 
 
 
 
 
Crude charge (BPD) (1)
263,340
262,170
 
221,890
290,460
262,470
270,180
 
261,380
Refinery throughput (BPD) (2)
277,260
280,920
 
242,120
304,840
275,270
289,050
 
277,940
Sales of produced refined products (BPD) (3)
259,290
262,300
 
228,540
282,950
253,700
277,560
 
260,800
 
 
 
 
 
 
 
 
 
 
Average per produced barrel sold (5)
 
 
 
 
 
 
 
 
 
  Refinery gross margin (6)
15.02
7.44
 
6.00
9.11
12.60
11.42
 
9.91
  Refinery operating expenses (7)
5.00
4.73
 
6.17
4.51
5.02
5.09
 
5.15
Net operating margin
10.02
2.71
 
(0.170)
4.60
7.58
6.33
 
4.76
 
 
 
 
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
 
 
Crude charge (BPD) (1)
432,560
423,910
 
371,070
467,090
454,790
461,110
 
438,800
Refinery throughput (BPD) (2)
463,580
457,480
 
405,360
498,300
485,780
497,450
 
472,010
Sales of produced refined products (BPD) (3)
442,650
440,640
 
388,440
472,870
463,750
482,860
 
452,270
 
 
 
 
 
 
 
 
 
 
Average per produced barrel sold (5)
 
 
 
 
 
 
 
 
 
Refinery gross margin (6)
15.88
8.16
 
7.54
11.36
14.05
12.54
 
11.56
Refinery operating expenses (7)
5.82
5.64
 
7.26
5.63
5.76
5.96
 
6.10
Net operating margin
10.06
2.52
 
0.28
5.73
8.29
6.58
 
5.46

(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)
Represents barrels sold of refined products produced at our refineries (including HFC Asphalt) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.            
(5)
Represents average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided below.     
(6)
Excludes lower of cost or market inventory valuation adjustments.                    
(7)
Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes of refined products produced at our refineries.



Exhibit 99.1

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 produced barrel sold is total refining segment revenues less total refining segment cost of products sold, exclusive of lower of cost or market inventory valuation adjustments, divided by sales volumes of produced refined products sold. Net operating margin per barrel sold is the difference between refinery gross margin and refinery operating expenses per barrel sold. These two margins do not include the non-cash effects of lower of cost or market inventory valuation adjustments, goodwill and asset impairment charges or 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.

Below are reconciliations to total sales and other revenues and operating expenses in our consolidated statements of income for refinery net operating and gross margin and operating expenses, in each case averaged per produced barrel sold. Due to rounding of reported numbers, some amounts may not calculate exactly.
Reconciliation of average refining segment net operating margin per produced barrel sold to refinery gross margin to total sales and other revenues    
Consolidated
FY 2015
 
FY 2016
 
Q1 2017
Q2 2017
Q3 2017
Q4 2017
 
FY 2017
(Dollars in thousands, except per barrel amounts)

Net operating margin per produced barrel sold
$
10.06

 
$
2.52

 
$
0.28

$
5.73

$
8.29

$
6.58

 
$
5.46

Add average refinery operating expenses per produced barrel sold
5.82

 
5.64

 
7.26

5.63

5.76

5.96

 
6.10

Refinery gross margin per produced barrel sold
15.88

 
8.16

 
7.54

11.36

14.05

12.54

 
11.56

Times produced barrels sold (BPD)
442,650

 
440,640

 
388,440

472,870

463,750

482,860

 
452,270

Times number of days in period
365

 
366

 
90

91

92

92

 
365

Refining segment gross margin
2,565,688

 
1,315,998

 
263,595

488,834

599,443

557,066

 
1,908,308

Add (subtract) rounding
1,156

 
1,212

 
(96)

(153)

(24)

52

 
409

Total refining segment gross margin
2,566,844

 
1,317,210

 
263,499

488,681

599,419

557,118

 
1,908,717

Add refining segment cost of products sold
10,472,268

 
9,003,505

 
2,559,136

2,615,918

2,774,703

3,059,588

 
11,009,345

Refining segment sales and other revenues
13,039,112

 
10,320,715

 
2,822,635

3,104,599

3,374,122

3,616,706

 
12,918,062

Add lubricants and specialty products segment sales and other revenues
493,282

 
464,359

 
321,269

444,000

413,074

415,693

 
1,594,036

Add HEP segment sales and other revenues
358,875

 
402,043

 
105,634

109,143

110,364

129,221

 
454,362

Subtract corporate, other and eliminations
(653,349)

 
(651,417)

 
(169,055)

(198,878)

(178,313)

(168,915)

 
(715,161)

Sales and other revenues

$13,237,920

 

$10,535,700

 

$3,080,483


$3,458,864


$3,719,247


$3,992,705

 

$14,251,299



Exhibit 99.1



Reconciliation of average refining segment operating expenses per produced barrel sold to total operating expenses

Consolidated
FY 2015
FY 2016
 
Q1 2017
Q2 2017
Q3 2017
Q4 2017
 
FY 2017
 
(Dollars in thousands, except per barrel amounts)
Average refining operating expense per barrel sold
 $ 5.82
 $ 5.64

 
 $ 7.26
 $ 5.63
 $ 5.76
 $ 5.96
 
 $ 6.10
Times produced barrels sold (BPD)
 442,650
 440,640

 
 388,440
 472,870
 463,750
 482,860
 
 452,270
Times number of days in period
 365
 366

 
 90
 91
 92
 92
 
 365
Refinery operating expenses
940,321
909,587

 
253,807
242,265
245,750
264,762
 
1,006,979
Add (subtract) rounding
308
137

 
18
 (98)
113
58
 
 (304)
Total refining segment operating expenses
 940,629
 909,724

 
 253,825
 242,167
 245,863
 264,820
 
 1,006,675
Add lubricants and specialty products segment operating expenses
 14,042
 13,867

 
 39,319
 55,750
 59,726
 67,666
 
 222,461
Add HEP segment operating expenses
 105,554
 123,984

 
 32,489
 34,097
 35,998
 35,021
 
 137,605
Subtract corporate, other and eliminations
 148
 (28,736)

 
 (18,516)
 (16,362)
 (19,919)
 (17,710)
 
 (72,507)
Operating expenses (exclusive of depreciation and amortization)
 $1,060,373
 $1,018,839

 
 $307,117
 $315,652
 $321,668
 $349,797
 
$1,294,234