Holly Corporation Reports Fourth Quarter and Full Year 2009 Results
DALLAS, Feb. 25 /PRNewswire-FirstCall/ -- Holly Corporation (NYSE: HOC) ("Holly" or the "Company") today reported fourth quarter financial results. For the fourth quarter of 2009, the net loss attributable to Holly Corporation stockholders was $40.6 million ($0.79 per basic and diluted share) compared to net income attributable to Holly Corporation stockholders of $50.6 million ($1.02 per basic and $1.01 per diluted share) for the same period of 2008. For the year ended December 31, 2009, net income attributable to Holly Corporation stockholders was $19.5 million ($0.39 per basic and diluted share) compared to $120.6 million ($2.40 per basic and $2.38 per diluted share) for the year ended December 31, 2008.
On December 1, 2009, Holly Energy Partners, L.P. ("HEP"), a consolidated subsidiary, sold its 70% interest in Rio Grande Pipeline Company ("Rio Grande"). As a result, Rio Grande's operating results and a gain on the sale are presented in discontinued operations. Excluding the gain on this sale and earnings from discontinued operations, the loss attributable to Holly Corporation stockholders from continuing operations for the fourth quarter of 2009 was $43.8 million ($0.85 per basic and diluted share) compared to income from continuing operations of $50.2 million ($1.01 per basic and $1.00 per diluted share) for the same period of 2008. For the year ended December 31, 2009, net income attributable to Holly Corporation stockholders from continuing operations was $15.2 million ($0.30 per basic and diluted share) compared to $119.2 million ($2.37 per basic and $2.36 per diluted share) for the year ended December 31, 2008.
Net income attributable to our stockholders for the fourth quarter and year ended December 31, 2009 decreased by $91.1 million and $101 million, respectively, compared to the same periods of 2008. These decreases were principally due to industry-wide, significantly reduced refinery gross margins in the fourth quarter of 2009 compared to the fourth quarter of 2008. Overall refinery gross margins for the quarter were $3.67 per produced barrel, a 69% decrease compared to $12.01 for the fourth quarter of 2008, and for the year ended December 31, 2009 were $7.21 per produced barrel, a 34% decrease compared to $10.96 for the year ended December 31, 2008. For the three months and year ended December 31, 2009, our refinery production levels increased 60% and 37%, respectively, over the same periods of 2008 due to production from our newly acquired Tulsa refinery facilities.
"The 2009 fourth quarter proved a particularly difficult period for the refining industry," said Matthew Clifton, Chairman of the Board and Chief Executive Officer of Holly. "Weak demand for gasoline and distillate products combined with increased crude oil costs reduced already tight margins, resulting in our fourth quarter loss. Refining margins were especially squeezed in markets served by our Navajo and Tulsa refineries, where overall margins came in at less than $3.00 per barrel. Throughout the year, the main driver in overall low margin levels was dramatically lower year-over-year, industry-wide diesel cracks. In the fourth quarter, rising crude prices and seasonally lower demand resulted in substantially lower gasoline cracks versus third quarter levels, swinging profitable third quarter refining results to a fourth quarter loss. Navajo was additionally negatively impacted by unusually lower West Coast versus Gulf Coast gasoline price differentials during the quarter, which indirectly affects Navajo's Arizona markets. Although Tulsa benefited from strong per barrel margins attributable to our specialty lubricants, seasonally low demand for these products allowed only a minor offset to depressed fuel cracks. In addition, production was reduced at our Tulsa facility in November during a low margin environment to address a maintenance issue that was adversely affecting our lubes production in anticipation of normally higher demand in the Spring season. Margins at the markets served by our Woods Cross refinery held up well during the quarter at $10.10 per barrel. We did realize strong year-over-year earnings improvements in our non-refining businesses in 2009. Our asphalt marketing results were up significantly for the year 2009 versus 2008, although the earnings contribution for the fourth quarter was substantially less than the fourth quarter of 2008. Additionally, our overall results benefited throughout the year from improvements in earnings attributable to Holly Energy Partners' logistics business. Although we are extremely disappointed with our results in 2009, especially the fourth quarter numbers, for the full year we generated positive earnings of $19.5 million and EBITDA from continuing operations of $156.7 million in an extremely difficult economic environment.
"During the first quarter of 2010 we will complete operational upgrades at the Navajo refinery, which will permit us to run a wider range of lower priced crudes while increasing our flexibility in varying the mix of transportation fuels. With respect to our Tulsa refineries, in mid January 2010 we commenced our initial integration action by moving unfinished oils between our two facilities for upgrading to transportation fuels utilizing a third party pipeline. Further integration and optimization action will proceed throughout the coming year.
"Looking forward, the refining industry will continue to face a challenging margin environment until economic activity recovers and demand for gasoline and distillate products improves relative to supply. We are confident that the enhanced capabilities of our assets, our expanded asset base, and the markets we serve, combined with the quality of our employees and our strong balance sheet will continue to allow us to meet these challenges," Clifton said.
Sales and other revenues for the 2009 fourth quarter were $1,662 million, an 80% increase compared to the three months ended December 31, 2008. This increase was due to the effects of a 19% increase in year-over-year fourth quarter sales prices of produced refined products combined with a 59% current quarter increase in volumes of refined products sold over the same period in 2008. The volume increase was primarily due to volumes attributable to our Tulsa refinery operations. Cost of products sold was $1,551 million, a 109% increase compared to the three months ended December 31, 2008 due mainly to significantly higher crude oil acquisition costs combined with the increased volumes.
Sales and other revenues for the year ended December 31, 2009 were $4,834.3 million, an 18% decrease compared to the year ended December 31, 2008. This decrease was due to the effects of an overall 32% decline in year-over-year prices of produced refined products for the current year-to-date period, partially offset by a 29% year-to-date increase in volumes of refined products sold over the same period in 2008. The volume increase was primarily due to volumes attributable to our Tulsa refinery operations. Cost of products sold was $4,238 million, a 20% decrease compared to the year ended December 31, 2008 due mainly to the effects of overall lower crude oil acquisition costs, partially offset by the increased volumes.
Operating costs and expenses for both the three months and year ended December 31, 2009 increased due to the inclusion of costs attributable to the operations of our Tulsa refinery facilities beginning June 1 and December 1, 2009, certain increased costs at our existing facilities following the recently completed expansions, costs attributable to the operations of HEP, and related increased depreciation and amortization expense. An additional factor contributing to the overall year-to-date increase in operating costs and expenses was due to the inclusion of HEP's costs for a full twelve month period during the year ended December 31, 2009 compared to ten months in 2008 as a result of our reconsolidation of HEP effective March 1, 2008. For the year ended December 31, 2009, HEP's operating costs and expenses were $75.2 million, an increase of $19.8 million compared to 2008. Interest expense for the year ended December 31, 2009 increased by $16.4 million primarily due to interest incurred on the $300 million Holly senior notes. Additionally, we expensed transaction costs in the year ended December 31, 2009 of $3.1 million related to the acquisitions of the Tulsa refineries. This press release includes key segment information that shows the impact of HEP's consolidation on certain balance sheet and income statement amounts.
The Company has scheduled a webcast conference call for today, February 25, 2009 at 10:00 AM Eastern Time to discuss financial results. This webcast may be accessed at: http://www.videonewswire.com/event.asp?id=66059.
An audio archive of this webcast will be available using the link above through March 11, 2010.
Holly Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and specialty lubricant products. Holly operates through its subsidiaries a 100,000 BPSD refinery located in Artesia, New Mexico, a 31,000 BPSD refinery in Woods Cross, Utah and a 125,000 BPSD refinery located in Tulsa, Oklahoma. Also, a subsidiary of Holly owns a 34% interest (including the general partner interest) in Holly Energy Partners, L.P., which through subsidiaries owns or leases approximately 2,500 miles of petroleum product and crude oil pipelines in Texas, New Mexico, Utah and Oklahoma and tankage and refined product terminals in several Southwest and Rocky Mountain states.
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 Securities and Exchange Commission. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Any differences could be caused by a number of factors, including, but not limited to, risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in the Company's markets, the demand for and supply of crude oil and refined products, the spread between market prices for refined products and market prices for crude oil, the possibility of constraints on the transportation of refined products, the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines, effects of governmental and environmental regulations and policies, the availability and cost of financing to the Company, the effectiveness of the Company's capital investments and marketing strategies, the Company's efficiency in carrying out construction projects, the ability of the Company to acquire refined product operations or pipeline and terminal operations on acceptable terms and to integrate any future acquired operations, the Company's ability to integrate the operations of the Tulsa refinery and the Sinclair refinery into a single facility and into its business, the possibility of terrorist attacks and the consequences of any such attacks, general economic conditions, and other financial, operational and legal risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
RESULTS OF OPERATIONS
Financial Data (all information in this release is unaudited)
Three Months Ended
December 31, Change from 2008
---------------- ----------------
2009 2008 Change Percent
------ ------ ------ -------
(In thousands, except per share data)
Sales and other revenues $1,661,969 $921,233 $740,736 80.4%
Operating costs and
expenses:
Cost of products sold
(exclusive of depreciation
and amortization) 1,550,990 741,935 809,055 109.0
Operating expenses
(exclusive of depreciation
and amortization) 115,338 61,016 54,322 89.0
General and administrative
expenses (exclusive of
depreciation and
amortization) 16,771 15,101 1,670 11.1
Depreciation and amortization 29,383 17,537 11,846 67.5
------ ------ ------
Total operating costs
and expenses 1,712,482 835,589 876,893 104.9
--------- ------- -------
Income (loss) from
operations (50,513) 85,644 (136,157) (159.0)
Other income (expense):
Equity in earnings of SLC
Pipeline 610 - 610 -
Interest income 2,484 1,546 938 (60.7)
Interest expense (14,496) (8,336) (6,160) 73.9
Acquisition costs -
Tulsa refineries (1,138) - (1,138) -
Impairment on equity
securities - (3,724) 3,724 (100.0)
Gain on Sale of HPI - 5,958 (5,958) (100.0)
--------- ------- -------
(12,540) (4,556) (7,984) 175.2
--------- ------- -------
Income (loss) from
continuing operations
before income taxes (63,053) 81,088 (144,141) (177.8)
Income tax provision
(benefit) (27,145) 28,236 (55,381) (196.1)
--------- ------- -------
Income (loss) from
continuing operations (35,908) 52,852 (88,760) (167.9)
Income from discontinued
operations(1) 13,496 1,161 12,335 1,062.4
--------- ------- -------
Net income (loss)(2) (22,412) 54,013 (76,425) (141.5)
Less noncontrolling interest
in net income (loss)(2) 18,143 3,455 14,688 425.1
--------- ------- -------
Net income (loss)
attributable to Holly
Corporation stockholders(2) $(40,555) $50,558 $(91,113) (180.2)%
========= ======= ========
Earnings attributable to
Holly Corporation
stockholders:
Income (loss) from
continuing operations $(43,819) $50,152 $(93,971) (187.4)%
Income from discontinued
operations 3,264 406 2,858 703.9
--------- ------- -------
Net income (loss) $(40,555) $50,558 $(91,113) (180.2)%
========= ======= ========
Earnings per share
attributable to
Holly Corporation
stockholders – basic:
Income (loss) from
continuing operations $(0.85) $1.01 $(1.86) (184.2)%
Income from discontinued
operations 0.06 0.01 0.05 500.0
--------- ------- -------
Net income (loss) $(0.79) $1.02 $(1.81) (177.5)%
========= ======= ========
Earnings per share
attributable to
Holly Corporation
stockholders – diluted:
Income (loss) from
continuing operations $(0.85) $1.00 $(1.85) (185.0)%
Income from discontinued
operations 0.06 0.01 0.05 500.0
--------- ------- -------
Net income (loss) $(0.79) $1.01 $(1.80) (178.2)%
========= ======= ========
Cash dividends declared
per common share $0.15 $0.15 $- -%
========= ======= ========
Average number of common
shares outstanding:
Basic 51,200 49,794 1,406 2.8%
Diluted 51,380 49,997 1,383 2.8%
EBITDA from continuing
operations $(29,569) $102,715 $(132,284) (128.8)%
Years Ended
December 31, Change from 2008
---------------- --------------------
2009 2008 Change Percent
------ ------ -------- --------
(In thousands, except per share data)
Sales and other revenues $4,834,268 $5,860,357 $(1,026,089) (17.5)%
Operating costs
and expenses:
Cost of products
sold (exclusive of
depreciation and
amortization) 4,238,008 5,280,699 (1,042,691) (19.7)
Operating expenses
(exclusive of
depreciation and
amortization) 356,855 265,705 91,150 34.3
General and administrative
expenses (exclusive
of depreciation
and amortization) 60,343 55,278 5,065 9.2
Depreciation and
amortization 98,751 62,995 35,756 56.8
-------- ------- -------
Total operating
costs and expenses 4,753,957 5,664,677 (910,720) (16.1)
--------- --------- -------
Income from operations 80,311 195,680 (115,369) (59.0)
Other income (expense):
Equity in earnings of
SLC Pipeline 1,919 - 1,919 -
Interest income 5,045 10,797 (5,752) (53.3)
Interest expense (40,346) (23,955) (16,391) 68.4
Acquisition costs –
Tulsa refineries (3,126) - (3,126) -
Impairment of equity
securities - (3,724) 3,724 (100.0)
Gain on sale of HPI - 5,958 (5,958) (100.0)
Equity in earnings
of HEP - 2,990 (2,990) (100.0)
-------- ------- -------
(36,508) (7,934) (28,574) 360.1
-------- ------- -------
Income from continuing
operations before
income taxes 43,803 187,746 (143,943) (76.7)
Income tax provision 7,460 64,028 (56,568) (88.3)
-------- ------- -------
Income from continuing
operations 36,343 123,718 (87,375) (70.6)
Income from discontinued
operations(1) 16,926 2,918 14,008 480.1
-------- ------- -------
Net income(2) 53,269 126,636 (73,367) (57.9)
Less noncontrolling
interest in net income(2) 33,736 6,078 27,658 455.1
-------- ------- -------
Net income attributable
to Holly Corporation
stockholders(2) $19,533 $120,558 $(101,025) (83.8)%
======== ======== =========
Earnings attributable
to Holly Corporation
stockholders:
Income from continuing
operations $15,209 $119,206 $(103,997) (87.2)%
Income from discontinued
operations 4,324 1,352 2,972 219.8
-------- ------- -------
Net income $19,533 $120,558 $(101,025) (83.8)%
======== ======== =========
Earnings per share
attributable to
Holly Corporation
stockholders – basic:
Income from continuing
operations $0.30 $2.37 $(2.07) (87.3)%
Income from discontinued
operations 0.09 0.03 0.06 200.0
-------- ------- -------
Net income $0.39 $2.40 $(2.01) (83.8)%
======== ======== =========
Earnings per share
attributable to
Holly Corporation
stockholders – diluted:
Income from continuing
operations $0.30 $2.36 $(2.06) (87.3)%
Income from discontinued
operations 0.09 0.02 0.07 350.0
-------- ------- -------
Net income $0.39 $2.38 $(1.99) (83.6)%
======== ======== =========
Cash dividends declared
per common share $0.60 $0.60 $- -%
======== ======== =========
Average number of common
shares outstanding:
Basic 50,418 50,202 216 0.4%
Diluted 50,603 50,549 54 0.1%
EBITDA from continuing
operations $156,721 $259,387 $(102,666) (39.6)%
Balance Sheet Data
December 31, December 31,
2009 2008
----------- ------------
(In thousands)
Cash, cash equivalents and
investments in marketable securities $125,819 $94,447
Working capital $257,899 $68,465
Total assets $3,145,939 $1,874,225
Long-term debt – Holly Corporation $328,260 $-
Long-term debt – Holly Energy Partners $379,198 $341,914
Total equity(2) $1,207,871 $936,332
(1) On December 1, 2009, HEP sold its interest in Rio Grande.
Accordingly, results of operations of Rio Grande and a net gain
of $12.5 million on the sale are presented in discontinued
operations.
(2) Accounting standards became effective January 1, 2009 that change
the classification of noncontrolling interests, also referred to as
minority interests, in the consolidated financial statements. As a
result, all previous references to "minority interest" in our
consolidated financial statements have been replaced with
"noncontrolling interest." Therefore, net income attributable to
the noncontrolling interest in our HEP subsidiary is now presented
as an adjustment to net income to arrive at "Net income attributable
to Holly Corporation stockholders" in our Consolidated Statements
of Income. Prior to 2009, this amount was presented as "Minority
interest in earnings of HEP," a non-operating expense item before
"Income before income taxes." Additionally, equity attributable to
noncontrolling interests is now presented as a separate component
of total equity in our consolidated financial statements. We have
adopted these standards on a retrospective basis. While this
presentation differs from previous requirements under generally
accepted accounting principles in the United States ("GAAP"), it
did not affect our net income and equity attributable to Holly
Corporation stockholders.
Segment Information
Our operations are currently 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 Navajo, Woods Cross and Tulsa refineries and Holly Asphalt Company. The Refining segment involves the purchase and refining of crude oil and wholesale and branded marketing of refined products, such as gasoline, diesel fuel, jet fuel and specialty lubricant products. The petroleum products produced by the Refining segment are primarily marketed in the Southwest, Rocky Mountain and Mid-Continent regions of the United States and northern Mexico. Additionally, the Refining segment includes specialty lubricant products produced at our Tulsa refinery that are marketed throughout North America and are distributed in Central and South America. Holly Asphalt Company manufactures and markets asphalt and asphalt products in Arizona, New Mexico, Texas and northern Mexico.
The HEP segment involves all of the operations of HEP effective March 1, 2008 (date of reconsolidation). HEP owns and operates a system of petroleum product and crude gathering pipelines in Texas, New Mexico, Oklahoma and Utah, distribution terminals in Texas, New Mexico, Arizona, Utah, Idaho, and Washington and refinery tankage in New Mexico, Utah and Oklahoma. Revenues are generated by charging tariffs for transporting petroleum products and crude oil through its pipelines, by charging fees for terminalling petroleum products and other hydrocarbons, and storing and providing other services at its storage tanks and terminals. The HEP segment also includes a 25% interest in SLC Pipeline LLC ("SLC Pipeline") that services refineries in the Salt Lake City, Utah area. Revenues from the HEP segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations as well as revenues relating to pipeline transportation services provided for our refining operations.
Corporate Consolidations
and and Consolidated
Refining HEP Other Eliminations Total
------------------------------------------------------
(In thousands)
Three Months Ended
December 31, 2009
Sales and other
revenues $1,653,804 $38,425 $(1,059) $(29,201) $1,661,969
Operating
expenses $103,530 $11,928 $7 $(127) $115,338
General and
administrative
expenses $- $2,607 $14,164 $- $16,771
Depreciation and
amortization $21,037 $6,804 $1,542 $- $29,383
Income (loss)
from operations $(50,422) $17,086 $(16,772) $(405) $(50,513)
Three Months Ended
December 31, 2008
Sales and other
revenues $913,417 $30,817 $784 $(23,785) $921,233
Operating
expenses $51,028 $9,983 $108 $(103) $61,016
General and
administrative
expenses $12 $2,137 $12,952 $- $15,101
Depreciation and
amortization $11,444 $4,636 $1,457 $- $17,537
Income (loss)
from operations $85,316 $14,061 $(13,733) $- $85,644
Year Ended December
31, 2009
Sales and other
revenues $4,786,937 $146,561 $2,248 $(101,478) $4,834,268
Operating
expenses $313,320 $44,003 $41 $(509) $356,855
General and
administrative
expenses $- $7,586 $52,757 $- $60,343
Depreciation and
amortization $67,347 $24,599 $6,805 $- $98,751
Income (loss)
from operations $68,397 $70,373 $(57,355) $(1,104) $80,311
Year Ended December
31, 2008
Sales and other
revenues $5,837,449 $94,439 $2,641 $(74,172) $5,860,357
Operating
expenses $232,511 $33,353 $128 $(287) $265,705
General and
administrative
expenses $12 $5,614 $49,652 $- $55,278
Depreciation and
amortization $40,090 $18,390 $4,515 $- $62,995
Income (loss)
from operations $210,252 $37,082 $(51,654) $- $195,680
December 31, 2009
Cash, cash
equivalents
and investments
in marketable
securities $- $2,508 $123,311 $- $125,819
Total assets $2,142,317 $641,775 $392,007 $(30,160) $3,145,939
December 31, 2008
Cash, cash
equivalents
and investments
in marketable
securities $- $3,708 $90,739 $- $94,447
Total assets $1,288,211 $458,049 $141,768 $(13,803) $1,874,225
Refining Operating Data
Our refinery operations include the Navajo, Woods Cross and Tulsa refineries. The following tables set forth information, including non-GAAP performance measures about our consolidated 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
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------ ------ ------ ------
Navajo Refinery
Crude charge (BPD) (1) 82,580 81,470 78,160 79,020
Refinery production (BPD) (2) 93,280 94,350 86,760 88,680
Sales of produced refined
products (BPD) 96,150 95,380 87,140 89,580
Sales of refined products
(BPD) (3) 99,060 100,380 90,870 97,320
Refinery utilization (4) 82.6% 95.8% 81.2% 93.0%
Average per produced barrel (5)
Net sales $83.40 $69.38 $73.15 $108.52
Cost of products (6) 80.75 58.50 65.95 98.97
----- ----- ----- -----
Refinery gross margin 2.65 10.88 7.20 9.55
Refinery operating
expenses (7) 4.63 3.52 4.81 4.58
----- ----- ----- -----
Net operating margin $(1.98) $7.36 $2.39 $4.97
====== ===== ===== =====
Feedstocks:
Sour crude oil 85% 77% 85% 79%
Sweet crude oil 4% 10% 6% 10%
Other feedstocks and blends 11% 13% 9% 11%
----- ----- ----- -----
Total 100% 100% 100% 100%
====== ===== ===== =====
Sales of produced refined products:
Gasolines 59% 59% 58% 57%
Diesel fuels 29% 33% 32% 33%
Jet fuels 4% 1% 2% 1%
Fuel oil 4% 2% 3% 3%
Asphalt 2% 3% 3% 3%
LPG and other 2% 2% 2% 3%
----- ----- ----- -----
Total 100% 100% 100% 100%
====== ===== ===== =====
Woods Cross Refinery(8)
Crude charge (BPD) (1) 22,600 23,360 24,900 21,660
Refinery production (BPD) (2) 24,370 24,660 25,750 22,170
Sales of produced refined
products (BPD) 26,320 23,170 26,870 22,370
Sales of refined
products (BPD) (3) 26,450 23,270 27,250 23,430
Refinery utilization (4) 72.9% 75.4% 80.3% 79.5%
Average per produced barrel (5)
Net sales $80.56 $67.71 $70.25 $110.07
Cost of products (6) 70.46 51.09 58.98 93.47
----- ----- ----- -----
Refinery gross margin 10.10 16.62 11.27 16.60
Refinery operating
expenses (7) 7.07 6.94 6.60 7.42
----- ----- ----- -----
Net operating margin $3.03 $9.68 $4.67 $9.18
====== ===== ===== =====
Feedstocks:
Sour crude oil 7% -% 5% 1%
Sweet crude oil 57% 67% 62% 72%
Black wax crude oil 28% 25% 28% 21%
Other feedstocks and blends 8% 8% 5% 6%
----- ----- ----- -----
Total 100% 100% 100% 100%
====== ===== ===== =====
Three Months Ended Years Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------ ------ ------ ------
Sales of produced refined
products:
Gasolines 62% 63% 64% 63%
Diesel fuels 27% 29% 28% 29%
Jet fuels 1% -% 1% -%
Fuel oil 3% 5% 3% 5%
Asphalt 3% 1% 2% 1%
LPG and other 4% 2% 2% 2%
----- ----- ----- -----
Total 100% 100% 100% 100%
====== ===== ===== =====
Tulsa Refinery(9)
Crude charge (BPD) (1) 72,250 - 39,370 -
Refinery production (BPD) (2) 73,040 - 38,910 -
Sales of produced refined
products (BPD) 71,660 - 37,570 -
Sales of refined
products (BPD) (3) 71,660 - 37,700 -
Refinery utilization (4) 85.0% -% 74.0% -%
Average per produced barrel (5)
Net sales $81.30 $- $78.89 $-
Cost of products (6) 78.62 - 74.56 -
----- ----- ----- -----
Refinery gross margin 2.68 - 4.33 -
Refinery operating
expenses (7) 5.77 - 5.25 -
----- ----- ----- -----
Net operating margin $(3.09) $- $(0.92) $-
====== ===== ===== =====
Feedstocks:
Sour crude oil -% -% -% -%
Sweet crude oil 99% -% 100% -%
Other feedstocks and blends 1% -% -% -%
----- ----- ----- -----
Total 100% -% 100% -%
====== ===== ===== =====
Sales of produced refined products:
Gasolines 29% -% 26% -%
Diesel fuels 28% -% 29% -%
Jet fuels 10% -% 10% -%
Lubricants 12% -% 16% -%
Gas oil / intermediates 18% -% 17% -%
Asphalt 1% -% -% -%
LPG and other 2% -% 2% -%
----- ----- ----- -----
Total 100% -% 100% -%
====== ===== ===== =====
Consolidated
Crude charge (BPD) (1) 177,430 104,830 142,430 100,680
Refinery production (BPD) (2) 190,690 119,010 151,420 110,850
Sales of produced
refined products (BPD) 194,130 118,550 151,580 111,950
Sales of refined
products (BPD) (3) 197,170 123,650 155,820 120,750
Refinery utilization (4) 77.4% 90.4% 78.9% 89.7%
Average per produced barrel (5)
Net sales $82.24 $69.06 $74.06 $108.83
Cost of products (6) 78.57 57.05 66.85 97.87
----- ----- ----- -----
Refinery gross margin 3.67 12.01 7.21 10.96
Refinery operating
expenses (7) 5.38 4.19 5.24 5.14
----- ----- ----- -----
Net operating margin $(1.71) $7.82 $1.97 $5.82
====== ===== ===== =====
Feedstocks:
Sour crude oil 43% 60% 49% 63%
Sweet crude oil 47% 22% 40% 23%
Black wax crude oil 4% 5% 5% 4%
Other feedstocks and blends 6% 13% 6% 10%
----- ----- ----- -----
Total 100% 100% 100% 100%
====== ===== ===== =====
Three Months Ended Years Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------ ------ ------ ------
Sales of produced refined
products:
Gasolines 48% 60% 51% 58%
Diesel fuels 29% 32% 31% 32%
Jet fuels 6% 1% 4% 1%
Fuel oil 2% 3% 2% 3%
Asphalt 1% 2% 2% 3%
Lubricants 5% -% 4% -%
Gas oil / intermediates 7% -% 4% -%
LPG and other 2% 2% 2% 3%
----- ----- ----- -----
Total 100% 100% 100% 100%
====== ===== ===== =====
(1) Crude charge represents the barrels per day of crude oil processed
at our refineries.
(2) 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.
(3) Includes refined products purchased for resale.
(4) Represents crude charge divided by total crude capacity (BPSD).
Our consolidated crude capacity was increased by 5,000 BPSD
effective January 1, 2009 (our Woods Cross refinery expansion),
15,000 BPSD effective April 1, 2009 (our Navajo refinery
expansion), 85,000 BPSD effective June 1, 2009 (our Tulsa Refinery
west facility acquisition) and 40,000 BPSD effective December 1,
2009 (our Tulsa refinery east facility acquisition), increasing our
consolidated crude capacity to 256,000 BPSD.
(5) 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.
(6) Transportation costs billed from HEP are included in cost of
products.
(7) Represents operating expenses of our refineries, exclusive of
depreciation and amortization.
(8) There was a scheduled major maintenance turnaround at the Woods
Cross refinery during the 2008 third quarter.
(9) The amounts reported for the Tulsa refinery for the year ended
December 31, 2009 include crude oil processed and products yielded
from the refinery for the period from June 1, 2009 through December
31, 2009 only, and averaged over the 365 days for the year ended.
Operating data for the periods from June 1, 2009 through
December 31, 2009 and from December 1, 2009 though December 31, 2009
is as follows:
Period From Period From
June 1, December 1,
2009 2009
Through Through
December 31, December 31,
2009 2009
Tulsa Refinery ---- ----
Crude charge (BPD) 67,160 93,810
Refinery production (BPD) 66,360 99,810
Sales of produced refined products (BPD) 64,080 96,170
Sales of refined products (BPD) 64,300 96,170
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 Holly Corporation stockholders plus (i) interest expense, net of interest income, (ii) income tax provision, and (iii) depreciation and amortization. EBITDA is not a calculation provided for under accounting principles generally accepted in the United States; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to net income or operating income as an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants.
Set forth below is our calculation of EBITDA from continuing operations.
Three Months Ended Years Ended
December 31, December 31,
----------------- ---------------
2009 2008 2009 2008
-------- ------- ------ ------
(In thousands)
Income (loss) from continuing
operations $(35,908) $52,852 $36,343 $123,718
Subtract noncontrolling
interest in income from
continuing operations (7,911) (2,700) (21,134) (4,512)
Add (subtract) income tax
provision (benefit) (27,145) 28,236 7,460 64,028
Add interest expense 14,496 8,336 40,346 23,955
Subtract interest income (2,484) (1,546) (5,045) (10,797)
Add depreciation and
amortization 29,383 17,537 98,751 62,995
------ ------ ------ ------
EBITDA from continuing
operations $(29,569) $102,715 $156,721 $259,387
======== ======== ======== ========
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.
We calculate refinery gross margin and net operating margin using net sales, cost of products and operating expenses, in each case averaged per produced barrel sold. 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 Margin
Refinery gross margin per barrel is the difference between average net sales price and average cost of products per barrel of produced refined products. Refinery gross margin for each of our refineries and for all of our refineries on a consolidated basis is calculated as shown below.
Three Months Ended Years Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------ ------ ------ ------
Average per produced barrel:
Navajo Refinery
Net sales $83.40 $69.38 $73.15 $108.52
Less cost of products 80.75 58.50 65.95 98.97
----- ----- ----- -----
Refinery gross margin $2.65 $10.88 $7.20 $9.55
===== ====== ===== =====
Woods Cross Refinery
Net sales $80.56 $67.71 $70.25 $110.07
Less cost of products 70.46 51.09 58.98 93.47
----- ----- ----- -----
Refinery gross margin $10.10 $16.62 $11.27 $16.60
===== ====== ===== ======
Tulsa Refinery
Net sales $81.30 $- $78.89 $-
Less cost of products 78.62 - 74.56 -
----- ----- ----- -----
Refinery gross margin $2.68 $- $4.33 $-
===== ====== ===== =====
Consolidated
Net sales $82.24 $69.06 $74.06 $108.83
Less cost of products 78.57 57.05 66.85 97.87
----- ----- ----- -----
Refinery gross margin $3.67 $12.01 $7.21 $10.96
===== ====== ===== ======
Net Operating Margin
Net operating margin per barrel is the difference between refinery gross margin and refinery operating expenses per barrel of produced refined products. Net operating margin for each of our refineries and for all of our refineries on a consolidated basis is calculated as shown below.
Three Months Ended Years Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------ ------ ------ ------
Average per produced barrel:
Navajo Refinery
Refinery gross margin $2.65 $10.88 $7.20 $9.55
Less refinery operating
expenses 4.63 3.52 4.81 4.58
----- ----- ----- -----
Net operating margin $(1.98) $7.36 $2.39 $4.97
====== ====== ===== ======
Woods Cross Refinery
Refinery gross margin $10.10 $16.62 $11.27 $16.60
Less refinery operating
expenses 7.07 6.94 6.60 7.42
----- ----- ----- -----
Net operating margin $3.03 $9.68 $4.67 $9.18
===== ====== ===== ======
Tulsa Refinery
Refinery gross margin $2.68 $- $4.33 $-
Less refinery operating
expenses 5.77 - 5.25 -
----- ----- ----- -----
Net operating margin $(3.09) $- $(0.92) $-
====== ====== ====== ======
Consolidated
Refinery gross margin $3.67 $12.01 $7.21 $10.96
Less refinery operating
expenses 5.38 4.19 5.24 5.14
----- ----- ----- -----
Net operating margin $(1.71) $7.82 $1.97 $5.82
====== ====== ===== ======
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 revenue
Three Months Ended Years Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------ ------ ------ ------
Navajo Refinery
Average sales price per
produced barrel sold $83.40 $69.38 $73.15 $108.52
Times sales of produced
refined products sold (BPD) 96,150 95,380 87,140 89,580
Times number of days in period 92 92 365 366
--- --- --- ---
Refined product sales from
produced products sold $737,740 $608,807 $2,326,616 $3,557,967
======== ======== ========== ==========
Woods Cross Refinery
Average sales price
per produced barrel sold $80.56 $67.71 $70.25 $110.07
Times sales of produced
refined products sold (BPD) 26,320 23,170 26,870 22,370
Times number of days in period 92 92 365 366
--- --- --- ---
Refined product sales from
produced products sold $195,071 $144,333 $688,980 $901,189
======== ======== ======== ========
Tulsa Refinery
Average sales price per
produced barrel sold $81.30 $- $78.89 $-
Times sales of produced
refined products sold (BPD) 71,660 - 37,570 -
Times number of days in period 92 - 365 -
--- --- --- ---
Refined product sales from
produced products sold $535,988 $- $1,081,823 $-
======== === ========== ===
Sum of refined products
sales from produced products
sold from our three
refineries (4) $1,468,799 $753,140 $4,097,419 $4,459,156
Add refined product sales
from purchased products
and rounding(1) 23,285 45,243 106,969 384,073
------ ------ ------- -------
Total refined products sales 1,492,084 798,383 4,204,388 4,843,229
Add direct sales of excess
crude oil(2) 133,542 83,480 453,958 860,642
Add other refining segment
revenue(3) 28,178 31,554 128,591 133,578
------ ------ ------- -------
Total refining segment
revenue 1,653,804 913,417 4,786,937 5,837,449
Add HEP segment sales
and other revenue 38,425 30,817 146,561 94,439
Add corporate and other
revenues (1,059) 784 2,248 2,641
Subtract consolidations
and eliminations (29,201) (23,785) (101,478) (74,172)
------ ------ ------- ------
Sales and other revenues $1,661,969 $921,233 $4,834,268 $5,860,357
========== ======== ========== ==========
(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, 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.
(3) Other refining segment revenue includes the revenues associated with
Holly Asphalt Company and revenue derived from feedstock and sulfur
credit sales.
(4) The above calculations of refined product sales from produced
products sold can also be computed on a consolidated basis. These
amounts may not calculate exactly due to rounding of reported
numbers.
Three Months Ended Years Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------ ------ ------ ------
Average sales price per
produced barrel sold $82.24 $69.06 $74.06 $108.83
Times sales of produced
refined products sold (BPD) 194,130 118,550 151,580 111,950
Times number of days in period 92 92 365 366
--- --- --- ----
Refined product sales
from produced products sold $1,468,799 $753,140 $4,097,419 $4,459,156
========== ======== ========== ==========
Reconciliation of average cost of products per produced barrel sold to total cost of products sold
Three Months Ended Years Ended
December 31, December 31,
---------------- -----------------
2009 2008 2009 2008
------ ------ ------ ------
Navajo Refinery
Average cost of products
per produced barrel sold $80.75 $58.50 $65.95 $98.97
Times sales of produced
refined products sold (BPD) 96,150 95,380 87,140 89,580
Times number of days in period 92 92 365 366
--- --- --- ---
Cost of products for
produced products sold $714,298 $513,335 $2,097,612 $3,244,858
======== ======== ========== ==========
Woods Cross Refinery
Average cost of products
per produced barrel sold $70.46 $51.09 $58.98 $93.47
Times sales of produced
refined products sold (BPD) 26,320 23,170 26,870 22,370
Times number of days in period 92 92 365 366
--- --- --- ---
Cost of products for produced
products sold $170,615 $108,905 $578,449 $765,278
======== ======== ======== ========
Tulsa Refinery
Average cost of products
per produced barrel sold $78.62 $- $74.56 $-
Times sales of produced
refined products sold (BPD) 71,660 - 37,570 -
Times number of days in period 92 - 365 -
--- --- --- ---
Cost of products for
produced products sold $518,320 $- $1,022,445 $-
======== === ========== ===
Sum of cost of products for
produced products sold from
our three refineries (4) $1,403,233 $622,240 $3,698,506 $4,010,136
Add refined product costs
from purchased products
sold and rounding (1) 26,489 46,273 114,650 389,944
------ ------ ------- -------
Total refined cost of
products sold 1,429,722 668,513 3,813,156 4,400,080
Add crude oil cost of
direct sales of excess
crude oil(2) 131,534 82,151 449,488 853,360
Add other refining segment
costs of products sold(3) 18,403 14,954 75,229 101,144
------ ------ ------ -------
Total refining segment
cost of products sold 1,579,659 765,618 4,337,873 5,354,584
Subtract consolidations
and eliminations (28,669) (23,683) (99,865) (73,885)
------ ------ ------ ------
Costs of products sold
(exclusive of depreciation
and amortization) $1,550,990 $741,935 $4,238,008 $5,280,699
========== ======== ========== ==========
(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, 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.
(3) Other refining segment cost of products sold includes the cost of
products for Holly Asphalt Company and costs attributable to
feedstock and sulfur credit sales.
(4) The above calculations of cost of products from produced products
sold can also be computed on a consolidated basis. These amounts
may not calculate exactly due to rounding of reported numbers.
Three Months Ended Years Ended
December 31, December 31,
---------------- -----------------
2009 2008 2009 2008
------ ------ ------ ------
Average cost of products
per produced barrel sold $78.57 $57.05 $66.85 $97.87
Times sales of produced
refined products sold (BPD) 194,130 118,550 151,580 111,950
Times number of days in period 92 92 365 366
--- --- --- ---
Cost of products for produced
products sold $1,403,233 $622,240 $3,698,506 $4,010,136
========== ======== ========== ==========
Reconciliation of average refinery operating expenses per produced barrel sold to total operating expenses
Three Months Ended Years Ended
December 31, December 31,
---------------- -----------------
2009 2008 2009 2008
------ ------ ------ ------
Navajo Refinery
Average refinery operating
expenses per produced
barrel sold $4.63 $3.52 $4.81 $4.58
Times sales of produced
refined products sold (BPD) 96,150 95,380 87,140 89,580
Times number of days in period 92 92 365 366
------ ------ ------ ------
Refinery operating expenses
for produced products sold $40,956 $30,888 $152,987 $150,161
======= ======= ======== ========
Woods Cross Refinery
Average refinery operating
expenses per produced
barrel sold $7.07 $6.94 $6.60 $7.42
Times sales of produced
refined products sold (BPD) 26,320 23,170 26,870 22,370
Times number of days in period 92 92 365 366
------ ------ ------ ------
Refinery operating expenses
for produced products sold $17,120 $14,794 $64,730 $60,751
======= ======= ======== ========
Tulsa Refinery
Average refinery operating
expenses per produced
barrel sold $5.77 $ - $5.25 $-
Times sales of produced
refined products sold (BPD) 71,660 - 37,570 -
Times number of days in period 92 - 365 -
------ ------ ------ ------
Refinery operating expenses
for produced products sold $38,040 $- $71,994 $-
======= ======= ======== ========
Sum of refinery operating
expenses per produced
products sold from our
three refineries (2) $96,116 $45,682 $289,711 $210,912
Add other refining segment
operating expenses and
rounding (1) 7,414 5,346 23,609 21,599
------ ------ ------ ------
Total refining segment
operating expenses 103,530 51,028 313,320 232,511
Add HEP segment operating
expenses 11,928 9,983 44,003 33,353
Add corporate and other costs 7 108 41 128
Subtract consolidations and
eliminations (127) (103) (509) (287)
------ ------ ------ ------
Operating expenses (exclusive
of depreciation and
amortization) $115,338 $61,016 $356,855 $265,705
======= ======= ======== ========
(1) Other refining segment operating expenses include the marketing
costs associated with our refining segment and the operating
expenses of Holly Asphalt Company.
(2) The above calculations of refinery operating expenses from produced
products sold can also be computed on a consolidated basis. These
amounts may not calculate exactly due to rounding of reported
numbers.
Three Months Ended Years Ended
December 31, December 31,
---------------- -----------------
2009 2008 2009 2008
------ ------ ------ ------
Average refinery operating
expenses per produced barrel
sold $5.38 $4.19 $5.24 $5.14
Times sales of produced
refined products sold (BPD) 194,130 118,550 151,580 111,950
Times number of days in period 92 92 365 366
--- --- --- ---
Refinery operating expenses
for produced products sold $96,116 $45,682 $289,711 $210,912
======= ======= ======== ========
Reconciliation of net operating margin per barrel to refinery gross margin per barrel to total sales and other revenues
Three Months Ended Years Ended
December 31, December 31,
---------------- -----------------
2009 2008 2009 2008
------ ------ ------ ------
Navajo Refinery
Net operating
margin per barrel $(1.98) $7.36 $2.39 $4.97
Add average refinery
operating expenses per
produced barrel 4.63 3.52 4.81 4.58
------ ------ ------- -------
Refinery gross margin
per barrel 2.65 10.88 7.20 9.55
Add average cost of
products per produced
barrel sold 80.75 58.50 65.95 98.97
------ ------ ------- -------
Average sales price per
produced barrel sold $83.40 $69.38 $73.15 $108.52
Times sales of produced
refined products sold (BPD) 96,150 95,380 87,140 89,580
Times number of days
in period 92 92 365 366
------ ------ ------- -------
Refined products sales
from produced products sold $737,740 $608,807 $2,326,616 $3,557,967
========== ======== ========== ==========
Woods Cross Refinery
Net operating
margin per barrel $3.03 $9.68 $4.67 $9.18
Add average refinery
operating expenses
per produced barrel 7.07 6.94 6.60 7.42
------ ------ ------- -------
Refinery gross margin
per barrel 10.10 16.62 11.27 16.60
Add average cost of
products per produced
barrel sold 70.46 51.09 58.98 93.47
------ ------ ------- -------
Average net sales per
produced barrel sold $80.56 $67.71 $70.25 $110.07
Times sales of produced
refined products sold (BPD) 26,320 23,170 26,870 22,370
Times number of days
in period 92 92 365 366
------ ------ ------- -------
Refined products sales
from produced products
sold $195,071 $144,333 $688,980 $901,189
========== ======== ========== ==========
Tulsa Refinery
Net operating
margin per barrel $(3.09) $- $(0.92) $-
Add average refinery
operating expenses
per produced barrel 5.77 - 5.25 -
------ ------ ------- -------
Refinery gross margin
per barrel 2.68 - 4.33 -
Add average cost of
products per produced
barrel sold 78.62 - 74.56 -
------ ------ ------- -------
Average net sales per
produced barrel sold $81.30 $- $78.89 $-
Times sales of produced
refined products sold (BPD) 71,660 - 37,570 -
Times number of days
in period 92 - 365 -
------ ------ ------- -------
Refined products sales
from produced products
sold $535,988 $- $1,081,823 $-
========== ======== ========== ==========
Sum of refined products
sales from produced
products sold from our
three refineries (4) $1,468,799 $753,140 $4,097,419 $4,459,156
Add refined product sales
from purchased products
and rounding (1) 23,285 45,243 106,969 384,073
------ ------ ------- -------
Total refined products
sales 1,492,084 798,383 4,204,388 4,843,229
Add direct sales of excess
crude oil(2) 133,542 83,480 453,958 860,642
Add other refining
segment revenue (3) 28,178 31,554 128,591 133,578
------ ------ ------- -------
Total refining
segment revenue 1,653,804 913,417 4,786,937 5,837,449
Add HEP segment
sales and other revenues 38,425 30,817 146,561 94,439
Add corporate and
other revenues (1,059) 784 2,248 2,641
Subtract consolidations
and eliminations (29,201) (23,785) (101,478) (74,172)
------ ------ ------- -------
Sales and other revenues $1,661,969 $921,233 $4,834,268 $5,860,357
========== ======== ========== ==========
(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, 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.
(3) Other refining segment revenue includes the revenues associated with
Holly Asphalt Company and revenue derived from feedstock and sulfur
credit sales.
(4) The above calculations of refined product sales from produced
products sold can also be computed on a consolidated basis.
These amounts may not calculate exactly due to rounding of reported
numbers.
Three Months Ended Years Ended
December 31, December 31,
---------------- -----------------
2009 2008 2009 2008
------ ------ ------ ------
Net operating margin
per barrel $(1.71) $7.82 $1.97 $5.82
Add average refinery
operating expenses per
produced barrel 5.38 4.19 5.24 5.14
---- ---- ---- ----
Refinery gross margin per barrel 3.67 12.01 7.21 10.96
Add average cost of products
per produced barrel sold 78.57 57.05 66.85 97.87
----- ----- ----- -----
Average sales price per
produced barrel sold $82.24 $69.06 $74.06 $108.83
Times sales of produced
refined products sold (BPD) 194,130 118,550 151,580 111,950
Times number of days in period 92 92 365 366
--- --- --- ---
Refined product sales from
produced products sold $1,468,799 $753,140 $4,097,419 $4,459,156
========== ======== ========== ==========
SOURCE Holly Corporation
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