DALLAS--(BUSINESS WIRE)-- HollyFrontier Corporation (NYSE: HFC) ("HollyFrontier" or the "Company") today reported third quarter net income attributable to HollyFrontier stockholders of $600.4 million or $2.94 per diluted share for the quarter ended September 30, 2012, compared to $523.1 million or $2.48 per diluted share for the quarter ended September 30, 2011. For the nine months ended September 30, 2012, net income attributable to HollyFrontier stockholders totaled $1,335.6 million or $6.44 per diluted share compared to $800.0 million or $5.63 per diluted share for the nine months ended September 30, 2011.

For the third quarter, net income attributable to our stockholders increased by $77.3 million, or 15% compared to the same period of 2011, principally reflecting higher third quarter refining margins. Refinery gross margins were $30.55 per produced barrel, a 9% increase compared to $28.10 for the third quarter of 2011. Production levels averaged approximately 457,000 barrels per day ("BPD") and crude oil charges averaged approximately 433,000 BPD for the current quarter. Operating expenses for the quarter were $233.9 million or $5.11 per barrel compared to $227.9 million or $5.07 per barrel for the third quarter of last year.

HollyFrontier's President & CEO, Mike Jennings, commented, "We had a tremendous quarter with third quarter results reaching new record levels. Exceptionally high inland to coastal crude oil differentials as well as robust heavy crude oil differentials helped drive our refined product margins to all time highs. Looking forward, we believe that the structural crude advantages currently driving our strong operating margins will continue to positively impact our operating income, allowing us to continue to pay both regular and special dividends. We remain focused on increasing total shareholder return while maintaining a strong balance sheet."

For the third quarter of 2012, net cash provided by operations totaled $742.3 million. During the period, we paid dividends to shareholders of $132.7 million consisting of our $0.15 regular and a $0.50 special dividend. In addition, we declared a second third quarter special dividend of $0.50 that was paid early in the fourth quarter. At September 30, 2012, our combined balance of cash and short-term investments totaled $2.3 billion and our consolidated debt was $1.3 billion. Our debt, exclusive of Holly Energy Partners' debt which is nonrecourse to HollyFrontier, was $471.8 million at September 30, 2012, which reflects the redemption of our $200 million 8.5% senior notes that were called in September 2012. We had no cash borrowings or outstanding principal under our credit facility during the quarter.

The Company has scheduled a webcast conference call for today, November 7, 2012, at 11:00 AM Eastern Time to discuss third quarter financial results. This webcast may be accessed at: https://event.webcasts.com/starthere.jsp?ei=1009187. An audio archive of this webcast will be available using the above noted link through November 19, 2012.

HollyFrontier 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 other specialty products. HollyFrontier operates through its subsidiaries a 135,000 barrels per stream day ("bpsd") refinery located in El Dorado, Kansas, two refinery facilities with a combined capacity of 125,000 bpsd located in Tulsa, Oklahoma, a 100,000 bpsd refinery located in Artesia, New Mexico, a 52,000 bpsd refinery located in Cheyenne, Wyoming and a 31,000 bpsd refinery in Woods Cross, Utah. HollyFrontier markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. A subsidiary of HollyFrontier also owns a 44% interest (including the general partner interest) in Holly Energy Partners, L.P.

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 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
				September 30,										Change from 2011
				2012					2011					Change					Percent
				(In thousands, except per share data)
Sales and other revenues				$	5,204,798				$	5,173,398				$	31,400				0.6	%
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)					3,898,736					3,989,927					(91,191	)			(2.3	)
Operating expenses (exclusive of depreciation and amortization)					233,859					227,883					5,976				2.6
General and administrative expenses (exclusive of depreciation and amortization)					28,787					43,141					(14,354	)			(33.3	)
Depreciation and amortization					65,112					43,240					21,872				50.6
Total operating costs and expenses					4,226,494					4,304,191					(77,697	)			(1.8	)
Income from operations					978,304					869,207					109,097				12.6
Other income (expense):
Earnings of equity method investments					852					532					320				60.2
Interest income					2,219					204					2,015				987.7
Interest expense					(21,103	)				(25,074	)				3,971				(15.8	)
Merger transaction costs					—					(9,100	)				9,100				(100.0	)
					(18,032	)				(33,438	)				15,406				(46.1	)
Income before income taxes					960,272					835,769					124,503				14.9
Income tax provision					349,622					304,758					44,864				14.7
Net income					610,650					531,011					79,639				15.0
Less net income attributable to noncontrolling interest					10,277					7,923					2,354				29.7
Net income attributable to HollyFrontier stockholders				$	600,373				$	523,088				$	77,285				14.8	%
Earnings per share attributable to HollyFrontier stockholders:
Basic				$	2.95				$	2.50				$	0.45				18.0	%
Diluted				$	2.94				$	2.48				$	0.46				18.5	%
Cash dividends declared per common share				$	1.15				$	0.59				$	0.56				94.9	%
Average number of common shares outstanding:
Basic					203,557					209,583					(6,026	)			(2.9	)%
Diluted					204,434					210,579					(6,145	)			(2.9	)%
EBITDA				$	1,033,991				$	895,956				$	138,035				15.4	%
				Nine Months Ended
				September 30,										Change from 2011
				2012					2011					Change					Percent
				(In thousands, except per share data)
Sales and other revenues				$	14,943,217				$	10,467,116				$	4,476,101				42.8	%
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)					11,767,417					8,421,639					3,345,778				39.7
Operating expenses (exclusive of depreciation and amortization)					698,212					501,971					196,241				39.1
General and administrative expenses (exclusive of depreciation and amortization)					88,421					78,641					9,780				12.4
Depreciation and amortization					178,162					106,380					71,782				67.5
Total operating costs and expenses					12,732,212					9,108,631					3,623,581				39.8
Income from operations					2,211,005					1,358,485					852,520				62.8
Other income (expense):
Earnings of equity method investments					2,455					1,739					716				41.2
Interest income					3,360					946					2,414				255.2
Interest expense					(81,360	)				(56,471	)				(24,889	)			44.1
Gain on sale of marketable securities					326					—					326				—
Merger transaction costs					—					(15,114	)				15,114				(100.0	)
					(75,219	)				(68,900	)				(6,319	)			9.2
Income before income taxes					2,135,786					1,289,585					846,201				65.6
Income tax provision					775,746					465,730					310,016				66.6
Net income					1,360,040					823,855					536,185				65.1
Less net income attributable to noncontrolling interest					24,472					23,838					634				2.7
Net income attributable to HollyFrontier stockholders				$	1,335,568				$	800,017				$	535,551				66.9	%
Earnings per share attributable to HollyFrontier stockholders:
Basic				$	6.46				$	5.66				$	0.80				14.1	%
Diluted				$	6.44				$	5.63				$	0.81				14.4	%
Cash dividends declared per common share				$	2.40				$	0.74				$	1.66				224.3	%
Average number of common shares outstanding:
Basic					206,657					141,353					65,304				46.2	%
Diluted					207,546					142,092					65,454				46.1	%
EBITDA				$	2,367,476				$	1,427,652				$	939,824				65.8	%

Our consolidated financial and operating results reflect the operations of the merged Frontier businesses beginning July 1, 2011.

Balance Sheet Data
				September 30,				December 31,
				2012				2011
				(In thousands)
Cash, cash equivalents and investments in marketable securities				$	2,343,336			$	1,840,610
Working capital				$	2,554,761			$	2,030,063
Total assets				$	10,345,936			$	9,576,243
Long-term debt				$	1,346,227			$	1,214,742
Total equity				$	6,359,496			$	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 El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross refineries and NK Asphalt and involves the purchase and refining of crude oil and wholesale and branded marketing of refined products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. The petroleum products are primarily marketed in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and northern Mexico. Additionally, specialty lubricant products produced at our Tulsa West facility are marketed throughout North America and are distributed in Central and South America. NK Asphalt manufactures and markets asphalt and asphalt products in Arizona, New Mexico, Oklahoma, Kansas, Missouri, Texas and northern Mexico.

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 Rocky Mountain regions of the United States. Revenues are generated by charging tariffs for transporting petroleum products and crude oil through its pipelines and 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 75% interest in the UNEV Pipeline (an HEP consolidated subsidiary) and a 25% interest in the SLC Pipeline. 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.

																	Consolidations
												Corporate					and					Consolidated
				Refining (1)				HEP (2)				and Other					Eliminations					Total
				(In thousands)
Three Months Ended September 30, 2012
Sales and other revenues				$	5,192,649			$	72,496			$	352				$	(60,699	)			$	5,204,798
Depreciation and amortization				$	47,890			$	12,636			$	4,793				$	(207	)			$	65,112
Income (loss) from operations				$	973,651			$	37,137			$	(31,871	)			$	(613	)			$	978,304
Capital expenditures				$	70,069			$	5,683			$	3,765				$	—				$	79,517
Three Months Ended September 30, 2011
Sales and other revenues				$	5,164,853			$	49,131			$	299				$	(40,885	)			$	5,173,398
Depreciation and amortization				$	35,070			$	7,505			$	872				$	(207	)			$	43,240
Income (loss) from operations				$	884,997			$	24,587			$	(40,135	)			$	(242	)			$	869,207
Capital expenditures				$	46,294			$	68,101			$	3,523				$	—				$	117,918
Nine Months Ended September 30, 2012
Sales and other revenues				$	14,907,849			$	207,250			$	912				$	(172,794	)			$	14,943,217
Depreciation and amortization				$	133,087			$	38,683			$	7,013				$	(621	)			$	178,162
Income (loss) from operations				$	2,207,253			$	100,843			$	(89,899	)			$	(7,192	)			$	2,211,005
Capital expenditures				$	171,865			$	29,302			$	6,370				$	—				$	207,537
Nine Months Ended September 30, 2011
Sales and other revenues				$	10,432,720			$	144,916			$	1,100				$	(111,620	)			$	10,467,116
Depreciation and amortization				$	81,875			$	22,407			$	2,719				$	(621	)			$	106,380
Income (loss) from operations				$	1,357,739			$	75,700			$	(73,689	)			$	(1,265	)			$	1,358,485
Capital expenditures				$	92,078			$	175,795			$	6,350				$	—				$	274,223
September 30, 2012
Cash, cash equivalents and investments in marketable securities				$	557			$	1,993			$	2,340,786				$	—				$	2,343,336
Total assets				$	6,567,224			$	1,409,151			$	2,426,067				$	(56,506	)			$	10,345,936
Long-term debt				$	—			$	874,434			$	487,843				$	(16,050	)			$	1,346,227
December 31, 2011
Cash, cash equivalents and investments in marketable securities				$	—			$	6,369			$	1,834,241				$	—				$	1,840,610
Total assets				$	6,280,426			$	1,418,660			$	1,997,601				$	(120,444	)			$	9,576,243
Long-term debt				$	—			$	598,761			$	705,331				$	(89,350	)			$	1,214,742

(1)			The Refining segment reflects the operations of the El Dorado and Cheyenne Refineries beginning July 1, 2011 (date of Holly-Frontier merger).
(2)			HEP acquired our 75% interest in the UNEV Pipeline in July 2012. We have recast our HEP segment information to include the UNEV Pipeline operations for all periods presented. For the three and nine months ended September 30, 2012, UNEV Pipeline revenues were $3.0 million and $10.8 million, respectively. The UNEV Pipeline was previously included in Corporate and Other.

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										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011 (10)
Mid-Continent Region (El Dorado and Tulsa Refineries)
Crude charge (BPD) (1)					256,850					263,260					252,110					160,230
Refinery throughput (BPD) (2)					278,990					283,970					270,380					168,150
Refinery production (BPD) (3)					268,310					272,790					262,830					162,900
Sales of produced refined products (BPD)					246,360					263,180					249,320					159,230
Sales of refined products (BPD) (4)					248,690					268,680					253,050					161,750
Refinery utilization (5)					98.8	%				101.3	%				97.0	%				94.0	%
Average per produced barrel (6)
Net sales				$	121.83				$	122.82				$	120.19				$	122.74
Cost of products (7)					92.84					96.18					96.49					100.32
Refinery gross margin					28.99					26.64					23.70					22.42
Refinery operating expenses (8)					4.71					4.57					4.72					5.09
Net operating margin				$	24.28				$	22.07				$	18.98				$	17.33
Refinery operating expenses per throughput barrel (9)				$	4.16				$	4.23				$	4.35				$	4.82
Feedstocks:
Sweet crude oil					69	%				75	%				70	%				84	%
Sour crude oil					9	%				7	%				8	%				4	%
Heavy sour crude oil					14	%				11	%				15	%				7	%
Other feedstocks and blends					8	%				7	%				7	%				5	%
Total					100	%				100	%				100	%				100	%
Sales of produced refined products:
Gasolines					50	%				44	%				47	%				41	%
Diesel fuels					26	%				35	%				29	%				33	%
Jet fuels					10	%				7	%				10	%				7	%
Fuel oil					1	%				—					1	%				—
Asphalt					2	%				2	%				2	%				4	%
Lubricants					5	%				4	%				5	%				7	%
Gas oil/intermediates					—					2	%				—					4	%
LPG and other					6	%				6	%				6	%				4	%
Total					100	%				100	%				100	%				100	%

				Three Months Ended										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011 (10)
Southwest Region (Navajo Refinery)
Crude charge (BPD) (1)					101,480					92,270					91,890					82,860
Refinery throughput (BPD) (2)					110,080					100,290					100,558					91,220
Refinery production (BPD) (3)					108,810					100,100					98,980					90,230
Sales of produced refined products (BPD)					106,370					99,530					97,470					91,310
Sales of refined products (BPD) (4)					110,760					102,940					102,450					95,980
Refinery utilization (5)					101.5	%				92.3	%				91.9	%				82.9	%
Average per produced barrel (6)
Net sales				$	122.16				$	120.67				$	123.64				$	119.84
Cost of products (7)					92.26					92.33					97.37					97.37
Refinery gross margin					29.90					28.34					26.27					22.47
Refinery operating expenses (8)					5.14					5.30					5.57					5.56
Net operating margin				$	24.76				$	23.04				$	20.70				$	16.91
Refinery operating expenses per throughput barrel (9)				$	4.97				$	5.26				$	5.40				$	5.57
Feedstocks:
Sweet crude oil					2	%				4	%				2	%				4	%
Sour crude oil					75	%				70	%				78	%				72	%
Heavy sour crude oil					16	%				18	%				11	%				15	%
Other feedstocks and blends					7	%				8	%				9	%				9	%
Total					100	%				100	%				100	%				100	%
Sales of produced refined products:
Gasolines					52	%				50	%				52	%				51	%
Diesel fuels					36	%				34	%				37	%				34	%
Jet fuels					—					1	%				—					1	%
Fuel oil					7	%				7	%				6	%				6	%
Asphalt					2	%				5	%				2	%				5	%
LPG and other					3	%				3	%				3	%				3	%
Total					100	%				100	%				100	%				100	%
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
Crude charge (BPD) (1)					75,040					70,060					73,660					41,050
Refinery throughput (BPD) (2)					82,030					75,860					81,550					44,340
Refinery production (BPD) (3)					79,500					73,620					79,650					43,030
Sales of produced refined products (BPD)					81,200					72,400					79,360					42,390
Sales of refined products (BPD) (4)					83,080					74,410					81,590					43,090
Refinery utilization (5)					90.4	%				84.4	%				88.7	%				84.6	%

				Three Months Ended										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011 (10)
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
Average per produced barrel (6)
Net sales				$	120.44				$	119.40				$	117.51				$	119.07
Cost of products (7)					84.35					86.35					88.87					90.00
Refinery gross margin					36.09					33.05					28.64					29.07
Refinery operating expenses (8)					6.30					6.55					6.30					6.44
Net operating margin				$	29.79				$	26.50				$	22.34				$	22.63
Refinery operating expenses per throughput barrel (9)				$	6.24				$	6.25				$	6.13				$	6.16
Feedstocks:
Sweet crude oil					51	%				49	%				44	%				53	%
Sour crude oil					2	%				3	%				2	%				2	%
Heavy sour crude oil					28	%				31	%				33	%				20	%
Black wax crude oil					11	%				10	%				11	%				18	%
Other feedstocks and blends					8	%				7	%				10	%				7	%
Total					100	%				100	%				100	%				100	%
Sales of produced refined products:
Gasolines					56	%				50	%				55	%				55	%
Diesel fuels					31	%				34	%				31	%				32	%
Jet fuels					—					—					—					1	%
Fuel oil					2	%				1	%				2	%				2	%
Asphalt					7	%				7	%				6	%				5	%
LPG and other					4	%				8	%				6	%				5	%
Total					100	%				100	%				100	%				100	%
Consolidated
Crude charge (BPD) (1)					433,370					425,590					417,660					284,140
Refinery throughput (BPD) (2)					471,100					460,120					452,488					303,710
Refinery production (BPD) (3)					456,620					446,510					441,460					296,160
Sales of produced refined products (BPD)					433,930					435,110					426,150					292,930
Sales of refined products (BPD) (4)					442,530					446,030					437,090					300,820
Refinery utilization (5)					97.8	%				96.1	%				94.3	%				89.1	%
Average per produced barrel (6)
Net sales				$	121.66				$	121.76				$	120.48				$	121.31
Cost of products (7)					91.11					93.66					95.28					97.91
Refinery gross margin					30.55					28.10					25.20					23.40
Refinery operating expenses (8)					5.11					5.07					5.21					5.43
Net operating margin				$	25.44				$	23.03				$	19.99				$	17.97
Refinery operating expenses per throughput barrel (9)				$	4.71				$	4.79				$	4.91				$	5.24
Feedstocks:
Sweet crude oil					50	%				55	%				49	%				55	%
Sour crude oil					23	%				20	%				22	%				24	%
Heavy sour crude oil					17	%				15	%				16	%				12	%
Black wax crude oil					2	%				2	%				2	%				3	%
Other feedstocks and blends					8	%				8	%				11	%				6	%
Total					100	%				100	%				100	%				100	%
				Three Months Ended										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011 (10)
Consolidated
Sales of produced refined products:
Gasolines					51	%				47	%				50	%				47	%
Diesel fuels					29	%				35	%				31	%				33	%
Jet fuels					6	%				4	%				6	%				4	%
Fuel oil					3	%				2	%				2	%				2	%
Asphalt					3	%				4	%				3	%				4	%
Lubricants					3	%				2	%				3	%				4	%
Gas oil / intermediates					—					1	%				—					2	%
LPG and other					5	%				5	%				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 July 1, 2011, our consolidated crude capacity increased from 256,000 BPSD to 443,000 BPSD.
					(6)			Represents average per barrel amount for produced refined products sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" 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 July 1, 2011. Refining operating data for the nine months ended September 30, 2011 include crude oil processed and products yielded from the El Dorado and Cheyenne Refineries for the period from July 1, 2011 through September 30, 2011 only, and averaged over the 273 days in the nine months ended September 30, 2011.

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 HollyFrontier 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.

				Three Months Ended										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011
				(In thousands)
Net income attributable to HollyFrontier stockholders				$	600,373				$	523,088				$	1,335,568				$	800,017
Add income tax provision					349,622					304,758					775,746					465,730
Add interest expense					21,103					25,074					81,360					56,471
Subtract interest income					(2,219	)				(204	)				(3,360	)				(946	)
Add depreciation and amortization					65,112					43,240					178,162					106,380
EBITDA				$	1,033,991				$	895,956				$	2,367,476				$	1,427,652

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										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011
				(Dollars in thousands, except per barrel amounts)
Consolidated
Average sales price per produced barrel sold				$	121.66				$	121.76				$	120.48				$	121.31
Times sales of produced refined products (BPD)					433,930					435,110					426,150					292,930
Times number of days in period					92					92					274					273
Refined product sales from produced products sold				$	4,856,857				$	4,874,067				$	14,067,859				$	9,701,147
Total refined product sales				$	4,856,857				$	4,874,067				$	14,067,859				$	9,701,147
Add refined product sales from purchased products and rounding (1)					100,674					127,520					376,813					266,355
Total refined product sales					4,957,531					5,001,587					14,444,672					9,967,502
Add direct sales of excess crude oil (2)					187,196					148,989					378,036					422,890
Add other refining segment revenue (3)					47,922					14,277					85,141					42,328
Total refining segment revenue					5,192,649					5,164,853					14,907,849					10,432,720
Add HEP segment sales and other revenues					72,496					49,131					207,250					144,916
Add corporate and other revenues					352					299					912					1,100
Subtract consolidations and eliminations					(60,699	)				(40,885	)				(172,794	)				(111,620	)
Sales and other revenues				$	5,204,798				$	5,173,398				$	14,943,217				$	10,467,116

Reconciliation of average cost of products per produced barrel sold to total cost of products sold
				Three Months Ended										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011
				(Dollars in thousands, except per barrel amounts)
Consolidated
Average cost of products per produced barrel sold				$	91.11				$	93.66				$	95.28				$	97.91
Times sales of produced refined products (BPD)					433,930					435,110					426,150					292,930
Times number of days in period					92					92					274					273
Cost of products for produced products sold				$	3,637,253				$	3,749,221				$	11,125,379				$	7,829,852
Total cost of products for produced products sold				$	3,637,253				$	3,749,221				$	11,125,379				$	7,829,852
Add refined product costs from purchased products sold and rounding (1)					100,078					128,857					377,476					268,390
Total cost of refined products sold					3,737,331					3,878,078					11,502,855					8,098,242
Add crude oil cost of direct sales of excess crude oil (2)					182,252					147,223					367,795					416,084
Add other refining segment cost of products sold (4)					38,678					4,696					61,580					17,032
Total refining segment cost of products sold					3,958,261					4,029,997					11,932,230					8,531,358
Subtract consolidations and eliminations					(59,525	)				(40,070	)				(164,813	)				(109,719	)
Costs of products sold (exclusive of depreciation and amortization)				$	3,898,736				$	3,989,927				$	11,767,417				$	8,421,639

Reconciliation of average refinery operating expenses per produced barrel sold to total operating expenses
				Three Months Ended										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011
				(Dollars in thousands, except per barrel amounts)
Consolidated
Average refinery operating expenses per produced barrel sold				$	5.11				$	5.07				$	5.21				$	5.43
Times sales of produced refined products (BPD)					433,930					435,110					426,150					292,930
Times number of days in period					92					92					274					273
Refinery operating expenses for produced products sold				$	203,999				$	202,953				$	608,346				$	434,237
Total refinery operating expenses for produced products sold				$	203,999				$	202,953				$	608,346				$	434,237
Add other refining segment operating expenses and rounding (5)					8,848					10,080					26,933					26,156
Total refining segment operating expenses					212,847					213,033					635,279					460,393
Add HEP segment operating expenses					21,324					15,015					61,799					41,872
Add corporate and other costs					42					291					1,302					117
Subtract consolidations and eliminations					(354	)				(456	)				(168	)				(411	)
Operating expenses (exclusive of depreciation and amortization)				$	233,859				$	227,883				$	698,212				$	501,971

Reconciliation of net operating margin per barrel to refinery gross margin per barrel to total sales and other revenues
				Three Months Ended										Nine Months Ended
				September 30,										September 30,
				2012					2011					2012					2011
				(Dollars in thousands, except per barrel amounts)
Consolidated
Net operating margin per barrel				$	25.44				$	23.03				$	19.99				$	17.97
Add average refinery operating expenses per produced barrel					5.11					5.07					5.21					5.43
Refinery gross margin per barrel					30.55					28.10					25.20					23.40
Add average cost of products per produced barrel sold					91.11					93.66					95.28					97.91
Average sales price per produced barrel sold				$	121.66				$	121.76				$	120.48				$	121.31
Times sales of produced refined products (BPD)					433,930					435,110					426,150					292,930
Times number of days in period					92					92					274					273
Refined product sales from produced products sold				$	4,856,857				$	4,874,067				$	14,067,859				$	9,701,147
Total refined product sales from produced products sold				$	4,856,857				$	4,874,067				$	14,067,859				$	9,701,147
Add refined product sales from purchased products and rounding (1)					100,674					127,520					376,813					266,355
Total refined product sales					4,957,531					5,001,587					14,444,672					9,967,502
Add direct sales of excess crude oil (2)					187,196					148,989					378,036					422,890
Add other refining segment revenue (3)					47,922					14,277					85,141					42,328
Total refining segment revenue					5,192,649					5,164,853					14,907,849					10,432,720
Add HEP segment sales and other revenues					72,496					49,131					207,250					144,916
Add corporate and other revenues					352					299					912					1,100
Subtract consolidations and eliminations					(60,699	)				(40,885	)				(172,794	)				(111,620	)
Sales and other revenues				$	5,204,798				$	5,173,398				$	14,943,217				$	10,467,116

					(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.
					(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.

HollyFrontier Corporation
Douglas S. Aron, 214-871-3555
Executive Vice President and Chief Financial Officer
or
Julia Heidenreich, 214-871-3555
Investor Relations

Source: HollyFrontier Corporation

 

News Provided by Acquire Media