HollyFrontier Corporation reports on fourth quarter performance

HollyFrontier Corporation reported a fourth quarter net loss attributable to HollyFrontier stockholders of US$43.9 million or US$(0.24) per diluted share for the quarter ended 31 December 2015, compared to a net loss of US$222.2 million or US$(1.13) per diluted share for the quarter ended 31 December 2014. Included in the current quarter results was a non-cash inventory valuation charge that decreased after-tax earnings by US$88.0 million or US$0.48 per share compared to US$244.0 million or US$1.25 per share for the quarter ended 31 December 2014. Excluding this inventory valuation charge, after-tax earnings were US$44.1 million, or US$0.24 per share compared to US$21.8 million, or US$0.12 per share for the quarter ended 31 December 2014.

Net income attributable to our stockholders (exclusive of 4Q15 and 2014 inventory valuation charges) increased by US$22.3 million for the quarter compared to the same period of 2014. This increase principally reflects lower operating costs and increased sales volumes, partially offset by a decrease in refining margins. For the fourth quarter, crude oil charges averaged 407 000 bpd and production levels averaged approximately 421 000 bpd. On a per barrel basis, consolidated refinery gross margin was US$9.91 per produced barrel compared to US$10.76 for the fourth quarter of 2014. Total operating expenses for the quarter were US$285.2 million compared to US$318.4 million for the fourth quarter of last year.

HollyFrontier's President & CEO, George Damiris, commented, "We have begun to see the benefits from the successful execution of our business improvement plan in our 2015 results. For the year, our reliability and process safety initiatives drove our refinery utilisation rate to 97.6%, the highest level achieved since our merger and a 6% increase compared to our 2014 utilisation rate of 91.7%. Additionally, improved operational reliability, our cost management initiative and lower natural gas costs contributed to a 7% reduction in operating expenses compared to 2014. Strong operational performance, improved realised margins and lower operating costs drove a 74% increase in earnings per share compared to 2014 (exclusive of inventory valuation charges)."

For the fourth quarter of 2015, net cash provided by operations totalled US$76.3 million. During the period, the company declared a regular dividend of US$0.33 per share to shareholders totalling approximately US$60.1 million and spent US$261.1 million on stock repurchases. At 31 December 2015, the combined balance of cash and short term investments totalled US$210.6 million, and consolidated debt was US$1.0 billion. The debt, exclusive of Holly Energy Partners' debt which is non-recourse to HollyFrontier, was US$31.3 million at 31 December 2015. The company had no cash borrowings or outstanding principal under the HollyFrontier credit facility during the quarter.

Adapted from press release by Rosalie Starling

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