DALLAS, May 12 /PRNewswire-FirstCall/ -- Holly Corporation (NYSE: HOC)
("Holly" or the "Company") today reported net income of $8.6 million ($0.17
per basic and diluted share) for the first quarter of 2008, compared to net
income of $67.5 million ($1.22 per basic and $1.20 per diluted share) for
the first quarter of 2007.
On February 29, 2008, Holly Energy Partners, L.P. (NYSE: HEP) ("HEP")
acquired our crude pipelines and tankage assets. As a result of this
transaction, we determined that our beneficial interest in HEP exceeds 50%.
Accordingly, we reconsolidated HEP effective March 1, 2008. Subsequent to
this date, we no longer record our share of its earnings under the equity
method of accounting. This press release includes key segment information
that shows the impact of this reconsolidation on certain balance sheet and
income statement accounts. The effect of this reconsolidation did not
impact our net income.
Net income decreased $58.9 million for the first quarter of 2008 as
compared to the first quarter of 2007, due principally to a decline in
refined product margins during the current year's first quarter and an
increase in operating expenses. These factors were partially offset by the
effects of an increase in volumes of produced refined products sold.
Overall, our refinery gross margins were $7.72 per produced barrel for the
first quarter of 2008 as compared to $16.09 for the first quarter of 2007.
Total volumes of refined products sold increased 6% for the first quarter
of 2008 as compared to the same period in 2007.
Our overall refinery production levels increased 7% for the first
quarter of 2008 as compared to the first quarter of 2007. This increase
resulted primarily from the combined effects of our 2,000 barrels per
stream day ("BPSD") Navajo Refinery capacity expansion in mid-year 2007 and
unplanned downtime of certain units at our Navajo Refinery in the first
quarter of 2007.
Sales and other revenues increased 60% for the first quarter of 2008 as
compared to the first quarter of 2007, due principally to higher refined
product sales prices. The average sales price we received per produced
barrel sold was $103.20 for the first quarter of 2008, an increase of 38%
over $74.59 for the same period in 2007. Cost of products sold increased by
63% to $95.48 per barrel for the first quarter of 2008 as compared to
$58.50 per barrel for the first quarter of 2007, due principally to
significantly higher crude oil costs. Additionally contributing to the
increases in revenues and cost of products sold were higher refined product
sales volumes and increases in sales of excess crude oil.
Operating expenses, exclusive of depreciation, depletion and
amortization, increased by $10.6 million during the first quarter of 2008
versus the first quarter of 2007 due principally to higher utility and
refinery maintenance costs, and the inclusion of $3.5 million in net
operating costs attributable to HEP as a result of our reconsolidation
effective March 1, 2008.
"We experienced a difficult first quarter as industry-wide refining
margins were squeezed, particularly during January. Our Navajo Refinery
experienced the effects of this industry trend although our Woods Cross
margins were less impacted due to its lower feedstock costs. Overall
increases in refined product prices did not keep pace with crude oil cost
increases. As the quarter developed, margins returned to more acceptable
levels led by exceptionally strong diesel prices. Operationally during the
first quarter, we were pleased with both our Navajo and Woods Cross
refineries. Our Navajo Refinery realized a 10% increase in production,
enabling us to achieve an overall 7% increase in refinery production for
the first quarter of 2008. Also during the first quarter, we completed the
"drop-down" transaction of our crude pipelines and tankage assets with HEP.
We remain pleased with the performance of HEP and the value this
transaction has created for both Holly and HEP," said Matthew Clifton,
Chairman of the Board and Chief Executive Officer of Holly. "We continue to
make substantial progress on both our Woods Cross and Navajo expansion and
crude flexibility capital projects. Additionally, I am pleased to report
that there were no serious injuries associated with the fire at our Woods
Cross Refinery on April 30. Costs required to repair a flare line and
related equipment were not significant and throughput rates have been
restored and are back to planned levels."
The Company has scheduled a conference call for today, May 12, 2008 at
10:00AM EDT to discuss financial results. Listeners may access this call by
dialing (888) 548-4639. The ID# for this call is 44464882. Listeners may
access the call via the internet at:
http://www.videonewswire.com/event.asp?id=47868. Additionally, listeners
may replay this call approximately two hours after the call concludes by
dialing (800) 642-1687. This audio archive will be available through May
26, 2008.
Holly Corporation, headquartered in Dallas, Texas, is an independent
petroleum refiner and marketer that produces high value light products such
as gasoline, diesel fuel and jet fuel. Holly operates through its
subsidiaries an 85,000 BPSD refinery located in Artesia, New Mexico and a
26,000 BPSD refinery in Woods Cross, Utah. Holly also owns a 46% 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 gathering pipelines in Texas, New Mexico,
Utah and Oklahoma, 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. Such 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 regulations and policies, the
availability and cost of financing to the Company, the effectiveness of the
Company's capital investments and marketing strategies, 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 efficiency in carrying out construction projects,
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
March 31, Change from 2007
2008 2007 Change Percent
(In thousands, except per share data)
Sales and other revenues $1,479,984 $925,867 $554,117 59.8%
Operating costs and expenses:
Cost of products sold
(exclusive of depreciation,
depletion and amortization) 1,383,437 751,714 631,723 84.0
Operating expenses (exclusive
of depreciation, depletion
and amortization) 60,708 50,129 10,579 21.1
General and administrative
expenses (exclusive of
depreciation, depletion and
amortization) 12,832 15,847 (3,015) (19.0)
Depreciation, depletion and
amortization 13,309 11,451 1,858 16.2
Exploration expenses, including
dry holes 105 152 (47) (30.9)
Total operating costs and
expenses 1,470,391 829,293 641,098 77.3
Income from operations 9,593 96,574 (86,981) (90.1)
Other income (expense):
Equity in earnings of HEP 2,990 3,346 (356) (10.6)
Minority interest in earnings
of HEP (802) - (802)(100.0)
Interest income 3,555 2,560 995 38.9
Interest expense (1,992) (252) (1,740)(690.5)
3,751 5,654 (1,903) (33.7)
Income from continuing operations
before income taxes 13,344 102,228 (88,884) (86.9)
Income tax provision 4,695 34,686 (29,991) (86.5)
Net income
$8,649 $67,542 $(58,893) (87.2)
Net income per share - basic $0.17 $1.22 $(1.05) (86.1)%
Net income per share - diluted $0.17 $1.20 $(1.03) (85.8)%
Cash dividends declared per common
share $0.15 $0.10 $0.05 50.0 %
Average number of common shares
outstanding:
Basic 51,165 55,189 (4,024) (7.3)%
Diluted 51,515 56,318 (4,803) (8.5)%
Balance Sheet Data
March 31, December 31,
2008 2007
(In thousands)
Cash, cash equivalents and investments in
marketable securities $437,771 $329,784
Working capital $255,259 $216,541
Total assets $2,276,722 $1,663,945
Long-term debt - HEP $341,416 $-
Stockholders' equity $500,033 $593,794
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 and includes the
operations of Holly Corporation, our parent company, and a small-scale oil
and gas exploration and production program.
The Refining segment includes the operations of our Navajo Refinery,
Woods Cross Refinery 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 and jet fuel,
and includes our Navajo Refinery and Woods Cross Refinery. The petroleum
products produced by the Refining segment are marketed in Texas, New
Mexico, Arizona, Utah, Wyoming, Idaho, Washington and northern Mexico. The
Refining segment also includes Holly Asphalt Company which 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 and Utah.
Revenues are generated by charging tariffs for transporting petroleum
products and crude oil through their pipelines and by charging fees for
terminalling petroleum products and other hydrocarbons, and storing and
providing other services at their storage tanks and terminals. The HEP
segment also included a 70% interest in Rio Grande which provides petroleum
products transportation services. 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 and from HEP's
interest in Rio Grande.
Consoli-
Corp- dations
orate and Consoli-
and Elimin- dated
Refining HEP Other ations Total
(In thousands)
Three Months Ended
March 31, 2008
Sales and
other
revenues $1,477,376 $9,942 $401 $(7,735) $1,479,984
Operating
expenses $57,216 $3,676 $- $(184) $60,708
General and
administrative
expenses $7 $522 $12,303 $- $12,832
Depreciation
and
amortization $10,281 $2,010 $1,018 $- $13,309
Income (loss)
from
operations 18,884 $3,734 $(13,025) $- $9,593
Cash, cash
equivalents
and
investments
in marketable
securities $- $8,237 $429,534 $- $437,771
Total assets $1,375,843 $447,472 $467,845 $(14,438) $2,276,722
Total debt $- $351,416 $- $- $351,416
Three Months Ended
March 31, 2007
Sales and
other
revenues $925,582 $- $391 $(106) $925,867
Operating
expenses $50,118 $- $11 $- $50,129
General and
administrative
expenses $3 $- $15,844 $- $15,847
Depreciation
and
amortization $11,026 $- $425 $- $11,451
Income (loss)
from
operations $112,615 $- $(16,041) $- $96,574
Cash, cash
equivalents
and
investments
in marketable
securities $- $- $280,397 $- $280,397
Total assets $922,003 $- $325,039 $- $1,247,042
Total debt $- $- $- $- $-
Refining Operating Data
Our refinery operations include the Navajo Refinery and the Woods Cross
Refinery. 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,
depletion and amortization. Reconciliations to amounts reported under GAAP
are provided under "Reconciliations to Amounts Reported Under Generally
Accepted Accounting Principles" below.
Three Months
Ended
March 31,
2008 2007
Navajo Refinery
Crude charge (BPD) (1) 83,200 76,820
Refinery production (BPD) (2) 94,640 86,100
Sales of produced refined products (BPD) 94,050 85,390
Sales of refined products (BPD) (3) 105,410 96,360
Refinery utilization (4) 97.9% 92.6%
Average per produced barrel (5)
Net sales $103.26 $75.58
Cost of products (6) 96.83 59.04
Refinery gross margin 6.43 16.54
Refinery operating expenses (7) 4.39 4.18
Net operating margin $2.04 $12.36
Feedstocks:
Sour crude oil 80% 75%
Sweet crude oil 8% 10%
Other feedstocks and blends 12% 15%
Total 100% 100%
Sales of produced refined products:
Gasolines 58% 61%
Diesel fuels 32% 27%
Jet fuels 1% 3%
Fuel oil 3% 3%
Asphalt 3% 3%
LPG and other 3% 3%
Total 100% 100%
Woods Cross Refinery
Crude charge (BPD) (1) 24,960 24,650
Refinery production (BPD) (2) 25,440 26,570
Sales of produced refined products (BPD) 25,300 28,120
Sales of refined products (BPD) (3) 27,530 28,550
Refinery utilization (4) 96.0% 94.8%
Average per produced barrel (5)
Net sales $102.96 $71.61
Cost of products (6) 90.42 56.87
Refinery gross margin 12.54 14.74
Refinery operating expenses (7) 6.26 4.76
Net operating margin $6.28 $9.98
Feedstocks:
Sour crude oil 3% -%
Sweet crude oil 92% 91%
Other feedstocks and blends 5% 9%
Total 100% 100%
Sales of produced refined products:
Gasolines 68% 63%
Diesel fuels 23% 25%
Jet fuels -% 2%
Fuel oil 5% 6%
LPG and other 4% 4%
Total 100% 100%
Consolidated
Crude charge (BPD) (1) 108,160 101,470
Refinery production (BPD) (2) 120,080 112,670
Sales of produced refined products (BPD) 119,350 113,510
Sales of refined products (BPD) (3) 132,940 124,910
Refinery utilization (4) 97.4% 93.1%
Average per produced barrel (5)
Net sales $103.20 $74.59
Cost of products (6) 95.48 58.50
Refinery gross margin 7.72 16.09
Refinery operating expenses (7) 4.78 4.32
Net operating margin $2.94 $11.77
Feedstocks:
Sour crude oil 64% 58%
Sweet crude oil 26% 28%
Other feedstocks and blends 10% 14%
Total 100% 100%
Sales of produced refined products:
Gasolines 60% 61%
Diesel fuels 30% 27%
Jet fuels 1% 3%
Fuel oil 3% 4%
Asphalt 3% 2%
LPG and other 3% 3%
Total 100% 100%
(1) Crude charge represents the barrels per day of crude oil processed at
the crude units 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 from 109,000 BPSD to 111,000
BPSD in mid-year 2007.
(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, depletion, and amortization.
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 plus (i) interest
expense net of interest income, (ii) income tax provision, and (iii)
depreciation, depletion and amortization. EBITDA is not a calculation based
upon 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
March 31,
2008 2007
(In thousands)
Income from continuing operations $8,649 $67,542
Add provision for income tax 4,695 34,686
Add interest expense 1,992 252
Subtract interest income (3,555) (2,560)
Add depreciation and amortization 13,309 11,451
EBITDA $25,090 $111,371
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, depletion and amortization. Each of these component
performance measures can be reconciled directly to our 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 both of
our refineries on a consolidated basis is calculated as shown below.
Three Months
Ended
March 31,
2008 2007
Average per produced barrel:
Navajo Refinery
Net sales $103.26 $75.58
Less cost of products 96.83 59.04
Refinery gross margin $6.43 $16.54
Woods Cross Refinery
Net sales $102.96 $71.61
Less cost of products 90.42 56.87
Refinery gross margin $12.54 $14.74
Consolidated
Net sales $103.20 $74.59
Less cost of products 95.48 58.50
Refinery gross margin $7.72 $16.09
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 both of
our refineries on a consolidated basis is calculated as shown below.
Three Months
Ended
March 31,
2008 2007
Average per produced barrel:
Navajo Refinery
Refinery gross margin $6.43 $16.54
Less refinery operating expenses 4.39 4.18
Net operating margin $2.04 $12.36
Woods Cross Refinery
Refinery gross margin $12.54 $14.74
Less refinery operating expenses 6.26 4.76
Net operating margin $6.28 $9.98
Consolidated
Refinery gross margin $7.72 $16.09
Less refinery operating expenses 4.78 4.32
Net operating margin $2.94 $11.77
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
March 31,
2008 2007
Navajo Refinery
Average sales price per produced barrel sold $103.26 $75.58
Times sales of produced refined products sold (BPD) 94,050 85,390
Times number of days in period 91 90
Refined product sales from produced products sold $883,756 $580,840
Woods Cross Refinery
Average sales price per produced barrel sold $102.96 $71.61
Times sales of produced refined products sold (BPD) 25,300 28,120
Times number of days in period 91 90
Refined product sales from produced products sold $237,045 $181,231
Sum of refined products sales from produced
products sold from our two refineries (4) $1,120,801 $762,071
Add refined product sales from purchased products
and rounding (1) 135,209 79,225
Total refined products sales 1,256,010 841,296
Add direct sales of excess crude oil (2) 202,951 61,680
Add other refining segment revenue (3) 18,415 22,606
Total refining segment revenue 1,477,376 925,582
Add HEP segment sales and other revenues 9,942 -
Add corporate and other revenues 401 391
Subtract consolidations and eliminations (7,735) (106)
Sales and other revenues $1,479,984 $925,867
(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 and enter into buy/sell exchanges in excess of
the needs to supply our refineries. Certain direct sales of this
excess crude oil are made to purchasers or users of crude oil. These
sales and related purchases are being measured at fair value and
accounted for as revenues with the related acquisition costs included
as cost of products sold.
(3) Other refining segment revenue includes the revenues associated with
Holly Asphalt Company and revenue derived from 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
March 31,
2008 2007
Average sales prices per produced barrel sold $103.20 $74.59
Times sales of produced refined products sold
(BPD) 119,350 113,510
Times number of days in period 91 90
Refined product sales from produced products
sold $1,120,801 $762,071
Reconciliation of average cost of products per produced barrel sold to
total costs of products sold
Three Months
Ended
March 31,
2008 2007
Navajo Refinery
Average cost of products per produced barrel sold $96.83 $59.04
Times sales of produced refined products sold (BPD) 94,050 85,390
Times number of days in period 91 90
Cost of products for produced products sold $828,724 $453,728
Woods Cross Refinery
Average cost of products per produced barrel sold $90.42 $56.87
Times sales of produced refined products sold (BPD) 25,300 28,120
Times number of days in period 91 90
Cost of products for produced products sold $208,174 $143,927
Sum of cost of products for produced products
sold from our two refineries (4) $1,036,898 $597,655
Add refined product costs from purchased products
sold and rounding (1) 135,164 82,044
Total refined cost of products sold 1,172,062 679,699
Add crude oil cost of direct sales of excess
crude oil (2) 202,213 61,852
Add other refining segment costs of products
sold (3) 16,713 10,269
Total refining segment cost of products sold 1,390,988 751,820
Subtract consolidations and eliminations (7,551) (106)
Costs of products sold (exclusive of depreciation, $1,383,437 $751,714
depletion and amortization)
(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 and enter into buy/sell exchanges in excess of
the needs to supply our refineries. Certain direct sales of this
excess crude oil are made to purchasers or users of crude oil. These
sales and related purchases are being measured at fair value and
accounted for as revenues with the related acquisition costs included
as cost of products sold.
(3) Other refining segment cost of products sold includes the cost of
products for Holly Asphalt Company and costs attributable to sulfur
credit sales.
(4) The above calculations of costs 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
March 31,
2008 2007
Average cost of products per produced barrel sold $95.48 $58.50
Times sales of produced refined products sold (BPD) 119,350 113,510
Times number of days in period 91 90
Cost of products for produced products sold $1,036,898 $597,655
Reconciliation of average refinery operating expenses per produced
barrel sold to total operating expenses
Three Months
Ended
March 31,
2008 2007
Navajo Refinery
Average refinery operating expenses per produced
barrel sold $4.39 $4.18
Times sales of produced refined products sold (BPD) 94,050 85,390
Times number of days in period 91 90
Refinery operating expenses for produced products
sold $37,572 $32,124
Woods Cross Refinery
Average refinery operating expenses per produced
barrel sold $6.26 $4.76
Times sales of produced refined products sold (BPD) 25,300 28,120
Times number of days in period 91 90
Refinery operating expenses for produced products
sold $14,412 $12,047
Sum of refinery operating expenses per produced
products sold from our two refineries (2) $51,984 $44,171
Add other refining segment operating expenses and
rounding (1) 5,232 5,947
Total refining segment operating expenses 57,216 50,118
Add HEP segment operating expenses 3,676 -
Add corporate and other costs (184) 11
Operating expenses (exclusive of depreciation,
depletion and amortization) $60,708 $50,129
(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
March 31,
2008 2007
Average refinery operating expenses per produced
barrel sold $4.78 $4.32
Times sales of produced refined products sold
(BPD) 119,350 113,510
Times number of days in period 91 90
Refinery operating expenses for produced
products sold $51,984 $44,171
Reconciliation of net operating margin per barrel to refinery gross
margin per barrel to total sales and other revenues
Three Months
Ended
March 31,
2008 2007
Navajo Refinery
Net operating margin per barrel $2.04 $12.36
Add average refinery operating expenses per
produced barrel 4.39 4.18
Refinery gross margin per barrel 6.43 16.54
Add average cost of products per produced
barrel sold 96.83 59.04
Average net sales per produced barrel sold $103.26 $75.58
Times sales of produced refined products sold
(BPD) 94,050 85,390
Times number of days in period 91 90
Refined products sales from produced products
sold $883,756 $580,840
Woods Cross Refinery
Net operating margin per barrel $6.28 $9.98
Add average refinery operating expenses per
produced barrel 6.26 4.76
Refinery gross margin per barrel 12.54 14.74
Add average cost of products per produced
barrel sold 90.42 56.87
Average net sales per produced barrel sold $102.96 $71.61
Times sales of produced refined products sold
(BPD) 25,300 28,120
Times number of days in period 91 90
Refined products sales from produced products
sold $237,045 $181,231
Sum of refined products sales from produced
products sold from our two refineries (4) $1,120,801 $762,071
Add refined product sales from purchased
products and rounding (1) 135,209 79,225
Total refined products sales 1,256,010 841,296
Add direct sales of excess crude oil(2) 202,951 61,680
Add other refining segment revenue (3) 18,415 22,606
Total refining segment revenue 1,477,376 925,582
Add HEP segment sales and other revenues 9,942 -
Add corporate and other revenues 401 391
Subtract consolidations and eliminations (7,735) (106)
Sales and other revenues $1,479,984 $925,867
(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 and enter into buy/sell exchanges in excess of
the needs to supply our refineries. Certain direct sales of this
excess crude oil are made to purchasers or users of crude oil. These
sales and related purchases are being measured at fair value and
accounted for as revenues with the related acquisition costs included
as cost of products sold.
(3) Other refining segment revenue includes the revenues associated with
Holly Asphalt Company and revenue derived from 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
March 31,
2008 2007
Net operating margin per barrel $2.94 $11.77
Add average refinery operating expenses per
produced barrel 4.78 4.32
Refinery gross margin per barrel 7.72 16.09
Add average cost of products per produced barrel
sold 95.48 58.50
Average sales price per produced barrel sold $103.20 $74.59
Times sales of produced refined products sold
(BPD) 119,350 113,510
Times number of days in period 91 90
Refined product sales from produced products
sold $1,120,801 $762,071
SOURCE Holly Corporation
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Related links:
http://www.hollycorp.com
http://www.videonewswire.com/event.asp?id=47868
CONTACT:
Bruce R, Shaw, Senior Vice President and
Chief Financial Officer, or M. Neale Hickerson, Vice President,
Investor Relations, both of Holly Corporation, +1-214-871-3555
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