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Press release from PR Newswire

Holly Corporation Reports Fourth Quarter and Full Year 2010 Results

Thursday, February 24, 2011

Holly Corporation Reports Fourth Quarter and Full Year 2010 Results07:00 EST Thursday, February 24, 2011Announces Regular Quarterly Cash DividendDALLAS, Feb. 24, 2011 /PRNewswire/ -- Holly Corporation (NYSE: HOC) ("Holly" or the "Company") today reported fourth quarter 2010 financial results.  For the quarter, net income attributable to Holly stockholders was $14.7 million ($0.28 per basic and $0.27 per diluted share) compared to a net loss attributable to Holly stockholders of $40.5 million ($0.79 per basic and diluted share) for the fourth quarter of 2009.  For the year ended December 31, 2010, net income attributable to Holly stockholders was $104 million ($1.95 per basic and $1.94 per diluted share) compared to $19.5 million ($0.39 per basic and diluted share) for 2009.Holly also announced that its Board of Directors has declared a regular quarterly cash dividend in the amount of $0.15 per share, payable April 4, 2011, to holders of record on March 25, 2011.For the quarter, net income attributable to our stockholders increased by $55.2 million compared to the same period of 2009.  This increase was due principally to higher refinery gross margins during the current year fourth quarter combined with increased sales volumes of produced refined products.  Overall refinery gross margins were $7.87 per produced barrel, a 114% increase compared to $3.67 for the fourth quarter of 2009.  For the quarter, our overall refinery production levels averaged 222,750 barrels per day ("BPD"), an increase of 17% over the same period of 2009 due principally to increased production from our Tulsa refinery complex since we acquired the east facility in December 2009. For the year ended December 31, 2010, net income attributable to our stockholders increased by $84.4 million compared to 2009.  This increase was due principally to increased sales volumes of produced refined products combined with higher refinery gross margins during 2010.  Overall refinery gross margins were $8.79 per produced barrel, a 22% increase compared to $7.21 in 2009.  For the year ended December 31, 2010, our overall refinery production levels averaged 225,980 BPD, an increase of 49% over 2009 due to production from our Tulsa refinery facilities and production increases at our Navajo and Woods Cross refineries.  "We are pleased with our fourth quarter and full year results," said Matthew Clifton, Chairman of the Board and Chief Executive Officer of Holly.  "Significant year-over-year margin improvements at each of our refineries, contributed to the much improved EBITDA levels of $69 million and $353.8 million for the three months and year ended December 31, 2010, representing respective increases of 333% and 126% over the same periods of 2009.  Particularly strong diesel cracks at each of our refineries combined with robust gasoline cracks at our Woods Cross refinery and attractive lube margins at our Tulsa refinery helped fuel these improved results.  Refinery margins in the 2010 fourth quarter were significantly better than the low margins experienced in late 2009 and early 2010, yet during the fourth quarter of 2010 margins somewhat fell off as gasoline prices did not keep pace with recent crude oil increases.  "Progress continues on our integration and diesel desulfurization expansion efforts at our Tulsa refinery with the diesel desulfurizer project expected to be completed within the next two weeks and the pipeline integration expected to be mechanically complete later this spring.  The Tulsa projects should lower operating expenses and improve the profit producing potential of what has been a strong profit contributor during the last three quarters.  "Our affiliated logistic MLP, Holly Energy Partners, had a strong fourth quarter achieving record quarterly distributable cash flow and EBITDA levels.  We received $9.7 million as a result of HEP's distribution declaration on January 26, 2010."At year end our cash and marketable securities stood at $230 million.  Excluding the Holly Energy Partners debt that is non-recourse to Holly, our cash adjusted debt to total capitalization ratio was at 14%, ranking our balance sheet as one of the strongest among our independent refining peers. "To date in the first quarter of 2011, steep discounts on WTI price related crudes compared to world oil prices and strong gasoline and diesel prices have raised margins at all three of our refineries. However, reduced production at our Navajo refinery over the last month due to the resultant impacts of a plant-wide power failure and bad weather will result in lower production than expected. Operations at Navajo are in the process of ramping back up to more typical levels."Looking forward, we are confident that the quality of our assets, combined with the markets we serve and our strong financial position will permit us to realize strong returns in 2011," Clifton said. Sales and other revenues for the fourth quarter of 2010 were $2,211.8 million, a 33% increase compared to the three months ended December 31, 2009.  This increase was due to the effects of a 16% year-over-year increase in fourth quarter refined product sales prices combined with a 19% increase in volumes of produced refined products sold.  The volume increase was primarily due to volumes attributable to our Tulsa refinery operations.  Cost of products sold was $1,988 million, a 28% increase compared to the fourth quarter of 2009 due mainly to higher crude oil acquisition costs and increased volumes of produced refined products sold.  Sales and other revenues for the year ended December 31, 2010, were $8,322.9 million, a 72% increase compared to the year ended December 31, 2009.  This increase was due to the effects of a 23% year-over-year increase in refined product sales prices combined with a 51% increase in volumes of produced refined products sold.  The volume increase was attributable to our Tulsa refinery operations and year-over-year production increases at our Navajo and Woods Cross refineries.  Cost of products sold was $7,367.1 million, a 74% increase compared to 2009 due mainly to higher crude oil acquisition costs and increased volumes of produced refined products sold.Operating costs and expenses for the three months and year ended December 31, 2010, increased mainly due to the inclusion of costs attributable to the operations of our Tulsa east refinery facilities.  Interest expense for the three months and year ended December 31, 2010, increased by $3.6 million and $33.9 million, respectively, primarily due to interest incurred on the $300 million Holly senior notes and the $150 million 8.25% senior notes issued by HEP in March 2010.As previously announced, Holly has entered into a definitive merger agreement under which it will combine with Frontier Oil Corporation in an all-stock merger of equals. Based on the closing market prices for the shares of both companies on Friday, February 18, 2011, and their debt levels as of December 31, 2010, the new company would have an enterprise value of $7 billion.  The new company, which will be named HollyFrontier Corporation, will have a well-positioned refining asset base, enhanced growth opportunities and one of the best balance sheets in the industry. The transaction is expected to be completed early in the third quarter of 2011.The Company has scheduled a webcast conference call for today, February 24, 2011, at 4:00 PM Eastern Time to discuss financial results.  This webcast may be accessed at: http://www.videonewswire.com/event.asp?id=76379.  An audio archive of this webcast will be available using the above noted link through March 9, 2011.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 2% 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 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 OPERATIONSFinancial Data (all information in this release is unaudited)Three Months EndedDecember 31,Change from 200920102009 ChangePercent(In thousands, except per share data)Sales and other revenues                                 $  2,211,791$  1,661,969$  549,82233.1%Operating costs and expenses: Cost of products sold (exclusive of depreciation and amortization)1,988,0291,550,990437,03928.2 Operating expenses (exclusive of depreciation and amortization)125,776115,33710,4399.1 General and administrative expenses (exclusive of depreciation   and amortization)                                    20,21616,7713,44520.5 Depreciation and amortization                            31,81029,3842,4268.3  Total operating costs and expenses                     2,165,8311,712,482453,34926.5Income (loss) from operations                              45,960(50,513)96,473191.0Other income (expense): Equity in earnings of SLC Pipeline                         79861018830.8 Interest income                                       4102,484(2,074)(83.5)    Interest expense                                       (18,083)(14,497)(3,586)24.7 Acquisition costs - Tulsa refineries                        -(1,138)1,138(100.0)(16,875)(12,541)(4,334)(34.6)Income (loss) from continuing operations before income taxes    29,085(63,054)92,139146.1Income tax provision (benefit)                              4,836(27,208)32,044117.8Income (loss) from continuing operations                     24,249(35,846)60,095167.6Income from discontinued operations (1)                     -13,488(13,488)(100.0)Net income (loss)                                        24,249(22,358)46,607208.5Less noncontrolling interest in net income                     9,53018,143(8,613)(47.5)Net income (loss) attributable to Holly Corporation stockholders   $  14,719$  (40,501)$  55,220136.3%Earnings (loss) attributable to Holly Corporation stockholders: Income (loss) from continuing operations                   $  14,719$  (43,805)$  58,524133.6% Income from discontinued operations                       -3,304(3,304)(100.0)    Net income (loss)                                      $  14,719$  (40,501)$  55,220136.3%Earnings (loss) per share attributable to Holly Corporation  stockholders ? basic: Income (loss) from continuing operations                   $  0.28$  (0.85)$  1.13132.9% Income from discontinued operations (1)                   -0.06(0.06)(100.0) Net income (loss)                                      $  0.28$  (0.79)$  1.07135.4%Earnings (loss) per share attributable to Holly Corporation  stockholders ? diluted: Income (loss) from continuing operations                   $  0.27$  (0.85)$  1.12131.8% Income from discontinued operations (1)                   -0.06(0.06)(100.0) Net income (loss)                                     $  0.27$  (0.79)$  1.06134.2%Cash dividends declared per common share                   $  0.15$  0.15$  --%Average number of common shares outstanding: Basic                                               53,25851,2002,0584.0% Diluted                                               53,64851,3802,2684.4%EBITDA from continuing operations                          $  69,038$  (29,616)$  98,654333.1%Years EndedDecember 31,Change from 200920102009 ChangePercent(In thousands, except per share data)Sales and other revenues                                 $  8,322,929$  4,834,268$  3,488,66172.2%Operating costs and expenses: Cost of products sold (exclusive of depreciation and amortization)7,367,1494,238,0083,129,14173.8 Operating expenses (exclusive of depreciation and amortization)504,414356,855147,55941.3 General and administrative expenses (exclusive of depreciation   and amortization)                                    70,83960,34310,49617.4 Depreciation and amortization                            117,52998,75118,77819.0  Total operating costs and expenses                     8,059,9314,753,9573,305,97469.5Income from operations                                   262,99880,311182,687227.5Other income (expense): Equity in earnings of SLC Pipeline                         2,3931,91947424.7 Interest income                                       1,1685,045(3,877)(76.8)    Interest expense                                       (74,196)(40,346)(33,850)83.9 Acquisition costs - Tulsa refineries                        -(3,126)3,126(100.0)(70,635)(36,508)(34,127)(93.5)Income from continuing operations before income taxes         192,36343,803148,560339.2Income tax provision                                     59,3127,46051,852695.1Income from continuing operations                           133,05136,34396,708266.1Income from discontinued operations (1)                     -16,926(16,926)(100.0)Net income                                             133,05153,26979,782149.8Less noncontrolling interest in net income                     29,08733,736(4,649)(13.8)Net income attributable to Holly Corporation stockholders         $  103,964$  19,533$  84,431432.2%Earnings attributable to Holly Corporation stockholders: Income from continuing operations                         $  103,964$  15,209$  88,755583.6% Income from discontinued operations                       -4,324(4,324)(100.0)    Net income                                           $  103,964$  19,533$  84,431432.2%Earnings per share attributable to Holly Corporation  stockholders ? basic: Income from continuing operations                         $  1.95$  0.30$  1.65550.0% Income from discontinued operations (1)                   -0.09(0.09)(100.0) Net income                                           $  1.95$  0.39$  1.56400.0%Earnings per share attributable to Holly Corporation  stockholders ? diluted: Income from continuing operations                         $  1.94$  0.30$  1.64546.7% Income from discontinued operations (1)                   -0.09(0.09)(100.0) Net income                                           $  1.94$  0.39$  1.55397.4%Cash dividends declared per common share                   $  0.60$  0.60$  --%Average number of common shares outstanding: Basic                                               53,21850,4182,8005.6% Diluted                                               53,60950,6033,0065.9%EBITDA from continuing operations                         $  353,833$  156,721$  197,112125.8%(1) On December 1, 2009, HEP sold its interest in Rio Grande Pipeline Company ("Rio Grande").  Results of operations of Rio Grande are presented in discontinued operations.Balance Sheet DataDecember 31,20102009(In thousands)Cash, cash equivalents and investments in marketable securities                       $     230,444$     125,819Working capital                                                              $     313,580$     257,899Total assets                                                                 $  3,701,475$  3,145,939Long-term debt                                                              $     810,561$     707,458Total equity                                                                 $  1,288,139$  1,207,781Segment 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 ("Holly Asphalt").  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 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.  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 leasing certain pipeline capacity to Alon USA, Inc., by charging fees for terminalling refined 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. RefiningHEPCorporate and OtherConsolidations and EliminationsConsolidated Total(In thousands)Three Months Ended December 31, 2010 Sales and other revenues             $  2,200,757$  49,384$  98$  (38,448)$  2,211,791 Operating expenses                 $  110,788$  12,760$  2,363$  (135)$  125,776 General and administrative expenses   $  -$  1,735$  18,481$  -$  20,216 Depreciation and amortization         $  21,988$  8,240$  1,379$  203$  31,810 Income (loss) from operations         $  42,386$  26,649$  (22,125)$  (950)$  45,960Three Months Ended December 31, 2009 Sales and other revenues             $  1,653,804$  38,425$  (1,059)$  (29,201)$  1,661,969 Operating expenses                 $  103,529$  11,928$  7$  (127)$  115,337 General and administrative expenses   $  -$  2,607$  14,164$  -$  16,771 Depreciation and amortization         $  21,038$  6,804$  1,542$  -$  29,384 Income (loss) from operations         $  (50,422)$  17,086$  (16,772)$  (405)$  (50,513)Year Ended December 31, 2010 Sales and other revenues             $  8,287,000$  182,114$  415$  (146,600)$  8,322,929 Operating expenses                 $  449,590$  52,947$  2,387$  (510)$  504,414 General and administrative expenses   $  -$  7,719$  63,120$  -$  70,839 Depreciation and amortization         $  84,587$  29,062$  4,562$  (682)$  117,529 Income (loss) from operations         $  242,466$  92,386$  (69,654)$  (2,200)$  262,998RefiningHEPCorporate And OtherConsolidations and EliminationsConsolidated Total(In thousands)Year Ended December 31, 2009 Sales and other revenues           $  4,789,821$  146,561$  (636)$  (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       $  71,281$  70,373$  (60,239)$  (1,104)$  80,311December 31, 2010 Cash, cash equivalents and    investments in marketable securities$  -$    403$    230,041$    -$  230,444 Total assets                     $  2,490,193$    669,820$    573,531$    (32,069)$  3,701,475 Long-term debt                   $  -$    482,271$    345,215$    (16,925)$  810,561December 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 Long-term debt                   $  -$    379,198$    345,602$  (17,342)$  707,458Refining Operating DataOur 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 December 31,Years EndedDecember 31,2010200920102009Navajo RefineryCrude charge (BPD) (1)                                                       89,08082,58083,90078,160Refinery throughput (2)                                                       100,07094,98094,27088,900Refinery production (BPD) (3)                                                 97,27093,28092,05086,760Sales of produced refined products (BPD)                                       97,93096,15092,55087,140Sales of refined products (BPD) (4)                                             101,74099,06095,79090,870Refinery utilization (5)                                                        89.1%82.6%83.9%81.2%Average per produced barrel (6) Net sales                                                                $  94.18$  83.40$  90.37$  73.15 Cost of products (7)                                                       87.7480.7583.1265.95 Refinery gross margin                                                     6.442.657.257.20 Refinery operating expenses (8)                                             4.784.634.954.81 Net operating margin                                                       $  1.66$   (1.98)$  2.30$  2.39Refinery operating expenses per throughput barrel                                 $  4.68$  4.69$  4.86$  4.71Feedstocks: Sour crude oil                                                            71%85%81%85% Sweet crude oil                                                           6%4%5%6% Heavy sour crude oil                                                       12%-%4%-% Other feedstocks and blends                                                11%11%10%9% Total                                                                   100%100%100%100%Three Months EndedDecember 31,Years EndedDecember 31,2010200920102009Sales of produced refined products: Gasolines                                                     56%59%57%58% Diesel fuels                                                    33%29%32%32% Jet fuels                                                       1%4%3%2% Fuel oil                                                        5%4%4%3% Asphalt                                                       3%2%2%3% LPG and other                                                  2%2%2%2% Total                                                         100%100%100%100%Woods Cross RefineryCrude charge (BPD) (1)                                             22,91022,60025,87024,900Refinery throughput (2)                                             25,05024,34027,54026,520Refinery production (BPD) (3)                                       24,29024,37027,02025,750Sales of produced refined products (BPD)                             26,48026,32027,81026,870Sales of refined products (BPD) (4)                                   26,60026,45027,98027,250Refinery utilization (5)                                              73.9%72.9%83.5%80.3%Average per produced barrel (6) Net sales                                                      $  95.99$  80.56$  94.26$  70.25 Cost of products (7)                                             80.3370.4675.5458.98 Refinery gross margin                                           15.6610.1018.7211.27 Refinery operating expenses (8)                                   6.837.076.096.60 Net operating margin                                             $  8.83$  3.03$ 12.63$  4.67Refinery operating expenses per throughput barrel                       $  7.22$  7.65$  6.15$  6.69Feedstocks: Heavy sour crude oil                                             6%7%6%5% Sweet crude oil                                                 53%57%59%62% Black wax crude oil                                             33%28%30%28% Other feedstocks and blends                                      8%8%5%5% Total                                                         100%100%100%100%Sales of produced refined products: Gasolines                                                     67%62%63%64% Diesel fuels                                                    26%27%30%28% Jet fuels                                                       1%1%1%1% Fuel oil                                                        1%3%1%3% Asphalt                                                       3%3%3%2% LPG and other                                                  2%4%2%2% Total                                                         100%100%100%100%Tulsa Refinery (9)Crude charge (BPD) (1)                                             109,66072,250111,67039,370Refinery throughput (2)                                             110,23072,810113,10039,520Refinery production (BPD) (3)                                       101,19073,040106,91038,910Sales of produced refined products (BPD)                             107,30071,660107,78037,570Sales of refined products (BPD) (4)                                   107,63071,660108,33037,700Refinery utilization (5)                                              87.7%85.0%89.3%74.0%Average per produced barrel (6) Net sales                                                      $  96.60$  81.30$  90.84$  78.89 Cost of products (7)                                             89.3778.6283.2974.56 Refinery gross margin                                           7.232.687.554.33 Refinery operating expenses (8)                                   4.475.774.945.25 Net operating margin                                             $  2.76$       (3.09)$  2.61$    (0.92)Refinery operating expenses per throughput barrel                       $  4.35$  5.68$  4.71$  4.99Three Months EndedDecember 31,Years EndedDecember 31,2010200920102009Feedstocks: Sour crude oil                                                   3%-%5%-% Sweet crude oil                                                 97%99%92%100% Heavy sour crude oil                                             -%1%3%-% Total                                                         100%100%100%100%Sales of produced refined products: Gasolines                                                     34%29%38%26% Diesel fuels                                                    32%28%31%29% Jet fuels                                                       8%10%8%10% Lubricants                                                     11%12%11%16% Gas oil / intermediates                                            7%18%4%17% Asphalt                                                       6%1%5%-%    LPG and other                                                  2%2%3%2% Total                                                         100%100%100%100%ConsolidatedCrude charge (BPD) (1)                                             221,650177,430221,440142,430Refinery throughput (2)                                             235,350192,130234,910154,940Refinery production (BPD) (3)                                       222,750190,690225,980151,420Sales of produced refined products (BPD)                             231,710194,130228,140151,580Sales of refined products (BPD) (4)                                   235,970197,170232,100155,820Refinery utilization (5)                                              86.6%77.4%86.5%78.9%Average per produced barrel (6) Net sales                                                      $  95.51$  82.24$  91.06$  74.06 Cost of products (7)                                             87.6478.5782.2766.85 Refinery gross margin                                           7.873.678.797.21 Refinery operating expenses (8)                                   4.875.385.085.24 Net operating margin                                             $  3.00$       (1.71)$  3.71$  1.97Refinery operating expenses per throughput barrel                       $  4.80$       5.44$  4.94$       5.12Feedstocks: Sour crude oil                                                   32%43%35%49% Sweet crude oil                                                 54%47%53%40% Black wax crude oil                                             4%4%3%5% Heavy sour crude oil                                             5%-%4%-% Other feedstocks and blends                                      5%6%5%6% Total                                                         100%100%100%100%Sales of produced refined products: Gasolines                                                     48%48%49%51% Diesel fuels                                                    31%29%31%31% Jet fuels                                                       5%6%5%4% Fuel oil                                                        2%2%2%2% Asphalt                                                       4%1%3%2% Lubricants                                                     5%5%5%4% Gas oil / intermediates                                            3%7%2%4% LPG and other                                                  2%2%3%2% 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 refinery.(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.  Refinery production excludes fuel produced for refinery consumption.(4) Includes refined products purchased for resale.(5) Represents crude charge divided by total crude capacity (BPSD).  Our consolidated crude capacity was increased by 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.(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) 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:Tulsa RefineryPeriod From June 1, 2009 Through December 31, 2009Period From December 1, 2009 Through December 31, 2009Crude charge (BPD)                                67,16093,810Refinery production (BPD)                           66,36099,810Sales of produced refined products (BPD)               64,08096,170Sales of refined products (BPD)                       64,30096,170Refinery utilization                                 74%75%Reconciliations to Amounts Reported Under Generally Accepted Accounting PrinciplesReconciliations 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 December 31,Years Ended December 31,2010200920102009(In thousands)Income (loss) from continuing operations                                  $  24,249$  (35,846)$  133,051$  36,343 Subtract noncontrolling interest in income from continuing  operations                                                       (9,530)(7,959)(29,087)(21,134) Add income tax provision                                             4,836(27,208)59,3127,460 Add interest expense                                               18,08314,49774,19640,346 Subtract interest income                                             (410)(2,484)(1,168)(5,045) Add depreciation and amortization                                     31,81029,384117,52998,751EBITDA from continuing operations                                       $  69,038$  (29,616)$  353,833$  156,721Reconciliations 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 MarginRefinery 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 December 31,Years Ended December 31,2010200920102009Average per produced barrel:Navajo Refinery Net sales                                             $  94.18$  83.40$  90.37$  73.15 Less cost of products                                   87.7480.7583.1265.95 Refinery gross margin                                   $  6.44$  2.65$  7.25$  7.20Woods Cross Refinery Net sales                                             $  95.99$  80.56$  94.26$  70.25 Less cost of products                                   80.3370.4675.5458.98 Refinery gross margin                                   $  15.66$  10.10$  18.72$  11.27Tulsa Refinery Net sales                                             $  96.60$  81.30$  90.84$  78.89 Less cost of products                                   89.3778.6283.2974.56 Refinery gross margin                                   $  7.23$  2.68$  7.55$  4.33Consolidated Net sales                                             $  95.51$  82.24$  91.06$  74.06 Less cost of products                                   87.6478.5782.2766.85 Refinery gross margin                                   $  7.87$  3.67$  8.79$  7.21Net Operating MarginNet 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 December 31,Years Ended December 31,2010200920102009Average per produced barrel:Navajo Refinery Refinery gross margin                                   $  6.44$  2.65$  7.25$  7.20 Less refinery operating expenses                         4.784.634.954.81 Net operating margin                                   $     1.66$     (1.98)$  2.30$  2.39Three Months Ended December 31,Years Ended December 31,2010200920102009Woods Cross Refinery Refinery gross margin                                   $  15.66$  10.10$  18.72$  11.27 Less refinery operating expenses                         6.837.076.096.60 Net operating margin                                   $  8.83$  3.03$  12.63$  4.67Tulsa Refinery Refinery gross margin                                   $  7.23$  2.68$  7.55$  4.33 Less refinery operating expenses                         4.475.774.945.25 Net operating margin                                   $  2.76$  (3.09)$      2.61$      (0.92)Consolidated Refinery gross margin                                   $  7.87$  3.67$  8.79$  7.21 Less refinery operating expenses                         4.875.385.085.24 Net operating margin                                   $  3.00$  (1.71)$  3.71$  1.97Below 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 revenueThree Months Ended December 31,Years Ended December 31,2010200920102009(Dollars in thousands, except per barrel amounts)Navajo RefineryAverage sales price per produced barrel sold                     $  94.18$  83.40$  90.37$  73.15Times sales of produced refined products sold (BPD)               97,93096,15092,55087,140Times number of days in period                                 9292365365Refined product sales from produced products sold                 $  848,520$  737,740$  3,052,766$  2,326,616Woods Cross RefineryAverage sales price per produced barrel sold                     $  95.99$  80.56$  94.26$  70.25Times sales of produced refined products sold (BPD)               26,48026,32027,81026,870Times number of days in period                                 9292365365Refined product sales from produced products sold                 $  233,847$  195,071$  956,800$  688,980Tulsa RefineryAverage sales price per produced barrel sold                     $  96.60$  81.30$  90.84$  78.89Times sales of produced refined products sold (BPD)               107,30071,660107,78037,570Times number of days in period                                 9292365365Refined product sales from produced products sold                 $  953,597$  535,988$3,573,618$  1,081,823Sum of refined product sales from produced products sold from our three refineries (1)$  2,035,964$  1,468,799$7,583,184$4,097,419Add refined product sales from purchased products and rounding (2)   37,21123,285130,348106,969Total refined product sales                                     2,073,1751,492,0847,713,5324,204,388Add direct sales of excess crude oil (3)                           104,362133,542459,743453,958Add other refining segment revenue (4)                           23,22028,178113,725131,475Total refining segment revenue                                 2,200,7571,653,8048,287,0004,789,821Add HEP segment sales and other revenues                       49,38438,425182,114146,561Add corporate and other revenues                               98(1,059)415(636)Subtract consolidations and eliminations                           (38,448)(29,201)(146,600)(101,478)Sales and other revenues                                     $  2,211,791$  1,661,969$8,322,929$4,834,268(1) 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.(2) We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments.(3) 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.(4) Other refining segment revenue includes the revenues associated with Holly Asphalt and revenue derived from feedstock and sulfur credit sales.Three Months Ended December 31,Years Ended December 31,2010200920102009(Dollars in thousands, except per barrel amounts)Average sales price per produced barrel sold                 $  95.51$  82.24$  91.06$  74.06Times sales of produced refined products sold (BPD)           231,710194,130228,140151,580Times number of days in period                             9292365365Refined product sales from produced products sold             $  2,035,964$  1,468,799$  7,583,184$  4,097,419Reconciliation of average cost of products per produced barrel sold to total cost of products soldThree Months Ended December 31,Years Ended December 31,2010200920102009(Dollars in thousands, except per barrel amounts)Navajo RefineryAverage cost of products per produced barrel sold             $  87.74$  80.75$  83.12$  65.95Times sales of produced refined products sold (BPD)           97,93096,15092,55087,140Times number of days in period                             9292365365Cost of products for produced products sold                  $  790,499$  714,298$  2,807,856$  2,097,612Woods Cross RefineryAverage cost of products per produced barrel sold             $  80.33$  70.46$  75.54$  58.98Times sales of produced refined products sold (BPD)           26,48026,32027,81026,870Times number of days in period                             9292365365Cost of products for produced products sold                  $  195,697$  170,615$  766,780$  578,449Tulsa RefineryAverage cost of products per produced barrel sold             $      89.37$      78.62$  83.29$  74.56Times sales of produced refined products sold (BPD)           107,30071,660107,78037,570Times number of days in period                             9292365365Cost of products for produced products sold                  $  882,225$  518,320$  3,276,604$  1,022,445Sum of cost of products for produced products sold from our three refineries (1)$1,868,421$1,403,233$6,851,240$  3,698,506Add refined product costs from purchased products sold and rounding (2)36,73426,489131,141114,650Total refined cost of products sold                           1,905,1551,429,7226,982,3813,813,156Add crude oil cost of direct sales of excess crude oil (3)         102,923131,534454,566449,488Add other refining segment cost of products sold (4)            17,51718,40373,41075,229Total refining segment cost of products sold                   2,025,5951,579,6597,510,3574,337,873Subtract consolidations and eliminations                      (37,566)(28,669)(143,208)(99,865)Costs of products sold (exclusive of depreciation and amortization) $  1,988,029$  1,550,990$  7,367,149$  4,238,008(1) The above calculations of cost of products for produced products sold can also be computed on a consolidated basis.  These amounts may not calculate exactly due to rounding of reported numbers.(2) We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments.(3) 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. (4) Other refining segment cost of products sold includes the cost of products for Holly Asphalt and costs attributable to feedstock and sulfur credit salesThree Months Ended December 31,Years Ended December 31,2010200920102009(Dollars in thousands, except per barrel amounts)  Average cost of products per produced barrel sold             $  87.64$  78.57$  82.27$  66.85  Times sales of produced refined products sold (BPD)           231,710194,130228,140151,580  Times number of days in period                             9292365365  Cost of products for produced products sold                   $  1,868,421$  1,403,233$  6,851,240$  3,698,506Reconciliation of average refinery operating expenses per produced barrel sold to total operating expensesThree Months Ended December 31,Years Ended December 31,2010200920102009(Dollars in thousands, except per barrel amounts)Navajo RefineryAverage refinery operating expenses per produced barrel sold   $  4.78$  4.63$  4.95$  4.81Times sales of produced refined products sold (BPD)           97,93096,15092,55087,140Times number of days in period                            9292365365Refinery operating expenses for produced products sold       $  43,066$  40,956$  167,215$  152,987Woods Cross RefineryAverage refinery operating expenses per produced barrel sold   $  6.83$  7.07$  6.09$  6.60Times sales of produced refined products sold (BPD)           26,48026,32027,81026,870Times number of days in period                            9292365365Refinery operating expenses for produced products sold       $  16,639$  17,120$  61,817$  64,730Tulsa RefineryAverage refinery operating expenses per produced barrel sold   $  4.47$  5.77$  4.94$  5.25Times sales of produced refined products sold (BPD)           107,30071,660107,78037,570Times number of days in period                            9292365365Refinery operating expenses for produced products sold       $   44,126$   38,040$     194,338$     71,994Sum of refinery operating expenses per produced products sold from our three refineries (1)$  103,831$  96,116$  423,370$  289,711Add other refining segment operating expenses and rounding (2) 6,9577,41426,22023,609Total refining segment operating expenses                   110,788103,529449,590313,320Add HEP segment operating expenses                       12,76011,92852,94744,003Add corporate and other costs                             2,36372,38741Subtract consolidations and eliminations                     (135)(127)(510)(509)Operating expenses (exclusive of depreciation and amortization) $  125,776$  115,337$  504,414$  356,855(1) 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. (2) Other refining segment operating expenses include the marketing costs associated with our refining segment and the operating expenses of Holly Asphalt.Three Months Ended December 31,Years EndedDecember 31,2010200920102009(Dollars in thousands, except per barrel amounts)  Average refinery operating expenses per produced barrel sold sold$  4.87$  5.38$  5.08$  5.24  Times sales of produced refined products sold (BPD)           231,710194,130228,140151,580  Times number of days in period                             9292365365  Refinery operating expenses for produced products sold         $  103,831$  96,116$  423,370$  289,711Reconciliation of net operating margin per barrel to refinery gross margin per barrel to total sales and other revenuesThree Months Ended December 31,Years Ended December 31,2010200920102009(Dollars in thousands, except per barrel amounts)Navajo RefineryNet operating margin per barrel                                 $  1.66$  (1.98)$  2.30$  2.39Add average refinery operating expenses per produced barrel        4.784.634.954.81Refinery gross margin per barrel                                6.442.657.257.20Add average cost of products per produced barrel sold             87.7480.7583.1265.95Average sales price per produced barrel sold                     $  94.18$  83.40$  90.37$  73.15Times sales of produced refined products sold (BPD)               97,93096,15092,55087,140Times number of days in period                                 9292365365Refined product sales from produced products sold                 $  848,520$  737,740$  3,052,766$  2,326,616Woods Cross RefineryNet operating margin per barrel                                 $  8.83$  3.03$  12.63$  4.67Add average refinery operating expenses per produced barrel        6.837.076.096.60Refinery gross margin per barrel                                15.6610.1018.7211.27Add average cost of products per produced barrel sold             80.3370.4675.5458.98Average sales price per produced barrel sold                     $  95.99$  80.56$  94.26$  70.25Times sales of produced refined products sold (BPD)               26,48026,32027,81026,870Times number of days in period                                 9292365365Refined product sales from produced products sold                 $  233,847$  195,071$  956,800$  688,980Tulsa RefineryNet operating margin per barrel                                 $  2.76$  (3.09)$  2.61$         (0.92)Add average refinery operating expenses per produced barrel        4.475.774.945.25Refinery gross margin per barrel                                7.232.687.554.33Add average cost of products per produced barrel sold             89.3778.6283.2974.56Average sales price per produced barrel sold                     $  96.60$  81.30$  90.84$  78.89Times sales of produced refined products sold (BPD)               107,30071,660107,78037,570Times number of days in period                                 9292365365Refined product sales from produced products sold                 $  953,597$    535,988$  3,573,618$  1,081,823Sum of refined product sales from produced products sold from our three refineries (1)$  2,035,964$  1,468,799$  7,583,184$  4,097,419Add refined product sales from purchased products and rounding (2)   37,21123,285130,348106,969Total refined product sales                                     2,073,1751,492,0847,713,5324,204,388Add direct sales of excess crude oil (3)                           104,362133,542459,743453,958Add other refining segment revenue (4)                           23,22028,178113,725131,475Total refining segment revenue                                 2,200,7571,653,8048,287,0004,789,821Add HEP segment sales and other revenues                       49,38438,425182,114146,561Add corporate and other revenues                               98(1,059)415(636)Subtract consolidations and eliminations                           (38,448)(29,201)(146,600)(101,478)Sales and other revenues                                     $  2,211,791$  1,661,969$  8,322,929$  4,834,268(1) 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.(2) We purchase finished products when opportunities arise that provide a profit on the sale of such products or to meet delivery commitments.(3) 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.(4) Other refining segment revenue includes the revenues associated with Holly Asphalt and revenue derived from feedstock and sulfur credit sales.Three Months Ended December 31,Years Ended December 31,2010200920102009(Dollars in thousands, except per barrel amounts)Net operating margin per barrel                             $  3.00$         (1.71)$  3.71$  1.97Add average refinery operating expenses per produced barrel    4.875.385.085.24Refinery gross margin per barrel                            7.873.678.797.21Add average cost of products per produced barrel sold         87.6478.5782.2766.85Average sales price per produced barrel sold                 $  95.51$  82.24$  91.06$  74.06Times sales of produced refined products sold (BPD)           231,710194,130228,140151,580Times number of days in period                             9292365365Refined product sales from produced products sold             $  2,035,964$  1,468,799$7,583,184$4,097,419SOURCE Holly CorporationFor further information: Bruce R, Shaw, Senior Vice President and Chief Financial Officer, or M. Neale Hickerson, Vice President, Investor Relations, +1-214-871-3555, both of Holly Corporation