The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from PR Newswire

HollyFrontier Corporation Reports Fourth Quarter 2011 Results

Tuesday, February 28, 2012

HollyFrontier Corporation Reports Fourth Quarter 2011 Results07:00 EST Tuesday, February 28, 2012DALLAS, Feb. 28, 2012 /PRNewswire/ -- HollyFrontier Corporation (NYSE-HFC) ("HollyFrontier" or the "Company") today reported fourth quarter net income attributable to HollyFrontier stockholders of $223.4 million or $1.06 per diluted share for the quarter ended December 31, 2011, compared to $14.7 million or $0.13 per diluted share for the quarter ended December 31, 2010. For the year ended December 31, 2011, net income attributable to HollyFrontier stockholders totaled $1 billion or $6.42 per diluted share compared to $104 million or $0.97 per diluted share for the year ended December 31, 2010.For the fourth quarter, net income increased by $208.7 million, or 1,418% compared to the same period of 2010, reflecting both the effects of increased operating scale due to our recent merger and historically strong fourth quarter refining margins, which continued to benefit from wide differentials between inland and coastal-sourced crude oils.  Overall refinery gross margins were $15.32 per produced barrel, a 95% increase compared to $7.87 for the fourth quarter of 2010, with overall production levels averaging 438,000 barrels per day ("BPD") and overall crude oil charges averaging 407,000 BPD for the current quarter.  The Company's Rocky Mountain refining margins were the strongest, with average gross margins of $18.33 per barrel for the quarter.  The Mid-Continent and Southwest refining operations also yielded good results, where quarterly gross margins averaged $14.71 and $14.76 per barrel, respectively.HollyFrontier's President & CEO, Mike Jennings, commented, "We are delighted with our fourth quarter results as we conclude our first fiscal year as a combined company.  Although overall product crack spreads narrowed during the quarter as the WTI crude differentials compressed, we generated solid profits for the quarter and remained near the top of our peer group in profitability per barrel.  We are especially pleased with the Company's full year results, as this was the most profitable year in our history, with net income over $1 billion.  Including last week's special dividend declaration, we have announced special distributions to shareholders of $1.50 per share or approximately $315 million since the completion of our merger in July of last year.  Further, we currently have a $350 million share repurchase program in place and continue to pay our regular quarterly dividend of $0.10 per share.  Looking forward, the differentials between inland and coastal crudes are fairly robust, which should contribute favorably to our first quarter results.  Further, we believe that operational synergies and increased asset scale gained during the merger will help us to extend our record of providing consistent returns and increasing shareholder value while maintaining a strong balance sheet."Sales and other revenues for the fourth quarter of 2011 were $5 billion, a 125% increase compared to the three months ended December 31, 2010.  This increase was due primarily to the inclusion of revenues from the El Dorado and Cheyenne refineries and the effects of a 19% year-over-year increase in fourth quarter refined product sales prices.  Cost of products sold for the quarter was $4.3 billion, a 114% increase compared to the fourth quarter of 2010, reflecting both the fourth quarter impact of the legacy Frontier refineries and a 13% year-over-year increase in fourth quarter crude oil acquisition costs.  During the quarter, we recognized merger integration costs of $8 million, which are included among general and administrative costs. Fourth quarter cash flows from operations totaled $249.2 million, of which $122.8 million was directed towards cash dividends to shareholders.  These strong cash flows continued to contribute to the Company's combined balance of cash and short-term investments which stood at $1.8 billion on December 31, 2011 and compared to debt of $1.2 billion on a consolidated basis and $688.9 million excluding HEP debt, which is non-recourse to HollyFrontier.  During the fourth quarter and for the full year ended December 31, 2011 we paid dividends of $122.8 million and $252.1 million, respectively.The Company has scheduled a webcast conference call for today, February 28, 2012, at 11:00 AM Eastern Time to discuss financial results.  This webcast may be accessed at: http://www.videonewswire.com/event.asp?id=84801.  An audio archive of this webcast will be available using the above noted link through March 12, 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, a 125,000 bpsd refinery 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 42% 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, our ability to realize fully or at all the anticipated benefits of our "merger of equals" with Frontier, 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 20102011 (1)2010 ChangePercent(In thousands, except per share data)Sales and other revenues                                 $  4,972,412$  2,211,791$  2,760,621124.8%Operating costs and expenses: Cost of products sold (exclusive of depreciation and amortization)4,258,4391,988,0292,270,410114.2 Operating expenses (exclusive of depreciation and amortization)246,110125,776120,33495.7 General and administrative expenses (exclusive of depreciation and amortization)41,47320,21621,257105.1 Depreciation and amortization                             53,32731,81021,51767.6  Total operating costs and expenses                     4,599,3492,165,8312,433,518112.4Income from operations                                   373,06345,960327,103711.7Other income (expense): Earnings in equity method investments                     561798(237)(29.7) Interest income                                        338410(72)(17.6) Interest expense                                       (21,852)(18,083)(3,769)20.8(20,953)(16,875)(4,078)24.2Income before income taxes                               352,11029,085323,0251,110.6Income tax provision                                     116,2614,836111,4252,304.1Net income                                             235,84924,249211,600872.6Less net income attributable to noncontrolling interest           12,4699,5302,93930.8Net income attributable to HollyFrontier stockholders             $  223,380$  14,719$  208,6611,417.6%Earnings per share attributable to HollyFrontier stockholders: Basic                                               $  1.07$  0.14$  0.93664.3% Diluted                                               $  1.06$  0.13$  0.93715.4%Cash dividends declared per common share                   $  0.60$  0.07$  0.53757.1%Average number of common shares outstanding: Basic                                               209,319106,516102,80396.5% Diluted                                               210,159107,296102,86395.9%EBITDA                                                $  414,482$  69,038$  345,444500.4%Years EndedDecember 31,Change from 20102011 (1)2010 ChangePercent(In thousands, except per share data)Sales and other revenues                                 $  15,439,528$  8,322,929$  7,116,59985.5%Operating costs and expenses: Cost of products sold (exclusive of depreciation and amortization)12,680,0787,367,1495,312,92972.1 Operating expenses (exclusive of depreciation and amortization)748,081504,414243,66748.3 General and administrative expenses (exclusive of depreciation and amortization)120,11470,83949,27569.6 Depreciation and amortization                             159,707117,52942,17835.9  Total operating costs and expenses                     13,707,9808,059,9315,648,04970.1Income from operations                                   1,731,548262,9981,468,550558.4Other income (expense): Earnings of equity method investments                     2,3002,393(93)(3.9) Interest income                                        1,2841,1681169.9 Interest expense                                       (78,323)(74,196)(4,127)5.6 Merger transaction costs                                (15,114)-(15,114)-(89,853)(70,635)(19,218)27.2Income before income taxes                               1,641,695192,3631,449,332753.4Income tax provision                                     581,99159,312522,679881.2Net income                                             1,059,704133,051926,653696.5Less net income attributable to noncontrolling interest           36,30729,0877,22024.8Net income attributable to HollyFrontier stockholders             $  1,023,397$  103,964$  919,433884.4%Earnings per share attributable to HollyFrontier stockholders: Basic                                               $  6.46$  0.98$    5.48559.2% Diluted                                               $  6.42$  0.97$  5.45561.9%Cash dividends declared per common share                   $  1.34$  0.30$  1.04346.7%Average number of common shares outstanding: Basic                                               158,486106,43652,05048.9% Diluted                                               159,294107,21852,07648.6%EBITDA                                                $  1,842,134$  353,833$  1,488,301420.6%(1)We merged with Frontier Oil Corporation ("Frontier") on July 1, 2011.  Our consolidated financial and operating results reflect the operations of the merged Frontier businesses beginning July 1, 2011.Balance Sheet DataDecember 31, December 31,20112010 (In thousands)Cash, cash equivalents and investments in marketable securities                 $     1,840,610$  230,444Working capital                                                         $  2,030,063$  313,580Total assets                                                           $  10,314,621$  3,701,475Long-term debt                                                         $  1,214,742$  810,561Total equity                                                            $  5,835,900$  1,288,139Segment 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 Partners ("NK Asphalt").  Refining activities involve the purchase and refining of crude oil and wholesale and branded marketing of refined products, such as gasoline, diesel fuel and jet fuel.  These petroleum products are primarily marketed in the Mid-Continent, Southwest and Rocky Mountain regions of the United States.  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.  NK Asphalt operates asphalt terminals in Arizona and New 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 New Mexico, Oklahoma, Texas and Utah, distribution terminals in Arizona, Idaho, Kansas, New Mexico, Oklahoma, Texas, Utah, Idaho, Washington and Wyoming and refinery tankage in Kansas, New Mexico, Oklahoma, Utah and Wyoming.  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. RefiningHEP (1)Corporateand OtherConsolidationsandEliminationsConsolidatedTotal(In thousands)Three Months Ended December 31, 2011 Sales and other revenues            $  4,959,334$  68,333$    147$    (55,402)$    4,972,412 Depreciation and amortization         $  41,086$  9,660$    2,788$    (207)$    53,327 Income (loss) from operations         $  379,074$  36,694$    (44,343)$    1,638$    373,063 Capital expenditures                 $  56,621$  7,844$    35,553$    -$    100,018Three Months Ended December 31, 2010 Sales and other revenues            $  2,200,757$  49,384$    98$    (38,448)$    2,211,791 Depreciation and amortization         $  21,988$  8,240$    1,379$    203$    31,810 Income (loss) from operations         $  42,386$  26,649$    (22,125)$    (950)$    45,960 Capital expenditures                 $  68,054$  17,049$    190$    -$    85,293Year Ended December 31, 2011 Sales and other revenues            $  15,392,430$  213,566$    1,247$    (167,715)$    15,439,528 Depreciation and amortization         $  122,437$  31,530$    6,568$    (828)$    159,707 Income (loss) from operations         $  1,739,068$  113,258$    (120,833)$    55$    1,731,548 Capital expenditures                 $  148,699$  39,337$    186,205$    -$    374,241Year Ended December 31, 2010 Sales and other revenues            $  8,287,000$  182,114$    415$    (146,600)$    8,322,929 Depreciation and amortization         $  84,587$  29,062$    4,562$    (682)$    117,529 Income (loss) from operations         $  242,466$  92,386$    (69,654)$    (2,200)$    262,998 Capital expenditures                 $  186,441$  25,103$    1,688$    -$    213,232December 31, 2011 Cash, cash equivalents and investments in marketable securities$  -$  3,269$    1,837,341$    -$    1,840,610 Total assets                       $  7,018,804$  992,408$    2,421,140$    (117,731)$    10,314,621 Long-term debt                     $  -$  598,761$    705,331$    (89,350)$    1,214,742December 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)$    810,561Refining Operating DataOur refinery operations include the El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross 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 EndedDecember 31,Years EndedDecember 31,201120102011(10)2010Mid-Continent Region (Tulsa and El Dorado Refineries)Crude charge (BPD) (1)                                  250,840109,660183,070111,670Refinery throughput (BPD) (2)                             271,940110,230194,310113,100Refinery production (BPD) (3)                             265,480101,190188,760106,910Sales of produced refined products (BPD)                   273,460107,300188,020107,780Sales of refined products (BPD) (4)                         275,210107,630190,340108,330Refinery utilization (5)                                   96.5%87.7%94.8%89.3%Average per produced barrel (6) Net sales                                           $  113.94$  96.60$  119.51$  90.84 Cost of products (7)                                   99.2389.3799.9283.29 Refinery gross margin                                 14.717.2319.597.55 Refinery operating expenses (8)                         4.944.475.044.94 Net operating margin                                   $  9.77$  2.76$  14.55$  2.61Refinery operating expenses per throughput barrel (9)         $  4.97$  4.35$  4.88$  4.71Feedstocks: Sweet crude oil                                       77%97%82%92% Heavy sour crude oil                                   10%-%8%3% Sour crude oil                                        5%3%4%5% Other feedstocks and blends                            8%-%6%-% Total                                               100%100%100%100%Sales of produced refined products: Gasolines                                           49%34%44%38% Diesel fuels                                          29%32%32%31% Jet fuels                                             7%8%7%8% Lubricants                                           4%11%6%11% Gas oil / intermediates                                 2%7%3%4% Asphalt                                             4%6%4%5% LPG and other                                       5%2%4%3% Total                                               100%100%100%100%Southwest Region (Navajo Refinery)Crude charge (BPD) (1)                                  86,19089,08083,70083,900Refinery throughput (BPD) (2)                             99,310100,07093,26094,270Refinery production (BPD) (3)                             96,49097,27091,81092,050Sales of produced refined products (BPD)                   101,78097,93093,95092,550Sales of refined products (BPD) (4)                         106,140101,74098,54095,790Refinery utilization (5)                                   86.2%89.1%83.7%83.9%Average per produced barrel (6) Net sales                                           $  115.90$  94.18$  118.76$  90.37 Cost of products (7)                                   101.1487.7498.4083.12 Refinery gross margin                                 14.766.4420.367.25 Refinery operating expenses (8)                         5.144.785.444.95 Net operating margin                                   $  9.62$  1.66$  14.92$  2.30Refinery operating expenses per throughput barrel (9)         $  5.27$  4.68$  5.48$  4.86Three Months EndedDecember 31,Years EndedDecember 31,201120102011(10)2010Feedstocks: Sour crude oil                                        86%71%75%81% Sweet crude oil                                       -%6%3%5% Heavy sour crude oil                                   1%12%11%4% Other feedstocks and blends                            13%11%11%10% Total                                               100%100%100%100%Sales of produced refined products: Gasolines                                           56%56%52%57% Diesel fuels                                          33%33%34%32% Jet fuels                                             1%1%1%3% Fuel oil                                             4%5%6%4% Asphalt                                             4%3%4%2% LPG and other                                       2%2%3%2% Total                                               100%100%100%100%Rocky Mountain Region (Woods Cross and Cheyenne Refineries)Crude charge (BPD) (1)                                  69,50022,91048,23025,870Refinery throughput (BPD) (2)                             77,21025,05052,63027,540Refinery production (BPD) (3)                             75,95024,29051,32027,020Sales of produced refined products (BPD)                   75,57026,48050,75027,810Sales of refined products (BPD) (4)                         77,43026,60051,75027,980Refinery utilization (5)                                   83.7%73.9%84.3%83.5%Average per produced barrel (6) Net sales                                           $  111.88$  95.99$  116.37$  94.26 Cost of products (7)                                   93.5580.3391.3375.54 Refinery gross margin                                 18.3315.6625.0418.72 Refinery operating expenses (8)                         6.346.836.416.09 Net operating margin                                   $  11.99$  8.83$  18.63$  12.63Refinery operating expenses per throughput barrel (9)         $  6.21$  7.22$  6.18$  6.15Feedstocks: Sweet crude oil                                       48%53%52%59% Heavy sour crude oil                                   30%6%24%6% Black wax crude oil                                   11%34%15%30% Sour crude oil                                        1%-%1%-% Other feedstocks and blends                            10%7%8%5% Total                                               100%100%100%100%Sales of produced refined products: Gasolines                                           58%67%56%63% Diesel fuels                                          30%26%31%30% Jet fuels                                             1%1%1%1% Fuel oil                                             1%1%1%1% Asphalt                                             5%3%6%3% LPG and other                                       5%2%5%2% Total                                               100%100%100%100%Three Months EndedDecember 31,Years EndedDecember 31,201120102011(10)2010ConsolidatedCrude charge (BPD) (1)                                  406,530221,650315,000221,440Refinery throughput (BPD) (2)                             448,460235,350340,200234,910Refinery production (BPD) (3)                             437,920222,750331,890225,980Sales of produced refined products (BPD)                   450,810231,710332,720228,140Sales of refined products (BPD) (4)                         458,780235,970340,630232,100Refinery utilization (5)                                   91.8%86.6%89.9%86.5%Average per produced barrel (6) Net sales                                           $  114.03$  95.51$  118.82$  91.06 Cost of products (7)                                   98.7187.6498.1882.27 Refinery gross margin                                 15.327.8720.648.79 Refinery operating expenses (8)                         5.224.875.365.08 Net operating margin                                   $  10.10$  3.00$  15.28$  3.71Refinery operating expenses per throughput barrel (9)         $  5.25$  4.80$  5.24$  4.94Feedstocks: Sour crude oil                                        22%32%23%35% Sweet crude oil                                       55%54%56%53% Heavy sour crude oil                                   12%5%12%4% Black wax crude oil                                   2%4%2%3% Other feedstocks and blends                            9%5%7%5% Total                                               100%100%100%100%Sales of produced refined products: Gasolines                                           52%48%48%49% Diesel fuels                                          31%31%32%31% Jet fuels                                             5%5%5%5% Fuel oil                                             1%2%2%2% Asphalt                                             4%4%4%3% Lubricants                                           2%5%3%5% Gas oil / intermediates                                 1%3%2%2% LPG and other                                       4%2%4%3% 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" following Item 3 of Part I of this Form 10-Q.(7)Transportation 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 year ended December 31, 2011 include crude oil processed and products yielded from the El Dorado and Cheyenne Refineries for the period from July 1, 2011 through December 31, 2011 only, and averaged over the 365 days in year ended December 31, 2011. 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 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 EndedDecember 31,Years EndedDecember 31,2011201020112010(In thousands)Net income attributable to HollyFrontier stockholders             $  223,380$  14,719$  1,023,397$  103,964 Add income tax provision                                116,2614,836581,99159,312 Add interest expense                                   21,85218,08378,32374,196 Subtract interest income                                 (338)(410)(1,284)(1,168) Add depreciation and amortization                         53,32731,810159,707117,529EBITDA                                                $  414,482$  69,038$  1,842,134$  353,833Reconciliations 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 MarginsBelow 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 revenuesThree Months EndedDecember 31,Years EndedDecember 31,2011201020112010(Dollars in thousands, except per barrel amounts)Average sales price per produced barrel sold                 $  114.03$  95.51$  118.82$  91.06Times sales of produced refined products (BPD)               450,810231,710332,720228,140Times number of days in period                             9292365365Refined product sales from produced products sold             $  4,729,340$  2,036,017$  14,429,833$  7,582,666Total refined product sales$  4,729,340$  2,036,017$  14,429,833$  7,582,666Add refined product sales from purchased products and rounding (1)84,13237,158350,843130,866Total refined product sales                                 4,813,4722,073,17514,780,6767,713,532Add direct sales of excess crude oil (2)                      135,965104,362558,855459,743Add other refining segment revenue (3)                       9,89723,22052,899113,725Total refining segment revenue                             4,959,3342,200,75715,392,4308,287,000Add HEP segment sales and other revenues                   68,33349,384213,566182,114Add corporate and other revenues                          147981,247415Subtract consolidations and eliminations                      (55,402)(38,448)(167,715)(146,600)Sales and other revenues                                 $  4,972,412$  2,211,791$  15,439,528$  8,322,929Reconciliation of average cost of products per produced barrel sold to total cost of products soldThree Months EndedDecember 31,Years EndedDecember 31,2011201020112010(Dollars in thousands, except per barrel amounts)Average cost of products per produced barrel sold             $  98.71$  87.64$  98.18$  82.27Times sales of produced refined products (BPD)               450,810231,710332,720228,140Times number of days in period                             9292365365Cost of products for produced products sold                  $  4,093,950$  1,868,250$  11,923,254$  6,850,713Total cost of products for produced products sold              $   4,093,950$1,868,250$  11,923,254$  6,850,713Add refined product costs from purchased products sold and rounding (1)83,01236,905351,788131,668Total cost of refined products sold                           4,176,9621,905,15512,275,0426,982,381Add crude oil cost of direct sales of excess crude oil (2)         134,535102,923550,619454,566Add other refining segment cost of products sold (4)            1,47817,51718,67273,410Total refining segment cost of products sold                   4,312,9752,025,59512,844,3337,510,357Subtract consolidations and eliminations                      (54,536)(37,566)(164,255)(143,208)Costs of products sold (exclusive of depreciation and amortization)$  4,258,439$  1,988,029$  12,680,078$  7,367,149Reconciliation of average refinery operating expenses per produced barrel sold to total operating expensesThree Months EndedDecember 31,Years EndedDecember 31,2011201020112010(Dollars in thousands, except per barrel amounts)Average refinery operating expenses per produced barrel sold   $  5.22$  4.87$  5.36$  5.08Times sales of produced refined products (BPD)               450,810231,710332,720228,140Times number of days in period                            9292365365Refinery operating expenses for produced products sold       $  216,497$  103,815$  650,933$  423,017Total refinery operating expenses for produced products sold   $  216,497$  103,815$  650,933$  423,017Add other refining segment operating expenses and rounding (5) 9,7026,97335,65926,573Total refining segment operating expenses                   226,199110,788686,592449,590Add HEP segment operating expenses                       18,72612,76062,20252,947Add corporate and other costs                             1,8572,3631,9742,387Subtract consolidations and eliminations                     (672)(135)(2,687)(510)Operating expenses (exclusive of depreciation and amortization) $  246,110$  125,776$  748,081$  504,414Reconciliation of net operating margin per barrel to refinery gross margin per barrel to total sales and other revenuesThree Months EndedDecember 31,Years EndedDecember 31,2011201020112010(Dollars in thousands, except per barrel amounts)Net operating margin per barrel                             $  10.10$  3.00$  15.28$  3.71Add average refinery operating expenses per produced barrel    5.224.875.365.08Refinery gross margin per barrel                            15.327.8720.648.79Add average cost of products per produced barrel sold         98.7187.6498.1882.27Average sales price per produced barrel sold                 $  114.03$  95.51$  118.82$  91.06Times sales of produced refined products (BPD)               450,810231,710332,720228,140Times number of days in period                             9292365365Refined product sales from produced products sold             $  4,729,340$  2,036,017$  14,429,833$    7,582,666Total refined product sales from produced products sold         $  4,729,340$  2,036,017$  14,429,833$  7,582,666Add refined product sales from purchased products and rounding (1)84,13237,158350,843130,866Total refined product sales                                 4,813,4722,073,17514,780,6767,713,532Add direct sales of excess crude oil (2)                      135,965104,362558,855459,743Add other refining segment revenue (3)                       9,89723,22052,899113,725Total refining segment revenue                             4,959,3342,200,75715,392,4308,287,000Add HEP segment sales and other revenues                   68,33349,384213,566182,114Add corporate and other revenues                          147981,247415Subtract consolidations and eliminations                      (55,402)(38,448)(167,715)(146,600)Sales and other revenues                                 $  4,972,412$   2,211,791$  15,439,528$  8,322,929(1)We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments. (2)We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as inventory and then upon sale as cost of products sold.  Additionally, we enter into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at carryover cost.(3)Other refining segment revenue includes the 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.SOURCE HollyFrontier CorporationFor further information: Douglas S. Aron, Executive Vice President and Chief Financial Officer, or M. Neale Hickerson, Vice President, Investor Relations, both of HollyFrontier Corporation, +1-214-871-3555