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Hollyfrontier Corp NYSE: HFC-N

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HollyFrontier Corporation Reports 2020 Fourth Quarter and Full Year Results

BusinessWire - Wed Feb 24, 5:30AM CST

HollyFrontier Corporation (NYSE:HFC) ("HollyFrontier" or the "Company") today reported fourth quarter net loss attributable to HollyFrontier stockholders of $(117.7) million or $(0.73) per diluted share for the quarter ended December 31, 2020, compared to net income of $60.6 million or $0.37 per diluted share for the quarter ended December 31, 2019.

The fourth quarter results reflect special items that collectively increased net loss by a total of $0.9 million. On a pre-tax basis, these items include goodwill and long-lived asset impairment charges totaling $108.4 million and charges related to the Cheyenne Refinery conversion to renewable diesel production, including decommissioning charges of $12.4 million, last-in, first-out ("LIFO") inventory liquidation costs of $3.1 million and severance charges totaling $0.3 million; partially offset by a lower of cost or market inventory valuation adjustment of $149.2 million. Excluding these items, adjusted net loss for the fourth quarter was $(118.6) million ($(0.74) per diluted share) compared to adjusted net income of $78.0 million ($0.48 per diluted share) for the fourth quarter of 2019, which excludes certain items that collectively decreased net income by $17.4 million for the three months ended December 31, 2019.

HollyFrontier's President & CEO, Michael Jennings, commented, "Despite the challenging environment, HollyFrontier preserved our industry-leading balance sheet thanks to a resilient set of results led by HEP and our Lubricants businesses. Looking forward, we expect demand for transportation fuels will strengthen as COVID-19 vaccines are distributed and the global economy recovers from the pandemic. Our focus for 2021 is on operating safely and reliably while executing our ambitious capital and turnaround plans."

The COVID-19 pandemic caused a decline in U.S. and global economic activity starting in the first quarter of 2020. This decrease reduced both volumes and unit margins across the Company's businesses, resulting in lower gross margins and earnings. During the fourth quarter of 2020, demand for transportation fuels remained challenged while lubricants and specialties continued to show strength in the second half of the year due to improvement in industrial and transportation-related markets and increased global demand for base oils.

The Refining segment reported adjusted EBITDA of $(111.5) million compared to $171.6 million for the fourth quarter of 2019. This decrease was primarily due to continued weak demand for gasoline and diesel coupled with compressed crude differentials. Refinery gross margin for the fourth quarter of 2020 was $4.02 per produced barrel, a 71% decrease compared to $13.66 for the fourth quarter of 2019. Crude oil charge averaged 379,910 barrels per day ("BPD") for the fourth quarter of 2020 compared to 359,500 BPD for the fourth quarter of 2019.

Our Lubricants and Specialty Products segment reported EBITDA of $(32.7) million, compared to $34.6 million in the fourth quarter of 2019. This decrease was driven by a goodwill impairment charge of $81.9 million related to Sonneborn. Excluding the impairment, our Lubricants and Specialties segment reported adjusted EBITDA of $49.2 million due to strengthening base oil margins in the fourth quarter of 2020.

Holly Energy Partners, L.P. ("HEP") reported EBITDA of $86.8 million for the fourth quarter of 2020 compared to $87.8 million in the fourth quarter of 2019. Despite lower volumes year over year, HEP delivered strong fourth quarter 2020 earnings which were supported by long-term minimum volume commitment contracts.

For the fourth quarter of 2020, net cash provided by operations totaled $66.9 million. During the period, HollyFrontier declared and paid a dividend of $0.35 per share to shareholders totaling $57.9 million. At December 31, 2020, the Company's cash and cash equivalents totaled $1,368.3 million, a $156.6 million decrease over cash and cash equivalents of $1,524.9 million at September 30, 2020. Additionally, the Company's consolidated debt was $3,142.7 million. The Company's debt, exclusive of HEP debt, which is nonrecourse to HollyFrontier, was $1,737.1 million at December 31, 2020.

The Company has scheduled a webcast conference call for today, February 24, 2021, at 8:30 AM Eastern Time to discuss fourth quarter financial results. This webcast may be accessed at: https://event.on24.com/wcc/r/2950760/AF27087C3232DF9D1112AE68A106191D. An audio archive of this webcast will be available using the above noted link through March 10, 2021.

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 owns and operates refineries located in Kansas, Oklahoma, New Mexico and Utah and markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. In addition, HollyFrontier produces base oils and other specialized lubricants in the U.S., Canada and the Netherlands, and exports products to more than 80 countries. HollyFrontier also owns a 57% limited partner interest and a non-economic general partner interest in Holly Energy Partners, L.P., a master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including HollyFrontier Corporation subsidiaries.

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, the extraordinary market environment and effects of the COVID-19 pandemic, including a significant decline in demand for refined petroleum products in markets the Company serves; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products or lubricant and specialty products in the Company's markets; the spread between market prices for refined products and market prices for crude oil; the possibility of constraints on the transportation of refined products or lubricant and specialty products; the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand; the effects of current and future governmental and environmental regulations and policies, including the effects of current and future restrictions on various commercial and economic activities in response to the COVID-19 pandemic; 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 and consummating construction projects, including the Company's ability to complete announced capital projects, such as the conversion of the Cheyenne Refinery to a renewable diesel facility and the construction of the Artesia renewable diesel unit and pretreatment unit, on time and within budget; the Company's ability to timely obtain or maintain permits, including those necessary for operations or capital projects; the ability of the Company to acquire refined or lubricant product operations or pipeline and terminal operations on acceptable terms and to integrate any existing or future acquired operations; the possibility of terrorist or cyberattacks and the consequences of any such attacks; general economic conditions, including uncertainty regarding the timing, pace and extent of an economic recovery in the United States; continued deterioration in gross margins or a prolonged economic slowdown due to COVID-19 could result in an impairment of goodwill and / or additional long-lived asset impairments; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

RESULTS OF OPERATIONS

Financial Data (all information in this release is unaudited)
                                                                                                                       Three Months Ended                                                                                    Change from 2019
                                                                                                                                             December 31,
                                                                                                  -------------------------------------------------------------------------------------------                            ----------------------------------------------------------------------------------------------
                                                                                                2020                                    2019                                      Change                                    Percent
                                                                                                  -----------------------------------                        ------------------------------------                        ----------------------------------------                        ----------------------------------
                                                                                                                                                                          (In thousands, except per share data)
Sales and other revenues                                                                          $      2,900,768     $       4,381,888     $          (1,481,120 )                                 (34 )%
Operating costs and expenses:                                                                                                                                           
                                                                                                                                                                        
   Cost of products sold:
                                                                                                         2,510,845             3,610,528                (1,099,683 )                                 (30 )
      Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
                                                                                                          (149,212 )                                 30,708                  (179,920 )                                (586 )
      Lower of cost or market inventory valuation adjustment
                                                                                                  ---------------  --------------------                      ----------------  --------------------                      --------------------  --------------------
                                                                                                         2,361,633             3,641,236                (1,279,603 )                                 (35 )
       
                                                                                                           336,077               383,630                   (47,553 )                                 (12 )
      Operating expenses
                                                                                                            76,041                93,259                   (17,218 )                                 (18 )
      Selling, general and administrative expenses
                                                                                                           124,879               134,580                    (9,701 )                                  (7 )
      Depreciation and amortization
                                                                                                           108,385        --                   108,385     --  
      Goodwill and long-lived asset impairments
                                                                                                  ---------------  --------------------                      ----------------  --------------------                      --------------------  --------------------
                                                                                                         3,007,015             4,252,705                (1,245,690 )                                 (29 )
         Total operating costs and expenses
                                                                                                  ---------------  --------------------                      ----------------  --------------------                      --------------------  --------------------
Income (loss) from operations                                                                             (106,247 )                                129,183                  (235,430 )                                (182 )
                                                                                                                                                     
Other income (expense):                                                                                                                                                 
                                                                                                             1,461                   (37 )                                      1,498             (4,049 )
      Earnings of equity method investments
                                                                                                             1,043                 5,012                    (3,969 )                                 (79 )
      Interest income
                                                                                                           (40,604 )                                (36,383 )                                     (4,221 )                                  12  
      Interest expense
                                                                                                             3,119                   576                     2,543                441  
      Gain on foreign currency transactions
                                                                                                             3,034                 2,008                     1,026                 51  
      Other, net
                                                                                                  ---------------  --------------------                      ----------------  --------------------                      --------------------  --------------------
                                                                                        (31,947 )                                (28,824 )                                     (3,123 )                                  11  
                                                                                                  ---------------  --------------------                      ----------------  --------------------                      --------------------  --------------------
Income (loss) before income taxes                                                                         (138,194 )                                100,359                  (238,553 )                                (238 )
Income tax expense (benefit)                                                                               (43,643 )                                 19,290                   (62,933 )                                (326 )
                                                                                                  ---------------  --------------------                      ----------------  --------------------                      --------------------  --------------------
Net income (loss)                                                                                          (94,551 )                                 81,069                  (175,620 )                                (217 )
Less net income attributable to noncontrolling interest                                                     23,196                20,464                     2,732                 13  
                                                                                                  ---------------  --------------------                      ----------------  --------------------                      --------------------  --------------------
Net income (loss) attributable to HollyFrontier stockholders                                      $       (117,747 )                      $          60,605     $            (178,352 )                                (294 )%
                                                                                                  ====== ========= ====================                      ======= ========= ====================                      ====== ============== ====================
                                                                                                                                                     
Earnings (loss) per share:                                                                                                                                              
                                                                                                  $          (0.73 )                      $            0.38     $               (1.11 )                                (292 )%
      Basic
                                                                                                  ====== ========= ====================                      ======= ========= ====================                      ====== ============== ====================
                                                                                                  $          (0.73 )                      $            0.37     $               (1.10 )                                (297 )%
      Diluted
                                                                                                  ====== ========= ====================                      ======= ========= ====================                      ====== ============== ====================
Cash dividends declared per common share                                                          $           0.35     $            0.35     $      --     -- %
                                                                                                  ====== ========= ====================                      ======= ========= ====================                      ====== ============== ====================
Average number of common shares outstanding:                                                                                                                            
                                                                                                           162,151               161,398                       753     -- %
      Basic
                                                                                                           162,151               162,898                      (747 )                      -- %
      Diluted
                                                                                                                                                     
EBITDA                                                                                            $          3,050     $         245,846     $            (242,796 )                                 (99 )%
Adjusted EBITDA                                                                                   $        (21,898 )                      $         262,660     $            (284,558 )                                (108 )%
Years Ended                                                                                      Change from 2019
                                                                                                                                              December 31,
                                                                                                  ---------------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------
                                                                                                2020                                      2019                                    Change                                  Percent
                                                                                                  ------------------------------------                        -------------------------------------                        ------------------------------------                        ----------------------------------
                                                                                                                                                                         (In thousands, except per share data)
Sales and other revenues                                                                          $      11,183,643     $       17,486,578     $      (6,302,935 )                                 (36 )%
Operating costs and expenses:                                                                                                                                         
                                                                                                                                                                      
   Cost of products sold:
                                                                                                          9,158,805             13,918,384            (4,759,579 )                                 (34 )
      Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
                                                                                                             78,499               (119,775 )                                198,274               (166 )
      Lower of cost or market inventory valuation adjustment
       
                                                                                                  ----------------  --------------------                      -----------------  --------------------                      ----------------  --------------------
                                                                                                          9,237,304             13,798,609            (4,561,305 )                                 (33 )
       
                                                                                                          1,300,277              1,394,052               (93,775 )                                  (7 )
      Operating expenses
                                                                                                            313,600                354,236               (40,636 )                                 (11 )
      Selling, general and administrative expenses
                                                                                                            520,912                509,925                10,987                  2  
      Depreciation and amortization
                                                                                                            545,293                152,712               392,581                257  
      Goodwill and long-lived asset impairments
                                                                                                  ----------------  --------------------                      -----------------  --------------------                      ----------------  --------------------
                                                                                                         11,917,386             16,209,534            (4,292,148 )                                 (26 )
         Total operating costs and expenses
                                                                                                  ----------------  --------------------                      -----------------  --------------------                      ----------------  --------------------
Income (loss) from operations                                                                              (733,743 )                               1,277,044            (2,010,787 )                                (157 )
                                                                                                                                                   
Other income (expense):                                                                                                                                               
                                                                                                              6,647                  5,180                 1,467                 28  
      Earnings of equity method investments
                                                                                                              7,633                 22,139               (14,506 )                                 (66 )
      Interest income
                                                                                                           (126,527 )                                (143,321 )                                 16,794                (12 )
      Interest expense
                                                                                                             81,000         --                81,000     -- %
      Gain on business interruption insurance settlement
                                                                                                             33,834         --                33,834     -- %
      Gain on sales-type lease
                                                                                                            (25,915 )                          --               (25,915 )                      -- %
      Loss on early extinguishment of debt
                                                                                                              2,201                  5,449                (3,248 )                                 (60 )
      Gain on foreign currency transactions
                                                                                                              7,824                  5,013                 2,811                 56  
      Other, net
                                                                                                  ----------------  --------------------                      -----------------  --------------------                      ----------------  --------------------
                                                                                         (13,303 )                                (105,540 )                                 92,237                (87 )
                                                                                                  ----------------  --------------------                      -----------------  --------------------                      ----------------  --------------------
Income (loss) before income taxes                                                                          (747,046 )                               1,171,504            (1,918,550 )                                (164 )
Income tax expense (benefit)                                                                               (232,147 )                                 299,152              (531,299 )                                (178 )
                                                                                                  ----------------  --------------------                      -----------------  --------------------                      ----------------  --------------------
Net income (loss)                                                                                          (514,899 )                                 872,352            (1,387,251 )                                (159 )
Less net income attributable to noncontrolling interest                                                      86,549                 99,964               (13,415 )                                 (13 )
                                                                                                  ----------------  --------------------                      -----------------  --------------------                      ----------------  --------------------
Net income (loss) attributable to HollyFrontier stockholders                                      $        (601,448 )                      $          772,388     $      (1,373,836 )                                (178 )%
                                                                                                  ====== ========== ====================                      ======= ========== ====================                      ====== ========== ====================
                                                                                                                                                   
Earnings (loss) per share:                                                                                                                                            
                                                                                                  $           (3.72 )                      $             4.64     $           (8.36 )                                (180 )%
      Basic
                                                                                                  ====== ========== ====================                      ======= ========== ====================                      ====== ========== ====================
                                                                                                  $           (3.72 )                      $             4.61     $           (8.33 )                                (181 )%
      Diluted
                                                                                                  ====== ========== ====================                      ======= ========== ====================                      ====== ========== ====================
Cash dividends declared per common share                                                          $            1.40     $             1.34     $            0.06                  4 %
                                                                                                  ====== ========== ====================                      ======= ========== ====================                      ====== ========== ====================
Average number of common shares outstanding:                                                                                                                          
                                                                                                            161,983                166,287                (4,304 )                                  (3 )%
      Basic
                                                                                                            161,983                167,385                (5,402 )                                  (3 )%
      Diluted
                                                                                                                                                   
EBITDA                                                                                            $        (193,789 )                      $        1,702,647     $      (1,896,436 )                                (111 )%
Adjusted EBITDA                                                                                   $         412,220     $        1,714,524     $      (1,302,304 )                                 (76 )%
Balance Sheet Data
                     Years Ended December 31,
                          ------------------------------------------------
             2020              2019
                          --------------                       --------------
                          (In thousands)
Cash and cash equivalents $     1,368,318   $       885,162
Working capital           $     1,935,605   $     1,620,261
Total assets              $    11,506,864   $    12,164,841
Long-term debt            $     3,142,718   $     2,455,640
Total equity              $     5,722,203   $     6,509,426

Segment Information

Our operations are organized into three reportable segments: Refining, Lubricants and Specialty Products and HEP. Our operations that are not included in the Refining, Lubricants and Specialty Products and HEP segments are included in Corporate and Other. Intersegment transactions are eliminated in our consolidated financial statements and are included in Eliminations. Corporate and Other and Eliminations are aggregated and presented under the Corporate, Other and Eliminations column.

The Refining segment represents the operations of our El Dorado, Tulsa, Navajo, Woods Cross Refineries and HollyFrontier Asphalt Company LLC ("HFC Asphalt") (aggregated as a reportable segment). 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 geographic regions of the United States. HFC Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma. The Refining segment also included the operations of the Cheyenne Refinery until it permanently ceased petroleum refining operations during the third quarter of 2020.

The Lubricants and Specialty Products segment involves Petro-Canada Lubricants Inc.'s ("PCLI") production operations, located in Mississauga, Ontario, that include lubricant products such as base oils, white oils, specialty products and finished lubricants and the operations of our Petro-Canada Lubricants business that includes the marketing of products to both retail and wholesale outlets through a global sales network with locations in Canada, the United States, Europe and China. Additionally, the Lubricants and Specialty Products segment includes specialty lubricant products produced at our Tulsa refineries that are marketed throughout North America and are distributed in Central and South America, the operations of Red Giant Oil, one of the largest suppliers of locomotive engine oil in North America and the operations of Sonneborn, a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes with manufacturing facilities in the United States and Europe.

The HEP segment involves all of the operations of HEP, a consolidated variable interest entity, which owns and operates logistics assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units in the Mid-Continent, Southwest and Rocky Mountain geographic regions of the United States. The HEP segment also includes a 75% interest in UNEV Pipeline, LLC (an HEP consolidated subsidiary), and a 50% ownership interest in each of Osage Pipeline Company, LLC, Cheyenne Pipeline LLC and Cushing Connect Pipeline & Terminal LLC. 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. Due to certain basis differences, our reported amounts for the HEP segment may not agree to amounts reported in HEP's periodic public filings.

Refining                        Lubricants                      Lubricants                                       HEP                                      Corporate,                                Consolidated
                                                                                                                                          and Specialty                   and Specialty                                                                                                                     Other and                                                       Total
                                                                                                                                            Products                        Products                                                                                                                      Eliminations
                                                                                        -------------------------------------------   -------------------- ----------------------------------------                        ----------------------------------------                        ----------------------------------------                        ------------------------------------
                                                                                                                                                                                                                   (In thousands)
Three Months Ended December 31, 2020                                                                                                                                                                                   
                                                                                                                                                                                                    
   Sales and other revenues:
                                                                                        $              2,406,214     $             462,724     $              25,629     $               6,201     $       2,900,768  
      Revenues from external customers
                                                                                                          74,492                     1,554                   101,827                  (177,873 )                         --  
      Intersegment revenues
                                                                                        -----------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      ----------------  --------------------
                                                                                        $              2,480,706     $             464,278     $             127,456     $            (171,672 )                      $       2,900,768  
       
                                                                                        $              2,326,150     $             318,857     $      --     $            (134,162 )                      $       2,510,845  
      Cost of products sold (exclusive of lower of cost or market inventory adjustment)
                                                                                        $               (145,497 )                      $      --     $      --     $              (3,715 )                      $        (149,212 )
      Lower of cost or market inventory valuation adjustment
                                                                                        $                233,433     $              59,609     $              37,971     $               5,064     $         336,077  
      Operating expenses
                                                                                        $                 32,621     $              36,162     $               2,420     $               4,838     $          76,041  
      Selling, general and administrative expenses
                                                                                        $                 73,598     $              21,396     $              23,350     $               6,535     $         124,879  
      Depreciation and amortization
                                                                                        $                 26,518     $              81,867     $      --     $      --     $         108,385  
      Goodwill and long-lived asset impairments
                                                                                        $                (66,117 )                      $             (53,613 )                      $              63,715     $             (50,232 )                      $        (106,247 )
      Income (loss) from operations
                                                                                        $                (66,117 )                      $             (54,056 )                      $              65,428     $             (43,888 )                      $         (98,633 )
      Income (loss) before interest and income taxes
                                                                                        $         --     $      --     $               1,124     $              22,072     $          23,196  
      Net income attributable to noncontrolling interest
                                                                                        $         --     $      --     $               1,461     $      --     $           1,461  
      Earnings of equity method investments
                                                                                        $                 45,870     $              12,086     $              20,641     $              38,555     $         117,152  
      Capital expenditures
                                                                                                                                                                                 
Three Months Ended December 31, 2019                                                                                                                                                                                   
                                                                                                                                                                                                    
   Sales and other revenues:
                                                                                        $              3,837,269     $             512,980     $              31,639     $      --     $       4,381,888  
      Revenues from external customers
                                                                                                          67,879                     3,150                    99,995                  (171,024 )                         --  
      Intersegment revenues
                                                                                        -----------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      ----------------  --------------------
                                                                                        $              3,905,148     $             516,130     $             131,634     $            (171,024 )                      $       4,381,888  
       
                                                                                        $              3,381,967     $             377,740     $      --     $            (149,179 )                      $       3,610,528  
      Cost of products sold (exclusive of lower of cost or market inventory adjustment)
                                                                                        $                 30,708     $      --     $      --     $      --     $          30,708  
      Lower of cost or market inventory valuation adjustment
                                                                                        $                301,407     $              60,868     $              38,951     $             (17,596 )                      $         383,630  
      Operating expenses
                                                                                        $                 32,196     $              42,914     $               2,929     $              15,220     $          93,259  
      Selling, general and administrative expenses
                                                                                        $                 82,527     $              22,890     $              24,514     $               4,649     $         134,580  
      Depreciation and amortization
                                                                                        $                 76,343     $              11,718     $              65,240     $             (24,118 )                      $         129,183  
      Income (loss) from operations
                                                                                        $                 76,343     $              11,681     $              65,532     $             (21,826 )                      $         131,730  
      Income (loss) before interest and income taxes
                                                                                        $         --     $      --     $               1,457     $              19,007     $          20,464  
      Net income attributable to noncontrolling interest
                                                                                        $         --     $      --     $                 (37 )                      $      --     $             (37 )
      Earnings of equity method investments
                                                                                        $                 69,835     $              15,110     $               6,284     $               7,477     $          98,706  
      Capital expenditures
Refining                                    Lubricants                               HEP                             Corporate,                                 Consolidated
                                                                                                                                                                        and Specialty                                                                                                    Other and                                                        Total
                                                                                                                                                                          Products                                                                                                     Eliminations
                                                                                        -----------------------------------------                        ----------------------------------------                        ------------------------                       ----------------------------------------                        -------------------------------------
                                                                                                                                                                                                          (In thousands)
Year Ended December 31, 2020                                                                                                                                                                        
                                                                                                                                                                                 
   Sales and other revenues:
                                                                                        $            9,286,658     $           1,792,745     $                  98,039   $               6,201     $       11,183,643  
      Revenues from external customers
                                                                                                       252,531                    10,465                       399,809                (662,805 )                          --  
      Intersegment revenues
                                                                                        ---------------------  --------------------                      --------------------  --------------------                      ------------------------                       --------------------  --------------------                      -----------------  --------------------
                                                                                        $            9,539,189     $           1,803,210     $                 497,848   $            (656,604 )                      $       11,183,643  
       
                                                                                        $            8,439,680     $           1,271,287     $          --   $            (552,162 )                      $        9,158,805  
      Cost of products sold (exclusive of lower of cost or market inventory adjustment)
                                                                                        $               82,214     $      --     $          --   $              (3,715 )                      $           78,499  
      Lower of cost or market inventory valuation adjustment
                                                                                        $              988,045     $             216,068     $                 147,692   $             (51,528 )                      $        1,300,277  
      Operating expenses
                                                                                        $              127,298     $             157,816     $                   9,989   $              18,497     $          313,600  
      Selling, general and administrative expenses
                                                                                        $              324,617     $              80,656     $                  95,445   $              20,194     $          520,912  
      Depreciation and amortization
                                                                                        $              241,760     $             286,575     $                  16,958   $      --     $          545,293  
      Goodwill and long-lived asset impairments
                                                                                        $             (664,425 )                      $            (209,192 )                      $                 227,764   $             (87,890 )                      $         (733,743 )
      Income (loss) from operations
                                                                                        $             (664,425 )                      $            (209,903 )                      $                 251,021   $              (4,845 )                      $         (628,152 )
      Income (loss) before interest and income taxes
                                                                                        $       --     $      --     $                   5,282   $              81,267     $           86,549  
      Net income attributable to noncontrolling interest
                                                                                        $       --     $      --     $                   6,647   $      --     $            6,647  
      Earnings of equity method investments
                                                                                        $              152,726     $              32,473     $                  59,283   $              85,678     $          330,160  
      Capital expenditures
                                                                                                                                                              
Year Ended December 31, 2019                                                                                                                                                                        
                                                                                                                                                                                 
   Sales and other revenues:
                                                                                        $           15,284,110     $           2,081,221     $                 121,027   $                 220     $       17,486,578  
      Revenues from external customers
                                                                                                       312,678                    11,307                       411,750                (735,735 )                          --  
      Intersegment revenues
                                                                                        ---------------------  --------------------                      --------------------  --------------------                      ------------------------                       --------------------  --------------------                      -----------------  --------------------
                                                                                        $           15,596,788     $           2,092,528     $                 532,777   $            (735,515 )                      $       17,486,578  
       
                                                                                        $           12,980,506     $           1,580,036     $          --   $            (642,158 )                      $       13,918,384  
      Cost of products sold (exclusive of lower of cost or market inventory adjustment)
                                                                                        $             (119,775 )                      $      --     $          --   $      --     $         (119,775 )
      Lower of cost or market inventory valuation adjustment
                                                                                        $            1,095,488     $             231,523     $                 161,996   $             (94,955 )                      $        1,394,052  
      Operating expenses
                                                                                        $              120,518     $             168,595     $                  10,251   $              54,872     $          354,236  
      Selling, general and administrative expenses
                                                                                        $              309,932     $              88,781     $                  96,706   $              14,506     $          509,925  
      Depreciation and amortization
                                                                                        $       --     $             152,712     $          --   $      --     $          152,712  
      Goodwill impairment
                                                                                        $            1,210,119     $            (129,119 )                      $                 263,824   $             (67,780 )                      $        1,277,044  
      Income (loss) from operations
                                                                                        $            1,210,119     $            (128,837 )                      $                 304,442   $             (93,038 )                      $        1,292,686  
      Income (loss) before interest and income taxes
                                                                                        $       --     $      --     $                   4,981   $              94,983     $           99,964  
      Net income attributable to noncontrolling interest
                                                                                        $       --     $      --     $                   5,180   $      --     $            5,180  
      Earnings of equity method investments
                                                                                        $              199,002     $              40,997     $                  30,112   $              23,652     $          293,763  
      Capital expenditures
Refining                   Lubricants                    HEP              Corporate,            Corporate,             Consolidated
                                                                                   and Specialty                                                       Other and             Other and                                    Total
                                                                                     Products                                                        Eliminations          Eliminations
                             ------------------------                       ------------------------                       --------------------  -------------------- --------------------                       --------------------
                                                                                                        (In thousands)
December 31, 2020                                         
                             $                   3,106   $                 163,729   $              21,990   $           1,179,493   $           1,368,318
   Cash and cash equivalents
                             $               6,203,847   $               1,864,313   $           2,198,478   $           1,240,226   $          11,506,864
   Total assets
                             $          --   $          --   $           1,405,603   $           1,737,115   $           3,142,718
   Long-term debt
                                       
December 31, 2019                                         
                             $                   9,755   $                 169,277   $              13,287   $             692,843   $             885,162
   Cash and cash equivalents
                             $               7,189,094   $               2,223,418   $           2,205,437   $             546,892   $          12,164,841
   Total assets
                             $          --   $          --   $           1,462,031   $             993,609   $           2,455,640
   Long-term debt

Refining Segment Operating Data

The following tables set forth information, including non-GAAP (Generally Accepted Accounting Principles) performance measures about our refinery operations. Refinery gross and net operating margins do not include the non-cash effects of long-lived asset impairment charges, lower of cost or market inventory valuation adjustments and depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" below.

As of December 31, 2020, our refinery operations included the El Dorado, Tulsa, Navajo and Woods Cross Refineries. In the third quarter of 2020, we permanently ceased petroleum refining operations at our Cheyenne Refinery and subsequently began converting certain assets at our Cheyenne Refinery to renewable diesel production. The disaggregation of the Company's refining geographic operating data is presented in two regions, Mid-Continent and West, to best reflect the economic drivers of our refining operations. The Mid-Continent region will continue to be comprised of the El Dorado and Tulsa Refineries, and the new West region will be comprised of the Navajo and Woods Cross Refineries. All prior period geographic operating data included below has been retrospectively adjusted to reflect the revised regional groupings.

Three Months Ended                                                                                   Years Ended
                                                                                                                      December 31,                                                                                                        December 31,
                                                                           --------------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------
                                                        2020                                     2019                                 2020                                 2019
                                                                           ----------------------------------------                        --------------------------------                        --------------------------------                        --------------------------------
Mid-Continent Region (El Dorado and Tulsa Refineries)                                                                                                        
Crude charge (BPD) (1)                                                260,780           243,400           241,140           254,010  
Refinery throughput (BPD) (2)                                         279,670           256,790           257,030           268,500  
Sales of produced refined products (BPD) (3)                          273,710           254,950           248,320           259,310  
Refinery utilization (4)                                                100.3 %                               93.6 %                               92.7 %                               97.7 %
                                                                                                    
Average per produced barrel (5)                                                                                        
                                                        $                1.93     $       11.15     $        5.17     $       13.71  
   Refinery gross margin
                                                                         5.42              6.66              5.46              5.77  
   Refinery operating expenses (6)
                                                                           --------------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
                                                        $               (3.49 )                      $        4.49     $       (0.29 )                      $        7.94  
   Net operating margin
                                                                           ========== ========== ====================                      ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================
                                                                                                    
Refinery operating expenses per throughput barrel (7)   $                5.30     $        6.61     $        5.27     $        5.58  
                                                                                                    
Feedstocks:                                                                                                            
                                                                           59 %                                 54 %                                 58 %                                 55 %
   Sweet crude oil
                                                                           19 %                                 26 %                                 19 %                                 24 %
   Sour crude oil
                                                                           15 %                                 15 %                                 17 %                                 16 %
   Heavy sour crude oil
                                                                            7 %                                  5 %                                  6 %                                  5 %
   Other feedstocks and blends
                                                                           --------------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
                                                                          100 %                                100 %                                100 %                                100 %
   Total
                                                                           ====================  ====================                      ============  ====================                      ============  ====================                      ============  ====================
                                                                                                    
Sales of produced refined products:                                                                                    
                                                                           54 %                                 53 %                                 52 %                                 51 %
   Gasolines
                                                                           33 %                                 30 %                                 34 %                                 32 %
   Diesel fuels
                                                                            4 %                                  6 %                                  4 %                                  7 %
   Jet fuels
                                                                            1 %                                  1 %                                  1 %                                  1 %
   Fuel oil
                                                                            3 %                                  4 %                                  3 %                                  3 %
   Asphalt
                                                                            4 %                                  3 %                                  4 %                                  4 %
   Base oils
                                                                            1 %                                  3 %                                  2 %                                  2 %
   LPG and other
                                                                           --------------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
                                                                          100 %                                100 %                                100 %                                100 %
   Total
                                                                           ====================  ====================                      ============  ====================                      ============  ====================                      ============  ====================
Three Months Ended                                                                               Years Ended
                                                                                                                  December 31,                                                                                                    December 31,
                                                                           ------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------
                                                    2020                                 2019                                 2020                                 2019
                                                                           --------------------------------                        --------------------------------                        --------------------------------                        --------------------------------
West Region (Navajo and Wood Cross Refineries)                                                                 
Crude charge (BPD) (1)                                        119,130           116,100           124,050           134,850  
Refinery throughput (BPD) (2)                                 133,110           128,983           138,050           149,070  
Sales of produced refined products (BPD) (3)                  144,280           143,410           143,350           155,060  
Refinery utilization (4)                                         82.2 %                               80.1 %                               85.6 %                               93.0 %
                                                                                            
Average per produced barrel (5)                                                                                
                                                        $        7.98     $       18.12     $       10.97     $       19.62  
   Refinery gross margin
                                                                 7.31              7.39              7.07              6.69  
   Refinery operating expenses (6)
                                                                           ------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
                                                        $        0.67     $       10.73     $        3.90     $       12.93  
   Net operating margin
                                                                           ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================
                                                                                            
Refinery operating expenses per throughput barrel (7)   $        7.93     $        8.22     $        7.34     $        6.96  
                                                                                            
Feedstocks:                                                                                                    
                                                                   29 %                                 28 %                                 30 %                                 26 %
   Sweet crude oil
                                                                   48 %                                 49 %                                 49 %                                 52 %
   Sour crude oil
                                                                   12 %                                 13 %                                 11 %                                 12 %
   Black wax crude oil
                                                                   11 %                                 10 %                                 10 %                                 10 %
   Other feedstocks and blends
                                                                           ------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
                                                                  100 %                                100 %                                100 %                                100 %
   Total
                                                                           ============  ====================                      ============  ====================                      ============  ====================                      ============  ====================
                                                                                            
Sales of produced refined products:                                                                            
                                                                   57 %                                 55 %                                 56 %                                 53 %
   Gasolines
                                                                   34 %                                 33 %                                 35 %                                 37 %
   Diesel fuels
                                                                    3 %                                  3 %                                  3 %                                  3 %
   Fuel oil
                                                                    3 %                                  4 %                                  4 %                                  4 %
   Asphalt
                                                                    3 %                                  5 %                                  2 %                                  3 %
   LPG and other
                                                                           ------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
Consolidated                                                                                                   
Crude charge (BPD) (1)                                        379,910           359,500           365,190           388,860  
Refinery throughput (BPD) (2)                                 412,780           385,773           395,080           417,570  
Sales of produced refined products (BPD) (3)                  417,990           398,360           391,670           414,370  
Refinery utilization (4)                                         93.8 %                               88.8 %                               90.2 %                               96.0 %
                                                                                            
Average per produced barrel (5)                                                                                
                                                        $        4.02     $       13.66     $        7.29     $       15.92  
   Refinery gross margin
                                                                 6.07              6.92              6.05              6.12  
   Refinery operating expenses (6)
                                                                           ------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
                                                        $       (2.05 )                      $        6.74     $        1.24     $        9.80  
   Net operating margin
                                                                           ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================
                                                                                            
Refinery operating expenses per throughput barrel (7)   $        6.15     $        7.15     $        6.00     $        6.07  
                                                                                            
Feedstocks:                                                                                                    
                                                                   49 %                                 45 %                                 48 %                                 45 %
   Sweet crude oil
                                                                   29 %                                 34 %                                 29 %                                 34 %
   Sour crude oil
                                                                   10 %                                 10 %                                 11 %                                 10 %
   Heavy sour crude oil
                                                                    4 %                                  4 %                                  4 %                                  4 %
   Black wax crude oil
                                                                    8 %                                  7 %                                  8 %                                  7 %
   Other feedstocks and blends
                                                                           ------------  --------------------                      ------------  --------------------                      ------------  --------------------                      ------------  --------------------
Consolidated                                       
Sales of produced refined products:                
                                              55 %                   53 %                   54 %                   52 %
   Gasolines
                                              33 %                   31 %                   34 %                   34 %
   Diesel fuels
                                               3 %                    4 %                    3 %                    4 %
   Jet fuels
                                               2 %                    2 %                    1 %                    2 %
   Fuel oil
                                               3 %                    4 %                    4 %                    3 %
   Asphalt
                                               2 %                    2 %                    2 %                    2 %
   Base oils
                                               2 %                    4 %                    2 %                    3 %
   LPG and other
                                                         ---------- ---------                      ---------- ---------                      ---------- ---------                      ---------- ---------
(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)   Represents barrels sold of refined products produced at our refineries (including HFC Asphalt) and does not include volumes of refined products purchased for resale or volumes of excess crude oil sold.
  (4)   Represents crude charge divided by total crude capacity ("BPSD"). Our consolidated crude capacity is 405,000 BPSD.
  (5)   Represents average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" below.
  (6)   Represents total Mid-Continent and West regions operating expenses, exclusive of long-lived asset impairment charges and depreciation and amortization, divided by sales volumes of refined products produced at our refineries.

Lubricants and Specialty Products Segment Operating Data

We acquired our Sonneborn business on February 1, 2019. For the year ended December 31, 2019, our lubricants and specialty product operating results reflect the operations of our Sonneborn business for the period February 1, 2019 through December 31, 2019.

The following table sets forth information about our lubricants and specialty products operations.

Three Months Ended                                                                         Years Ended
                                                                                           December 31,                                                                                              December 31,
                                                       --------------------------------------------------------------------------------                          --------------------------------------------------------------------------------
                               2020                              2019                              2020                              2019
                                                       ------------------------------                       ------------------------------                       ------------------------------                       ------------------------------
Lubricants and Specialty Products                                                 
Throughput (BPD)                        21,425         21,229         19,645         20,251  
Sales of produced products (BPD)        33,559         34,392         32,902         34,827  
                                                               
Sales of produced products:                                                       
                                            49 %                              47 %                              49 %                              49 %
   Finished products
                                            28 %                              25 %                              26 %                              27 %
   Base oils
                                            23 %                              28 %                              25 %                              24 %
   Other
                                                       ---------- --------------------                      ---------- --------------------                      ---------- --------------------                      ---------- --------------------
                                           100 %                             100 %                             100 %                             100 %
   Total
                                                       ========== ====================                      ========== ====================                      ========== ====================                      ========== ====================

Our Lubricants and Specialty Products segment includes base oil production activities, by-product sales to third parties and intra-segment base oil sales to rack forward, referred to as "Rack Back." "Rack Forward" includes the purchase of base oils and the blending, packaging, marketing and distribution and sales of finished lubricants and specialty products to third parties. Supplemental financial data attributable to our Lubricants and Specialty Products segment is presented below:

Rack Back (1)                                 Rack                               Eliminations (3)                                Total
                                                                                                                            Forward (2)                                                                                                            Lubricants and
                                                                                                                                                                                                                                                      Specialty
                                                                                                                                                                                                                                                      Products
                                               ----------------------------------------                        ---------------------------------                        ----------------------------------------                        ---------------------------------
                                                                                                                                   (In thousands)
Three Months Ended December 31, 2020                                                                                   
Sales and other revenues                       $             143,786     $      426,407     $            (105,915 )                      $      464,278  
Cost of products sold                          $             110,351     $      314,421     $            (105,915 )                      $      318,857  
Operating expenses                             $              26,760     $       32,849     $      --     $       59,609  
Selling, general and administrative expenses   $               5,680     $       30,482     $      --     $       36,162  
Depreciation and amortization                  $               6,908     $       14,488     $      --     $       21,396  
Goodwill impairment                            $      --     $       81,867     $      --     $       81,867  
Income (loss) from operations                  $              (5,913 )                      $      (47,700 )                      $      --     $      (53,613 )
Income (loss) before interest and income taxes $              (5,913 )                      $      (48,143 )                      $      --     $      (54,056 )
EBITDA                                         $                 995     $      (33,655 )                      $      --     $      (32,660 )
                                                                                                    
Three Months Ended December 31, 2019                                                                                   
Sales and other revenues                       $             175,488     $      455,134     $            (114,492 )                      $      516,130  
Cost of products sold                          $             167,141     $      325,091     $            (114,492 )                      $      377,740  
Operating expenses                             $              29,014     $       31,854     $      --     $       60,868  
Selling, general and administrative expenses   $               6,147     $       36,767     $      --     $       42,914  
Depreciation and amortization                  $               4,010     $       18,880     $      --     $       22,890  
Income (loss) from operations                  $             (30,824 )                      $       42,542     $      --     $       11,718  
Income (loss) before interest and income taxes $             (30,824 )                      $       42,505     $      --     $       11,681  
EBITDA                                         $             (26,814 )                      $       61,385     $      --     $       34,571
Rack Back (1)                         Rack                          Eliminations (3)                                 Total
                                                                                                                 Forward (2)                                                                                                        Lubricants and
                                                                                                                                                                                                                                       Specialty
                                                                                                                                                                                                                                       Products
                                               ----------------------------------                        ------------------------                       ----------------------------------------                        -----------------------------------
                                                                                                                            (In thousands)
Year Ended December 31, 2020                                                                           
Sales and other revenues                       $       505,424     $               1,667,809   $            (370,023 )                      $      1,803,210  
Cost of products sold                          $       456,194     $               1,185,116   $            (370,023 )                      $      1,271,287  
Operating expenses                             $        96,463     $                 119,605   $      --     $        216,068  
Selling, general and administrative expenses   $        22,276     $                 135,540   $      --     $        157,816  
Depreciation and amortization                  $        29,071     $                  51,585   $      --     $         80,656  
Goodwill and long-lived asset impairments      $       167,017     $                 119,558   $      --     $        286,575  
Income (loss) from operations                  $      (265,597 )                      $                  56,405   $      --     $       (209,192 )
Income (loss) before interest and income taxes $      (265,597 )                      $                  55,694   $      --     $       (209,903 )
EBITDA                                         $      (236,526 )                      $                 107,279   $      --     $       (129,247 )
                                                                                    
Year Ended December 31, 2019                                                                           
Sales and other revenues                       $       661,523     $               1,883,920   $            (452,915 )                      $      2,092,528  
Cost of products sold                          $       620,660     $               1,412,291   $            (452,915 )                      $      1,580,036  
Operating expenses                             $       116,984     $                 114,539   $      --     $        231,523  
Selling, general and administrative expenses   $        31,854     $                 136,741   $      --     $        168,595  
Depreciation and amortization                  $        37,001     $                  51,780   $      --     $         88,781  
Goodwill impairment                            $       152,712     $          --   $      --     $        152,712  
Income (loss) from operations                  $      (297,688 )                      $                 168,569   $      --     $       (129,119 )
Income (loss) before interest and income taxes $      (297,688 )                      $                 168,851   $      --     $       (128,837 )
EBITDA                                         $      (260,687 )                      $                 220,631   $      --     $        (40,056 )
(1)   Rack Back consists of the PCLI base oil production activities, by-product sales to third parties and intra-segment base oil sales to rack forward.
  (2)   Rack Forward activities include the purchase of base oils from Rack Back and the blending, packaging, marketing and distribution and sales of finished lubricants and specialty products to third parties.

Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles

Reconciliations of earnings before interest, taxes, depreciation and amortization ("EBITDA") and EBITDA excluding special items ("Adjusted EBITDA") to amounts reported under generally accepted accounting principles ("GAAP") in financial statements.

Earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, is calculated as net income (loss) attributable to HollyFrontier stockholders plus (i) interest expense, net of interest income, (ii) income tax provision and (iii) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA plus or minus (i) lower of cost or market inventory valuation adjustments, (ii) HollyFrontier's pro-rata share of gain on business interruption insurance settlement, (iii) long-lived asset impairment, inclusive of pro-rata share of impairment in HEP segment, (iv) goodwill impairment, (v) HollyFrontier's pro-rata share of HEP's gain on sales-type leases, (vi) HollyFrontier's pro-rata share of HEP's loss on early extinguishment of debt, (vii) severance costs, (viii) restructuring charges, (ix) Cheyenne Refinery LIFO inventory liquidation costs, (x) decommissioning costs, (xi) acquisition integration and regulatory costs, (xii) incremental cost of products sold attributable to our Sonneborn inventory value step-up (xiii) RINs cost reductions and (xiv) biodiesel blender's tax credit.

EBITDA and Adjusted EBITDA are not calculations provided for under accounting principles generally accepted in the United States; however, the amounts included in these calculations are derived from amounts included in our consolidated financial statements. EBITDA and Adjusted EBITDA should not be considered as alternatives 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 and Adjusted EBITDA are not necessarily comparable to similarly titled measures of other companies. These are presented here because they are widely used financial indicators used by investors and analysts to measure performance. EBITDA and Adjusted EBITDA are also used by our management for internal analysis and as a basis for financial covenants.

Set forth below is our calculation of EBITDA and Adjusted EBITDA.

Three Months Ended                                                                                     Years Ended
                                                                                                                                           December 31,                                                                                                          December 31,
                                                                                                 -----------------------------------------------------------------------------------------                            -------------------------------------------------------------------------------------------
                                                                                               2020                                   2019                                    2020                                    2019
                                                                                                 -----------------------------------                        ----------------------------------                        -----------------------------------                        ------------------------------------
                                                                                                                                                                                  (In thousands)
Net income (loss) attributable to HollyFrontier stockholders                                     $       (117,747 )                      $        60,605     $       (601,448 )                      $         772,388  
                                                                                                          (43,643 )                               19,290             (232,147 )                                299,152  
   Add (subtract) income tax expense (benefit)
                                                                                                           40,604              36,383              126,527               143,321  
   Add interest expense
                                                                                                           (1,043 )                               (5,012 )                                (7,633 )                                (22,139 )
   Subtract interest income
                                                                                                          124,879             134,580              520,912               509,925  
   Add depreciation and amortization
                                                                                                 ---------------  --------------------                      --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
EBITDA                                                                                           $          3,050     $       245,846     $       (193,789 )                      $       1,702,647  
                                                                                                         (149,212 )                               30,708               78,499              (119,775 )
   Add (subtract) lower of cost or market inventory valuation adjustment
                                                                                                           81,867      --               81,867               152,712  
   Add goodwill impairment
                                                                                                   --      --              (77,143 )                         --  
   Subtract HollyFrontier's pro-rata share of gain on business interruption insurance settlement
                                                                                                           26,518      --              456,058        --  
   Add long-lived asset impairment, inclusive of pro-rata share of impairment in HEP segment
                                                                                                   --      --              (19,134 )                         --  
   Subtract HollyFrontier's pro-rata share of HEP's gain on sales-type leases
                                                                                                   --      --               14,656        --  
   Add HollyFrontier's pro-rata share of HEP's loss on early extinguishment of debt
                                                                                                              296      --                3,842        --  
   Add severance costs
                                                                                                   --      --                3,679        --  
   Add restructuring charges
                                                                                                            3,129      --               36,943        --  
   Add Cheyenne Refinery LIFO inventory liquidation costs
                                                                                                           12,439      --               24,748        --  
   Add decommissioning costs
                                                                                                               15               4,118                1,994                24,194  
   Add acquisition integration and regulatory costs
                                                                                                   --      --       --                 9,338  
   Add incremental cost of products sold attributable to Sonneborn inventory value step-up
                                                                                                   --      --       --               (36,580 )
   Subtract RINs cost reduction
                                                                                                   --             (18,012 )                        --               (18,012 )
   Subtract biodiesel blender's tax credit
                                                                                                 ---------------  --------------------                      --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
Adjusted EBITDA                                                                                  $        (21,898 )                      $       262,660     $        412,220     $       1,714,524  
                                                                                                 ======= ======== ====================                      ======= ======= ====================                      ======= ======== ====================                      ======= ========= ====================

EBITDA and Adjusted EBITDA attributable to our Refining segment is presented below:

Three Months Ended                                                                                     Years Ended
                                                                                                                  December 31,                                                                                                          December 31,
                                                                         ----------------------------------------------------------------------------------------                            -------------------------------------------------------------------------------------------
Refining Segment                                                                         2020                                   2019                                    2020                                    2019
                                                                         ----------------------------------                        ----------------------------------                        -----------------------------------                        ------------------------------------
                                                                                                                                                          (In thousands)
Income (loss) from operations (1)                                        $       (66,117 )                      $        76,343     $       (664,425 )                      $       1,210,119  
                                                                                  73,598              82,527              324,617               309,932  
   Add depreciation and amortization
                                                                         --------------  --------------------                      --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
EBITDA                                                                   $         7,481     $       158,870     $       (339,808 )                      $       1,520,051  
                                                                                (145,497 )                               30,708               82,214              (119,775 )
   Add (subtract) lower of cost or market inventory valuation adjustment
                                                                                  26,518      --              241,760        --  
   Add long-lived asset impairment
                                                                          --      --                3,546        --  
   Add severance costs
                                                                          --      --                2,009        --  
   Add restructuring charges
                                                                          --      --       --               (36,580 )
   Subtract RINs cost reduction
                                                                          --             (18,012 )                        --               (18,012 )
   Subtract biodiesel blender's tax credit
                                                                          --      --               33,814        --  
   Add Cheyenne Refinery LIFO inventory liquidation costs
                                                                          --      --               12,309        --  
   Add decommissioning costs
                                                                         --------------  --------------------                      --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
(1)   Income (loss) from operations of our Refining segment represents income plus (i) interest expense, net of interest income and (ii) income tax provision.

EBITDA and Adjusted EBITDA attributable to our Lubricants and Specialty Products segment is set forth below.

Lubricants and Specialty Products Segment                                                                 Rack Back                            Rack Forward                         Total Lubricants
                                                                                                                                                                                                                            and Specialty
                                                                                                                                                                                                                              Products
                                                                                           -----------------------------------                        ----------------------------------                        ----------------------------------
                                                                                                                                              (In thousands)
Three Months Ended December 31, 2020                                                                                                 
Loss before interest and income taxes (1)                                                  $         (5,913 )                      $       (48,143 )                      $       (54,056 )
                                                                                                      6,908              14,488              21,396  
   Add depreciation and amortization
                                                                                           ---------------  --------------------                      --------------  --------------------                      --------------  --------------------
EBITDA                                                                                                  995             (33,655 )                              (32,660 )
                                                                                             --              81,867              81,867  
   Add goodwill impairment
                                                                                           ---------------  --------------------                      --------------  --------------------                      --------------  --------------------
Adjusted EBITDA                                                                            $            995     $        48,212     $        49,207  
                                                                                           ======= ======== ====================                      ======= ======= ====================                      ====== ======== ====================
                                                                                                                  
Three Months Ended December 31, 2019                                                                                                 
Income (loss) before interest and income taxes (1)                                         $        (30,824 )                      $        42,505     $        11,681  
                                                                                                      4,010              18,880              22,890  
   Add depreciation and amortization
                                                                                           ---------------  --------------------                      --------------  --------------------                      --------------  --------------------
EBITDA                                                                                     $        (26,814 )                      $        61,385     $        34,571  
                                                                                           ======= ======== ====================                      ======= ======= ====================                      ====== ======== ====================
                                                                                                                  
Year Ended December 31, 2020                                                                                                         
Income (loss) before interest and income taxes (1)                                         $       (265,597 )                      $        55,694     $      (209,903 )
                                                                                                     29,071              51,585              80,656  
   Add depreciation and amortization
                                                                                           ---------------  --------------------                      --------------  --------------------                      --------------  --------------------
EBITDA                                                                                             (236,526 )                              107,279            (129,247 )
                                                                                                    167,017             119,558             286,575  
   Add goodwill and long-lived asset impairments
                                                                                           ---------------  --------------------                      --------------  --------------------                      --------------  --------------------
Adjusted EBITDA                                                                            $        (69,509 )                      $       226,837     $       157,328  
                                                                                           ======= ======== ====================                      ======= ======= ====================                      ====== ======== ====================
                                                                                                                  
Year Ended December 31, 2019                                                                                                         
Income (loss) before interest and income taxes (1)                                         $       (297,688 )                      $       168,851     $      (128,837 )
                                                                                                     37,001              51,780              88,781  
   Add depreciation and amortization
                                                                                           ---------------  --------------------                      --------------  --------------------                      --------------  --------------------
EBITDA                                                                                             (260,687 )                              220,631             (40,056 )
                                                                                                    152,712      --             152,712  
   Add goodwill impairment
                                                                                             --               9,338               9,338  
   Add incremental cost of products sold attributable to Sonneborn inventory value step-up
                                                                                           ---------------  --------------------                      --------------  --------------------                      --------------  --------------------
Adjusted EBITDA                                                                            $       (107,975 )                      $       229,969     $       121,994  
                                                                                           ======= ======== ====================                      ======= ======= ====================                      ====== ======== ====================
(1)   Income (loss) before interest and income taxes of our Lubricants and Specialty Products segment represents income (loss) plus (i) interest expense, net of interest income, and (ii) income tax provision.

Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.

Refinery gross margin and net operating margin are non-GAAP performance measures that are used by our management and others to compare our refining performance to that of other companies in our industry. We believe these margin measures are helpful to investors in evaluating our refining performance on a relative and absolute basis. Refinery gross margin per produced barrel sold is total refining segment revenues less total refining segment cost of products sold, exclusive of lower of cost or market inventory valuation adjustments, divided by sales volumes of produced refined products sold. Net operating margin per barrel sold is the difference between refinery gross margin and refinery operating expenses per produced barrel sold. These two margins do not include the non-cash effects of long-lived asset impairment charges, lower of cost or market inventory valuation adjustments or 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.

Below are reconciliations to our consolidated statements of income for refinery net operating and gross margin and operating expenses, in each case averaged per produced barrel sold. Due to rounding of reported numbers, some amounts may not calculate exactly.

Reconciliation of average refining segment net operating margin per produced barrel sold to refinery gross margin to total sales and other revenues

Three Months Ended                                                                                   Years Ended
                                                                                                                December 31,                                                                                                        December 31,
                                                                       ---------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------
                                                                    2020                         2019                         2019                                   2020                                    2019
                                                                       ----------------------------------   -------------------- ---------------------------------                        -----------------------------------                        -----------------------------------
                                                                                                                                      (Dollars in thousands, except per barrel amounts)
Consolidated                                                                                                                        
Net operating margin per produced barrel sold                          $         (2.05 )                      $         6.74     $           1.24     $           9.80  
Add average refinery operating expenses per produced barrel sold                  6.07               6.92                 6.05                 6.12  
                                                                       --------------  --------------------                      -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
Refinery gross margin per produced barrel sold                         $          4.02     $        13.66     $           7.29     $          15.92  
Times produced barrels sold (BPD)                                              417,990            398,360              391,670              414,370  
Times number of days in period                                                      92                 92                  366                  365  
                                                                       --------------  --------------------                      -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
Refining gross margin                                                  $       154,589     $      500,627     $      1,045,030     $      2,407,821  
Add (subtract) rounding                                                            (33 )                                  41                  523                  215  
                                                                       --------------  --------------------                      -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
West and Mid-Continent regions gross margin                                    154,556            500,668            1,045,553            2,408,036  
Add West and Mid-Continent regions cost of products sold                     2,326,150          3,198,238            7,992,047           12,062,661  
Add Cheyenne Refinery sales and other revenues                          --            206,242              501,589            1,126,091  
                                                                       --------------  --------------------                      -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
Refining segment sales and other revenues                                    2,480,706          3,905,148            9,539,189           15,596,788  
Add lubricants and specialty products segment sales and other revenues         464,278            516,130            1,803,210            2,092,528  
Add HEP segment sales and other revenues                                       127,456            131,634              497,848              532,777  
Subtract corporate, other and eliminations                                    (171,672 )                            (171,024 )                              (656,604 )                              (735,515 )
                                                                       --------------  --------------------                      -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------

Reconciliation of average refining segment operating expenses per produced barrel sold to total operating expenses

Three Months Ended                                                                            Years Ended
                                                                                                  December 31,                                                                                                 December 31,
                                                                 -------------------------------------------------------------------------                           ------------------------------------------------------------------------------------------
                                                       2020                           2019                                   2020                                    2019
                                                                 --------------------                       ---------------------------------                        -----------------------------------                        -----------------------------------
                                                                                                                        (Dollars in thousands, except per barrel amounts)
Consolidated                                                                                                   
Average operating expenses per produced barrel sold              $                6.07   $         6.92     $           6.05     $           6.12  
Times produced barrels sold (BPD)                                              417,990          398,360              391,670              414,370  
Times number of days in period                                                      92               92                  366                  365  
                                                                 --------------------                       -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
Refining operating expenses                                      $             233,422   $      253,612     $        867,275     $        925,620  
Add (subtract) rounding                                                             11               88                 (381 )                                  (338 )
                                                                 --------------------                       -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
West and Mid-Continent regions operating expenses                              233,433          253,700              866,894              925,282  
Add Cheyenne Refinery operating expenses                                --           47,707              121,151              170,206  
                                                                 --------------------                       -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
Total refining segment operating expenses                                      233,433          301,407              988,045            1,095,488  
Add lubricants and specialty products segment operating expenses                59,609           60,868              216,068              231,523  
Add HEP segment operating expenses                                              37,971           38,951              147,692              161,996  
Add (subtract) corporate, other and eliminations                                 5,064          (17,596 )                               (51,528 )                               (94,955 )
                                                                 --------------------                       -------------  --------------------                      ---------------  --------------------                      ---------------  --------------------
Operating expenses (exclusive of depreciation and amortization)  $             336,077   $      383,630     $      1,300,277     $      1,394,052  
                                                                 ========== ==========                      ====== ======= ====================                      ====== ========= ====================                      ====== ========= ====================

Reconciliation of net income (loss) attributable to HollyFrontier stockholders to adjusted net income (loss) attributable to HollyFrontier stockholders

Adjusted net income (loss) attributable to HollyFrontier stockholders is a non-GAAP financial measure that excludes non-cash lower of cost or market inventory valuation adjustments, goodwill and long-lived asset impairments, gain on business interruption insurance settlement, HEP's gain on sales-type leases, HEP's loss on early extinguishment of debt, severance costs, restructuring charges, Cheyenne Refinery LIFO inventory liquidation costs, decommissioning costs, RINs cost reductions, biodiesel blender's tax credit, acquisition integration and regulatory costs and incremental cost of products sold due to Sonneborn inventory value step-up. We believe this measure is helpful to investors and others in evaluating our financial performance and to compare our results to that of other companies in our industry. Similarly titled performance measures of other companies may not be calculated in the same manner.

Three Months Ended                                                                                     Years Ended
                                                                                                                              December 31,                                                                                                          December 31,
                                                                                    -----------------------------------------------------------------------------------------                            -------------------------------------------------------------------------------------------
                                                                                  2020                                   2019                         2020                          2020                                    2019
                                                                                    -----------------------------------                        ----------------------------------   -------------------- -----------------------------------                        ------------------------------------
                                                                                                                                                    (Dollars in thousands, except per share amounts)
Consolidated                                                                                                                                       
GAAP:                                                                                                                                              
Income (loss) before income taxes                                                   $       (138,194 )                      $       100,359     $       (747,046 )                      $       1,171,504  
Income tax expense (benefit)                                                                 (43,643 )                               19,290             (232,147 )                                299,152  
                                                                                    ---------------  --------------------                      --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
Net income (loss)                                                                            (94,551 )                               81,069             (514,899 )                                872,352  
Less net income attributable to noncontrolling interest                                       23,196              20,464               86,549                99,964  
                                                                                    ---------------  --------------------                      --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
Net income (loss) attributable to HollyFrontier stockholders                                (117,747 )                               60,605             (601,448 )                                772,388  
                                                                                    ---------------  --------------------                      --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
                                                                                                                                                  
Non-GAAP adjustments to arrive at adjusted results:                                                                                                                  
Lower of cost or market inventory valuation adjustment                                      (149,212 )                               30,708               78,499              (119,775 )
Goodwill and long-lived asset impairments                                                    108,385      --              545,293               152,712  
Gain on business interruption insurance settlement                                    --      --              (81,000 )                         --  
HEP's gain on sales-type lease                                                        --      --              (33,834 )                         --  
HEP's loss on early extinguishment of debt                                            --      --               25,915        --  
Severance costs                                                                                  296      --                3,842        --  
Restructuring charges                                                                 --      --                3,679        --  
Cheyenne Refinery LIFO inventory liquidation costs                                             3,129      --               36,943        --  
Decommissioning costs                                                                         12,439      --               24,748        --  
RINs cost reduction                                                                   --      --       --               (36,580 )
Biodiesel blender's tax credit                                                        --             (18,012 )                        --               (18,012 )
Acquisition integration and regulatory costs                                                      15               4,118                1,994                24,194  
Incremental cost of products sold attributable to Sonneborn inventory value step up   --      --       --                 9,338  
                                                                                    ---------------  -------------------- -------------------- --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
Total adjustments to income (loss) before income taxes                                       (24,948 )                               16,814              606,079                11,877  
Adjustment to income tax expense (1)                                                         (24,077 )                                 (566 )                               144,424               (37,270 )
Adjustment to net income attributable to noncontrolling interest                      --      --                   70        --  
                                                                                    ---------------  -------------------- -------------------- --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
Total adjustments, net of tax                                                                   (871 )                               17,380              461,585                49,147  
                                                                                    ---------------  -------------------- -------------------- --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
                                                                                                                                
Adjusted results - Non-GAAP:                                                                                                                       
Adjusted income (loss) before income taxes                                                  (163,142 )                              117,173             (140,967 )                              1,183,381  
Adjusted income tax expense (benefit) (2)                                                    (67,720 )                               18,724              (87,723 )                                261,882  
                                                                                    ---------------  -------------------- -------------------- --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
Adjusted net income (loss)                                                                   (95,422 )                               98,449              (53,244 )                                921,499  
Less net income attributable to noncontrolling interest                                       23,196              20,464               86,619                99,964  
                                                                                    ---------------  -------------------- -------------------- --------------  --------------------                      ---------------  --------------------                      ----------------  --------------------
Adjusted net income (loss) attributable to HollyFrontier stockholders               $       (118,618 )                      $        77,985     $       (139,863 )                      $         821,535  
                                                                                    ======= ======== ==================== ==================== ======= ======= ====================                      ======= ======== ====================                      ======= ========= ====================
Adjusted earnings (loss) per share - diluted (3)                                    $          (0.74 )                      $          0.48     $          (0.87 )                      $            4.90  
                                                                                    ======= ======== ====================                      ======= ======= ====================                      ======= ======== ====================                      ======= ========= ====================
(1)   Represents adjustment to GAAP income tax expense to arrive at adjusted income tax expense, which is computed as follows:
Three Months Ended                                                                  Years Ended
                                                                           December 31,                                                                                       December 31,
                                           ----------------------------------------------------------------------                            -----------------------------------------------------------------------
                                2020                          2019                          2020                           2019
                                           ------------------                        --------------------------------                        ------------------                        ---------------------------------
                                                                                                     (Dollars in thousands)
                                                   
Non-GAAP income tax expense (benefit) (2)  $      (67,720 )       $      18,724     $      (87,723 )       $      261,882  
Subtract GAAP income tax expense (benefit)        (43,643 )              19,290           (232,147 )              299,152  
                                           -------------  ----- -------------------- ------------  --------------------                      -------------  -----                      -------------  --------------------
(2)   Non-GAAP income tax expense is computed by a) adjusting HFC's consolidated estimated Annual Effective Tax Rate ("AETR") for GAAP purposes for the effects of the above Non-GAAP adjustments, b) applying the resulting Adjusted Non-GAAP AETR to Non-GAAP adjusted income before income taxes and c) adjusting for discrete tax items applicable to the period.

Reconciliation of effective tax rate to adjusted effective tax rate

Three Months Ended                                                                   Years Ended
                                                                                                          December 31,                                                                                        December 31,
                                                                         -----------------------------------------------------------------------                            -------------------------------------------------------------------------
                                           2020                           2019                          2020                            2019
                                                                         ------------------                        ---------------------------------                        ------------------                        -----------------------------------
                                                                                                                 (Dollars in thousands)
GAAP:                                                                             
                                                      $      (138,194 )      $      100,359     $      (747,046 )      $      1,171,504  
   Income before income taxes
                                                      $       (43,643 )      $       19,290     $      (232,147 )      $        299,152  
   Income tax expense
                                                                 31.6 %                19.2 %                                 31.1 %                  25.5 %
   Effective tax rate for GAAP financial statements
Adjusted - Non-GAAP:                                                                               
                                                                  9.9 %               (3.2) %                                 31.1 %                 (3.4) %
   Effect of Non-GAAP adjustments

View source version on businesswire.com: https://www.businesswire.com/news/home/20210224005278/en/

SOURCE: HollyFrontier Corporation

Richard L. Voliva III, Executive Vice President and Chief Financial Officer
Craig Biery, Vice President, Investor Relations
HollyFrontier Corporation
214-954-6510
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