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HollyFrontier Corporation Reports Record Quarterly Net Income

HollyFrontier Corporation (NYSE: HFC) (“HollyFrontier” or the “Company”) today reported third quarter net income attributable to HollyFrontier stockholders of $600.4 million or $2.94 per diluted share for the quarter ended September 30, 2012, compared to $523.1 million or $2.48 per diluted share for the quarter ended September 30, 2011. For the nine months ended September 30, 2012, net income attributable to HollyFrontier stockholders totaled $1,335.6 million or $6.44 per diluted share compared to $800.0 million or $5.63 per diluted share for the nine months ended September 30, 2011.

For the third quarter, net income attributable to our stockholders increased by $77.3 million, or 15% compared to the same period of 2011, principally reflecting higher third quarter refining margins. Refinery gross margins were $30.55 per produced barrel, a 9% increase compared to $28.10 for the third quarter of 2011. Production levels averaged approximately 457,000 barrels per day (“BPD”) and crude oil charges averaged approximately 433,000 BPD for the current quarter. Operating expenses for the quarter were $233.9 million or $5.11 per barrel compared to $227.9 million or $5.07 per barrel for the third quarter of last year.

HollyFrontier’s President & CEO, Mike Jennings, commented, “We had a tremendous quarter with third quarter results reaching new record levels. Exceptionally high inland to coastal crude oil differentials as well as robust heavy crude oil differentials helped drive our refined product margins to all time highs. Looking forward, we believe that the structural crude advantages currently driving our strong operating margins will continue to positively impact our operating income, allowing us to continue to pay both regular and special dividends. We remain focused on increasing total shareholder return while maintaining a strong balance sheet.”

For the third quarter of 2012, net cash provided by operations totaled $742.3 million. During the period, we paid dividends to shareholders of $132.7 million consisting of our $0.15 regular and a $0.50 special dividend. In addition, we declared a second third quarter special dividend of $0.50 that was paid early in the fourth quarter. At September 30, 2012, our combined balance of cash and short-term investments totaled $2.3 billion and our consolidated debt was $1.3 billion. Our debt, exclusive of Holly Energy Partners' debt which is nonrecourse to HollyFrontier, was $471.8 million at September 30, 2012, which reflects the redemption of our $200 million 8.5% senior notes that were called in September 2012. We had no cash borrowings or outstanding principal under our credit facility during the quarter.

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