Business Wire | Aug 6, 2020 06:30AM EDT

HollyFrontier Corporation Reports Quarterly Results and Announces Regular Cash Dividend

Aug. 06, 2020

DALLAS--(BUSINESS WIRE)--Aug. 06, 2020--HollyFrontier Corporation (NYSE:HFC) ("HollyFrontier" or the "Company") today reported second quarter net loss attributable to HollyFrontier stockholders of $(176.7) million, or $(1.09) per diluted share, for the quarter ended June 30, 2020, compared to net income of $196.9 million, or $1.15 per diluted share, for the quarter ended June 30, 2019.

The second quarter results reflect special items that collectively decreased net income by a total of $135.9 million. On a pre-tax basis, these items include long-lived asset impairments at the Cheyenne Refinery and PCLI totaling $429.5 million and corporate restructuring, Cheyenne Refinery severance and integration charges totaling $5.4 million. These items were partially offset by a lower of cost or market inventory valuation adjustment of $269.9 million and HollyFrontier's pro-rata share of Holly Energy Partners, L.P.'s gain on sales-type leases of $19.1 million. Excluding these items, net loss for the current quarter was $(40.8) million ($(0.25) per diluted share) compared to $372.3 million ($2.18 per diluted share) for the second quarter of 2019, which excludes certain items that collectively decreased net income by $175.4 million.

HollyFrontier's President & CEO, Michael Jennings, commented, "During the second quarter, our focus remained on the safety of our employees, contractors and communities as we all continue to face the COVID-19 pandemic. Despite this challenging environment, HollyFrontier demonstrated its financial strength and we have taken prudent steps to preserve cash. Our strong balance sheet and the superior quality of our assets provides us with a competitive advantage through the cycle.

We are capitalizing on these strengths to continue growth in our renewables business. On June 1, we announced plans to convert the Cheyenne Refinery to renewable diesel production and to construct a pre-treatment unit which will provide feedstock flexibility for the previously announced renewable diesel unit at our Navajo Refinery. With the completion of these projects, HollyFrontier will become one of the largest producers of renewable diesel in the U.S., allowing us to capitalize on the increasing consumer demand for renewable fuels."

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. Over the course of the second quarter, demand for transportation fuels and lubricants stabilized and showed incremental improvement late in the quarter as compared to the end of the first quarter of 2020.

The Refining segment reported adjusted EBITDA of $25.0 million compared to $556.1 million for the second quarter of 2019. This decrease was primarily due to weak demand for refined products, which resulted in lower utilization rates and weaker product margins across our refining system. Refinery gross margin for the second quarter of 2020 was $8.44 per produced barrel, a 57% decrease compared to $19.64 for the second quarter of 2019. Crude oil charge averaged 349,580 barrels per day ("BPD") for the current quarter compared to 453,030 BPD for the second quarter 2019.

The Lubricants and Specialty Products segment reported adjusted EBITDA of $15.2 million, compared to $28.9 million in the second quarter 2019. This decrease was primarily due to global weakness in demand within the industrial and automotive end markets during the quarter.

Holly Energy Partners, L.P. ("HEP") reported EBITDA of $112.5 million for the second quarter 2020 compared to $88.6 million in the second quarter of 2019. The second quarter of 2020 includes a gain on sales-type leases of $33.8 million

For the second quarter of 2020, net cash provided by operations totaled $119.2 million. During the period, HollyFrontier declared and paid a dividend of $0.35 per share to shareholders totaling $57.2 million. At June 30, 2020, the Company's cash and cash equivalents totaled $902.5 million, a $6.6 million decrease over cash and cash equivalents of $909.1 million at March 31, 2020. Additionally, the Company's consolidated debt was $2,480.7 million. The Company's debt, exclusive of HEP debt, which is nonrecourse to HollyFrontier, was $994.1 million at June 30, 2020.

HollyFrontier also announced today that its Board of Directors declared a regular quarterly dividend of $0.35 per share. The dividend will be paid on September 2, 2020 to holders of record of common stock on August 17, 2020.

The Company has scheduled a webcast conference call for today, August 6, 2020, at 8:30 AM Eastern Time to discuss second quarter financial results. This webcast may be accessed at: https://event.on24.com/wcc/r/2395502/D3710FD67F414A527E9C541851C2AE4B. An audio archive of this webcast will be available using the above noted link through August 20, 2020.

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 the continuation of a material 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; effects of governmental and environmental regulations and policies, including the effects of current 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; further 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 June 30,

2020 2019 Change Percent

(In thousands, except per share data)

Sales and other $ 2,062,930 $ 4,782,615 $ (2,719,685 ) (57 )revenues %

Operating costs and expenses:

Cost of products sold:

Cost of products sold(exclusive of lower ofcost or market 1,576,996 3,704,884 (2,127,888 ) (57 )inventory valuationadjustment)

Lower of cost ormarket inventory (269,904 ) 47,801 (317,705 ) (665 )valuation adjustment

1,307,092 3,752,685 (2,445,593 ) (65 )

Operating expenses 303,359 333,252 (29,893 ) (9 )

Selling, general andadministrative 75,369 85,317 (9,948 ) (12 )expenses

Depreciation and 130,178 126,908 3,270 3 amortization

Long-lived asset and 436,908 152,712 284,196 186 goodwill impairments

Total operating costs 2,252,906 4,450,874 (2,197,968 ) (49 )and expenses

Income (loss) from (189,976 ) 331,741 (521,717 ) (157 )operations



Other income (expense):

Earnings of equity 2,156 1,783 373 21 method investments

Interest income 1,506 4,588 (3,082 ) (67 )

Interest expense (32,695 ) (34,264 ) 1,569 (5 )

Gain on sales-type 33,834 - 33,834 - leases

Gain on foreign 2,285 2,213 72 3 currency transactions

Other, net 1,572 92 1,480 1,609

8,658 (25,588 ) 34,246 (134 )

Income (loss) before (181,318 ) 306,153 (487,471 ) (159 )income taxes

Income tax expense (30,911 ) 89,336 (120,247 ) (135 )(benefit)

Net income (loss) (150,407 ) 216,817 (367,224 ) (169 )

Less net incomeattributable to 26,270 19,902 6,368 32 noncontrollinginterest

Net income (loss)attributable to $ (176,677 ) $ 196,915 $ (373,592 ) (190 )HollyFrontier %stockholders



Earnings (loss) pershare attributable to HollyFrontierstockholders:

Basic $ (1.09 ) $ 1.16 $ (2.25 ) (194 ) %

Diluted $ (1.09 ) $ 1.15 $ (2.24 ) (195 ) %

Cash dividendsdeclared per common $ 0.35 $ 0.33 $ 0.02 6 %share

Average number ofcommon shares outstanding:

Basic 161,889 169,356 (7,467 ) (4 ) %

Diluted 161,889 170,547 (8,658 ) (5 ) %



EBITDA $ (46,221 ) $ 442,835 $ (489,056 ) (110 ) %

Adjusted EBITDA $ 99,711 $ 646,985 $ (547,274 ) (85 ) %

Six Months Ended Change from 2019 June 30,

2020 2019 Change Percent

(In thousands, except per share data)

Sales and other $ 5,463,475 $ 8,679,862 $ (3,216,387 ) (37 )%revenues

Operating costs and expenses:

Cost of products sold:

Cost of products sold(exclusive of lower ofcost or market 4,270,722 6,904,089 (2,633,367 ) (38 )inventory valuationadjustment)

Lower of cost ormarket inventory 290,560 (184,545 ) 475,105 (257 )valuation adjustment

4,561,282 6,719,544 (2,158,262 ) (32 )

Operating expenses 631,704 664,844 (33,140 ) (5 )

Selling, general andadministrative 163,106 173,351 (10,245 ) (6 )expenses

Depreciation and 270,753 248,329 22,424 9 amortization

Long-lived asset and 436,908 152,712 284,196 186 goodwill impairments

Total operating costs 6,063,753 7,958,780 (1,895,027 ) (24 )and expenses

Income (loss) from (600,278 ) 721,082 (1,321,360 ) (183 )operations



Other income (expense):

Earnings of equity 3,870 3,883 (13 ) - method investments

Interest income 5,579 10,963 (5,384 ) (49 )

Interest expense (55,334 ) (70,911 ) 15,577 (22 )

Gain on sales-type 33,834 - 33,834 - leases

Loss on early (25,915 ) - (25,915 ) - extinguishment of debt

Gain (loss) on foreign (1,948 ) 4,478 (6,426 ) (144 )currency transactions

Other, net 3,422 649 2,773 427

(36,492 ) (50,938 ) 14,446 (28 )

Income (loss) before (636,770 ) 670,144 (1,306,914 ) (195 )income taxes

Income tax expense (193,077 ) 176,841 (369,918 ) (209 )(benefit)

Net income (loss) (443,693 ) 493,303 (936,996 ) (190 )

Less net incomeattributable to 37,607 43,333 (5,726 ) (13 )noncontrollinginterest

Net income (loss)attributable to $ (481,300 ) $ 449,970 $ (931,270 ) (207 )%HollyFrontierstockholders



Earnings (loss) pershare attributable to HollyFrontierstockholders:

Basic $ (2.97 ) $ 2.64 $ (5.61 ) (213 )%

Diluted $ (2.97 ) $ 2.62 $ (5.59 ) (213 )%

Cash dividendsdeclared per common $ 0.70 $ 0.66 $ 0.04 6 %share

Average number ofcommon shares outstanding:

Basic 161,882 170,100 (8,218 ) (5 )%

Diluted 161,882 171,264 (9,382 ) (5 )%



EBITDA $ (353,869 ) $ 935,088 $ (1,288,957 ) (138 )%

Adjusted EBITDA $ 368,480 $ 928,782 $ (560,302 ) (60 )%

Balance Sheet Data

June 30, December 31,

2020 2019

(In thousands)

Cash and cash equivalents $ 902,509 $ 885,162

Working capital $ 1,470,492 $ 1,620,261

Total assets $ 11,063,820 $ 12,164,841

Long-term debt $ 2,480,746 $ 2,455,640

Total equity $ 5,914,511 $ 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 includes the operations of our El Dorado, Tulsa, Navajo, Cheyenne and 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 regions of the United States. HFC Asphalt operates various terminals in Arizona, New Mexico and Oklahoma.

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 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.

Lubricants Corporate, Refining and HEP Other and Consolidated Specialty Eliminations Total Products

(In thousands)

Three Months Ended June 30, 2020

Sales andother revenues:

Revenues fromexternal $ 1,690,042 $ 353,644 $ 19,244 $ - $ 2,062,930 customers

Intersegment 37,462 3,643 95,563 (136,668 ) - revenues

$ 1,727,504 $ 357,287 $ 114,807 $ (136,668 ) $ 2,062,930

Cost ofproducts sold(exclusive of $ 1,433,437 $ 258,347 $ - $ (114,788 ) $ 1,576,996 lower of costor marketinventory)

Lower of costor marketinventory $ (269,904 ) $ - $ - $ - $ (269,904 )valuationadjustment

Operating $ 239,359 $ 47,840 $ 34,737 $ (18,577 ) $ 303,359 expenses

Selling,general and $ 32,811 $ 35,919 $ 2,535 $ 4,104 $ 75,369 administrativeexpenses

Depreciationand $ 81,694 $ 19,779 $ 24,008 $ 4,697 $ 130,178 amortization

Long-livedasset $ 215,242 $ 204,708 $ 16,958 $ - $ 436,908 impairment

Income (loss)from $ (5,135 ) $ (209,306 ) $ 36,569 $ (12,104 ) $ (189,976 )operations

Income (loss)before $ (5,135 ) $ (209,257 ) $ 73,028 $ (8,765 ) $ (150,129 )interest andincome taxes

Net incomeattributableto $ - $ - $ 650 $ 25,620 $ 26,270 noncontrollinginterest

Earnings ofequity method $ - $ - $ 2,156 $ - $ 2,156 investments

Capital $ 12,102 $ 4,311 $ 11,798 $ 17,776 $ 45,987 expenditures



Three Months Ended June 30, 2019

Sales andother revenues:

Revenues fromexternal $ 4,208,776 $ 545,346 $ 28,382 $ 111 $ 4,782,615 customers

Intersegment 88,484 - 102,369 (190,853 ) - revenues

$ 4,297,260 $ 545,346 $ 130,751 $ (190,742 ) $ 4,782,615

Cost ofproducts sold(exclusive of $ 3,458,832 $ 415,353 $ - $ (169,301 ) $ 3,704,884 lower of costor marketinventory)

Lower of costor marketinventory $ 47,801 $ - $ - $ - $ 47,801 valuationadjustment

Operating $ 252,715 $ 59,122 $ 40,608 $ (19,193 ) $ 333,252 expenses

Selling,general and $ 29,638 $ 42,087 $ 1,988 $ 11,604 $ 85,317 administrativeexpenses

Depreciationand $ 76,225 $ 23,020 $ 24,241 $ 3,422 $ 126,908 amortization

Goodwill $ - $ 152,712 $ - $ - $ 152,712 impairment

Income (loss)from $ 432,049 $ (146,948 ) $ 63,914 $ (17,274 ) $ 331,741 operations

Income (loss)before $ 432,049 $ (146,848 ) $ 65,807 $ (15,179 ) $ 335,829 interest andincome taxes

Net incomeattributableto $ - $ - $ 688 $ 19,214 $ 19,902 noncontrollinginterest

Earnings ofequity method $ - $ - $ 1,783 $ - $ 1,783 investments

Capital $ 33,899 $ 9,331 $ 7,034 $ 6,470 $ 56,734 expenditures



Lubricants Corporate, Refining and HEP Other and Consolidated Specialty Eliminations Total Products

(In thousands)

Six Months Ended June 30, 2020

Sales andother revenues:

Revenues fromexternal $ 4,540,662 $ 877,143 $ 45,670 $ - $ 5,463,475 customers

Intersegment 121,708 6,747 196,991 (325,446 ) - revenues

$ 4,662,370 $ 883,890 $ 242,661 $ (325,446 ) $ 5,463,475

Cost ofproducts sold(exclusive of $ 3,902,188 $ 649,727 $ - $ (281,193 ) $ 4,270,722 lower of costor marketinventory)

Lower of costor marketinventory $ 290,560 $ - $ - $ - $ 290,560 valuationadjustment

Operating $ 498,533 $ 101,971 $ 69,718 $ (38,518 ) $ 631,704 expenses

Selling,general and $ 63,811 $ 84,881 $ 5,237 $ 9,177 $ 163,106 administrativeexpenses

Depreciationand $ 171,873 $ 41,828 $ 47,986 $ 9,066 $ 270,753 amortization

Long-livedasset $ 215,242 $ 204,708 $ 16,958 $ - $ 436,908 impairment

Income (loss)from $ (479,837 ) $ (199,225 ) $ 102,762 $ (23,978 ) $ (600,278 )operations

Income (loss)before $ (479,837 ) $ (198,967 ) $ 115,526 $ (23,737 ) $ (587,015 )interest andincome taxes

Net incomeattributableto $ - $ - $ 1,865 $ 35,742 $ 37,607 noncontrollinginterest

Earnings ofequity method $ - $ - $ 3,870 $ - $ 3,870 investments

Capital $ 65,116 $ 13,392 $ 30,740 $ 20,488 $ 129,736 expenditures



Six Months Ended June 30, 2019

Sales andother revenues:

Revenues fromexternal $ 7,581,442 $ 1,038,680 $ 59,520 $ 220 $ 8,679,862 customers

Intersegment 163,228 - 205,728 (368,956 ) - revenues

$ 7,744,670 $ 1,038,680 $ 265,248 $ (368,736 ) $ 8,679,862

Cost ofproducts sold(exclusive of $ 6,421,372 $ 804,370 $ - $ (321,653 ) $ 6,904,089 lower of costor marketinventory)

Lower of costor marketinventory $ (184,545 ) $ - $ - $ - $ (184,545 )valuationadjustment

Operating $ 517,212 $ 112,681 $ 78,121 $ (43,170 ) $ 664,844 expenses

Selling,general and $ 56,615 $ 81,806 $ 4,608 $ 30,322 $ 173,351 administrativeexpenses

Depreciationand $ 150,640 $ 43,191 $ 48,071 $ 6,427 $ 248,329 amortization

Goodwill $ - $ 152,712 $ - $ - $ 152,712 impairment

Income (loss)from $ 783,376 $ (156,080 ) $ 134,448 $ (40,662 ) $ 721,082 operations

Income (loss)before $ 783,376 $ (155,843 ) $ 138,132 $ (35,573 ) $ 730,092 interest andincome taxes

Net incomeattributableto $ - $ - $ 2,520 $ 40,813 $ 43,333 noncontrollinginterest

Earnings ofequity method $ - $ - $ 3,883 $ - $ 3,883 investments

Capital $ 75,662 $ 17,190 $ 17,752 $ 9,865 $ 120,469 expenditures

Lubricants Corporate, Consolidated Refining and Specialty HEP Other and Total Products Eliminations

(In thousands)

June 30, 2020

Cash and cash $ 15,652 $ 189,571 $ 18,913 $ 678,373 $ 902,509 equivalents

Total assets $ 6,327,809 $ 1,910,431 $ 2,215,053 $ 610,527 $ 11,063,820

Long-term debt $ - $ - $ 1,486,648 $ 994,098 $ 2,480,746



December 31, 2019

Cash and cash $ 9,755 $ 169,277 $ 13,287 $ 692,843 $ 885,162 equivalents

Total assets $ 7,189,094 $ 2,223,418 $ 2,205,437 $ 546,892 $ 12,164,841

Long-term debt $ - $ - $ 1,462,031 $ 993,609 $ 2,455,640



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.

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Mid-Continent Region (El Dorado and Tulsa Refineries)

Crude charge (BPD) ^(1) 206,950 264,290 229,670 238,890

Refinery throughput (BPD)^ (2) 220,010 278,710 245,470 254,520

Sales of produced refined 216,280 273,010 237,760 245,450 products (BPD) ^(3)

Refinery utilization ^(4) 79.6 % 101.7 % 88.3 % 91.9 %



Average per produced barrel ^ (5)

Refinery gross margin $ 6.31 $ 17.17 $ 8.07 $ 14.51

Refinery operating expenses ^ 5.68 5.02 5.47 5.74 (6)

Net operating margin $ 0.63 $ 12.15 $ 2.60 $ 8.77



Refinery operating expenses per $ 5.58 $ 4.92 $ 5.30 $ 5.54 throughput barrel ^(7)



Feedstocks:

Sweet crude oil 61 % 57 % 56 % 54 %

Sour crude oil 16 % 22 % 19 % 23 %

Heavy sour crude oil 17 % 16 % 19 % 17 %

Other feedstocks and blends 6 % 5 % 6 % 6 %

Total 100 % 100 % 100 % 100 %



Sales of produced refined products:

Gasolines 54 % 51 % 53 % 52 %

Diesel fuels 36 % 34 % 33 % 31 %

Jet fuels 1 % 6 % 4 % 7 %

Fuel oil 1 % 1 % 1 % 1 %

Asphalt 3 % 2 % 3 % 3 %

Base oils 3 % 4 % 4 % 4 %

LPG and other 2 % 2 % 2 % 2 %

Total 100 % 100 % 100 % 100 %



Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Southwest Region (Navajo Refinery)

Crude charge (BPD) ^(1) 79,460 109,080 93,130 107,560

Refinery throughput (BPD)^ 89,470 119,480 103,460 117,860 (2)

Sales of produced refined 101,880 122,090 107,740 122,730 products (BPD) ^(3)

Refinery utilization ^(4) 79.5 % 109.1 % 93.1 % 107.6 %



Average per produced barrel ^(5)

Refinery gross margin $ 11.08 $ 23.45 $ 11.89 $ 19.70

Refinery operating expenses 5.12 4.53 5.20 4.73 ^(6)

Net operating margin $ 5.96 $ 18.92 $ 6.69 $ 14.97



Refinery operating expenses $ 5.83 $ 4.63 $ 5.42 $ 4.93 per throughput barrel ^(7)



Feedstocks:

Sweet crude oil 25 % 24 % 24 % 20 %

Sour crude oil 64 % 67 % 66 % 71 %

Other feedstocks and blends 11 % 9 % 10 % 9 %

Total 100 % 100 % 100 % 100 %



Sales of produced refined products:

Gasolines 53 % 48 % 54 % 51 %

Diesel fuels 34 % 40 % 36 % 38 %

Fuel oil 2 % 4 % 2 % 3 %

Asphalt 8 % 6 % 5 % 5 %

LPG and other 3 % 2 % 3 % 3 %

Total 100 % 100 % 100 % 100 %

Rocky Mountain Region (Cheyenne and Woods Cross Refineries)

Crude charge (BPD) ^(1) 63,170 79,660 70,170 80,440

Refinery throughput (BPD)^ 68,020 86,700 75,610 87,080 (2)

Sales of produced refined 64,750 74,000 72,100 78,000 products (BPD) ^(3)

Refinery utilization ^(4) 65.1 % 82.1 % 72.3 % 82.9 %



Average per produced barrel ^(5)

Refinery gross margin $ 11.41 $ 22.48 $ 13.54 $ 17.07

Refinery operating expenses 13.60 11.53 12.17 11.11 ^(6)

Net operating margin $ (2.19 ) $ 10.95 $ 1.37 $ 5.96



Refinery operating expenses $ 12.95 $ 9.84 $ 11.61 $ 9.95 per throughput barrel ^(7)



Feedstocks:

Sweet crude oil 37 % 34 % 36 % 35 %

Heavy sour crude oil 41 % 35 % 38 % 35 %

Black wax crude oil 15 % 23 % 19 % 22 %

Other feedstocks and blends 7 % 8 % 7 % 8 %

Total 100 % 100 % 100 % 100 %

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Rocky Mountain Region (Cheyenne and Woods Cross Refineries)

Sales of produced refined products:

Gasolines 54 % 50 % 55 % 52 %

Diesel fuels 35 % 37 % 33 % 35 %

Fuel oil 2 % 4 % 3 % 4 %

Asphalt 6 % 6 % 6 % 6 %

LPG and other 3 % 3 % 3 % 3 %

Total 100 % 100 % 100 % 100 %

Consolidated

Crude charge (BPD) ^(1) 349,580 453,030 392,970 426,890

Refinery throughput 377,500 484,890 424,540 459,460 (BPD)^ (2)

Sales of producedrefined products (BPD) 382,910 469,100 417,600 446,190 ^(3)

Refinery utilization ^ 76.5 % 99.1 % 86.0 % 93.4 %(4)



Average per produced barrel ^(5)

Refinery gross margin $ 8.44 $ 19.64 $ 10.00 $ 16.39

Refinery operating 6.87 5.92 6.56 6.40 expenses ^(6)

Net operating margin $ 1.57 $ 13.72 $ 3.44 $ 9.99



Refinery operatingexpenses per throughput $ 6.97 $ 5.73 $ 6.45 $ 6.22 barrel ^(7)



Feedstocks:

Sweet crude oil 48 % 44 % 45 % 42 %

Sour crude oil 25 % 29 % 27 % 31 %

Heavy sour crude oil 17 % 16 % 17 % 16 %

Black wax crude oil 3 % 4 % 4 % 4 %

Other feedstocks and 7 % 7 % 7 % 7 %blends

Total 100 % 100 % 100 % 100 %

Sales of produced refined products:

Gasolines 54 % 50 % 53 % 52 %

Diesel fuels 35 % 36 % 34 % 34 %

Jet fuels 1 % 4 % 3 % 4 %

Fuel oil 1 % 2 % 1 % 2 %

Asphalt 4 % 4 % 4 % 4 %

Base oils 2 % 2 % 2 % 2 %

LPG and other 3 % 2 % 3 % 2 %

Total 100 % 100 % 100 % 100 %

(1) Crude charge represents the barrels per day of crude oil processed at our refineries.

Refinery throughput represents the barrels per day of crude and other(2) refinery feedstocks input to the crude units and other conversion units at our refineries.

Represents barrels sold of refined products produced at our refineries(3) (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 457,000 BPSD.

Represents average amount per produced barrel sold, which is a non-GAAP(5) measure. Reconciliations to amounts reported under GAAP are provided under "Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles" below.

Represents total refining segment operating expenses, exclusive of(6) depreciation and amortization, divided by sales volumes of refined products produced at our refineries.

(7) Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.



Lubricants and Specialty Products Segment Operating Data

We acquired our Sonneborn business on February 1, 2019. For the six months ended June 30, 2019 our lubricants and specialty product operating results reflect the operations of our Sonneborn business for the period February 1, 2019 through June 30, 2019.

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

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Lubricants and Specialty Products

Throughput (BPD) 16,370 16,990 19,060 18,390

Sales of produced products (BPD) 26,990 34,660 31,900 34,050



Sales of produced products:

Finished products 56 % 52 % 51 % 50 %

Base oils 19 % 32 % 23 % 29 %

Other 25 % 16 % 26 % 21 %

Total 100 % 100 % 100 % 100 %



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:

Total Rack Back ^ Rack Eliminations Lubricants (1) Forward ^ ^(3) and (2) Specialty Products

(In thousands)

Three months ended June 30, 2020

Sales and other $ 85,857 $ 343,927 $ (72,497 ) $ 357,287 revenues

Cost of products $ 67,210 $ 263,634 $ (72,497 ) $ 258,347 sold

Operating expenses $ 21,034 $ 26,806 $ - $ 47,840

Selling, general andadministrative $ 5,617 $ 30,302 $ - $ 35,919 expenses

Depreciation and $ 5,877 $ 13,902 $ - $ 19,779 amortization

Long-lived asset $ 167,017 $ 37,691 $ - $ 204,708 impairment

Income (loss) from $ (180,898 ) $ (28,408 ) $ - $ (209,306 )operations

Income (loss) beforeinterest and income $ (180,898 ) $ (28,359 ) $ - $ (209,257 )taxes

EBITDA $ (175,021 ) $ (14,457 ) $ - $ (189,478 )



Three months ended June 30, 2019

Sales and other $ 133,225 $ 507,183 $ (95,062 ) $ 545,346 revenues

Cost of products $ 131,725 $ 378,690 $ (95,062 ) $ 415,353 sold

Operating expenses $ 30,585 $ 28,537 $ - $ 59,122

Selling, general andadministrative $ 6,366 $ 35,721 $ - $ 42,087 expenses

Depreciation and $ 11,075 $ 11,945 $ - $ 23,020 amortization

Goodwill impairment $ 152,712 $ - $ - $ 152,712

Income (loss) from $ (199,238 ) $ 52,290 $ - $ (146,948 )operations

Income (loss) beforeinterest and income $ (199,238 ) $ 52,390 $ - $ (146,848 )taxes

EBITDA $ (188,163 ) $ 64,335 $ - $ (123,828 )



Rack Total Rack Back ^ Forward ^ Eliminations Lubricants (1) (2) ^(3) and Specialty Products

(In thousands)

Six months ended June 30, 2020

Sales and other $ 250,686 $ 817,984 $ (184,780 ) $ 883,890 revenues

Cost of products $ 247,810 $ 586,697 $ (184,780 ) $ 649,727 sold

Operating expenses $ 44,303 $ 57,668 $ - $ 101,971

Selling, generaland administrative $ 10,980 $ 73,901 $ - $ 84,881 expenses

Depreciation and $ 16,744 $ 25,084 $ - $ 41,828 amortization

Long-lived asset $ 167,017 $ 37,691 $ - $ 204,708 impairment

Income (loss) from $ (236,168 ) $ 36,943 $ - $ (199,225 )operations

Income (loss)before interest and $ (236,168 ) $ 37,201 $ - $ (198,967 )income taxes

EBITDA $ (219,424 ) $ 62,285 $ - $ (157,139 )



Six months ended June 30, 2019

Sales and other $ 289,680 $ 951,525 $ (202,525 ) $ 1,038,680 revenues

Cost of products $ 277,543 $ 729,352 $ (202,525 ) $ 804,370 sold

Operating expenses $ 60,145 $ 52,536 $ - $ 112,681

Selling, generaland administrative $ 19,845 $ 61,961 $ - $ 81,806 expenses

Depreciation and $ 21,601 $ 21,590 $ - $ 43,191 amortization

Goodwill impairment $ 152,712 $ - $ - $ 152,712

Income (loss) from $ (242,166 ) $ 86,086 $ - $ (156,080 )operations

Income (loss)before interest and $ (242,166 ) $ 86,323 $ - $ (155,843 )income taxes

EBITDA $ (220,565 ) $ 107,913 $ - $ (112,652 )

(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.

Rack Forward activities include the purchase of base oils from Rack Back(2) and the blending, packaging, marketing and distribution and sales of finished lubricants and specialty products to third parties.

(3) Intra-segment sales of Rack Back produced base oils to rack forward are eliminated under the "Eliminations" column.



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 expense, and (iii) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA plus or minus (i) lower of cost or market inventory valuation adjustments, (ii) long-lived asset impairment, inclusive of pro-rata share of impairment in HEP segment, (iii) goodwill impairment, (iv) HollyFrontier's pro-rata share of HEP's gain on sales-type leases, (v) acquisition integration and regulatory costs, (vi) HollyFrontier's pro-rata share of HEP's loss on early extinguishment of debt, (vii) severance costs, (viii) restructuring charges and (ix) incremental cost of products sold attributable to our Sonneborn inventory value step-up.

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 June Six Months Ended June 30, 30,

2020 2019 2020 2019

(In thousands)

Net income (loss)attributable to $ (176,677 ) $ 196,915 $ (481,300 ) $ 449,970 HollyFrontierstockholders

Add interest expense 32,695 34,264 55,334 70,911

Subtract interest (1,506 ) (4,588 ) (5,579 ) (10,963 )income

Add (subtract) income (30,911 ) 89,336 (193,077 ) 176,841 tax expense (benefit)

Add depreciation and 130,178 126,908 270,753 248,329 amortization

EBITDA $ (46,221 ) $ 442,835 $ (353,869 ) $ 935,088

Add (subtract) lowerof cost or market (269,904 ) 47,801 290,560 (184,545 )inventory valuationadjustment

Add long-lived assetimpairment, inclusiveof pro-rata share of 429,540 - 429,540 - impairment in HEPsegment

Add goodwill - 152,712 - 152,712 impairment

SubtractHollyFrontier'spro-rata share of (19,134 ) - (19,134 ) - HEP's gain onsales-type leases

Add HollyFrontier'spro-rata share ofHEP's loss on early - - 14,656 - extinguishment ofdebt

Severance costs 1,117 - 1,117 -

Restructuring charge 3,679 - 3,679 -

Add acquisitionintegration and 634 3,637 1,931 16,189 regulatory costs

Add incremental costof products soldattributable to - - - 9,338 Sonneborn inventoryvalue step-up

Adjusted EBITDA $ 99,711 $ 646,985 $ 368,480 $ 928,782



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

Three Months Ended June Six Months Ended June 30, 30,

Refining Segment 2020 2019 2020 2019

(In thousands)

Income (loss) from $ (5,135 ) $ 432,049 $ (479,837 ) $ 783,376 operations ^(1)

Add depreciation and 81,694 76,225 171,873 150,640 amortization

EBITDA 76,559 508,274 (307,964 ) 934,016

Add (subtract) lower ofcost or market (269,904 ) 47,801 290,560 (184,545 )inventory valuationadjustment

Add long-lived asset 215,242 - 215,242 - impairment

Add severance costs 1,117 - 1,117 -

Add restructuring 2,009 - 2,009 - charges

Adjusted EBITDA $ 25,023 $ 556,075 $ 200,964 $ 749,471

(1) Income 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.

TotalLubricants and Specialty Products Rack LubricantsSegment Rack Back Forward and Specialty Products

(In thousands)

Three months ended June 30, 2020

Income (loss) before interest and $ (180,898 ) $ (28,359 ) $ (209,257 )income taxes^ (1)

Add depreciation and amortization 5,877 13,902 19,779

EBITDA (175,021 ) (14,457 ) (189,478 )

Add long-lived asset impairment 167,017 37,691 204,708

Adjusted EBITDA $ (8,004 ) $ 23,234 $ 15,230



Three months ended June 30, 2019

Income (loss) before interest and $ (199,238 ) $ 52,390 $ (146,848 )income taxes ^(1)

Add depreciation and amortization 11,075 11,945 23,020

EBITDA (188,163 ) 64,335 (123,828 )

Add goodwill impairment 152,712 - 152,712

Adjusted EBITDA $ (35,451 ) $ 64,335 $ 28,884



Six months ended June 30, 2020

Income (loss) before interest and $ (236,168 ) $ 37,201 $ (198,967 )income taxes ^(1)

Add depreciation and amortization 16,744 25,084 41,828

EBITDA $ (219,424 ) $ 62,285 $ (157,139 )

Add long-lived asset impairment 167,017 37,691 204,708

Adjusted EBITDA $ (52,407 ) $ 99,976 $ 47,569



Six months ended June 30, 2019

Income (loss) before interest and $ (242,166 ) $ 86,323 $ (155,843 )income taxes ^(1)

Add depreciation and amortization 21,601 21,590 43,191

EBITDA (220,565 ) 107,913 (112,652 )

Add goodwill impairment 152,712 - 152,712

Add incremental cost of productssold attributable to Sonneborn - 9,338 9,338 inventory value step-up

Adjusted EBITDA $ (67,853 ) $ 117,251 $ 49,398

Income (loss) before interest and income taxes of our Lubricants and(1) 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 June 30, Six Months Ended June 30,

2020 2019 2020 2019

(Dollars in thousands, except per barrel amounts)

Consolidated

Net operatingmargin per $ 1.57 $ 13.72 $ 3.44 $ 9.99 produced barrelsold

Add averagerefineryoperating 6.87 5.92 6.56 6.40 expenses perproduced barrelsold

Refinery grossmargin per $ 8.44 $ 19.64 $ 10.00 $ 16.39 produced barrelsold

Times producedbarrels sold 382,910 469,100 417,600 446,190 (BPD)

Times number of 91 91 182 181 days in period

Refiningsegment gross $ 294,090 $ 838,394 $ 760,032 $ 1,323,663 margin

Add (subtract) (23 ) 34 150 (365 )rounding

Total refiningsegment gross 294,067 838,428 760,182 1,323,298 margin

Add refiningsegment cost of 1,433,437 3,458,832 3,902,188 6,421,372 products sold

Refiningsegment sales 1,727,504 4,297,260 4,662,370 7,744,670 and otherrevenues

Add lubricantsand specialtyproducts 357,287 545,346 883,890 1,038,680 segment salesand otherrevenues

Add HEP segmentsales and other 114,807 130,751 242,661 265,248 revenues

Subtractcorporate, (136,668 ) (190,742 ) (325,446 ) (368,736 )other andeliminations

Sales and other $ 2,062,930 $ 4,782,615 $ 5,463,475 $ 8,679,862 revenues



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

Three Months Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

(Dollars in thousands, except per barrel amounts)

Consolidated

Average operatingexpenses per produced $ 6.87 $ 5.92 $ 6.56 $ 6.40 barrel sold

Times produced barrels 382,910 469,100 417,600 446,190 sold (BPD)

Times number of days in 91 91 182 181 period

Refining segment $ 239,384 $ 252,714 $ 498,581 $ 516,866 operating expenses

Add (subtract) rounding (25 ) 1 (48 ) 346

Total refining segment 239,359 252,715 498,533 517,212 operating expenses

Add lubricants andspecialty products 47,840 59,122 101,971 112,681 segment operatingexpenses

Add HEP segment 34,737 40,608 69,718 78,121 operating expenses

Subtract corporate, (18,577 ) (19,193 ) (38,518 ) (43,170 )other and eliminations

Operating expenses(exclusive of $ 303,359 $ 333,252 $ 631,704 $ 664,844 depreciation andamortization)



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

Adjusted net income attributable to HollyFrontier stockholders is a non-GAAP financial measure that excludes non-cash lower of cost or market inventory valuation adjustments, long-lived asset and goodwill impairments, acquisition integration and regulatory costs, severance costs, restructuring charges, HEP's gain on sales-type leases, HEP's loss on early extinguishment of debt 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 June Six Months Ended June 30, 30,

2020 2019 2020 2019

(In thousands, except per share amounts)

Consolidated

GAAP:

Income (loss) before $ (181,318 ) $ 306,153 $ (636,770 ) $ 670,144 income taxes

Income tax expense (30,911 ) 89,336 (193,077 ) 176,841 (benefit)

Net income (loss) (150,407 ) 216,817 (443,693 ) 493,303

Less net incomeattributable to 26,270 19,902 37,607 43,333 noncontrollinginterest

Net income (loss)attributable to (176,677 ) 196,915 (481,300 ) 449,970 HollyFrontierstockholders



Non-GAAP adjustmentsto arrive at adjusted results:

Lower of cost ormarket inventory (269,904 ) 47,801 290,560 (184,545 )valuation adjustment

HEP's gain on (33,834 ) - (33,834 ) - sales-type leases

HEP's loss on earlyextinguishment of - - 25,915 - debt

Acquisitionintegration and 634 3,637 1,931 16,189 regulatory costs

Long-lived asset and 436,908 152,712 436,908 152,712 goodwill impairments

Severance costs 1,117 - 1,117 -

Restructuring charges 3,679 - 3,679 -

Incremental cost ofproducts soldattributable to - - - 9,338 Sonneborn inventoryvalue step-up

Total adjustments toincome (loss) before 138,600 204,150 726,276 (6,306 )income taxes

Adjustment to income 10,065 28,748 195,404 (21,769 )tax expense ^(1)

Adjustment to netincome attributable (7,332 ) - 3,927 - to noncontrollinginterest

Total adjustments, 135,867 175,402 526,945 15,463 net of tax



Adjusted results - Non-GAAP:

Adjusted income (42,718 ) 510,303 89,506 663,838 before income taxes

Adjusted income tax (20,846 ) 118,084 2,327 155,072 expense ^(2)

Adjusted net income (21,872 ) 392,219 87,179 508,766

Adjusted net incomeattributable to 18,938 19,902 41,534 43,333 noncontrollinginterest

Adjusted net incomeattributable to $ (40,810 ) $ 372,317 $ 45,645 $ 465,433 HollyFrontierstockholders

Adjusted earnings pershare attributable toHollyFrontier $ (0.25 ) $ 2.18 $ 0.28 $ 2.71 stockholders -diluted ^(3)

Average number ofcommon shares 161,889 170,547 162,556 171,264 outstanding - diluted

(1) Represents adjustment to GAAP income tax expense to arrive at adjusted income tax expense, which is computed as follows:



Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

(In thousands)



Non-GAAP income tax $ (20,846 ) $ 118,084 $ 2,327 $ 155,072 expense^ (2)

Subtract GAAP income (30,911 ) 89,336 (193,077 ) 176,841 tax expense (benefit)

Non-GAAP adjustment to $ 10,065 $ 28,748 $ 195,404 $ (21,769 )income tax expense

Non-GAAP income tax expense is computed by a) adjusting HFC's consolidated estimated Annual Effective Tax Rate ("AETR") for GAAP purposes for the(2) 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.

Adjusted earnings per share attributable to HollyFrontier stockholders -(3) diluted is calculated as adjusted net income attributable to HollyFrontier stockholders divided by the average number of shares of common stock outstanding assuming dilution.



Reconciliation of effective tax rate to adjusted effective tax rate

Three Months Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

(Dollars in thousands)

GAAP:

Income (loss) before $ (181,318 ) $ 306,153 $ (636,770 ) $ 670,144 income taxes

Income tax expense $ (30,911 ) $ 89,336 $ (193,077 ) $ 176,841 (benefit)

Effective tax ratefor GAAP financial 17.0 % 29.2 % 30.3 % 26.4 %statements

Adjusted - Non-GAAP:

Effect of Non-GAAP 31.8 % (6.0 ) (27.7 ) (3.0 )adjustments % % %

Effective tax rate 48.8 % 23.2 % 2.6 % 23.4 %for adjusted results

View source version on businesswire.com: https://www.businesswire.com/news/home/20200806005193/en/

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