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HollyFrontier Corp HFC
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/26/2013

Operator: Welcome to HollyFrontier Corporation's Fourth Quarter 2012 Conference Call and Webcast. Hosting the call today from HollyFrontier Corporation is Mike Jennings, President and Chief Executive Officer. He is joined by Doug Aron, Executive Vice President and Chief Financial Officer and Dave Lamp, Executive Vice President and Chief Operating Officer. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. Please note that this conference is being recorded.

It is now my pleasure to turn the floor over to Julia Heidenreich. Julia, you may begin.

Julia Heidenreich - VP, IR: Thank you, Jackie. Good morning, everyone, and welcome to HollyFrontier Corporation's fourth quarter earnings call. I am Julia Heidenreich, Vice President of Investor Relations. In addition to Mike, Dave and Doug, we also have other members from our management team to assist in the Q&A portion of the call.

This morning, we issued a press release announcing results for the quarter ending December 31, 2012. If you would like a copy of today's release, you can find one on our website www.hollyfrontier.com.

Before Mike, Dave and Doug proceed with their prepared remarks, please note the Safe Harbor disclosure statement in today's press release. In summary it says statements made regarding management's expectations, judgments or predictions are forward-looking statements. These statements are intended to be covered under the Safe Harbor provisions of federal securities laws. There are many factors that could results to differ from expectations including those noted in our SEC filings. Today's statements are not guarantees of future outcomes.

Today's call may also include discussion of non-GAAP measures. Please see today's press release for reconciliations to GAAP financials. Also please note that information presented on today's call speaks only as of today, February 26. Any time-sensitive information provided may no longer be accurate at the time of any webcast replay or re-reading of the transcript.

With that, I will turn the call over to Mike Jennings.

Michael C. Jennings - Chairman, CEO and President: Thank you, Julia. Good morning. Thanks for joining us on HollyFrontier's fourth quarter earnings call. Today I'm pleased to announce record full year results for HollyFrontier. Full year 2012 net income attributable to HFC shareholders was $1.7 billion, or $8.38 per diluted share, a 69% improvement over the $1 billion or $6.42 per share posted for the full year 2011.

Fourth quarter net income attributable to HFC shareholders was $392 million, or $1.92 per diluted share, a 68% improvement over the $233 million or $1.06 per share reported for the fourth quarter of 2011. We generated a record $3.1 billion of EBITDA in 2012, more than 1.5 times our 2011 EBITDA of $1.8 billion. Fourth quarter EBITDA of $730 million was more than a 75% improvement on fourth quarter 2011 EBITDA of $414 million.

Rather than contracting towards year-end, as many of suspected, the inland coastal crude differential widened with Brent TI averaging over $20 for the quarter. This contributed to gross margin levels well above our historical fourth quarter average. During the quarter, our consolidated refining gross margins were $24 per produced barrel, 57% above the $15.32 of gross margin we recorded in fourth quarter of 2011 and more than 200% above the fourth quarter 2010 gross margin per barrel of $8.79.

Read our Earnings Call Transcript disclaimer.
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