Item 7.01. Regulation FD Disclosure.
Capital Expenditure Guidance
For fiscal year 2021, HollyFrontier Corporation ("HollyFrontier") expects
consolidated capital and turnaround cash spending guidance, inclusive of Holly
Energy Partners, L.P. ("HEP") and its subsidiaries as consolidated subsidiaries
of HollyFrontier, as set forth in the table below:
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Corporate Segment Guidance
Beginning in the fourth quarter of 2020, activities associated with the
conversion of HollyFrontier's Cheyenne, Wyoming refinery (the "Cheyenne
Refinery") to renewable diesel production, along with the construction of
renewable diesel and pre-treatment units in Artesia, New Mexico, will be
reported in HollyFrontier's Corporate and Other segment. For the fourth quarter
of 2020, HollyFrontier expects Corporate segment operating expenses to be in the
range of $30 million to $35 million, which includes decommissioning and
severance costs related to the Cheyenne Refinery conversion in the range of $10
million to $15 million. For fiscal year 2021, HollyFrontier expects Corporate
segment operating expenses to be in the range of $100 million to $120 million,
which includes decommissioning and severance costs related to the Cheyenne
Refinery conversion in the range of $20 million to $30 million.
Refining Geographic Operating Data
As previously disclosed, HollyFrontier ceased petroleum refining operations at
the Cheyenne Refinery in the third quarter of 2020 and subsequently began
converting certain assets at the Cheyenne Refinery to renewable diesel
production. As discussed above, beginning in the fourth quarter of 2020,
activities associated with the conversion of the Cheyenne Refinery to renewable
diesel production will be reported in HollyFrontier's Corporate and Other
segment, and the disaggregation of HollyFrontier's refining geographic operating
data will be presented in two regions, Mid-Continent and West, to best reflect
the economic drivers of HollyFrontier's refining operations. The Mid-Continent
region will continue to be comprised of HollyFrontier's El Dorado and Tulsa
refineries, and the new West region will be comprised of HollyFrontier's Navajo
and Woods Cross refineries.
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In order to provide historical refining geographic operating data on a basis
consistent with the revised regional groupings, furnished as Exhibit 99.1 and
incorporated by reference into this Item 7.01 in its entirety is a supplemental
schedule containing HollyFrontier's revised unaudited refining geographic
operating data for the fiscal years ended December 31, 2019 and 2018, the nine
months ended September 30, 2020, and each of the three months ended March 31,
2020, 2019 and 2018, June 30, 2020, 2019 and 2018, September 30, 2020, 2019 and
2018, and December 31, 2019 and 2018, to conform to the revised regional
groupings.
The refining geographic operating data contained in Exhibit 99.1 has no impact
on HollyFrontier's earnings or earnings per share in any period and does not
represent a restatement or reissuance of previously issued financial statements.
The information contained in, or incorporated into, this Item 7.01 is being
furnished and shall not be deemed "filed" for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference
into any registration statement or other filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific reference
in such filing.
Cautionary Note Regarding Forward Looking Statements
This Current Report on Form 8-K report contains certain "forward-looking
statements" within the meaning of the federal securities laws. All statements,
other than statements of historical fact included in this Form 8-K, including
those under "Corporate Expenditure Guidance" and "Corporate Segment Guidance",
are forward-looking statements. Forward-looking statements use words such as
"anticipate," "project," "expect," "plan," "goal," "forecast," "intend,"
"should," "would," "could," "believe," "may," and similar expressions and
statements regarding our plans and objectives for future operations. Examples of
forward-looking statements include, among others, the statements we make
regarding future capital expenditures, future Corporate segment operating
expenses, and future decommissioning and severance costs related to the
conversion of the Cheyenne Refinery to renewable diesel production.
These statements are based on our 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 such expectations reflected in such forward-looking
statements are reasonable, we cannot give assurance that our expectations will
prove to be correct. Therefore, actual outcomes and results could materially
differ from what is expressed, implied or forecast in these statements. Any
differences could be caused by a number of factors including, but not limited
to, the following: (i) 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 HollyFrontier serves; (ii) 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 HollyFrontier's markets; (iii) the spread between market
prices for refined products and market prices for crude oil; (iv) the
possibility of constraints on the transportation of refined products or
lubricant and specialty products; (v) 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; (vi) 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; (vii) the availability and cost of financing
to HollyFrontier; (viii) the effectiveness of HollyFrontier's capital
investments and marketing strategies; (ix) HollyFrontier's efficiency in
carrying out and consummating construction projects, including the 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; (x) the
ability to timely obtain or maintain permits, including those necessary for
operations or capital projects; (xi) the ability of HollyFrontier to acquire
refined or lubricant product operations or pipeline and terminal operations on
acceptable terms and to integrate any existing or future acquired operations;
(xii) the possibility of terrorist or cyber-attacks and the consequences of any
such attacks; (xiii) general economic conditions, including uncertainty
regarding the timing, pace and extent of an economic recovery in the United
States; (xiv) prolonged decline in our financial condition, restrictions in our
debt agreements or certain legal requirements, which could result in our
inability to declare future dividends; (xv) further deterioration in gross
margins or a prolonged economic slowdown due to COVID-19 could result in an
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impairment of goodwill and / or additional long-lived asset impairments; and
(xvi) other financial, operational and legal risks and uncertainties detailed
from time to time in HollyFrontier's Securities and Exchange Commission filings,
including the detailed risk factors and other cautionary statements set forth
under the heading "Risk Factors" included in Item 1A in the HollyFrontier Annual
Report on Form 10-K for the year ended December 31, 2019 and the HollyFrontier
Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. All
forward-looking statements included in this Form 8-K and all subsequent written
or oral forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by these cautionary statements.
The forward-looking statements speak only as of the date made and, other than as
required by law, HollyFrontier undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Supplemental schedule containing certain historical unaudited
refining geographic operating data. *
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* Furnished herewith.
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