Bulletin
Investor Alert

press release

Feb. 23, 2022, 6:30 a.m. EST

HollyFrontier Corporation Reports 2021 Fourth Quarter and Full Year Results

Reported net income attributable to HollyFrontier stockholders of $558.3 million or $3.39 per diluted share and adjusted net income of $250.1 million or $1.52 per diluted share, for the year Reported EBITDA of $1,306.9 million and adjusted EBITDA of $915.7 million, for the year

DALLAS, (BUSINESS WIRE) -- HollyFrontier Corporation (“HollyFrontier” or the “Company”) today reported fourth quarter net loss attributable to HollyFrontier stockholders of $(39.5) million or $(0.24) per diluted share for the quarter ended December 31, 2021, compared to $(117.7) million or $(0.73) per diluted share for the quarter ended December 31, 2020.

The fourth quarter results reflect special items that collectively increased net loss by a total of $21.9 million. On a pre-tax basis, these items include acquisition integration costs of $15.8 million, a lower of cost or market inventory valuation adjustment of $8.7 million and charges related to the Cheyenne Refinery conversion to renewable diesel production, including decommissioning charges of $2.8 million. Excluding these items, adjusted net loss for the fourth quarter was $(17.6) million ($(0.11) per diluted share) compared to $(118.6) million ($(0.74) per diluted share) for the fourth quarter of 2020, which excludes certain items that collectively decreased net loss by $0.9 million for the three months ended December 31, 2020.

HollyFrontier’s CEO, Michael Jennings, commented, “Despite heavy planned and unplanned refining maintenance and weather-related downtime in the fourth quarter, HollyFrontier delivered solid financial results in 2021, highlighted by record earnings in our Lubricants and Specialties business and the closing of our acquisition of the Puget Sound Refinery. Looking forward to 2022, we remain constructive on the macro environment and are focused on the execution of our strategic initiatives: the successful completion and start-up of our renewables business, closing on our acquisition of Sinclair and accelerating returns of capital to our shareholders.”

Refining segment loss before interest and income taxes was $(63.5) million for the fourth quarter of 2021 compared to $(66.1) million in the fourth quarter of 2020. The segment reported EBITDA of $25.0 million for the fourth quarter of 2021 compared to $7.5 million for the fourth quarter of 2020. This increase was driven by stronger product demand, which resulted in a consolidated refinery gross margin of $8.70 per produced barrel, a 116% increase compared to $4.02 for the fourth quarter of 2020. Crude oil charge averaged 421,000 barrels per day (“BPD”) for the fourth quarter of 2021 compared to 379,910 BPD for the fourth quarter of 2020.

Lubricants and Specialty Products segment income before interest and income taxes was $53.7 million for the fourth quarter of 2021 compared to a loss before interest and income taxes of $(54.1) million in the fourth quarter of 2020. The segment reported EBITDA of $74.9 million for the fourth quarter of 2021 compared to $(32.7) million in the fourth quarter of 2020. Fourth quarter of 2020 included a goodwill impairment charge of $81.9 million related to Sonneborn.

Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $70.8 million for the fourth quarter of 2021 compared to $86.8 million in the fourth quarter of 2020.

For the fourth quarter of 2021, net cash used for operations totaled $332.8 million. At December 31, 2021, the Company's cash and cash equivalents totaled $234.4 million, a $1,247.1 million decrease over cash and cash equivalents of $1,481.6 million at September 30, 2021 inclusive of our purchase of the Puget Sound Refinery. Additionally, the Company's consolidated debt was $3,072.7 million. The Company's debt, exclusive of HEP debt, which is nonrecourse to HollyFrontier, was $1,739.7 million at December 31, 2021.

The Company has scheduled a webcast conference call for today, February 23, 2022, at 8:30 AM Eastern Time to discuss fourth quarter financial results. This webcast may be accessed at: https://events.q4inc.com/attendee/868741482 . An audio archive of this webcast will be available using the above noted link through March 9, 2022.

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, Washington 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 HEP, a master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including subsidiaries of HollyFrontier Corporation.

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. Forward-looking statements use words such as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “strategy,” “intend,” “should,” “would,” “could,” “believe,” “may,” and similar expressions and statements regarding our plans and objectives for future operations. 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 Company’s ability to successfully close the pending acquisition by the Company and HEP of Sinclair Oil Corporation and Sinclair Transportation Company (collectively, “Sinclair”, and such transactions, the “Sinclair Transactions”), or once closed, integrate the operations of Sinclair with its existing operations and fully realize the expected synergies of the Sinclair Transactions or on the expected timeline; the satisfaction or waivers of the conditions precedent to the proposed Sinclair Transactions, including without limitation, regulatory approvals (including clearance by antitrust authorities necessary to complete the Sinclair Transactions on the terms and timeline desired), risks relating to the value of HF Sinclair common stock and the value of HEP’s limited partner common units to be issued at the closing of the Sinclair Transactions from sales in anticipation of closing and from sales by the Sinclair holders following the closing of the Sinclair Transactions; the cost and potential for a delay in closing as a result of litigation against the Company or HEP challenging the Sinclair Transactions; the Company's ability to successfully integrate the operation of the Puget Sound Refinery with the Company's existing operations; the demand for and supply of crude oil and refined products, including uncertainty regarding the effects of the continuing coronavirus (“COVID-19”) pandemic on future demand and increasing societal expectations that companies address climate change; 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/or future governmental and environmental regulations and policies, including the effects of current and/or 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 construction of the Artesia renewable diesel unit and pretreatment unit, on time and within capital guidance; 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; a prolonged economic slowdown due to the COVID-19 pandemic which could result in an impairment of goodwill and/or 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
December 31,
  Change from 2020
  2021   2020   Change   Percent
  (In thousands, except per share data)
Sales and other revenues $ 5,622,667     $ 2,900,768     $ 2,721,899     94 %
Operating costs and expenses:              
Cost of products sold:              
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)   4,958,160       2,510,845       2,447,315     97  
Lower of cost or market inventory valuation adjustment   8,739       (149,212 )     157,951     (106 )
    4,966,899       2,361,633       2,605,266     110  
Operating expenses   430,858       336,077       94,781     28  
Selling, general and administrative expenses   111,225       76,041       35,184     46  
Depreciation and amortization   134,198       124,879       9,319     7  
Goodwill and long-lived asset impairments         108,385       (108,385 )   (100 )
Total operating costs and expenses   5,643,180       3,007,015       2,636,165     88  
Loss from operations   (20,513 )     (106,247 )     85,734     (81 )
               
Other income (expense):              
Earnings of equity method investments   3,557       1,461       2,096     143  
Interest income   941       1,043       (102 )   (10 )
Interest expense   (30,955 )     (40,604 )     9,649     (24 )
Gain on foreign currency transactions   1,288       3,119       (1,831 )   (59 )
Gain on sale of assets and other   2,532       3,034       (502 )   (17 )
    (22,637 )     (31,947 )     9,310     (29 )
Loss before income taxes   (43,150 )     (138,194 )     95,044     (69 )
Income tax benefit   (26,046 )     (43,643 )     17,597     (40 )
Net loss   (17,104 )     (94,551 )     77,447     (82 )
Less net income attributable to noncontrolling interest   22,426       23,196       (770 )   (3 )
Net loss attributable to HollyFrontier stockholders $ (39,530 )   $ (117,747 )   $ 78,217     (66 )%
               
Loss per share:              
Basic $ (0.24 )   $ (0.73 )   $ 0.49     (67 )%
Diluted $ (0.24 )   $ (0.73 )   $ 0.49     (67 )%
Cash dividends declared per common share $     $ 0.35     $ (0.35 )   (100 )%
Average number of common shares outstanding:              
Basic   162,721       162,151       570     %
Diluted   162,721       162,151       570     %
               
EBITDA $ 98,636     $ 3,050     $ 95,586     3,134 %
Adjusted EBITDA $ 126,026     $ (21,898 )   $ 147,924     (676 )%
  Years Ended
December 31,
  Change from 2020
  2021   2020   Change   Percent
  (In thousands, except per share data)
Sales and other revenues $ 18,389,142     $ 11,183,643     $ 7,205,499     64 %
Operating costs and expenses:              
Cost of products sold:              
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)   15,567,052       9,158,805       6,408,247     70  
Lower of cost or market inventory valuation adjustment   (310,123 )     78,499       (388,622 )   (495 )
    15,256,929       9,237,304       6,019,625     65  
Operating expenses   1,517,478       1,300,277       217,201     17  
Selling, general and administrative expenses   362,010       313,600       48,410     15  
Depreciation and amortization   503,539       520,912       (17,373 )   (3 )
Goodwill and long-lived asset impairments         545,293       (545,293 )   (100 )
Total operating costs and expenses   17,639,956       11,917,386       5,722,570     48  
Income (loss) from operations   749,186       (733,743 )     1,482,929     (202 )
               
Other income (expense):              
Earnings of equity method investments   12,432       6,647       5,785     87  
Interest income   4,019       7,633       (3,614 )   (47 )
Interest expense   (125,175 )     (126,527 )     1,352     (1 )
Gain on business interruption insurance settlement         81,000       (81,000 )   (100 )
Gain on tariff settlement   51,500             51,500      
Gain on sales-type lease         33,834       (33,834 )   (100 )
Loss on early extinguishment of debt         (25,915 )     25,915     (100 )
Gain (loss) on foreign currency transactions   (2,938 )     2,201       (5,139 )   (233 )
Gain on sale of assets and other   98,128       7,824       90,304     1,154  
    37,966       (13,303 )     51,269     (385 )
Income (loss) before income taxes   787,152       (747,046 )     1,534,198     (205 )
Income tax expense (benefit)   123,898       (232,147 )     356,045     (153 )
Net income (loss)   663,254       (514,899 )     1,178,153     (229 )
Less net income attributable to noncontrolling interest   104,930       86,549       18,381     21  
Net income (loss) attributable to HollyFrontier stockholders $ 558,324     $ (601,448 )   $ 1,159,772     (193 )%
               
Earnings (loss) per share:              
Basic $ 3.39     $ (3.72 )   $ 7.11     (191 )%
Diluted $ 3.39     $ (3.72 )   $ 7.11     (191 )%
Cash dividends declared per common share $ 0.35     $ 1.40     $ (1.05 )   (75 )%
Average number of common shares outstanding:              
Basic   162,569       161,983       586     %
Diluted   162,569       161,983       586     %
               
EBITDA $ 1,306,917     $ (193,789 )   $ 1,500,706     (774 )%
Adjusted EBITDA $ 915,665     $ 412,220     $ 503,445     122 %

Balance Sheet Data

  Years Ended December 31,
  2021   2020
  (In thousands)
Cash and cash equivalents $ 234,444   $ 1,368,318
Working capital $ 1,696,990   $ 1,935,605
Total assets $ 12,916,613   $ 11,506,864
Long-term debt $ 3,072,737   $ 3,142,718
Total equity $ 6,294,465   $ 5,722,203

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 and Woods Cross refineries, HollyFrontier Asphalt Company LLC (“HFC Asphalt”) and also our recently acquired Puget Sound Refinery from the closing date on November 1, 2021 (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 Mountains extending into the Pacific Northwest 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 our Cheyenne Refinery until it permanently ceased petroleum refining operations during the third quarter of 2020.

Beginning in the fourth quarter of 2020, activities associated with the conversion of Cheyenne Refinery to renewable diesel production, along with the construction of renewable diesel and pre-treatment units in Artesia, New Mexico were reported in Corporate and Other. The Cheyenne renewable diesel unit was mechanically complete in the fourth quarter of 2021. The pre-treatment unit is expected to be completed in the first quarter of 2022, and the Artesia renewable diesel unit is expected to be completed in the second quarter of 2022. Beginning in the first quarter of 2022, renewable diesel operations will cease to be reported in Corporate and Other and will be reported under a new Renewables segment.

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 includes all of the operations of HEP, a consolidated variable interest entity, which owns and operates logistics and refinery 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% ownership 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 and Specialty Products   HEP   Corporate, Other and Eliminations   Consolidated Total
    (In thousands)
Three Months Ended December 31, 2021                
Sales and other revenues:                    
Revenues from external customers   $ 4,896,994     $ 699,838     $ 25,837   $ (2 )   $ 5,622,667  
Intersegment revenues     168,599       488       92,656     (261,743 )      
    $ 5,065,593     $ 700,326     $ 118,493   $ (261,745 )   $ 5,622,667  
Cost of products sold (exclusive of lower of cost or market inventory adjustment)   $ 4,686,200     $ 510,528     $   $ (238,568 )   $ 4,958,160  
Lower of cost or market inventory valuation adjustment   $     $     $   $ 8,739     $ 8,739  
Operating expenses   $ 317,831     $ 69,453     $ 44,298   $ (724 )   $ 430,858  
Selling, general and administrative expenses   $ 36,586     $ 45,543     $ 2,973   $ 26,123     $ 111,225  
Depreciation and amortization   $ 88,455     $ 21,268     $ 20,090   $ 4,385     $ 134,198  
Income (loss) from operations   $ (63,479 )   $ 53,534     $ 51,132   $ (61,700 )   $ (20,513 )
Income (loss) before interest and income taxes   $ (63,479 )   $ 53,665     $ 54,873   $ (58,195 )   $ (13,136 )
Net income attributable to noncontrolling interest   $     $     $ 3,190   $ 19,236     $ 22,426  
Earnings of equity method investments   $     $     $ 3,557   $     $ 3,557  
Capital expenditures   $ 46,106     $ 13,344     $ 11,403   $ 194,211     $ 265,064  
                     
Three Months Ended December 31, 2020                
Sales and other revenues:                    
Revenues from external customers   $ 2,406,214     $ 462,724     $ 25,629   $ 6,201     $ 2,900,768  
Intersegment revenues     74,492       1,554       101,827     (177,873 )      
    $ 2,480,706     $ 464,278     $ 127,456   $ (171,672 )   $ 2,900,768  
Cost of products sold (exclusive of lower of cost or market inventory adjustment)   $ 2,326,150     $ 318,857     $   $ (134,162 )   $ 2,510,845  
Lower of cost or market inventory valuation adjustment   $ (145,497 )   $     $   $ (3,715 )   $ (149,212 )
Operating expenses   $ 233,433     $ 59,609     $ 37,971   $ 5,064     $ 336,077  
Selling, general and administrative expenses   $ 32,621     $ 36,162     $ 2,420   $ 4,838     $ 76,041  
Depreciation and amortization   $ 73,598     $ 21,396     $ 23,350   $ 6,535     $ 124,879  
Goodwill and long-lived asset impairments   $ 26,518     $ 81,867     $   $     $ 108,385  
Income (loss) from operations   $ (66,117 )   $ (53,613 )   $ 63,715   $ (50,232 )   $ (106,247 )
Income (loss) before interest and income taxes   $ (66,117 )   $ (54,056 )   $ 65,428   $ (43,888 )   $ (98,633 )
Net income attributable to noncontrolling interest   $     $     $ 1,124   $ 22,072     $ 23,196  
Earnings of equity method investments   $     $     $ 1,461   $     $ 1,461  
Capital expenditures   $ 45,870     $ 12,086     $ 20,641   $ 38,555     $ 117,152  
  Refining   Lubricants and Specialty Products   HEP   Corporate, Other and Eliminations   Consolidated Total
  (In thousands)
Year Ended December 31, 2021                
Sales and other revenues:                  
Revenues from external customers $ 15,734,870     $ 2,550,624     $ 103,646   $ 2     $ 18,389,142  
Intersegment revenues   623,688       9,988       390,849     (1,024,525 )      
  $ 16,358,558     $ 2,560,612     $ 494,495   $ (1,024,523 )   $ 18,389,142  
Cost of products sold (exclusive of lower of cost or market inventory adjustment) $ 14,673,062     $ 1,815,802     $   $ (921,812 )   $ 15,567,052  
Lower of cost or market inventory valuation adjustment $ (318,353 )   $     $   $ 8,230     $ (310,123 )
Operating expenses $ 1,090,424     $ 252,456     $ 170,524   $ 4,074     $ 1,517,478  
Selling, general and administrative expenses $ 127,563     $ 170,155     $ 12,637   $ 51,655     $ 362,010  
Depreciation and amortization $ 334,365     $ 79,767     $ 86,998   $ 2,409     $ 503,539  
Income (loss) from operations $ 451,497     $ 242,432     $ 224,336   $ (169,079 )   $ 749,186  
Income (loss) before interest and income taxes $ 449,747     $ 329,203     $ 267,623   $ (138,265 )   $ 908,308  
Net income attributable to noncontrolling interest $     $     $ 7,217   $ 97,713     $ 104,930  
Earnings of equity method investments $     $     $ 12,432   $     $ 12,432  
Capital expenditures $ 160,431     $ 30,878     $ 88,336   $ 533,764     $ 813,409  
                   
Year Ended December 31, 2020                
Sales and other revenues:                  
Revenues from external customers $ 9,286,658     $ 1,792,745     $ 98,039   $ 6,201     $ 11,183,643  
Intersegment revenues   252,531       10,465       399,809     (662,805 )      
  $ 9,539,189     $ 1,803,210     $ 497,848   $ (656,604 )   $ 11,183,643  
Cost of products sold (exclusive of lower of cost or market inventory adjustment) $ 8,439,680     $ 1,271,287     $   $ (552,162 )   $ 9,158,805  
Lower of cost or market inventory valuation adjustment $ 82,214     $     $   $ (3,715 )   $ 78,499  
Operating expenses $ 988,045     $ 216,068     $ 147,692   $ (51,528 )   $ 1,300,277  
Selling, general and administrative expenses $ 127,298     $ 157,816     $ 9,989   $ 18,497     $ 313,600  
Depreciation and amortization $ 324,617     $ 80,656     $ 95,445   $ 20,194     $ 520,912  
Goodwill impairment $ 241,760     $ 286,575     $ 16,958   $     $ 545,293  
Income (loss) from operations $ (664,425 )   $ (209,192 )   $ 227,764   $ (87,890 )   $ (733,743 )
Income (loss) before interest and income taxes $ (664,425 )   $ (209,903 )   $ 251,021   $ (4,845 )   $ (628,152 )
Net income attributable to noncontrolling interest $     $     $ 5,282   $ 81,267     $ 86,549  
Earnings of equity method investments $     $     $ 6,647   $     $ 6,647  
Capital expenditures $ 152,726     $ 32,473     $ 59,283   $ 85,678     $ 330,160  
    Refining   Lubricants and Specialty Products   HEP   Corporate, Other and Eliminations   Consolidated Total
    (In thousands)
December 31, 2021                    
Cash and cash equivalents   $   $ 113,474   $ 14,381   $ 106,589     $ 234,444
Total assets   $ 9,736,851   $ 2,073,638   $ 2,250,115   $ (1,143,991 )   $ 12,916,613
Long-term debt   $   $   $ 1,333,049   $ 1,739,688     $ 3,072,737
                     
December 31, 2020                    
Cash and cash equivalents   $ 3,106   $ 163,729   $ 21,990   $ 1,179,493     $ 1,368,318
Total assets   $ 6,203,847   $ 1,864,313   $ 2,198,478   $ 1,240,226     $ 11,506,864
Long-term debt   $   $   $ 1,405,603   $ 1,737,115     $ 3,142,718

Refining Segment Operating Data

As of December 31, 2021, our refinery operations included the El Dorado, Tulsa, Puget Sound, Navajo and Woods Cross Refineries. The refinery operations of the Puget Sound Refinery are included for the period November 1, 2021 (date of acquisition) through December 31, 2021. 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 December 31,   Years Ended December 31,
    2021   2020   2021   2020
Mid-Continent Region (El Dorado and Tulsa Refineries)            
Crude charge (BPD) [(1)]     265,770       260,780       260,350       241,140  
Refinery throughput (BPD) [ (2)]     287,300       279,670       276,430       257,030  
Sales of produced refined products (BPD) [(3)]     285,250       273,710       265,470       248,320  
Refinery utilization [(4)]     102.2 %     100.3 %     100.1 %     92.7 %
                 
Average per produced barrel [(5)]                
Refinery gross margin   $ 6.18     $ 1.93     $ 9.44     $ 5.17  
Refinery operating expenses [(6)]     5.73       5.42       6.42       5.46  
Net operating margin   $ 0.45     $ (3.49 )   $ 3.02     $ (0.29 )
                 
Refinery operating expenses per throughput barrel [(7)]   $ 5.69     $ 5.30     $ 6.17     $ 5.27  
                 
Feedstocks:                
Sweet crude oil     55 %     59 %     61 %     58 %
Sour crude oil     21 %     19 %     15 %     19 %
Heavy sour crude oil     17 %     15 %     18 %     17 %
Other feedstocks and blends     7 %     7 %     6 %     6 %
Total     100 %     100 %     100 %     100 %
                 
Sales of produced refined products:                
Gasolines     53 %     54 %     52 %     52 %
Diesel fuels     32 %     33 %     33 %     34 %
Jet fuels     6 %     4 %     5 %     4 %
Fuel oil     1 %     1 %     1 %     1 %
Asphalt     2 %     3 %     3 %     3 %
Base oils     4 %     4 %     4 %     4 %
LPG and other     2 %     1 %     2 %     2 %
Total     100 %     100 %     100 %     100 %
    Three Months Ended   Years Ended
    2021 (8)   2020   2021 (8)   2020
West Region (Puget Sound, Navajo and Wood Cross Refineries)                
Crude charge (BPD) [(1)]     155,230       119,130       140,370       124,050  
Refinery throughput (BPD) [ (2)]     175,440       133,110       155,440       138,050  
Sales of produced refined products (BPD) [(3)]     188,980       144,280       158,630       143,350  
Refinery utilization [(4)]     63.7 %     82.2 %     82.7 %     85.6 %
                 
Average per produced barrel [(5)]                
Refinery gross margin   $ 12.50     $ 7.98     $ 13.32     $ 10.97  
Refinery operating expenses [(6)]     9.63       7.31       8.09       7.07  
Net operating margin   $ 2.87     $ 0.67     $ 5.23     $ 3.90  
                 
Refinery operating expenses per throughput barrel [(7)]   $ 10.38     $ 7.93     $ 9.27     $ 7.34  
                 
Feedstocks:                
Sweet crude oil     20 %     29 %     22 %     30 %
Sour crude oil     56 %     48 %     58 %     49 %
Heavy sour crude oil     2 %     %     1 %     %
Black wax crude oil     11 %     12 %     10 %     11 %
Other feedstocks and blends     11 %     11 %     9 %     10 %
Total     100 %     100 %     100 %     100 %
                 
Sales of produced refined products:                
Gasolines     56 %     57 %     54 %     56 %
Diesel fuels     29 %     34 %     35 %     35 %
Jet fuels     4 %     %     1 %     %
Fuel oil     3 %     3 %     3 %     3 %
Asphalt     3 %     3 %     4 %     4 %
LPG and other     5 %     3 %     3 %     2 %
Total     100 %     100 %     100 %     100 %
Consolidated                
Crude charge (BPD) [(1)]     421,000       379,910       400,720       365,190  
Refinery throughput (BPD) [ (2)]     462,740       412,780       431,870       395,080  
Sales of produced refined products (BPD) [(3)]     474,230       417,990       424,100       391,670  
Refinery utilization [(4)]     83.6 %     93.8 %     93.1 %     90.2 %
                 
Average per produced barrel [(5)]                
Refinery gross margin   $ 8.70     $ 4.02     $ 10.89     $ 7.29  
Refinery operating expenses [(6)]     7.28       6.07       7.04       6.05  
Net operating margin   $ 1.42     $ (2.05 )   $ 3.85     $ 1.24  
                 
Refinery operating expenses per throughput barrel [(7)]   $ 7.47     $ 6.15     $ 6.92     $ 6.00  
                 
Feedstocks:                
Sweet crude oil     41 %     49 %     47 %     48 %
Sour crude oil     34 %     29 %     31 %     29 %
Heavy sour crude oil     12 %     10 %     12 %     11 %
Black wax crude oil     4 %     4 %     4 %     4 %
Other feedstocks and blends     9 %     8 %     6 %     8 %
Total     100 %     100 %     100 %     100 %
    Three Months Ended   Years Ended
    2021   2020   2021   2020
Consolidated                
Sales of produced refined products:                
Gasolines   54 %   55 %   53 %   54 %
Diesel fuels   31 %   33 %   34 %   34 %
Jet fuels   6 %   3 %   4 %   3 %
Fuel oil   1 %   2 %   1 %   1 %
Asphalt   3 %   3 %   3 %   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.
(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"). As a result of our acquisition of the Puget Sound Refinery on November 1, 2021, our consolidated crude capacity increased from 405,000 BPSD to 554,000 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.
(7) Represents total Mid-Continent and West regions operating expenses, exclusive of long-lived asset impairment charges and depreciation and amortization, divided by refinery throughput.
(8) We acquired the Puget Sound Refinery on November 1, 2021. Refining operating data for the quarter and year ended December 31, 2021 includes crude oil and feedstocks processed and refined products sold at our Puget Sound Refinery for the period November 1, 2021 through December 31, 2021 only, averaged over the 92 days and 365 days in the quarter and year ended December 31, 2021, respectively.

Lubricants and Specialty Products Segment Operating Data

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

    Three Months Ended   Years Ended
    2021   2020   2021   2020
Lubricants and Specialty Products                
Throughput (BPD)   18,760     21,425     19,177     19,645  
Sales of produced products (BPD)   35,120     33,559     34,016     32,902  
                 
Sales of produced products:                
Finished products   46 %   49 %   51 %   49 %
Base oils   26 %   28 %   27 %   26 %
Other   28 %   23 %   22 %   25 %
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:

    Rack Back (1)   Rack Forward (2)   Eliminations (3)   Total Lubricants and Specialty Products
    (In thousands)
Three Months Ended December 31, 2021                
Sales and other revenues   $ 307,018     $ 631,221     $ (237,913 )   $ 700,326  
Cost of products sold   $ 202,124     $ 546,317     $ (237,913 )   $ 510,528  
Operating expenses   $ 33,977     $ 35,476     $     $ 69,453  
Selling, general and administrative expenses   $ 7,360     $ 38,183     $     $ 45,543  
Depreciation and amortization   $ 8,183     $ 13,085     $     $ 21,268  
Income (loss) from operations   $ 55,374     $ (1,840 )   $     $ 53,534  
Income (loss) before interest and income taxes   $ 55,374     $ (1,709 )   $     $ 53,665  
EBITDA   $ 63,557     $ 11,376     $     $ 74,933  
                 
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  
Loss from operations   $ (5,913 )   $ (47,700 )   $     $ (53,613 )
Loss before interest and income taxes   $ (5,913 )   $ (48,143 )   $     $ (54,056 )
EBITDA   $ 995     $ (33,655 )   $     $ (32,660 )
    Rack Back (1)   Rack Forward (2)   Eliminations (3)   Total Lubricants and Specialty Products
    (In thousands)
Year Ended December 31, 2021                
Sales and other revenues   $ 1,005,152     $ 2,378,332   $ (822,872 )   $ 2,560,612  
Cost of products sold   $ 646,107     $ 1,992,567   $ (822,872 )   $ 1,815,802  
Operating expenses   $ 120,750     $ 131,706   $     $ 252,456  
Selling, general and administrative expenses   $ 27,071     $ 143,084   $     $ 170,155  
Depreciation and amortization   $ 28,093     $ 51,674   $     $ 79,767  
Income from operations   $ 183,131     $ 59,301   $     $ 242,432  
Income before interest and income taxes   $ 269,149     $ 60,054   $     $ 329,203  
EBITDA   $ 297,242     $ 111,728   $     $ 408,970  
                 
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 impairment   $ 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 )
(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.
(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 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) gain on sale of real property, (iii) goodwill impairment, (iv) HollyFrontier's pro-rata share of gain on business interruption insurance settlement, (v) long-lived asset impairment, inclusive of pro-rata share of impairment in HEP segment, (vi) HollyFrontier's pro-rata share of HEP's gain on sales-type leases, (vii) HollyFrontier's pro-rata share of HEP's loss on early extinguishment of debt, (viii) severance costs, (ix) restructuring charges, (x) Cheyenne Refinery LIFO inventory liquidation costs, (xi) decommissioning costs, (xii) pre-close acquisition integration costs, (xiii) acquisition integration and regulatory costs and (xiv) gain on tariff settlement.

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
    2021   2020   2021   2020
    (In thousands)
Net income (loss) attributable to HollyFrontier stockholders   $ (39,530 )   $ (117,747 )   $ 558,324     $ (601,448 )
Add (subtract) income tax expense (benefit)     (26,046 )     (43,643 )     123,898       (232,147 )
Add interest expense     30,955       40,604       125,175       126,527  
Subtract interest income     (941 )     (1,043 )     (4,019 )     (7,633 )
Add depreciation and amortization     134,198       124,879       503,539       520,912  
EBITDA   $ 98,636     $ 3,050     $ 1,306,917     $ (193,789 )
Add (subtract) lower of cost or market inventory valuation adjustment     8,739       (149,212 )     (310,123 )     78,499  
Subtract gain on sale of real property                 (86,018 )      
Add goodwill impairment           81,867             81,867  
Subtract HollyFrontier's pro-rata share of gain on business interruption insurance settlement                       (77,143 )
Add long-lived asset impairment, inclusive of pro-rata share of impairment in HEP segment           26,518             456,058  
Subtract HollyFrontier's pro-rata share of HEP's gain on sales-type leases                       (19,134 )
Add HollyFrontier's pro-rata share of HEP's loss on early extinguishment of debt                       14,656  
Add severance costs     82       296       988       3,842  
Add restructuring charges                 7,813       3,679  
Add Cheyenne Refinery LIFO inventory liquidation costs           3,129       923       36,943  
Add decommissioning costs     2,774       12,439       25,835       24,748  
Add pre-close acquisition integration costs     12,278             17,313        
Add acquisition integration and regulatory costs     3,517       15       3,517       1,994  
Subtract gain on tariff settlement                 (51,500 )      
Adjusted EBITDA   $ 126,026     $ (21,898 )   $ 915,665     $ 412,220  

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

    Three Months Ended   Years Ended
Refining Segment   2021   2020   2021   2020
    (In thousands)
Income (loss) before interest and income taxes [(1)]   $ (63,479 )   $ (66,117 )   $ 449,747     $ (664,425 )
Add depreciation and amortization     88,455       73,598       334,365       324,617  
EBITDA   $ 24,976     $ 7,481     $ 784,112     $ (339,808 )
Add (subtract) lower of cost or market inventory valuation adjustment           (145,497 )     (318,353 )     82,214  
Add long-lived asset impairment           26,518             241,760  
Add severance costs                       3,546  
Add restructuring charges                       2,009  
Add Cheyenne Refinery LIFO inventory liquidation costs                       33,814  
Add decommissioning costs                       12,309  
Adjusted EBITDA   $ 24,976     $ (111,498 )   $ 465,759     $ 35,844  
(1) Income (loss) before interest and income taxes of our Refining segment represents income (loss) 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, 2021            
Income (loss) before interest and income taxes [ (1)]   $ 55,374     $ (1,709 )   $ 53,665  
Add depreciation and amortization     8,183       13,085       21,268  
EBITDA   $ 63,557     $ 11,376     $ 74,933  
             
Three Months Ended December 31, 2020            
Loss before interest and income taxes [(1)]   $ (5,913 )   $ (48,143 )   $ (54,056 )
Add depreciation and amortization     6,908       14,488       21,396  
EBITDA   $ 995     $ (33,655 )   $ (32,660 )
Add goodwill impairment           81,867       81,867  
Adjusted EBITDA   $ 995     $ 48,212     $ 49,207  
             
Year Ended December 31, 2021            
Income before interest and income taxes [(1)]   $ 269,149     $ 60,054     $ 329,203  
Add depreciation and amortization     28,093       51,674       79,767  
EBITDA     297,242       111,728       408,970  
Subtract gain on sale of real property     (86,018 )           (86,018 )
Add restructuring charges   $ 1,079     $ 6,734     $ 7,813  
Adjusted EBITDA   $ 212,303     $ 118,462     $ 330,765  
             
Year Ended December 31, 2020            
Income (loss) before interest and income taxes [(1)]   $ (265,597 )   $ 55,694     $ (209,903 )
Add depreciation and amortization     29,071       51,585       80,656  
EBITDA     (236,526 )     107,279       (129,247 )
Add goodwill impairment     167,017       119,558       286,575  
Adjusted EBITDA   $ (69,509 )   $ 226,837     $ 157,328  
(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
    2021   2020   2021   2020
    (Dollars in thousands, except per barrel amounts)
Consolidated                
Net operating margin per produced barrel sold   $ 1.42     $ (2.05 )   $ 3.85     $ 1.24  
Add average refinery operating expenses per produced barrel sold     7.28       6.07       7.04       6.05  
Refinery gross margin per produced barrel sold   $ 8.70     $ 4.02     $ 10.89     $ 7.29  
Times produced barrels sold (BPD)     474,230       417,990       424,100       391,670  
Times number of days in period     92       92       365       366  
Refining gross margin   $ 379,574     $ 154,589     $ 1,685,734     $ 1,045,030  
Add (subtract) rounding     (181 )     (33 )     (238 )     523  
West and Mid-Continent regions gross margin     379,393       154,556       1,685,496       1,045,553  
Add West and Mid-Continent regions cost of products sold     4,686,200       2,326,150       14,673,062       7,992,047  
Add Cheyenne Refinery sales and other revenues                       501,589  
Refining segment sales and other revenues     5,065,593       2,480,706       16,358,558       9,539,189  
Add lubricants and specialty products segment sales and other revenues     700,326       464,278       2,560,612       1,803,210  
Add HEP segment sales and other revenues     118,493