HF Sinclair 8-K Holly Corporation Reports Third Quarter Results

Exhibit 99.1

For Immediate Release

HOLLY CORPORATION REPORTS THIRD QUARTER RESULTS

     Dallas, Texas, November 1, 2006 — Holly Corporation (NYSE-HOC) (“Holly” or the “Company”) today reported quarterly net income of $79.0 million ($1.40 per basic and $1.37 per diluted share) for the three months ended September 30, 2006, compared to net income of $61.7 million ($1.01 per basic and $0.98 per diluted share) for the three months ended September 30, 2005. Net income was $218.9 million ($3.81 per basic and $3.73 per diluted share) for the nine months ended September 30, 2006, compared to net income of $127.8 million ($2.04 per basic and $2.00 per diluted share) for the nine months ended September 30, 2005.

     As previously reported, on March 31, 2006 we sold our petroleum refinery in Great Falls, Montana (the “Montana Refinery”) to a subsidiary of Connacher Oil and Gas Limited. Accordingly, the results of operations of the Montana Refinery and a gain on the sale of $13.8 million, net of income taxes of $8.2 million, are shown in discontinued operations. Income from continuing operations for the three months ended September 30, 2006 was $79.2 million ($1.40 per basic and $1.37 per diluted share) as compared to $60.7 million ($0.99 per basic and $0.97 per diluted share) for the three months ended September 30, 2005. Income from continuing operations for the nine months ended September 30, 2006 was $198.1 million ($3.45 per basic and $3.38 per diluted share) as compared to $126.2 million ($2.02 per basic and $1.97 per diluted share) for the nine months ended September 30, 2005.

     Income from continuing operations increased $18.5 million for the third quarter of 2006 and $71.9 million for the first nine months of 2006 as compared to the third quarter and first nine months of 2005, respectively, due principally to improved refined product margins experienced throughout the current year. In addition, our 2006 earnings have benefited from higher refinery yields due to the start-up in December 2005 of our ROSE unit, which converts a significant

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portion of lower value asphalt into high value transportation fuels. Furthermore, revenues for the first nine months of 2006 include the second quarter sales of $12.0 million of sulfur credits which were generated because our Navajo Refinery is making gasoline that is substantially lower in sulfur than required by EPA regulations. These favorable factors were partially offset by the effects of higher operating costs and expenses incurred in the current year. Refinery production levels from continuing operations increased 2% in the third quarter of 2006 as compared to the same period in 2005 due to the recently completed capacity expansion from 75,000 BPSD to 82,000 BPSD at our Navajo Refinery, which resulted in a gradual increase in production levels until we reached the new full capacity level in September. Overall refinery production levels from continuing operations decreased 4% in the nine months ended September 30, 2006 as compared to the same period in 2005 primarily due to production downtime arising from planned capital and refinery maintenance projects at our Navajo and Woods Cross Refineries during the second quarter. Refinery gross margins from continuing operations were $17.75 per produced barrel for the third quarter of 2006 compared to margins of $15.34 per produced barrel for the third quarter of 2005, and $17.23 per produced barrel for the nine months ended September 30, 2006 compared to margins of $12.25 per produced barrel for the nine months ended September 30, 2005.

     Sales and other revenues from continuing operations increased 33% for the third quarter of 2006 and 38% for the first nine months of 2006 as compared to the third quarter and first nine months of 2005, respectively, due principally to increased refined product prices. Additionally, the third quarter and first nine months of 2006 included revenues attributable to certain direct crude oil sales that were previously netted against the corresponding purchases and presented in cost of products sold prior to our adoption of new accounting guidance effective April 1, 2006. Cost of products sold was higher in the third quarter and first nine months of 2006 due principally to the higher costs of purchased crude oil and the inclusion of costs attributable to direct crude oil sales. Operating expenses increased in the third quarter and first nine months of 2006 due principally to higher utility costs (natural gas and electricity) and refinery maintenance, partially offset by the exclusion of operating costs of Holly Energy Partners, L.P. (“HEP”) in the first nine months of 2006 resulting from the deconsolidation of HEP effective July 1, 2005. General and administrative expenses were up for the first nine months of 2006, as compared to same period in 2005, due primarily to increased equity-based incentive compensation expense

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for the first half of 2006. The Company’s effective tax rate decreased in 2006 as compared to 2005 primarily due to the impact of the American Jobs Creation Act of 2004, which provides tax incentives for small business refiners incurring costs to produce ultra low sulfur diesel fuel.

     “We are quite pleased with our 2006 third quarter results, as we continued to realize solid refined product margins and are seeing very favorable contributions from our recently completed capital projects,” said Matthew Clifton, Chief Executive Officer of Holly. “Our income from continuing operations continues to surpass prior years’ levels, and has already placed us on track for another record year. So far in 2006, we have generated earnings before interest, taxes and depreciation (“EBITDA”) of $329.8 million, including $130.2 million in the third quarter. However, refined product margins have recently declined somewhat from the very high levels experienced in the spring and summer months.”

     “During the 2006 third quarter, we continued with our share repurchase program, purchasing 1,068,000 shares during the quarter at an average cost of $45.94. As announced earlier this week, our Board of Directors authorized a $100 million increase in the current stock repurchase program, which underscores our confidence in the continued growth and profitability of the Company. In addition to the stock repurchase program, in this era of high profitability, we have reinvested significant sums in capital projects at our refineries aimed at maximizing shareholder return. In the past year, we have completed clean diesel fuel projects at both of our refineries along with a ROSE unit and phase one of an expansion at the Navajo refinery. We are very pleased with the operations at both our refineries following the completion of these projects. Additionally, as previously reported, our Board of Directors is evaluating proposed projects to significantly enhance our feedstock flexibility at the Navajo and Woods Cross refineries and to expand the capacity of both refineries.”

     “Looking forward, we believe that the combination of our sour crude oil processing capabilities, the fast growing markets that we serve and our successful execution of value-added refining projects, will continue to favorably impact our future results. With respect to Holly Energy Partners, we continue to be pleased with its operations to date and look forward to its continued success,” said Clifton.

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     The Company has scheduled a conference call for today, November 1, 2006 at 10:00AM EST to discuss financial results. Listeners may access this call by dialing (800) 858-5936. The ID# for this call is 8992661. Listeners may access the call via the internet at:http://audioevent.mshow.com/311277. Additionally, listeners may replay this call approximately two hours after the call concludes by dialing (800) 642-1687. This audio archive will be available for two weeks.

     Holly Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel and jet fuel. Holly operates through its subsidiaries an 82,000 barrels per stream day (“bpsd”) refinery located in southeast New Mexico and a 26,000 bpsd refinery in Woods Cross, Utah. Holly also owns a 45% interest (including the general partner interest) in Holly Energy Partners, L.P., which through subsidiaries owns or leases approximately 1,600 miles of petroleum product pipelines in Texas, New Mexico and Oklahoma and refined product terminals in several Southwest and Rocky Mountain states.

     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. Such differences could be caused by a number of factors including, but not limited to, risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in the Company’s markets, the demand for and supply of crude oil and refined products, the spread between market prices for refined products and market prices for crude oil, the possibility of constraints on the transportation of refined products, the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines, effects of governmental regulations and policies, the availability and cost of financing to the Company, the effectiveness

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of the Company’s capital investments and marketing strategies, the ability of the Company to acquire refined product operations or pipeline and terminal operations on acceptable terms and to integrate any future acquired operations, the Company’s efficiency in carrying out construction projects, the possibility of terrorist attacks and the consequences of any such attacks, general economic conditions, 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.

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RESULTS OF OPERATIONS

Financial Data (all information in this release is unaudited)

	Three Months Ended
	September 30,						Change from 2005
	2006			2005			Change			Percent
	(In thousands, except per share data)
Sales and other revenues	$	1,172,693		$	880,520		$	292,173			33.2	%
Operating costs and expenses:
Cost of products sold (exclusive of depreciation, depletion and amortization)		979,309			725,286			254,023			35.0
Operating expenses (exclusive of depreciation, depletion and amortization)		54,146			42,287			11,859			28.0
General and administrative expenses (exclusive of depreciation, depletion and amortization)		12,566			12,619			(53	)		(0.4	)
Depreciation, depletion and amortization		9,480			8,549			931			10.9
Exploration expenses, including dry holes		102			69			33			47.8
Total operating costs and expenses		1,055,603			788,810			266,793			33.8
Income from operations		117,090			91,710			25,380			27.7
Other income (expense):
Equity in earnings of HEP		3,596			3,296			300			9.1
Interest income		2,747			1,202			1,545			128.5
Interest expense		(268	)		(501	)		233			(46.5	)
		6,075			3,997			2,078			52.0
Income from continuing operations before income taxes		123,165			95,707			27,458			28.7
Income tax provision		43,964			35,690			8,274			23.2
Income from continuing operations before cumulative change in accounting principle		79,201			60,017			19,184			32.0
Cumulative effect of accounting change (net of tax expense of $426)		—			669			(669	)		(100.0	)
Income from continuing operations		79,201			60,686			18,515			30.5
Income (loss) from discontinued operations, net of taxes		(199	)		1,033			(1,232	)		(119.3	)
Net income	$	79,002		$	61,719		$	17,283			28.0	%
Basic earnings per share:
Continuing operations	$	1.40		$	0.99		$	0.41			41.4	%
Discontinued operations		—			0.02			(0.02	)		(100.0	)
Net income	$	1.40		$	1.01		$	0.39			38.6	%
Diluted earnings per share:
Continuing operations	$	1.37		$	0.97		$	0.40			41.2	%
Discontinued operations		—			0.01			(0.01	)		(100.0	)
Net income	$	1.37		$	0.98		$	0.39			39.8	%
Cash dividends declared per common share	$	0.08		$	0.05		$	0.03			60.0	%
Average number of common shares outstanding:
Basic		56,555			61,236			(4,681	)		(7.6	)%
Diluted		57,783			62,772			(4,989	)		(7.9	)%

     On May 11, 2006, we announced that our Board of Directors approved a two-for-one stock split payable in the form of a stock dividend of one share of common stock for each issued and outstanding share of common stock. The dividend was paid on June 1, 2006 to all holders of record of common stock at the close of business on May 22, 2006. All references to the number of shares of common stock and per share amounts have been adjusted to reflect the split on a retrospective basis.

     Due to the sale of the Montana Refinery, we have reclassified certain amounts previously reported and now report as discontinued operations.

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	Nine Months Ended
	September 30,						Change from 2005
	2006			2005			Change			Percent
	(In thousands, except per share data)
Sales and other revenues	$	3,085,127		$	2,233,895		$	851,232			38.1	%
Operating costs and expenses:
Cost of products sold (exclusive of depreciation, depletion and amortization)		2,562,803			1,828,632			734,171			40.1
Operating expenses (exclusive of depreciation, depletion and amortization)		155,705			132,031			23,674			17.9
General and administrative expenses (exclusive of depreciation, depletion and amortization)		44,813			35,527			9,286			26.1
Depreciation, depletion and amortization		28,187			31,896			(3,709	)		(11.6	)
Exploration expenses, including dry holes		329			310			19			6.1
Total operating costs and expenses		2,791,837			2,028,396			763,441			37.6
Income from operations		293,290			205,499			87,791			42.7
Other income (expense):
Equity in loss of joint ventures		—			(685	)		685			(100.0	)
Equity in earnings of HEP		8,324			3,296			5,028			152.5
Minority interests in income of partnerships		—			(6,721	)		6,721			(100.0	)
Interest income		6,890			4,455			2,435			54.7
Interest expense		(815	)		(4,706	)		3,891			(82.7	)
		14,399			(4,361	)		18,760			(430.2	)
Income from continuing operations before income taxes		307,689			201,138			106,551			53.0
Income tax provision		109,599			75,602			33,997			45.0
Income from continuing operations before cumulative change in accounting principle		198,090			125,536			72,554			57.8
Cumulative effect of accounting change (net of tax expense of $426)		—			669			(669	)		(100.0	)
Income from continuing operations		198,090			126,205			71,885			57.0
Income from discontinued operations, net of taxes		20,817			1,572			19,245			1,224.2
Net income	$	218,907		$	127,777		$	91,130			71.3	%
Basic earnings per share:
Continuing operations	$	3.45		$	2.02		$	1.43			70.8	%
Discontinued operations		0.36			0.02			0.34			1,700.0
Net income	$	3.81		$	2.04		$	1.77			86.8	%
Diluted earnings per share:
Continuing operations	$	3.38		$	1.97		$	1.41			71.6	%
Discontinued operations		0.35			0.03			0.32			1,066.7
Net income	$	3.73		$	2.00		$	1.73			86.5	%
Cash dividends declared per common share	$	0.21		$	0.14		$	0.07			50.0	%
Average number of common shares outstanding:
Basic		57,393			62,506			(5,113	)		(8.2	)%
Diluted		58,643			63,960			(5,317	)		(8.3	)%

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Balance Sheet Data (Unaudited)

	September 30,		December 31,
	2006		2005
	(In thousands)
Cash, cash equivalents and investments in marketable securities	$	290,457	$	254,842
Working capital	$	253,961	$	210,103
Total assets	$	1,228,792	$	1,142,900
Stockholders’ equity	$	462,738	$	377,351

Other Financial Data (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
				(In thousands)
Net cash provided by operating activities	$	128,476		$	90,396		$	208,271		$	162,876
Net cash provided by (used for) investing activities	$	(2,786	)	$	(12,645	)	$	73,342		$	(263,466	)
Net cash provided by (used for) financing activities	$	(48,918	)	$	(113,043	)	$	(136,049	)	$	109,439
Capital expenditures	$	21,688		$	29,417		$	89,182		$	58,062
EBITDA from continuing operations(1)	$	130,166		$	104,224		$	329,801		$	233,954

(1) Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA as presented above is reconciled to net income under “Reconciliations to Amounts Reported under Generally Accepted Accounting Principles” below.

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Refining Operating Data

Our refinery operations include the Navajo Refinery and the Woods Cross Refinery. The following tables set forth information, including non-GAAP performance measures about our refinery operations. The cost of products and refinery gross margin do not include the effect of depreciation, depletion and amortization. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported under Generally Accepted Accounting Principles” below.

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2006			2005			2006			2005
Navajo Refinery
Crude charge (BPD)(1)			75,610			73,030			69,520			73,080
Refinery production (BPD)(2)			82,190			79,660			76,310			80,470
Sales of produced refined products (BPD)			80,950			80,280			75,680			80,160
Sales of refined products (BPD)(3)			96,688			87,830			90,495			89,130
Refinery utilization(4)			92.2	%		97.4	%		89.9	%		97.4	%
Average per produced barrel(5)
Net sales		$	84.49		$	79.18		$	83.21		$	67.46
Cost of products(6)			68.40			63.07			66.16			54.11
Refinery gross margin			16.09			16.11			17.05			13.35
Refinery operating expenses(7)			4.89			3.65			5.00			3.48
Net operating margin		$	11.20		$	12.46		$	12.05		$	9.87
Feedstocks:
Sour crude oil			79	%		87	%		81	%		88	%
Sweet crude oil			10	%		2	%		8	%		1	%
Other feedstocks and blends			11	%		11	%		11	%		11	%
Total			100	%		100	%		100	%		100	%
Sales of produced refined products:
Gasolines			58	%		57	%		59	%		58	%
Diesel fuels			31	%		29	%		28	%		28	%
Jet fuels			3	%		4	%		4	%		4	%
Asphalt			3	%		5	%		3	%		6	%
LPG and other			5	%		5	%		6	%		4	%
Total			100	%		100	%		100	%		100	%
	��
Woods Cross Refinery
Crude charge (BPD)(1)			24,360			24,350			24,130			23,970
Refinery production (BPD)(2)			25,790			26,190			25,620			25,760
Sales of produced refined products (BPD)			25,160			27,240			25,320			26,710
Sales of refined products (BPD)(3)			25,860			28,840			26,360			27,960
Refinery utilization(4)			93.7	%		93.7	%		92.8	%		92.2	%
Average per produced barrel(5)
Net sales		$	94.88		$	81.72		$	85.33		$	68.23
Cost of products(6)			71.82			68.65			67.56			59.26
Refinery gross margin			23.06			13.07			17.77			8.97
Refinery operating expenses(7)			5.18			4.11			5.01			4.18
Net operating margin		$	17.88		$	8.96		$	12.76		$	4.79

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	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Woods Cross Refinery
Feedstocks:
Sour crude oil		0	%		7	%		3	%		8	%
Sweet crude oil		92	%		81	%		89	%		81	%
Other feedstocks and blends		8	%		12	%		8	%		11	%
Total		100	%		100	%		100	%		100	%
Sales of produced refined products:
Gasolines		65	%		63	%		64	%		61	%
Diesel fuels		29	%		30	%		28	%		29	%
Jet fuels		2	%		2	%		2	%		2	%
Fuel oil		4	%		4	%		5	%		6	%
LPG and other		0	%		1	%		1	%		2	%
Total		100	%		100	%		100	%		100	%
Consolidated(8)
Crude charge (BPD)(1)		99,970			97,380			93,650			97,050
Refinery production (BPD)(2)		107,980			105,850			101,930			106,230
Sales of produced refined products (BPD)		106,110			107,520			101,000			106,870
Sales of refined products (BPD)(3)		122,548			116,670			116,855			117,090
Refinery utilization(4)		92.6	%		96.4	%		90.6	%		96.1	%
Average per produced barrel(5)
Net sales	$	86.96		$	79.82		$	83.74		$	67.65
Cost of products(6)		69.21			64.48			66.51			55.40
Refinery gross margin		17.75			15.34			17.23			12.25
Refinery operating expenses(7)		4.96			3.77			5.00			3.66
Net operating margin	$	12.79		$	11.57		$	12.23		$	8.59
Feedstocks:
Sour crude oil		60	%		67	%		61	%		69	%
Sweet crude oil		30	%		22	%		28	%		20	%
Other feedstocks and blends		10	%		11	%		11	%		11	%
Total		100	%		100	%		100	%		100	%
Sales of produced refined products:
Gasolines		60	%		59	%		60	%		59	%
Diesel fuels		30	%		29	%		28	%		28	%
Jet fuels		2	%		3	%		4	%		3	%
Asphalt		3	%		4	%		2	%		5	%
LPG and other		5	%		5	%		6	%		5	%
Total		100	%		100	%		100	%		100	%

(1)	Crude charge represents the barrels per day of crude oil processed at the crude units at our refineries.
(2)	Refinery production represents the barrels per day of refined products yielded from processing crude and other refinery feedstocks through the crude units and other conversion units at our refineries.
(3)	Includes refined products purchased for resale.
(4)	Represents crude charge divided by total crude capacity (BPSD).
(5)	Represents average per barrel amounts for produced refined products sold, which are non-GAAP. Reconciliations to amounts reported under GAAP are located under “Reconciliations to Amounts Reported under Generally Accepted Accounting Principles” below.
(6)	Transportation costs billed from HEP are included in cost of products.
(7)	Represents operating expenses of our refineries, exclusive of depreciation, depletion, and amortization.
(8)	The Montana Refinery was sold on March 31, 2006. Amounts reported are for the Navajo and Woods Cross Refineries.

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Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles

Reconciliations of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to amounts reported under generally accepted accounting principles in financial statements.

Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA, is calculated as net income plus (i) interest expense net of interest income, (ii) income tax provision, and (iii) depreciation, depletion and amortization. EBITDA is not a calculation based upon accounting principles generally accepted in the United States; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative 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 is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants. We are reporting EBITDA from continuing operations.

Set forth below is our calculation of EBITDA from continuing operations.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
				(In thousands)
Income from continuing operations	$	79,201		$	60,686		$	198,090		$	126,205
Add provision for income tax		43,964			35,690			109,599			75,602
Add interest expense		268			501			815			4,706
Subtract interest income		(2,747	)		(1,202	)		(6,890	)		(4,455	)
Add depreciation, depletion and amortization		9,480			8,549			28,187			31,896
EBITDA from continuing operations	$	130,166		$	104,224		$	329,801		$	233,954

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.

We calculate refinery gross margin and net operating margin using net sales, cost of products and operating expenses, in each case averaged per produced barrel sold. These two margins do not include the effect of depreciation, depletion and amortization. Each of these component performance measures can be reconciled directly to our Statements of Income.

Other companies in our industry may not calculate these performance measures in the same manner.

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Refinery Gross Margin
Refinery gross margin per barrel is the difference between average net sales price and average cost of products per barrel of produced refined products. Refinery gross margin for each of our refineries and for both of our refineries on a consolidated basis is calculated as shown below.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2006		2005		2006		2005
Average per produced barrel:
Navajo Refinery
Net sales	$	84.49	$	79.18	$	83.21	$	67.46
Less cost of products		68.40		63.07		66.16		54.11
Refinery gross margin	$	16.09	$	16.11	$	17.05	$	13.35
Woods Cross Refinery
Net sales	$	94.88	$	81.72	$	85.33	$	68.23
Less cost of products		71.82		68.65		67.56		59.26
Refinery gross margin	$	23.06	$	13.07	$	17.77	$	8.97
Consolidated
Net sales	$	86.96	$	79.82	$	83.74	$	67.65
Less cost of products		69.21		64.48		66.51		55.40
Refinery gross margin	$	17.75	$	15.34	$	17.23	$	12.25

Net Operating Margin
Net operating margin per barrel is the difference between refinery gross margin and refinery operating expenses per barrel of produced refined products. Net operating margin for each of our refineries and for both of our refineries on a consolidated basis is calculated as shown below.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2006		2005		2006		2005
Average per produced barrel:
Navajo Refinery
Refinery gross margin	$	16.09	$	16.11	$	17.05	$	13.35
Less refinery operating expenses		4.89		3.65		5.00		3.48
Net operating margin	$	11.20	$	12.46	$	12.05	$	9.87
Woods Cross Refinery
Refinery gross margin	$	23.06	$	13.07	$	17.77	$	8.97
Less refinery operating expenses		5.18		4.11		5.01		4.18
Net operating margin	$	17.88	$	8.96	$	12.76	$	4.79
Consolidated
Refinery gross margin	$	17.75	$	15.34	$	17.23	$	12.25
Less refinery operating expenses		4.96		3.77		5.00		3.66
Net operating margin	$	12.79	$	11.57	$	12.23	$	8.59

Below are reconciliations to our Consolidated Statements of Income for (i) net sales, cost of products and operating expenses, in each case averaged per produced barrel sold, and (ii) net operating margin and refinery gross margin. Due to rounding of reported numbers, some amounts may not calculate exactly.

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     Reconciliations of refined product sales from produced products sold to total sales and other revenue

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Navajo Refinery
Average sales price per produced barrel sold	$	84.49		$	79.18		$	83.21		$	67.46
Times sales of produced refined products sold (BPD)		80,950			80,280			75,680			80,160
Times number of days in period		92			92			273			273
Refined product sales from produced products sold	$	629,231		$	584,804		$	1,719,172		$	1,476,273
Woods Cross Refinery
Average sales price per produced barrel sold	$	94.88		$	81.72		$	85.33		$	68.23
Times sales of produced refined products sold (BPD)		25,160			27,240			25,320			26,710
Times number of days in period		92			92			273			273
Refined product sales from produced products sold	$	219,621		$	204,797		$	589,832		$	497,522
Sum of refined products sales from produced products sold from our two refineries(4)	$	848,852		$	789,601		$	2,309,004		$	1,973,795
Add refined product sales from purchased products and rounding(1)		143,421			67,315			395,664			192,097
Total refined products sales		992,273			856,916			2,704,668			2,165,892
Add direct sales of excess crude oil(2)		143,103			—			274,378			—
Add other refining segment revenue(3)		37,033			23,312			105,549			50,634
Total refining segment revenue		1,172,409			880,228			3,084,595			2,216,526
Add HEP sales and other revenue		—			—			—			36,034
Add corporate and other revenues		404			417			928			1,034
Subtract consolidations and eliminations		(120	)		(125	)		(396	)		(19,699	)
Sales and other revenues	$	1,172,693		$	880,520		$	3,085,127		$	2,233,895

(1)	We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments.
(2)	We purchase crude oil and enter into buy/sell exchanges in excess of the needs to supply our refineries. Certain direct sales of this excess crude oil are made to purchasers or users of crude oil. Under new accounting guidance, these sales and related purchases starting April 1, 2006 are being measured at fair value and accounted for as revenues with the related acquisition costs included as cost of products sold. Prior to April 1, 2006, sales and cost of sales attributable to such excess crude oil direct sales were netted and presented in cost of products sold.
(3)	Other refining segment revenue includes the revenues associated with NK Asphalt Partners subsequent to their consolidation in February 2005 and revenue derived from sulfur credit sales.
(4)	The above calculations of refined product sales from produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2006		2005		2006		2005
Average sales price per produced barrel sold	$	86.96	$	79.82	$	83.74	$	67.65
Times sales of produced refined products sold (BPD)		106,110		107,520		101,000		106,870
Times number of days in period		92		92		273		273
Refined product sales from produced products sold	$	848,852	$	789,601	$	2,309,004	$	1,973,795

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Reconciliation of average cost of products per produced barrel sold to total costs of products sold

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Navajo Refinery
Average cost of products per produced barrel sold	$	68.40		$	63.07		$	66.16		$	54.11
Times sales of produced refined products sold (BPD)		80,950			80,280			75,680			80,160
Times number of days in period		92			92			273			273
Cost of products for produced products sold	$	509,402		$	465,820		$	1,366,908		$	1,184,126
Woods Cross Refinery
Average cost of products per produced barrel sold	$	71.82		$	68.65		$	67.56		$	59.26
Times sales of produced refined products sold (BPD)		25,160			27,240			25,320			26,710
Times number of days in period		92			92			273			273
Cost of products for produced products sold	$	166,243		$	172,042		$	466,999		$	432,114
Sum of cost of products for produced products sold from our two refineries(4)	$	675,645		$	637,862		$	1,833,907		$	1,616,240
Add refined product costs from purchased products sold and rounding(1)		136,241			70,839			394,131			198,150
Total refined cost of products sold		811,886			708,701			2,228,038			1,814,390
Add crude oil cost of direct sales of excess crude oil(2)		142,863			—			273,924			—
Add other refining segment costs of products sold(3)		24,680			16,710			61,237			33,941
Total refining segment cost of products sold		979,429			725,411			2,563,199			1,848,331
Add corporate and other costs		—			—			—			—
Subtract consolidations and eliminations		(120	)		(125	)		(396	)		(19,699	)
Costs of products sold (exclusive of depreciation, depletion and amortization)	$	979,309		$	725,286		$	2,562,803		$	1,828,632

(1)	We purchase finished products when opportunities arise that provide a profit on the sale of such products, or to meet delivery commitments.
(2)	We purchase crude oil and enter into buy/sell exchanges in excess of the needs to supply our refineries. Certain direct sales of this excess crude oil are made to purchasers or users of crude oil. Under new accounting guidance, these sales and related purchases starting April 1, 2006 are being measured at fair value and accounted for as revenues with the related acquisition costs included as cost of products sold. Prior to April 1, 2006, sales and cost of sales attributable to such excess crude oil direct sales were netted and presented in cost of products sold.
(3)	Other refining segment costs of products sold includes the costs of products for NK Asphalt Partners subsequent to their consolidation in February 2005 and costs attributable to sulfur credit sales.
(4)	The above calculations of costs of products from produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2006		2005		2006		2005
Average cost of products per produced barrel sold	$	69.21	$	64.48	$	66.51	$	55.40
Times sales of produced refined products sold (BPD)		106,110		107,520		101,000		106,870
Times number of days in period		92		92		273		273
Cost of products for produced products sold	$	675,645	$	637,862	$	1,833,907	$	1,616,240

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Reconciliation of average refinery operating expenses per produced barrel sold to total operating expenses

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2006		2005		2006		2005
Navajo Refinery
Average refinery operating expenses per produced barrel sold	$	4.89	$	3.65	$	5.00	$	3.48
Times sales of produced refined products sold (BPD)		80,950		80,280		75,680		80,160
Times number of days in period		92		92		273		273
Refinery operating expenses for produced products sold	$	36,418	$	26,958	$	103,303	$	76,155
Woods Cross Refinery
Average refinery operating expenses per produced barrel sold	$	5.18	$	4.11	$	5.01	$	4.18
Times sales of produced refined products sold (BPD)		25,160		27,240		25,320		26,710
Times number of days in period		92		92		273		273
Refinery operating expenses for produced products sold	$	11,990	$	10,300	$	34,631	$	30,480
Sum of refinery operating expenses per produced products sold from our two refineries(2)	$	48,408	$	37,258	$	137,934	$	106,635
Add other refining segment operating expenses and rounding(1)		5,714		5,029		17,731		13,560
Total refining segment operating expenses		54,122		42,287		155,665		120,195
Add HEP operating expenses		—		—		—		11,836
Add corporate and other costs		24		—		40		—
Operating expenses (exclusive of depreciation, depletion and amortization)	$	54,146	$	42,287	$	155,705	$	132,031

(1)	Other refining segment operating expenses include the marketing costs associated with our refining segment and the operating expenses of NK Asphalt Partners subsequent to their consolidation in February 2005.
(2)	The above calculations of refinery operating expenses from produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2006		2005		2006		2005
Average refinery operating expenses per produced barrel sold	$	4.96	$	3.77	$	5.00	$	3.66
Times sales of produced refined products sold (BPD)		106,110		107,520		101,000		106,870
Times number of days in period		92		92		273		273
Refinery operating expenses for produced products sold	$	48,408	$	37,258	$	137,934	$	106,635

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Reconciliation of net operating margin per barrel to refinery gross margin per barrel to total sales and other revenues

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Navajo Refinery
Net operating margin per barrel	$	11.20		$	12.46		$	12.05		$	9.87
Add average refinery operating expenses per produced barrel		4.89			3.65			5.00			3.48
Refinery gross margin per barrel		16.09			16.11			17.05			13.35
Add average cost of products per produced barrel sold		68.40			63.07			66.16			54.11
Average net sales per produced barrel sold	$	84.49		$	79.18		$	83.21		$	67.46
Times sales of produced refined products sold (BPD)		80,950			80,280			75,680			80,160
Times number of days in period		92			92			273			273
Refined products sales from produced products sold	$	629,231		$	584,804		$	1,719,172		$	1,476,273
Woods Cross Refinery
Net operating margin per barrel	$	17.88		$	8.96		$	12.76		$	4.79
Add average refinery operating expenses per produced barrel		5.18			4.11			5.01			4.18
Refinery gross margin per barrel		23.06			13.07			17.77			8.97
Add average cost of products per produced barrel sold		71.82			68.65			67.56			59.26
Average net sales per produced barrel sold	$	94.88		$	81.72		$	85.33		$	68.23
Times sales of produced refined products sold (BPD)		25,160			27,240			25,320			26,710
Times number of days in period		92			92			273			273
Refined products sales from produced products sold	$	219,621		$	204,797		$	589,832		$	497,522
Sum of refined products sales from produced products sold from our two refineries(4)	$	848,852		$	789,601		$	2,309,004		$	1,973,795
Add refined product sales from purchased products and rounding(1)		143,421			67,315			395,664			192,097
Total refined products sales		992,273			856,916			2,704,668			2,165,892
Add direct sales of excess crude oil(2)		143,103			—			274,378			—
Add other refining segment revenue(3)		37,033			23,312			105,549			50,634
Total refining segment revenue		1,172,409			880,228			3,084,595			2,216,526
Add HEP sales and other revenue		—			—			—			36,034
Add corporate and other revenues		404			417			928			1,034
Subtract consolidations and eliminations		(120	)		(125	)		(396	)		(19,699	)
Sales and other revenues	$	1,172,693		$	880,520		$	3,085,127		$	2,233,895

(1)	We purchase finished products when opportunities arise that provide a profit on the sale of such products or to meet delivery commitments.
(2)	We purchase crude oil and enter into buy/sell exchanges in excess of the needs to supply our refineries. Certain direct sales of this excess crude oil are made to purchasers or users of crude oil. Under new accounting guidance, these sales and related purchases starting April 1, 2006 are being measured at fair value and accounted for as revenues with the related acquisition costs included as cost of products sold. Prior to April 1, 2006, sales and cost of sales attributable to such excess crude oil direct sales were netted and presented in cost of products sold.
(3)	Other refining segment revenue includes the revenues associated with NK Asphalt Partners subsequent to their consolidation in February 2005 and revenue derived from sulfur credit sales.
(4)	The above calculations of refined product sales from produced products sold can also be computed on a consolidated basis. These amounts may not calculate exactly due to rounding of reported numbers.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2006		2005		2006		2005
Net operating margin per barrel	$	12.79	$	11.57	$	12.23	$	8.59
Add average refinery operating expenses per produced barrel		4.96		3.77		5.00		3.66
Refinery gross margin per barrel		17.75		15.34		17.23		12.25
Add average cost of products per produced barrel sold		69.21		64.48		66.51		55.40
Average sales price per produced barrel sold	$	86.96	$	79.82	$	83.74	$	67.65
Times sales of produced refined products sold (BPD)		106,110		107,520		101,000		106,870
Times number of days in period		92		92		273		273
Refined product sales from produced products sold	$	848,852	$	789,601	$	2,309,004	$	1,973,795

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FOR FURTHER INFORMATION, Contact:

Stephen J. McDonnell, Vice President and
     Chief Financial Officer
M. Neale Hickerson, Vice President,
     Investor Relations
Holly Corporation
214/871-3555

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