UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 20, 2002
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HOLLY CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 001-03876 75-1056913
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 871-3555
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ITEM 5. OTHER EVENTS
On December 20, 2002, the Company issued the following press release:
HOLLY CORPORATION ANNOUNCES AGREEMENT
TO ACQUIRE THE WOODS CROSS REFINERY IN SALT LAKE CITY
Dallas, Texas, December 20, 2002 - Holly Corporation (AMEX -
HOC), today announced that it has entered into a definitive agreement
with ConocoPhillips to acquire the Woods Cross refinery near Salt Lake
City, Utah and related assets. The total price for the assets is $25
million subject to reduction for certain pension obligations, plus the
value of crude oil, refined product and other inventories (estimated to
be approximately $30 million at closing).
The Woods Cross refinery has a crude oil capacity of 25,000
barrels per day and has operated at close to capacity over the last
three years. The purchase will also include certain pipelines and other
transportation assets used in connection with the refinery, 25 retail
service stations located in Utah and Wyoming, and a 10-year exclusive
license to market fuels under the Phillips brand in the states of Utah,
Wyoming, Idaho and Montana. ConocoPhillips and Holly also agree to work
cooperatively on possible extensions of this 10-year term. Over the
last three years, the Woods Cross refinery and retail assets have
averaged $20 million in earnings before interest, taxes and
depreciation. The purchase is expected to be financed by a combination
of cash and an inventory financing.
Matthew P. Clifton, President of Holly Corporation, said, "We
are very pleased about the Woods Cross acquisition. We expect the
acquisition to be significantly accretive to our earnings and cash flow
from the start. The refinery is well maintained, well staffed and is
currently meeting EPA mandated cleaner burning gasoline requirements
through January 2009. Estimated capital expenditures to address EPA's
June 2006 low-sulfur diesel fuel requirements are relatively modest and
offer potential opportunities for improved profitability. We plan on
working cooperatively with ConocoPhillips and the branded marketers in
the four states to support the quality and excellence of the Phillips
brand in these areas. We look forward to being a good employer for the
refinery's employees and to contributing to the local economy by
continuing to be a reliable supplier of clean
fuels." The transaction has been approved by both companies.
Consummation of the sale is subject to the satisfaction of certain
conditions, including approval by the Federal Trade Commission. The
transaction is expected to close in Holly Corporation's fiscal quarter
ended April 30, 2002.
Holly Corporation, through its affiliates, Navajo Refining
Company and Montana Refining Company, is engaged in the refining,
transportation, terminalling and wholesale marketing of petroleum
products.
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 belief 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. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, the Company cannot give any assurances that these
expectations will prove to be 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 or shutdowns in
refinery operations or pipelines, effects of governmental regulations
and policies, 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 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
Company assumes no duty to publicly update or revise such statements,
whether as a result of new information, future events or otherwise.
For further information, contact:
Matthew P. Clifton, President
Stephen J. McDonnell, Vice President and
Chief Financial Officer
Holly Corporation
(214) 871-3555
For information from ConocoPhillips concerning this transaction,
contact:
Rich Johnson
ConocoPhillips
(281) 293-1286
This Current Report on Form 8-K contains certain "forward-looking
statements" within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. All statements, other than statements of historical facts included
in this Form 8-K, are forward-looking statements. Such statements are subject to
risks and uncertainties, 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 or
shutdowns in refinery operations or pipelines, effects of governmental
regulations and policies, 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 construction projects, the possibility
of terrorist attacks and the consequences of any such attacks, and general
economic conditions. Although the Company believes that the expectations
reflected by such forward-looking statements are reasonable based on information
currently available to the Company, no assurances can be given that such
expectations will prove to have been correct. This summary discussion of risks
and uncertainties that may cause actual results to differ from those indicated
in forward-looking statements should be read in conjunction with the discussion
under the heading "Additional Factors That May Affect Future Results" included
in Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended
July 31, 2002, and the discussion under the heading "Additional Factors That May
Affect Future Results" included in Item 2 of Part I of the Company's Quarterly
Report on Form 10-Q for the quarter ended October 31, 2002. All forward-looking
statements included in this Current Report on Form 8-K and all subsequent oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by the cautionary statements
set forth above.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
HOLLY CORPORATION
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(Registrant)
Date: December 20, 2002 By /s/Stephen J. McDonnell
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Stephen J. McDonnell
Vice President and Chief
Financial Officer