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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number 1-3876
HOLLY CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 75-1056913
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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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Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
8,253,514 shares of Common Stock, par value $.01 per share, were outstanding on
March 2, 1998.
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HOLLY CORPORATION
INDEX
Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet -
January 31, 1998 (Unaudited) and July 31, 1997 3
Consolidated Statement of Income (Unaudited) -
Three Months and Six Months Ended January 31, 1998 and 1997 4
Consolidated Statement of Cash Flows (Unaudited) -
Six Months Ended January 31, 1998 and 1997 5
Notes to Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HOLLY CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands Except Per Share Amounts)
Unaudited
January 31, July 31,
1998 1997
--------- ---------
ASSETS
Current assets
Cash and cash equivalents $ 3,177 $ 20,042
Accounts receivable: Product 37,343 45,608
Crude oil resales 47,373 60,213
--------- ---------
84,716 105,821
Inventories: Crude oil and refined products 44,514 49,429
Materials and supplies 8,947 8,844
--------- ---------
53,461 58,273
Income taxes receivable 1,819 1,319
Prepayments and other 13,452 9,273
--------- ---------
Total current assets 156,625 194,728
Properties, plants and equipment, at cost 300,952 278,707
Less accumulated depreciation, depletion and amortization 143,630 135,167
--------- ---------
157,322 143,540
Investment in joint venture 6,371 5,235
Other assets 18,641 6,300
--------- ---------
$ 338,959 $ 349,803
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 99,366 $ 124,585
Accrued liabilities 13,841 13,730
Income taxes payable 285 397
Current maturities of long-term debt 10,775 10,775
Borrowings under credit agreement 9,300 --
--------- ---------
Total current liabilities 133,567 149,487
Deferred income taxes 23,012 19,679
Long-term debt, less current maturities 75,508 75,516
Commitments and contingencies
Stockholders' equity
Preferred stock, $1.00 par value -
1,000,000 shares authorized; none issued
Common stock, $.01 par value -- --
20,000,000 shares
authorized; 8,650,282 shares issued 87 87
Additional capital 6,132 6,132
Retained earnings 101,222 99,471
--------- ---------
107,441 105,690
Common stock held in treasury, at cost - 396,768 shares (569) (569)
--------- ---------
Total stockholders' equity 106,872 105,121
--------- ---------
$ 338,959 $ 349,803
========= =========
See accompanying notes
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HOLLY CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Dollars in Thousands Except Per Share Amounts)
Unaudited Unaudited
Three Months Ended Six Months Ended
January 31, January 31,
------------------------ ------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
Revenues
Refined products $ 134,661 $ 182,004 $ 300,767 $ 367,399
Oil and gas 1,980 1,621 4,609 3,047
Miscellaneous 142 276 329 401
--------- --------- --------- ---------
136,783 183,901 305,705 370,847
Costs and expenses
Cost of refined products 126,484 176,169 276,217 347,085
General and administrative 3,607 3,309 6,758 6,945
Depreciation, depletion and amortization 6,074 4,840 11,248 9,940
Exploration expenses, including dry holes 814 602 1,604 1,225
--------- --------- --------- ---------
136,979 184,920 295,827 365,195
--------- --------- --------- ---------
Income (loss) from operations (196) (1,019) 9,878 5,652
Other
Equity in earnings of joint venture 558 -- 909 --
Interest income 122 873 520 1,932
Interest expense (2,118) (2,384) (4,262) (4,756)
--------- --------- --------- ---------
(1,438) (1,511) (2,833) (2,824)
--------- --------- --------- ---------
Income (loss) before income taxes (1,634) (2,530) 7,045 2,828
Income tax provision (benefit)
Current (2,981) (1,850) (1,273) (533)
Deferred 2,327 834 4,091 1,667
--------- --------- --------- ---------
(654) (1,016) 2,818 1,134
--------- --------- --------- ---------
Net income (loss) $ (980) $ (1,514) $ 4,227 $ 1,694
========= ========= ========= =========
Income (loss) per common share (basic
and diluted) $ (.12) $ (.18) $ .51 $ .21
Cash dividends paid per share $ .15 $ .12 $ .30 $ .24
Average number of shares of common
stock outstanding (in thousands) 8,254 8,254 8,254 8,254
See accompanying notes.
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HOLLY CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
Unaudited
Six Months Ended
January 31,
----------------------
1998 1997
-------- --------
Cash flows from operating activities
Net income $ 4,227 $ 1,694
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation, depletion and amortization 11,248 9,940
Deferred income taxes 4,091 1,667
Equity in earnings of joint venture (909) --
Dry hole costs and leasehold impairment 421 247
(Increase) decrease in operating assets
Accounts receivable 21,105 (3,691)
Inventories 4,812 (10,270)
Income taxes receivable (500) (4,269)
Prepayments and other (473) (360)
Increase (decrease) in operating liabilities
Accounts payable (25,219) 20,140
Accrued liabilities 111 528
Income taxes payable (112) (4,202)
Turnaround expenditures (18,685) (3,076)
Other, net 112 73
-------- --------
Net cash provided by operating activities 229 8,421
Cash flows from financing activities
Increase in borrowings under credit agreement 9,300 --
Payment of long-term debt (8) (8)
Debt issuance costs (547) --
Cash dividends (2,476) (1,981)
-------- --------
Net cash provided by (used for) financing activities 6,269 (1,989)
Cash flows from investing activities
Additions to properties, plants and equipment (23,363) (14,134)
Investment in joint venture -- (2,542)
-------- --------
Net cash used for investing activities (23,363) (16,676)
-------- --------
Cash and cash equivalents
Decrease for the period (16,865) (10,244)
Beginning of year 20,042 63,959
-------- --------
End of period $ 3,177 $ 53,715
======== ========
Supplemental disclosure of cash flow information
Cash paid during period for
Interest $ 4,154 $ 4,652
Income taxes $ 360 $ 7,505
See accompanying notes.
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HOLLY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Presentation of Financial Statements
In the opinion of the Company, the accompanying consolidated financial
statements, which have not been audited by independent accountants (except for
the consolidated balance sheet as of July 31, 1997), reflect all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the Company's consolidated financial position as of January 31, 1998, the
consolidated results of operations for the three months and six months ended
January 31, 1998 and 1997, and consolidated cash flows for the six months ended
January 31, 1998 and 1997.
Certain notes and other information have been condensed or omitted.
Therefore, these financial statements should be read in conjunction with the
consolidated financial statements and related notes included in the Company's
Annual Report on Form 10-K for the fiscal year ended July 31, 1997. Certain
reclassifications have been made to the prior years' financial statements to
conform to current classifications.
References herein to the "Company" are for convenience of presentation
and may include obligations, commitments or contingencies that pertain solely to
one or more affiliates of the Company. Results of operations for the first six
months of fiscal 1998 are not necessarily indicative of the results to be
expected for the full year.
Note B - Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
Per Share." SFAS No. 128, which establishes standards for computing and
presenting earnings per share, is effective for interim and annual periods
ending after December 15, 1997 and requires restatement of earnings per share
data presented in prior periods. The Company adopted SFAS No. 128 in the
quarterly period ending January 31, 1998. The adoption of SFAS No. 128 did not
have an impact on reported earnings per share.
Note C - Debt
In October 1997, the Company and its subsidiaries entered into a new
three-year credit agreement (Credit Agreement) with a group of banks. The Credit
Agreement provides a $100 million facility for letters of credit, or for direct
borrowings of up to $50 million. Interest on borrowings is based upon, at the
Company's option, (i) the higher of the agent bank's prime rate and the Federal
funds rate plus .50% per annum; or (ii) various Euro-dollar related rates. A fee
ranging from 1% to 1.5% per annum is payable on the outstanding balance of all
letters of credit and a commitment fee ranging from .20% to .35% per annum is
payable on the unused portion of the facility. Such fees are determined based on
a quarterly calculation of the ratio of cash flow to debt of the Company. The
borrowing base, which secures the facility, consists of accounts receivable and
inventory. The Credit Agreement imposes certain requirements, including: (i) a
prohibition of other indebtedness in excess of $5 million with exceptions for,
among other things,
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HOLLY CORPORATION
indebtedness under the Company's Senior Notes; (ii) maintenance of certain
levels of net worth, working capital and a cash flow-to-debt ratio; (iii)
limitations on investments, capital expenditures and dividends; and (iv) a
prohibition of changes in controlling ownership and material changes in senior
management.
Note D - Contingencies
In July 1993, the United States Department of Justice (DOJ), on behalf of
the United States Environmental Protection Agency (EPA), filed a suit against
the Company's subsidiary, Navajo Refining Company (Navajo) alleging that,
beginning in September 1990 and continuing through the present, Navajo has
violated and continues to violate the Resource Conservation and Recovery Act
(RCRA) and implementing regulations of the EPA by treating, storing and
disposing of certain hazardous wastes in the refinery's wastewater treatment
system without compliance with regulatory requirements. Navajo and the DOJ have
agreed in principle on a settlement that would resolve this pending litigation.
Under this agreement, the Company would close the existing evaporation ponds of
its wastewater treatment system. The agreement also contemplates that the
Company would utilize an alternative to the existing wastewater treatment system
at an estimated total cost of approximately $3 million. The costs to implement
an alternative wastewater treatment system would be capitalized and amortized
over the future useful life of the resulting asset in accordance with generally
accepted accounting principles. Finally, the agreement would also involve the
payment of a civil penalty of less than $2 million. In fiscal 1993, the Company
recorded a $2 million reserve for this litigation.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Factors Affecting Forward-Looking Statements
This Quarterly Report on Form 10-Q contains certain "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1993, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements included in this Form 10-Q, including without limitation statements
in this Item 2 under the headings "Results of Operations" and "Liquidity and
Capital Resources," other than statements of historical facts, 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
crude oil, the possibility of constraints on the transportation of refined
products, the possibility of inefficiencies or shutdowns in refinery operations,
governmental regulations and policies, the availability of financing to the
Company on favorable terms, the effectiveness of Company capital investments and
marketing strategies, and the completion of announced capital projects. Because
of these and other risks and uncertainties, actual results may vary materially
from those estimated, anticipated or projected. Although the Company believes
that the expectations reflected by the
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
forward-looking statements contained in this Report are reasonable based on
information currently available to the Company, no assurances can be given that
such expectations will prove to be 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, 1997 and in conjunction with the discussion below under the heading
"Liquidity and Capital Resources." All forward-looking statements included in
this Form 10-Q 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.
Results of Operations
The Company incurred a net loss for the second quarter ended January 31,
1998 of $1.0 million as compared to a net loss of $1.5 million, for the second
quarter of the prior year. For the six months ended January 31, 1998, net income
was $4.2 million as compared to net income of $1.7 million for the same period
of fiscal 1997.
The decrease in the loss in the second quarter of fiscal 1998 and the
increase in net income in the six months ending January 31, 1998 as compared to
the prior year were principally due to increased refinery margins over levels
for the same periods of the prior year. For both the second quarter and the
first six months of fiscal 1998, crude prices decreased at a greater rate than
product prices, resulting in the earnings increase. Refinery margins for Montana
Refining Company were especially strong throughout the first six months of
fiscal 1998. Refinery margins for Navajo Refining Company, although at higher
levels than for the the previous year's second quarter, were at depressed levels
during portions of the second quarter of fiscal 1998. Somewhat offsetting the
increase in earnings resulting from the better margins was an overall decrease
in refined product sales volumes of 12% and 10% in the second quarter and the
first six months of fiscal 1998 as compared to the same periods of fiscal 1997.
These volume decreases, which had a negative impact on earnings in the current
year periods, resulted from reductions in production that were required by
planned major maintenance (a turnaround) that was conducted in stages at the
Navajo Refinery in the first quarter and the early part of the second quarter of
fiscal 1998. During this turnaround, the fluid catalytic cracking unit (FCC)
upgrade became operational and has substantially improved high value product
yields. Additionally impacting earnings in the current year periods was an
increase in depreciation, depletion and amortization resulting from the
turnaround costs, which began to be amortized after the completion of the
turnaround in the second quarter. Revenues decreased in the three and six month
periods ended January 31, 1998 from the prior year's comparable periods as a
result of the reduced volumes and reduced sales prices.
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HOLLY CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
Liquidity and Capital Resources
Cash and cash equivalents decreased during the six months ended January
31, 1998 by $16.9 million, as cash flows required for capital expenditures and
dividends paid were greater than cash flows generated from operations and new
borrowings under the Credit Agreement. Working capital decreased during the six
months ended January 31, 1998 by $22.2 million to $23.1 million. The Company's
long-term debt now represents 44.7% of total capitalization as compared to 45.1%
at July 31, 1997. In October 1997, the Company entered into a new Credit
Agreement which can be used for direct borrowings of up to $50 million. The
Company believes that these sources of funds, together with future cash flows
from operations, should provide sufficient resources, financial strength and
flexibility to enable the Company for the foreseeable future to satisfy its
liquidity needs, capital requirements, and debt service obligations while
continuing the payment of dividends.
Net cash provided by operating activities amounted to $.2 million in the
first six months of fiscal 1998, as compared to $8.4 million in the same period
of the prior year. The decrease in net cash provided by operating activities was
principally due to expenditures of $18.7 million during the six months ended
January 31, 1998 for the Navajo Refinery turnaround. Such expenditures were
partially offset by increased cash generated by operating activities, including
the increase in earnings for the six months, and changes in working capital
accounts.
Cash flows provided by financing activities amounted to $6.3 million in
the first six months of fiscal 1998, as compared to cash flows used for
financing activities of $2.0 million in the same period of the prior year. With
the Company's then-existing credit agreement scheduled to mature in November
1997, the Company in October 1997 entered into a new three-year Credit Agreement
with a different group of banks, some of which had also been included in the
previous credit agreement. The new Credit Agreement provides for a total
facility of $100 million, the full amount of which may be used to support
letters of credit and $50 million of which may be used for direct borrowings. As
of January 31, 1998, the Company had direct borrowings outstanding under the
Credit Agreement of $9.3 million. The other terms of the new Credit Agreement
are substantially similar to those of the previous credit agreement. See Note C
to the Consolidated Financial Statements for a summary of the terms and
conditions of the new Credit Agreement. The next principal payment of $10.8
million on the Company's Senior Notes is due in June 1998.
Cash flows used for investing activities were $23.4 million in the first
six months of fiscal 1998, as compared to $16.7 million in the same period of
the prior year. The Company has adopted capital budgets totalling $23 million
for fiscal 1998. The components of this budget are $8 million for various
refinery improvements and environmental and safety enhancements, $12 million for
various pipeline and transportation projects and $3 million for oil and gas
exploration
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HOLLY CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
and production activities. In addition to these projects, the Company plans to
complete in the 1998 fiscal year certain major capital projects, with
expenditures totalling $21 million, that were approved in previous capital
budgets. These include projects involving upgrades at the Navajo Refinery to
improve product yields, certain environmental enhancements, and the construction
of a connecting pipeline and related product terminals that will be used in
conjunction with the leased pipeline to northwest New Mexico described below.
In addition to the above projects, the Company purchased for $5 million
in November 1997 a hydrotreater unit from a closed refinery. This purchase will
give the Company the ability, if market conditions necessitate, to reconstruct
the unit at the Navajo Refinery at a substantial savings as compared to the cost
of a new unit. The hydrotreater would enhance product yields and facilitate the
Company's ability to meet the present California Air Resources Board (CARB)
standards, should such standards be adopted in markets that the Company serves.
The Company believes the scheduled capital projects to upgrade the
Navajo Refinery will improve product yields and enhance refining profitability.
In November 1997, the fluid catalytic cracking unit (FCC) upgrade for the Navajo
Refinery became operational and has substantially improved the high value
product yields.
The Company has entered into an agreement with Mid-America Pipeline
Company to lease more than 300 miles of 8" pipeline running from Chaves County
to San Juan County, New Mexico (the Leased Pipeline). The Company has
constructed a 12" pipeline, from the Navajo Refinery to the Leased Pipeline, and
is in the process of constructing related terminalling and pumping facilities.
These facilities will allow the Company to use the Leased Pipeline to transport
refined products from the Navajo Refinery to Albuquerque and to markets in
northwest New Mexico. The Leased Pipeline and related facilities are projected
to be operational near the end of fiscal 1998.
Completion of the current pipeline and terminals to be used in
connection with the Leased Pipeline to Albuquerque and to northwest New Mexico
together with recently expanded pipeline capacity to El Paso should reduce the
Company's pipeline operating expenses at current throughputs and would give the
Company increased flexibility to expand shipments of refined products from the
Navajo Refinery to existing and new markets.
The Company announced in February 1997 the formation of an alliance with
FINA, Inc. (FINA) to create a comprehensive supply network that can increase
substantially the supplies of gasoline and diesel fuel in the West Texas, New
Mexico, and Arizona markets to meet expected increasing demand in the coming
years. FINA is in the process of constructing a 50-mile pipeline which will
connect an existing FINA pipeline system to the Company's 12" pipeline extending
between Orla, Texas and El Paso, Texas. Once completed, FINA will be able to
transport to El Paso gasoline and diesel fuel from its Big Spring, Texas
refinery or, if conditions dictate, from its
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HOLLY CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
Port Arthur, Texas refinery on the Gulf Coast via FINA's connecting Amdel
Pipeline. In New Mexico, the activation of the Company's 12" pipeline from the
Navajo Refinery to the Leased Pipeline will provide direct transportation
service to Albuquerque and northwest New Mexico, positioning the Company and
FINA, via exchange, to meet increasing demand in these areas. Pursuant to a
long-term agreement, FINA will have the right to transport up to 20,000 BPD to
El Paso on this interconnected system. However, if conditions dictate and if
mutually agreed by the Company and FINA, volumes from Big Spring or the Gulf
Coast could be substantially increased to utilize more fully this 10"-12"
pipeline network in meeting future demand increases in New Mexico, West Texas
and Arizona. It is anticipated that this pipeline network should be fully
operational by August 1998, at which time the Company will begin to realize
pipeline and terminalling revenues from FINA under the terms of the agreement.
Ultramar Diamond Shamrock Corporation (UDS), an independent refiner and
marketer, completed in November 1995 the construction of a 408-mile, 10" refined
products pipeline from its McKee refinery near Dumas, Texas to El Paso. UDS has
announced that the pipeline currently has a capacity of 45,000 BPD, and that,
with the addition of four pump stations to be completed in 1998, it will have a
capacity of 60,000 BPD. UDS has stated its intention to use this pipeline to
supply fuels to the El Paso, New Mexico, Arizona and northern Mexico markets. In
November 1997, UDS agreed to sell to Phillips Petroleum Company (Phillips) a 25%
initial interest, increasing to a 33-1/3% interest after the pipeline capacity
is increased to 60,000 BPD, in the pipeline and a UDS terminal in El Paso.
Phillips has announced plans to complete a 35-mile pipeline from its Borger,
Texas refinery to the existing line at the UDS McKee refinery. Phillips stated
that this arrangement will replace its previously announced plans to build a
pipeline from its Borger, Texas refinery to El Paso and will allow Phillips to
supply fuels to El Paso and other markets in the Southwest.
These pipeline systems have increased, and could further increase, the
supply of products in the Company's principal markets.
In addition, there continue to be reports, in the media and otherwise,
concerning other potential pipeline projects that could substantially affect the
volume of products in the Company's markets. The effects of such projects on the
Company's future results of operations cannot presently be determined.
In July 1993, the United States Department of Justice (DOJ) on behalf of
the United States Environmental Protection Agency (EPA), filed a suit against
the Company's subsidiary, Navajo alleging that, beginning in September 1990 and
continuing through the present, Navajo has violated and continues to violate the
Resource Conservation and Recovery Act (RCRA) and implementing regulations of
the EPA by treating, storing and disposing of certain hazardous
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HOLLY CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
wastes in the refinery's wastewater treatment system without compliance with
regulatory requirements. Navajo and the DOJ have agreed in principle on a
settlement that would resolve this pending litigation. Under this agreement, the
Company would close the existing evaporation ponds used in its wastewater
treatment system. The agreement also contemplates that the Company would utilize
an alternative to the existing wastewater treatment system at an estimated total
cost of approximately $3 million. The costs to implement the alternative
treatment system would be capitalized and amortized over the future useful life
of the resulting asset in accordance with generally accepted accounting
principles. Finally, the agreement would also involve the payment of a civil
penalty of less than $2 million. In fiscal 1993, the Company recorded a $2
million reserve for this litigation.
This discussion 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,
1997.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In July 1993, the DOJ, acting on behalf of the EPA, filed a complaint in
the United States District Court for the District of New Mexico alleging that
Navajo, beginning in September 1990 and continuing until the present, had
violated and continues to violate RCRA and implementing regulations of the EPA
by treating, storing and disposing of certain hazardous wastes without necessary
authorization and without compliance with regulatory requirements. The complaint
seeks a court order directing Navajo to comply with these regulatory standards
and civil penalties for the alleged non-compliance. As discussed in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note D to the Consolidated Financial Statements, an agreement in
principle has been reached.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: See Index to Exhibits on page 14.
(b) Reports on Form 8-K: None.
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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
-----------------------------------------
(Registrant)
Date: March 6, 1998 By /s/ HENRY A. TEICHHOLZ
---------------------------------------
Henry A. Teichholz
Vice President, Treasurer
and Controller
(Duly Authorized Principal
Financial and Accounting
Officer)
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INDEX TO EXHIBITS
(Exhibits are numbered to correspond to the
exhibit table in Item 601 of Regulation S-K)
Exhibit
Number Description
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27 - Financial Data Schedule
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