Welcome to HollyFrontier Corporation's 2nd Quarter 2019 Conference Call and Webcast. Hosting the call today from HollyFrontier is George Damaris, President and Chief Executive Officer. He is joined by Rich Voliva, Executive Vice President and Chief Financial Officer Tom Creery, President, Refining and Marketing and Jim Stump, Senior Vice President, Refining. At this time, all participants have been placed in a listen only mode Call. Please note that this conference is being recorded.
It is now my pleasure to turn the call over to Craig Berry, Director, Investor Relations. Craig, you may begin.
Thank you, Stacy. Good morning, everyone, and welcome to HollyFrontier Corporation's Q2 2019 earnings call. This morning, we issued a press release announcing results for the quarter ending June 30, 2019. If you would like a copy of the press release, you may find 1 on our website at hollyfrontier.com. Before we proceed with remarks, please note the Safe Harbor disclosure statement in today's press release.
In summary, it says statements made regarding management expectations, judgments or predictions forward looking statements. These statements are intended to be covered under the Safe Harbor provisions of federal security laws. There are many factors that could cause results to differ from expectations, including those noted in our SEC filings. The call also may include discussion of non GAAP measures. Please see the press release for reconciliations to GAAP Financial Measures.
Also, please note any time sensitive information provided on today's call may no longer be accurate at the time of any webcast replay or rereading of the transcript. And with that, I'll turn the call over to George Dameris.
Thanks, Craig, and good morning, everyone. Today, we reported 2nd quarter net income attributable to HollyFrontier shareholders of $197,000,000 or $1.15 per diluted share. Certain items detailed in our earnings release decreased net income by $175,000,000 on an after tax basis. Excluding these items, net income for the current quarter was $372,000,000 or $2.18 per diluted share versus adjusted net income of $259,000,000 or $1.45 per diluted share for the same period last year. Adjusted EBITDA for the period was $647,000,000 an increase of $162,000,000 compared to the Q2 2018.
This increase was principally driven by strong gasoline and diesel margins across our company, along with our 1st full quarter contribution from Sonneborn. The Refining and Marketing segment reported adjusted EBITDA of $556,000,000 compared to $385,000,000 for the Q2 of 2018. Strong product margins in all of our regions resulted in a consolidated refinery gross margin of $19.64 per produced barrel, a 19% increase compared to the $16.57 for the same period last year. Our Lubricants and Specialty Products business reported adjusted EBITDA of $29,000,000 despite weakness in the base oil market. Rack Forward adjusted EBITDA was $64,000,000 for the quarter and adjusted EBITDA margin was 13% of sales.
The strength in Rack Forward earnings was driven by improved finished product margins. Our integration of Sonneborn is progressing well. And as of July 30, we have achieved run rate synergies of $9,000,000 and continue to expect long term synergies of $20,000,000 per year. Holly Energy Partners reported EBITDA of $89,000,000 for the Q2 compared to $82,000,000 in the Q2 of last year. Higher crude oil pipeline volumes around the Permian Basin and our crude pipeline systems in Wyoming and Utah contributed to a 10% increase in volumes year over year.
During the quarter, we returned $246,000,000 of cash to shareholders through our regular dividends and share repurchases. Looking forward, we will continue our focus on improving reliability across our refining system and successfully integrating Sonneborn, further strengthening our earnings profile. With no major planned downtime until September, our refineries are well positioned for strong operational and financial performance in the Q3. I'll now turn the call over to Jim for an update on our operations. Thank you, George.
For the Q1,
our crude throughput was 453,000 barrels per day within our guidance of 445,000 to 455,000 barrels per day. Crude throughput was impacted by the 2 week precautionary shutdown at our Tulsa refinery due to flooding in the Tulsa area. Our consolidated operating cost of $5.73 per throughput barrel was $0.16 lower versus last year. In the Mid Con, we ran 264,000 barrels per day of crude. OpEx per throughput barrel was $4.92 and was elevated versus the same period last year due to the 2 week outage in late May early June at Tulsa.
Our El Dorado refinery set a quarterly crude charge rate in the 2nd quarter, averaging 158,000 barrels per day. In the Southwest, we ran 109,000 barrels per day of crude and improved our operating expense per throughput barrel to $4.63 versus the $5.25 we recorded in the Q2 of 2018. In the Rockies, we ran 80,000 barrels per day of crude. Our operating expense was $9.84 per throughput barrel, a 26% decrease over the same period last year. We have planned maintenance at Navajo and a planned turnaround at Cheyenne, both scheduled to begin in September, and we expect to run between 440,000,450,000 barrels per day of crude in the 3rd quarter.
I will now turn the call over to Tom for an update on our commercial operations.
Thanks, Jim, and good morning, everyone. As Jim previously mentioned, in the Q2 of 2019, we ran 453,000 barrels a day of crude oil. This was composed of 30 5% Permian and 20% WCS and black wax crude oil. Our average laid in crude cost was under WTI by $3.35 in the Rockies, dollars 0.25 in the Mid Con and $0.94 in the Southwest. In the Q2 of 2019, gasoline inventories in the Magellan system started the quarter at 7,700,000 barrels and ended the quarter at 6,900,000 barrels.
Current inventories of Group 3 gasoline remain relatively static at 6,700,000 barrels. This is in keeping with the 5 year average volume. Group 3 diesel inventories rose by 1,100,000 barrels throughout the period to finish at 8,100,000 barrels. 2nd quarter 3/2/1 cracks in the Mid Con were $19.99 $31.30 in the Southwest and $32.19 in the Rockies. In our Southwest and Rocky regions, we saw higher margins as refinery operation issues on the West Coast affected markets in both Phoenix and Las Vegas.
Crude differentials compressed across the heavy and sour slates during the Q2. In the Canadian heavy market, 2nd quarter crude differentials for WCS at Hardisty averaged 11 $0.13 slightly below 1st quarter levels. Apportionment on the Enbridge system remained high at 40% despite the continuation of production cutbacks by the Alberta government. The former market for WCS remains wider as the market foresees incremental crude production coupled with perceived positive impact from IMO 2020. We continue to be able to purchase and deliver adequate volumes of price advantaged heavy crude oil from Canada to meet our refining needs.
Canadian heavy and sour runs averaged 76,000 barrels a day at our plants in the Mid Con and Rocky regions. We refined approximately 160,000 barrels per day of Permian crude in our refining system composed of 100,000 barrels per day at the Navajo complex and 60,000 barrels per day delivered by the Centurion pipeline to our refinery at El Dorado. Midland differentials averaged the quarter at $2.13 under WTI and currently we seem to see the same differential trading at around $0.70 below Cushing as new pipeline capacity is expected to come on stream. We anticipate for the remainder of this year the differential to narrow as additional pipeline comes on. Our rent expense for the quarter was $31,000,000 a $25,000,000 decrease versus the $56,000,000 in the same period last year.
And with that, let me turn the call over to Rich.
Thank you, Tom. As George mentioned, the 2nd quarter included a few unusual items. Pretax earnings were negatively impacted by a goodwill impairment of $153,000,000 a lower cost or market charge of $48,000,000 and Sonneborn integration costs of $4,000,000 The table of these items can be found in our press release. For the 2nd quarter, cash flow from operations was $753,000,000 including turnaround spending of $31,000,000 HollyFrontier's standalone capital expenditures totaled $50,000,000 in the quarter, producing free cash flow of $696,000,000 This second quarter's strong free cash flow allowed us to return a total of $246,000,000 of cash to shareholders, comprised of a $0.33 per share regular dividend, totaling $57,000,000 as well as the repurchase of approximately 4,500,000 shares of common stock totaling $189,000,000 As of June 30, we had approximately $509,000,000 remaining on our share repurchase authorization. Over the past 12 months, while continuing to invest across our three businesses, HollyFrontier has returned over $800,000,000 of cash to shareholders through both dividends and share repurchase, representing a cash yield of 10%.
At the end of the second quarter, our total cash balance stood at $915,000,000 which is above our target cash balance of $500,000,000 This strong cash position along with our undrawn $1,350,000,000 credit facility puts our total liquidity at over $2,300,000,000 As of quarter end, we had $1,000,000,000 of standalone debt and a debt to capital ratio of 14%. Total HEP distributions received by HFC in the 2nd quarter were $37,000,000 a 2% increase over the same period in 2018. HollyFrontier owns 59,600,000 HEP limited partner units, representing 57% of HEP's LP units with a market value of $1,700,000,000 as of last night's close. A few guidance items for 2019. We continue to expect to spend between $470,000,000 $510,000,000 for both standalone capital and turnarounds in our refining and marketing business, dollars 40,000,000 to $50,000,000 at HollyFrontier Lubes and Specialties and $30,000,000 to $40,000,000 of capital at HEP.
We anticipate an elevated cash balance through the 3rd quarter ahead of planned maintenance at both our El Dorado and Cheyenne refineries into the Q4. In our Lubes and Specialty Products business, due to both the continuing sales impacts of the flooding related shutdown at our Tulsa facility as well as previously unplanned maintenance at Tulsa's lube extraction unit in October, we're revising our annual Rack Forward guidance to $240,000,000 to $260,000,000 We continue to expect $25,000,000 to $30,000,000 of Sonneborn integration costs, implying another $9,000,000 to $14,000,000 which will stretch into 2020. In the Q2, due to the goodwill asset impairment, our effective tax rate was slightly elevated to 29%. Based on this, we now expect our full year effective tax rate to land at 25% to 27% and to revert back to normalized levels of 24% to 26% in 2020. And with that, Stacy, we're ready to take questions.
The floor is now open for questions. Thank you. I will now turn the call back over to Craig.
Thanks, everyone. We appreciate you taking the time to join us on today's call. If you have any follow-up questions, as always, reach out to Investor Relations. Otherwise, we look forward to sharing our Q3 results with you in October.
Thank you. This does conclude today's teleconference. Please disconnect your lines at this time. Have a wonderful day.