Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-3876 | |
Entity Registrant Name | HOLLYFRONTIER CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-1056913 | |
Entity Address, Address Line One | 2828 N. Harwood, | |
Entity Address, Address Line Two | Suite 1300 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75201 | |
City Area Code | 214 | |
Local Phone Number | 871-3555 | |
Title of 12(b) Security | Common Stock $0.01 par value | |
Trading Symbol | HFC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 162,490,166 | |
Entity Central Index Key | 0000048039 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents (HEP:$19,561 and $21,990, respectively) | $ 1,398,280 | $ 1,368,318 |
Accounts receivable: Product and transportation (HEP: $14,749 and $14,543, respectively) | 803,858 | 590,526 |
Crude oil resales | 122,579 | 39,510 |
Accounts receivable, total | 926,437 | 630,036 |
Inventories: Crude oil and refined products | 1,522,907 | 989,296 |
Materials, supplies and other (HEP: $1,041 and $895, respectively) | 177,698 | 184,180 |
Total inventory | 1,700,605 | 1,173,476 |
Income taxes receivable | 69,862 | 91,348 |
Prepayments and other (HEP: $4,286 and $8,591, respectively) | 49,266 | 47,583 |
Total current assets | 4,144,450 | 3,310,761 |
Properties, plants and equipment, at cost (HEP: $2,160,681 and $2,119,295, respectively) | 7,633,297 | 7,299,517 |
Less accumulated depreciation (HEP: $(674,298) and $(644,149), respectively) | (2,873,658) | (2,726,378) |
Properties, plants and equipment, net | 4,759,639 | 4,573,139 |
Operating lease right-of-use assets (HEP: $70,922 and $72,480, respectively) | 404,009 | 350,548 |
Other assets: Turnaround costs | 303,707 | 314,816 |
Goodwill (HEP: $312,873 and $312,873, respectively) | 2,293,544 | 2,293,935 |
Intangibles and other (HEP: $221,309 and $224,430, respectively) | 654,684 | 663,665 |
Other assets, total | 3,251,935 | 3,272,416 |
Total assets | 12,560,033 | 11,506,864 |
Current liabilities: | ||
Accounts payable (HEP: $25,773 and $28,565, respectively) | 1,480,820 | 1,000,959 |
Income taxes payable | 6,146 | 1,801 |
Operating lease liabilities (HEP: $3,815 and $3,827, respectively) | 104,768 | 97,937 |
Accrued liabilities (HEP: $19,570 and $29,518, respectively) | 421,037 | 274,459 |
Total current liabilities | 2,012,771 | 1,375,156 |
Long-term debt (HEP: $1,362,570 and $1,405,603, respectively) | 3,100,969 | 3,142,718 |
Noncurrent operating lease liabilities (HEP: $67,481 and $68,454, respectively) | 327,838 | 285,785 |
Deferred income taxes (HEP: $451 and $449, respectively) | 805,734 | 713,703 |
Other long-term liabilities (HEP: $45,755 and $55,105, respectively) | 272,477 | 267,299 |
HollyFrontier stockholders’ equity: | ||
Preferred stock, $1.00 par value – 5,000,000 shares authorized; none issued | 0 | 0 |
Common stock $.01 par value – 320,000,000 shares authorized; 256,046,051 shares issued as of June 30, 2021 and December 31, 2020 | 2,560 | 2,560 |
Additional capital | 4,225,032 | 4,207,672 |
Retained earnings | 4,172,560 | 3,913,179 |
Accumulated other comprehensive income | 9,653 | 13,462 |
Common stock held in treasury, at cost – 93,562,308 and 93,632,391 shares as of June 30, 2021 and December 31, 2020, respectively | (2,966,430) | (2,968,512) |
Total HollyFrontier stockholders’ equity | 5,443,375 | 5,168,361 |
Noncontrolling interest | 596,869 | 553,842 |
Total equity | 6,040,244 | 5,722,203 |
Total liabilities and equity | $ 12,560,033 | $ 11,506,864 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Cash and cash equivalents | $ 1,398,280 | $ 1,368,318 |
Accounts receivable: product and transportation | 803,858 | 590,526 |
Inventories: materials, supplies and other | 177,698 | 184,180 |
Prepayments and other | 49,266 | 47,583 |
Properties, plants and equipment, at cost | 7,633,297 | 7,299,517 |
Accumulated depreciation | (2,873,658) | (2,726,378) |
Operating lease right-of-use asset | 404,009 | 350,548 |
Turnaround costs | 303,707 | 314,816 |
Goodwill | 2,293,544 | 2,293,935 |
Intangibles and other | 654,684 | 663,665 |
Accounts payable | 1,480,820 | 1,000,959 |
Operating lease liabilities | 104,768 | 97,937 |
Accrued liabilities | 421,037 | 274,459 |
Long-term debt | 3,100,969 | 3,142,718 |
Noncurrent operating lease liabilities | 327,838 | 285,785 |
Deferred income taxes | 805,734 | 713,703 |
Other long-term liabilities | $ 272,477 | $ 267,299 |
Preferred stock par value (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 |
Common stock, shares issued (in shares) | 256,046,051 | 256,046,051 |
Common stock held in treasury (in shares) | 93,562,308 | 93,632,391 |
HEP | ||
Cash and cash equivalents | $ 19,561 | $ 21,990 |
Accounts receivable: product and transportation | 14,749 | 14,543 |
Inventories: materials, supplies and other | 1,041 | 895 |
Prepayments and other | 4,286 | 8,591 |
Properties, plants and equipment, at cost | 2,160,681 | 2,119,295 |
Accumulated depreciation | (674,298) | (644,149) |
Operating lease right-of-use asset | 70,922 | 72,480 |
Goodwill | 312,873 | 312,873 |
Intangibles and other | 221,309 | 224,430 |
Accounts payable | 25,773 | 28,565 |
Operating lease liabilities | 3,815 | 3,827 |
Accrued liabilities | 19,570 | 29,518 |
Long-term debt | 1,362,570 | 1,405,603 |
Noncurrent operating lease liabilities | 67,481 | 68,454 |
Deferred income taxes | 451 | 449 |
Other long-term liabilities | $ 45,755 | $ 55,105 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Sales and other revenues | $ 4,577,123 | $ 2,062,930 | $ 8,081,416 | $ 5,463,475 |
Operating costs and expenses: | ||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 3,825,729 | 1,576,996 | 6,786,034 | 4,270,722 |
Lower of cost or market inventory valuation adjustment | (118,825) | (269,904) | (318,862) | 290,560 |
Total costs of products sold (exclusive of depreciation and amortization) | 3,706,904 | 1,307,092 | 6,467,172 | 4,561,282 |
Operating expenses (exclusive of depreciation and amortization) | 334,191 | 303,359 | 734,100 | 631,704 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 77,754 | 75,369 | 159,729 | 163,106 |
Depreciation and amortization | 124,042 | 130,178 | 248,121 | 270,753 |
Long-lived asset impairment | 0 | 436,908 | 0 | 436,908 |
Total operating costs and expenses | 4,242,891 | 2,252,906 | 7,609,122 | 6,063,753 |
Income (loss) from operations | 334,232 | (189,976) | 472,294 | (600,278) |
Other income (expense): | ||||
Earnings of equity method investments | 3,423 | 2,156 | 5,186 | 3,870 |
Interest income | 1,029 | 1,506 | 2,060 | 5,579 |
Interest expense | (28,942) | (32,695) | (67,328) | (55,334) |
Gain on tariff settlement | 0 | 0 | 51,500 | 0 |
Gain on sales-type leases | 0 | 33,834 | 0 | 33,834 |
Loss on early extinguishment of debt | 0 | 0 | 0 | (25,915) |
Gain (loss) on foreign currency transactions | 583 | 2,285 | (734) | (1,948) |
Other, net | 7,927 | 1,572 | 9,817 | 3,422 |
Other income (expense) total | (15,980) | 8,658 | 501 | (36,492) |
Income (loss) before income taxes | 318,252 | (181,318) | 472,795 | (636,770) |
Income tax expense (benefit): | ||||
Current | (9,175) | (65,607) | 1,990 | (77,047) |
Deferred | 132,660 | 34,696 | 93,188 | (116,030) |
Income tax expense (benefit) total | 123,485 | (30,911) | 95,178 | (193,077) |
Net income (loss) | 194,767 | (150,407) | 377,617 | (443,693) |
Less net income attributable to noncontrolling interest | 25,917 | 26,270 | 60,550 | 37,607 |
Net income (loss) attributable to HollyFrontier stockholders | $ 168,850 | $ (176,677) | $ 317,067 | $ (481,300) |
Earnings (loss) per share: | ||||
Basic (in USD per share) | $ 1.03 | $ (1.09) | $ 1.92 | $ (2.97) |
Diluted (in USD per share) | $ 1.03 | $ (1.09) | $ 1.92 | $ (2.97) |
Average number of common shares outstanding: | ||||
Basic (in shares) | 162,523 | 161,889 | 162,501 | 161,882 |
Diluted (in shares) | 162,523 | 161,889 | 162,501 | 161,882 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net income (loss) | $ 194,767 | $ (150,407) | $ 377,617 | $ (443,693) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 2,088 | 11,710 | (3,775) | (9,876) |
Change in fair value of cash flow hedging instruments | 475 | 1,513 | (18,042) | (5,235) |
Reclassification adjustments to net income (loss) on settlement of cash flow hedging instruments | 4,949 | 5,401 | 18,824 | (1,175) |
Net unrealized gain (loss) on hedging instruments | 5,424 | 6,914 | 782 | (6,410) |
Net change in pension and other post-retirement benefit obligations | (932) | 0 | (1,862) | (42) |
Other comprehensive income (loss) before income taxes | 6,580 | 18,624 | (4,855) | (16,328) |
Income tax expense (benefit) | 1,585 | 4,250 | (1,046) | (3,779) |
Other comprehensive income (loss) | 4,995 | 14,374 | (3,809) | (12,549) |
Total comprehensive income (loss) | 199,762 | (136,033) | 373,808 | (456,242) |
Less noncontrolling interest in comprehensive income | 25,917 | 26,270 | 60,550 | 37,607 |
Comprehensive income (loss) attributable to HollyFrontier stockholders | 173,845 | (162,303) | 313,258 | (493,849) |
Actuarial loss on pension plans | ||||
Other comprehensive income (loss): | ||||
Actuarial gain (loss) on plan | 0 | 0 | 0 | (45) |
Plan gain reclassified to net income | (104) | 0 | (205) | 0 |
Actuarial gain on post-retirement healthcare plans | ||||
Other comprehensive income (loss): | ||||
Actuarial gain (loss) on plan | 0 | 0 | 0 | 3 |
Plan gain reclassified to net income | (837) | 0 | (1,675) | 0 |
Retirement restoration plan | ||||
Other comprehensive income (loss): | ||||
Retirement restoration plan loss reclassified to net income | $ 9 | $ 0 | $ 18 | $ 0 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 377,617 | $ (443,693) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 248,121 | 270,753 |
Long-lived asset impairment | 0 | 436,908 |
Lower of cost or market inventory valuation adjustment | (318,862) | 290,560 |
Earnings of equity method investments, inclusive of distributions | 0 | (1,298) |
Loss on early extinguishment of debt | 0 | 25,915 |
Gain on sales-type leases | 0 | (33,834) |
Gain on sale of assets | (5,423) | (357) |
Deferred income taxes | 93,188 | (116,030) |
Equity-based compensation expense | 21,142 | 14,289 |
Change in fair value – derivative instruments | (3,531) | (9,377) |
(Increase) decrease in current assets: | ||
Accounts receivable | (292,901) | 281,011 |
Inventories | (204,708) | (764) |
Income taxes receivable | 21,314 | (72,382) |
Prepayments and other | (200) | 9,704 |
Increase (decrease) in current liabilities: | ||
Accounts payable | 467,203 | (314,892) |
Income taxes payable | 4,097 | (9,268) |
Accrued liabilities | 154,224 | 3,340 |
Turnaround expenditures | (51,926) | (49,248) |
Other, net | (19,274) | 27,965 |
Net cash provided by operating activities | 490,081 | 309,302 |
Cash flows from investing activities: | ||
Additions to properties, plants and equipment | (275,125) | (98,996) |
Proceeds from sale of assets | 7,422 | 0 |
Distributions from equity method investments in excess of equity earnings | 3,107 | 470 |
Net cash used for investing activities | (322,312) | (131,666) |
Cash flows from financing activities: | ||
Borrowings under credit agreements | 141,000 | 168,000 |
Repayments under credit agreements | (184,500) | (138,500) |
Purchase of treasury stock | (491) | (1,243) |
Dividends | (57,663) | (114,430) |
Distributions to noncontrolling interests | (38,188) | (51,008) |
Contributions from noncontrolling interests | 17,593 | 13,263 |
Payments on finance leases | (1,296) | (843) |
Deferred financing costs | (14,500) | (8,714) |
Other, net | (433) | 456 |
Net cash used for financing activities | (138,478) | (155,519) |
Effect of exchange rate on cash flow | 671 | (4,770) |
Cash and cash equivalents: | ||
Increase for the period | 29,962 | 17,347 |
Beginning of period | 1,368,318 | 885,162 |
End of period | 1,398,280 | 902,509 |
Cash (paid) received during the period for: | ||
Interest | (68,328) | (64,003) |
Income taxes, net | 22,996 | (4,738) |
Increase in accrued and unpaid capital expenditures | 7,544 | 4,588 |
HEP | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Loss on early extinguishment of debt | 25,900 | |
Cash flows from investing activities: | ||
Additions to properties, plants and equipment | (57,716) | (30,740) |
Investment in equity company - HEP | 0 | (2,400) |
Cash flows from financing activities: | ||
Proceeds from issuance of senior notes - HEP | 0 | 500,000 |
Redemption of senior notes - HEP | $ 0 | $ (522,500) |
Consolidated Statements Of Equi
Consolidated Statements Of Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock | Non-controlling Interest |
Stockholders' equity at beginning of period at Dec. 31, 2019 | $ 6,509,426 | $ 2,560 | $ 4,204,547 | $ 4,744,120 | $ 14,774 | $ (2,987,808) | $ 531,233 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (293,286) | (304,623) | 11,337 | ||||
Dividends ($0.35 declared per common share) | (57,248) | (57,248) | |||||
Distributions to noncontrolling interest holders | (33,918) | (33,918) | |||||
Other comprehensive income (loss), net of tax | (26,923) | (26,923) | |||||
Issuance of common stock under incentive compensation plans | (2,037) | 2,037 | |||||
Equity-based compensation | 6,330 | 5,824 | 506 | ||||
Purchase of treasury stock | (1,062) | (1,062) | |||||
Purchase of HEP units for restricted grants | (145) | (145) | |||||
Contributions from noncontrolling interests | 7,304 | 7,304 | |||||
Stockholders' equity at end of period at Mar. 31, 2020 | 6,110,478 | 2,560 | 4,208,334 | 4,382,249 | (12,149) | (2,986,833) | 516,317 |
Stockholders' equity at beginning of period at Dec. 31, 2019 | 6,509,426 | 2,560 | 4,204,547 | 4,744,120 | 14,774 | (2,987,808) | 531,233 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (443,693) | ||||||
Other comprehensive income (loss), net of tax | (12,549) | ||||||
Stockholders' equity at end of period at Jun. 30, 2020 | 5,914,511 | 2,560 | 4,215,894 | 4,148,390 | 2,225 | (2,986,487) | 531,929 |
Stockholders' equity at beginning of period at Mar. 31, 2020 | 6,110,478 | 2,560 | 4,208,334 | 4,382,249 | (12,149) | (2,986,833) | 516,317 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (150,407) | (176,677) | 26,270 | ||||
Dividends ($0.35 declared per common share) | (57,182) | (57,182) | |||||
Distributions to noncontrolling interest holders | (17,090) | (17,090) | |||||
Other comprehensive income (loss), net of tax | 14,374 | 14,374 | |||||
Issuance of common stock under incentive compensation plans | (527) | 527 | |||||
Equity-based compensation | 7,959 | 7,484 | 475 | ||||
Purchase of treasury stock | (181) | (181) | |||||
Purchase of HEP units for restricted grants | (2) | (2) | |||||
Contributions from noncontrolling interests | 5,959 | 5,959 | |||||
Other | 603 | 603 | |||||
Stockholders' equity at end of period at Jun. 30, 2020 | 5,914,511 | 2,560 | 4,215,894 | 4,148,390 | 2,225 | (2,986,487) | 531,929 |
Stockholders' equity at beginning of period at Dec. 31, 2020 | 5,722,203 | 2,560 | 4,207,672 | 3,913,179 | 13,462 | (2,968,512) | 553,842 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 182,850 | 148,217 | 34,633 | ||||
Dividends ($0.35 declared per common share) | (57,663) | (57,663) | |||||
Distributions to noncontrolling interest holders | (19,977) | (19,977) | |||||
Other comprehensive income (loss), net of tax | (8,804) | (8,804) | |||||
Issuance of common stock under incentive compensation plans | 56 | (56) | |||||
Equity-based compensation | 9,770 | 9,088 | 682 | ||||
Purchase of treasury stock | (12) | (12) | |||||
Purchase of HEP units for restricted grants | (68) | (68) | |||||
Contributions from noncontrolling interests | 9,747 | 9,747 | |||||
Stockholders' equity at end of period at Mar. 31, 2021 | 5,838,046 | 2,560 | 4,216,816 | 4,003,733 | 4,658 | (2,968,580) | 578,859 |
Stockholders' equity at beginning of period at Dec. 31, 2020 | 5,722,203 | 2,560 | 4,207,672 | 3,913,179 | 13,462 | (2,968,512) | 553,842 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 377,617 | ||||||
Other comprehensive income (loss), net of tax | (3,809) | ||||||
Stockholders' equity at end of period at Jun. 30, 2021 | 6,040,244 | 2,560 | 4,225,032 | 4,172,560 | 9,653 | (2,966,430) | 596,869 |
Stockholders' equity at beginning of period at Mar. 31, 2021 | 5,838,046 | 2,560 | 4,216,816 | 4,003,733 | 4,658 | (2,968,580) | 578,859 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 194,767 | 168,850 | 25,917 | ||||
Distributions to noncontrolling interest holders | (18,211) | (18,211) | |||||
Other comprehensive income (loss), net of tax | 4,995 | 4,995 | |||||
Issuance of common stock under incentive compensation plans | (2,629) | 2,629 | |||||
Equity-based compensation | 11,372 | 10,845 | 527 | ||||
Purchase of treasury stock | (479) | (479) | |||||
Purchase of HEP units for restricted grants | (2) | (2) | |||||
Contributions from noncontrolling interests | 9,779 | 9,779 | |||||
Other | (23) | (23) | |||||
Stockholders' equity at end of period at Jun. 30, 2021 | $ 6,040,244 | $ 2,560 | $ 4,225,032 | $ 4,172,560 | $ 9,653 | $ (2,966,430) | $ 596,869 |
Consolidated Statements Of Eq_2
Consolidated Statements Of Equity (Parenthetical) - $ / shares | 3 Months Ended | ||
Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per common share (in USD per share) | $ 0.35 | $ 0.35 | $ 0.35 |
Description of Business and Pre
Description of Business and Presentation of Financial Statements | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description Of Business And Presentation Of Financial Statements | Description of Business and Presentation of Financial Statements References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Quarterly Report on Form 10-Q has been written in the first person. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries. We are an independent petroleum refiner and marketer that produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products and specialty and modified asphalt. We own and operate petroleum refineries that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain geographic regions of the United States. In addition, we produce base oils and other specialized lubricants in the United States, Canada and the Netherlands, with retail and wholesale marketing of our products through a global sales network with locations in Canada, the United States, Europe, China and Latin America. As of June 30, 2021, we: • owned and operated a petroleum refinery in El Dorado, Kansas (the “El Dorado Refinery”), two refinery facilities located in Tulsa, Oklahoma (collectively, the “Tulsa Refineries”), a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”) and a refinery in Woods Cross, Utah (the “Woods Cross Refinery”); • owned a facility in Cheyenne, Wyoming, which operated as a petroleum refinery until early August 2020, at which time its assets began to be converted to renewable diesel production (the “Cheyenne Refinery”); • owned and operated Petro-Canada Lubricants Inc. (“PCLI”) located in Mississauga, Ontario, which produces base oils and other specialized lubricant products; • owned and operated manufacturing facilities in Petrolia, Pennsylvania and the Netherlands, which produce specialty lubricant products for our Sonneborn business, such as white oils, petrolatums and waxes; • owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil and has storage and distribution facilities in Iowa and Wyoming, along with a blending and packaging facility in Texas; • owned and operated HollyFrontier Asphalt Company LLC (“HFC Asphalt”), which operates various asphalt terminals in Arizona, New Mexico and Oklahoma; and • owned a 57% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain geographic regions of the United States. On May 4, 2021, HollyFrontier Puget Sound Refining LLC, a wholly-owned subsidiary of HollyFrontier Corporation, entered into a sale and purchase agreement with Equilon Enterprises LLC d/b/a Shell Oil Products US (“Shell”) to acquire Shell’s refinery and related assets, including the on-site cogeneration facility and related logistics assets (the “Puget Sound Refinery”), for a base cash purchase price of $350 million plus hydrocarbon inventory to be valued at closing with an estimated current value in the range of $150 million to $180 million (the “Puget Sound Acquisition”). The Puget Sound Refinery is strategically located on approximately 850 acres in Anacortes, Washington, approximately 80 miles north of Seattle and 90 miles south of Vancouver. The 149,000 barrel per day facility is a large, high quality and complex refinery with catalytic cracking and delayed coking units and is well positioned geographically and logistically to source advantaged Canadian and Alaskan North Slope crudes. In addition to refining assets and an on-site cogeneration facility, the transaction includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with approximately 5.8 million barrels of crude, product and other hydrocarbon storage capacity. The Puget Sound Acquisition is expected to close in the fourth quarter of 2021, subject to customary closing conditions. We expect to fund the Puget Sound Acquisition with a one-year suspension of our regular quarterly dividend and cash on hand. During the first quarter of 2021, we initiated a restructuring within our Lubricants and Specialty Products segment. As a result of this restructuring, we recorded $7.8 million in employee severance costs for the six months ended June 30, 2021, which were recognized primarily as selling, general and administrative expenses in our Lubricants and Specialty Products segment. In the third quarter of 2020, we permanently ceased petroleum refining operations at our Cheyenne Refinery and subsequently began converting certain assets at our Cheyenne Refinery to renewable diesel production. In connection with the cessation of petroleum refining operations at our Cheyenne Refinery, we recognized $8.1 million and $16.3 million, in decommissioning expense and $0.2 million and $0.7 million, in employee severance costs for the three and six months ended June 30, 2021, respectively, which were recognized in operating expenses in our Corporate and Other segment. During the second quarter of 2020, we recorded $1.1 million in employee severance costs related to the conversion of our Cheyenne Refinery. These severance costs were recognized in operating expenses and were reported in our Refining segment. Also, during the second quarter of 2020, we recorded a long-lived asset impairment charge of $232.2 million related to our Cheyenne Refinery asset group. During the second quarter of 2020, we initiated and completed a corporate restructuring. As a result of this restructuring, we recorded $3.7 million in employee severance costs, which were recognized primarily as operating expenses in our Refining segment and selling, general and administrative expenses in our Corporate and Other segment. We have prepared these consolidated financial statements without audit. In management’s opinion, these consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our consolidated financial position as of June 30, 2021, the consolidated results of operations, comprehensive income and statements of equity for the three and six months ended June 30, 2021 and 2020 and consolidated cash flows for the six months ended June 30, 2021 and 2020 in accordance with the rules and regulations of the SEC. Although certain notes and other information required by generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 that has been filed with the SEC. Our results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results of operations to be realized for the year ending December 31, 2021. Accounts Receivable: Our accounts receivable consist of amounts due from customers that are primarily companies in the petroleum industry. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for expected credit losses based on our historical loss experience as well as expected credit losses from current economic conditions and management’s expectations of future economic conditions. Credit losses are charged to the allowance for expected credit losses when an account is deemed uncollectible. Our allowance for expected credit losses was $4.3 million at June 30, 2021 and $3.4 million at December 31, 2020. Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation. Inventories of our Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value. Inventories consisting of process chemicals, materials and maintenance supplies and renewable identification numbers (“RINs”) are stated at the lower of weighted-average cost or net realizable value. Leases: At inception, we determine if an arrangement is or contains a lease. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our payment obligation under the leasing arrangement. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable. Operating leases are recorded in operating lease right-of-use assets and current and noncurrent operating lease liabilities on our consolidated balance sheet. Finance leases are included in properties, plants and equipment and accrued liabilities and other long-term liabilities on our consolidated balance sheet. Our lease term includes an option to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet. For certain equipment leases, we apply a portfolio approach for the operating lease ROU assets and liabilities. Also, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. In addition, HEP, as a lessor, does not separate the non-lease (service) component in contracts in which the lease component is the dominant component. HEP treats these combined components as a lease. Goodwill and Long-lived Assets: As of June 30, 2021, our goodwill balance was $2.3 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1,733.5 million, $247.2 million and $312.9 million, respectively. See Note 14 for additional information on our segments. The carrying amount of our goodwill may fluctuate from period to period due to the effects of foreign currency translation adjustments on goodwill assigned to our Lubricants and Specialty Products segment. Goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing first entails either a quantitative assessment or an optional qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we determine that based on the qualitative factors that it is more likely than not that the carrying amount of the reporting unit is greater than its fair value, a quantitative test is performed in which we estimate the fair value of the related reporting unit. If the carrying amount of a reporting unit exceeds its fair value, the goodwill of that reporting unit is impaired, and we measure goodwill impairment as the excess of the carrying amount of the reporting unit over the related fair value. For purposes of long-lived asset impairment evaluation, we have grouped our long-lived assets as follows: (i) our refinery asset groups, which include certain HEP logistics assets, (ii) our Lubricants and Specialty Products asset groups and (iii) our HEP asset groups, which comprises HEP assets not included in our refinery asset groups. These asset groups represent the lowest level for which independent cash flows can be identified. Our long-lived assets are evaluated for impairment by identifying whether indicators of impairment exist and if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss measured, if any, is equal to the amount by which the asset group’s carrying value exceeds its fair value. During the second quarter of 2020, we recorded long-lived asset impairment charges of $232.2 million and $204.7 million related to our Cheyenne Refinery and PCLI asset groups, respectively. Revenue Recognition: Revenue on refined product and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold. Our lubricants and specialty products business has sales agreements with marketers and distributors that provide certain rights of return or provisions for the repurchase of products previously sold to them. Under these agreements, revenues and cost of revenues are deferred until the products have been sold to end customers. Our lubricants and specialty products business also has agreements that create an obligation to deliver products at a future date for which consideration has already been received and recorded as deferred revenue. This revenue is recognized when the products are delivered to the customer. HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain throughput agreements that specify minimum volume requirements, whereby HEP bills a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. If there are no future performance obligations, HEP recognizes these deficiency payments as revenue. In certain of these throughput agreements, a customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. HEP recognizes the service portion of these deficiency payments as revenue when HEP does not expect it will be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer. Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice. Foreign Currency Translation: Assets and liabilities recorded in foreign currencies are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income. We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the consolidated statements of operations. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to Corporate and Other. See Note 14 for additional information on our segments. Income Taxes : Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized. Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter. For the six months ended June 30, 2021, we recorded income tax expense of $95.2 million compared to an income tax benefit of $193.1 million for the six months ended June 30, 2020. Thi s increase was due principally to pre-t ax income during the six months ended June 30, 2021 compared to pre-tax loss in the same period of 2020. Our effective tax rates were 20.1% and 30.3% for the six months ended June 30, 2021 and 2020, respectively. The year-over-year decrease in the e ffective tax rate is due principally to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes. The difference in the U.S. federal statutory rate and the effective tax rate for the six months ended June 30, 2021 was primarily due to the tax effects of income attributable to noncontrolling interests. Inventory Repurchase Obligations: We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. For the six months ended June 30, 2021 and 2020, we received proceeds of $23.0 million and $20.4 million, respectively, and subsequently repaid $24.2 million and $21.7 million, respectively, under these sell / buy transactions. |
Holly Energy Partners
Holly Energy Partners | 6 Months Ended |
Jun. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Holly Energy Partners | Holly Energy Partners HEP is a publicly held master limited partnership that owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations, as well as other third-party refineries, in the Mid-Continent, Southwest and Rocky Mountain geographic regions of the United States. Additionally, as of June 30, 2021, HEP owned a 75% interest in UNEV Pipeline, LLC (“UNEV”), the owner of a pipeline running from Woods Cross, Utah to Las Vegas, Nevada (the “UNEV Pipeline”) and associated product terminals, and a 50% ownership interest in each of Osage Pipe Line Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas (the “Osage Pipeline”); Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”) and Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), the owner of a crude oil storage terminal in Cushing, Oklahoma and a pipeline under construction that will run from Cushing, Oklahoma to our Tulsa Refineries. At June 30, 2021, we owned a 57% limited partner interest and a non-economic general partner interest in HEP. As the general partner of HEP, we have the sole ability to direct the activities that most significantly impact HEP’s financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP. HEP generates revenues by charging tariffs for transporting petroleum products and crude oil through its pipelines, by charging fees for terminalling refined products and other hydrocarbons, and by storing and providing other services at its storage tanks and terminals. Under our long-term transportation agreements with HEP (discussed further below), we accounted for 79% of HEP’s total revenues for the six months ended June 30, 2021. We do not provide financial or equity support through any liquidity arrangements and / or debt guarantees to HEP. HEP has outstanding debt under a senior secured revolving credit agreement and its senior notes. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. See Note 9 for a description of HEP’s debt obligations. HEP has risk associated with its operations. If a major customer of HEP were to terminate its contracts or fail to meet desired shipping or throughput levels for an extended period of time, revenue would be reduced and HEP could suffer substantial losses to the extent that a new customer is not found. In the event that HEP incurs a loss, our operating results will reflect HEP’s loss, net of intercompany eliminations, to the extent of our ownership interest in HEP at that point in time. Cushing Connect Joint Venture In October 2019, HEP Cushing LLC (“HEP Cushing”), a wholly-owned subsidiary of HEP, and Plains Marketing, L.P. (“PMLP”), a wholly-owned subsidiary of Plains All American Pipeline, L.P. (“Plains”), formed a 50/50 joint venture, Cushing Connect, for (i) the development, construction, ownership and operation of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that will connect the Cushing, Oklahoma crude oil hub to our Tulsa Refineries and (ii) the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma (the “Cushing Connect Terminal”). The Cushing Connect Terminal was fully in service beginning in April 2020, and the Cushing Connect Pipeline is expected to be placed in service during the third quarter of 2021. Long-term commercial agreements have been entered into to support the Cushing Connect assets. Cushing Connect will contract with an affiliate of HEP to manage the construction and operation of the Cushing Connect Pipeline and with an affiliate of Plains to manage the operation of the Cushing Connect Terminal. The total investment in Cushing Connect will be shared equally among the partners. However, HEP is solely responsible for any Cushing Connect Pipeline constructions costs that exceed the budget by more than 10%. HEP estimates its share of the cost of the Cushing Connect Terminal contributed by Plains and Cushing Connect Pipeline construction costs are approximately $70 million to $75 million. Cushing Connect and its two subsidiaries, Cushing Connect Pipeline and Cushing Connect Terminal, are each VIE’s because they do not have sufficient equity at risk to finance their activities without additional financial support. HEP is the primary beneficiary of two of these entities as HEP is constructing and will operate the Cushing Connect Pipeline, and HEP has more ability to direct the activities that most significantly impact the financial performance of Cushing Connect and Cushing Connect Pipeline. Therefore, HEP consolidates these two entities. HEP is not the primary beneficiary of Cushing Connect Terminal, which HEP accounts for using the equity method of accounting. Transportation Agreements HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring fro m 2022 through 2036. U nder these agreements, we pay HEP fees to transport, store and process throughput volumes of refined products, crude oil and feedstocks on HEP’s pipeline, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to HEP including UNEV (a consolidated subsidiary of HEP). Under these agreements, the agreed upon tariff rates are subject to annual tariff rate adjustments on July 1 at a rate based upon the percentage change in Producer Price Index or Federal Energy Regulatory Commission index. As of July 1, 2021, these agreements require minimum annualized payments to HE P of $339.8 million. Our transactions with HEP and fees paid under our transportation agreements with HEP and UNEV are eliminated and have no impact on our consolidated financial statements. Lessor Accounting Our consolidated statements of operations reflect lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor. Lease income recognized was as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Operating lease revenues $ 3,731 $ 5,442 $ 8,178 $ 13,732 Gain on sales-type leases $ — $ 33,834 $ — $ 33,834 Sales-type lease interest income $ 637 $ 642 $ 1,276 $ 642 Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable $ 520 $ 286 $ 857 $ 286 One of HEP’s throughput agreements with Delek US Holdings, Inc. (“Delek”) was partially renewed during the three months ended June 30, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, HEP recognized a gain on sales-type leases totaling $33.8 million during the three months ended June 30, 2020. This sales-type lease transaction, including the related gain, was a non-cash transaction. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | RevenuesSubstantially all revenue-generating activities relate to sales of refined product and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to HEP logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties. Disaggregated revenues were as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Revenues by type Refined product revenues Transportation fuels (1) $ 3,323,897 $ 1,385,246 $ 5,795,668 $ 3,863,593 Specialty lubricant products (2) 605,939 340,284 1,086,620 811,237 Asphalt, fuel oil and other products (3) 221,743 145,298 380,329 346,641 Total refined product revenues 4,151,579 1,870,828 7,262,617 5,021,471 Excess crude oil revenues (4) 389,275 163,394 745,575 363,173 Transportation and logistic services 27,092 19,244 52,350 45,670 Other revenues (5) 9,177 9,464 20,874 33,161 Total sales and other revenues $ 4,577,123 $ 2,062,930 $ 8,081,416 $ 5,463,475 Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Refined product revenues by market United States Mid-Continent $ 2,334,226 $ 867,660 $ 4,002,439 $ 2,400,584 Southwest 941,451 436,073 1,709,514 1,170,248 Rocky Mountains 373,252 274,973 611,055 743,752 Northeast 199,955 110,909 372,253 270,733 Canada 213,338 120,870 395,284 303,523 Europe, Asia and Latin America 89,357 60,343 172,072 132,631 Total refined product revenues $ 4,151,579 $ 1,870,828 $ 7,262,617 $ 5,021,471 (1) Transportation fuels consist of gasoline, diesel and jet fuel. (2) Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids. (3) Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of $165.9 million and $55.8 million, respectively, for the three months ended June 30, 2021, $283.2 million and $97.1 million, respectively, for the six months ended June 30, 2021, $131.9 million and $13.4 million, respectively, for the three months ended June 30, 2020, $280.7 million and $65.9 million respectively, for the six months ended June 30, 2020. (4) Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries. (5) Other revenues are principally attributable to our Refining segment. Our consolidated balance sheet reflects contract liabilities related to unearned revenues attributable to future service obligations under HEP’s third-party transportation agreements and production agreements from our Sonneborn operation s. The following table presents changes to our contract liabilities during the six months ended June 30, 2021 and 2020. Six Months Ended June 30, 2021 2020 (In thousands) Balance at January 1 $ 6,738 $ 4,652 Increase 15,314 16,115 Recognized as revenue (14,686) (14,980) Balance at June 30 $ 7,366 $ 5,787 As of June 30, 2021, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialty products to be sold ratably at market prices thro ugh 2025. Such volumes are typically nominated in the month preceding delivery and delivered ratably throughout the following month. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under Accounting Standards Codification 606-10-50-14A. Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows: Remainder of 2021 2022 2023 Thereafter Total (In thousands) Refined product sales volumes (barrels) 9,528 14,272 12,795 11,698 48,293 Additionally, HEP has long-term contracts with third-party customers that specify minimum volumes of product to be transported through its pipelines and terminals that result in fixed-minimum annual revenues throu gh 2025. Annual minimum revenues attributable to HEP’s third-party contracts as of June 30, 2021 are presented below: Remainder of 2021 2022 2023 Thereafter Total (In thousands) HEP contractual minimum revenues $ 10,422 $ 11,005 $ 8,922 $ 11,414 $ 41,763 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our financial instruments measured at fair value on a recurring basis consist of derivative instruments and RINs credit obligations. Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability, including assumptions about risk). GAAP categorizes inputs used in fair value measurements into three broad levels as follows: • (Level 1) Quoted prices in active markets for identical assets or liabilities. • (Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data. • (Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs. The carrying amounts of derivative instruments and RINs credit obligations at June 30, 2021 and December 31, 2020 were as follows: Fair Value by Input Level Carrying Amount Level 1 Level 2 Level 3 (In thousands) June 30, 2021 Assets: Commodity price swaps $ 892 $ — $ 892 $ — Commodity forward contracts 671 — 671 — Total assets $ 1,563 $ — $ 1,563 $ — Liabilities: NYMEX futures contracts $ 2,352 $ 2,352 $ — $ — Commodity forward contracts 1,112 — 1,112 — Foreign currency forward contracts 19,059 — 19,059 — RINs credit obligations (1) 131,052 — 131,052 — Total liabilities $ 153,575 $ 2,352 $ 151,223 $ — December 31, 2020 Assets: Commodity forward contracts $ 275 $ — $ 275 $ — Total assets $ 275 $ — $ 275 $ — Liabilities: NYMEX futures contracts $ 418 $ 418 $ — $ — Commodity price swaps 359 — 359 — Commodity forward contracts 196 — 196 — Foreign currency forward contracts 23,005 — 23,005 — Total liabilities $ 23,978 $ 418 $ 23,560 $ — (1) Represent obligations for RINs credits for which we did not have sufficient quantities at June 30, 2021 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements. Level 1 Instruments Our NYMEX futures contracts are exchange traded and are measured and recorded at fair value using quoted market prices, a Level 1 input. Level 2 Instruments Derivative instruments consisting of foreign currency forward contracts, commodity price swaps and forward sales and purchase contracts are measured and recorded at fair value using Level 2 inputs. The fair value of the commodity price swap contracts is based on the net present value of expected future cash flows related to both variable and fixed rate legs of the respective swap agreements. The measurements are computed using market-based observable input and quoted forward commodity prices with respect to our commodity price swaps. The fair value of the forward sales and purchase contracts are computed using quoted forward commodity prices. RINs credit obligations are valued based on current market RINs prices. The fair value of foreign currency forward contracts are based on values provided by a third party, which were derived using market quotes for similar type instruments, a Level 2 input. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated as net income (loss) attributable to HollyFrontier stockholders, adjusted for participating securities’ share in earnings divided by the average number of shares of common stock outstanding. Diluted earnings per share includes the incremental shares resulting from certain share-based awards. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income (loss) attributable to HollyFrontier stockholders: Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands, except per share data) Net income (loss) attributable to HollyFrontier stockholders $ 168,850 $ (176,677) $ 317,067 $ (481,300) Participating securities’ share in earnings (1) 2,223 — 4,271 — Net income (loss) attributable to common shares $ 166,627 $ (176,677) $ 312,796 $ (481,300) Average number of shares of common stock outstanding 162,523 161,889 162,501 161,882 Average number of shares of common stock outstanding assuming dilution 162,523 161,889 162,501 161,882 Basic earnings (loss) per share $ 1.03 $ (1.09) $ 1.92 $ (2.97) Diluted earnings (loss) per share $ 1.03 $ (1.09) $ 1.92 $ (2.97) (1) Unvested restricted stock unit awards and unvested performance share units represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HollyFrontier. Participating earnings represent the distributed and undistributed earnings of HollyFrontier attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We have a principal share-based compensation plan (the “2020 Long-Term Incentive Plan”), which allows us to grant new equity awards to certain officers, non-employee directors and other key employees of HollyFrontier. The restricted stock unit awards generally vest over a period of one The compensation cost for these plans was $11.9 million and $8.1 million for the three months ended June 30, 2021 and 2020, respectively, and $22.8 million and $12.9 million, for the six months ended June 30, 2021 and 2020, respectively. Additionally, HEP maintains a share-based compensation plan for Holly Logistic Services, L.L.C.’s non-employee directors and certain executives and employees. Compensation cost attributable to HEP’s share-based compensation plan was $0.5 million and $0.5 million for the three months ended June 30, 2021 and 2020, respectively, and $1.2 million and $1.0 million, for the six months ended June 30, 2021 and 2020, respectively. In July 2021, we adopted a stock compensation deferral plan which allows non-employee directors to defer settlement of vested stock granted under our share-based compensation plan. This plan is effective October 1, 2021. A summary of restricted stock unit and performance share unit activity during the six months ended June 30, 2021 is presented below: Restricted Stock Units Performance Share Units Outstanding at January 1, 2021 2,057,045 635,204 Granted (1) 9,983 — Vested (89,381) (3,565) Forfeited (132,284) (26,192) Outstanding at June 30, 2021 1,845,363 605,447 (1) Weighted average grant date fair value per unit $ 34.98 $ — |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2021 | |
Inventory, Net [Abstract] | |
Inventories | Inventories Inventories consist of the following components: June 30, December 31, 2020 (In thousands) Crude oil $ 511,056 $ 451,967 Other raw materials and unfinished products (1) 342,791 260,495 Finished products (2) 669,060 595,696 Lower of cost or market reserve — (318,862) Process chemicals (3) 43,021 35,006 Repair and maintenance supplies and other (4) 134,677 149,174 Total inventory $ 1,700,605 $ 1,173,476 (1) Other raw materials and unfinished products include feedstocks and blendstocks, other than crude. (2) Finished products include gasolines, jet fuels, diesels, lubricants, asphalts, LPG’s and residual fuels. (3) Process chemicals include additives and other chemicals. (4) Includes RINs. Our inventories that are valued at the lower of LIFO cost or market reflected a valuation reserve of $318.9 million at December 31, 2020. The December 31, 2020 market reserve of $318.9 million was reversed during the six months ended June 30, 2021 due to the sale of inventory quantities that gave rise to the 2020 reserve. The effect of the change in lower of cost or market reserve was a decrease to cost of products sold totaling $118.8 million and $318.9 million for the three and six months ended June 30, 2021, respectively, and a decrease to cost of products sold totaling $269.9 million for the three months ended June 30, 2020, and an increase of $290.6 million for the six months ended June 30, 2020. At June 30, 2021, the LIFO value of inventory was equal to cost. |
Environmental
Environmental | 6 Months Ended |
Jun. 30, 2021 | |
Environmental Expense and Liabilities [Abstract] | |
Environmental | Environmental Environmental costs are charged to operating expenses if they relate to an existing condition caused by past operations and do not contribute to current or future revenue generation. We have ongoing investigations of environmental matters at various locations and routinely assess our recorded environmental obligations, if any, with respect to such matters. Liabilities are recorded when site restoration and environmental remediation, cleanup and other obligations are either known or considered probable and can be reasonably estimated. Such estimates are undiscounted and require judgment with respect to costs, time frame and extent of required remedial and cleanup activities and are subject to periodic adjustments based on currently available information. Recoveries of environmental costs through insurance, indemnification arrangements or other sources are included in other assets to the extent such recoveries are considered probable. We incurred expense of $1.9 million and $0.4 million for the three months ended June 30, 2021 and 2020, respectively, and $2.0 million for both the six months ended June 30, 2021 and 2020, for environmental remediation obligations. The accrued environmental liability reflected in our consolidated balance sheets was $113.8 million and $115.0 million at June 30, 2021 and December 31, 2020, respectively, of which $94.8 million and $94.0 million, respectively, were classified as other long-term liabilities. These accruals include remediation and monitoring costs expected to be incurred over an extended period of time (up to 30 years for certain projects). Estimated liabilities could increase in the future when the results of ongoing investigations become known, are considered probable and can be reasonably estimated. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt HollyFrontier Credit Agreement On April 30, 2021, we a mended our $1.35 billion senior unsecured revolving credit facility to extend the maturity date to April 30, 2026 (the “HollyFrontier Credit Agreement”). The HollyFrontier Credit Agreement may be used for revolving credit loans and letters of credit from time to time and is available to fund general corporate purposes. At June 30, 2021, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.3 million under the HollyFrontier Credit Agreement. Indebtedness under the HollyFrontier Credit Agreement bears interest, at our option, at either (a) the alternate base rate (as defined in the HollyFrontier Credit Agreement) plus an applicable margin of (ranging from 0.25% to 1.125%), (b) the LIBO Rate (as defined in the HollyFrontier Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) or (c) the CDOR Rate (as defined in the HollyFrontier Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) for Canadian dollar denominated borrowings. HEP Credit Agreement On April 30, 2021, HEP amended its $1.4 billion senior secured revolving credit facility decreasing the commitments under the facility to $1.2 billion and extending the maturity to July 27, 2025 (the “HEP Credit Agreement”). The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and continues to provide for an accordion feature that allows HEP to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. During the six months ended June 30, 2021, HEP received advances totaling $141.0 million and repaid $184.5 million under the HEP Credit Agreement. At June 30, 2021, HEP was in compliance with all of its covenants, had outstanding borrowings of $870.0 million and no outstanding letters of credit under the HEP Credit Agreement. Prior to the Investment Grade Date (as defined in the HEP Credit Agreement), indebtedness under the HEP Credit Agreement bears interest, at HEP’s option, at either (a) the alternate base rate (as defined in the HEP Credit Agreement) plus an applicable margin or (b) the Eurodollar Rate (as defined in the HEP Credit Agreement) plus an applicable margin. In each case, the applicable margin is based upon HEP’s Total Leverage Ratio (as defined in the HEP Credit Agreement). The weighted average interest rate in effect under the HEP Credit Agreement on HEP’s borrowings was 2.20% for June 30, 2021. HEP’s obligations under the HEP Credit Agreement are collateralized by substantially all of HEP’s assets and are guaranteed by HEP’s material wholly-owned subsidiaries. Any recourse to the general partner would be limited to the extent of HEP Logistics Holdings, L.P.’s assets, which other than its investment in HEP are not significant. HEP’s creditors have no recourse to our other assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. HollyFrontier Senior Notes At June 30, 2021, our senior notes consisted of the following: • $350.0 million in aggregate principal amount of 2.625% senior notes maturing October 2023 (the “2.625% Senior Notes”); • $1.0 billion in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “5.875% Senior Notes”); and • $400.0 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “4.500% Senior Notes”). These senior notes (collectively, the “HollyFrontier Senior Notes”) are unsecured and unsubordinated obligations and rank equally with all our other existing and future unsecured and unsubordinated indebtedness. HollyFrontier Financing Arrangements Certain of our wholly-owned subsidiaries entered into financing arrangements whereby such subsidiaries sold a portion of their precious metals catalyst to a financial institution and then leased back the precious metals catalyst in exchange for cash. The volume of the precious metals catalyst and the lease rate are fixed over the term of each lease, and the lease payments are recorded as interest expense. The current leases mature on February 1, 2022. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity. These financing arrangements are recorded at a Level 2 fair value totaling $41.7 million and $43.9 million at June 30, 2021 and December 31, 2020, respectively, and are included in “Accrued liabilities” in our consolidated balance sheets. See Note 4 for additional information on Level 2 inputs. HEP Senior Notes In February 2020, HEP closed a private placement of $500.0 million in aggregate principal amount of 5.0% HEP senior unsecured notes maturing February 2028 (the “HEP Senior Notes”). Subsequently, in February 2020, HEP redeemed its existing $500.0 million aggregate principal amount of 6.0% senior notes maturing August 2024 at a redemption cost of $522.5 million. HEP recognized a $25.9 million early extinguishment loss consisting of a $22.5 million debt redemption premium and unamortized discount and financing costs of $3.4 million during the three months ended March 31, 2020. The HEP Senior Notes are unsecured and impose certain restrictive covenants, including limitations on HEP’s ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates, and enter into mergers. HEP was in compliance with the restrictive covenants for the HEP Senior Notes as of June 30, 2021. At any time when the HEP Senior Notes are rated investment grade by either Moody’s or Standard & Poor’s and no default or event of default exists, HEP will not be subject to many of the foregoing covenants. Additionally, HEP has certain redemption rights at varying premiums over face value under the HEP Senior Notes. Indebtedness under the HEP Senior Notes is guaranteed by HEP’s wholly-owned subsidiaries. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. The carrying amounts of long-term debt are as follows: June 30, December 31, (In thousands) HollyFrontier 2.625% Senior Notes $ 350,000 $ 350,000 5.875% Senior Notes 1,000,000 1,000,000 4.500% Senior Notes 400,000 400,000 1,750,000 1,750,000 Unamortized discount and debt issuance costs (11,601) (12,885) Total HollyFrontier long-term debt 1,738,399 1,737,115 HEP Credit Agreement 870,000 913,500 HEP 5.000% Senior Notes Principal 500,000 500,000 Unamortized discount and debt issuance costs (7,430) (7,897) Total HEP long-term debt 1,362,570 1,405,603 Total long-term debt $ 3,100,969 $ 3,142,718 The fair values of the senior notes are as follows: June 30, December 31, (In thousands) HollyFrontier Senior Notes $ 1,948,756 $ 1,903,867 HEP Senior Notes $ 512,245 $ 506,540 These fair values are based on a Level 2 input. See Note 4 for additional information on Level 2 inputs. We capitalized interest attributable to construction projects of $2.8 million and $0.8 million for the three months ended June 30, 2021 and 2020, respectively, and $4.7 million and $1.4 million, for the six months ended June 30, 2021 and 2020, respectively. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Commodity Price Risk Management Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, forward purchase and sales and futures contracts to mitigate price exposure with respect to our inventory positions, natural gas purchases, sales prices of refined products and crude oil costs. Foreign Currency Risk Management We are exposed to market risk related to the volatility in foreign currency exchange rates. We periodically enter into derivative contracts in the form of foreign exchange forward and foreign exchange swap contracts to mitigate the exposure associated with fluctuations on intercompany notes with our foreign subsidiaries that are not denominated in the U.S. dollar. Accounting Hedges We have swap contracts serving as cash flow hedges against price risk on forecasted purchases of natural gas. We also periodically have swap contracts to lock in basis spread differentials on forecasted purchases of crude oil and forward sales contracts that lock in the prices of future sales of crude oil and refined product. These contracts have been designated as accounting hedges and are measured at fair value with offsetting adjustments (gains/losses) recorded directly to other comprehensive income. These fair value adjustments are later reclassified to earnings as the hedging instruments mature. The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of hedging instruments under hedge accounting: Net Unrealized Gain (Loss) Recognized in OCI Gain (Loss) Reclassified into Earnings Derivatives Designated as Cash Flow Hedging Instruments Three Months Ended Income Statement Location Three Months Ended 2021 2020 2021 2020 (In thousands) Commodity contracts $ 5,424 $ 6,914 Sales and other revenues $ (5,052) $ (5,403) Cost of products sold — 459 Operating expenses 103 (457) Total $ 5,424 $ 6,914 $ (4,949) $ (5,401) Derivatives Designated as Cash Flow Hedging Instruments Six Months Ended Income Statement Location Six Months Ended 2021 2020 2021 2020 (In thousands) Commodity contracts $ 782 $ (6,410) Sales and other revenues $ (18,771) $ 49 Cost of products sold — 2,289 Operating expenses (53) (1,163) Total $ 782 $ (6,410) $ (18,824) $ 1,175 Economic Hedges We have commodity contracts including NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory and forward purchase and sell contracts, as well as periodically have contracts to lock in basis spread differentials on forecasted purchases of crude oil, that serve as economic hedges (derivatives used for risk management, but not designated as accounting hedges). We also have forward currency contracts to fix the rate of foreign currency. In addition, our catalyst financing arrangements discussed in Note 9 could require repayment under certain conditions based on the future pricing of platinum, which is an embedded derivative. These contracts are measured at fair value with offsetting adjustments (gains/losses) recorded directly to earnings. The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges: Gain (Loss) Recognized in Earnings Derivatives Not Designated as Hedging Instruments Income Statement Location Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Commodity contracts Cost of products sold $ (9,469) $ (7,180) $ (12,079) $ 17,909 Interest expense 4,831 (5,100) 7,506 4,712 Foreign currency contracts Gain (loss) on foreign currency transactions (6,086) (14,315) (12,829) 19,160 Total $ (10,724) $ (26,595) $ (17,402) $ 41,781 As of June 30, 2021, we have the following notional contract volumes related to outstanding derivative instruments: Notional Contract Volumes by Year of Maturity Total Outstanding Notional 2021 2022 Unit of Measure Derivatives Designated as Hedging Instruments Natural gas price swaps - long 900,000 900,000 — MMBTU Forward crude oil contracts - short 90,000 90,000 — Barrels Derivatives Not Designated as Hedging Instruments NYMEX futures (WTI) - short 665,000 665,000 — Barrels Forward gasoline and diesel contracts - long 365,000 365,000 — Barrels Foreign currency forward contracts 434,968,532 210,609,988 224,358,544 U.S. dollar Forward commodity contracts (platinum) 38,723 — 38,723 Troy ounces The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements. Derivatives in Net Asset Position Derivatives in Net Liability Position Gross Assets Gross Liabilities Offset in Balance Sheet Net Assets Recognized in Balance Sheet Gross Liabilities Gross Assets Offset in Balance Sheet Net Liabilities Recognized in Balance Sheet (In thousands) June 30, 2021 Derivatives designated as cash flow hedging instruments: Commodity price swap contracts $ 892 $ — $ 892 $ — $ — $ — Commodity forward contracts — — — 462 — 462 $ 892 $ — $ 892 $ 462 $ — $ 462 Derivatives not designated as cash flow hedging instruments: NYMEX futures contracts $ — $ — $ — $ 2,352 $ — $ 2,352 Commodity forward contracts 671 — 671 650 — 650 Foreign currency forward contracts — — — 20,007 (948) 19,059 $ 671 $ — $ 671 $ 23,009 $ (948) $ 22,061 Total net balance $ 1,563 $ 22,523 Balance sheet classification: Prepayment and other $ 1,563 Accrued liabilities $ 22,523 Derivatives in Net Asset Position Derivatives in Net Liability Position Gross Assets Gross Liabilities Offset in Balance Sheet Net Assets Recognized in Balance Sheet Gross Liabilities Gross Assets Offset in Balance Sheet Net Liabilities Recognized in Balance Sheet (In thousands) December 31, 2020 Derivatives designated as cash flow hedging instruments: Commodity price swap contracts $ — $ — $ — $ 359 $ — $ 359 $ — $ — $ — $ 359 $ — $ 359 Derivatives not designated as cash flow hedging instruments: NYMEX futures contracts $ — $ — $ — $ 418 $ — $ 418 Commodity forward contracts 275 — 275 196 — 196 Foreign currency forward contracts — — — 23,005 — 23,005 $ 275 $ — $ 275 $ 23,619 $ — $ 23,619 Total net balance $ 275 $ 23,978 Balance sheet classification: Prepayment and other $ 275 Accrued liabilities $ 23,978 At June 30, 2021, we had a pre-tax net unrealized gain of $0.4 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2021, which, assuming commodity prices remain unchanged, will be effectively transferred from accumulated other comprehensive income into the statement of operations as the hedging instruments contractually mature over the next twelve-month period. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity In November 2019, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. The timing and amount of stock repurchases will depend on market conditions and corporate, regulatory and other relevant considerations. This program may be discontinued at any time by the Board of Directors. As of June 30, 2021, we had not repurchased common stock under this stock repurchase program. In addition, we are authorized by our Board of Directors to repurchase shares in an amount sufficient to offset shares issued under our compensation programs. During the six months ended June 30, 2021 and 2020, we withheld 14,063 and 29,587, respectively, shares of our common stock from certain employees. These withholdings were made under the terms of restricted stock unit and performance share unit agreements upon vesting, at which time, we concurrently made cash payments to fund payroll and income taxes on behalf of officers and employees who elected to have shares withheld from vested amounts to pay such taxes. |
Other Comprehensive Income
Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2021 | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |
Other Comprehensive Income | Other Comprehensive Income The components and allocated tax effects of other comprehensive income are as follows: Before-Tax Tax Expense After-Tax (In thousands) Three Months Ended June 30, 2021 Net change in foreign currency translation adjustment $ 2,088 $ 450 $ 1,638 Net unrealized gain on hedging instruments 5,424 1,363 4,061 Net change in pension and other post-retirement benefit obligations (932) (228) (704) Other comprehensive income attributable to HollyFrontier stockholders $ 6,580 $ 1,585 $ 4,995 Three Months Ended June 30, 2020 Net change in foreign currency translation adjustment $ 11,710 $ 2,488 $ 9,222 Net unrealized gain on hedging instruments 6,914 1,762 5,152 Other comprehensive income attributable to HollyFrontier stockholders $ 18,624 $ 4,250 $ 14,374 Six Months Ended June 30, 2021 Net change in foreign currency translation adjustment $ (3,775) $ (775) $ (3,000) Net unrealized gain on hedging instruments 782 194 588 Net change in pension and other post-retirement benefit obligations (1,862) (465) (1,397) Other comprehensive loss attributable to HollyFrontier stockholders $ (4,855) $ (1,046) $ (3,809) Six Months Ended June 30, 2020 Net change in foreign currency translation adjustment $ (9,876) $ (2,139) $ (7,737) Net unrealized loss on hedging instruments (6,410) (1,636) (4,774) Net change in pension and other post-retirement benefit obligations (42) (4) (38) Other comprehensive loss attributable to HollyFrontier stockholders $ (16,328) $ (3,779) $ (12,549) The following table presents the statements of operations line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”): AOCI Component Gain (Loss) Reclassified From AOCI Statement of Operations Line Item Three Months Ended June 30, 2021 2020 (In thousands) Hedging instruments: Commodity price swaps $ (5,052) $ (5,403) Sales and other revenues — 459 Cost of products sold 103 (457) Operating expenses (4,949) (5,401) (1,247) (1,377) Income tax benefit (3,702) (4,024) Net of tax Other post-retirement benefit obligations: Pension obligations 104 — Other, net 26 — Income tax expense 78 — Net of tax Post-retirement healthcare obligations 837 — Other, net 211 — Income tax expense 626 — Net of tax Retirement restoration plan (9) — Other, net (2) — Income tax benefit (7) — Net of tax Total reclassifications for the period $ (3,005) $ (4,024) AOCI Component Gain (Loss) Reclassified From AOCI Statement of Operations Line Item Six Months Ended June 30, 2021 2020 (In thousands) Hedging instruments: Commodity price swaps $ (18,771) $ 49 Sales and other revenues — 2,289 Cost of products sold (53) (1,163) Operating expenses (18,824) 1,175 (4,744) 300 Income tax expense (benefit) (14,080) 875 Net of tax Other post-retirement benefit obligations: Pension obligations 205 — Other, net 52 — Income tax expense 153 — Net of tax Post-retirement healthcare obligations 1,675 — Other, net 422 — Income tax expense 1,253 — Net of tax Retirement restoration plan (18) — Other, net (5) — Income tax benefit (13) — Net of tax Total reclassifications for the period $ (12,687) $ 875 Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes: June 30, December 31, (In thousands) Foreign currency translation adjustment $ (318) $ 2,682 Unrealized loss on pension obligation (453) (248) Unrealized gain on post-retirement benefit obligations 10,118 11,310 Unrealized gain (loss) on hedging instruments 306 (282) Accumulated other comprehensive income $ 9,653 $ 13,462 |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies We are a party to various litigation and legal proceedings which we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse effect on our financial condition, results of operations or cash flows. During 2017, 2018 and 2019, the EPA granted the Cheyenne Refinery and Woods Cross Refinery each a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2016, 2017 and 2018, respectively, calendar years. As a result, the Cheyenne Refinery’s and Woods Cross Refinery’s gasoline and diesel production are not subject to the Renewable Volume Obligation for the respective years. Upon each exemption granted, we increased our inventory of RINs and reduced our cost of products sold. Various subsidiaries of HollyFrontier are currently intervenors in two lawsuits brought by renewable fuel interest groups against the EPA in federal courts alleging violations of the RFS under the Clean Air Act and challenging the EPA’s handling of small refinery exemptions. We intervened to vigorously defend the EPA’s position on small refinery exemptions because we believe the EPA correctly applied applicable law to the matters at issue. The first lawsuit is before the U.S. Court of Appeals for the Tenth Circuit. The matter is fully briefed and remains pending before that court. The second lawsuit is before the U.S. Court of Appeals for the DC Circuit. Briefing of the issues before the court commenced on December 7, 2020; however, in light of the Supreme Court’s decision to review HollyFrontier’s petition for certiorari of the Tenth Circuit January 24, 2020 decision, this case was stayed pending a decision from the Supreme Court. The stay has not been lifted to date. On January 24, 2020, in a separate matter before the Tenth Circuit, the Tenth Circuit vacated the small refinery exemptions granted to two of our refineries for 2016 and remanded the case to the EPA for further proceedings. On April 15, 2020, the Tenth Circuit issued its mandate, remanding the matter back to the EPA. On September 4, 2020, various subsidiaries of HollyFrontier filed a Petition for a Writ of Certiorari with the U.S. Supreme Court seeking review of the Tenth Circuit decision. On January 8, 2021, the U.S. Supreme Court granted HollyFrontier's petition. The oral argument occurred on April 27, 2021. The U.S. Supreme Court issued its opinion in this matter on June 25, 2021 and reversed the Tenth Circuit. On July 27, 2021, the Tenth Circuit recalled the mandate it issued to the EPA on April 15, 2020 and vacated its January 24, 2020 judgment. On July 29, 2021, the Tenth Circuit issued an order and judgment confirming that it recalled its mandate and vacated its previous judgment in this case. The Tenth Circuit also issued a new mandate returning jurisdiction to the EPA. In December 2020, various subsidiaries of HollyFrontier also filed a petition for review in the DC Circuit challenging the EPA's denial of small refinery exemption petitions for years prior to 2016. The petition was consolidated with petitions from eight other refining companies challenging the same decision. In light of the Supreme Court's decision to hear HollyFrontier's appeal of the Tenth Circuit decision, this case was stayed pending a decision from the Supreme Court. Following the Supreme Court’s decision, HollyFrontier’s subsidiaries filed a motion on July 26, 2021 to dismiss their petition. The DC Circuit granted this motion and dismissed the case on July 28, 2021. We are unable to estimate the costs we may incur, if any, at this time. It is too early to assess how the U.S. Supreme Court decision will impact future small refinery exemptions or whether the remaining cases are expected to have any impact on us. We have been party to multiple proceedings before the Federal Energy Regulatory Commission (“FERC”) challenging the rates charged by SFPP, L.P. (“SFPP”) on its East Line pipeline facilities from El Paso, Texas to Phoenix, Arizona. In March 2018, FERC ruled that SFPP, as a master limited partnership, was prohibited from including an allowance for investor income taxes in the cost of service underlying its East Line rates. We reached a negotiated settlement with SFPP that provides for a payment to us of $51.5 million. FERC approved the settlement on December 31, 2020 subject to a rehearing period that resulted in a settlement effective date of February 2, 2021. Under the terms of the settlement agreement, SFPP made the $51.5 million payment to us on February 10, 2021. As of December 31, 2020, we had no enforceable right to collect any of the settlement. Accordingly, recognition of a gain occurred when the uncertainties were resolved on February 2, 2021, and we recorded as Gain on tariff settlement in our consolidated statements of operations for the six months ended June 30, 2021. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 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 the El Dorado, Tulsa, Navajo and Woods Cross Refineries and HFC Asphalt (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 Mountain 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 the Cheyenne Refinery through the third quarter of 2020, at which time it permanently ceased petroleum refining operations. The Lubricants and Specialty Products segment involves PCLI’s production operations, located in Mississauga, Ontario, that includes 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 and Red Giant Oil, one of the largest suppliers of locomotive engine oil in North America. Also, the Lubricants and Specialty Products segment includes 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, 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 (a consolidated subsidiary of HEP) and 50% ownership interests in each of the Osage Pipeline, the Cheyenne Pipeline and Cushing Connect. 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. The accounting policies for our segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2020, except that our Refining segment excludes intercompany ROU assets and liabilities for operating leases. Refining Lubricants and Specialty Products HEP Corporate, Other and Eliminations (1) Consolidated (In thousands) Three Months Ended June 30, 2021 Sales and other revenues: Revenues from external customers $ 3,887,273 $ 662,755 $ 27,092 $ 3 $ 4,577,123 Intersegment revenues 205,186 6,434 99,142 (310,762) — $ 4,092,459 $ 669,189 $ 126,234 $ (310,759) $ 4,577,123 Cost of products sold (exclusive of lower of cost or market inventory) $ 3,619,319 $ 491,218 $ — $ (284,808) $ 3,825,729 Lower of cost or market inventory valuation adjustment $ (118,825) $ — $ — $ — $ (118,825) Operating expenses $ 231,422 $ 61,310 $ 42,068 $ (609) $ 334,191 Selling, general and administrative expenses $ 30,136 $ 37,583 $ 2,846 $ 7,189 $ 77,754 Depreciation and amortization $ 79,938 $ 19,152 $ 22,275 $ 2,677 $ 124,042 Income (loss) from operations $ 250,469 $ 59,926 $ 59,045 $ (35,208) $ 334,232 Earnings of equity method investments $ — $ — $ 3,423 $ — $ 3,423 Capital expenditures $ 33,150 $ 5,614 $ 24,498 $ 119,618 $ 182,880 Three Months Ended June 30, 2020 Sales and other revenues: Revenues from external customers $ 1,690,042 $ 353,644 $ 19,244 $ — $ 2,062,930 Intersegment revenues 37,462 3,643 95,563 (136,668) — $ 1,727,504 $ 357,287 $ 114,807 $ (136,668) $ 2,062,930 Cost of products sold (exclusive of lower of cost or market inventory) $ 1,433,437 $ 258,347 $ — $ (114,788) $ 1,576,996 Lower of cost or market inventory valuation adjustment $ (269,904) $ — $ — $ — $ (269,904) Operating expenses $ 239,359 $ 47,840 $ 34,737 $ (18,577) $ 303,359 Selling, general and administrative expenses $ 32,811 $ 35,919 $ 2,535 $ 4,104 $ 75,369 Depreciation and amortization $ 81,694 $ 19,779 $ 24,008 $ 4,697 $ 130,178 Long-lived asset impairment (2) $ 215,242 $ 204,708 $ 16,958 $ — $ 436,908 Income (loss) from operations $ (5,135) $ (209,306) $ 36,569 $ (12,104) $ (189,976) Earnings of equity method investments $ — $ — $ 2,156 $ — $ 2,156 Capital expenditures $ 12,102 $ 4,311 $ 11,798 $ 17,776 $ 45,987 Refining Lubricants and Specialty Products HEP Corporate, Other and Eliminations (1) Consolidated (In thousands) Six Months Ended June 30, 2021 Sales and other revenues: Revenues from external customers $ 6,844,306 $ 1,184,753 $ 52,350 $ 7 $ 8,081,416 Intersegment revenues 265,648 8,999 201,068 (475,715) — $ 7,109,954 $ 1,193,752 $ 253,418 $ (475,708) $ 8,081,416 Cost of products sold (exclusive of lower of cost or market inventory) $ 6,381,262 $ 822,741 $ — $ (417,969) $ 6,786,034 Lower of cost or market inventory valuation adjustment $ (318,353) $ — $ — $ (509) $ (318,862) Operating expenses $ 524,277 $ 122,063 $ 83,433 $ 4,327 $ 734,100 Selling, general and administrative expenses $ 58,632 $ 83,136 $ 5,815 $ 12,146 $ 159,729 Depreciation and amortization $ 168,020 $ 39,273 $ 45,281 $ (4,453) $ 248,121 Income (loss) from operations $ 296,116 $ 126,539 $ 118,889 $ (69,250) $ 472,294 Earnings of equity method investments $ — $ — $ 5,186 $ — $ 5,186 Capital expenditures $ 73,511 $ 9,701 $ 57,716 $ 191,913 $ 332,841 Six Months Ended June 30, 2020 Sales and other revenues: Revenues from external customers $ 4,540,662 $ 877,143 $ 45,670 $ — $ 5,463,475 Intersegment revenues 121,708 6,747 196,991 (325,446) — $ 4,662,370 $ 883,890 $ 242,661 $ (325,446) $ 5,463,475 Cost of products sold (exclusive of lower of cost or market inventory) $ 3,902,188 $ 649,727 $ — $ (281,193) $ 4,270,722 Lower of cost or market inventory valuation adjustment $ 290,560 $ — $ — $ — $ 290,560 Operating expenses $ 498,533 $ 101,971 $ 69,718 $ (38,518) $ 631,704 Selling, general and administrative expenses $ 63,811 $ 84,881 $ 5,237 $ 9,177 $ 163,106 Depreciation and amortization $ 171,873 $ 41,828 $ 47,986 $ 9,066 $ 270,753 Long-lived asset impairment (2) $ 215,242 $ 204,708 $ 16,958 $ — $ 436,908 Income (loss) from operations $ (479,837) $ (199,225) $ 102,762 $ (23,978) $ (600,278) Earnings of equity method investments $ — $ — $ 3,870 $ — $ 3,870 Capital expenditures $ 65,116 $ 13,392 $ 30,740 $ 20,488 $ 129,736 (1) For the three and the six months ended June 30, 2021, Corporate and Other includes $11.3 million and $24.1 million, respectively, of operating expenses and $113.8 million and $184.0 million, respectively, of capital expenditures related to the construction of our renewable diesel units. (2) The results of our HEP reportable segment for the three and six months ended June 30, 2020 include a long-lived asset impairment charge attributed to HEP’s logistics assets at our Cheyenne Refinery. Refining Lubricants and Specialty Products HEP Corporate, Other Consolidated (In thousands) June 30, 2021 Cash and cash equivalents $ 6,383 $ 126,944 $ 19,561 $ 1,245,392 $ 1,398,280 Total assets $ 7,018,933 $ 2,015,176 $ 2,255,752 $ 1,270,172 $ 12,560,033 Long-term debt $ — $ — $ 1,362,570 $ 1,738,399 $ 3,100,969 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 |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event HFC Transactions On August 2, 2021, HollyFrontier, Hippo Parent Corporation, a wholly owned subsidiary of HollyFrontier (“New Parent”), Hippo Merger Sub, Inc., a wholly owned subsidiary of New Parent (“Parent Merger Sub”), The Sinclair Companies (“Sinclair”), and Hippo Holding LLC, a wholly owned subsidiary of Sinclair (the “Target Company”), entered into a Business Combination Agreement (the “Business Combination Agreement”). Pursuant to the Business Combination Agreement, HollyFrontier will acquire the Target Company by effecting (a) a holding company merger in accordance with Section 251(g) of the Delaware General Corporation Law whereby HollyFrontier will merge with and into Parent Merger Sub, with HollyFrontier surviving such merger as a direct wholly owned subsidiary of New Parent (the “HFC Merger”) and (b) immediately following the HFC Merger, a contribution whereby Sinclair will contribute all of the equity interests of the Target Company to New Parent in exchange for shares of New Parent, resulting in the Target Company becoming a direct wholly owned subsidiary of New Parent (the “Sinclair Oil Acquisition” and together with the HFC Merger, the “HFC Transactions”). Under the terms of the Business Combination Agreement, at the effective time of the HFC Merger, (a) each share of common stock of HollyFrontier, par value $0.01 per share, will be automatically converted into one share of common stock of New Parent, par value $0.01 per share (“New Parent Common Stock”) and (b) immediately thereafter, Sinclair will contribute the equity interests in the Target Company to New Parent in exchange for 60,230,036 shares of New Parent Common Stock, subject to adjustment if, as a condition to obtaining antitrust clearance for the Sinclair Transactions (as defined below), HollyFrontier agrees to divest certain Woods Cross Refinery assets and the sales price for such assets does not exceed a threshold provided in the Business Combination Agreement. On a pro forma basis following the closing, Sinclair is expected to own 26.75% of the outstanding common stock of New Parent, and HollyFrontier’s current stockholders are expected to hold in the aggregate 73.25% of the outstanding common stock of New Parent, based on HollyFrontier’s outstanding shares of common stock as of July 30, 2021. Consummation of the HFC Transactions is subject to satisfaction or waiver of certain customary conditions, including, among others, receipt of approval for the issuance of New Parent common stock from HollyFrontier’s stockholders; the satisfaction of certain required regulatory consents and approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act; and the consummation of the HEP Transactions (as defined below), which will occur immediately prior to the HFC Transactions (the HEP Transactions, together with the HFC Transactions, the “Sinclair Transactions”). The Business Combination Agreement automatically terminates if the HEP Transactions are terminated and contains other customary termination rights. In the event that certain events occur under specified circumstances outlined in the Business Combination Agreement, HollyFrontier could be required to pay Sinclair a termination fee equal to $200 million or $35 million as reimbursement for expenses. Upon closing of the Sinclair Transactions, HollyFrontier’s existing senior management team will operate the combined company. Under the definitive agreements, Sinclair will be granted the right to nominate two directors to the New Parent Board of Directors at the closing. The Sinclair stockholders have also agreed to certain customary lock up, voting and standstill restrictions, as well as customary registration rights, for the New Parent Common Stock to be issued to the stockholders of Sinclair. The new company will be headquartered in Dallas, Texas, with combined business offices in Salt Lake City, Utah. Following the consummation of the HFC Merger, New Parent will assume HollyFrontier’s listing on the New York Stock Exchange and will be renamed “HF Sinclair Corporation”. HEP Transactions On August 2, 2021, HEP, Sinclair, and Sinclair Transportation Company, a wholly owned subsidiary of Sinclair (“STC”), entered into a Contribution Agreement (the “Contribution Agreement”) pursuant to which the Partnership will acquire all of the outstanding shares of STC in exchange for 21 million newly issued common limited partner units of HEP and cash consideration equal to $325 million (the “HEP Transactions”). The cash consideration for the HEP Transactions is subject to customary adjustments at closing for working capital of STC. The number of HEP common limited partner units to be issued to Sinclair at closing is subject to downward adjustment if, as a condition to obtaining antitrust clearance for the Sinclair Transactions, HEP agrees to divest a portion of its equity interest in UNEV Pipeline LLC and the sales price for such interests does not exceed the threshold provided in the Contribution Agreement. The Contribution Agreement contains customary representations, warranties and covenants of HEP, Sinclair, and STC. The HEP Transactions are expected to close in mid-2022, subject to the satisfaction or waiver of certain customary conditions, including, among others, the receipt of certain required regulatory consents and approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the consummation of the HFC Transactions. The Contribution Agreement automatically terminates if the HFC Transactions are terminated and contains other customary termination rights, including a termination right for each of the Partnership and Sinclair if, under certain circumstances, the closing does not occur by May 2, 2022 (the “Outside Date”), except that the Outside Date can be extended by either party by up to two 90 day periods to obtain any required antitrust clearance. Upon closing of the HEP Transactions, HEP’s existing senior management team will continue to operate HEP. Under the definitive agreements, Sinclair will be granted the right to nominate one director to the HEP Board of Directors at the closing. The Sinclair stockholders have also agreed to certain customary lock up restrictions and registration rights for the HEP common limited partner units to be issued to the stockholders of Sinclair. HEP will continue to operate under the name Holly Energy Partners, L.P. On August 2, 2021, in connection with the Sinclair Transactions, HEP and HollyFrontier entered into a Letter Agreement (“Letter Agreement”) pursuant to which, among other things, HEP and HollyFrontier agreed, upon the consummation of the Sinclair Transactions, to enter into amendments to certain of the agreements by and among HEP and HollyFrontier, including the master throughput agreement, to include within the scope of such agreements the assets to be acquired by HEP pursuant to the Contribution Agreement. |
Description of Business and P_2
Description of Business and Presentation of Financial Statements (Policy) | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Quarterly Report on Form 10-Q has been written in the first person. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries. We are an independent petroleum refiner and marketer that produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products and specialty and modified asphalt. We own and operate petroleum refineries that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain geographic regions of the United States. In addition, we produce base oils and other specialized lubricants in the United States, Canada and the Netherlands, with retail and wholesale marketing of our products through a global sales network with locations in Canada, the United States, Europe, China and Latin America. As of June 30, 2021, we: • owned and operated a petroleum refinery in El Dorado, Kansas (the “El Dorado Refinery”), two refinery facilities located in Tulsa, Oklahoma (collectively, the “Tulsa Refineries”), a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”) and a refinery in Woods Cross, Utah (the “Woods Cross Refinery”); • owned a facility in Cheyenne, Wyoming, which operated as a petroleum refinery until early August 2020, at which time its assets began to be converted to renewable diesel production (the “Cheyenne Refinery”); • owned and operated Petro-Canada Lubricants Inc. (“PCLI”) located in Mississauga, Ontario, which produces base oils and other specialized lubricant products; • owned and operated manufacturing facilities in Petrolia, Pennsylvania and the Netherlands, which produce specialty lubricant products for our Sonneborn business, such as white oils, petrolatums and waxes; • owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil and has storage and distribution facilities in Iowa and Wyoming, along with a blending and packaging facility in Texas; • owned and operated HollyFrontier Asphalt Company LLC (“HFC Asphalt”), which operates various asphalt terminals in Arizona, New Mexico and Oklahoma; and • owned a 57% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain geographic regions of the United States. On May 4, 2021, HollyFrontier Puget Sound Refining LLC, a wholly-owned subsidiary of HollyFrontier Corporation, entered into a sale and purchase agreement with Equilon Enterprises LLC d/b/a Shell Oil Products US (“Shell”) to acquire Shell’s refinery and related assets, including the on-site cogeneration facility and related logistics assets (the “Puget Sound Refinery”), for a base cash purchase price of $350 million plus hydrocarbon inventory to be valued at closing with an estimated current value in the range of $150 million to $180 million (the “Puget Sound Acquisition”). The Puget Sound Refinery is strategically located on approximately 850 acres in Anacortes, Washington, approximately 80 miles north of Seattle and 90 miles south of Vancouver. The 149,000 barrel per day facility is a large, high quality and complex refinery with catalytic cracking and delayed coking units and is well positioned geographically and logistically to source advantaged Canadian and Alaskan North Slope crudes. In addition to refining assets and an on-site cogeneration facility, the transaction includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with approximately 5.8 million barrels of crude, product and other hydrocarbon storage capacity. The Puget Sound Acquisition is expected to close in the fourth quarter of 2021, subject to customary closing conditions. We expect to fund the Puget Sound Acquisition with a one-year suspension of our regular quarterly dividend and cash on hand. During the first quarter of 2021, we initiated a restructuring within our Lubricants and Specialty Products segment. As a result of this restructuring, we recorded $7.8 million in employee severance costs for the six months ended June 30, 2021, which were recognized primarily as selling, general and administrative expenses in our Lubricants and Specialty Products segment. In the third quarter of 2020, we permanently ceased petroleum refining operations at our Cheyenne Refinery and subsequently began converting certain assets at our Cheyenne Refinery to renewable diesel production. In connection with the cessation of petroleum refining operations at our Cheyenne Refinery, we recognized $8.1 million and $16.3 million, in decommissioning expense and $0.2 million and $0.7 million, in employee severance costs for the three and six months ended June 30, 2021, respectively, which were recognized in operating expenses in our Corporate and Other segment. During the second quarter of 2020, we recorded $1.1 million in employee severance costs related to the conversion of our Cheyenne Refinery. These severance costs were recognized in operating expenses and were reported in our Refining segment. Also, during the second quarter of 2020, we recorded a long-lived asset impairment charge of $232.2 million related to our Cheyenne Refinery asset group. During the second quarter of 2020, we initiated and completed a corporate restructuring. As a result of this restructuring, we recorded $3.7 million in employee severance costs, which were recognized primarily as operating expenses in our Refining segment and selling, general and administrative expenses in our Corporate and Other segment. We have prepared these consolidated financial statements without audit. In management’s opinion, these consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of our consolidated financial position as of June 30, 2021, the consolidated results of operations, comprehensive income and statements of equity for the three and six months ended June 30, 2021 and 2020 and consolidated cash flows for the six months ended June 30, 2021 and 2020 in accordance with the rules and regulations of the SEC. Although certain notes and other information required by generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 that has been filed with the SEC. Our results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results of operations to be realized for the year ending December 31, 2021. |
Accounts Receivable | Accounts Receivable: Our accounts receivable consist of amounts due from customers that are primarily companies in the petroleum industry. Credit is extended based on our evaluation of the customer’s financial condition, and in certain circumstances collateral, such as letters of credit or guarantees, is required. We reserve for expected credit losses based on our historical loss experience as well as expected credit losses from current economic conditions and management’s expectations of future economic conditions. Credit losses are charged to the allowance for expected credit losses when an account is deemed uncollectible. Our allowance for expected credit losses was $4.3 million at June 30, 2021 and $3.4 million at December 31, 2020. |
Inventories | Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products, or market. In periods of rapidly declining prices, LIFO inventories may have to be written down to market value due to the higher costs assigned to LIFO layers in prior periods. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and are subject to the final year-end LIFO inventory valuation. Inventories of our Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of cost, using the first-in, first-out (“FIFO”) method, or net realizable value. Inventories consisting of process chemicals, materials and maintenance supplies and renewable identification numbers (“RINs”) are stated at the lower of weighted-average cost or net realizable value. |
Leases | Leases: At inception, we determine if an arrangement is or contains a lease. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our payment obligation under the leasing arrangement. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable. Operating leases are recorded in operating lease right-of-use assets and current and noncurrent operating lease liabilities on our consolidated balance sheet. Finance leases are included in properties, plants and equipment and accrued liabilities and other long-term liabilities on our consolidated balance sheet. Our lease term includes an option to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet. For certain equipment leases, we apply a portfolio approach for the operating lease ROU assets and liabilities. Also, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. In addition, HEP, as a lessor, does not separate the non-lease (service) component in contracts in which the lease component is the dominant component. HEP treats these combined components as a lease. |
Goodwill and Long-lived Assets | Goodwill and Long-lived Assets: As of June 30, 2021, our goodwill balance was $2.3 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1,733.5 million, $247.2 million and $312.9 million, respectively. See Note 14 for additional information on our segments. The carrying amount of our goodwill may fluctuate from period to period due to the effects of foreign currency translation adjustments on goodwill assigned to our Lubricants and Specialty Products segment. Goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill is not subject to amortization and is tested annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our goodwill impairment testing first entails either a quantitative assessment or an optional qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we determine that based on the qualitative factors that it is more likely than not that the carrying amount of the reporting unit is greater than its fair value, a quantitative test is performed in which we estimate the fair value of the related reporting unit. If the carrying amount of a reporting unit exceeds its fair value, the goodwill of that reporting unit is impaired, and we measure goodwill impairment as the excess of the carrying amount of the reporting unit over the related fair value. For purposes of long-lived asset impairment evaluation, we have grouped our long-lived assets as follows: (i) our refinery asset groups, which include certain HEP logistics assets, (ii) our Lubricants and Specialty Products asset groups and (iii) our HEP asset groups, which comprises HEP assets not included in our refinery asset groups. These asset groups represent the lowest level for which independent cash flows can be identified. Our long-lived assets are evaluated for impairment by identifying whether indicators of impairment exist and if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss measured, if any, is equal to the amount by which the asset group’s carrying value exceeds its fair value. During the second quarter of 2020, we recorded long-lived asset impairment charges of $232.2 million and $204.7 million related to our Cheyenne Refinery and PCLI asset groups, respectively. |
Revenue Recognition | Revenue Recognition: Revenue on refined product and excess crude oil sales are recognized when delivered (via pipeline, in-tank or rack) and the customer obtains control of such inventory, which is typically when title passes and the customer is billed. All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported as cost of products sold. Our lubricants and specialty products business has sales agreements with marketers and distributors that provide certain rights of return or provisions for the repurchase of products previously sold to them. Under these agreements, revenues and cost of revenues are deferred until the products have been sold to end customers. Our lubricants and specialty products business also has agreements that create an obligation to deliver products at a future date for which consideration has already been received and recorded as deferred revenue. This revenue is recognized when the products are delivered to the customer. |
Foreign Currency Translation | Foreign Currency Translation: Assets and liabilities recorded in foreign currencies are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted-average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income. We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the consolidated statements of operations. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to Corporate and Other. See Note 14 for additional information on our segments. |
Income Taxes | Income Taxes : Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized. Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter. For the six months ended June 30, 2021, we recorded income tax expense of $95.2 million compared to an income tax benefit of $193.1 million for the six months ended June 30, 2020. Thi s increase was due principally to pre-t ax income during the six months ended June 30, 2021 compared to pre-tax loss in the same period of 2020. Our effective tax rates were 20.1% and 30.3% for the six months ended June 30, 2021 and 2020, respectively. The year-over-year decrease in the e ffective tax rate is due principally to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes. The difference in the U.S. federal statutory rate and the effective tax rate for the six months ended June 30, 2021 was primarily due to the tax effects of income attributable to noncontrolling interests. |
Inventory Repurchase Obligations | Inventory Repurchase Obligations: We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. For the six months ended June 30, 2021 and 2020, we received proceeds of $23.0 million and $20.4 million, respectively, and subsequently repaid $24.2 million and $21.7 million, respectively, under these sell / buy transactions. |
Holly Energy Partners (Tables)
Holly Energy Partners (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Lease Income Recognized | Lease income recognized was as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Operating lease revenues $ 3,731 $ 5,442 $ 8,178 $ 13,732 Gain on sales-type leases $ — $ 33,834 $ — $ 33,834 Sales-type lease interest income $ 637 $ 642 $ 1,276 $ 642 Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable $ 520 $ 286 $ 857 $ 286 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenues | Disaggregated revenues were as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Revenues by type Refined product revenues Transportation fuels (1) $ 3,323,897 $ 1,385,246 $ 5,795,668 $ 3,863,593 Specialty lubricant products (2) 605,939 340,284 1,086,620 811,237 Asphalt, fuel oil and other products (3) 221,743 145,298 380,329 346,641 Total refined product revenues 4,151,579 1,870,828 7,262,617 5,021,471 Excess crude oil revenues (4) 389,275 163,394 745,575 363,173 Transportation and logistic services 27,092 19,244 52,350 45,670 Other revenues (5) 9,177 9,464 20,874 33,161 Total sales and other revenues $ 4,577,123 $ 2,062,930 $ 8,081,416 $ 5,463,475 Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Refined product revenues by market United States Mid-Continent $ 2,334,226 $ 867,660 $ 4,002,439 $ 2,400,584 Southwest 941,451 436,073 1,709,514 1,170,248 Rocky Mountains 373,252 274,973 611,055 743,752 Northeast 199,955 110,909 372,253 270,733 Canada 213,338 120,870 395,284 303,523 Europe, Asia and Latin America 89,357 60,343 172,072 132,631 Total refined product revenues $ 4,151,579 $ 1,870,828 $ 7,262,617 $ 5,021,471 (1) Transportation fuels consist of gasoline, diesel and jet fuel. (2) Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids. (3) Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of $165.9 million and $55.8 million, respectively, for the three months ended June 30, 2021, $283.2 million and $97.1 million, respectively, for the six months ended June 30, 2021, $131.9 million and $13.4 million, respectively, for the three months ended June 30, 2020, $280.7 million and $65.9 million respectively, for the six months ended June 30, 2020. (4) Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries. (5) Other revenues are principally attributable to our Refining segment. |
Schedule of Changes to Contract Liabilities | The following table presents changes to our contract liabilities during the six months ended June 30, 2021 and 2020. Six Months Ended June 30, 2021 2020 (In thousands) Balance at January 1 $ 6,738 $ 4,652 Increase 15,314 16,115 Recognized as revenue (14,686) (14,980) Balance at June 30 $ 7,366 $ 5,787 |
Schedules of Aggregate Minimum Volumes Expected to Be Sold Under Long-term Sales Contracts | Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows: Remainder of 2021 2022 2023 Thereafter Total (In thousands) Refined product sales volumes (barrels) 9,528 14,272 12,795 11,698 48,293 minimum revenues attributable to HEP’s third-party contracts as of June 30, 2021 are presented below: Remainder of 2021 2022 2023 Thereafter Total (In thousands) HEP contractual minimum revenues $ 10,422 $ 11,005 $ 8,922 $ 11,414 $ 41,763 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Fair Value Measurements Of Asset and Liability Instruments | The carrying amounts of derivative instruments and RINs credit obligations at June 30, 2021 and December 31, 2020 were as follows: Fair Value by Input Level Carrying Amount Level 1 Level 2 Level 3 (In thousands) June 30, 2021 Assets: Commodity price swaps $ 892 $ — $ 892 $ — Commodity forward contracts 671 — 671 — Total assets $ 1,563 $ — $ 1,563 $ — Liabilities: NYMEX futures contracts $ 2,352 $ 2,352 $ — $ — Commodity forward contracts 1,112 — 1,112 — Foreign currency forward contracts 19,059 — 19,059 — RINs credit obligations (1) 131,052 — 131,052 — Total liabilities $ 153,575 $ 2,352 $ 151,223 $ — December 31, 2020 Assets: Commodity forward contracts $ 275 $ — $ 275 $ — Total assets $ 275 $ — $ 275 $ — Liabilities: NYMEX futures contracts $ 418 $ 418 $ — $ — Commodity price swaps 359 — 359 — Commodity forward contracts 196 — 196 — Foreign currency forward contracts 23,005 — 23,005 — Total liabilities $ 23,978 $ 418 $ 23,560 $ — (1) Represent obligations for RINs credits for which we did not have sufficient quantities at June 30, 2021 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule Of Earnings Per Share | The following is a reconciliation of the denominators of the basic and diluted per share computations for net income (loss) attributable to HollyFrontier stockholders: Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands, except per share data) Net income (loss) attributable to HollyFrontier stockholders $ 168,850 $ (176,677) $ 317,067 $ (481,300) Participating securities’ share in earnings (1) 2,223 — 4,271 — Net income (loss) attributable to common shares $ 166,627 $ (176,677) $ 312,796 $ (481,300) Average number of shares of common stock outstanding 162,523 161,889 162,501 161,882 Average number of shares of common stock outstanding assuming dilution 162,523 161,889 162,501 161,882 Basic earnings (loss) per share $ 1.03 $ (1.09) $ 1.92 $ (2.97) Diluted earnings (loss) per share $ 1.03 $ (1.09) $ 1.92 $ (2.97) (1) Unvested restricted stock unit awards and unvested performance share units represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HollyFrontier. Participating earnings represent the distributed and undistributed earnings of HollyFrontier attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule Of Restricted Stock Activity | A summary of restricted stock unit and performance share unit activity during the six months ended June 30, 2021 is presented below: Restricted Stock Units Performance Share Units Outstanding at January 1, 2021 2,057,045 635,204 Granted (1) 9,983 — Vested (89,381) (3,565) Forfeited (132,284) (26,192) Outstanding at June 30, 2021 1,845,363 605,447 (1) Weighted average grant date fair value per unit $ 34.98 $ — |
Schedule Of Performance Share Activity | A summary of restricted stock unit and performance share unit activity during the six months ended June 30, 2021 is presented below: Restricted Stock Units Performance Share Units Outstanding at January 1, 2021 2,057,045 635,204 Granted (1) 9,983 — Vested (89,381) (3,565) Forfeited (132,284) (26,192) Outstanding at June 30, 2021 1,845,363 605,447 (1) Weighted average grant date fair value per unit $ 34.98 $ — |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory, Net [Abstract] | |
Schedule of Inventory Components | Inventories consist of the following components: June 30, December 31, 2020 (In thousands) Crude oil $ 511,056 $ 451,967 Other raw materials and unfinished products (1) 342,791 260,495 Finished products (2) 669,060 595,696 Lower of cost or market reserve — (318,862) Process chemicals (3) 43,021 35,006 Repair and maintenance supplies and other (4) 134,677 149,174 Total inventory $ 1,700,605 $ 1,173,476 (1) Other raw materials and unfinished products include feedstocks and blendstocks, other than crude. (2) Finished products include gasolines, jet fuels, diesels, lubricants, asphalts, LPG’s and residual fuels. (3) Process chemicals include additives and other chemicals. (4) Includes RINs. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Carrying Amounts Of Long-Term Debt | The carrying amounts of long-term debt are as follows: June 30, December 31, (In thousands) HollyFrontier 2.625% Senior Notes $ 350,000 $ 350,000 5.875% Senior Notes 1,000,000 1,000,000 4.500% Senior Notes 400,000 400,000 1,750,000 1,750,000 Unamortized discount and debt issuance costs (11,601) (12,885) Total HollyFrontier long-term debt 1,738,399 1,737,115 HEP Credit Agreement 870,000 913,500 HEP 5.000% Senior Notes Principal 500,000 500,000 Unamortized discount and debt issuance costs (7,430) (7,897) Total HEP long-term debt 1,362,570 1,405,603 Total long-term debt $ 3,100,969 $ 3,142,718 The fair values of the senior notes are as follows: June 30, December 31, (In thousands) HollyFrontier Senior Notes $ 1,948,756 $ 1,903,867 HEP Senior Notes $ 512,245 $ 506,540 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Net Unrealized Gain (Loss) Recognized in OCI and Gain (Loss) Reclassified into Earnings | The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of hedging instruments under hedge accounting: Net Unrealized Gain (Loss) Recognized in OCI Gain (Loss) Reclassified into Earnings Derivatives Designated as Cash Flow Hedging Instruments Three Months Ended Income Statement Location Three Months Ended 2021 2020 2021 2020 (In thousands) Commodity contracts $ 5,424 $ 6,914 Sales and other revenues $ (5,052) $ (5,403) Cost of products sold — 459 Operating expenses 103 (457) Total $ 5,424 $ 6,914 $ (4,949) $ (5,401) Derivatives Designated as Cash Flow Hedging Instruments Six Months Ended Income Statement Location Six Months Ended 2021 2020 2021 2020 (In thousands) Commodity contracts $ 782 $ (6,410) Sales and other revenues $ (18,771) $ 49 Cost of products sold — 2,289 Operating expenses (53) (1,163) Total $ 782 $ (6,410) $ (18,824) $ 1,175 |
Schedule of Gain (Loss) Recognized in Earnings | The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges: Gain (Loss) Recognized in Earnings Derivatives Not Designated as Hedging Instruments Income Statement Location Three Months Ended Six Months Ended 2021 2020 2021 2020 (In thousands) Commodity contracts Cost of products sold $ (9,469) $ (7,180) $ (12,079) $ 17,909 Interest expense 4,831 (5,100) 7,506 4,712 Foreign currency contracts Gain (loss) on foreign currency transactions (6,086) (14,315) (12,829) 19,160 Total $ (10,724) $ (26,595) $ (17,402) $ 41,781 |
Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges | As of June 30, 2021, we have the following notional contract volumes related to outstanding derivative instruments: Notional Contract Volumes by Year of Maturity Total Outstanding Notional 2021 2022 Unit of Measure Derivatives Designated as Hedging Instruments Natural gas price swaps - long 900,000 900,000 — MMBTU Forward crude oil contracts - short 90,000 90,000 — Barrels Derivatives Not Designated as Hedging Instruments NYMEX futures (WTI) - short 665,000 665,000 — Barrels Forward gasoline and diesel contracts - long 365,000 365,000 — Barrels Foreign currency forward contracts 434,968,532 210,609,988 224,358,544 U.S. dollar Forward commodity contracts (platinum) 38,723 — 38,723 Troy ounces |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements. Derivatives in Net Asset Position Derivatives in Net Liability Position Gross Assets Gross Liabilities Offset in Balance Sheet Net Assets Recognized in Balance Sheet Gross Liabilities Gross Assets Offset in Balance Sheet Net Liabilities Recognized in Balance Sheet (In thousands) June 30, 2021 Derivatives designated as cash flow hedging instruments: Commodity price swap contracts $ 892 $ — $ 892 $ — $ — $ — Commodity forward contracts — — — 462 — 462 $ 892 $ — $ 892 $ 462 $ — $ 462 Derivatives not designated as cash flow hedging instruments: NYMEX futures contracts $ — $ — $ — $ 2,352 $ — $ 2,352 Commodity forward contracts 671 — 671 650 — 650 Foreign currency forward contracts — — — 20,007 (948) 19,059 $ 671 $ — $ 671 $ 23,009 $ (948) $ 22,061 Total net balance $ 1,563 $ 22,523 Balance sheet classification: Prepayment and other $ 1,563 Accrued liabilities $ 22,523 Derivatives in Net Asset Position Derivatives in Net Liability Position Gross Assets Gross Liabilities Offset in Balance Sheet Net Assets Recognized in Balance Sheet Gross Liabilities Gross Assets Offset in Balance Sheet Net Liabilities Recognized in Balance Sheet (In thousands) December 31, 2020 Derivatives designated as cash flow hedging instruments: Commodity price swap contracts $ — $ — $ — $ 359 $ — $ 359 $ — $ — $ — $ 359 $ — $ 359 Derivatives not designated as cash flow hedging instruments: NYMEX futures contracts $ — $ — $ — $ 418 $ — $ 418 Commodity forward contracts 275 — 275 196 — 196 Foreign currency forward contracts — — — 23,005 — 23,005 $ 275 $ — $ 275 $ 23,619 $ — $ 23,619 Total net balance $ 275 $ 23,978 Balance sheet classification: Prepayment and other $ 275 Accrued liabilities $ 23,978 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |
Schedule of Components and Allocated Tax Effects of OCI | The components and allocated tax effects of other comprehensive income are as follows: Before-Tax Tax Expense After-Tax (In thousands) Three Months Ended June 30, 2021 Net change in foreign currency translation adjustment $ 2,088 $ 450 $ 1,638 Net unrealized gain on hedging instruments 5,424 1,363 4,061 Net change in pension and other post-retirement benefit obligations (932) (228) (704) Other comprehensive income attributable to HollyFrontier stockholders $ 6,580 $ 1,585 $ 4,995 Three Months Ended June 30, 2020 Net change in foreign currency translation adjustment $ 11,710 $ 2,488 $ 9,222 Net unrealized gain on hedging instruments 6,914 1,762 5,152 Other comprehensive income attributable to HollyFrontier stockholders $ 18,624 $ 4,250 $ 14,374 Six Months Ended June 30, 2021 Net change in foreign currency translation adjustment $ (3,775) $ (775) $ (3,000) Net unrealized gain on hedging instruments 782 194 588 Net change in pension and other post-retirement benefit obligations (1,862) (465) (1,397) Other comprehensive loss attributable to HollyFrontier stockholders $ (4,855) $ (1,046) $ (3,809) Six Months Ended June 30, 2020 Net change in foreign currency translation adjustment $ (9,876) $ (2,139) $ (7,737) Net unrealized loss on hedging instruments (6,410) (1,636) (4,774) Net change in pension and other post-retirement benefit obligations (42) (4) (38) Other comprehensive loss attributable to HollyFrontier stockholders $ (16,328) $ (3,779) $ (12,549) |
Schedule of Income Statement Line Items Effects Out of AOCI | The following table presents the statements of operations line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”): AOCI Component Gain (Loss) Reclassified From AOCI Statement of Operations Line Item Three Months Ended June 30, 2021 2020 (In thousands) Hedging instruments: Commodity price swaps $ (5,052) $ (5,403) Sales and other revenues — 459 Cost of products sold 103 (457) Operating expenses (4,949) (5,401) (1,247) (1,377) Income tax benefit (3,702) (4,024) Net of tax Other post-retirement benefit obligations: Pension obligations 104 — Other, net 26 — Income tax expense 78 — Net of tax Post-retirement healthcare obligations 837 — Other, net 211 — Income tax expense 626 — Net of tax Retirement restoration plan (9) — Other, net (2) — Income tax benefit (7) — Net of tax Total reclassifications for the period $ (3,005) $ (4,024) AOCI Component Gain (Loss) Reclassified From AOCI Statement of Operations Line Item Six Months Ended June 30, 2021 2020 (In thousands) Hedging instruments: Commodity price swaps $ (18,771) $ 49 Sales and other revenues — 2,289 Cost of products sold (53) (1,163) Operating expenses (18,824) 1,175 (4,744) 300 Income tax expense (benefit) (14,080) 875 Net of tax Other post-retirement benefit obligations: Pension obligations 205 — Other, net 52 — Income tax expense 153 — Net of tax Post-retirement healthcare obligations 1,675 — Other, net 422 — Income tax expense 1,253 — Net of tax Retirement restoration plan (18) — Other, net (5) — Income tax benefit (13) — Net of tax Total reclassifications for the period $ (12,687) $ 875 |
Schedule of AOCI in Equity | Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes: June 30, December 31, (In thousands) Foreign currency translation adjustment $ (318) $ 2,682 Unrealized loss on pension obligation (453) (248) Unrealized gain on post-retirement benefit obligations 10,118 11,310 Unrealized gain (loss) on hedging instruments 306 (282) Accumulated other comprehensive income $ 9,653 $ 13,462 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule Of Segment Reporting Information | Refining Lubricants and Specialty Products HEP Corporate, Other and Eliminations (1) Consolidated (In thousands) Three Months Ended June 30, 2021 Sales and other revenues: Revenues from external customers $ 3,887,273 $ 662,755 $ 27,092 $ 3 $ 4,577,123 Intersegment revenues 205,186 6,434 99,142 (310,762) — $ 4,092,459 $ 669,189 $ 126,234 $ (310,759) $ 4,577,123 Cost of products sold (exclusive of lower of cost or market inventory) $ 3,619,319 $ 491,218 $ — $ (284,808) $ 3,825,729 Lower of cost or market inventory valuation adjustment $ (118,825) $ — $ — $ — $ (118,825) Operating expenses $ 231,422 $ 61,310 $ 42,068 $ (609) $ 334,191 Selling, general and administrative expenses $ 30,136 $ 37,583 $ 2,846 $ 7,189 $ 77,754 Depreciation and amortization $ 79,938 $ 19,152 $ 22,275 $ 2,677 $ 124,042 Income (loss) from operations $ 250,469 $ 59,926 $ 59,045 $ (35,208) $ 334,232 Earnings of equity method investments $ — $ — $ 3,423 $ — $ 3,423 Capital expenditures $ 33,150 $ 5,614 $ 24,498 $ 119,618 $ 182,880 Three Months Ended June 30, 2020 Sales and other revenues: Revenues from external customers $ 1,690,042 $ 353,644 $ 19,244 $ — $ 2,062,930 Intersegment revenues 37,462 3,643 95,563 (136,668) — $ 1,727,504 $ 357,287 $ 114,807 $ (136,668) $ 2,062,930 Cost of products sold (exclusive of lower of cost or market inventory) $ 1,433,437 $ 258,347 $ — $ (114,788) $ 1,576,996 Lower of cost or market inventory valuation adjustment $ (269,904) $ — $ — $ — $ (269,904) Operating expenses $ 239,359 $ 47,840 $ 34,737 $ (18,577) $ 303,359 Selling, general and administrative expenses $ 32,811 $ 35,919 $ 2,535 $ 4,104 $ 75,369 Depreciation and amortization $ 81,694 $ 19,779 $ 24,008 $ 4,697 $ 130,178 Long-lived asset impairment (2) $ 215,242 $ 204,708 $ 16,958 $ — $ 436,908 Income (loss) from operations $ (5,135) $ (209,306) $ 36,569 $ (12,104) $ (189,976) Earnings of equity method investments $ — $ — $ 2,156 $ — $ 2,156 Capital expenditures $ 12,102 $ 4,311 $ 11,798 $ 17,776 $ 45,987 Refining Lubricants and Specialty Products HEP Corporate, Other and Eliminations (1) Consolidated (In thousands) Six Months Ended June 30, 2021 Sales and other revenues: Revenues from external customers $ 6,844,306 $ 1,184,753 $ 52,350 $ 7 $ 8,081,416 Intersegment revenues 265,648 8,999 201,068 (475,715) — $ 7,109,954 $ 1,193,752 $ 253,418 $ (475,708) $ 8,081,416 Cost of products sold (exclusive of lower of cost or market inventory) $ 6,381,262 $ 822,741 $ — $ (417,969) $ 6,786,034 Lower of cost or market inventory valuation adjustment $ (318,353) $ — $ — $ (509) $ (318,862) Operating expenses $ 524,277 $ 122,063 $ 83,433 $ 4,327 $ 734,100 Selling, general and administrative expenses $ 58,632 $ 83,136 $ 5,815 $ 12,146 $ 159,729 Depreciation and amortization $ 168,020 $ 39,273 $ 45,281 $ (4,453) $ 248,121 Income (loss) from operations $ 296,116 $ 126,539 $ 118,889 $ (69,250) $ 472,294 Earnings of equity method investments $ — $ — $ 5,186 $ — $ 5,186 Capital expenditures $ 73,511 $ 9,701 $ 57,716 $ 191,913 $ 332,841 Six Months Ended June 30, 2020 Sales and other revenues: Revenues from external customers $ 4,540,662 $ 877,143 $ 45,670 $ — $ 5,463,475 Intersegment revenues 121,708 6,747 196,991 (325,446) — $ 4,662,370 $ 883,890 $ 242,661 $ (325,446) $ 5,463,475 Cost of products sold (exclusive of lower of cost or market inventory) $ 3,902,188 $ 649,727 $ — $ (281,193) $ 4,270,722 Lower of cost or market inventory valuation adjustment $ 290,560 $ — $ — $ — $ 290,560 Operating expenses $ 498,533 $ 101,971 $ 69,718 $ (38,518) $ 631,704 Selling, general and administrative expenses $ 63,811 $ 84,881 $ 5,237 $ 9,177 $ 163,106 Depreciation and amortization $ 171,873 $ 41,828 $ 47,986 $ 9,066 $ 270,753 Long-lived asset impairment (2) $ 215,242 $ 204,708 $ 16,958 $ — $ 436,908 Income (loss) from operations $ (479,837) $ (199,225) $ 102,762 $ (23,978) $ (600,278) Earnings of equity method investments $ — $ — $ 3,870 $ — $ 3,870 Capital expenditures $ 65,116 $ 13,392 $ 30,740 $ 20,488 $ 129,736 (1) For the three and the six months ended June 30, 2021, Corporate and Other includes $11.3 million and $24.1 million, respectively, of operating expenses and $113.8 million and $184.0 million, respectively, of capital expenditures related to the construction of our renewable diesel units. (2) The results of our HEP reportable segment for the three and six months ended June 30, 2020 include a long-lived asset impairment charge attributed to HEP’s logistics assets at our Cheyenne Refinery. Refining Lubricants and Specialty Products HEP Corporate, Other Consolidated (In thousands) June 30, 2021 Cash and cash equivalents $ 6,383 $ 126,944 $ 19,561 $ 1,245,392 $ 1,398,280 Total assets $ 7,018,933 $ 2,015,176 $ 2,255,752 $ 1,270,172 $ 12,560,033 Long-term debt $ — $ — $ 1,362,570 $ 1,738,399 $ 3,100,969 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 |
Description of Business and P_3
Description of Business and Presentation of Financial Statements (Details) bbl in Thousands, $ in Thousands | May 04, 2021USD ($)abblmi | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)petroleumRefinerymi | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Ownership Interest By Project Type [Line Items] | ||||||
Facility distance from main city (in miles) | mi | 65 | |||||
Severance costs | $ 3,700 | |||||
Allowance for expected credit losses | $ 4,300 | $ 4,300 | $ 3,400 | |||
Goodwill | 2,293,544 | 2,293,544 | 2,293,935 | |||
Income tax expense (benefit) | 123,485 | (30,911) | $ 95,178 | $ (193,077) | ||
Effective income tax rate | 20.10% | 30.30% | ||||
Proceeds from inventory repurchase agreements | $ 23,000 | $ 20,400 | ||||
Payments under inventory repurchase agreements | 24,200 | $ 21,700 | ||||
Puget Sound Refinery | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Cash purchase price | $ 350,000 | |||||
Refinery area of land (in acres) | a | 850 | |||||
Refinery capacity for barrels of crude oil per day (in barrels) | bbl | 149 | |||||
Storage capacity acquired (in barrels) | bbl | 5,800 | |||||
Puget Sound Refinery | Minimum | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Value of inventory transferred in acquisition | $ 150,000 | |||||
Puget Sound Refinery | Maximum | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Value of inventory transferred in acquisition | $ 180,000 | |||||
Cheyenne Refinery | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Severance costs | 200 | 700 | ||||
Decommissioning expense | 8,100 | $ 16,300 | ||||
Impairment of long-lived assets | 232,200 | |||||
PCLI | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Impairment of long-lived assets | 204,700 | |||||
Tulsa, OK | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Number of refineries | petroleumRefinery | 2 | |||||
Seattle, WA | Puget Sound Refinery | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Facility distance from main city (in miles) | mi | 80 | |||||
Vancouver, BC (Canada) | Puget Sound Refinery | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Facility distance from main city (in miles) | mi | 90 | |||||
Refining | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Goodwill | 1,733,500 | $ 1,733,500 | ||||
Refining | Cheyenne Refinery | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Severance costs | $ 1,100 | |||||
Lubricants and Specialty Products | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Severance costs | 7,800 | |||||
Goodwill | 247,200 | 247,200 | ||||
HEP | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Goodwill | 312,900 | $ 312,900 | ||||
HEP | ||||||
Ownership Interest By Project Type [Line Items] | ||||||
Percentage of ownership in variable interest entity | 57.00% | |||||
Goodwill | $ 312,873 | $ 312,873 | $ 312,873 |
Holly Energy Partners - Narrati
Holly Energy Partners - Narrative (Details) bbl in Thousands, $ in Thousands | Jul. 01, 2021USD ($) | Oct. 31, 2019USD ($)bbl | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) |
Holly Energy Partners Entity [Line Items] | ||||||
Gain on sales-type leases | $ 0 | $ 33,834 | $ 0 | $ 33,834 | ||
Osage Pipeline | ||||||
Holly Energy Partners Entity [Line Items] | ||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | ||||
Crushing Connect Joint Venture | ||||||
Holly Energy Partners Entity [Line Items] | ||||||
Barrels of crude oil per day | bbl | 160 | |||||
Barrels of crude oil, value | bbl | 1,500 | |||||
Crushing Connect Joint Venture | Minimum | ||||||
Holly Energy Partners Entity [Line Items] | ||||||
Expected construction costs | $ 70,000 | |||||
Crushing Connect Joint Venture | Maximum | ||||||
Holly Energy Partners Entity [Line Items] | ||||||
Expected construction costs | $ 75,000 | |||||
HEP | ||||||
Holly Energy Partners Entity [Line Items] | ||||||
Percentage of ownership in variable interest entity | 57.00% | |||||
HEP | Revenue Benchmark | Customer Concentration Risk | HEP | HollyFrontier | ||||||
Holly Energy Partners Entity [Line Items] | ||||||
Concentration risk, percentage of total revenues | 79.00% | |||||
HEP | Subsequent Event | ||||||
Holly Energy Partners Entity [Line Items] | ||||||
Minimum annualized payments under agreement | $ 339,800 |
Holly Energy Partners - Schedul
Holly Energy Partners - Schedule of Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | ||||
Operating lease revenues | $ 3,731 | $ 5,442 | $ 8,178 | $ 13,732 |
Gain on sales-type leases | 0 | 33,834 | 0 | 33,834 |
Sales-type lease interest income | 637 | 642 | 1,276 | 642 |
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable | $ 520 | $ 286 | $ 857 | $ 286 |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | $ 4,577,123 | $ 2,062,930 | $ 8,081,416 | $ 5,463,475 |
Mid-Continent | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 2,334,226 | 867,660 | 4,002,439 | 2,400,584 |
Southwest | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 941,451 | 436,073 | 1,709,514 | 1,170,248 |
Rocky Mountains | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 373,252 | 274,973 | 611,055 | 743,752 |
Northeast | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 199,955 | 110,909 | 372,253 | 270,733 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 213,338 | 120,870 | 395,284 | 303,523 |
Europe, Asia and Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 89,357 | 60,343 | 172,072 | 132,631 |
Transportation fuels | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 3,323,897 | 1,385,246 | 5,795,668 | 3,863,593 |
Specialty lubricant products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 605,939 | 340,284 | 1,086,620 | 811,237 |
Asphalt, fuel oil and other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 221,743 | 145,298 | 380,329 | 346,641 |
Refined product | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 4,151,579 | 1,870,828 | 7,262,617 | 5,021,471 |
Excess crude oil revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 389,275 | 163,394 | 745,575 | 363,173 |
Transportation and logistic services | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 27,092 | 19,244 | 52,350 | 45,670 |
Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 9,177 | 9,464 | 20,874 | 33,161 |
Refining | Asphalt, fuel oil and other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | 165,900 | 131,900 | 283,200 | 280,700 |
Lubricants and Specialty Products | Asphalt, fuel oil and other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and other revenues | $ 55,800 | $ 13,400 | $ 97,100 | $ 65,900 |
Revenues - Schedule Contract Li
Revenues - Schedule Contract Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Change In Contract With Customer, Liability [Roll Forward] | ||
Contract liabilities at beginning of period | $ 6,738 | $ 4,652 |
Increase | 15,314 | 16,115 |
Recognized as revenue | (14,686) | (14,980) |
Contract liabilities at end of period | $ 7,366 | $ 5,787 |
Revenues - Schedule of Performa
Revenues - Schedule of Performance Obligations (Details) bbl in Thousands, $ in Thousands | Jun. 30, 2021USD ($)bbl |
Third-Party Customer | HEP | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenues | $ | $ 41,763 |
Refined product | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, sale of refined product barrels | bbl | 48,293 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | Third-Party Customer | HEP | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenues | $ | $ 10,422 |
Satisfaction period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | Refined product | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, sale of refined product barrels | bbl | 9,528 |
Satisfaction period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Third-Party Customer | HEP | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenues | $ | $ 11,005 |
Satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Refined product | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, sale of refined product barrels | bbl | 14,272 |
Satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Third-Party Customer | HEP | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenues | $ | $ 8,922 |
Satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Refined product | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, sale of refined product barrels | bbl | 12,795 |
Satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Third-Party Customer | HEP | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenues | $ | $ 11,414 |
Satisfaction period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Refined product | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, sale of refined product barrels | bbl | 11,698 |
Satisfaction period |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Level 1 | ||
Debt Instrument [Line Items] | ||
Assets: | $ 0 | $ 0 |
Liabilities: | 2,352 | 418 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Assets: | 1,563 | 275 |
Liabilities: | 151,223 | 23,560 |
Level 3 | ||
Debt Instrument [Line Items] | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Carrying Amount | ||
Debt Instrument [Line Items] | ||
Assets: | 1,563 | 275 |
Liabilities: | 153,575 | 23,978 |
NYMEX futures contracts | Level 1 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 2,352 | 418 |
NYMEX futures contracts | Level 2 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 0 | 0 |
NYMEX futures contracts | Level 3 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 0 | 0 |
NYMEX futures contracts | Carrying Amount | ||
Debt Instrument [Line Items] | ||
Liabilities: | 2,352 | 418 |
Commodity price swaps | Level 1 | ||
Debt Instrument [Line Items] | ||
Assets: | 0 | |
Liabilities: | 0 | |
Commodity price swaps | Level 2 | ||
Debt Instrument [Line Items] | ||
Assets: | 892 | |
Liabilities: | 359 | |
Commodity price swaps | Level 3 | ||
Debt Instrument [Line Items] | ||
Assets: | 0 | |
Liabilities: | 0 | |
Commodity price swaps | Carrying Amount | ||
Debt Instrument [Line Items] | ||
Assets: | 892 | |
Liabilities: | 359 | |
Commodity forward contracts | Level 1 | ||
Debt Instrument [Line Items] | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Commodity forward contracts | Level 2 | ||
Debt Instrument [Line Items] | ||
Assets: | 671 | 275 |
Liabilities: | 1,112 | 196 |
Commodity forward contracts | Level 3 | ||
Debt Instrument [Line Items] | ||
Assets: | 0 | 0 |
Liabilities: | 0 | 0 |
Commodity forward contracts | Carrying Amount | ||
Debt Instrument [Line Items] | ||
Assets: | 671 | 275 |
Liabilities: | 1,112 | 196 |
Foreign currency forward contracts | Level 1 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 0 | 0 |
Foreign currency forward contracts | Level 2 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 19,059 | 23,005 |
Foreign currency forward contracts | Level 3 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 0 | 0 |
Foreign currency forward contracts | Carrying Amount | ||
Debt Instrument [Line Items] | ||
Liabilities: | 19,059 | $ 23,005 |
RINs credit obligations | Level 1 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 0 | |
RINs credit obligations | Level 2 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 131,052 | |
RINs credit obligations | Level 3 | ||
Debt Instrument [Line Items] | ||
Liabilities: | 0 | |
RINs credit obligations | Carrying Amount | ||
Debt Instrument [Line Items] | ||
Liabilities: | $ 131,052 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to HollyFrontier stockholders | $ 168,850 | $ (176,677) | $ 317,067 | $ (481,300) |
Participating securities' share in earnings | 2,223 | 0 | 4,271 | 0 |
Net income (loss) attributable to common shares | $ 166,627 | $ (176,677) | $ 312,796 | $ (481,300) |
Average number of shares of common stock outstanding (in shares) | 162,523 | 161,889 | 162,501 | 161,882 |
Average number of shares of common stock outstanding assuming dilution (in shares) | 162,523 | 161,889 | 162,501 | 161,882 |
Basic earnings (loss) per share (in USD per share) | $ 1.03 | $ (1.09) | $ 1.92 | $ (2.97) |
Diluted earnings (loss) per share (in USD per share) | $ 1.03 | $ (1.09) | $ 1.92 | $ (2.97) |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost attributable to share-based compensation plans | $ 11.9 | $ 8.1 | $ 22.8 | $ 12.9 |
HEP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost attributable to share-based compensation plans | $ 0.5 | $ 0.5 | $ 1.2 | $ 1 |
Restricted Stock Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock vesting period (in years) | 1 year | |||
Restricted Stock Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock vesting period (in years) | 3 years | |||
Performance Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock vesting period (in years) | 3 years | |||
Performance Share Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of target | 0.00% | |||
Performance Share Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of target | 200.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule Of Restricted Stock and Performance Share Activity (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants outstanding at beginning of period (in shares) | 2,057,045 |
Units granted (in shares) | 9,983 |
Units vested (in shares) | (89,381) |
Units forfeited (in shares) | (132,284) |
Grants outstanding at end of period (in shares) | 1,845,363 |
Weighted average grant date fair value of units granted (in USD per share) | $ / shares | $ 34.98 |
Performance Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants outstanding at beginning of period (in shares) | 635,204 |
Units granted (in shares) | 0 |
Units vested (in shares) | (3,565) |
Units forfeited (in shares) | (26,192) |
Grants outstanding at end of period (in shares) | 605,447 |
Weighted average grant date fair value of units granted (in USD per share) | $ / shares | $ 0 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Inventories | ||
Crude oil | $ 511,056 | $ 451,967 |
Other raw materials and unfinished products | 342,791 | 260,495 |
Finished products | 669,060 | 595,696 |
Lower of cost or market reserve | 0 | (318,862) |
Process chemicals | 43,021 | 35,006 |
Repair and maintenance supplies and other | 134,677 | 149,174 |
Total inventory | $ 1,700,605 | $ 1,173,476 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Inventory, Net [Abstract] | |||||
Inventory valuation reserves | $ 0 | $ 0 | $ 318,862 | ||
Lower of cost or market inventory valuation adjustment | $ (118,825) | $ (269,904) | $ (318,862) | $ 290,560 |
Environmental (Details)
Environmental (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | |||||
Environmental remediation costs | $ 1.9 | $ 0.4 | $ 2 | $ 2 | |
Accrued environmental liability | 113.8 | $ 113.8 | $ 115 | ||
Period for environmental remediation (in years) | 30 years | ||||
Other Noncurrent Liabilities | |||||
Loss Contingencies [Line Items] | |||||
Accrued environmental liability | $ 94.8 | $ 94.8 | $ 94 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Feb. 29, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Apr. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity under revolving credit agreement | $ 1,350,000,000 | |||||||
Outstanding borrowing | $ 0 | $ 0 | ||||||
Letters of credit amount outstanding | 2,300,000 | 2,300,000 | ||||||
Principal | 1,750,000,000 | 1,750,000,000 | $ 1,750,000,000 | |||||
Fair value of financing arrangements | 41,700,000 | 41,700,000 | 43,900,000 | |||||
Loss on early extinguishment of debt | 0 | $ 0 | 0 | $ (25,915,000) | ||||
Capitalized interest | $ 2,800,000 | $ 800,000 | 4,700,000 | 1,400,000 | ||||
Base Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate spread | 0.25% | |||||||
Base Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate spread | 1.125% | |||||||
LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate spread | 1.25% | |||||||
LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate spread | 2.125% | |||||||
CDOR Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate spread | 1.25% | |||||||
CDOR Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate spread | 2.125% | |||||||
2.625% Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | $ 350,000,000 | $ 350,000,000 | 350,000,000 | |||||
Stated interest rate | 2.625% | 2.625% | ||||||
4.500% Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | $ 400,000,000 | $ 400,000,000 | 400,000,000 | |||||
Stated interest rate | 4.50% | 4.50% | ||||||
5.875% Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | $ 1,000,000,000 | $ 1,000,000,000 | 1,000,000,000 | |||||
Stated interest rate | 5.875% | 5.875% | ||||||
HEP 5.000% Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 5.00% | |||||||
Aggregate principal amount of senior note | $ 500,000,000 | |||||||
HEP | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity under revolving credit agreement | 1,200,000,000 | $ 1,400,000,000 | ||||||
Outstanding borrowing | $ 870,000,000 | $ 870,000,000 | 913,500,000 | |||||
Letters of credit amount outstanding | $ 0 | 0 | ||||||
Maximum borrowing capacity with accordion feature | 1,700,000,000 | |||||||
Proceeds from line of credit | 141,000,000 | |||||||
Repayments of lines of credit | $ 184,500,000 | |||||||
Effective interest rate on debt | 2.20% | 2.20% | ||||||
Redemption cost | 522,500,000 | |||||||
Loss on early extinguishment of debt | (25,900,000) | |||||||
Debt redemption premium | $ 22,500,000 | |||||||
Unamortized discount | 3,400,000 | |||||||
HEP | Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, maximum capacity available | $ 50,000,000 | |||||||
HEP | HEP 5.000% Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||||
Stated interest rate | 5.00% | 5.00% | ||||||
HEP | 6.0% Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | $ 500,000,000 | |||||||
Stated interest rate | 6.00% |
Debt - Carrying Amounts Of Long
Debt - Carrying Amounts Of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Feb. 29, 2020 |
Debt Instrument [Line Items] | |||
Principal | $ 1,750,000 | $ 1,750,000 | |
Unamortized discount and debt issuance costs | (11,601) | (12,885) | |
Total HollyFrontier long-term debt | 1,738,399 | 1,737,115 | |
HEP Credit Agreement | 0 | ||
Total long-term debt | 3,100,969 | 3,142,718 | |
Level 2 | |||
Debt Instrument [Line Items] | |||
Senior notes | 1,948,756 | 1,903,867 | |
2.625% Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal | $ 350,000 | 350,000 | |
Stated interest rate | 2.625% | ||
5.875% Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal | $ 1,000,000 | 1,000,000 | |
Stated interest rate | 5.875% | ||
4.500% Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal | $ 400,000 | 400,000 | |
Stated interest rate | 4.50% | ||
HEP 5.000% Senior Notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.00% | ||
HEP | |||
Debt Instrument [Line Items] | |||
HEP Credit Agreement | $ 870,000 | 913,500 | |
Total long-term debt | 1,362,570 | 1,405,603 | |
HEP | Level 2 | |||
Debt Instrument [Line Items] | |||
Senior notes | 512,245 | 506,540 | |
HEP | HEP 5.000% Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal | 500,000 | 500,000 | |
Unamortized discount and debt issuance costs | $ (7,430) | $ (7,897) | |
Stated interest rate | 5.00% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities- Location of Gain Loss in Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Trading Activity, Gains and Losses, Net [Line Items] | ||||
Net unrealized gain (loss) recognized in other comprehensive income | $ 5,424 | $ 6,914 | $ 782 | $ (6,410) |
Gain (loss) reclassified into earnings | (4,949) | (5,401) | (18,824) | 1,175 |
Commodity contracts | ||||
Trading Activity, Gains and Losses, Net [Line Items] | ||||
Net unrealized gain (loss) recognized in other comprehensive income | 5,424 | 6,914 | 782 | (6,410) |
Commodity contracts | Sales and other revenues | ||||
Trading Activity, Gains and Losses, Net [Line Items] | ||||
Gain (loss) reclassified into earnings | (5,052) | (5,403) | (18,771) | 49 |
Commodity contracts | Cost of products sold | ||||
Trading Activity, Gains and Losses, Net [Line Items] | ||||
Gain (loss) reclassified into earnings | 0 | 459 | 0 | 2,289 |
Commodity contracts | Operating expenses | ||||
Trading Activity, Gains and Losses, Net [Line Items] | ||||
Gain (loss) reclassified into earnings | $ 103 | $ (457) | $ (53) | $ (1,163) |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Pre-tax effect on Income Due to Maturities and Fair Value Adjustments of Economic Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives not designated as hedging instruments | $ (10,724) | $ (26,595) | $ (17,402) | $ 41,781 |
Commodity contracts | Cost of products sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives not designated as hedging instruments | (9,469) | (7,180) | (12,079) | 17,909 |
Commodity contracts | Interest expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives not designated as hedging instruments | 4,831 | (5,100) | 7,506 | 4,712 |
Foreign currency contracts | Gain (loss) on foreign currency transactions | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives not designated as hedging instruments | $ (6,086) | $ (14,315) | $ (12,829) | $ 19,160 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Notional Contracts by Derivative Type (Details) bbl in Thousands, MMBTU in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($)MMBTUoztbbl | |
Derivatives Designated as Hedging Instruments | Natural gas price swaps - long | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU | 900 |
Derivatives Designated as Hedging Instruments | Natural gas price swaps - long | 2021 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU | 900 |
Derivatives Designated as Hedging Instruments | Natural gas price swaps - long | 2022 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in MMBTUs) | MMBTU | 0 |
Derivatives Designated as Hedging Instruments | Forward crude oil contracts - short | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 90 |
Derivatives Designated as Hedging Instruments | Forward crude oil contracts - short | 2021 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 90 |
Derivatives Designated as Hedging Instruments | Forward crude oil contracts - short | 2022 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 0 |
Derivatives Not Designated as Hedging Instruments | NYMEX futures (WTI) - short | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 665 |
Derivatives Not Designated as Hedging Instruments | NYMEX futures (WTI) - short | 2021 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 665 |
Derivatives Not Designated as Hedging Instruments | NYMEX futures (WTI) - short | 2022 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 0 |
Derivatives Not Designated as Hedging Instruments | Commodity forward contracts | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 365 |
Derivatives Not Designated as Hedging Instruments | Commodity forward contracts | 2021 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 365 |
Derivatives Not Designated as Hedging Instruments | Commodity forward contracts | 2022 | |
Economic hedges by derivative type [Line Items] | |
Derivative nonmonetary notional amount (in barrels) | 0 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | |
Economic hedges by derivative type [Line Items] | |
Derivative notional amount | $ | $ 434,968,532 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | 2021 | |
Economic hedges by derivative type [Line Items] | |
Derivative notional amount | $ | 210,609,988 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | 2022 | |
Economic hedges by derivative type [Line Items] | |
Derivative notional amount | $ | $ 224,358,544 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | |
Economic hedges by derivative type [Line Items] | |
Derivative notional amount (in troy ounce) | ozt | 38,723 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | 2021 | |
Economic hedges by derivative type [Line Items] | |
Derivative notional amount (in troy ounce) | ozt | 0 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | 2022 | |
Economic hedges by derivative type [Line Items] | |
Derivative notional amount (in troy ounce) | ozt | 38,723 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Summary Of Balance Sheet Locations And Related Fair Values Of Outstanding Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Net Assets Recognized in Balance Sheet | $ 1,563 | $ 275 |
Net Liabilities Recognized in Balance Sheet | 22,523 | 23,978 |
Prepayment and other | ||
Derivative [Line Items] | ||
Net Assets Recognized in Balance Sheet | 1,563 | 275 |
Accrued liabilities | ||
Derivative [Line Items] | ||
Net Liabilities Recognized in Balance Sheet | 22,523 | 23,978 |
Derivatives Designated as Hedging Instruments | ||
Derivative [Line Items] | ||
Gross Assets | 892 | 0 |
Gross Liabilities Offset in Balance Sheet | 0 | 0 |
Net Assets Recognized in Balance Sheet | 892 | 0 |
Gross Liabilities | 462 | 359 |
Gross Assets Offset in Balance Sheet | 0 | 0 |
Net Liabilities Recognized in Balance Sheet | 462 | 359 |
Derivatives Designated as Hedging Instruments | Commodity price swaps | ||
Derivative [Line Items] | ||
Gross Assets | 892 | 0 |
Gross Liabilities Offset in Balance Sheet | 0 | 0 |
Net Assets Recognized in Balance Sheet | 892 | 0 |
Gross Liabilities | 0 | 359 |
Gross Assets Offset in Balance Sheet | 0 | 0 |
Net Liabilities Recognized in Balance Sheet | 0 | 359 |
Derivatives Designated as Hedging Instruments | Commodity forward contracts | ||
Derivative [Line Items] | ||
Gross Assets | 0 | |
Gross Liabilities Offset in Balance Sheet | 0 | |
Net Assets Recognized in Balance Sheet | 0 | |
Gross Liabilities | 462 | |
Gross Assets Offset in Balance Sheet | 0 | |
Net Liabilities Recognized in Balance Sheet | 462 | |
Derivatives Not Designated as Hedging Instruments | ||
Derivative [Line Items] | ||
Gross Assets | 671 | 275 |
Gross Liabilities Offset in Balance Sheet | 0 | 0 |
Net Assets Recognized in Balance Sheet | 671 | 275 |
Gross Liabilities | 23,009 | 23,619 |
Gross Assets Offset in Balance Sheet | (948) | 0 |
Net Liabilities Recognized in Balance Sheet | 22,061 | 23,619 |
Derivatives Not Designated as Hedging Instruments | NYMEX futures contracts | ||
Derivative [Line Items] | ||
Gross Assets | 0 | 0 |
Gross Liabilities Offset in Balance Sheet | 0 | 0 |
Net Assets Recognized in Balance Sheet | 0 | 0 |
Gross Liabilities | 2,352 | 418 |
Gross Assets Offset in Balance Sheet | 0 | 0 |
Net Liabilities Recognized in Balance Sheet | 2,352 | 418 |
Derivatives Not Designated as Hedging Instruments | Commodity forward contracts | ||
Derivative [Line Items] | ||
Gross Assets | 671 | 275 |
Gross Liabilities Offset in Balance Sheet | 0 | 0 |
Net Assets Recognized in Balance Sheet | 671 | 275 |
Gross Liabilities | 650 | 196 |
Gross Assets Offset in Balance Sheet | 0 | 0 |
Net Liabilities Recognized in Balance Sheet | 650 | 196 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Gross Assets | 0 | 0 |
Gross Liabilities Offset in Balance Sheet | 0 | 0 |
Net Assets Recognized in Balance Sheet | 0 | 0 |
Gross Liabilities | 20,007 | 23,005 |
Gross Assets Offset in Balance Sheet | (948) | 0 |
Net Liabilities Recognized in Balance Sheet | $ 19,059 | $ 23,005 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Pre-tax net unrealized gain (loss) | $ 5,443,375 | $ 5,168,361 |
Unrealized gain (loss) on hedging instruments | ||
Derivative [Line Items] | ||
Pre-tax net unrealized gain (loss) | $ 400 |
Equity (Details)
Equity (Details) - USD ($) $ in Billions | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Nov. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |||
Authorized share repurchase | $ 1 | ||
Common stock withheld from certain employees (in shares) | 14,063 | 29,587 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) - Components And Allocated Tax Effects Of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Before-Tax | $ 6,580 | $ 18,624 | $ (4,855) | $ (16,328) | ||
Tax Expense (Benefit) | 1,585 | 4,250 | (1,046) | (3,779) | ||
Other comprehensive income (loss) | 4,995 | $ (8,804) | 14,374 | $ (26,923) | (3,809) | (12,549) |
Net change in foreign currency translation adjustment | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Before-Tax | 2,088 | 11,710 | (3,775) | (9,876) | ||
Tax Expense (Benefit) | 450 | 2,488 | (775) | (2,139) | ||
Other comprehensive income (loss) | 1,638 | 9,222 | (3,000) | (7,737) | ||
Net unrealized gain on hedging instruments | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Before-Tax | 5,424 | 6,914 | 782 | (6,410) | ||
Tax Expense (Benefit) | 1,363 | 1,762 | 194 | (1,636) | ||
Other comprehensive income (loss) | 4,061 | $ 5,152 | 588 | (4,774) | ||
Net change in pension and other post-retirement benefit obligations | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Before-Tax | (932) | (1,862) | (42) | |||
Tax Expense (Benefit) | (228) | (465) | (4) | |||
Other comprehensive income (loss) | $ (704) | $ (1,397) | $ (38) |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) - Other Comprehensive Income (Loss) Amounts Reclassified to Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Sales and other revenues | $ (4,577,123) | $ (2,062,930) | $ (8,081,416) | $ (5,463,475) | ||
Cost of products sold | 3,825,729 | 1,576,996 | 6,786,034 | 4,270,722 | ||
Operating expenses | 334,191 | 303,359 | 734,100 | 631,704 | ||
Gain (loss) reclassified into earnings | (4,949) | (5,401) | (18,824) | 1,175 | ||
Income tax expense (benefit) | (123,485) | 30,911 | (95,178) | 193,077 | ||
Net income (loss) | (194,767) | $ (182,850) | 150,407 | $ 293,286 | (377,617) | 443,693 |
Reclassification out of Accumulated Other Comprehensive Income | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Net income (loss) | (3,005) | (4,024) | (12,687) | 875 | ||
Reclassification out of Accumulated Other Comprehensive Income | Net unrealized gain on hedging instruments | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Gain (loss) reclassified into earnings | (4,949) | (5,401) | (18,824) | 1,175 | ||
Income tax expense (benefit) | (1,247) | (1,377) | (4,744) | 300 | ||
Net income (loss) | (3,702) | (4,024) | (14,080) | 875 | ||
Reclassification out of Accumulated Other Comprehensive Income | Net unrealized gain on hedging instruments | Commodity price swaps | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Sales and other revenues | (5,052) | (5,403) | (18,771) | 49 | ||
Cost of products sold | 0 | 459 | 0 | 2,289 | ||
Operating expenses | 103 | (457) | (53) | (1,163) | ||
Reclassification out of Accumulated Other Comprehensive Income | Net change in pension and other post-retirement benefit obligations | Actuarial loss on pension plans | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Other, net | 104 | 0 | 205 | 0 | ||
Income tax expense (benefit) | 26 | 0 | 52 | 0 | ||
Net income (loss) | 78 | 0 | 153 | 0 | ||
Reclassification out of Accumulated Other Comprehensive Income | Net change in pension and other post-retirement benefit obligations | Actuarial gain on post-retirement healthcare plans | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Other, net | 837 | 0 | 1,675 | 0 | ||
Income tax expense (benefit) | 211 | 0 | 422 | 0 | ||
Net income (loss) | 626 | 0 | 1,253 | 0 | ||
Reclassification out of Accumulated Other Comprehensive Income | Net change in pension and other post-retirement benefit obligations | Retirement restoration plan | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Other, net | (9) | 0 | (18) | 0 | ||
Income tax expense (benefit) | (2) | 0 | (5) | 0 | ||
Net income (loss) | $ (7) | $ 0 | $ (13) | $ 0 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Loss In Equity (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Stockholders' equity | $ 6,040,244 | $ 5,838,046 | $ 5,722,203 | $ 5,914,511 | $ 6,110,478 | $ 6,509,426 |
Foreign currency translation adjustment | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Stockholders' equity | (318) | 2,682 | ||||
Unrealized gain (loss) on defined benefit plans | Actuarial loss on pension plans | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Stockholders' equity | (453) | (248) | ||||
Unrealized gain (loss) on defined benefit plans | Actuarial gain on post-retirement healthcare plans | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Stockholders' equity | 10,118 | 11,310 | ||||
Unrealized gain (loss) on hedging instruments | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Stockholders' equity | 306 | (282) | ||||
Accumulated Other Comprehensive Income | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Stockholders' equity | $ 9,653 | $ 4,658 | $ 13,462 | $ 2,225 | $ (12,149) | $ 14,774 |
Contingencies (Details)
Contingencies (Details) $ in Millions | Feb. 10, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Proceeds from legal settlements | $ 51.5 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 3 |
Osage Pipeline | |
Segment Reporting Information [Line Items] | |
Equity method investment, ownership percentage | 50.00% |
UNEV Pipeline | |
Segment Reporting Information [Line Items] | |
Equity method investment, ownership percentage | 75.00% |
Segment Information - Schedule
Segment Information - Schedule Of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | $ 4,577,123 | $ 2,062,930 | $ 8,081,416 | $ 5,463,475 | |
Intersegment revenues | 0 | 0 | 0 | 0 | |
Sales and other revenues | 4,577,123 | 2,062,930 | 8,081,416 | 5,463,475 | |
Cost of products sold | 3,825,729 | 1,576,996 | 6,786,034 | 4,270,722 | |
Lower of cost or market inventory valuation adjustment | (118,825) | (269,904) | (318,862) | 290,560 | |
Operating expenses | 334,191 | 303,359 | 734,100 | 631,704 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 77,754 | 75,369 | 159,729 | 163,106 | |
Depreciation and amortization | 124,042 | 130,178 | 248,121 | 270,753 | |
Long-lived asset impairment | 0 | 436,908 | 0 | 436,908 | |
Income (loss) from operations | 334,232 | (189,976) | 472,294 | (600,278) | |
Earnings of equity method investments | 3,423 | 2,156 | 5,186 | 3,870 | |
Capital expenditures | 182,880 | 45,987 | 332,841 | 129,736 | |
Cash and cash equivalents | 1,398,280 | 1,398,280 | $ 1,368,318 | ||
Total assets | 12,560,033 | 12,560,033 | 11,506,864 | ||
Long-term debt | 3,100,969 | 3,100,969 | 3,142,718 | ||
Capital expenditures | 275,125 | 98,996 | |||
Corporate, Other and Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 3 | 0 | 7 | 0 | |
Intersegment revenues | (310,762) | (136,668) | (475,715) | (325,446) | |
Sales and other revenues | (310,759) | (136,668) | (475,708) | (325,446) | |
Cost of products sold | (284,808) | (114,788) | (417,969) | (281,193) | |
Lower of cost or market inventory valuation adjustment | 0 | 0 | (509) | 0 | |
Operating expenses | (609) | (18,577) | 4,327 | (38,518) | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 7,189 | 4,104 | 12,146 | 9,177 | |
Depreciation and amortization | 2,677 | 4,697 | (4,453) | 9,066 | |
Long-lived asset impairment | 0 | 0 | |||
Income (loss) from operations | (35,208) | (12,104) | (69,250) | (23,978) | |
Earnings of equity method investments | 0 | 0 | 0 | 0 | |
Capital expenditures | 119,618 | 17,776 | 191,913 | 20,488 | |
Cash and cash equivalents | 1,245,392 | 1,245,392 | 1,179,493 | ||
Total assets | 1,270,172 | 1,270,172 | 1,240,226 | ||
Long-term debt | 1,738,399 | 1,738,399 | 1,737,115 | ||
Refining | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 3,887,273 | 1,690,042 | 6,844,306 | 4,540,662 | |
Intersegment revenues | 205,186 | 37,462 | 265,648 | 121,708 | |
Sales and other revenues | 4,092,459 | 1,727,504 | 7,109,954 | 4,662,370 | |
Cost of products sold | 3,619,319 | 1,433,437 | 6,381,262 | 3,902,188 | |
Lower of cost or market inventory valuation adjustment | (118,825) | (269,904) | (318,353) | 290,560 | |
Operating expenses | 231,422 | 239,359 | 524,277 | 498,533 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 30,136 | 32,811 | 58,632 | 63,811 | |
Depreciation and amortization | 79,938 | 81,694 | 168,020 | 171,873 | |
Long-lived asset impairment | 215,242 | 215,242 | |||
Income (loss) from operations | 250,469 | (5,135) | 296,116 | (479,837) | |
Earnings of equity method investments | 0 | 0 | 0 | 0 | |
Capital expenditures | 33,150 | 12,102 | 73,511 | 65,116 | |
Cash and cash equivalents | 6,383 | 6,383 | 3,106 | ||
Total assets | 7,018,933 | 7,018,933 | 6,203,847 | ||
Long-term debt | 0 | 0 | 0 | ||
Lubricants and Specialty Products | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 662,755 | 353,644 | 1,184,753 | 877,143 | |
Intersegment revenues | 6,434 | 3,643 | 8,999 | 6,747 | |
Sales and other revenues | 669,189 | 357,287 | 1,193,752 | 883,890 | |
Cost of products sold | 491,218 | 258,347 | 822,741 | 649,727 | |
Lower of cost or market inventory valuation adjustment | 0 | 0 | 0 | 0 | |
Operating expenses | 61,310 | 47,840 | 122,063 | 101,971 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 37,583 | 35,919 | 83,136 | 84,881 | |
Depreciation and amortization | 19,152 | 19,779 | 39,273 | 41,828 | |
Long-lived asset impairment | 204,708 | 204,708 | |||
Income (loss) from operations | 59,926 | (209,306) | 126,539 | (199,225) | |
Earnings of equity method investments | 0 | 0 | 0 | 0 | |
Capital expenditures | 5,614 | 4,311 | 9,701 | 13,392 | |
Cash and cash equivalents | 126,944 | 126,944 | 163,729 | ||
Total assets | 2,015,176 | 2,015,176 | 1,864,313 | ||
Long-term debt | 0 | 0 | 0 | ||
HEP | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 27,092 | 19,244 | 52,350 | 45,670 | |
Intersegment revenues | 99,142 | 95,563 | 201,068 | 196,991 | |
Sales and other revenues | 126,234 | 114,807 | 253,418 | 242,661 | |
Cost of products sold | 0 | 0 | 0 | 0 | |
Lower of cost or market inventory valuation adjustment | 0 | 0 | 0 | 0 | |
Operating expenses | 42,068 | 34,737 | 83,433 | 69,718 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 2,846 | 2,535 | 5,815 | 5,237 | |
Depreciation and amortization | 22,275 | 24,008 | 45,281 | 47,986 | |
Long-lived asset impairment | 16,958 | 16,958 | |||
Income (loss) from operations | 59,045 | 36,569 | 118,889 | 102,762 | |
Earnings of equity method investments | 3,423 | 2,156 | 5,186 | 3,870 | |
Capital expenditures | 24,498 | $ 11,798 | 57,716 | $ 30,740 | |
Cash and cash equivalents | 19,561 | 19,561 | 21,990 | ||
Total assets | 2,255,752 | 2,255,752 | 2,198,478 | ||
Long-term debt | 1,362,570 | 1,362,570 | $ 1,405,603 | ||
Corporate and Other | Renewable diesel units | |||||
Segment Reporting Information [Line Items] | |||||
Operating expenses | 11,300 | 24,100 | |||
Capital expenditures | $ 113,800 | $ 184,000 |
Subsequent Event (Details)
Subsequent Event (Details) $ / shares in Units, $ in Millions | Aug. 02, 2021USD ($)nominationextensionOption$ / sharesshares | Jun. 30, 2021$ / shares | Dec. 31, 2020$ / shares |
Subsequent Event [Line Items] | |||
Common stock par value (in USD per share) | $ / shares | $ 0.01 | $ 0.01 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock par value (in USD per share) | $ / shares | $ 0.01 | ||
Subsequent Event | Woods Cross Refinery Acquisition | |||
Subsequent Event [Line Items] | |||
Cash considerations paid under agreement | $ 232.5 | ||
Subsequent Event | New Parent | |||
Subsequent Event [Line Items] | |||
Common stock par value (in USD per share) | $ / shares | $ 0.01 | ||
New Parent | Subsequent Event | New Parent | |||
Subsequent Event [Line Items] | |||
Pro forma ownership percentage by parent | 73.25% | ||
New Parent | Subsequent Event | Sinclair | Scenario, Plan | |||
Subsequent Event [Line Items] | |||
Transaction potential termination fee | $ 200 | ||
Transaction potential termination reimbursement expense | $ 35 | ||
New Parent | Subsequent Event | Sinclair | New Parent | |||
Subsequent Event [Line Items] | |||
Pro forma ownership percentage by noncontrolling owner | 26.75% | ||
New Parent | Common Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Conversion of shares in transaction | 1 | ||
New Parent | Common Stock | Subsequent Event | New Parent | Sinclair | |||
Subsequent Event [Line Items] | |||
Shares transferred in transaction (in shares) | shares | 60,230,036 | ||
Sinclair Transportation Company | Subsequent Event | HEP | |||
Subsequent Event [Line Items] | |||
Shares transferred in transaction (in shares) | shares | 21,000,000 | ||
Transaction cash consideration transferred | $ 325 | ||
Number of termination date extension periods in transaction | extensionOption | 2 | ||
Transaction termination date extension period | 90 days | ||
Number of director nominations granted in transaction | nomination | 1 |