Operating Segments

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Operating Segments

Operating Segments

Although financial information is reviewed by our chief operating decision makers from a variety of perspectives, they view the business in two reportable operating segments: (1) pipelines and terminals and (2) refinery processing units. These segments adhere to the accounting polices used for our consolidated financial statements. For a discussion of these accounting policies and a summary of our derivation of revenue, see Note 1.

Our pipelines and terminals segment includes our petroleum product and crude pipelines and terminal, tankage and loading rack facilities that support refining and marketing operations of HF Sinclair and other refineries in the Mid-Continent, Southwest and Northwest regions of the United States.

Our Refinery Processing Unit segment consists of five refinery processing units at two of HF Sinclair's refining facility locations.

Pipelines and terminals have been aggregated as one reportable segment as both pipelines and terminals (1) have similar economic characteristics, (2) similarly provide logistics services of transportation and storage of petroleum products, (3) similarly support the petroleum refining business, including distribution of its products, (4) have principally the same customers and (5) are subject to similar regulatory requirements.

We evaluate the performance of each segment based on its respective operating income. Certain general and administrative expenses and interest and financing costs are excluded from segment operating income as they are not directly attributable to a specific reportable segment. Identifiable assets are those used by the segment, whereas other assets are principally equity method investments, cash, deposits and other assets that are not associated with a specific reportable segment.

	Years Ended December 31,
	2022		2021		2020
	(In thousands)
Revenues:
Pipelines and terminals - affiliate	$	344,063	$	301,731	$	319,487
Pipelines and terminals - third-party	109,200		103,646		98,039
Refinery processing units - affiliate	94,217		89,118		80,322
Total segment revenues	$	547,480	$	494,495	$	497,848
Segment operating income:
Pipelines and terminals(1)	$	202,908	$	180,965	$	176,611
Refinery processing units	34,857		38,172		38,314
Total segment operating income	237,765		219,137		214,925
Unallocated general and administrative expenses	(17,003)		(12,637)		(9,989)
Interest expense	(82,560)		(53,818)		(59,424)
Interest income	91,406		29,925		10,621
Loss on early extinguishment of debt	—		—		(25,915)
Equity in earnings (losses) of unconsolidated affiliates	(260)		12,432		6,647
Gain on sales-type leases	—		24,677		33,834
Gain on sale of assets and other	668		6,179		8,691
Income before income taxes	$	230,016	$	225,895	$	179,390
Capital Expenditures:
Pipelines and terminals	$	33,071	$	87,756	$	59,108
Refinery processing units	5,893		2,239		175
Total capital expenditures	$	38,964	$	89,995	$	59,283

	December 31, 2022		December 31, 2021
	(In thousands)
Identifiable assets:
Pipelines and terminals(2)	$	2,152,159	$	1,737,388
Refinery processing units	304,332		294,452
Other	291,011		134,027
Total identifiable assets	$	2,747,502	$	2,165,867

(1)Pipelines and terminals segment operating income included goodwill impairment charges of $11.0 million and $35.7 million for the years ended December 31, 2021 and December 31, 2020, respectively.

(2)Includes goodwill of $342.8 million and $223.7 million as of December 31, 2022 and 2021, respectively.