Derivative Instruments And Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Instruments, Gain (Loss) [Line Items]

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of commodity price swaps under hedge accounting:

	Unrealized Gain (Loss) Recognized in OCI			Gain (Loss) Recognized in Earnings Due to Settlements				Gain (Loss) Attributable to Hedge Ineffectiveness Recognized in Earnings
				Location	Amount			Location	Amount
	(In thousands)
Three Months Ended March 31, 2014
Commodity price swaps
Change in fair value	$	92,478		Sales and other revenues	$	(25,331	)
Gain reclassified to earnings due to settlements	(5,760		)	Cost of products sold	29,317
Amortization of discontinued hedges reclassified to earnings	270			Operating expenses	1,504			Operating expenses	$	(2,160	)
Total	$	86,988			$	5,490			$	(2,160	)
Three Months Ended March 31, 2013
Commodity price swaps
Change in fair value	$	(10,404	)	Sales and other revenues	$	(19,185	)	Sales and other revenues	$	(356	)
Loss reclassified to earnings due to settlements	27,200			Cost of products sold	(6,532		)	Cost of products sold	3,131
Amortization of discontinued hedges reclassified to earnings	90			Operating expenses	(1,573		)	Operating expenses	(365		)
Total	$	16,886			$	(27,290	)		$	2,410

Schedule of Notional Amounts of Outstanding Derivatives Serving as Cash Flow Hedges

As of March 31, 2014, we have the following notional contract volumes related to outstanding derivative instruments serving as cash flow hedges against price risk on forecasted purchases of natural gas and crude oil and sales of refined products:

		Notional Contract Volumes by Year of Maturity
Derivative Instrument	Total Outstanding Notional	2014	2015	2016	2017	Unit of Measure
Natural gas - long	36,000,000	7,200,000	9,600,000	9,600,000	9,600,000	MMBTU
WTI crude oil - long	24,042,500	19,662,500	4,380,000	—	—	Barrels
Ultra-low sulfur diesel - short	14,142,500	9,762,500	4,380,000	—	—	Barrels
Sub octane gasoline - short	9,900,000	9,900,000	—	—	—	Barrels
Forward sales - diesel and gasoline	825,000	825,000	—	—	—	Barrels

Schedule of Realized Gain (Loss)

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Three Months Ended March 31,
Location of Gain (Loss) Recognized in Income	2014			2013
	(In thousands)
Cost of products sold	$	26		$	33,592
Operating expenses	(48		)	(4,993		)
Total	$	(22	)	$	28,599

Schedule of Notional Amounts of Outstanding Derivative Positions

As of March 31, 2014, we have the following notional contract volumes related to our outstanding derivative contracts serving as economic hedges:

		Notional Contract Volumes by Year of Maturity
Derivative Instrument	Total Outstanding Notional	2014	2015	2016	2017	Unit of Measure
Commodity price swap (WCS spread) - long	4,812,500	4,812,500	—	—	—	Barrels
Commodity price swap (natural gas) - long	36,000,000	7,200,000	9,600,000	9,600,000	9,600,000	MMBTU
Commodity price swap (natural gas) - short	36,000,000	7,200,000	9,600,000	9,600,000	9,600,000	MMBTU
NYMEX futures (WTI) - short	2,914,000	2,914,000	—	—	—	Barrels

Schedule of Interest Rate Derivatives

The following table presents the pre-tax effect on other comprehensive income and earnings due to fair value adjustments and maturities of HEP's interest rate swaps under hedge accounting:

	Unrealized Gain (Loss) Recognized in OCI			Loss Recognized in Earnings Due to Settlements
				Location	Amount
	(In thousands)
Three Months Ended March 31, 2014
Interest rate swaps
Change in fair value	$	(443	)
Loss reclassified to earnings due to settlements	538			Interest expense	$	(538	)
Total	$	95			$	(538	)
Three Months Ended March 31, 2013
Interest rate swaps
Change in fair value	$	58
Loss reclassified to earnings due to settlements	504
Amortization of discontinued hedge reclassified to earnings	849			Interest expense	$	(1,353	)
Total	$	1,411			$	(1,353	)

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)
March 31, 2014
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	92,912	$	(40,044	)	$	52,868	$	18,321	$	(8,040	)	$	10,281
Forward sales contracts	2,089		—			2,089		—		—			—
Interest rate swap contracts	1,628		—			1,628		1,677		—			1,677
	$	96,629	$	(40,044	)	$	56,585	$	19,998	$	(8,040	)	$	11,958
Derivatives not designated as cash flow hedging instruments:
Commodity price swap contracts	$	19,093	$	(4,445	)	$	14,648	$	13,487	$	(9,083	)	$	4,404
NYMEX futures contracts	—		—			—		3,450		—			3,450
	$	19,093	$	(4,445	)	$	14,648	$	16,937	$	(9,083	)	$	7,854
Total net balance						$	71,233						$	19,812
Balance sheet classification:	Prepayment and other					$	68,572	Accrued liabilities					$	3,450
	Intangibles and other					2,661		Other long-term liabilities					16,362
						$	71,233						$	19,812

	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, 2013
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	63,561	$	(23,679	)	$	39,882
Interest rate swap contracts	1,670		—		1,670		1,814		—			1,814
	$	1,670	$	—	$	1,670	$	65,375	$	(23,679	)	$	41,696
Derivatives not designated as cash flow hedging instruments:
Commodity price swap contracts	$	6,972	$	—	$	6,972	$	19,766	$	(12,611	)	$	7,155
NYMEX futures contracts	—		—		—		3,569		—			3,569
	$	6,972	$	—	$	6,972	$	23,335	$	(12,611	)	$	10,724
Total net balance					$	8,642						$	52,420
Balance sheet classification:	Prepayment and other				$	6,972	Accrued liabilities					$	26,843
	Intangibles and other				1,670		Other long-term liabilities					25,577
					$	8,642						$	52,420