Derivative Instruments And Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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 and forward sales 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 September 30, 2017
Change in fair value	$	(2,095	)
Loss reclassified to earnings due to settlements	5,179			Sales and other revenues	$	(488	)
Amortization of discontinued hedges reclassified to earnings	270			Operating expenses	(4,961		)	Operating expenses	$	18
Total	$	3,354			$	(5,449	)		$	18
Three Months Ended September 30, 2016
Change in fair value	$	(1,511	)
Loss reclassified to earnings due to settlements	4,046			Sales and other revenue	$	228
Amortization of discontinued hedges reclassified to earnings	270			Operating expenses	(4,544		)	Operating expenses	$	—
Total	$	2,805			$	(4,316	)		$	—
Nine Months Ended September 30, 2017
Change in fair value	$	2,620		Sales and other revenues	$	7,937
Loss reclassified to earnings due to settlements	5,228			Cost of products sold	(299		)
Amortization of discontinued hedge reclassified to earnings	810			Operating expenses	(13,676		)	Operating expenses	$	—
Total	$	8,658			$	(6,038	)		$	—
Nine Months Ended September 30, 2016
Change in fair value	$	(18,570	)
Loss reclassified to earnings due to settlements	37,012			Sales and other revenues	$	(20,425	)
Amortization of discontinued hedge reclassified to earnings	810			Operating expenses	(17,397		)	Operating expenses	$	—
Total	$	19,252			$	(37,822	)		$	—

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

As of September 30, 2017, we have the following notional contract volumes related to outstanding derivative instruments serving as cash flow hedges against price risk on forecasted transactions:

		Notional Contract Volumes by Year of Maturity
Derivative Instrument	Total Outstanding Notional	2017	2018	2019	2020	2021	Unit of Measure
Natural gas price swaps - long	9,600,000	2,400,000	1,800,000	1,800,000	1,800,000	1,800,000	MMBTU
Physical crude contracts - short	150,000	150,000	—	—	—	—	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 September 30,						Nine Months Ended September 30,
Location of Gain (Loss) Recognized in Earnings	2017			2016			2017			2016
	(In thousands)
Cost of products sold	$	(10,632	)	$	(2,438	)	$	3,403		$	(1,135	)
Operating expenses	(629		)	(2,291		)	(6,392		)	2,322
Gain on foreign currency swap	—			—			24,545			—
Total	$	(11,261	)	$	(4,729	)	$	21,556		$	1,187

Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges

As of September 30, 2017, 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	2017	2018	Unit of Measure
Crude price swaps (basis spread) - long	918,000	918,000	—	Barrels
WTI and sub-octane gasoline crack spread swaps - short	700,000	700,000	—	Barrels
Natural gas price swaps (basis spread) - long	2,577,000	2,577,000	—	MMBTU
Natural gas price swaps - long	2,400,000	2,400,000	—	MMBTU
Natural gas price swaps - short	2,400,000	2,400,000	—	MMBTU
NYMEX futures (WTI) - short	1,870,000	955,000	915,000	Barrels
Forward gasoline and diesel contracts - long	715,000	705,000	10,000	Barrels

Schedule of Interest Rate Hedges

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			Gain (Loss) Recognized in Earnings Due to Settlements
				Location	Amount
	(In thousands)
Three Months Ended September 30, 2017
Interest rate swaps
Change in fair value	$	1
Gain reclassified to earnings due to settlements	(64		)	Interest expense	$	64
Total	$	(63	)		$	64
Three Months Ended September 30, 2016
Interest rate swaps
Change in fair value	$	201
Loss reclassified to earnings due to settlements	95			Interest expense	$	(95	)
Total	$	296			$	(95	)
Nine Months Ended September 30, 2017
Interest rate swaps
Change in fair value	$	88
Gain reclassified to earnings due to settlements	(179		)	Interest expense	$	179
Total	$	(91	)		$	179
Nine Months Ended September 30, 2016
Interest rate swaps
Change in fair value	$	(737	)
Loss reclassified to earnings due to settlements	438			Interest expense	$	(438	)
Total	$	(299	)		$	(438	)

Schedule of Fair Value and Balance Sheet Location of Outstanding Derivatives

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)
September 30, 2017
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	6,374	$	—		$	6,374
Forward contracts	—		—		—		707		—			707
	$	—	$	—	$	—	$	7,081	$	—		$	7,081
Derivatives not designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	8,517	$	(4,417	)	$	4,100
NYMEX futures contracts	—		—		—		5,881		—			5,881
Forward contracts	1,358		—		1,358		904		—			904
	$	1,358	$	—	$	1,358	$	15,302	$	(4,417	)	$	10,885
Total net balance					$	1,358						$	17,966
Balance sheet classification:							Accrued liabilities					$	17,182
							Other long-term liabilities					784
	Prepayment and other				$	1,358						$	17,966

	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, 2016
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—		$	—	$	13,185	$	(431	)	$	12,754
Commodity forward contracts	—		—			—		2,978		—			2,978
Interest rate swap contracts	91		—			91		—		—			—
	$	91	$	—		$	91	$	16,163	$	(431	)	$	15,732
Derivatives not designated as cash flow hedging instruments:
Commodity price swap contracts	$	4,244	$	(756	)	$	3,488	$	12,903	$	(9,887	)	$	3,016
NYMEX futures contracts	—		—			—		1,975		—			1,975
Commodity forward contracts	5,905		—			5,905		5,338		—			5,338
Foreign currency forward contracts	—		—			—		6,519		—			6,519
	$	10,149	$	(756	)	$	9,393	$	26,735	$	(9,887	)	$	16,848
Total net balance						$	9,484						$	32,580
Balance sheet classification:	Prepayment and other					$	9,484	Accrued liabilities					$	32,580