Segment Information

In the fourth quarter of 2017, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. Accordingly, our Tulsa Refineries’ lubricants operations, previously reported in the Refining segment, are now combined with the operations of our Petro-Canada Lubricants business (acquired February 1, 2017) and reported in the Lubricants and Specialty Products segment. Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

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 Corporate, Other and Eliminations column.

The Refining segment represents the operations of the El Dorado, Tulsa, Navajo, Cheyenne 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 regions of the United States. HFC Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma.

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.

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 processing units in the Mid-Continent, Southwest and Rocky Mountain 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 and the Cheyenne Pipeline. 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, 2017.



	Refining			Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Three Months Ended March 31, 2018
Sales and other revenues:
Revenues from external customers	$	3,655,867		$	444,840	$	27,457	$	263		$	4,128,427
Intersegment revenues	93,318			—		101,427		(194,745		)	—
	$	3,749,185		$	444,840	$	128,884	$	(194,482	)	$	4,128,427
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,211,704		$	307,531	$	—	$	(172,110	)	$	3,347,125
Lower of cost or market inventory valuation adjustment	$	(103,838	)	$	—	$	—	$	—		$	(103,838	)
Operating expenses	$	238,484		$	64,908	$	36,203	$	(19,307	)	$	320,288
Selling, general and administrative expenses	$	26,371		$	30,654	$	3,122	$	4,517		$	64,664
Depreciation and amortization	$	67,175		$	8,864	$	25,141	$	3,161		$	104,341
Income (loss) from operations	$	309,289		$	32,883	$	64,418	$	(10,743	)	$	395,847
Earnings of equity method investments	$	—		$	—	$	1,279	$	—		$	1,279
Capital expenditures	$	42,774		$	8,538	$	12,612	$	5,615		$	69,539

Three Months Ended March 31, 2017
Sales and other revenues:
Revenues from external customers	$	2,742,747		$	321,269	$	16,609	$	(142	)	$	3,080,483
Intersegment revenues	$	79,888		$	—	$	89,025	$	(168,913	)	$	—
	$	2,822,635		$	321,269	$	105,634	$	(169,055	)	$	3,080,483
Cost of products sold (exclusive of lower of cost or market inventory)	$	2,559,155		$	230,781	$	—	$	(148,760	)	$	2,641,176
Lower of cost or market inventory valuation adjustment	$	11,531		$	292	$	—	$	—		$	11,823
Operating expenses	$	254,370		$	39,319	$	32,552	$	(18,516	)	$	307,725
Selling, general and administrative expenses	$	22,368		$	13,320	$	2,637	$	18,930		$	57,255
Depreciation and amortization	$	69,438		$	5,304	$	18,373	$	2,925		$	96,040
Income (loss) from operations	$	(94,227	)	$	32,253	$	52,072	$	(23,634	)	$	(33,536	)
Earnings of equity method investments	$	—		$	—	$	1,840	$	—		$	1,840
Capital expenditures	$	47,434		$	1,835	$	8,265	$	2,223		$	59,757



	Refining		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
March 31, 2018
Cash and cash equivalents	$	6,703	$	118,926	$	8,565	$	647,273	$	781,467
Total assets	$	6,830,385	$	1,445,978	$	2,173,063	$	462,648	$	10,912,074
Long-term debt	$	—	$	—	$	1,390,952	$	991,922	$	2,382,874

December 31, 2017
Cash and cash equivalents	$	7,488	$	41,756	$	7,776	$	573,737	$	630,757
Total assets	$	6,474,666	$	1,610,472	$	2,191,984	$	415,032	$	10,692,154
Long-term debt	$	—	$	—	$	1,507,308	$	991,685	$	2,498,993