QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) | |
Securities registered pursuant to 12(b) of the Securities Exchange Act of 1934: | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ||
Emerging growth company | |||||||
Page | |
June 30, 2019 (Unaudited) and December 31, 2018 | |
Three and Six Months Ended June 30, 2019 and 2018 | |
Three and Six Months Ended June 30, 2019 and 2018 | |
Six Months Ended June 30, 2019 and 2018 | |
Three and Six Months Ended June 30, 2019 and 2018 | |
Index to Exhibits | |
Signatures | |
• | risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets; |
• | the demand for and supply of crude oil and refined products; |
• | the spread between market prices for refined products and market prices for crude oil; |
• | the possibility of constraints on the transportation of refined products; |
• | the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines; |
• | effects of governmental and environmental regulations and policies; |
• | the availability and cost of our financing; |
• | the effectiveness of our capital investments and marketing strategies; |
• | our efficiency in carrying out construction projects; |
• | our ability to acquire refined or lubricant product operations or pipeline and terminal operations on acceptable terms and to integrate any existing or future acquired operations; |
• | the possibility of terrorist or cyber attacks and the consequences of any such attacks; |
• | general economic conditions; and |
• | other financial, operational and legal risks and uncertainties detailed from time to time in our SEC filings. |
Item 1. | Financial Statements |
June 30, 2019 | December 31, 2018 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents (HEP: $6,941 and $3,045, respectively) | $ | $ | ||||||
Accounts receivable: Product and transportation (HEP: $15,074 and $12,332, respectively) | ||||||||
Crude oil resales | ||||||||
Inventories: Crude oil and refined products | ||||||||
Materials, supplies and other (HEP: $900 and $858, respectively) | ||||||||
Income taxes receivable | ||||||||
Prepayments and other (HEP: $2,983 and $3,452, respectively) | ||||||||
Total current assets | ||||||||
Properties, plants and equipment, at cost (HEP: $2,071,467 and $2,058,388, respectively) | ||||||||
Less accumulated depreciation (HEP: $(535,019) and $(489,217), respectively) | ( | ) | ( | ) | ||||
Operating lease right-of-use assets (HEP: $76,551) | ||||||||
Other assets: Turnaround costs | ||||||||
Goodwill (HEP: $312,873 and $314,229, respectively) | ||||||||
Intangibles and other (HEP: $169,678 and $176,291, respectively) | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable (HEP: $10,659 and $16,723, respectively) | $ | $ | ||||||
Income taxes payable | ||||||||
Operating lease liabilities (HEP: $5,346) | ||||||||
Accrued liabilities (HEP: $29,444 and $27,240, respectively) | ||||||||
Total current liabilities | ||||||||
Long-term debt (HEP: $1,437,710 and $1,418,900, respectively) | ||||||||
Noncurrent operating lease liabilities (HEP: $71,550) | ||||||||
Deferred income taxes (HEP: $423 and $488, respectively) | ||||||||
Other long-term liabilities (HEP: $61,195 and $63,534, respectively) | ||||||||
Equity: | ||||||||
HollyFrontier stockholders’ equity: | ||||||||
Preferred stock, $1.00 par value – 5,000,000 shares authorized; none issued | ||||||||
Common stock $.01 par value – 320,000,000 shares authorized; 256,036,760 and 256,036,788 shares issued as of June 30, 2019 and December 31, 2018, respectively | ||||||||
Additional capital | ||||||||
Retained earnings | ||||||||
Accumulated other comprehensive income | ||||||||
Common stock held in treasury, at cost – 90,138,137 and 83,915,297 shares as of June 30, 2019 and December 31, 2018, respectively | ( | ) | ( | ) | ||||
Total HollyFrontier stockholders’ equity | ||||||||
Noncontrolling interest | ||||||||
Total equity | ||||||||
Total liabilities and equity | $ | $ | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Sales and other revenues | $ | $ | $ | $ | ||||||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of products sold (exclusive of depreciation and amortization): | ||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | ||||||||||||||||
Lower of cost or market inventory valuation adjustment | ( | ) | ( | ) | ( | ) | ||||||||||
Operating expenses (exclusive of depreciation and amortization) | ||||||||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | ||||||||||||||||
Depreciation and amortization | ||||||||||||||||
Goodwill impairment | ||||||||||||||||
Total operating costs and expenses | ||||||||||||||||
Income from operations | ||||||||||||||||
Other income (expense): | ||||||||||||||||
Earnings of equity method investments | ||||||||||||||||
Interest income | ||||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Gain (loss) on foreign currency transactions | ( | ) | ||||||||||||||
Other, net | ||||||||||||||||
( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Income before income taxes | ||||||||||||||||
Income tax expense: | ||||||||||||||||
Current | ||||||||||||||||
Deferred | ||||||||||||||||
Net income | ||||||||||||||||
Less net income attributable to noncontrolling interest | ||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | $ | $ | $ | ||||||||||||
Earnings per share attributable to HollyFrontier stockholders: | ||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||
Diluted | $ | $ | $ | $ | ||||||||||||
Average number of common shares outstanding: | ||||||||||||||||
Basic | ||||||||||||||||
Diluted | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
Hedging instruments: | ||||||||||||||||
Change in fair value of cash flow hedging instruments | ( | ) | ( | ) | ( | ) | ||||||||||
Reclassification adjustments to net income on settlement of cash flow hedging instruments | ( | ) | ( | ) | ||||||||||||
Net unrealized gain (loss) on hedging instruments | ( | ) | ( | ) | ||||||||||||
Post-retirement benefit obligations: | ||||||||||||||||
Gain on pension plans | — | — | ||||||||||||||
Gain on post-retirement healthcare plan | ||||||||||||||||
Net change in post-retirement benefit obligations | ||||||||||||||||
Other comprehensive income (loss) before income taxes | ( | ) | ( | ) | ||||||||||||
Income tax expense (benefit) | ( | ) | ( | ) | ||||||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||
Total comprehensive income | ||||||||||||||||
Less noncontrolling interest in comprehensive income | ||||||||||||||||
Comprehensive income attributable to HollyFrontier stockholders | $ | $ | $ | $ | ||||||||||||
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | ||||||||
Goodwill impairment | ||||||||
Lower of cost or market inventory valuation adjustment | ( | ) | ( | ) | ||||
Earnings of equity method investments, inclusive of distributions | ||||||||
(Gain) loss on sale of assets | ( | ) | ||||||
Deferred income taxes | ||||||||
Equity-based compensation expense | ||||||||
Change in fair value – derivative instruments | ( | ) | ||||||
(Increase) decrease in current assets: | ||||||||
Accounts receivable | ( | ) | ( | ) | ||||
Inventories | ( | ) | ||||||
Income taxes receivable | ( | ) | ||||||
Prepayments and other | ( | ) | ||||||
Increase (decrease) in current liabilities: | ||||||||
Accounts payable | ||||||||
Income taxes payable | ||||||||
Accrued liabilities | ||||||||
Turnaround expenditures | ( | ) | ( | ) | ||||
Other, net | ||||||||
Net cash provided by operating activities | ||||||||
Cash flows from investing activities: | ||||||||
Additions to properties, plants and equipment | ( | ) | ( | ) | ||||
Additions to properties, plants and equipment – HEP | ( | ) | ( | ) | ||||
Purchase of Sonneborn, net of cash acquired | ( | ) | ||||||
Other, net | ||||||||
Net cash used for investing activities | ( | ) | ( | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under credit agreements | ||||||||
Repayments under credit agreements | ( | ) | ( | ) | ||||
Proceeds from issuance of common units - HEP | ||||||||
Purchase of treasury stock | ( | ) | ( | ) | ||||
Dividends | ( | ) | ( | ) | ||||
Distributions to noncontrolling interest | ( | ) | ( | ) | ||||
Payments on finance leases | ( | ) | ||||||
Other, net | ( | ) | ( | ) | ||||
Net cash used for financing activities | ( | ) | ( | ) | ||||
Effect of exchange rate on cash flow | ( | ) | ||||||
Cash and cash equivalents: | ||||||||
Increase (decrease) for the period | ( | ) | ||||||
Beginning of period | ||||||||
End of period | $ | $ | ||||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | ( | ) | $ | ( | ) | ||
Income taxes, net | $ | ( | ) | $ | ( | ) | ||
HollyFrontier Stockholders' Equity | |||||||||||||||||||||||||||
Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury stock | Non-controlling Interest | Total Equity | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||
Dividends ($0.33 declared per common share) | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | ||||||||||||||||||||||
Issuance of common stock under incentive compensation plans, net of tax | — | — | — | ( | ) | — | — | ||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Purchase of HEP units for restricted grants | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||
Dividends ($0.33 declared per common share) | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | ||||||||||||||||||||||
Equity attributable to HEP common unit issuances, net of tax | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
Issuance of common stock under incentive compensation plans, net of tax | — | ( | ) | — | — | — | — | ||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
HollyFrontier Stockholders' Equity | |||||||||||||||||||||||||||
Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury stock | Non-controlling Interest | Total Equity | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||
Dividends ($0.33 declared per common share) | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||
Equity attributable to HEP common unit issuances, net of tax | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock under incentive compensation plans, net of tax | — | — | — | ( | ) | — | — | ||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Purchase of HEP units for restricted grants | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Adoption of accounting standards | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Other | — | ( | ) | — | — | — | — | ||||||||||||||||||||
Balance at March 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||
Dividends ($0.33 declared per common share) | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||
Equity attributable to HEP common unit issuances, net of tax | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock under incentive compensation plans, net of tax | — | — | — | ( | ) | — | — | ||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Other | — | ( | ) | — | — | — | — | ||||||||||||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
NOTE 1: | Description of Business and Presentation of Financial Statements |
• | owned and operated a petroleum refinery in El Dorado, Kansas (the “El Dorado 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 Sonneborn with manufacturing facilities in Petrolia, Pennsylvania and the Netherlands; |
• | owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil with storage and distribution facilities in Iowa, Kansas, Utah 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 |
NOTE 2: | Acquisitions |
(In millions) | |||
Cash and cash equivalents | $ | ||
Accounts receivable and other current assets | |||
Inventories | |||
Properties, plants and equipment | |||
Goodwill | |||
Intangibles and other noncurrent assets | |||
Accounts payable and accrued liabilities | ( | ) | |
Deferred income tax liabilities | ( | ) | |
Other long-term liabilities | ( | ) | |
$ | |||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2018 | 2019 | 2018 | ||||||||||
(In thousands) | ||||||||||||
Sales and other revenues | $ | $ | $ | |||||||||
Operating income (1) | $ | $ | ( | ) | $ | |||||||
NOTE 3: | Leases |
June 30, 2019 | ||||
(In thousands) | ||||
Operating leases: | ||||
Operating lease right-of-use assets | $ | |||
Operating lease liabilities | ||||
Noncurrent operating lease liabilities | ||||
Total operating lease liabilities | $ | |||
Finance leases: | ||||
Properties, plants and equipment, at cost | $ | |||
Accumulated amortization | ( | ) | ||
Properties, plants and equipment, net | $ | |||
Accrued liabilities | $ | |||
Other long-term liabilities | ||||
Total finance lease liabilities | $ | |||
June 30, 2019 | |||
Weighted average remaining lease term (in years) | |||
Operating leases | |||
Finance leases | |||
Weighted average discount rate | |||
Operating leases | % | ||
Finance leases | % | ||
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | |||||||
(In thousands) | ||||||||
Operating lease expense | $ | $ | ||||||
Finance lease expense: | ||||||||
Amortization of right-of-use assets | ||||||||
Interest on lease liabilities | ||||||||
Variable lease cost | ||||||||
Total lease expense | $ | $ | ||||||
Six Months Ended June 30, 2019 | ||||
(In thousands) | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ | |||
Operating cash flows from finance leases | $ | |||
Financing cash flows from finance leases | $ | |||
Operating | Finance | |||||||
(In thousands) | ||||||||
Remainder of 2019 | $ | $ | ||||||
2020 | ||||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 and thereafter | ||||||||
Future minimum lease payments | ||||||||
Less: imputed interest | ||||||||
Total lease obligations | ||||||||
Less: current obligations | ||||||||
Long-term lease obligations | $ | $ | ||||||
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | |||||||
(In thousands) | ||||||||
Operating lease revenues | $ | $ | ||||||
(In thousands) | |||
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Total | $ | ||
NOTE 4: | Holly Energy Partners |
NOTE 5: | Revenues |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Revenues by type | ||||||||||||||||
Refined product revenues | ||||||||||||||||
Transportation fuels (1) | $ | $ | $ | $ | ||||||||||||
Specialty lubricant products (2) | ||||||||||||||||
Asphalt, fuel oil and other products (3) | ||||||||||||||||
Total refined product revenues | ||||||||||||||||
Excess crude oil revenues (4) | ||||||||||||||||
Transportation and logistic services | ||||||||||||||||
Other revenues (5) | ||||||||||||||||
Total sales and other revenues | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Refined product revenues by market | ||||||||||||||||
North America | ||||||||||||||||
Mid-Continent | $ | $ | $ | $ | ||||||||||||
Southwest | ||||||||||||||||
Rocky Mountains | ||||||||||||||||
Northeast | ||||||||||||||||
Canada | ||||||||||||||||
Europe and Asia | ||||||||||||||||
Total refined product revenues | $ | $ | $ | $ | ||||||||||||
(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 $ |
(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. |
January 1, 2019 | Sonneborn Acquisition | Increase | Recognized as Revenue | June 30, 2019 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Accrued liabilities | $ | $ | $ | ( | ) | $ | |||||||||||||
Remainder of 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||
(In thousands) | |||||||||||||||
Refined product sales volumes (barrels) | |||||||||||||||
Remainder of 2019 | 2020 | 2021 | Thereafter | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
HEP contractual minimum revenues | $ | $ | $ | $ | $ | |||||||||||||||
NOTE 6: | Fair Value Measurements |
• | (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. |
Fair Value by Input Level | ||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
June 30, 2019 | ||||||||||||||||
Assets: | ||||||||||||||||
Commodity price swaps | $ | $ | — | $ | $ | — | ||||||||||
Commodity forward contracts | — | — | ||||||||||||||
Total assets | $ | $ | — | $ | $ | — | ||||||||||
Liabilities: | ||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | — | |||||||||||
Foreign currency forward contracts | — | — | ||||||||||||||
RINs credit obligations (1) | — | — | ||||||||||||||
Total liabilities | $ | $ | $ | $ | — | |||||||||||
December 31, 2018 | ||||||||||||||||
Assets: | ||||||||||||||||
NYMEX futures contracts | $ | $ | $ | — | $ | — | ||||||||||
Foreign currency forward contracts | — | — | ||||||||||||||
Commodity price swaps | — | — | ||||||||||||||
Commodity forward contracts | — | $ | — | |||||||||||||
Total assets | $ | $ | $ | $ | — | |||||||||||
Liabilities: | ||||||||||||||||
Commodity price swaps | $ | $ | — | $ | $ | — | ||||||||||
Commodity forward contracts | — | — | ||||||||||||||
RINs credit obligations (1) | — | — | ||||||||||||||
Total liabilities | $ | $ | $ | $ | — | |||||||||||
(1) | Represent obligations for RINs credits for which we do not have sufficient quantities at June 30, 2019 and December 31, 2018 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements. |
NOTE 7: | Earnings Per Share |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | $ | $ | $ | ||||||||||||
Participating securities’ (restricted stock) share in earnings | ||||||||||||||||
Net income attributable to common shares | $ | $ | $ | $ | ||||||||||||
Average number of shares of common stock outstanding | ||||||||||||||||
Effect of dilutive variable restricted shares and performance share units (1) | ||||||||||||||||
Average number of shares of common stock outstanding assuming dilution | ||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | ||||||||||||
Diluted earnings per share | $ | $ | $ | $ | ||||||||||||
(1) Excludes anti-dilutive restricted and performance share units of: | ||||||||||||||||
NOTE 8: | Stock-Based Compensation |
Restricted Stock and Restricted Stock Units | Grants | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value ($000) | ||||||||
Outstanding at January 1, 2019 (non-vested) | $ | ||||||||||
Granted | |||||||||||
Vesting (transfer/conversion to common stock) | ( | ) | |||||||||
Forfeited | ( | ) | |||||||||
Outstanding at June 30, 2019 (non-vested) | $ | ||||||||||
Performance Share Units | Grants | ||
Outstanding at January 1, 2019 (non-vested) | |||
Granted | |||
Forfeited | ( | ) | |
Outstanding at June 30, 2019 (non-vested) | |||
NOTE 9: | Inventories |
June 30, 2019 | December 31, 2018 | |||||||
(In thousands) | ||||||||
Crude oil | $ | $ | ||||||
Other raw materials and unfinished products(1) | ||||||||
Finished products(2) | ||||||||
Lower of cost or market reserve | ( | ) | ( | ) | ||||
Process chemicals(3) | ||||||||
Repair and maintenance supplies and other (4) | ||||||||
Total inventory | $ | $ | ||||||
(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. |
NOTE 10: | Environmental |
NOTE 11: | Debt |
June 30, 2019 | December 31, 2018 | |||||||
(In thousands) | ||||||||
HollyFrontier 5.875% Senior Notes | ||||||||
Principal | $ | $ | ||||||
Unamortized discount and debt issuance costs | ( | ) | ( | ) | ||||
HEP Credit Agreement | ||||||||
HEP 6% Senior Notes | ||||||||
Principal | ||||||||
Unamortized discount and debt issuance costs | ( | ) | ( | ) | ||||
Total HEP long-term debt | ||||||||
Total long-term debt | $ | $ | ||||||
June 30, 2019 | December 31, 2018 | |||||||
(In thousands) | ||||||||
HollyFrontier senior notes | $ | $ | ||||||
HEP senior notes | $ | $ | ||||||
Net Unrealized Gain (Loss) Recognized in OCI | Gain (Loss) Reclassified into Earnings | |||||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Three Months Ended June 30, | Income Statement Location | Three Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
(In thousands) | ||||||||||||||||||
Commodity contracts | $ | ( | ) | $ | Sales and other revenues | $ | $ | ( | ) | |||||||||
Cost of products sold | ||||||||||||||||||
Operating expenses | ( | ) | ( | ) | ||||||||||||||
Total | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||
Unrealized Gain (Loss) Recognized in OCI | Gain (Loss) Reclassified into Earnings | |||||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Six Months Ended June 30, | Income Statement Location | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
(In thousands) | ||||||||||||||||||
Commodity contracts | $ | $ | ( | ) | Sales and other revenues | $ | ( | ) | $ | ( | ) | |||||||
Cost of products sold | ||||||||||||||||||
Operating expenses | ( | ) | ( | ) | ||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||
Gain (Loss) Recognized in Earnings | ||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Income Statement Location | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
(In thousands) | ||||||||||||||||||
Commodity contracts | Cost of products sold | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||
Interest expense | ( | ) | ||||||||||||||||
Foreign currency contracts | Gain (loss) on foreign currency transactions | ( | ) | ( | ) | |||||||||||||
Total | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||
Notional Contract Volumes by Year of Maturity | ||||||||||||||
Total Outstanding Notional | 2019 | 2020 | 2021 | Unit of Measure | ||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||||
Natural gas price swaps - long | MMBTU | |||||||||||||
Crude oil price swaps (basis spread) - long | Barrels | |||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||
NYMEX futures (WTI) - short | — | — | Barrels | |||||||||||
Crude oil price swaps (basis spread) - long | — | Barrels | ||||||||||||
Forward gasoline and diesel contracts - long | — | — | Barrels | |||||||||||
Foreign currency forward contracts | — | U.S. dollar | ||||||||||||
Forward commodity contracts (platinum) | — | — | Troy ounces | |||||||||||
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, 2019 | ||||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||
Commodity price swap contracts | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
$ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
NYMEX futures contracts | ||||||||||||||||||||||||
Commodity price swap contracts | — | — | — | |||||||||||||||||||||
Commodity forward contracts | — | — | — | |||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||
Balance sheet classification: | Prepayment and other | $ | Accrued liabilities | $ | ||||||||||||||||||||
Intangibles and other | Other long-term liabilities | |||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||
December 31, 2018 | ||||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||
Commodity price swap contracts | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
$ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | — | $ | — | $ | — | |||||||||||||||
NYMEX futures contracts | — | — | — | |||||||||||||||||||||
Commodity forward contracts | — | — | ||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||
Balance sheet classification: | Prepayment and other | $ | Accrued liabilities | $ | ||||||||||||||||||||
Intangibles and other | Other long-term liabilities | |||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||
NOTE 13: | Equity |
NOTE 14: | Other Comprehensive Income |
Before-Tax | Tax Expense (Benefit) | After-Tax | ||||||||||
(In thousands) | ||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||
Net change in foreign currency translation adjustment | $ | $ | $ | |||||||||
Net unrealized loss on hedging instruments | ( | ) | ( | ) | ( | ) | ||||||
Net change in pension and other post-retirement benefit obligations | ||||||||||||
Other comprehensive income attributable to HollyFrontier stockholders | $ | $ | $ | |||||||||
Three Months Ended June 30, 2018 | ||||||||||||
Net change in foreign currency translation adjustment | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net unrealized gain on hedging instruments | ||||||||||||
Other comprehensive loss attributable to HollyFrontier stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Six Months Ended June 30, 2019 | ||||||||||||
Net change in foreign currency translation adjustment | $ | $ | $ | |||||||||
Net unrealized gain on hedging instruments | ||||||||||||
Other comprehensive income attributable to HollyFrontier stockholders | $ | $ | $ | |||||||||
Six Months Ended June 30, 2018 | ||||||||||||
Net change in foreign currency translation adjustment | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net unrealized loss on hedging instruments | ( | ) | ( | ) | ( | ) | ||||||
Other comprehensive loss attributable to HollyFrontier stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
AOCI Component | Gain (Loss) Reclassified From AOCI | Income Statement Line Item | ||||||||
(In thousands) | ||||||||||
Three Months Ended June 30, | ||||||||||
2019 | 2018 | |||||||||
Hedging instruments: | ||||||||||
Commodity price swaps | $ | $ | ( | ) | Sales and other revenues | |||||
Cost of products sold | ||||||||||
( | ) | ( | ) | Operating expenses | ||||||
( | ) | |||||||||
( | ) | Income tax expense (benefit) | ||||||||
Total reclassifications for the period | $ | $ | ( | ) | Net of tax | |||||
Six Months Ended June 30, | ||||||||||
2019 | 2018 | |||||||||
Hedging instruments: | ||||||||||
Commodity price swaps | $ | ( | ) | $ | ( | ) | Sales and other revenues | |||
Cost of products sold | ||||||||||
( | ) | ( | ) | Operating expenses | ||||||
( | ) | |||||||||
( | ) | Income tax expense (benefit) | ||||||||
Total reclassifications for the period | $ | $ | ( | ) | Net of tax | |||||
June 30, 2019 | December 31, 2018 | |||||||
(In thousands) | ||||||||
Foreign currency translation adjustment | $ | ( | ) | $ | ( | ) | ||
Unrealized loss on pension obligation | ( | ) | ( | ) | ||||
Unrealized gain on post-retirement benefit obligations | ||||||||
Unrealized gain on hedging instruments | ||||||||
Accumulated other comprehensive income | $ | $ | ||||||
NOTE 15: | Post-retirement Plans |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Service cost - benefit earned during the period | $ | $ | $ | $ | ||||||||||||
Interest cost on projected benefit obligations | ||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of loss | ||||||||||||||||
Net periodic pension expense | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Service cost – benefit earned during the period | $ | $ | $ | $ | ||||||||||||
Interest cost on projected benefit obligations | ||||||||||||||||
Amortization of prior service credit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of gain | ( | ) | ( | ) | ||||||||||||
Net periodic post-retirement credit | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
NOTE 16: | Contingencies |
NOTE 17: | Segment Information |
Refining | Lubricants and Specialty Products | HEP | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | |||||||||||||||
Intersegment revenues | ( | ) | ||||||||||||||||||
$ | $ | $ | $ | ( | ) | $ | ||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Lower of cost or market inventory valuation adjustment | $ | $ | $ | $ | $ | |||||||||||||||
Operating expenses | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | |||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
Goodwill impairment | $ | $ | $ | $ | $ | |||||||||||||||
Income (loss) from operations | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | |||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | |||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Intersegment revenues | ( | ) | ||||||||||||||||||
$ | $ | $ | $ | ( | ) | $ | ||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) (1) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Lower of cost or market inventory valuation adjustment | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||
Operating expenses (1) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | |||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
Income (loss) from operations | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | |||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | |||||||||||||||
Refining | Lubricants and Specialty Products | HEP | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Six Months Ended June 30, 2019 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | |||||||||||||||
Intersegment revenues | ( | ) | ||||||||||||||||||
$ | $ | $ | $ | ( | ) | $ | ||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Lower of cost or market inventory valuation adjustment | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||
Operating expenses | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | |||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
Goodwill impairment | $ | $ | $ | $ | $ | |||||||||||||||
Income (loss) from operations | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | |||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | |||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Intersegment revenues | ( | ) | ||||||||||||||||||
$ | $ | $ | $ | ( | ) | $ | ||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Lower of cost or market inventory valuation adjustment | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||
Operating expenses | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | |||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
Income (loss) from operations | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | |||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | |||||||||||||||
Refining | Lubricants and Specialty Products | HEP | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
June 30, 2019 | ||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
Total assets | $ | $ | $ | $ | $ | |||||||||||||||
Long-term debt | $ | $ | $ | $ | $ | |||||||||||||||
December 31, 2018 | ||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
Total assets | $ | $ | $ | $ | $ | |||||||||||||||
Long-term debt | $ | $ | $ | $ | $ | |||||||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended June 30, | Change from 2018 | ||||||||||||||
2019 | 2018 | Change | Percent | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Sales and other revenues | $ | 4,782,615 | $ | 4,471,236 | $ | 311,379 | 7 | % | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of products sold (exclusive of depreciation and amortization): | |||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 3,704,884 | 3,595,916 | 108,968 | 3 | |||||||||||
Lower of cost or market inventory valuation adjustment | 47,801 | (106,926 | ) | 154,727 | (145 | ) | |||||||||
3,752,685 | 3,488,990 | 263,695 | 8 | ||||||||||||
Operating expenses (exclusive of depreciation and amortization) | 333,252 | 296,215 | 37,037 | 13 | |||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 85,317 | 68,675 | 16,642 | 24 | |||||||||||
Depreciation and amortization | 126,908 | 110,379 | 16,529 | 15 | |||||||||||
Goodwill impairment | 152,712 | — | 152,712 | — | |||||||||||
Total operating costs and expenses | 4,450,874 | 3,964,259 | 486,615 | 12 | |||||||||||
Income from operations | 331,741 | 506,977 | (175,236 | ) | (35 | ) | |||||||||
Other income (expense): | |||||||||||||||
Earnings of equity method investments | 1,783 | 1,734 | 49 | 3 | |||||||||||
Interest income | 4,588 | 2,934 | 1,654 | 56 | |||||||||||
Interest expense | (34,264 | ) | (32,324 | ) | (1,940 | ) | 6 | ||||||||
Gain (loss) on foreign currency transactions | 2,213 | (325 | ) | 2,538 | (781 | ) | |||||||||
Other, net | 92 | 1,364 | (1,272 | ) | (93 | ) | |||||||||
(25,588 | ) | (26,617 | ) | 1,029 | (4 | ) | |||||||||
Income before income taxes | 306,153 | 480,360 | (174,207 | ) | (36 | ) | |||||||||
Income tax expense | 89,336 | 117,447 | (28,111 | ) | (24 | ) | |||||||||
Net income | 216,817 | 362,913 | (146,096 | ) | (40 | ) | |||||||||
Less net income attributable to noncontrolling interest | 19,902 | 17,406 | 2,496 | 14 | |||||||||||
Net income attributable to HollyFrontier stockholders | $ | 196,915 | $ | 345,507 | $ | (148,592 | ) | (43 | )% | ||||||
Earnings per share attributable to HollyFrontier stockholders: | |||||||||||||||
Basic | $ | 1.16 | $ | 1.96 | $ | (0.80 | ) | (41 | )% | ||||||
Diluted | $ | 1.15 | $ | 1.94 | $ | (0.79 | ) | (41 | )% | ||||||
Cash dividends declared per common share | $ | 0.33 | $ | 0.33 | $ | — | — | % | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 169,356 | 175,899 | (6,543 | ) | (4 | )% | |||||||||
Diluted | 170,547 | 177,586 | (7,039 | ) | (4 | )% | |||||||||
Six Months Ended June 30, | Change from 2018 | ||||||||||||||
2019 | 2018 | Change | Percent | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Sales and other revenues | $ | 8,679,862 | $ | 8,599,663 | $ | 80,199 | 1 | % | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of products sold (exclusive of depreciation and amortization): | |||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 6,904,089 | 6,943,041 | (38,952 | ) | (1 | ) | |||||||||
Lower of cost or market inventory valuation adjustment | (184,545 | ) | (210,764 | ) | 26,219 | (12 | ) | ||||||||
6,719,544 | 6,732,277 | (12,733 | ) | — | |||||||||||
Operating expenses (exclusive of depreciation and amortization) | 664,844 | 616,503 | 48,341 | 8 | |||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 173,351 | 133,339 | 40,012 | 30 | |||||||||||
Depreciation and amortization | 248,329 | 214,720 | 33,609 | 16 | |||||||||||
Goodwill impairment | 152,712 | — | 152,712 | — | |||||||||||
Total operating costs and expenses | 7,958,780 | 7,696,839 | 261,941 | 3 | |||||||||||
Income from operations | 721,082 | 902,824 | (181,742 | ) | (20 | ) | |||||||||
Other income (expense): | |||||||||||||||
Earnings of equity method investments | 3,883 | 3,013 | 870 | 29 | |||||||||||
Interest income | 10,963 | 5,524 | 5,439 | 98 | |||||||||||
Interest expense | (70,911 | ) | (65,047 | ) | (5,864 | ) | 9 | ||||||||
Gain on foreign currency transactions | 4,478 | 5,235 | (757 | ) | (14 | ) | |||||||||
Other, net | 649 | 2,710 | (2,061 | ) | (76 | ) | |||||||||
(50,938 | ) | (48,565 | ) | (2,373 | ) | 5 | |||||||||
Income before income taxes | 670,144 | 854,259 | (184,115 | ) | (22 | ) | |||||||||
Income tax expense | 176,841 | 202,484 | (25,643 | ) | (13 | ) | |||||||||
Net income | 493,303 | 651,775 | (158,472 | ) | (24 | ) | |||||||||
Less net income attributable to noncontrolling interest | 43,333 | 38,177 | 5,156 | 14 | |||||||||||
Net income attributable to HollyFrontier stockholders | $ | 449,970 | $ | 613,598 | $ | (163,628 | ) | (27 | )% | ||||||
Earnings per share attributable to HollyFrontier stockholders: | |||||||||||||||
Basic | $ | 2.64 | $ | 3.47 | $ | (0.83 | ) | (24 | )% | ||||||
Diluted | $ | 2.62 | $ | 3.44 | $ | (0.82 | ) | (24 | )% | ||||||
Cash dividends declared per common share | $ | 0.66 | $ | 0.66 | $ | — | — | % | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 170,100 | 176,256 | (6,156 | ) | (3 | )% | |||||||||
Diluted | 171,264 | 177,820 | (6,556 | ) | (4 | )% | |||||||||
June 30, 2019 | December 31, 2018 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 914,644 | $ | 1,154,752 | ||||
Working capital | $ | 1,802,370 | $ | 2,128,224 | ||||
Total assets | $ | 12,104,491 | $ | 10,994,601 | ||||
Long-term debt | $ | 2,430,832 | $ | 2,411,540 | ||||
Total equity | $ | 6,530,999 | $ | 6,459,059 | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Net cash provided by operating activities | $ | 752,734 | $ | 394,361 | $ | 969,550 | $ | 728,145 | ||||||||
Net cash used for investing activities | $ | (55,584 | ) | $ | (79,997 | ) | $ | (782,309 | ) | $ | (146,078 | ) | ||||
Net cash used for financing activities | $ | (279,736 | ) | $ | (114,004 | ) | $ | (429,864 | ) | $ | (229,715 | ) | ||||
Capital expenditures | $ | 56,734 | $ | 79,938 | $ | 120,469 | $ | 149,477 | ||||||||
EBITDA (1) | $ | 442,835 | $ | 602,723 | $ | 935,088 | $ | 1,090,325 | ||||||||
(1) | Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as net income attributable to HollyFrontier stockholders plus (i) interest expense, net of interest income, (ii) income tax provision, and (iii) depreciation and amortization. EBITDA is not a calculation provided for under GAAP; however, the amounts included in the EBITDA calculation are derived from amounts included in our consolidated financial statements. EBITDA should not be considered as an alternative to net income or operating income as an indication of our operating performance or as an alternative to operating cash flow as a measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used by our management for internal analysis and as a basis for financial covenants. EBITDA presented above is reconciled to net income under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||||||||||
Crude charge (BPD) (1) | 264,290 | 289,820 | 238,890 | 258,930 | ||||||||||||
Refinery throughput (BPD) (2) | 278,710 | 300,030 | 254,520 | 273,200 | ||||||||||||
Sales of produced refined products (BPD) (3) | 273,010 | 270,710 | 245,450 | 261,950 | ||||||||||||
Refinery utilization (4) | 101.7 | % | 111.5 | % | 91.9 | % | 99.6 | % | ||||||||
Average per produced barrel (5) | ||||||||||||||||
Refinery gross margin | $ | 17.17 | $ | 11.90 | $ | 14.51 | $ | 11.30 | ||||||||
Refinery operating expenses (6) | 5.02 | 4.89 | 5.74 | 5.02 | ||||||||||||
Net operating margin | $ | 12.15 | $ | 7.01 | $ | 8.77 | $ | 6.28 | ||||||||
Refinery operating expenses per throughput barrel (7) | $ | 4.92 | $ | 4.41 | $ | 5.54 | $ | 4.82 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 57 | % | 58 | % | 54 | % | 51 | % | ||||||||
Sour crude oil | 22 | % | 23 | % | 23 | % | 26 | % | ||||||||
Heavy sour crude oil | 16 | % | 16 | % | 17 | % | 18 | % | ||||||||
Other feedstocks and blends | 5 | % | 3 | % | 6 | % | 5 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Sales of produced refined products: | ||||||||||||
Gasolines | 51 | % | 49 | % | 52 | % | 51 | % | ||||
Diesel fuels | 34 | % | 35 | % | 31 | % | 33 | % | ||||
Jet fuels | 6 | % | 6 | % | 7 | % | 6 | % | ||||
Fuel oil | 1 | % | 1 | % | 1 | % | 1 | % | ||||
Asphalt | 2 | % | 3 | % | 3 | % | 3 | % | ||||
Base oils | 4 | % | 4 | % | 4 | % | 4 | % | ||||
LPG and other | 2 | % | 2 | % | 2 | % | 2 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
Southwest Region (Navajo Refinery) | ||||||||||||||||
Crude charge (BPD) (1) | 109,080 | 111,900 | 107,560 | 109,020 | ||||||||||||
Refinery throughput (BPD) (2) | 119,480 | 120,340 | 117,860 | 118,510 | ||||||||||||
Sales of produced refined products (BPD) (3) | 122,090 | 118,240 | 122,730 | 120,240 | ||||||||||||
Refinery utilization (4) | 109.1 | % | 111.9 | % | 107.6 | % | 109.0 | % | ||||||||
Average per produced barrel (5) | ||||||||||||||||
Refinery gross margin | $ | 23.45 | $ | 21.04 | $ | 19.70 | $ | 15.38 | ||||||||
Refinery operating expenses (6) | 4.53 | 5.34 | 4.73 | 4.68 | ||||||||||||
Net operating margin | $ | 18.92 | $ | 15.70 | $ | 14.97 | $ | 10.70 | ||||||||
Refinery operating expenses per throughput barrel (7) | $ | 4.63 | $ | 5.25 | $ | 4.93 | $ | 4.75 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 24 | % | 34 | % | 20 | % | 32 | % | ||||||||
Sour crude oil | 67 | % | 59 | % | 71 | % | 60 | % | ||||||||
Other feedstocks and blends | 9 | % | 7 | % | 9 | % | 8 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Sales of produced refined products: | ||||||||||||||||
Gasolines | 48 | % | 47 | % | 51 | % | 51 | % | ||||||||
Diesel fuels | 40 | % | 41 | % | 38 | % | 39 | % | ||||||||
Fuel oil | 4 | % | 3 | % | 3 | % | 2 | % | ||||||||
Asphalt | 6 | % | 5 | % | 5 | % | 4 | % | ||||||||
LPG and other | 2 | % | 4 | % | 3 | % | 4 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Rocky Mountain Region (Cheyenne and Woods Cross Refineries) | ||||||||||||||||
Crude charge (BPD) (1) | 79,660 | 61,760 | 80,440 | 71,560 | ||||||||||||
Refinery throughput (BPD) (2) | 86,700 | 69,830 | 87,080 | 79,570 | ||||||||||||
Sales of produced refined products (BPD) (3) | 74,000 | 64,870 | 78,000 | 77,460 | ||||||||||||
Refinery utilization (4) | 82.1 | % | 63.7 | % | 82.9 | % | 73.8 | % | ||||||||
Average per produced barrel (6) | ||||||||||||||||
Refinery gross margin (8) | $ | 22.48 | $ | 27.89 | $ | 17.07 | $ | 25.05 | ||||||||
Refinery operating expenses (9) | 11.53 | 14.34 | 11.11 | 11.58 | ||||||||||||
Net operating margin (8) | $ | 10.95 | $ | 13.55 | $ | 5.96 | $ | 13.47 | ||||||||
Refinery operating expenses per throughput barrel (10) | $ | 9.84 | $ | 13.33 | $ | 9.95 | $ | 11.28 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Feedstocks: | ||||||||||||
Sweet crude oil | 34 | % | 18 | % | 35 | % | 26 | % | ||||
Heavy sour crude oil | 35 | % | 51 | % | 35 | % | 43 | % | ||||
Black wax crude oil | 23 | % | 20 | % | 22 | % | 21 | % | ||||
Other feedstocks and blends | 8 | % | 11 | % | 8 | % | 10 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
Sales of produced refined products: | ||||||||||||
Gasolines | 50 | % | 57 | % | 52 | % | 57 | % | ||||
Diesel fuels | 37 | % | 32 | % | 35 | % | 33 | % | ||||
Fuel oil | 4 | % | 3 | % | 4 | % | 2 | % | ||||
Asphalt | 6 | % | 5 | % | 6 | % | 4 | % | ||||
LPG and other | 3 | % | 3 | % | 3 | % | 4 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
Consolidated | ||||||||||||||||
Crude charge (BPD) (1) | 453,030 | 463,480 | 426,890 | 439,510 | ||||||||||||
Refinery throughput (BPD) (2) | 484,890 | 490,200 | 459,460 | 471,280 | ||||||||||||
Sales of produced refined products (BPD) (3) | 469,100 | 453,830 | 446,190 | 459,640 | ||||||||||||
Refinery utilization (4) | 99.1 | % | 101.4 | % | 93.4 | % | 96.2 | % | ||||||||
Average per produced barrel (5) | ||||||||||||||||
Refinery gross margin | $ | 19.64 | $ | 16.57 | $ | 16.39 | $ | 14.68 | ||||||||
Refinery operating expenses (6) | 5.92 | 6.36 | 6.40 | 6.04 | ||||||||||||
Net operating margin | $ | 13.72 | $ | 10.21 | $ | 9.99 | $ | 8.64 | ||||||||
Refinery operating expenses per throughput barrel (7) | $ | 5.73 | $ | 5.89 | $ | 6.22 | $ | 5.89 | ||||||||
Feedstocks: | ||||||||||||||||
Sweet crude oil | 44 | % | 46 | % | 42 | % | 42 | % | ||||||||
Sour crude oil | 29 | % | 29 | % | 31 | % | 30 | % | ||||||||
Heavy sour crude oil | 16 | % | 17 | % | 16 | % | 18 | % | ||||||||
Black wax crude oil | 4 | % | 3 | % | 4 | % | 3 | % | ||||||||
Other feedstocks and blends | 7 | % | 5 | % | 7 | % | 7 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Sales of produced refined products: | ||||||||||||
Gasolines | 50 | % | 50 | % | 52 | % | 52 | % | ||||
Diesel fuels | 36 | % | 36 | % | 34 | % | 35 | % | ||||
Jet fuels | 4 | % | 4 | % | 4 | % | 3 | % | ||||
Fuel oil | 2 | % | 1 | % | 2 | % | 2 | % | ||||
Asphalt | 4 | % | 4 | % | 4 | % | 3 | % | ||||
Base oils | 2 | % | 2 | % | 2 | % | 2 | % | ||||
LPG and other | 2 | % | 3 | % | 2 | % | 3 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
(1) | Crude charge represents the barrels per day of crude oil processed at our refineries. |
(2) | Refinery throughput represents the barrels per day of crude and other refinery feedstocks input to the crude units and other conversion units at our refineries. |
(3) | Represents barrels sold of refined products produced at our refineries (including HFC Asphalt) and does not include volumes |
(4) | Represents crude charge divided by total crude capacity (BPSD). Our consolidated crude capacity is 457,000 BPSD. |
(5) | Represents average amount per produced barrel sold, which is a non-GAAP measure. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q. |
(6) | Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes |
(7) | Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Lubricants and Specialty Products | ||||||||||||
Throughput (BPD) | 16,990 | 18,610 | 18,390 | 20,100 | ||||||||
Sales of produced refined products (BPD) | 34,660 | 31,000 | 34,050 | 31,400 | ||||||||
Sales of produced refined products: | ||||||||||||
Finished products | 52 | % | 48 | % | 50 | % | 48 | % | ||||
Base oils | 32 | % | 32 | % | 29 | % | 32 | % | ||||
Other | 16 | % | 20 | % | 21 | % | 20 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
Rack Back (1) | Rack Forward (2) | Eliminations (3) | Total Lubricants and Specialty Products | |||||||||||||
(In thousands) | ||||||||||||||||
Three months ended June 30, 2019 | ||||||||||||||||
Sales and other revenues | $ | 133,225 | $ | 507,183 | $ | (95,062 | ) | $ | 545,346 | |||||||
Cost of products sold | $ | 131,725 | $ | 378,690 | $ | (95,062 | ) | $ | 415,353 | |||||||
Operating expenses | $ | 30,585 | $ | 28,537 | $ | — | $ | 59,122 | ||||||||
Selling, general and administrative expenses | $ | 6,366 | $ | 35,721 | $ | — | $ | 42,087 | ||||||||
Depreciation and amortization | $ | 11,075 | $ | 11,945 | $ | — | $ | 23,020 | ||||||||
Goodwill impairment (4) | $ | 152,712 | $ | — | $ | — | $ | 152,712 | ||||||||
Income (loss) from operations | $ | (199,238 | ) | $ | 52,290 | $ | — | $ | (146,948 | ) | ||||||
Three months ended June 30, 2018 | ||||||||||||||||
Sales and other revenues | $ | 175,642 | $ | 425,461 | $ | (133,414 | ) | $ | 467,689 | |||||||
Cost of products sold | $ | 153,040 | $ | 353,515 | $ | (133,414 | ) | $ | 373,141 | |||||||
Operating expenses (5) | $ | 27,210 | $ | (7,305 | ) | $ | — | $ | 19,905 | |||||||
Selling, general and administrative expenses | $ | 7,888 | $ | 27,369 | $ | — | $ | 35,257 | ||||||||
Depreciation and amortization | $ | 6,013 | $ | 4,007 | $ | — | $ | 10,020 | ||||||||
Income (loss) from operations | $ | (18,509 | ) | $ | 47,875 | $ | — | $ | 29,366 | |||||||
Rack Back (1) | Rack Forward (2) | Eliminations (3) | Total Lubricants and Specialty Products | |||||||||||||
(In thousands) | ||||||||||||||||
Six months ended June 30, 2019 | ||||||||||||||||
Sales and other revenues | $ | 289,680 | $ | 951,525 | $ | (202,525 | ) | $ | 1,038,680 | |||||||
Cost of products sold | $ | 277,543 | $ | 729,352 | $ | (202,525 | ) | $ | 804,370 | |||||||
Operating expenses | $ | 60,145 | $ | 52,536 | $ | — | $ | 112,681 | ||||||||
Selling, general and administrative expenses | $ | 19,845 | $ | 61,961 | $ | — | $ | 81,806 | ||||||||
Depreciation and amortization | $ | 21,601 | $ | 21,590 | $ | — | $ | 43,191 | ||||||||
Goodwill impairment (4) | $ | 152,712 | $ | — | $ | — | $ | 152,712 | ||||||||
Income (loss) from operations | $ | (242,166 | ) | $ | 86,086 | $ | — | $ | (156,080 | ) | ||||||
Six months ended June 30, 2018 | ||||||||||||||||
Sales and other revenues | $ | 349,074 | $ | 824,500 | $ | (261,045 | ) | $ | 912,529 | |||||||
Cost of products sold | $ | 305,094 | $ | 636,623 | $ | (261,045 | ) | $ | 680,672 | |||||||
Operating expenses | $ | 55,981 | $ | 28,832 | $ | — | $ | 84,813 | ||||||||
Selling, general and administrative expenses | $ | 14,707 | $ | 51,204 | $ | — | $ | 65,911 | ||||||||
Depreciation and amortization | $ | 11,641 | $ | 7,243 | $ | — | $ | 18,884 | ||||||||
Income (loss) from operations | $ | (38,349 | ) | $ | 100,598 | $ | — | $ | 62,249 | |||||||
Expected Cash Spending Range | |||||||
(In millions) | |||||||
Type: | |||||||
Capital | $ | 275.0 | - | $ | 300.0 | ||
Turnarounds | 235.0 | - | 260.0 | ||||
Total | $ | 510.0 | - | $ | 560.0 | ||
Notional Contract Volumes by Year of Maturity | ||||||||||||||
Derivative Instrument | Total Outstanding Notional | 2019 | 2020 | 2021 | Unit of Measure | |||||||||
Natural gas price swaps - long | 4,500,000 | 900,000 | 1,800,000 | 1,800,000 | MMBTU | |||||||||
Crude oil price swaps (basis spread) - long | 8,614,000 | 2,392,000 | 6,222,000 | — | Barrels | |||||||||
NYMEX futures (WTI) - short | 924,000 | 924,000 | — | — | Barrels | |||||||||
Forward gasoline and diesel contracts - long | 400,000 | 400,000 | — | — | Barrels | |||||||||
Foreign currency forward contracts | 435,734,135 | 223,084,671 | 212,649,464 | — | U.S. dollar | |||||||||
Forward commodity contracts (platinum) (1) | 41,147 | 41,147 | — | — | Troy ounces | |||||||||
Estimated Change in Fair Value at June 30, | ||||||||
Commodity-based Derivative Contracts | 2019 | 2018 | ||||||
(In thousands) | ||||||||
Hypothetical 10% change in underlying commodity prices | $ | 2,902 | $ | 8,650 | ||||
Outstanding Principal | Estimated Fair Value | Estimated Change in Fair Value | ||||||||||
(In thousands) | ||||||||||||
HollyFrontier Senior Notes | $ | 1,000,000 | $ | 1,095,910 | $ | 26,176 | ||||||
HEP Senior Notes | $ | 500,000 | $ | 517,375 | $ | 11,869 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | ||||||||||||||||
Net income attributable to HollyFrontier stockholders | $ | 196,915 | $ | 345,507 | $ | 449,970 | $ | 613,598 | ||||||||
Add income tax expense | 89,336 | 117,447 | 176,841 | 202,484 | ||||||||||||
Add interest expense | 34,264 | 32,324 | 70,911 | 65,047 | ||||||||||||
Subtract interest income | (4,588 | ) | (2,934 | ) | (10,963 | ) | (5,524 | ) | ||||||||
Add depreciation and amortization | 126,908 | 110,379 | 248,329 | 214,720 | ||||||||||||
EBITDA | $ | 442,835 | $ | 602,723 | $ | 935,088 | $ | 1,090,325 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Net operating margin per produced barrel sold | $ | 13.72 | $ | 10.21 | $ | 9.99 | $ | 8.64 | ||||||||
Add average refinery operating expenses per produced barrel sold | 5.92 | 6.36 | 6.40 | 6.04 | ||||||||||||
Refinery gross margin per produced barrel sold | 19.64 | 16.57 | 16.39 | 14.68 | ||||||||||||
Times produced barrels sold (BPD) | 469,100 | 453,830 | 446,190 | 459,640 | ||||||||||||
Times number of days in period | 91 | 91 | 181 | 181 | ||||||||||||
Refining segment gross margin | 838,394 | 684,317 | 1,323,663 | 1,221,300 | ||||||||||||
Add (subtract) rounding | 34 | (189 | ) | (365 | ) | 309 | ||||||||||
Total refining segment gross margin | 838,428 | 684,128 | 1,323,298 | 1,221,609 | ||||||||||||
Add refining segment cost of products sold | 3,458,832 | 3,394,853 | 6,421,372 | 6,606,557 | ||||||||||||
Refining segment sales and other revenues | 4,297,260 | 4,078,981 | 7,744,670 | 7,828,166 | ||||||||||||
Add lubricants and specialty products segment sales and other revenues | 545,346 | 467,689 | 1,038,680 | 912,529 | ||||||||||||
Add HEP segment sales and other revenues | 130,751 | 118,760 | 265,248 | 247,644 | ||||||||||||
Subtract corporate, other and eliminations | (190,742 | ) | (194,194 | ) | (368,736 | ) | (388,676 | ) | ||||||||
Sales and other revenues | $ | 4,782,615 | $ | 4,471,236 | $ | 8,679,862 | $ | 8,599,663 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||
Consolidated | ||||||||||||||||
Average refinery operating expenses per produced barrel sold | $ | 5.92 | $ | 6.36 | $ | 6.40 | $ | 6.04 | ||||||||
Times produced barrels sold (BPD) | 469,100 | 453,830 | 446,190 | 459,640 | ||||||||||||
Times number of days in period | 91 | 91 | 181 | 181 | ||||||||||||
Refinery operating expenses | 252,714 | 262,659 | 516,866 | 502,497 | ||||||||||||
Add (subtract) rounding | 1 | (101 | ) | 346 | (92 | ) | ||||||||||
Total refining segment operating expenses | 252,715 | 262,558 | 517,212 | 502,405 | ||||||||||||
Add lubricants and specialty products segment operating expenses | 59,122 | 19,905 | 112,681 | 84,813 | ||||||||||||
Add HEP segment operating expenses | 40,608 | 34,533 | 78,121 | 70,736 | ||||||||||||
Subtract corporate, other and eliminations | (19,193 | ) | (20,781 | ) | (43,170 | ) | (41,451 | ) | ||||||||
Operating expenses (exclusive of depreciation and amortization) | $ | 333,252 | $ | 296,215 | $ | 664,844 | $ | 616,503 | ||||||||
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
April 2019 | — | $ | — | — | $ | 714,419,895 | ||||||||
May 2019 | 1,170,000 | $ | 43.03 | 1,170,000 | $ | 664,075,326 | ||||||||
June 2019 | 3,700,000 | $ | 41.94 | 3,700,000 | $ | 508,881,726 | ||||||||
Total for April to June 2019 | 4,870,000 | 4,870,000 | ||||||||||||
Item 6. | Exhibits |
Exhibit Number | Description | |
2.1 | ||
3.1 | ||
3.2 | ||
10.1 | ||
10.2*+ | ||
10.3 | Fifth Amended and Restated Master Throughput Agreement, dated as of July 1, 2019, by and between HollyFrontier Refining and Marketing LLC and Holly Energy Partners - Operating, L.P. (incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K Current Report filed July 2, 2019, File No. 1-03876). | |
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
101+ | The following financial information from HollyFrontier Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements. | |
HOLLYFRONTIER CORPORATION | |||
(Registrant) | |||
Date: August 1, 2019 | /s/ Richard L. Voliva III | ||
Richard L.Voliva III | |||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||
Date: August 1, 2019 | /s/ J. W. Gann, Jr. | ||
J. W. Gann, Jr. | |||
Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) | |||
1. | I have reviewed this quarterly report on Form 10-Q of HollyFrontier Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting |
August 1, 2019 | /s/ George J. Damiris | |
George J. Damiris | ||
Chief Executive Officer and President | ||
1. | I have reviewed this quarterly report on Form 10-Q of HollyFrontier Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's most recent fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 1, 2019 | /s/ Richard L. Voliva III | |
Richard L. Voliva III | ||
Executive Vice President and Chief Financial Officer | ||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 1, 2019 | /s/ George J. Damiris | |
George J. Damiris | ||
Chief Executive Officer and President | ||
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 1, 2019 | /s/ Richard L. Voliva III | |
Richard L. Voliva III | ||
Executive Vice President and Chief Financial Officer | ||
Consolidated Statements Of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Operating costs and expenses: | ||||
| Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ 3,704,884 | $ 3,595,916 | $ 6,904,089 | $ 6,943,041 |
| Lower of cost or market inventory valuation adjustment | 47,801 | (106,926) | (184,545) | (210,764) |
| Costs of products sold, net | 3,752,685 | 3,488,990 | 6,719,544 | 6,732,277 |
| Operating expenses (exclusive of depreciation and amortization) | 333,252 | 296,215 | 664,844 | 616,503 |
| Selling, general and administrative expenses (exclusive of depreciation and amortization) | 85,317 | 68,675 | 173,351 | 133,339 |
| Depreciation and amortization | 126,908 | 110,379 | 248,329 | 214,720 |
| Goodwill, Impairment Loss | 152,712 | 0 | 152,712 | 0 |
| Total operating costs and expenses | 4,450,874 | 3,964,259 | 7,958,780 | 7,696,839 |
| Sales and other revenues | 4,782,615 | 4,471,236 | 8,679,862 | 8,599,663 |
| Income from operations | 331,741 | 506,977 | 721,082 | 902,824 |
| Other income (expense): | ||||
| Income before income taxes | 306,153 | 480,360 | 670,144 | 854,259 |
| Earnings of equity method investments | 1,783 | 1,734 | 3,883 | 3,013 |
| Interest income | 4,588 | 2,934 | 10,963 | 5,524 |
| Interest expense | (34,264) | (32,324) | (70,911) | (65,047) |
| Gain (loss) on foreign currency transactions | 2,213 | (325) | 4,478 | 5,235 |
| Other, net | 92 | 1,364 | 649 | 2,710 |
| Other income (expense) total | (25,588) | (26,617) | (50,938) | (48,565) |
| Income tax expense (benefit): | ||||
| Current | 63,364 | 88,283 | 118,648 | 145,934 |
| Deferred | 25,972 | 29,164 | 58,193 | 56,550 |
| Income tax expense (benefit) | 89,336 | 117,447 | 176,841 | 202,484 |
| Net income | 216,817 | 362,913 | 493,303 | 651,775 |
| Less net income attributable to noncontrolling interest | 19,902 | 17,406 | 43,333 | 38,177 |
| Net income attributable to HollyFrontier stockholders | $ 196,915 | $ 345,507 | $ 449,970 | $ 613,598 |
| Earnings per share attributable to HollyFrontier stockholders: | ||||
| Basic | $ 1.16 | $ 1.96 | $ 2.64 | $ 3.47 |
| Diluted | $ 1.15 | $ 1.94 | $ 2.62 | $ 3.44 |
| Average number of common shares outstanding: | ||||
| Basic | 169,356 | 175,899 | 170,100 | 176,256 |
| Diluted | 170,547 | 177,586 | 171,264 | 177,820 |
Description of Business and Presentation of Financial Statements |
6 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||
| 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 and other specialty products. We own and operate petroleum refineries that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain 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, 2019, we:
On November 12, 2018, we entered into an equity purchase agreement to acquire 100% of the issued and outstanding capital stock of Sonneborn US Holdings Inc. and 100% of the membership rights in Sonneborn Coöperatief U.A. (collectively, “Sonneborn”). The acquisition closed on February 1, 2019. On July 10, 2018, we entered into a definitive agreement to acquire Red Giant Oil, a privately-owned lubricants company. The acquisition closed on August 1, 2018. 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, 2019, the consolidated results of operations, comprehensive income and statements of equity for the three and six months ended June 30, 2019 and 2018 and consolidated cash flows for the six months ended June 30, 2019 and 2018 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, 2018 that has been filed with the SEC. Our results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results of operations to be realized for the year ending December 31, 2019. 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 doubtful accounts based on our historical loss experience as well as specific accounts identified as high risk, which historically have been minimal. Credit losses are charged to the allowance for doubtful accounts when an account is deemed uncollectible. Our allowance for doubtful accounts was $4.4 million at June 30, 2019 and $3.6 million at December 31, 2018. 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 and lease expense is accounted for on a straight-line basis. 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 an operating lease. Goodwill and Long-lived Assets: As of June 30, 2019, our goodwill balance was $2.4 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1,733.5 million, $329.3 million and $312.9 million, respectively. During the six months ended June 30, 2019, we recognized $283.6 million in goodwill as a result of our Sonneborn acquisition, all of which has been assigned to our Lubricants and Specialty Products segment. See Note 17 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 fair value of the reporting unit is greater than its carrying amount, 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 reporting unit over the related fair value. Our long-lived assets principally consist of our refining assets that are organized as refining asset groups and the assets of our Lubricants and Specialty Products asset groups. The refinery asset groups also constitute our individual refinery reporting units that are used for testing and measuring goodwill impairments. 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. Goodwill impairment During the second quarter of 2019, we performed interim goodwill impairment testing of the PCLI reporting unit included in our Lubricants and Specialty Products segment. We elected to perform this interim assessment due to the recent reorganization of our reporting unit structure within the Lubricants and Specialty Products segment, combined with the identification of events and circumstances which were indicators of potential goodwill impairment at PCLI, including recent declines in gross margins to lower than historic levels. These recent lower gross margins are in the base oil market which is largely attributed to the increase in global supply of base oils with a current outlook for continued near-term softness. Our interim goodwill impairment testing was performed as of May 31, 2019. The estimated fair values of our goodwill reporting units within our Lubricants and Specialty Products segment were derived using a combination of both income and market approaches. The income approach reflects expected future cash flows based on estimated future production volumes, selling prices, gross margins, operating costs and capital expenditures. Our market approach includes both the guideline public company and guideline transaction methods. Both methods utilize pricing multiples derived from historical market transactions of other like-kind assets. These fair value measurements involve significant unobservable inputs (Level 3 inputs). See Note 6 for further discussion of Level 3 inputs. As a result of our impairment testing, we determined that the carrying value of the PCLI reporting unit’s goodwill within our Lubricants and Specialty Products segment was fully impaired and a goodwill impairment charge of $152.7 million was recorded. Our testing did not identify any other impairments. 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. Additionally, 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. In connection with our PCLI acquisition on February 1, 2017, we issued intercompany notes to initially fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of such intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the income statement. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to Corporate and Other. See Note 17 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. 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, 2019 and 2018, we received proceeds of $12.6 million and $23.6 million, respectively, and repaid $12.9 million and $24.1 million, respectively, under these sell / buy transactions. Cost Classifications: During the three months ended June 30, 2018, we recognized an adjustment in our Lubricants and Specialty Products segment to correct an expense misclassification related to the three months ended March 31, 2018, whereby $24.0 million of inventory transportation costs were classified as operating expenses, which should have been included in cost of products sold. This adjustment had no impact on our operating or net income. Accounting Pronouncements - Recently Adopted Goodwill Impairment Testing In January 2017, Accounting Standard Update (“ASU”) 2017-04, “Simplifying the Test for Goodwill Impairment,” was issued amending the testing for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. We adopted this standard effective in the second quarter of 2019, and the adoption of this standard resulted in no change to the amount of goodwill impairment recorded in the second quarter of 2019. Leases In February 2016, ASU 2016-02, “Leases,” was issued requiring leases to be measured and recognized as a lease liability, with a corresponding ROU asset on the balance sheet. We adopted this standard effective January 1, 2019 using the optional transition method, whereby comparative prior period financial information will not be restated and will continue to be reported under the lease accounting standard in effect during those periods. We also elected practical expedients provided by the new standard, including the package of practical expedients, whereby we did not reassess lease classification or initial indirect lease cost under the new standard. In addition, we elected to exclude short-term leases, which at inception have a lease term of 12 months or less, from the amounts recognized on our balance sheet. In addition, HEP elected an expedient whereby a lessor does not have to separate non-lease (service) components from lease components under certain contracts. Under this expedient, HEP treated the combined components of its leases with third parties (i.e., the contracts that are not eliminated upon consolidation of HEP by HFC) as an operating lease in which the dominant component was a lease in accordance with ASC 842. Upon adoption of this standard, we recognized $433.4 million of lease liabilities and corresponding ROU assets on our consolidated balance sheet. Adoption of this standard did not have a material impact on our results of operations or cash flows. In addition, upon our acquisition of Sonneborn on February 1, 2019, we recognized $15.9 million of lease liabilities and corresponding ROU assets. Accounting Pronouncements - Not Yet Adopted Credit Losses Measurement In June 2016, ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” was issued requiring measurement of all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This standard is effective January 1, 2020, and we are currently evaluating the impact of this standard.
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Acquisitions (Notes) |
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| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mergers, Acquisitions and Dispositions Disclosures | Acquisitions On November 12, 2018, we entered into an equity purchase agreement to acquire 100% of the capital stock of Sonneborn. The acquisition closed on February 1, 2019. Sonneborn is a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes with manufacturing facilities in the United States and Europe. Aggregate consideration totaled $701.6 million and consisted of $662.7 million in cash paid at acquisition, net of cash acquired. Working capital settlement pursuant to the purchase agreement has been finalized. This transaction is accounted for as a business combination using the acquisition method of accounting, with the purchase price allocated to the fair value of the acquired Sonneborn assets and liabilities as of the February 1 acquisition date, with the excess purchase price recorded as goodwill assigned to our Lubricants and Specialty Products segment. The following summarizes our preliminary value estimates of the Sonneborn assets and liabilities acquired on February 1, 2019:
The preliminary purchase price allocation resulted in the recognition of $283.6 million in goodwill, which relates to the established workforce and global market presence of the acquired business as well as the expected synergies to be gained upon combining with our existing operations to form an expanded lubricants and specialty products business. Intangibles include customer relationships, trademarks, patents and technical know-how totaling $209.6 million that are being amortized on a straight-line basis over a 12-year period. These values, including deferred taxes, are preliminary and, therefore, may change once we complete our valuations. Our consolidated financial and operating results reflect the Sonneborn operations beginning February 1, 2019. Our results of operations for the three months ended June 30, 2019 included revenues and income before income taxes of $101.0 million and $5.4 million, respectively, and revenue and loss before income taxes of $165.4 million and $(1.7) million, respectively, for the period from February 1, 2019 through June 30, 2019 related to these operations. As of June 30, 2019, we have incurred $16.2 million in incremental direct acquisition and integration costs that principally relate to legal, advisory and other professional fees and are presented as selling, general and administrative expenses. The following unaudited pro forma information for the six months ended June 30, 2019 and the three and six months ended June 30, 2018 presents the revenues and operating income for our Lubricants and Specialty Products segment assuming the acquisition of Sonneborn had occurred as of January 1, 2018. The proforma effects on consolidated HFC revenue and operating income are not material.
(1) For the six months ended June 30, 2019, includes goodwill impairment of $152.7 million from the PCLI reporting unit of our Lubricants and Specialty Products segment. See Note 1 for additional information on this goodwill impairment.
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessee, Operating Leases | Leases We have operating and finance leases for land, buildings, pipelines, storage tanks, transportation and other equipment for our operations. Our leases have remaining terms of one to 60 years, some of which include options to extend the leases for up to 10 years. The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheet.
Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of June 30, 2019, we have no right-of-use assets that were obtained in exchange for lease obligation. As of June 30, 2019, minimum future lease payments of our operating and finance lease obligations were as follows:
As of June 30, 2019, we have no additional operating and finance lease commitments that have not yet commenced. Our consolidated income statement reflects lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor. Lease income recognized was as follows:
Annual minimum undiscounted lease payments in which HEP is a lessor to third-party contracts as of June 30, 2019 were as follows:
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| Lessor, Operating Leases | Leases We have operating and finance leases for land, buildings, pipelines, storage tanks, transportation and other equipment for our operations. Our leases have remaining terms of one to 60 years, some of which include options to extend the leases for up to 10 years. The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheet.
Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of June 30, 2019, we have no right-of-use assets that were obtained in exchange for lease obligation. As of June 30, 2019, minimum future lease payments of our operating and finance lease obligations were as follows:
As of June 30, 2019, we have no additional operating and finance lease commitments that have not yet commenced. Our consolidated income statement reflects lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor. Lease income recognized was as follows:
Annual minimum undiscounted lease payments in which HEP is a lessor to third-party contracts as of June 30, 2019 were as follows:
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| Lessee, Finance Leases | Leases We have operating and finance leases for land, buildings, pipelines, storage tanks, transportation and other equipment for our operations. Our leases have remaining terms of one to 60 years, some of which include options to extend the leases for up to 10 years. The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheet.
Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of June 30, 2019, we have no right-of-use assets that were obtained in exchange for lease obligation. As of June 30, 2019, minimum future lease payments of our operating and finance lease obligations were as follows:
As of June 30, 2019, we have no additional operating and finance lease commitments that have not yet commenced. Our consolidated income statement reflects lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor. Lease income recognized was as follows:
Annual minimum undiscounted lease payments in which HEP is a lessor to third-party contracts as of June 30, 2019 were as follows:
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Holly Energy Partners |
6 Months Ended |
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Jun. 30, 2019 | |
| Holly Energy Partners [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 in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Delek’s refinery in Big Spring, Texas. Additionally, HEP owns 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”) and Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”). As of June 30, 2019, 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 has two primary customers (including us) and 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 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 78% of HEP’s total revenues for the six months ended June 30, 2019. 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 11 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. HEP Private Placement Agreements On January 25, 2018, HEP entered into a common unit purchase agreement in which certain purchasers agreed to purchase in a private placement 3,700,000 HEP common units, representing limited partner interests, at a price of $29.73 per common unit. The private placement closed on February 6, 2018, at which time HEP received proceeds of $110.0 million, which were used to repay indebtedness under the HEP Credit Agreement. HEP Common Unit Continuous Offering Program In May 2016, HEP established a continuous offering program under which HEP may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million. During the six months ended June 30, 2019, HEP did not issue any common units under this program. As of June 30, 2019, HEP has issued 2,413,153 common units under this program, providing $82.3 million in gross proceeds. HEP intends to use the net proceeds for general partnership purposes, which may include funding working capital, repayment of debt, acquisitions and capital expenditures. Amounts repaid under HEP’s credit facility may be reborrowed from time to time. As a result of these transactions and resulting HEP ownership changes, we adjusted additional capital and equity attributable to HEP's noncontrolling interest holders to reallocate HEP's equity among its unitholders. Transportation Agreements HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2020 through 2036. Under 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, 2019, these agreements result in minimum annualized payments to HEP of $349.1 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.
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Revenues from Contracts with Customers |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues from Contracts with Customers | Revenues Substantially 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:
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 the acquisition of Sonneborn on February 1, 2019. The following table presents changes to our contract liabilities during the six months ended June 30, 2019.
As of June 30, 2019, 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 through 2021. 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:
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 of revenues through 2022. Annual minimum revenues attributable to HEP’s third-party contracts as of June 30, 2019 are presented below:
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Fair Value Measurements |
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| 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:
The carrying amounts of derivative instruments and RINs credit obligations at June 30, 2019 and December 31, 2018 were as follows:
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. 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.
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Earnings Per Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Earnings Per Share Basic earnings per share is calculated as net income attributable to HollyFrontier stockholders divided by the average number of shares of common stock outstanding. Diluted earnings per share assumes, when dilutive, the issuance of the net incremental shares from restricted shares and performance share units. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HollyFrontier stockholders:
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Stock-Based Compensation |
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| Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | Stock-Based Compensation We have a principal share-based compensation plan (the “Long-Term Incentive Compensation Plan”). The compensation cost charged against income for the plan was $11.9 million and $7.8 million for the three months ended June 30, 2019 and 2018, respectively, and $20.8 million and $15.8 million for the six months ended June 30, 2019 and 2018, respectively. Our accounting policy for the recognition of compensation expense for awards with pro-rata vesting is to expense the costs ratably over the vesting periods. 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 $0.6 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively, and $1.2 million and $1.5 million for the six months ended June 30, 2019 and 2018, respectively. Restricted Stock and Restricted Stock Units Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees restricted stock unit awards with awards generally vesting over a period of three years. We previously granted restricted stock to certain officers and key employees with awards vesting over a period of three years. Certain restricted stock unit award recipients have the right to receive dividends, however, restricted stock units do not have any other rights of absolute ownership. Restricted stock award recipients are generally entitled to all the rights of absolute ownership of the restricted shares from the date of grant including the right to vote the shares and to receive dividends. Upon vesting, restrictions on the restricted stock and restricted stock units lapse at which time they convert to common shares or cash. In addition, we grant non-employee directors restricted stock unit awards, which typically vest over a period of one year and are payable in stock. The fair value of each restricted stock and restricted stock unit award is measured based on the grant date market price of our common shares and is amortized over the respective vesting period. We account for forfeitures on an estimated basis. A summary of restricted stock and restricted stock unit activity during the six months ended June 30, 2019 is presented below:
For the six months ended June 30, 2019, restricted stock and restricted stock units vested having a grant date fair value of $0.5 million. As of June 30, 2019, there was $20.7 million of total unrecognized compensation cost related to non-vested restricted stock and restricted stock unit grants. That cost is expected to be recognized over a weighted-average period of 1.1 years. Performance Share Units Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees performance share units, which are payable in stock or cash upon meeting certain criteria over the service period, and generally vest over a period of three years. Under the terms of our performance share unit grants, awards are subject to “financial performance” and “market performance” criteria. Financial performance is based on our financial performance compared to a peer group of independent refining companies, while market performance is based on the relative standing of total shareholder return achieved by HollyFrontier compared to peer group companies. The number of shares ultimately issued under these awards can range from zero to 200% of target award amounts. A summary of performance share unit activity during the six months ended June 30, 2019 is presented below:
As of June 30, 2019, there was $10.7 million of total unrecognized compensation cost related to non-vested performance share units having a grant date fair value of $47.24 per unit. That cost is expected to be recognized over a weighted-average period of 1.2 years.
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Inventories |
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| Inventory, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | Inventories Inventories consist of the following components:
Our inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $175.6 million and $360.1 million at June 30, 2019 and December 31, 2018, respectively. The December 31, 2018 market reserve of $360.1 million was reversed due to the sale of inventory quantities that gave rise to the 2018 reserve. A new market reserve of $175.6 million was established as of June 30, 2019 based on market conditions and prices at that time. The effect of the change in lower of cost or market reserve was an increase to cost of products sold totaling $47.8 million for the three months ended June 30, 2019 and a decrease of $106.9 million for the three months ended June 30, 2018 and a decrease to cost of products sold totaling $184.5 million and $210.8 million for the six months ended June 30, 2019 and 2018, respectively. At June 30, 2019, the LIFO value of inventory, net of the lower of cost or market reserve, was equal to current costs. During the three months ended June 30, 2018, the EPA granted the Woods Cross Refinery a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2017 calendar year end. As a result, the Woods Cross Refinery’s gasoline and diesel production are not subject to the Renewable Volume Obligation (“RVO”) for 2017. In the second quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $25.3 million, representing the net cost of the Woods Cross Refinery’s RINs charge to cost of products sold in 2017, less the loss incurred for selling 2017 vintage RINs in excess of those which we can use subject to the 20% carryover limit. During the three months ended March 31, 2018, the EPA granted the Cheyenne Refinery a one-year small refinery exemption from the RFS program requirements for the 2015 and 2017 calendar years end. As a result, the Cheyenne Refinery’s gasoline and diesel production are not subject to the RVO for those years. At the date we received the 2017 Cheyenne Refinery exemption, we had not yet retired RINs to satisfy the 2017 RVO, which we intended to satisfy, in part, with 2016 vintage RINs subject to the 20% carryover limit. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $37.9 million, representing the net cost of the Cheyenne Refinery’s RINs charged to cost of products sold in 2017, less the loss incurred from selling 2016 vintage RINs prior to their expiration in 2018. In the first quarter of 2018, the EPA provided us 2018 vintage RINs to replace the RINs previously submitted to meet the Cheyenne Refinery’s 2015 RVO. In the first quarter of 2018, we increased our inventory of RINs and reduced our cost of products sold by $33.8 million representing the fair value of the 2018 replacement RINs obtained from the Cheyenne Refinery’s exemption of its 2015 RVO. Various subsidiaries of HollyFrontier have intervened in three lawsuits brought by renewable fuel interest groups against the EPA in federal appellate courts alleging violations of the RFS under the Clean Air Act and challenging the EPA’s handling of small refinery exemptions. We believe the EPA correctly applied applicable law to the matters at issue and will vigorously defend the EPA’s position on small refinery exemptions. It is too early to assess whether the cases are expected to have any impact on us.
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Environmental |
6 Months Ended |
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Jun. 30, 2019 | |
| 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 $2.3 million and $1.3 million for the three months ended June 30, 2019 and 2018, respectively, and $3.7 million and $1.6 million for the six months ended June 30, 2019 and 2018, respectively, for environmental remediation obligations. The accrued environmental liability reflected in our consolidated balance sheets was $110.4 million and $110.2 million at June 30, 2019 and December 31, 2018, respectively, of which $92.8 million and $93.8 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.
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt HollyFrontier Credit Agreement We have a $1.35 billion senior unsecured revolving credit facility maturing in February 2022 (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, 2019, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $4.4 million under the HollyFrontier Credit Agreement. HEP Credit Agreement HEP has a $1.4 billion senior secured revolving credit facility maturing in July 2022 (the “HEP Credit Agreement”) and 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 has a $300 million accordion. During the six months ended June 30, 2019, HEP received advances totaling $175.0 million and repaid $156.5 million under the HEP Credit Agreement. At June 30, 2019, HEP was in compliance with all of its covenants, had outstanding borrowings of $941.5 million and no outstanding letters of credit under the HEP Credit Agreement. 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 Our 5.875% senior notes ($1 billion aggregate principal amount maturing April 2026) (the “HollyFrontier Senior Notes”) are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness. HollyFrontier Financing Arrangements In December 2018, 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 total cash received of $32.5 million. The volume of the precious metals catalyst and the lease rate are fixed over the one-year term of each lease, and the lease payments are recorded as interest expense. At maturity, we must repurchase the precious metals catalyst at its then fair market value. These financing arrangements are recorded at a Level 2 fair value totaling $34.8 million at June 30, 2019 and are included in “Accrued liabilities” in our consolidated balance sheets. See Note 6 for additional information on Level 2 inputs. HEP Senior Notes HEP’s 6.0% senior notes ($500 million aggregate principal amount maturing August 2024) (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. At any time when the HEP Senior Notes are rated investment grade by both Moody’s and 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 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:
The fair values of the senior notes are as follows:
These fair values are based on a Level 2 input. See Note 6 for additional information on Level 2 inputs. We capitalized interest attributable to construction projects of $0.5 million and $1.0 million for the three months ended June 30, 2019 and 2018, respectively, and $1.1 million and $1.9 million for the six months ended June 30, 2019 and 2018, respectively.
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Derivative Instruments And Hedging Activities |
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| 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 and to lock in basis spread differentials on forecasted purchases of crude oil. We also periodically have 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 derivatives designated as hedging instruments under hedge accounting:
Economic Hedges We have commodity contracts including contracts to lock in basis spread differentials on forecasted purchases of crude oil, forward purchase and sell contracts and NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory 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 11 could require repayment under certain conditions based on the futures price of platinum, which is an embedded derivative. These contracts are measured at fair value with offsetting adjustments (gains/losses) recorded directly to income. The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:
As of June 30, 2019, we have the following notional contract volumes related to outstanding derivative instruments:
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.
At June 30, 2019, we had a pre-tax net unrealized gain of $17.8 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2021. Assuming commodity prices remain unchanged, an unrealized gain of $15.7 million will be effectively transferred from accumulated other comprehensive income into the statement of income as the hedging instruments contractually mature over the next twelve-month period.
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Equity |
6 Months Ended |
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Jun. 30, 2019 | |
| Stockholders' Equity Note [Abstract] | |
| Equity | Equity In September 2018, our Board of Directors approved a $1 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, 2019, we had remaining authorization to repurchase up to $508.9 million 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, 2019 and 2018, we withheld 2,484 and 12,469, respectively, shares of our common stock under the terms of stock-based compensation agreements to provide funds for the payment of payroll and income taxes due at the vesting of share-based awards.
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Other Comprehensive Income |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive Income (Loss) | Other Comprehensive Income The components and allocated tax effects of other comprehensive income are as follows:
The following table presents the income statement line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes:
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Post-retirement Plan |
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| Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Post-retirement Plans | Post-retirement Plans Our net periodic pension expense consisted of the following components:
The expected long-term annual rates of return on plan assets are 5.00% and 2.2% for the PCLI and Sonneborn plans, respectively. These rates were used in measuring 2019 net periodic benefit costs. The net periodic benefit credit of our post-retirement healthcare and other benefits plans consisted of the following components
The components, other than service cost, of our net periodic pension expense and net periodic post-retirement credit are recorded in Other, net in our consolidated statements of income. Sonneborn has various post-retirement benefit plans for employees in the United States and in the Netherlands. The plans for Sonneborn employees in the Netherlands include a defined benefit pension plan which was frozen and all plan participants became inactive in 2016. The plan assets are in the form of a third-party insurance contract that is valued based on the assets held by the insurer and insures a value which approximates the accrued benefits related to the plan’s accumulated benefit obligation. A new multiemployer pension plan was established in 2016, which is accounted for as a defined contribution plan. Also, in 2016, a new plan was established to provide future indexation benefits to participants who had accrued benefits under the expiring arrangements. Such benefits are funded by Sonneborn Refined Products B.V. The plans for Sonneborn employees in the United States include a post-retirement medical plan and a multiemployer plan for union employees. These plans are accounted for as defined contribution plans.
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Contingencies |
6 Months Ended |
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Jun. 30, 2019 | |
| Loss Contingency [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 material adverse effect on our financial condition, results of operations or cash flows. We have a crude oil supply contract that requires the supplier to deliver a specified volume of crude oil or pay a shortfall fee for the difference in the actual barrels delivered to us less the specified barrels per the supply contract. For the contract year ended August 31, 2017, the actual number of barrels delivered to us was substantially less than the specified barrels, and we recorded a reduction to cost of products sold and accumulated a shortfall fee receivable of $26.0 million during this period. In September 2017, the supplier notified us they are disputing the shortfall fee owed and in October 2017 notified us of their demand for arbitration. We offset the receivable with payments of invoices for deliveries of crude oil received subsequent to August 31, 2017, which is permitted under the supply contract. For the second contract year ended August 31, 2018, the actual number of barrels delivered to us was less than the specified barrels, and we recorded a reduction to cost of products sold and accumulated a shortfall fee receivable of $8.0 million during this period. We offset the receivable with payments of invoices for deliveries of crude oil received subsequent to August 31, 2018, which is permitted under the supply contract. The shortfall fees owed for the second contract year are now also part of the arbitration proceedings. In February 2019, the arbitration panel ruled in our favor on our motion for summary judgment. In May 2019, we and the supplier reached a settlement agreement, and this matter is now closed. In March 2006, a subsidiary of ours sold the assets of Montana Refining Company under an Asset Purchase Agreement (“APA”). Calumet Montana Refining LLC, the current owner of the assets, has submitted requests for reimbursement of approximately $20.0 million pursuant to contractual indemnity provisions under the APA for various costs incurred. Calumet has also asserted claims related to environmental matters. We have rejected all of the currently pending claims for payment, and selected issues were arbitrated in July 2018. In September 2018, the arbitration panel ruled on the selected issues and held that the APA places a number of important limitations on claims advanced by Calumet. The remaining issues were heard by the arbitration panel in April 2019, and the arbitration panel’s decision is expected in August 2019. We have accrued appropriate costs for this matter, and we believe that any reasonably possible losses beyond the amounts accrued are not material. We filed a business interruption claim with our insurance carriers related to a fire at our Woods Cross Refinery that occurred in the first quarter 2018. As of June 30, 2019, we have collected interim payments totaling $56.0 million, but have not reached a final agreement regarding the amounts owed to us pursuant to our business interruption coverage. We have accounted for this claim as a gain contingency and accordingly, we have deferred revenue recognition for the interim payments received until such time that uncertainties regarding the amounts owed to us have been resolved.
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Segment Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 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 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. Also, effective with our acquisition that closed August 1, 2018, the Lubricants and Specialty Products segment includes Red Giant Oil, one of the largest suppliers of locomotive engine oil in North America, and effective with our acquisition that closed February 1, 2019, 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 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, 2018.
(1) During the three months ended June 30, 2018, we recognized an adjustment in our Lubricants and Specialty Products segment to correct an expense misclassification related to the three months ended March 31, 2018, whereby $24 million of inventory transportation costs were classified as operating expenses, which should have been included in cost of products sold.
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Description of Business and Presentation of Financial Statements (Policy) |
6 Months Ended |
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Jun. 30, 2019 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Cost Classifications | Cost Classifications: During the three months ended June 30, 2018, we recognized an adjustment in our Lubricants and Specialty Products segment to correct an expense misclassification related to the three months ended March 31, 2018, whereby $24.0 million of inventory transportation costs were classified as operating expenses, which should have been included in cost of products sold. This adjustment had no impact on our operating or net income. |
| 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 doubtful accounts based on our historical loss experience as well as specific accounts identified as high risk, which historically have been minimal. Credit losses are charged to the allowance for doubtful accounts when an account is deemed uncollectible. Our allowance for doubtful accounts was $4.4 million at June 30, 2019 and $3.6 million at December 31, 2018.
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| 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 and lease expense is accounted for on a straight-line basis. 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 an operating lease. |
| Goodwill and Long-lived Assets | Goodwill and Long-lived Assets: As of June 30, 2019, our goodwill balance was $2.4 billion, with goodwill assigned to our Refining, Lubricants and Specialty Products and HEP segments of $1,733.5 million, $329.3 million and $312.9 million, respectively. During the six months ended June 30, 2019, we recognized $283.6 million in goodwill as a result of our Sonneborn acquisition, all of which has been assigned to our Lubricants and Specialty Products segment. See Note 17 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 fair value of the reporting unit is greater than its carrying amount, 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 reporting unit over the related fair value. Our long-lived assets principally consist of our refining assets that are organized as refining asset groups and the assets of our Lubricants and Specialty Products asset groups. The refinery asset groups also constitute our individual refinery reporting units that are used for testing and measuring goodwill impairments. 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.
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| Goodwill Impairment | Goodwill impairment During the second quarter of 2019, we performed interim goodwill impairment testing of the PCLI reporting unit included in our Lubricants and Specialty Products segment. We elected to perform this interim assessment due to the recent reorganization of our reporting unit structure within the Lubricants and Specialty Products segment, combined with the identification of events and circumstances which were indicators of potential goodwill impairment at PCLI, including recent declines in gross margins to lower than historic levels. These recent lower gross margins are in the base oil market which is largely attributed to the increase in global supply of base oils with a current outlook for continued near-term softness. Our interim goodwill impairment testing was performed as of May 31, 2019. The estimated fair values of our goodwill reporting units within our Lubricants and Specialty Products segment were derived using a combination of both income and market approaches. The income approach reflects expected future cash flows based on estimated future production volumes, selling prices, gross margins, operating costs and capital expenditures. Our market approach includes both the guideline public company and guideline transaction methods. Both methods utilize pricing multiples derived from historical market transactions of other like-kind assets. These fair value measurements involve significant unobservable inputs (Level 3 inputs). See Note 6 for further discussion of Level 3 inputs. As a result of our impairment testing, we determined that the carrying value of the PCLI reporting unit’s goodwill within our Lubricants and Specialty Products segment was fully impaired and a goodwill impairment charge of $152.7 million was recorded. Our testing did not identify any other impairments.
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| 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. Additionally, 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.
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| 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. In connection with our PCLI acquisition on February 1, 2017, we issued intercompany notes to initially fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of such intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the income statement. Such adjustments are not recorded to the Lubricants and Specialty Products segment operations, but to Corporate and Other. See Note 17 for additional information on our segments.
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| 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.
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| 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, 2019 and 2018, we received proceeds of $12.6 million and $23.6 million, respectively, and repaid $12.9 million and $24.1 million, respectively, under these sell / buy transactions.
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| New Accounting Pronouncements | Goodwill Impairment Testing In January 2017, Accounting Standard Update (“ASU”) 2017-04, “Simplifying the Test for Goodwill Impairment,” was issued amending the testing for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. We adopted this standard effective in the second quarter of 2019, and the adoption of this standard resulted in no change to the amount of goodwill impairment recorded in the second quarter of 2019. Leases In February 2016, ASU 2016-02, “Leases,” was issued requiring leases to be measured and recognized as a lease liability, with a corresponding ROU asset on the balance sheet. We adopted this standard effective January 1, 2019 using the optional transition method, whereby comparative prior period financial information will not be restated and will continue to be reported under the lease accounting standard in effect during those periods. We also elected practical expedients provided by the new standard, including the package of practical expedients, whereby we did not reassess lease classification or initial indirect lease cost under the new standard. In addition, we elected to exclude short-term leases, which at inception have a lease term of 12 months or less, from the amounts recognized on our balance sheet. In addition, HEP elected an expedient whereby a lessor does not have to separate non-lease (service) components from lease components under certain contracts. Under this expedient, HEP treated the combined components of its leases with third parties (i.e., the contracts that are not eliminated upon consolidation of HEP by HFC) as an operating lease in which the dominant component was a lease in accordance with ASC 842. Upon adoption of this standard, we recognized $433.4 million of lease liabilities and corresponding ROU assets on our consolidated balance sheet. Adoption of this standard did not have a material impact on our results of operations or cash flows. In addition, upon our acquisition of Sonneborn on February 1, 2019, we recognized $15.9 million of lease liabilities and corresponding ROU assets. |
| Description of New Accounting Pronouncements Not yet Adopted [Text Block] | Credit Losses Measurement In June 2016, ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” was issued requiring measurement of all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This standard is effective January 1, 2020, and we are currently evaluating the impact of this standard.
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Acquisitions (Tables) |
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| Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisition, Pro Forma Information |
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| Schedule of Business Acquisitions, by Acquisition | The following summarizes our preliminary value estimates of the Sonneborn assets and liabilities acquired on February 1, 2019:
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Leases (Tables) |
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| Schedule of Supplemental Balance Sheet Information | The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheet.
Supplemental balance sheet information related to our leases was as follows:
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| Schedule of Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
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| Schedule of Operating Lease Maturities | were as follows:
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| Schedule of Finance Lease Maturities | were as follows:
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| Schedule of Lease Income | Our consolidated income statement reflects lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor. Lease income recognized was as follows:
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| Schedule of Minimum Undiscounted Lease Payments | Annual minimum undiscounted lease payments in which HEP is a lessor to third-party contracts as of June 30, 2019 were as follows:
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Revenues from Contracts with Customers (Tables) |
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| Schedule of Disaggregated Revenues | Disaggregated revenues were as follows:
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| Schedule of Changes to Contract Liabilities | The following table presents changes to our contract liabilities during the six months ended June 30, 2019.
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| Schedules of Future Performance Obligations and Minimum Revenue Obligations | Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:
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Fair Value Measurements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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, 2019 and December 31, 2018 were as follows:
(1) Represent obligations for RINs credits for which we do not have sufficient quantities at June 30, 2019 and December 31, 2018 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 attributable to HollyFrontier stockholders:
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary Of Restricted Stock Activity | A summary of restricted stock and restricted stock unit activity during the six months ended June 30, 2019 is presented below:
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| Summary Of Performance Share Unit Activity | A summary of performance share unit activity during the six months ended June 30, 2019 is presented below:
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Inventories (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Components | Inventories consist of the following components:
(4) Includes RINs.
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrying Amounts Of Long-Term Debt | The carrying amounts of long-term debt are as follows:
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| Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The fair values of the senior notes are as follows:
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Derivative Instruments And Hedging Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 derivatives designated as hedging instruments under hedge accounting:
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| 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:
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| Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges | As of June 30, 2019, we have the following notional contract volumes related to outstanding derivative instruments:
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| 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.
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Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components And Allocated Tax Effects Of Other Comprehensive Income (Loss) | The components and allocated tax effects of other comprehensive income are as follows:
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| Reclassifications from Other Comprehensive Income to Income Statement | The following table presents the income statement line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
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| Accumulated Other Comprehensive Loss In Equity | Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes:
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Post-retirement Plan (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Costs of Retirement Plans | net periodic pension expense consisted of the following components:
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| Net Periodic Pension Expense | The net periodic benefit credit of our post-retirement healthcare and other benefits plans consisted of the following components
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule Of Segment Reporting Information |
(1) During the three months ended June 30, 2018, we recognized an adjustment in our Lubricants and Specialty Products segment to correct an expense misclassification related to the three months ended March 31, 2018, whereby $24 million of inventory transportation costs were classified as operating expenses, which should have been included in cost of products sold.
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Leases - Narrative (Details) |
Jun. 30, 2019 |
|---|---|
| Lessee, Lease, Description [Line Items] | |
| Finance lease term | 1 year |
| Operating lease renewal term | 10 years |
| Maximum | |
| Lessee, Lease, Description [Line Items] | |
| Operating lease term | 60 years |
Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Feb. 01, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|---|---|---|---|---|
| Operating leases: | ||||
| Operating lease right-of-use assets | $ 449,745 | $ 0 | ||
| Operating lease liabilities | 93,991 | 0 | ||
| Noncurrent operating lease liabilities | 357,635 | $ 0 | ||
| Total operating lease liabilities | 451,626 | $ 15,900 | $ 433,400 | |
| Finance leases: | ||||
| Properties, plants and equipment, at cost | 12,035 | |||
| Accumulated amortization | (6,127) | |||
| Properties, plants and equipment, net | 5,908 | |||
| Accrued liabilities | 1,649 | |||
| Other long-term liabilities | 4,580 | |||
| Finance Lease, Liability | $ 6,229 | |||
| Weighted average remaining lease term (in years) | ||||
| Operating leases | 7 years 10 months 24 days | |||
| Finance leases | 8 years 7 months 6 days | |||
| Weighted average discount rate | ||||
| Operating leases | 4.30% | |||
| Finance leases | 5.10% |
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
| Leases [Abstract] | ||
| Operating lease expense | $ 27,759 | $ 55,383 |
| Finance lease expense: | ||
| Amortization of right-of-use assets | 375 | 775 |
| Interest on lease liabilities | 83 | 171 |
| Variable lease cost | 774 | 1,389 |
| Total lease expense | $ 28,991 | $ 57,718 |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Cash paid for amounts included in the measurement of lease liabilities: | ||
| Operating cash flows from operating leases | $ 58,252 | |
| Operating cash flows from finance leases | 171 | |
| Financing cash flows from finance leases | $ 783 | $ 0 |
Leases - Operating and Finance Lease Maturities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Feb. 01, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|---|---|---|---|---|
| Operating | ||||
| 2019 | $ 61,224 | |||
| 2020 | 101,811 | |||
| 2021 | 79,523 | |||
| 2022 | 67,029 | |||
| 2023 | 61,768 | |||
| 2024 and thereafter | 168,121 | |||
| Total lease payments | 539,476 | |||
| Less imputed interest | 87,850 | |||
| Total operating lease liabilities | 451,626 | $ 15,900 | $ 433,400 | |
| Less current obligations | 93,991 | $ 0 | ||
| Noncurrent operating lease liabilities | 357,635 | $ 0 | ||
| Finance | ||||
| 2019 | 1,066 | |||
| 2020 | 1,710 | |||
| 2021 | 910 | |||
| 2022 | 640 | |||
| 2023 | 635 | |||
| 2024 and thereafter | 2,790 | |||
| Total lease payments | 7,751 | |||
| Less imputed interest | 1,522 | |||
| Finance Lease, Liability | 6,229 | |||
| Less current obligations | 1,649 | |||
| Long-term lease obligations | $ 4,580 |
Leases - Schedule of Lease Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
| HEP | ||
| Lessor, Lease, Description [Line Items] | ||
| Operating lease revenues | $ 8,267 | $ 16,466 |
Leases - Schedule of Minimum Undiscounted Lease Payments (Details) - HEP $ in Thousands |
Jun. 30, 2019
USD ($)
|
|---|---|
| Lessor, Lease, Description [Line Items] | |
| Remainder of 2019 | $ 16,123 |
| 2020 | 8,166 |
| 2021 | 1,546 |
| 2022 | 129 |
| 2023 | 0 |
| Thereafter | 0 |
| Total | $ 25,964 |
Revenues from Contracts with Customers - Schedule of Disaggregated Revenues (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | $ 4,782,615,000 | $ 4,471,236,000 | $ 8,679,862,000 | $ 8,599,663,000 | |||||||||||
| Mid-Continent | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 2,361,969,000 | 2,231,700,000 | 4,092,474,000 | 4,121,246,000 | |||||||||||
| Southwest | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 1,008,806,000 | 1,002,075,000 | 1,858,955,000 | 1,848,553,000 | |||||||||||
| Rocky Mountains | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 613,063,000 | 610,970,000 | 1,128,398,000 | 1,241,872,000 | |||||||||||
| Northeast | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 148,116,000 | 93,179,000 | 276,007,000 | 176,036,000 | |||||||||||
| Canada | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 174,772,000 | 191,939,000 | 352,127,000 | 372,361,000 | |||||||||||
| Europe and Asia | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 83,284,000 | 50,724,000 | 152,689,000 | 101,703,000 | |||||||||||
| Transportation fuels | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | [1] | 3,633,966,000 | 3,520,014,000 | 6,441,407,000 | 6,594,402,000 | ||||||||||
| Specialty lubricant products | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | [2] | 507,183,000 | 417,177,000 | 951,525,000 | 816,216,000 | ||||||||||
| Asphalt, fuel oil and other products (3) | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | [3] | 248,861,000 | 243,396,000 | 467,718,000 | 451,153,000 | ||||||||||
| Total refined product revenues | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 4,390,010,000 | 4,180,587,000 | 7,860,650,000 | 7,861,771,000 | |||||||||||
| Excess crude oil revenues | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | [4] | 350,683,000 | 256,090,000 | 733,313,000 | 652,806,000 | ||||||||||
| Transportation and logistic services | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 28,382,000 | 24,746,000 | 59,520,000 | 52,203,000 | |||||||||||
| Other revenues (5) | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | [5] | 13,540,000 | 9,813,000 | 26,379,000 | 32,883,000 | ||||||||||
| Refining | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 4,208,776,000 | 3,987,115,000 | 7,581,442,000 | 7,645,262,000 | |||||||||||
| Refining | Asphalt, fuel oil and other products (3) | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 210,700,000 | 192,884 | 380,600,000 | 354,840 | |||||||||||
| Lubricants and other specialty products | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | 545,346,000 | 459,405,000 | 1,038,680,000 | 902,271,000 | |||||||||||
| Lubricants and other specialty products | Asphalt, fuel oil and other products (3) | |||||||||||||||
| Disaggregation of Revenue [Line Items] | |||||||||||||||
| Sales and other revenues | $ 38,200,000 | $ 50,512 | $ 87,200,000 | $ 96,313 | |||||||||||
| |||||||||||||||
Revenues from Contracts with Customers - Contract Liabilities Rollforward (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2019 |
Feb. 01, 2019 |
Dec. 31, 2018 |
|
| Revenues from Customers Remaining Performance Obligations [Line Items] | |||
| Contract with Customer, Liability | $ 4,502 | $ 6,463 | $ 132 |
| Contract With Customer, Liability, Increase | 10,813 | ||
| Contract with Customer, Liability, Revenue Recognized | $ (12,906) |
Earnings Per Share (Schedule Of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Earnings Per Share [Abstract] | ||||
| Net income attributable to HollyFrontier stockholders | $ 196,915 | $ 345,507 | $ 449,970 | $ 613,598 |
| Participating securities’ (restricted stock) share in earnings | 283 | 1,196 | 647 | 2,147 |
| Net income (loss) attributable to common shares | $ 196,632 | $ 344,311 | $ 449,323 | $ 611,451 |
| Average number of shares of common stock outstanding | 169,356 | 175,899 | 170,100 | 176,256 |
| Effect of dilutive variable restricted shares and performance share units | 1,191 | 1,687 | 1,164 | 1,564 |
| Average number of shares of common stock outstanding assuming dilution | 170,547 | 177,586 | 171,264 | 177,820 |
| Basic earnings (loss) per share | $ 1.16 | $ 1.96 | $ 2.64 | $ 3.47 |
| Diluted earnings (loss) per share | $ 1.15 | $ 1.94 | $ 2.62 | $ 3.44 |
| Excludes anti-dilutive restricted and performance share units of: | 160 | 648 | 131 | 753 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventories | |||||||||||
| Crude Oil | $ 526,419 | $ 503,705 | |||||||||
| Other raw materials and unfinished products | [1] | 341,708 | 360,124 | ||||||||
| Finished products | [2] | 747,151 | 662,713 | ||||||||
| Lower of cost or market reserve | (175,593) | (360,138) | |||||||||
| Process chemicals | [3] | 35,852 | 31,413 | ||||||||
| Repair and maintenance supplies and other | [4] | 161,044 | 156,562 | ||||||||
| Inventories, total | $ 1,636,581 | $ 1,354,379 | |||||||||
| |||||||||||
Inventories (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Mar. 31, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
| Inventory Disclosure - Narrative [Abstract] | |||||||
| Inventory Valuation Reserves | $ 175,593 | $ 175,593 | $ 360,138 | ||||
| Lower of cost or market inventory valuation adjustment | $ 47,801 | $ (106,926) | $ (184,545) | $ (210,764) | |||
| Cost of Sales Reduction | $ 25,300 | $ 33,800 | $ 37,900 | ||||
Environmental (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
| Loss Contingencies [Line Items] | |||||
| Environmental remediation costs | $ 2.3 | $ 1.3 | $ 3.7 | $ 1.6 | |
| Accrued environmental liability | 110.4 | $ 110.4 | $ 110.2 | ||
| Estimated time frame to remediate contigency | P30Y | ||||
| Other Noncurrent Liabilities [Member] | |||||
| Loss Contingencies [Line Items] | |||||
| Accrued environmental liability | $ 92.8 | $ 92.8 | $ 93.8 | ||
Derivative Instruments And Hedging Activities (Narrative) (Details) $ in Millions |
6 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Derivative [Line Items] | |
| Net unrealized loss in accumulated other comprehensive income related to accounting hedges | $ (17.8) |
| Net unrealized loss to be transferred from accumulated other comprehensive income to statement of income | $ (15.7) |
Derivative Instruments And Hedging Activities Interest Rate Swaps (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Derivative [Line Items] | ||||
| Interest expense | $ 34,264 | $ 32,324 | $ 70,911 | $ 65,047 |
Equity (Changes To Equity) (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 508.9 | |
| Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 2,484 | 12,469 |
| Repurchase Agreements [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Stock Repurchase Program, Authorized Amount | $ 1,000.0 | |
Other Comprehensive Income (Loss) Other Comprehensive Income Balance Components (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Other Comprehensive Income (Loss), Tax [Abstract] | ||
| Foreign currency translation adjustment | $ (2,008) | $ (12,676) |
| Unrealized loss on pension obligation | (1,404) | (1,404) |
| Unrealized gain on post-retirement benefit obligations | 20,358 | 20,358 |
| Unrealized loss on hedging instruments | 13,256 | 7,345 |
| Accumulated other comprehensive income | $ 30,202 | $ 13,623 |
Post-retirement Plan (Narrative) (Details) |
3 Months Ended | 6 Months Ended |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
| Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Rate of Return on Plan Assets | 2.20% | 5.00% |
Post-retirement Plan (Net Periodic Pension Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Defined Benefit Plan, Service Cost | $ 1,198 | $ 1,106 | $ 2,397 | $ 2,235 |
| Interest cost on projected benefit obligations | 440 | 563 | 877 | 1,138 |
| Expected return on plan assets | (811) | (867) | (1,621) | (1,752) |
| Defined Benefit Plan, Amortization of Gain (Loss) | (830) | 0 | (1,660) | 0 |
| Net periodic pension expense | 1,657 | 802 | 3,313 | 1,621 |
| Other Postretirement Benefits Plan [Member] | ||||
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Defined Benefit Plan, Service Cost | 386 | 412 | 771 | 826 |
| Interest cost on projected benefit obligations | 266 | 234 | 531 | 471 |
| Amortization of prior service credit | (870) | (870) | (1,741) | (1,741) |
| Defined Benefit Plan, Amortization of Gain (Loss) | (22) | 0 | (44) | 0 |
| Net periodic post-retirement credit | $ (240) | $ (224) | $ (483) | $ (444) |
Contingencies Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
| Contingency claim [Abstract] | |||
| Receivables, Long-term Contracts or Programs | $ 8.0 | $ 8.0 | $ 26.0 |
| Business Combination, Change in Amount of Contingent Consideration, Liability | $ 20.0 | ||
| Business Interruption Insurance Recoveries | $ 56.0 |
Segment Information (Narrative) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
|
| Segment Reporting Information [Line Items] | |||||
| Results of Operations, Transportation Costs | $ 24,000 | $ 24,000 | |||
| Number of Reportable Segments | 3 | ||||
| Equity Method Investment, Ownership Percentage | 50.00% | 50.00% | |||
| Revenues | $ 4,782,615 | $ 4,471,236 | $ 8,679,862 | $ 8,599,663 | |
| UNEV Pipeline [Member] | |||||
| Segment Reporting Information [Line Items] | |||||
| Equity Method Investment, Ownership Percentage | 75.00% | 75.00% | |||