Leases

6 Months Ended

Jun. 30, 2019

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.

	June 30, 2019
	(In thousands)
Operating leases:
Operating lease right-of-use assets	$	449,745
Operating lease liabilities	93,991
Noncurrent operating lease liabilities	357,635
Total operating lease liabilities	$	451,626
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
Total finance lease liabilities	$	6,229

Supplemental balance sheet information related to our leases was as follows:

	June 30, 2019
Weighted average remaining lease term (in years)
Operating leases	7.9
Finance leases	8.6
Weighted average discount rate
Operating leases	4.3	%
Finance leases	5.1	%

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(In thousands)
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

Supplemental cash flow information related to leases was as follows:

	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	$	58,252
Operating cash flows from finance leases	$	171
Financing cash flows from finance leases	$	783

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:

	Operating		Finance
	(In thousands)
Remainder of 2019	$	61,224	$	1,066
2020	101,811		1,710
2021	79,523		910
2022	67,029		640
2023	61,768		635
2024 and thereafter	168,121		2,790
Future minimum lease payments	539,476		7,751
Less: imputed interest	87,850		1,522
Total lease obligations	451,626		6,229
Less: current obligations	93,991		1,649
Long-term lease obligations	$	357,635	$	4,580

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:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(In thousands)
Operating lease revenues	$	8,267	$	16,466

Annual minimum undiscounted lease payments in which HEP is a lessor to third-party contracts as of June 30, 2019 were as follows:

	(In thousands)
Remainder of 2019	$	16,123
2020	8,166
2021	1,546
2022	129
2023	—
Thereafter	—
Total	$	25,964

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.

	June 30, 2019
	(In thousands)
Operating leases:
Operating lease right-of-use assets	$	449,745
Operating lease liabilities	93,991
Noncurrent operating lease liabilities	357,635
Total operating lease liabilities	$	451,626
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
Total finance lease liabilities	$	6,229

Supplemental balance sheet information related to our leases was as follows:

	June 30, 2019
Weighted average remaining lease term (in years)
Operating leases	7.9
Finance leases	8.6
Weighted average discount rate
Operating leases	4.3	%
Finance leases	5.1	%

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(In thousands)
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

Supplemental cash flow information related to leases was as follows:

	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	$	58,252
Operating cash flows from finance leases	$	171
Financing cash flows from finance leases	$	783

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:

	Operating		Finance
	(In thousands)
Remainder of 2019	$	61,224	$	1,066
2020	101,811		1,710
2021	79,523		910
2022	67,029		640
2023	61,768		635
2024 and thereafter	168,121		2,790
Future minimum lease payments	539,476		7,751
Less: imputed interest	87,850		1,522
Total lease obligations	451,626		6,229
Less: current obligations	93,991		1,649
Long-term lease obligations	$	357,635	$	4,580

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:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(In thousands)
Operating lease revenues	$	8,267	$	16,466

Annual minimum undiscounted lease payments in which HEP is a lessor to third-party contracts as of June 30, 2019 were as follows:

	(In thousands)
Remainder of 2019	$	16,123
2020	8,166
2021	1,546
2022	129
2023	—
Thereafter	—
Total	$	25,964

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.

	June 30, 2019
	(In thousands)
Operating leases:
Operating lease right-of-use assets	$	449,745
Operating lease liabilities	93,991
Noncurrent operating lease liabilities	357,635
Total operating lease liabilities	$	451,626
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
Total finance lease liabilities	$	6,229

Supplemental balance sheet information related to our leases was as follows:

	June 30, 2019
Weighted average remaining lease term (in years)
Operating leases	7.9
Finance leases	8.6
Weighted average discount rate
Operating leases	4.3	%
Finance leases	5.1	%

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(In thousands)
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

Supplemental cash flow information related to leases was as follows:

	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	$	58,252
Operating cash flows from finance leases	$	171
Financing cash flows from finance leases	$	783

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:

	Operating		Finance
	(In thousands)
Remainder of 2019	$	61,224	$	1,066
2020	101,811		1,710
2021	79,523		910
2022	67,029		640
2023	61,768		635
2024 and thereafter	168,121		2,790
Future minimum lease payments	539,476		7,751
Less: imputed interest	87,850		1,522
Total lease obligations	451,626		6,229
Less: current obligations	93,991		1,649
Long-term lease obligations	$	357,635	$	4,580

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:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(In thousands)
Operating lease revenues	$	8,267	$	16,466

Annual minimum undiscounted lease payments in which HEP is a lessor to third-party contracts as of June 30, 2019 were as follows:

	(In thousands)
Remainder of 2019	$	16,123
2020	8,166
2021	1,546
2022	129
2023	—
Thereafter	—
Total	$	25,964