10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________________

FORM 10-Q

_________________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from    __________   to   ____________         

Commission File Number 1-3876

 _________________________________________________________________

HOLLYFRONTIER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	75-1056913
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2828 N. Harwood, Suite 1300
Dallas
Texas	75201
(Address of principal executive offices)	(Zip Code)

(214) 871-3555

(Registrant’s telephone number, including area code)

_________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

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
Common Stock $0.01 par value	HFC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

162,015,416 shares of Common Stock, par value $.01 per share, were outstanding on July 31, 2020.

HOLLYFRONTIER CORPORATION

INDEX

	Page
Forward-Looking Statements	3
Definitions	5
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 2020 (Unaudited) and December 31, 2019	6
Consolidated Statements of Income (Unaudited)
Three and Six Months Ended June 30, 2020 and 2019	7
Consolidated Statements of Comprehensive Income (Unaudited)
Three and Six Months Ended June 30, 2020 and 2019	8
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 2020 and 2019	9
Consolidated Statements of Equity (Unaudited)
Three and Six Months Ended June 30, 2020 and 2019	10
Notes to Consolidated Financial Statements (Unaudited)	12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3. Quantitative and Qualitative Disclosures About Market Risk	55
Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles	55
Item 4. Controls and Procedures	57
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	58
Item 1A. Risk Factors	60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 6. Exhibits	61
Index to Exhibits	62
Signatures	63

FORWARD-LOOKING 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 this document, 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. This document contains 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.

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the federal securities laws. All statements, other than statements of historical fact included in this Form 10-Q, including, but not limited to, those under “Results of Operations,” “Liquidity and Capital Resources” and “Risk Management” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and those in Part II, Item 1 “Legal Proceedings” are forward-looking statements. Forward-looking statements use words such as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “intend,” “should,” “would,” “could,” “believe,” “may,” and similar expressions and statements regarding our plans and objectives for future operations. These statements are based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties. All statements concerning our expectations for future results of operations are based on forecasts for our existing operations and do not include the potential impact of any future acquisitions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove to be correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in these statements. Any differences could be caused by a number of factors including, but not limited to:

• the extraordinary market environment and effects of the COVID-19 pandemic, including the continuation of a material decline in demand for refined petroleum products in markets we serve;

• risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products or lubricant and specialty products in our markets;

• the spread between market prices for refined products and market prices for crude oil;

• the possibility of constraints on the transportation of refined products or lubricant and specialty products;

• the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand;

• effects of governmental and environmental regulations and policies, including the effects of current restrictions on various commercial and economic activities in response to the COVID-19 pandemic;

• the availability and cost of our financing;

• the effectiveness of our capital investments and marketing strategies;

• our efficiency in carrying out and consummating construction projects, including our ability to complete announced capital projects, such as the conversion of the Cheyenne Refinery to a renewable diesel facility and the construction of the Artesia renewable diesel unit and pretreatment unit, on time and within budget;

• our ability to timely obtain or maintain permits, including those necessary for operations or capital 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 cyberattacks and the consequences of any such attacks;

• general economic conditions, including uncertainty regarding the timing, pace and extent of an economic recovery in the United States;

• further deterioration in gross margins or a prolonged economic slowdown due to the COVID-19 pandemic which could result in an impairment of goodwill and / or additional long-lived asset impairments; and

• other financial, operational and legal risks and uncertainties detailed from time to time in our SEC filings.

Cautionary statements identifying important factors that could cause actual results to differ materially from our expectations are set forth in this Form 10-Q, including without limitation the forward-looking statements that are referred to above. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth under the heading “Risk Factors” included in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2019 and in conjunction

3

with the discussion in this Form 10-Q in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Liquidity and Capital Resources” and Part II, Item 1A, “Risk Factors.” All forward-looking statements included in this Form 10-Q and all subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

4

DEFINITIONS

Within this report, the following terms have these specific meanings:

“BPD” means the number of barrels per calendar day of crude oil or petroleum products.

“BPSD” means the number of barrels per stream day (barrels of capacity in a 24 hour period) of crude oil or petroleum products.

“Base oil” is a lubricant grade oil initially produced from refining crude oil or through chemical synthesis that is used in producing lubricant products such as lubricating greases, motor oil and metal processing fluids.

“Black wax crude oil” is a low sulfur, low gravity crude oil produced in the Uintah Basin in Eastern Utah that has certain characteristics that require specific facilities to transport, store and refine into transportation fuels.

“Cracking” means the process of breaking down larger, heavier and more complex hydrocarbon molecules into simpler and lighter molecules.

“Crude oil distillation” means the process of distilling vapor from liquid crudes, usually by heating, and condensing the vapor slightly above atmospheric pressure turning it back to liquid in order to purify, fractionate or form the desired products.

“FCC,” or fluid catalytic cracking, means a refinery process that breaks down large complex hydrocarbon molecules into smaller more useful ones using a circulating bed of catalyst at relatively high temperatures.

“LPG” means liquid petroleum gases.

“Lubricant” or “lube” means a solvent neutral paraffinic product used in commercial heavy duty engine oils, passenger car oils and specialty products for industrial applications such as heat transfer, metalworking, rubber and other general process oil.

“MMBTU” means one million British thermal units.

“Rack back” represents the portion of our Lubricants and Specialty Products business operations that entails the processing of feedstocks into base oils.

“Rack forward” represents the portion of our Lubricants and Specialty Products business operations that entails the processing of base oils into finished lubricants and the packaging, distribution and sale to customers.

“Refinery gross margin” means the difference between average net sales price and average cost per barrel sold. This does not include the associated depreciation and amortization costs.

“RINs” means renewable identification numbers and refers to serial numbers assigned to credits generated from renewable fuel production under the Environmental Protection Agency’s Renewable Fuel Standard (“RFS”) regulations, which require blending renewable fuels into the nation’s fuel supply. In lieu of blending, refiners may purchase these transferable credits in order to comply with the regulations.

“Sour crude oil” means crude oil containing quantities of sulfur greater than 0.4 percent by weight, while “sweet crude oil” means crude oil containing quantities of sulfur equal to or less than 0.4 percent by weight.

“Vacuum distillation” means the process of distilling vapor from liquid crudes, usually by heating, and condensing the vapor below atmospheric pressure turning it back to a liquid in order to purify, fractionate or form the desired products.

“White oil” is an extremely pure, highly-refined petroleum product that has a wide variety of applications ranging from pharmaceutical to cosmetic products.

“WTI” means West Texas Intermediate and is a grade of crude oil used as a common benchmark in oil pricing. WTI is a sweet crude oil and has a relatively low density.

5

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HOLLYFRONTIER CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30, 2020			December 31, 2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (HEP: $18,913 and $13,287, respectively)	$	902,509		$	885,162
Accounts receivable: Product and transportation (HEP: $14,929 and $18,732, respectively)	540,818			834,771
Crude oil resales	52,567			44,914
	593,385			879,685
Inventories: Crude oil and refined products	977,851			1,282,789
Materials, supplies and other (HEP: $935 and $833, respectively)	195,850			191,413
	1,173,701			1,474,202
Income taxes receivable	77,729			5,478
Prepayments and other (HEP: $6,970 and $6,795, respectively)	56,210			61,662
Total current assets	2,803,534			3,306,189
Properties, plants and equipment, at cost (HEP: $2,053,174 and $2,047,674, respectively)	7,052,866			7,237,297
Less accumulated depreciation (HEP: $(584,651) and $(552,786), respectively)	(2,567,686		)	(2,414,585		)
	4,485,180			4,822,712
Operating lease right-of-use assets (HEP: $3,377 and $2,652, respectively)	390,497			467,109
Other assets: Turnaround costs	359,203			521,278
Goodwill (HEP: $312,873 and $312,873, respectively)	2,373,912			2,373,907
Intangibles and other (HEP: $350,056 and $319,569, respectively)	651,494			673,646
	3,384,609			3,568,831
Total assets	$	11,063,820		$	12,164,841
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable (HEP: $14,888 and $18,050, respectively)	$	870,695		$	1,215,555
Income taxes payable	18,759			27,965
Operating lease liabilities (HEP: $3,766 and $3,608, respectively)	102,336			104,415
Accrued liabilities (HEP: $30,886 and $30,418, respectively)	341,252			337,993
Total current liabilities	1,333,042			1,685,928
Long-term debt (HEP: $1,486,648 and $1,462,031, respectively)	2,480,746			2,455,640
Noncurrent operating lease liabilities (HEP: $70,167 and $72,000, respectively)	318,955			364,420
Deferred income taxes (HEP: $432 and $424, respectively)	765,572			889,270
Other long-term liabilities (HEP: $58,351 and $59,021, respectively)	250,994			260,157
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; 256,042,554 shares issued as of June 30, 2020 and December 31, 2019	2,560			2,560
Additional capital	4,215,894			4,204,547
Retained earnings	4,148,390			4,744,120
Accumulated other comprehensive income	2,225			14,774
Common stock held in treasury, at cost – 94,144,334 and 94,196,029 shares as of June 30, 2020 and December 31, 2019, respectively	(2,986,487		)	(2,987,808		)
Total HollyFrontier stockholders’ equity	5,382,582			5,978,193
Noncontrolling interest	531,929			531,233
Total equity	5,914,511			6,509,426
Total liabilities and equity	$	11,063,820		$	12,164,841

Parenthetical amounts represent asset and liability balances attributable to Holly Energy Partners, L.P. (“HEP”) as of June 30, 2020 and December 31, 2019. HEP is a variable interest entity.

See accompanying notes.

6

HOLLYFRONTIER CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Sales and other revenues	$	2,062,930		$	4,782,615		$	5,463,475		$	8,679,862
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)	1,576,996			3,704,884			4,270,722			6,904,089
Lower of cost or market inventory valuation adjustment	(269,904		)	47,801			290,560			(184,545		)
	1,307,092			3,752,685			4,561,282			6,719,544
Operating expenses (exclusive of depreciation and amortization)	303,359			333,252			631,704			664,844
Selling, general and administrative expenses (exclusive of depreciation and amortization)	75,369			85,317			163,106			173,351
Depreciation and amortization	130,178			126,908			270,753			248,329
Long-lived asset and goodwill impairments	436,908			152,712			436,908			152,712
Total operating costs and expenses	2,252,906			4,450,874			6,063,753			7,958,780
Income (loss) from operations	(189,976		)	331,741			(600,278		)	721,082
Other income (expense):
Earnings of equity method investments	2,156			1,783			3,870			3,883
Interest income	1,506			4,588			5,579			10,963
Interest expense	(32,695		)	(34,264		)	(55,334		)	(70,911		)
Gain on sales-type leases	33,834			—			33,834			—
Loss on early extinguishment of debt	—			—			(25,915		)	—
Gain (loss) on foreign currency transactions	2,285			2,213			(1,948		)	4,478
Other, net	1,572			92			3,422			649
	8,658			(25,588		)	(36,492		)	(50,938		)
Income (loss) before income taxes	(181,318		)	306,153			(636,770		)	670,144
Income tax expense (benefit):
Current	(65,607		)	63,364			(77,047		)	118,648
Deferred	34,696			25,972			(116,030		)	58,193
	(30,911		)	89,336			(193,077		)	176,841
Net income (loss)	(150,407		)	216,817			(443,693		)	493,303
Less net income attributable to noncontrolling interest	26,270			19,902			37,607			43,333
Net income (loss) attributable to HollyFrontier stockholders	$	(176,677	)	$	196,915		$	(481,300	)	$	449,970
Earnings (loss) per share attributable to HollyFrontier stockholders:
Basic	$	(1.09	)	$	1.16		$	(2.97	)	$	2.64
Diluted	$	(1.09	)	$	1.15		$	(2.97	)	$	2.62
Average number of common shares outstanding:
Basic	161,889			169,356			161,882			170,100
Diluted	161,889			170,547			161,882			171,264

See accompanying notes.

7

HOLLYFRONTIER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net income (loss)	$	(150,407	)	$	216,817		$	(443,693	)	$	493,303
Other comprehensive income (loss):
Foreign currency translation adjustment	11,710			9,160			(9,876		)	13,523
Hedging instruments:
Change in fair value of cash flow hedging instruments	1,513			(693		)	(5,235		)	14,897
Reclassification adjustments to net income (loss) on settlement of cash flow hedging instruments	5,401			(5,321		)	(1,175		)	(6,963		)
Net unrealized gain (loss) on hedging instruments	6,914			(6,014		)	(6,410		)	7,934
Pension and other post-retirement benefit obligations:
Actuarial gain (loss) on pension plans	—			72			(45		)	—
Actuarial gain on post-retirement healthcare plans	—			2			3			—
Net change in pension and other post-retirement benefit obligations	—			74			(42		)	—
Other comprehensive income (loss) before income taxes	18,624			3,220			(16,328		)	21,457
Income tax expense (benefit)	4,250			416			(3,779		)	4,878
Other comprehensive income (loss)	14,374			2,804			(12,549		)	16,579
Total comprehensive income (loss)	(136,033		)	219,621			(456,242		)	509,882
Less noncontrolling interest in comprehensive income	26,270			19,902			37,607			43,333
Comprehensive income (loss) attributable to HollyFrontier stockholders	$	(162,303	)	$	199,719		$	(493,849	)	$	466,549

See accompanying notes.

8

HOLLYFRONTIER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended June 30,
	2020			2019
Cash flows from operating activities:
Net income (loss)	$	(443,693	)	$	493,303
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	270,753			248,329
Long-lived asset and goodwill impairments	436,908			152,712
Lower of cost or market inventory valuation adjustment	290,560			(184,545		)
Earnings of equity method investments, inclusive of distributions	(1,298		)	—
Loss on early extinguishment of debt	25,915			—
Gain on sales-type leases	(33,834		)	—
(Gain) loss on sale of assets	(357		)	73
Deferred income taxes	(116,030		)	58,193
Equity-based compensation expense	14,289			21,562
Change in fair value – derivative instruments	(9,377		)	31,454
(Increase) decrease in current assets:
Accounts receivable	281,011			(72,300		)
Inventories	(764		)	(6,708		)
Income taxes receivable	(72,382		)	(26,835		)
Prepayments and other	9,704			14,020
Increase (decrease) in current liabilities:
Accounts payable	(314,892		)	292,893
Income taxes payable	(9,268		)	7,826
Accrued liabilities	3,340			38,003
Turnaround expenditures	(49,248		)	(110,273		)
Other, net	27,965			11,843
Net cash provided by operating activities	309,302			969,550
Cash flows from investing activities:
Additions to properties, plants and equipment	(98,996		)	(102,717		)
Additions to properties, plants and equipment – HEP	(30,740		)	(17,752		)
Purchase of Sonneborn, net of cash acquired	—			(662,665		)
Investment in equity company - HEP	(2,400		)	—
Other, net	470			825
Net cash used for investing activities	(131,666		)	(782,309		)
Cash flows from financing activities:
Borrowings under credit agreements	168,000			175,000
Repayments under credit agreements	(138,500		)	(156,500		)
Proceeds from issuance of senior notes - HEP	500,000			—
Redemption of senior notes - HEP	(522,500		)	—
Purchase of treasury stock	(1,243		)	(266,996		)
Dividends	(114,430		)	(113,508		)
Distributions to noncontrolling interests	(51,008		)	(66,703		)
Contributions from noncontrolling interests	13,263			—
Payments on finance leases	(843		)	(783		)
Deferred financing costs	(8,714		)	—
Other, net	456			(374		)
Net cash used for financing activities	(155,519		)	(429,864		)
Effect of exchange rate on cash flow	(4,770		)	2,515
Cash and cash equivalents:
Increase (decrease) for the period	17,347			(240,108		)
Beginning of period	885,162			1,154,752
End of period	$	902,509		$	914,644
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	(64,003	)	$	(67,620	)
Income taxes, net	$	(4,738	)	$	(138,587	)

See accompanying notes.

9

HOLLYFRONTIER CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands except per share data)

	HollyFrontier Stockholders' Equity
	Common Stock		Additional Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interest			Total Equity
Balance at December 31, 2019	$	2,560	$	4,204,547		$	4,744,120		$	14,774		$	(2,987,808	)	$	531,233		$	6,509,426
Net income (loss)	—		—			(304,623		)	—			—			11,337			(293,286		)
Dividends ($0.35 declared per common share)	—		—			(57,248		)	—			—			—			(57,248		)
Distributions to noncontrolling interest holders	—		—			—			—			—			(33,918		)	(33,918		)
Other comprehensive loss, net of tax	—		—			—			(26,923		)	—			—			(26,923		)
Issuance of common stock under incentive compensation plans, net of forfeitures	—		(2,037		)	—			—			2,037			—			—
Equity-based compensation	—		5,824			—			—			—			506			6,330
Purchase of treasury stock	—		—			—			—			(1,062		)	—			(1,062		)
Purchase of HEP units for restricted grants	—		—			—			—			—			(145		)	(145		)
Contributions from noncontrolling interests	—		—			—			—			—			7,304			7,304
Balance at March 31, 2020	$	2,560	$	4,208,334		$	4,382,249		$	(12,149	)	$	(2,986,833	)	$	516,317		$	6,110,478
Net income (loss)	—		—			(176,677		)	—			—			26,270			(150,407		)
Dividends ($0.35 declared per common share)	—		—			(57,182		)	—			—			—			(57,182		)
Distributions to noncontrolling interest holders	—		—			—			—			—			(17,090		)	(17,090		)
Other comprehensive income, net of tax	—		—			—			14,374			—			—			14,374
Issuance of common stock under incentive compensation plans, net of forfeitures	—		(527		)	—			—			527			—			—
Equity-based compensation	—		7,484			—			—			—			475			7,959
Purchase of treasury stock	—		—			—			—			(181		)	—			(181		)
Purchase of HEP units for restricted grants	—		—			—			—			—			(2		)	(2		)
Contributions from noncontrolling interests	—		—			—			—			—			5,959			5,959
Reclamation of stockholder short-swing profit	—		603			—			—			—			—			603
Balance at June 30, 2020	$	2,560	$	4,215,894		$	4,148,390		$	2,225		$	(2,986,487	)	$	531,929		$	5,914,511

10

	HollyFrontier Stockholders' Equity
	Common Stock		Additional Capital			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Non-controlling Interest			Total Equity
Balance at December 31, 2018	$	2,560	$	4,196,125		$	4,196,902		$	13,623	$	(2,490,639	)	$	540,488		$	6,459,059
Net income	—		—			253,055			—		—			23,431			276,486
Dividends ($0.33 declared per common share)	—		—			(56,849		)	—		—			—			(56,849		)
Distributions to noncontrolling interest holders	—		—			—			—		—			(33,673		)	(33,673		)
Other comprehensive income, net of tax	—		—			—			13,775		—			—			13,775
Issuance of common stock under incentive compensation plans, net of forfeitures	—		3			—			—		(3		)	—			—
Equity-based compensation	—		8,713			—			—		—			661			9,374
Purchase of treasury stock	—		—			—			—		(73,225		)	—			(73,225		)
Purchase of HEP units for restricted grants	—		—			—			—		—			(373		)	(373		)
Balance at March 31, 2019	$	2,560	$	4,204,841		$	4,393,108		$	27,398	$	(2,563,867	)	$	530,534		$	6,594,574
Net income	—		—			196,915			—		—			19,902			216,817
Dividends ($0.33 declared per common share)	—		—			(56,659		)	—		—			—			(56,659		)
Distributions to noncontrolling interest holders	—		—			—			—		—			(33,030		)	(33,030		)
Other comprehensive income, net of tax	—		—			—			2,804		—			—			2,804
Equity attributable to HEP common unit issuances, net of tax	—		—			—			—		—			(140		)	(140		)
Issuance of common stock under incentive compensation plans, net of forfeitures	—		(138		)	—			—		138			—			—
Equity-based compensation	—		11,602			—			—		—			586			12,188
Purchase of treasury stock	—		—			—			—		(205,555		)	—			(205,555		)
Balance at June 30, 2019	$	2,560	$	4,216,305		$	4,533,364		$	30,202	$	(2,769,284	)	$	517,852		$	6,530,999

See accompanying notes.

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HOLLYFRONTIER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1: 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, 2020, we:

• owned and operated a petroleum refinery in El Dorado, Kansas (the “El Dorado Refinery”), two refinery facilities located in Tulsa, Oklahoma (collectively, the “Tulsa Refineries”), a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”), a refinery located in Cheyenne, Wyoming (the “Cheyenne Refinery”) and a refinery in Woods Cross, Utah (the “Woods Cross 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 (as defined below) with manufacturing facilities in Petrolia, Pennsylvania and the Netherlands, which produce specialty lubricant products, such as white oils, petrolatums and waxes;

• owned and operated Red Giant Oil Company LLC (“Red Giant Oil”), which supplies locomotive engine oil and has 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 57% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP 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.

On June 1, 2020, we announced plans to permanently cease petroleum refining operations at our Cheyenne Refinery and to convert certain assets at our Cheyenne Refinery to renewable diesel production. We subsequently began winding down refining operations at our Cheyenne Refinery on August 3, 2020. This decision was primarily based on a positive outlook on the market for renewable diesel and the expectation that future free cash flow generation at our Cheyenne Refinery would be challenged due to lower gross margins resulting from the economic impact of the COVID-19 pandemic and compressed crude differentials due to dislocations in the crude oil market. Additional factors included uncompetitive operating and maintenance costs forecasted for our Cheyenne Refinery and the anticipated loss of the Environmental Protection Agency’s (“EPA”) small refinery exemption. Approximately 200 employees at our Cheyenne Refinery are expected to be impacted by this decision.

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During the second quarter of 2020, we recorded a long-lived asset impairment of $232.2 million and accelerated depreciation of $2.2 million related to our Cheyenne Refinery asset groups. We expect to record additional non-cash charges of $3.7 million for accelerated depreciation in the third quarter of 2020. Additionally, during the second quarter of 2020, we recorded $1.1 million in employee severance costs related to the conversion of our Cheyenne Refinery. Also, during the second quarter of 2020, we recorded a reserve of $6.2 million against our repair and maintenance supplies inventory. These severance costs and the inventory reserve charge were recognized in operating expenses and were reported in our Refining segment.

During the second quarter of 2020, we initiated and completed a corporate restructuring. As a result of this restructuring, we recorded $3.7 million in employee severance costs, which were recognized primarily as operating expenses in our Refining segment and selling, general and administrative expenses in our Corporate and Other segment.

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. Aggregate consideration totaled $701.6 million and consisted of $662.7 million in cash paid at acquisition, net of cash acquired. Sonneborn is a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes with manufacturing facilities in the United States and Europe.

This transaction was 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, 2019 acquisition date, with the excess purchase price recorded as goodwill assigned to our Lubricants and Specialty Products segment. This goodwill is not deductible for income tax purposes. Fair values are as follows: cash and cash equivalents $38.9 million, current assets $139.4 million, properties, plants and equipment $168.2 million, goodwill $282.3 million, intangibles and other noncurrent assets $231.5 million, current liabilities $47.9 million and deferred income tax and other long-term liabilities $110.8 million.

We incurred $0.6 million and $3.6 million for the three months ended June 30, 2020 and 2019, respectively, and $1.9 million and $16.2 million for the six months ended June 30, 2020 and 2019, respectively, in incremental direct integration and regulatory costs that principally relate to legal, advisory and other professional fees and are presented as selling, general and administrative expenses.

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, 2020, the consolidated results of operations, comprehensive income and statements of equity for the three and six months ended June 30, 2020 and 2019 and consolidated cash flows for the six months ended June 30, 2020 and 2019 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, 2019 that has been filed with the SEC.

Our results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results of operations to be realized for the year ending December 31, 2020.

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 expected credit losses from current economic conditions and management’s expectations of future economic conditions. Credit losses are charged to the allowance for doubtful accounts when an account is deemed uncollectible. Our allowance for doubtful accounts was $3.4 million at June 30, 2020 and $4.5 million at December 31, 2019.

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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. 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, 2020, 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, $327.6 million and $312.9 million, respectively. See Note 15 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 the reporting unit over the related fair value.

For purposes of long-lived asset impairment evaluation, we have grouped our long-lived assets as follows: (i) our refinery asset groups, which include certain HEP logistics assets, (ii) our Lubricants and Specialty Products asset groups and (iii) our HEP asset groups, which comprises HEP assets not included in our refinery asset groups. These asset groups represent the lowest level for which independent cash flows can be identified. 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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Indicators of goodwill and long-lived asset impairment

Due to the recent economic slowdown caused by the COVID-19 pandemic, we determined that indicators of potential goodwill impairment for our Refining and Lubricants and Specialty Products reporting units were present. In addition, we determined that these indicators were also evidence of potential long-lived asset impairments. These indicators included reductions in the prices of our finished goods and raw materials and the related decrease in our gross margins, as well as the recent decline in our common share price which has resulted in a decrease in our market capitalization. Additionally, our recent announcement of the conversion of our Cheyenne Refinery to renewable diesel production was also considered a triggering event requiring assessment of potential impairments to the carrying value of our Cheyenne Refinery asset group. During the second quarter of 2020, we performed interim goodwill and long-lived asset impairment testing as of May 31, 2020.

Long-lived asset impairment testing

As a result of our long-lived asset impairment testing, we determined that the carrying value of the long-lived assets of our Cheyenne Refinery and PCLI asset groups were not recoverable, and thus recorded long-lived asset impairment charges of $232.2 million and $204.7 million, respectively, in the second quarter of 2020. Our testing did not result in any other impairment of long-lived assets.

The estimated fair values of the Cheyenne Refinery and PCLI asset groups were determined using a combination of the income and cost approaches. The income approach was based on management’s best estimates of the expected future cash flows over the remaining useful life of the asset group. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and economic obsolescence. These fair value measurements involve significant unobservable inputs (Level 3 inputs). See Note 4 for further discussion of Level 3 inputs.

Goodwill impairment testing

The estimated fair values of our Refining and Lubricants and Specialty Products reporting units were derived using a combination of income and market approaches. The income approach reflects expected future cash flows based on estimated forecasted production levels, selling prices, gross margins, operating costs and capital expenditures. Our market approaches include 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 4 for further discussion of Level 3 inputs.

Our interim goodwill impairment testing indicated that the fair values of our Refining and Lubricants and Specialty Products reporting units were in excess of their respective carrying amounts ranging from 9% to 283%; therefore, there was no impairment of goodwill at our Refining and Lubricants and Specialty Products reporting units.

A reasonable expectation exists that further deterioration in our operating results or overall economic conditions could result in an impairment of goodwill and / or additional long-lived assets impairments at some point in the future. Future impairment charges could be material to our results of operations and financial condition. Our annual goodwill impairment testing is performed on July 1.

During the second quarter of 2019, we recorded a goodwill impairment charge of $152.7 million to fully impair the goodwill of the PCLI reporting unit included in our Lubricants and Specialty Products segment.

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.

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.

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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, 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 15 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.

For the six months ended June 30, 2020, we recorded an income tax benefit of $193.1 million compared to income tax expense of $176.8 million for the six months ended June 30, 2019. This decrease was due principally to a pre-tax loss during the six months ended June 30, 2020 compared to pre-tax earnings in the same period of 2019. Our effective tax rates were 30.3% and 26.4% for the six months ended June 30, 2020 and 2019, respectively. The year-over-year increase in the effective tax rate is due principally to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes.

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, 2020 and 2019, we received proceeds of $20.4 million and $12.6 million, respectively, and subsequently repaid $21.7 million and $12.9 million, respectively, under these sell / buy transactions.

Accounting Pronouncements - Recently Adopted

Income Tax Accounting

In December 2019, Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes,” was issued which eliminates some exceptions to the general approach in ASC Topic 740 “Income Taxes” and also provides clarification of other aspects of ASC 740. We adopted this standard effective January 1, 2020 on a prospective basis, and recognized an income tax benefit for the six months ended June 30, 2020 based upon the application of our estimated annual effective tax rate to our pre-tax loss.

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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. We adopted this standard effective January 1, 2020, at which time our review of historic and expected credit losses resulted in a decrease of $3.2 million in our reserve for doubtful accounts. Based upon our assessment of the potential impact of current and forecasted conditions, we increased our reserve for doubtful accounts by $2.1 million during the six months ended June 30, 2020. Assumptions about the potential effects of the COVID-19 pandemic on our estimate of expected credit losses are inherently subjective and difficult to forecast. However, we believe that our current estimate of allowance for doubtful accounts to be reasonable based upon current information and forecasts.

NOTE 2: 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, as well as other third-party refineries, in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. Additionally, as of June 30, 2020, HEP owned 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”); Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”) and Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), the owner of a crude oil storage terminal in Cushing, Oklahoma and a to-be-constructed pipeline that will run from Cushing, Oklahoma to our Tulsa Refineries.

At June 30, 2020, 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 by 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 81% of HEP’s total revenues for the six months ended June 30, 2020. 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 9 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.

Cushing Connect Joint Venture

In October 2019, HEP Cushing LLC (“HEP Cushing”), a wholly-owned subsidiary of HEP, and Plains Marketing, L.P. (“PMLP”), a wholly-owned subsidiary of Plains All American Pipeline, L.P. (“Plains”), formed a 50/50 joint venture, Cushing Connect, for (i) the development and construction of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that will connect the Cushing, Oklahoma crude oil hub to our Tulsa Refineries and (ii) the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma (the “Cushing Connect Terminal”). The Cushing Connect Terminal was fully in service beginning in April 2020, and the Cushing Connect Pipeline is expected to be placed in service during the first quarter of 2021. Long-term commercial agreements have been entered into to support the Cushing Connect assets.

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Cushing Connect will contract with an affiliate of HEP to manage the construction and operation of the Cushing Connect Pipeline and with an affiliate of Plains to manage the operation of the Cushing Connect Terminal. The total investment in Cushing Connect will be shared proportionately among the partners, and HEP estimates its share of the cost of the Cushing Connect Terminal contributed by Plains and Cushing Connect Pipeline construction costs are approximately $65.0 million.

Cushing Connect and its two subsidiaries, Cushing Connect Pipeline and Cushing Connect Terminal, are each VIE’s because they do not have sufficient equity at risk to finance their activities without additional financial support. HEP is the primary beneficiary of two of these entities as HEP is constructing and will operate the Cushing Connect Pipeline, and HEP has more ability to direct the activities that most significantly impact the financial performance of Cushing Connect and Cushing Connect Pipeline. Therefore, HEP consolidates these two entities. HEP is not the primary beneficiary of Cushing Connect Terminal, which HEP accounts for using the equity method of accounting.

Transportation Agreements

HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2021 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, 2020, these agreements result in minimum annualized payments to HEP of $351.1 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.

Lessor Accounting

Our consolidated statements of income reflect lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor.

One of HEP’s throughput agreements with Delek US Holdings, Inc. (“Delek”) was renewed during the three months ended June 30, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, HEP recognized a gain on sales-type leases totaling $33.8 million, during the three months ended June 30, 2020. This sales-type lease transaction, including the related gain, was a non-cash transaction.

Lease income recognized was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Operating lease revenues	$	5,442	$	8,267	$	13,732	$	16,466
Gain on sales-type leases	$	33,834	$	—	$	33,834	$	—
Sales-type lease interest income	$	642	$	—	$	642	$	—
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable	$	286	$	—	$	286	$	—

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, 2020, HEP did not issue any common units under this program. As of June 30, 2020, HEP has issued 2,413,153 common units under this program, providing $82.3 million in gross proceeds.

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NOTE 3: 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:    

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	1,385,246	$	3,633,966	$	3,863,593	$	6,441,407
Specialty lubricant products (2)	340,284		507,183		811,237		951,525
Asphalt, fuel oil and other products (3)	145,298		248,861		346,641		467,718
Total refined product revenues	1,870,828		4,390,010		5,021,471		7,860,650
Excess crude oil revenues (4)	163,394		350,683		363,173		733,313
Transportation and logistic services	19,244		28,382		45,670		59,520
Other revenues (5)	9,464		13,540		33,161		26,379
Total sales and other revenues	$	2,062,930	$	4,782,615	$	5,463,475	$	8,679,862

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Refined product revenues by market
United States
Mid-Continent	$	867,660	$	2,361,969	$	2,400,584	$	4,092,474
Southwest	436,073		1,008,806		1,170,248		1,858,955
Rocky Mountains	274,973		613,063		743,752		1,128,398
Northeast	110,909		148,116		270,733		276,007
Canada	120,870		174,772		303,523		352,127
Europe, Asia and Latin America	60,343		83,284		132,631		152,689
Total refined product revenues	$	1,870,828	$	4,390,010	$	5,021,471	$	7,860,650

(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 $131.9 million and $13.4 million, respectively, for the three months ended June 30, 2020, $280.7 million and $65.9 million, respectively for the six months ended June 30, 2020, $210.7 million and $38.2 million, respectively, for the three months ended June 30, 2019, and $380.6 million and $87.2 million, respectively, for the six months ended June 30, 2019.

(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.

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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, 2020 and 2019.

	Six Months Ended June 30,
	2020			2019
	(In thousands)
Balance at January 1	$	4,652		$	132
Sonneborn acquisition	—			6,463
Increase	16,115			10,813
Recognized as revenue	(14,980		)	(12,906		)
Balance at June 30	$	5,787		$	4,502

As of June 30, 2020, 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 2024. 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:

	Remainder of 2020	2021	2022	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	10,398	15,958	12,799	24,465	63,620

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 revenues through 2025. Annual minimum revenues attributable to HEP’s third-party contracts as of June 30, 2020 are presented below:

	Remainder of 2020		2021		2022		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	13,164	$	21,942	$	10,954	$	20,293	$	66,353

NOTE 4: 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:

• (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.

20

The carrying amounts of derivative instruments and RINs credit obligations at June 30, 2020 and December 31, 2019 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
June 30, 2020
Assets:
Commodity price swaps	$	3,561	$	—	$	3,561	$	—
Commodity forward contracts	4,219		—		4,219		—
Foreign currency forward contracts	7,361		—		7,361		—
Total assets	$	15,141	$	—	$	15,141	$	—
Liabilities:
NYMEX futures contracts	$	6,987	$	6,987	$	—	$	—
Commodity price swaps	395		—		395		—
Commodity forward contracts	6,156		—		6,156		—
RINs credit obligations (1)	5,349		—		5,349		—
Total liabilities	$	18,887	$	6,987	$	11,900	$	—

				Fair Value by Input Level
		Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
December 31, 2019
Assets:
Commodity price swaps		$	13,455	$	—	$	13,455	$	—
Commodity forward contracts		4,133		—		4,133		$	—
Total assets		$	17,588	$	—	$	17,588	$	—
Liabilities:
NYMEX futures contracts		$	2,578	$	2,578	$	—	$	—
Commodity price swaps		1,230		—		1,230		—
Commodity forward contracts		3,685		—		3,685		—
Foreign currency forward contracts		6,722		—		6,722		—
Total liabilities		$	14,215	$	2,578	$	11,637	$	—

(1) Represent obligations for RINs credits for which we did not have sufficient quantities at June 30, 2020 to satisfy our EPA regulatory blending requirements.

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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Nonrecurring Fair Value Measurements

During the three months ended June 30, 2020, we recognized long-lived asset impairment charges based on fair value measurements utilized during our goodwill and long-lived asset impairment testing (see Note 1). The fair value measurements were based on a combination of valuation methods including discounted cash flows, the guideline public company and guideline transaction methods and obsolescence adjusted replacement costs, all of which are Level 3 inputs.

During the three months ended June 30, 2020, HEP recognized a gain on sales-type leases (see Note 2). The estimated fair value of the underlying leased assets at contract inception and the present value of the estimated unguaranteed residual asset at the end of the lease term were used in determining the net investment in leases and related recognized gain on sales-type leases. The asset valuation estimates included Level 3 inputs based on a replacement cost valuation method.

NOTE 5: Earnings Per Share

Basic earnings per share is calculated as net income (loss) 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 stock units and performance share units. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income (loss) attributable to HollyFrontier stockholders:

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
	(In thousands, except per share data)
Net income (loss) attributable to HollyFrontier stockholders	$	(176,677	)	$	196,915	$	(481,300	)	$	449,970
Participating securities’ (restricted stock) share in earnings	—			283		—			647
Net income (loss) attributable to common shares	$	(176,677	)	$	196,632	$	(481,300	)	$	449,323
Average number of shares of common stock outstanding	161,889			169,356		161,882			170,100
Effect of dilutive variable restricted stock units and performance share units (1)	—			1,191		—			1,164
Average number of shares of common stock outstanding assuming dilution	161,889			170,547		161,882			171,264
Basic earnings (loss) per share	$	(1.09	)	$	1.16	$	(2.97	)	$	2.64
Diluted earnings (loss) per share	$	(1.09	)	$	1.15	$	(2.97	)	$	2.62
(1) Excludes anti-dilutive restricted and performance share units of:	590			160		585			131

NOTE 6: Stock-Based Compensation

We have a principal share-based compensation plan (the “2020 Long-Term Incentive Plan”), which allows us to grant new equity awards until February 12, 2030. We also have a long-term incentive compensation plan which expires pursuant to its terms on December 31, 2020 and will continue to govern outstanding equity awards granted thereunder; however, as of February 12, 2020, no new awards are being granted under this plan. The compensation cost charged against income for these plans was $8.1 million and $11.9 million for the three months ended June 30, 2020 and 2019, respectively, and $12.9 million and $20.8 million for the six months ended June 30, 2020 and 2019, 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 $0.5 million and $0.6 million for the three months ended June 30, 2020 and 2019, respectively, and $1.0 million and $1.2 million for the six months ended June 30, 2020 and 2019, respectively.

Restricted Stock Units

Under our long-term incentive plan, we grant certain officers and other key employees restricted stock unit awards, which are payable in stock or cash and generally vest 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. Upon vesting, restrictions on the 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 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.

22

A summary of restricted stock unit activity during the six months ended June 30, 2020 is presented below:

Restricted Stock Units	Grants		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2020	1,101,781		$	53.30
Granted	62,776		35.58
Vested	(79,956	)	44.30
Forfeited	(59,494	)	53.41
Converted from performance share units	19,450		38.13
Outstanding at June 30, 2020	1,044,557		52.48		$	30,501

For the six months ended June 30, 2020, restricted stock units vested having a grant date fair value of $3.5 million. As of June 30, 2020, there was $23.2 million of total unrecognized compensation cost related to non-vested restricted stock unit grants. That cost is expected to be recognized over a weighted-average period of 1.2 years.

Performance Share Units

Under our long-term incentive 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 or cash paid under these awards can range from zero to 200% of target award amounts. Holders of performance share units have the right to receive dividend equivalents and other distributions with respect to such performance share units based on the target level of payout.

A summary of performance share unit activity and changes during the six months ended June 30, 2020 is presented below:

Performance Share Units	Grants
Outstanding at January 1, 2020	375,588
Vested	(12,129	)
Forfeited	(18,766	)
Converted to restricted stock units	(19,450	)
Outstanding at June 30, 2020	325,243

For the six months June 30, 2020, we issued 7,889 shares of common stock, representing a 100% payout on vested performance share units having a grant date fair value of $0.5 million. As of June 30, 2020, there was $8.3 million of total unrecognized compensation cost related to non-vested performance share units having a grant date fair value of $58.07 per unit. That cost is expected to be recognized over a weighted-average period of 1.6 years.

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NOTE 7: Inventories

Inventories consist of the following components:

	June 30, 2020			December 31, 2019
	(In thousands)
Crude oil	$	537,863		$	489,169
Other raw materials and unfinished products(1)	301,956			394,045
Finished products(2)	668,955			639,938
Lower of cost or market reserve	(530,923		)	(240,363		)
Process chemicals(3)	33,677			36,786
Repair and maintenance supplies and other (4)	162,173			154,627
Total inventory	$	1,173,701		$	1,474,202

(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.

Our inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $530.9 million and $240.4 million at June 30, 2020 and December 31, 2019, respectively. The December 31, 2019 market reserve of $240.4 million was reversed due to the sale of inventory quantities that gave rise to the 2019 reserve. A new market reserve of $530.9 million was established as of June 30, 2020 based on market conditions and prices at that time. The effect of the change in lower of cost or market reserve was a decrease to cost of products sold totaling $269.9 million for the three months ended June 30, 2020 and an increase to cost of products sold totaling $47.8 million for the three months ended June 30, 2019, respectively, and an increase to cost of products sold totaling $290.6 million for the six months ended June 30, 2020 and a decrease to cost of products sold totaling $184.5 million for the six months ended June 30, 2019, respectively.

At June 30, 2020, the LIFO value of inventory, net of the lower of cost or market reserve, was equal to current costs.

In connection with our announcement of the conversion of our Cheyenne Refinery to renewable diesel production, we recorded a reserve of $6.2 million against our repair and maintenance supplies inventory. This charge was recorded in operating expenses in the second quarter of 2020.

NOTE 8: 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 $0.4 million and $2.3 million for the three months ended June 30, 2020 and 2019, respectively, and $2.0 million and $3.7 million for the six months ended June 30, 2020 and 2019, respectively, for environmental remediation obligations. The accrued environmental liability reflected in our consolidated balance sheets was $115.6 million and $117.7 million at June 30, 2020 and December 31, 2019, respectively, of which $94.1 million and $95.6 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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NOTE 9: 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, 2020, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $4.9 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, 2020, HEP received advances totaling $168.0 million and repaid $138.5 million under the HEP Credit Agreement. At June 30, 2020, HEP was in compliance with all of its covenants, had outstanding borrowings of $995.0 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 term of each lease, and the lease payments are recorded as interest expense. The leases mature on February 1, 2021. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity. These financing arrangements are recorded at a Level 2 fair value totaling $35.0 million and $40.0 million at June 30, 2020 and December 31, 2019, respectively, and are included in “Accrued liabilities” in our consolidated balance sheets. See Note 4 for additional information on Level 2 inputs.

HEP Senior Notes

On February 4, 2020, HEP closed a private placement of $500 million in aggregate principal amount of 5.0% HEP senior unsecured notes maturing February 2028 (the “HEP Senior Notes”). On February 5, 2020, HEP redeemed its existing $500 million aggregate principal amount of 6.0% senior notes maturing August 2024 at a redemption cost of $522.5 million. HEP recognized a $25.9 million early extinguishment loss consisting of a $22.5 million debt redemption premium and unamortized discount and financing costs of $3.4 million. HEP funded the $522.5 million redemption with proceeds from the issuance of its 5.0% senior notes and borrowings under the HEP Credit Agreement.

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. HEP was in compliance with the restrictive covenants for the HEP Senior Notes as of June 30, 2020. At any time when the HEP Senior Notes are rated investment grade by either Moody’s or 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 at varying premiums over face value 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.

25

The carrying amounts of long-term debt are as follows:

	June 30, 2020			December 31, 2019
	(In thousands)
HollyFrontier 5.875% Senior Notes
Principal	$	1,000,000		$	1,000,000
Unamortized discount and debt issuance costs	(5,902		)	(6,391		)
	994,098			993,609
HEP Credit Agreement	995,000			965,500
HEP 5.0% Senior Notes
Principal	500,000			—
Unamortized discount and debt issuance costs	(8,352		)	—
	491,648			—
HEP 6.0% Senior Notes
Principal	—			500,000
Unamortized discount and debt issuance costs	—			(3,469		)
	—			496,531
Total HEP long-term debt	1,486,648			1,462,031
Total long-term debt	$	2,480,746		$	2,455,640

The fair values of the senior notes are as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
HollyFrontier senior notes	$	1,105,120	$	1,127,610
HEP senior notes	$	477,835	$	522,045

These fair values are based on a Level 2 input. See Note 4 for additional information on Level 2 inputs.

We capitalized interest attributable to construction projects of $0.8 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively.

NOTE 10: 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.

26

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 hedging instruments under hedge accounting:

	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,
	2020		2019				2020			2019
	(In thousands)
Commodity contracts	$	6,914	$	(6,014	)	Sales and other revenues	$	(5,403	)	$	—
						Cost of products sold	459			5,674
						Operating expenses	(457		)	(353		)
Total	$	6,914	$	(6,014	)		$	(5,401	)	$	5,321

	Net 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,
	2020			2019			2020			2019
	(In thousands)
Commodity contracts	$	(6,410	)	$	7,934	Sales and other revenues	$	49		$	(1,799	)
						Cost of products sold	2,289			9,295
						Operating expenses	(1,163		)	(533		)
Total	$	(6,410	)	$	7,934		$	1,175		$	6,963

Economic Hedges

We have commodity contracts including contracts to lock in basis spread differentials on forecasted purchases of crude oil, NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory and forward purchase and sell contracts 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 9 could require repayment under certain conditions based on the future pricing 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:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended June 30,						Six Months Ended June 30,
		2020			2019			2020		2019
		(In thousands)
Commodity contracts	Cost of products sold	$	(7,180	)	$	338		$	17,909	$	(7,079	)
	Interest expense	(5,100		)	741			4,712		(1,275		)
Foreign currency contracts	Gain (loss) on foreign currency transactions	(14,315		)	(7,090		)	19,160		(14,696		)
	Total	$	(26,595	)	$	(6,011	)	$	41,781	$	(23,050	)

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As of June 30, 2020, we have the following notional contract volumes related to outstanding derivative instruments:

		Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional	2020	2021	Unit of Measure
Derivatives Designated as Hedging Instruments
Natural gas price swaps - long	2,700,000	900,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	2,392,000	2,392,000	—	Barrels
Forward diesel contracts - short	200,000	200,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	890,000	890,000	—	Barrels
Crude oil price swaps (basis spread) - long	736,000	736,000	—	Barrels
Forward gasoline and diesel contracts - long	464,000	464,000	—	Barrels
Foreign currency forward contracts	422,074,120	214,491,576	207,582,544	U.S. dollar
Forward commodity contracts (platinum)	40,867	—	40,867	Troy ounces

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position							Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet			Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
June 30, 2020
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	1,800	$	(1,194	)	$	606	$	395	$	—	$	395
Commodity forward contracts	—		—			—		2,134		—		2,134
	$	1,800	$	(1,194	)	$	606	$	2,529	$	—	$	2,529
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—		$	—	$	6,987	$	—	$	6,987
Commodity price swap contracts	2,955		—			2,955		—		—		—
Commodity forward contracts	4,219		—			4,219		4,022		—		4,022
Foreign currency forward contracts	9,765		(2,404		)	7,361		—		—		—
	$	16,939	$	(2,404	)	$	14,535	$	11,009	$	—	$	11,009
Total net balance						$	15,141					$	13,538
Balance sheet classification:	Prepayment and other					$	15,141	Accrued liabilities				$	13,143
								Other long-term liabilities				395
						$	15,141					$	13,538

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	Derivatives in Net Asset Position							Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet			Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2019
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	7,526	$	(1,784	)	$	5,742	$	1,230	$	—	$	1,230
	$	7,526	$	(1,784	)	$	5,742	$	1,230	$	—	$	1,230
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—		$	—	$	2,578	$	—	$	2,578
Commodity price swap contracts	7,713		—			7,713		—		—		—
Commodity forward contracts	4,133		—			4,133		3,685		—		3,685
Foreign currency forward contracts	—		—			—		6,722		—		6,722
	$	11,846	$	—		$	11,846	$	12,985	$	—	$	12,985
Total net balance						$	17,588					$	14,215
Balance sheet classification:	Prepayment and other					$	17,588	Accrued liabilities				$	12,985
								Other long-term liabilities				1,230
						$	17,588					$	14,215

At June 30, 2020, we had a pre-tax net unrealized loss of $1.9 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 loss of $1.5 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.

NOTE 11: Equity

In November 2019, our Board of Directors approved a $1.0 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, 2020, we had not repurchased common stock 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, 2020 and 2019, we withheld 29,587 and 2,484, respectively, shares of our common stock from certain employees. These withholdings were made under the terms of restricted stock unit and performance share unit agreements upon vesting, at which time, we concurrently made cash payments to fund payroll and income taxes on behalf of officers and employees who elected to have shares withheld from vested amounts to pay such taxes.

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NOTE 12: Other Comprehensive Income

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax			Tax Expense (Benefit)			After-Tax
	(In thousands)
Three Months Ended June 30, 2020
Net change in foreign currency translation adjustment	$	11,710		$	2,488		$	9,222
Net unrealized gain on hedging instruments	6,914			1,762			5,152
Other comprehensive income attributable to HollyFrontier stockholders	$	18,624		$	4,250		$	14,374
Three Months Ended June 30, 2019
Net change in foreign currency translation adjustment	$	9,160		$	1,950		$	7,210
Net unrealized loss on hedging instruments	(6,014		)	(1,534		)	(4,480		)
Net change in pension and other post-retirement benefit obligations	74			—			74
Other comprehensive income attributable to HollyFrontier stockholders	$	3,220		$	416		$	2,804
Six Months Ended June 30, 2020
Net change in foreign currency translation adjustment	$	(9,876	)	$	(2,139	)	$	(7,737	)
Net unrealized loss on hedging instruments	(6,410		)	(1,636		)	(4,774		)
Net change in pension and other post-retirement benefit obligations	(42		)	(4		)	(38		)
Other comprehensive loss attributable to HollyFrontier stockholders	$	(16,328	)	$	(3,779	)	$	(12,549	)
Six Months Ended June 30, 2019
Net change in foreign currency translation adjustment	$	13,523		$	2,855		$	10,668
Net unrealized gain on hedging instruments	7,934			2,023			5,911
Other comprehensive income attributable to HollyFrontier stockholders	$	21,457		$	4,878		$	16,579

The following table presents the income statement line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI						Income Statement Line Item
	Three Months Ended June 30,
	2020			2019
	(In thousands)
Hedging instruments:
Commodity price swaps	$	(5,403	)	$	—		Sales and other revenues
	459			5,674			Cost of products sold
	(457		)	(353		)	Operating expenses
	(5,401		)	5,321
	(1,377		)	1,357			Income tax expense (benefit)
Total reclassifications for the period	$	(4,024	)	$	3,964		Net of tax
	Six Months Ended June 30,
	2020			2019
Hedging instruments:
Commodity price swaps	$	49		$	(1,799	)	Sales and other revenues
	2,289			9,295			Cost of products sold
	(1,163		)	(533		)	Operating expenses
	1,175			6,963
	300			1,776			Income tax expense
Total reclassifications for the period	$	875		$	5,187		Net of tax

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Accumulated other comprehensive income (loss) in the equity section of our consolidated balance sheets includes:

	June 30, 2020			December 31, 2019
	(In thousands)
Foreign currency translation adjustment	$	(9,924	)	$	(2,187	)
Unrealized loss on pension obligation	(1,798		)	(1,733		)
Unrealized gain on post-retirement benefit obligations	15,360			15,333
Unrealized gain (loss) on hedging instruments	(1,413		)	3,361
Accumulated other comprehensive income	$	2,225		$	14,774

NOTE 13: Post-retirement Plans

PCLI has union and non-union pension plans which are closed to new entrants. In addition, Sonneborn employees in the Netherlands have a defined benefit pension plan which was frozen and all plan participants became inactive in 2016. Our net periodic pension expense consisted of the following components:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Service cost - benefit earned during the period	$	1,072		$	1,198		$	2,200		$	2,397
Interest cost on projected benefit obligations	413			440			856			877
Expected return on plan assets	(976		)	(811		)	(2,009		)	(1,621		)
Amortization of loss	—			830			—			1,660
Net periodic pension expense	$	509		$	1,657		$	1,047		$	3,313

The expected long-term annual rates of return on plan assets are 5.75% and 1.50% for the PCLI and Sonneborn plans, respectively. These rates were used in measuring 2020 net periodic benefit costs.

We have post-retirement healthcare and other benefits that are available to certain of our employees who satisfy certain age and service requirements. The net periodic benefit credit of our post-retirement healthcare and other benefits plans consisted of the following components

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Service cost – benefit earned during the period	$	446		$	386		$	899		$	771
Interest cost on projected benefit obligations	233			266			471			531
Amortization of prior service credit	(870		)	(870		)	(1,741		)	(1,741		)
Amortization of (gain) loss	12			(22		)	25			(44		)
Net periodic post-retirement credit	$	(179	)	$	(240	)	$	(346	)	$	(483	)

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.

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NOTE 14: 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 materially adverse effect on our financial condition, results of operations or cash flows.

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, 2020, 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.

During 2017, 2018 and 2019, the EPA granted the Cheyenne Refinery and Woods Cross Refinery each a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2016, 2017 and 2018, respectively, calendar years. As a result, the Cheyenne Refinery’s and Woods Cross Refinery’s gasoline and diesel production are not subject to the Renewable Volume Obligation for the respective years. Upon each exemption granted, we increased our inventory of RINs and reduced our cost of products sold.

In 2019, various subsidiaries of HollyFrontier moved to intervene in four lawsuits brought by renewable fuel interest groups against the EPA in federal courts alleging violations of the RFS under the Clean Air Act and challenging the EPA’s handling of small refinery exemptions. We intervened to vigorously defend the EPA’s position on small refinery exemptions because we believe the EPA correctly applied applicable law to the matters at issue. The U.S. Court of Appeals for the DC Circuit dismissed one of these four lawsuits on November 12, 2019 for lack of jurisdiction. On January 24, 2020, the U.S. Court of Appeals for the Tenth Circuit vacated the small refinery exemptions granted to two of our refineries for 2016 and remanded the case to the EPA for further proceedings. On March 24, 2020, various subsidiaries of HollyFrontier filed a Petition for Rehearing with the U.S. Court of Appeals for the Tenth Circuit. On April 7, 2020, the Tenth Circuit denied our request to reconsider its decision, and on April 15, 2020, the Tenth Circuit entered its mandate, remanding the matter back to the EPA. It is not clear at this time what steps the EPA will take with respect to our 2016 small refinery exemptions, and we are unable to estimate the costs we may incur, if any, at this time. It is also not clear how the case will impact future small refinery exemptions. It is too early to assess whether the remaining two cases are expected to have any impact on us.

NOTE 15: 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 the 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 and Red Giant Oil, one of the largest suppliers of locomotive engine oil in North America. Also, effective with our acquisition that closed February 1, 2019, the Lubricants and Specialty Products segment includes Sonneborn, a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes with manufacturing facilities in the United States and Europe.

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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 refinery processing units in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. As of June 30, 2020, 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, the Cheyenne Pipeline and Cushing Connect. 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, 2019.

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Three Months Ended June 30, 2020
Sales and other revenues:
Revenues from external customers	$	1,690,042		$	353,644		$	19,244	$	—		$	2,062,930
Intersegment revenues	37,462			3,643			95,563		(136,668		)	—
	$	1,727,504		$	357,287		$	114,807	$	(136,668	)	$	2,062,930
Cost of products sold (exclusive of lower of cost or market inventory)	$	1,433,437		$	258,347		$	—	$	(114,788	)	$	1,576,996
Lower of cost or market inventory valuation adjustment	$	(269,904	)	$	—		$	—	$	—		$	(269,904	)
Operating expenses	$	239,359		$	47,840		$	34,737	$	(18,577	)	$	303,359
Selling, general and administrative expenses	$	32,811		$	35,919		$	2,535	$	4,104		$	75,369
Depreciation and amortization	$	81,694		$	19,779		$	24,008	$	4,697		$	130,178
Long-lived asset impairment (1)	$	215,242		$	204,708		$	16,958	$	—		$	436,908
Income (loss) from operations	$	(5,135	)	$	(209,306	)	$	36,569	$	(12,104	)	$	(189,976	)
Earnings of equity method investments	$	—		$	—		$	2,156	$	—		$	2,156
Capital expenditures	$	12,102		$	4,311		$	11,798	$	17,776		$	45,987
Three Months Ended June 30, 2019
Sales and other revenues:
Revenues from external customers	$	4,208,776		$	545,346		$	28,382	$	111		$	4,782,615
Intersegment revenues	88,484			—			102,369		(190,853		)	—
	$	4,297,260		$	545,346		$	130,751	$	(190,742	)	$	4,782,615
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,458,832		$	415,353		$	—	$	(169,301	)	$	3,704,884
Lower of cost or market inventory valuation adjustment	$	47,801		$	—		$	—	$	—		$	47,801
Operating expenses	$	252,715		$	59,122		$	40,608	$	(19,193	)	$	333,252
Selling, general and administrative expenses	$	29,638		$	42,087		$	1,988	$	11,604		$	85,317
Depreciation and amortization	$	76,225		$	23,020		$	24,241	$	3,422		$	126,908
Goodwill impairment	$	—		$	152,712		$	—	$	—		$	152,712
Income (loss) from operations	$	432,049		$	(146,948	)	$	63,914	$	(17,274	)	$	331,741
Earnings of equity method investments	$	—		$	—		$	1,783	$	—		$	1,783
Capital expenditures	$	33,899		$	9,331		$	7,034	$	6,470		$	56,734

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	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Six Months Ended June 30, 2020
Sales and other revenues:
Revenues from external customers	$	4,540,662		$	877,143		$	45,670	$	—		$	5,463,475
Intersegment revenues	121,708			6,747			196,991		(325,446		)	—
	$	4,662,370		$	883,890		$	242,661	$	(325,446	)	$	5,463,475
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,902,188		$	649,727		$	—	$	(281,193	)	$	4,270,722
Lower of cost or market inventory valuation adjustment	$	290,560		$	—		$	—	$	—		$	290,560
Operating expenses	$	498,533		$	101,971		$	69,718	$	(38,518	)	$	631,704
Selling, general and administrative expenses	$	63,811		$	84,881		$	5,237	$	9,177		$	163,106
Depreciation and amortization	$	171,873		$	41,828		$	47,986	$	9,066		$	270,753
Long-lived asset impairment (1)	$	215,242		$	204,708		$	16,958	$	—		$	436,908
Income (loss) from operations	$	(479,837	)	$	(199,225	)	$	102,762	$	(23,978	)	$	(600,278	)
Earnings of equity method investments	$	—		$	—		$	3,870	$	—		$	3,870
Capital expenditures	$	65,116		$	13,392		$	30,740	$	20,488		$	129,736
Six Months Ended June 30, 2019
Sales and other revenues:
Revenues from external customers	$	7,581,442		$	1,038,680		$	59,520	$	220		$	8,679,862
Intersegment revenues	163,228			—			205,728		(368,956		)	—
	$	7,744,670		$	1,038,680		$	265,248	$	(368,736	)	$	8,679,862
Cost of products sold (exclusive of lower of cost or market inventory)	$	6,421,372		$	804,370		$	—	$	(321,653	)	$	6,904,089
Lower of cost or market inventory valuation adjustment	$	(184,545	)	$	—		$	—	$	—		$	(184,545	)
Operating expenses	$	517,212		$	112,681		$	78,121	$	(43,170	)	$	664,844
Selling, general and administrative expenses	$	56,615		$	81,806		$	4,608	$	30,322		$	173,351
Depreciation and amortization	$	150,640		$	43,191		$	48,071	$	6,427		$	248,329
Goodwill impairment	$	—		$	152,712		$	—	$	—		$	152,712
Income (loss) from operations	$	783,376		$	(156,080	)	$	134,448	$	(40,662	)	$	721,082
Earnings of equity method investments	$	—		$	—		$	3,883	$	—		$	3,883
Capital expenditures	$	75,662		$	17,190		$	17,752	$	9,865		$	120,469

(1) The results of our HEP reportable segment for the three and six months ended June 30, 2020 include a long-lived asset impairment charge attributed to HEP’s logistics assets at our Cheyenne Refinery.

	Refining		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
June 30, 2020
Cash and cash equivalents	$	15,652	$	189,571	$	18,913	$	678,373	$	902,509
Total assets	$	6,327,809	$	1,910,431	$	2,215,053	$	610,527	$	11,063,820
Long-term debt	$	—	$	—	$	1,486,648	$	994,098	$	2,480,746
December 31, 2019
Cash and cash equivalents	$	9,755	$	169,277	$	13,287	$	692,843	$	885,162
Total assets	$	7,189,094	$	2,223,418	$	2,205,437	$	546,892	$	12,164,841
Long-term debt	$	—	$	—	$	1,462,031	$	993,609	$	2,455,640

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Item 2 contains “forward-looking” statements. See “Forward-Looking Statements” at the beginning of Part I of this Quarterly Report on Form 10-Q. In this document, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier Corporation (“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. This document contains 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.

OVERVIEW

We are principally an independent petroleum refiner that produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products and specialty and modified asphalt. As of June 30, 2020, we owned and operated refineries located in El Dorado, Kansas (the “El Dorado Refinery”), Tulsa, Oklahoma (the “Tulsa Refineries”), which comprise two production facilities, the Tulsa West and East facilities, Artesia, New Mexico, which operates in conjunction with crude, vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”), Cheyenne, Wyoming (the “Cheyenne Refinery”) and Woods Cross, Utah (the “Woods Cross Refinery”). We market our refined products principally in the Southwest United States, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. In addition, we produce base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries. We also own a 57% limited partner interest and a non-economic general partner interest in HEP, a master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including HollyFrontier Corporation subsidiaries.

On June 1, 2020, we announced plans to permanently cease petroleum refining operations at our Cheyenne Refinery and to convert certain assets at our Cheyenne Refinery to renewable diesel production. This decision was primarily based on a positive outlook on the market for renewable diesel and the expectation that future free cash flow generation at our Cheyenne Refinery would be challenged due to lower gross margins resulting from the economic impact of the COVID-19 pandemic and compressed crude differentials due to dislocations in the crude oil market. Additional factors included uncompetitive operating and maintenance costs forecasted for our Cheyenne Refinery and the anticipated loss of the Environmental Protection Agency’s (“EPA”) small refinery exemption. Approximately 200 employees at our Cheyenne Refinery are expected to be impacted by this decision. We began winding down refining operations at our Cheyenne Refinery on August 3, 2020, and subsequently began conversion of certain units for renewable diesel production. The renewable diesel units are expected to be completed in the first quarter of 2022 with an expected capital budget between $125-$175 million.

During the second quarter of 2020, we recorded a long-lived asset impairment of $232.2 million and accelerated depreciation of $2.2 million related to our Cheyenne Refinery asset groups. We expect to record additional non-cash charges of $3.7 million for accelerated depreciation in the third quarter of 2020.

Additionally, during the second quarter of 2020, we recorded $1.1 million in employee severance costs related to the conversion of our Cheyenne Refinery. Also, during the second quarter of 2020, we recorded a reserve of $6.2 million against our repair and maintenance supplies inventory. These severance costs and the inventory reserve charge were recognized in operating expenses and were reported in the Refining segment. Over the next twelve months, we anticipate pre-tax costs of approximately $45 million for decommissioning assets and $5-$7 million for severance obligations and proceeds of $50-$70 million from the liquidation of working capital. In addition, we may potentially incur further charges related to revisions in our estimates of asset retirement obligations for our Cheyenne Refinery.

During the second quarter of 2020, we initiated and completed a corporate restructuring, which is expected to save approximately $30 million per year of ongoing cash expenses. As a result of this restructuring, we recorded $3.7 million in employee severance costs, which were recognized primarily as operating expenses in our Refining segment and selling, general and administrative expenses in our Corporate and Other segment.

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. Cash consideration paid was $662.7 million. Sonneborn is a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes with manufacturing facilities in the United States and Europe.

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For the three months ended June 30, 2020, net loss attributable to HollyFrontier stockholders was $(176.7) million compared to net income of $196.9 million for the three months ended June 30, 2019. For the six months ended June 30, 2020, net loss attributable to HollyFrontier stockholders was $(481.3) million compared to net income of $450.0 million for the six months ended June 30, 2019. Included in our financial results for the second quarter of 2020 were non-cash items consisting of $436.9 million long-lived asset impairment charges related to our Cheyenne Refinery and PCLI, offset by an inventory reserve adjustment that resulted in a benefit of $269.9 million. Second quarter earnings reflect weak demand for refined products, lubricants and transportation services across the industry, with overall gross refining margin per produced barrel sold decreasing 57% for the three months ended June 30, 2020 over the same period of 2019. Included in the three months ended June 30, 2019, was a goodwill impairment charge of $152.7 million related to our Lubricants and Specialty Products segment.

Pursuant to the 2007 Energy Independence and Security Act, the EPA promulgated the Renewable Fuel Standard (“RFS”) regulations, which increased the volume of renewable fuels mandated to be blended into the nation’s fuel supply. The regulations, in part, require refiners to add annually increasing amounts of “renewable fuels” to their petroleum products or purchase credits, known as renewable identification numbers (“RINs”), in lieu of such blending. Compliance with RFS regulations significantly increases our cost of products sold, with RINs costs totaling $32.5 million for the three months ended June 30, 2020.

Impact of COVID-19 on Our Business

The COVID-19 pandemic caused a decline in U.S. and global economic activity starting in the first quarter of 2020. This decrease reduced both volumes and unit margins across our businesses, resulting in lower gross margins and earnings. Over the course of the second quarter, demand for transportation fuels and lubricants stabilized and showed incremental improvement late in the quarter. In response to this level of demand, during the second quarter of 2020, we operated our Refining segment refineries at an average crude charge of 349,580 BPD.

The stabilization of demand drove a broad increase in commodity prices, resulting in values for our inventories held at June 30, 2020 above the costs of these inventories using the last-in, first-out (“LIFO”) method and in a lower of cost or market valuation gain of $269.9 million for the three months ended June 30, 2020. Additionally, this stabilization of demand and commodity prices resulted in a smaller than expected use of working capital during the quarter.

As a result of these conditions, we have reduced our 2020 expected total consolidated capital expenditures by approximately 15%, to a range of $525 million to $625 million. Additionally, during the second quarter, we completed a corporate restructuring program expected to save approximately $30 million per year in ongoing cash expenses.

HollyFrontier’s standalone (excluding HEP) liquidity was over $2.2 billion at June 30, 2020, consisting of a cash balance of $883.6 million and an undrawn $1.35 billion credit facility maturing in 2022. HollyFrontier’s earliest standalone (excluding HEP) debt maturity is $1.0 billion of senior notes due in 2026.

OUTLOOK

The impact of COVID-19 on the global macroeconomy has created unprecedented reduction in demand, as well as lack of forward visibility, for many of the transportation fuels, lubricants and specialty products and the associated transportation and terminal services we provide. Other factors expected to impact crude oil supply include production levels implemented by OPEC members, other large oil producers such as Russia and domestic and Canadian oil producers. While we have seen a recent stabilization in demand and commodity and expect a strong recovery of demand for all of these essential products in the long-run, there remains little visibility on the timing for or extent of this recovery in the near term.

In response to the COVID-19 pandemic, and with the health and safety of our employees as a top priority, we have continued several initiatives, including limiting onsite staff at all of our facilities to essential operational personnel only, using a work from home policy for certain employees and restricting travel unless approved by senior leadership. We will continue to monitor COVID-19 developments and the dynamic environment to properly address these policies going forward.

Within our Refining segment, for the third quarter 2020, we expect to run between 340,000-370,000 barrels per day of crude oil based on market demand for transportation fuels. Currently, the primary determinants of demand are the various government orders and guidance restricting or discouraging most forms of travel. We expect to adjust refinery production levels commensurate with market demand.

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In our Lubricants and Specialty Products segment, we have withdrawn 2020 guidance for the Rack Forward business. Within our industrial and passenger car-related end markets, demand saw improvement over the course of the second quarter as compared to the depressed levels we saw at the end of the first quarter of 2020, while in our personal care end markets, demand continues to run slightly below historical levels. We expect industrial demand to continue to rebound with the broader economy. Within the Rack Back portion, we expect base oil demand to rebound with the reopening of its primary transportation-related end markets. Similar to our Refining segment, we intend to match production to market demand.

At HEP, we have seen an improvement in demand for transportation and terminal services during the second quarter of 2020 as compared to the first quarter of 2020, and we expect that trend to continue. HEP maintained its quarterly distribution to $0.35 per unit, representative of a new distribution policy focused on funding all capital expenditures and distributions within cash flow, improving distributable cash flow coverage to 1.3x or greater and reducing leverage to 3.0-3.5x.

During the quarter, we announced plans to further expand our renewables business through the construction of a pre-treatment unit located at the Navajo Refinery’s Artesia facility and conversion of the Cheyenne Refinery to renewable diesel production. Including this decision, we maintained the range of our 2020 consolidated capital budget at $525 million to $625 million. Additionally, we implemented a corporate restructuring program expected to save approximately $30 million of annual expenses. We continue to evaluate additional ways to reduce cash costs including operating, sales, general and administrative spending reductions as well as incremental capital spending reductions. We do not intend to repurchase common stock under our $1.0 billion share repurchase program until commodity prices and demand for our products normalize.

On March 27, 2020, the U.S. government passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), an approximately $2 trillion stimulus package that includes various provisions intended to provide relief to individuals and businesses in the form of tax changes, loans and grants, among others. At this time, we have not sought relief in the form of loans or grants from the CARES Act; however, we have benefited from certain tax deferrals in the CARES Act and may benefit from other tax provisions if we meet the requirements to do so.

The extent to which our future results are affected by COVID-19 will depend on various factors and consequences beyond our control, such as the duration and scope of the pandemic; additional actions by businesses and governments in response to the pandemic, and the speed and effectiveness of responses to combat the virus. COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also exacerbate the risk factors identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in this Form 10-Q. COVID-19 may also materially adversely affect our results in a manner that is either not currently known or that we do not currently consider to be a significant risk to our business.

See “Item 1A - Risk Factors” for other potential impacts of COVID-19 on our business.

A more detailed discussion of our financial and operating results for the three and six months ended June 30, 2020 and 2019 is presented in the following sections.

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RESULTS OF OPERATIONS

Financial Data

	Three Months Ended June 30,						Change from 2019
	2020			2019			Change			Percent
	(In thousands, except per share data)
Sales and other revenues	$	2,062,930		$	4,782,615		$	(2,719,685	)	(57	)%
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)	1,576,996			3,704,884			(2,127,888		)	(57	)
Lower of cost or market inventory valuation adjustment	(269,904		)	47,801			(317,705		)	(665	)
	1,307,092			3,752,685			(2,445,593		)	(65	)
Operating expenses (exclusive of depreciation and amortization)	303,359			333,252			(29,893		)	(9	)
Selling, general and administrative expenses (exclusive of depreciation and amortization)	75,369			85,317			(9,948		)	(12	)
Depreciation and amortization	130,178			126,908			3,270			3
Long-lived asset and goodwill impairments	436,908			152,712			284,196			186
Total operating costs and expenses	2,252,906			4,450,874			(2,197,968		)	(49	)
Income (loss) from operations	(189,976		)	331,741			(521,717		)	(157	)
Other income (expense):
Earnings of equity method investments	2,156			1,783			373			21
Interest income	1,506			4,588			(3,082		)	(67	)
Interest expense	(32,695		)	(34,264		)	1,569			(5	)
Gain on sales-type leases	33,834			—			33,834			—
Gain on foreign currency transactions	2,285			2,213			72			3
Other, net	1,572			92			1,480			1,609
	8,658			(25,588		)	34,246			(134	)
Income (loss) before income taxes	(181,318		)	306,153			(487,471		)	(159	)
Income tax expense (benefit)	(30,911		)	89,336			(120,247		)	(135	)
Net income (loss)	(150,407		)	216,817			(367,224		)	(169	)
Less net income attributable to noncontrolling interest	26,270			19,902			6,368			32
Net income (loss) attributable to HollyFrontier stockholders	$	(176,677	)	$	196,915		$	(373,592	)	(190	)%
Earnings (loss) per share attributable to HollyFrontier stockholders:
Basic	$	(1.09	)	$	1.16		$	(2.25	)	(194	)%
Diluted	$	(1.09	)	$	1.15		$	(2.24	)	(195	)%
Cash dividends declared per common share	$	0.35		$	0.33		$	0.02		6	%
Average number of common shares outstanding:
Basic	161,889			169,356			(7,467		)	(4	)%
Diluted	161,889			170,547			(8,658		)	(5	)%

38

	Six Months Ended June 30,						Change from 2019
	2020			2019			Change			Percent
	(In thousands, except per share data)
Sales and other revenues	$	5,463,475		$	8,679,862		$	(3,216,387	)	(37	)%
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)	4,270,722			6,904,089			(2,633,367		)	(38	)
Lower of cost or market inventory valuation adjustment	290,560			(184,545		)	475,105			(257	)
	4,561,282			6,719,544			(2,158,262		)	(32	)
Operating expenses (exclusive of depreciation and amortization)	631,704			664,844			(33,140		)	(5	)
Selling, general and administrative expenses (exclusive of depreciation and amortization)	163,106			173,351			(10,245		)	(6	)
Depreciation and amortization	270,753			248,329			22,424			9
Long-lived asset and goodwill impairments	436,908			152,712			284,196			186
Total operating costs and expenses	6,063,753			7,958,780			(1,895,027		)	(24	)
Income (loss) from operations	(600,278		)	721,082			(1,321,360		)	(183	)
Other income (expense):
Earnings of equity method investments	3,870			3,883			(13		)	—
Interest income	5,579			10,963			(5,384		)	(49	)
Interest expense	(55,334		)	(70,911		)	15,577			(22	)
Gain on sales-type leases	33,834			—			33,834			—
Loss on early extinguishment of debt	(25,915		)	—			(25,915		)	—
Gain (loss) on foreign currency transactions	(1,948		)	4,478			(6,426		)	(144	)
Other, net	3,422			649			2,773			427
	(36,492		)	(50,938		)	14,446			(28	)
Income (loss) before income taxes	(636,770		)	670,144			(1,306,914		)	(195	)
Income tax expense (benefit)	(193,077		)	176,841			(369,918		)	(209	)
Net income (loss)	(443,693		)	493,303			(936,996		)	(190	)
Less net income attributable to noncontrolling interest	37,607			43,333			(5,726		)	(13	)
Net income (loss) attributable to HollyFrontier stockholders	$	(481,300	)	$	449,970		$	(931,270	)	(207	)%
Earnings (loss) per share attributable to HollyFrontier stockholders:
Basic	$	(2.97	)	$	2.64		$	(5.61	)	(213	)%
Diluted	$	(2.97	)	$	2.62		$	(5.59	)	(213	)%
Cash dividends declared per common share	$	0.70		$	0.66		$	0.04		6	%
Average number of common shares outstanding:
Basic	161,882			170,100			(8,218		)	(5	)%
Diluted	161,882			171,264			(9,382		)	(5	)%

Balance Sheet Data

	June 30, 2020		December 31, 2019
	(Unaudited)
	(In thousands)
Cash and cash equivalents	$	902,509	$	885,162
Working capital	$	1,470,492	$	1,620,261
Total assets	$	11,063,820	$	12,164,841
Long-term debt	$	2,480,746	$	2,455,640
Total equity	$	5,914,511	$	6,509,426

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Other Financial Data 

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Net cash provided by operating activities	$	119,204		$	752,734		$	309,302		$	969,550
Net cash used for investing activities	$	(45,572	)	$	(55,584	)	$	(131,666	)	$	(782,309	)
Net cash used for financing activities	$	(84,062	)	$	(279,736	)	$	(155,519	)	$	(429,864	)
Capital expenditures	$	45,987		$	56,734		$	129,736		$	120,469
EBITDA (1)	$	(46,221	)	$	442,835		$	(353,869	)	$	935,088

(1) Earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” is calculated as net income (loss) 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.

Segment Operating Data

Our operations are organized into three reportable segments, Refining, Lubricants and Specialty Products and HEP. See Note 15 “Segment Information” in the Notes to Consolidated Financial Statements for additional information on our reportable segments.

Refining Segment Operating Data

Our refinery operations include the El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries. The following tables set forth information, including non-GAAP performance measures, about our consolidated refinery operations. The cost of products and refinery gross and net operating margins do not include the non-cash effects of long-lived asset impairment charges, lower of cost or market inventory valuation adjustments and depreciation and amortization. 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. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Mid-Continent Region (El Dorado and Tulsa Refineries)
Crude charge (BPD) (1)	206,950			264,290			229,670			238,890
Refinery throughput (BPD) (2)	220,010			278,710			245,470			254,520
Sales of produced refined products (BPD) (3)	216,280			273,010			237,760			245,450
Refinery utilization (4)	79.6		%	101.7		%	88.3		%	91.9		%
Average per produced barrel (5)
Refinery gross margin	$	6.31		$	17.17		$	8.07		$	14.51
Refinery operating expenses (6)	5.68			5.02			5.47			5.74
Net operating margin	$	0.63		$	12.15		$	2.60		$	8.77
Refinery operating expenses per throughput barrel (7)	$	5.58		$	4.92		$	5.30		$	5.54
Feedstocks:
Sweet crude oil	61		%	57		%	56		%	54		%
Sour crude oil	16		%	22		%	19		%	23		%
Heavy sour crude oil	17		%	16		%	19		%	17		%
Other feedstocks and blends	6		%	5		%	6		%	6		%
Total	100		%	100		%	100		%	100		%

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	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Mid-Continent Region (El Dorado and Tulsa Refineries)
Sales of produced refined products:
Gasolines	54	%	51	%	53	%	52	%
Diesel fuels	36	%	34	%	33	%	31	%
Jet fuels	1	%	6	%	4	%	7	%
Fuel oil	1	%	1	%	1	%	1	%
Asphalt	3	%	2	%	3	%	3	%
Base oils	3	%	4	%	4	%	4	%
LPG and other	2	%	2	%	2	%	2	%
Total	100	%	100	%	100	%	100	%

Southwest Region (Navajo Refinery)
Crude charge (BPD) (1)	79,460			109,080			93,130			107,560
Refinery throughput (BPD) (2)	89,470			119,480			103,460			117,860
Sales of produced refined products (BPD) (3)	101,880			122,090			107,740			122,730
Refinery utilization (4)	79.5		%	109.1		%	93.1		%	107.6		%
Average per produced barrel (5)
Refinery gross margin	$	11.08		$	23.45		$	11.89		$	19.70
Refinery operating expenses (6)	5.12			4.53			5.20			4.73
Net operating margin	$	5.96		$	18.92		$	6.69		$	14.97
Refinery operating expenses per throughput barrel (7)	$	5.83		$	4.63		$	5.42		$	4.93
Feedstocks:
Sweet crude oil	25		%	24		%	24		%	20		%
Sour crude oil	64		%	67		%	66		%	71		%
Other feedstocks and blends	11		%	9		%	10		%	9		%
Total	100		%	100		%	100		%	100		%
Sales of produced refined products:
Gasolines	53		%	48		%	54		%	51		%
Diesel fuels	34		%	40		%	36		%	38		%
Fuel oil	2		%	4		%	2		%	3		%
Asphalt	8		%	6		%	5		%	5		%
LPG and other	3		%	2		%	3		%	3		%
Total	100		%	100		%	100		%	100		%

Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
Crude charge (BPD) (1)	63,170			79,660			70,170			80,440
Refinery throughput (BPD) (2)	68,020			86,700			75,610			87,080
Sales of produced refined products (BPD) (3)	64,750			74,000			72,100			78,000
Refinery utilization (4)	65.1		%	82.1		%	72.3		%	82.9		%
Average per produced barrel (5)
Refinery gross margin	$	11.41		$	22.48		$	13.54		$	17.07
Refinery operating expenses (6)	13.60			11.53			12.17			11.11
Net operating margin	$	(2.19	)	$	10.95		$	1.37		$	5.96
Refinery operating expenses per throughput barrel (7)	$	12.95		$	9.84		$	11.61		$	9.95

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	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
Feedstocks:
Sweet crude oil	37	%	34	%	36	%	35	%
Heavy sour crude oil	41	%	35	%	38	%	35	%
Black wax crude oil	15	%	23	%	19	%	22	%
Other feedstocks and blends	7	%	8	%	7	%	8	%
Total	100	%	100	%	100	%	100	%
Sales of produced refined products:
Gasolines	54	%	50	%	55	%	52	%
Diesel fuels	35	%	37	%	33	%	35	%
Fuel oil	2	%	4	%	3	%	4	%
Asphalt	6	%	6	%	6	%	6	%
LPG and other	3	%	3	%	3	%	3	%
Total	100	%	100	%	100	%	100	%

Consolidated
Crude charge (BPD) (1)	349,580			453,030			392,970			426,890
Refinery throughput (BPD) (2)	377,500			484,890			424,540			459,460
Sales of produced refined products (BPD) (3)	382,910			469,100			417,600			446,190
Refinery utilization (4)	76.5		%	99.1		%	86.0		%	93.4		%
Average per produced barrel (5)
Refinery gross margin	$	8.44		$	19.64		$	10.00		$	16.39
Refinery operating expenses (6)	6.87			5.92			6.56			6.40
Net operating margin	$	1.57		$	13.72		$	3.44		$	9.99
Refinery operating expenses per throughput barrel (7)	$	6.97		$	5.73		$	6.45		$	6.22
Feedstocks:
Sweet crude oil	48		%	44		%	45		%	42		%
Sour crude oil	25		%	29		%	27		%	31		%
Heavy sour crude oil	17		%	16		%	17		%	16		%
Black wax crude oil	3		%	4		%	4		%	4		%
Other feedstocks and blends	7		%	7		%	7		%	7		%
Total	100		%	100		%	100		%	100		%

Sales of produced refined products:
Gasolines	54	%	50	%	53	%	52	%
Diesel fuels	35	%	36	%	34	%	34	%
Jet fuels	1	%	4	%	3	%	4	%
Fuel oil	1	%	2	%	1	%	2	%
Asphalt	4	%	4	%	4	%	4	%
Base oils	2	%	2	%	2	%	2	%
LPG and other	3	%	2	%	3	%	2	%
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

of refined products purchased for resale or volumes of excess crude oil sold.

(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.

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(6) Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by sales volumes

of refined products produced at our refineries.

(7) Represents total refining segment operating expenses, exclusive of depreciation and amortization, divided by refinery throughput.

Lubricants and Specialty Products Operating Data

The following table sets forth information about our lubricants and specialty products operations. For the six months ended June 30, 2019, our lubricants and specialty products operating results reflect the operations of our Sonneborn business for the period February 1, 2019 (date of acquisition) through June 30, 2019.

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Lubricants and Specialty Products
Throughput (BPD)	16,370		16,990		19,060		18,390
Sales of produced refined products (BPD)	26,990		34,660		31,900		34,050
Sales of produced refined products:
Finished products	56	%	52	%	51	%	50	%
Base oils	19	%	32	%	23	%	29	%
Other	25	%	16	%	26	%	21	%
Total	100	%	100	%	100	%	100	%

Supplemental financial data attributable to our Lubricants and Specialty Products segment is presented below.

	Rack Back (1)			Rack Forward (2)			Eliminations (3)			Total Lubricants and Specialty Products
	(In thousands)
Three months ended June 30, 2020
Sales and other revenues	$	85,857		$	343,927		$	(72,497	)	$	357,287
Cost of products sold	$	67,210		$	263,634		$	(72,497	)	$	258,347
Operating expenses	$	21,034		$	26,806		$	—		$	47,840
Selling, general and administrative expenses	$	5,617		$	30,302		$	—		$	35,919
Depreciation and amortization	$	5,877		$	13,902		$	—		$	19,779
Long-lived asset impairment	$	167,017		$	37,691		$	—		$	204,708
Income (loss) from operations	$	(180,898	)	$	(28,408	)	$	—		$	(209,306	)
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	)

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	Rack Back (1)			Rack Forward (2)		Eliminations (3)			Total Lubricants and Specialty Products
	(In thousands)
Six months ended June 30, 2020
Sales and other revenues	$	250,686		$	817,984	$	(184,780	)	$	883,890
Cost of products sold	$	247,810		$	586,697	$	(184,780	)	$	649,727
Operating expenses	$	44,303		$	57,668	$	—		$	101,971
Selling, general and administrative expenses	$	10,980		$	73,901	$	—		$	84,881
Depreciation and amortization	$	16,744		$	25,084	$	—		$	41,828
Long-lived asset impairment	$	167,017		$	37,691	$	—		$	204,708
Income (loss) from operations	$	(236,168	)	$	36,943	$	—		$	(199,225	)
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	)

(1) Rack back consists of our PCLI base oil production activities, by-product sales to third parties and intra-segment base oil sales to rack forward.

(2) Rack forward activities include the purchase of base oils from rack back and the blending, packaging, marketing and distribution and sales of finished lubricants and specialty products to third parties.

(3) Intra-segment sales of rack back produced base oils to rack forward are eliminated under the “Eliminations” column.

(4) During the three months ended June 30, 2019, a goodwill impairment charge of $152.7 million was recorded in the PCLI reporting unit within the Lubricants and Specialty Products segment. We separately allocated this goodwill impairment charge for purposes of management’s discussion and analysis presentation of Rack Back and Rack Forward results entirely to Rack Back.

Results of Operations – Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

Summary

Net loss attributable to HollyFrontier stockholders for the three months ended June 30, 2020 was $(176.7) million ($(1.09) per basic and diluted share), a $373.6 million decrease compared to net income of $196.9 million ($1.16 per basic and $1.15 per diluted share) for the three months ended June 30, 2019. Net income decreased due principally to long-lived asset impairment charges of $436.9 million, lower gross refining margins and lower refining segment sales volumes. For the three months ended June 30, 2020, lower of cost or market inventory reserve adjustments increased pre-tax earnings by $269.9 million compared to a decrease to pre-tax earnings of $47.8 million for the three months ended June 30, 2019. Refinery gross margins for the three months ended June 30, 2020 decreased to $8.44 per barrel sold from $19.64 for the three months ended June 30, 2019. The three months ended June 30, 2019 included a goodwill impairment charge of $152.7 million.

Sales and Other Revenues

Sales and other revenues decreased 57% from $4,782.6 million for the three months ended June 30, 2019 to $2,062.9 million for the three months ended June 30, 2020 due to a year-over-year decrease in second quarter sales prices and lower refined product sales volumes. Sales and other revenues for the three months ended June 30, 2020 and 2019 included $19.2 million and $28.4 million, respectively, in HEP revenues attributable to pipeline and transportation services provided to unaffiliated parties. Additionally, sales and other revenues included $353.6 million and $545.3 million in unaffiliated revenues related to our Lubricants and Specialty Products segment for the three months ended June 30, 2020 and 2019, respectively.

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Cost of Products Sold

Total cost of products sold decreased 65% from $3,752.7 million for the three months ended June 30, 2019 to $1,307.1 million for the three months ended June 30, 2020 due principally to lower crude oil costs and lower refined product sales volumes. Additionally, during the second quarter of 2020, we recognized a lower of cost or market inventory valuation adjustment benefit of $269.9 million compared to a charge of $47.8 million for the same period of 2019, resulting in a new $530.9 million inventory lower of cost or market reserve at June 30, 2020. The lower of cost or market reserve at June 30, 2020 is based on market conditions and prices at that time.

Gross Refinery Margins

Gross refinery margin per barrel sold decreased 57% from $19.64 for the three months ended June 30, 2019 to $8.44 for the three months ended June 30, 2020. This was due to the effects of a decrease in the average per barrel sold sales price during the current year quarter, partially offset by decreased crude oil and feedstock prices. Gross refinery margin per barrel does not include the non-cash effects of lower of cost or market inventory valuation adjustments or depreciation and amortization. See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q for a reconciliation to the income statement of sale prices of products sold and cost of products purchased.

Operating Expenses

Operating expenses, exclusive of depreciation and amortization, decreased 9% from $333.3 million for the three months ended June 30, 2019 to $303.4 million for the three months ended June 30, 2020 due principally to lower repair and maintenance costs for the three months ended June 30, 2020 compared to prior period. Prior year period operating expenses included higher repair and maintenance costs related to a February 2019 fire in an FCC unit at our El Dorado Refinery.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 12% from $85.3 million for the three months ended June 30, 2019 to $75.4 million for the three months ended June 30, 2020 due principally to lower incentive compensation costs and employee-related travels expenses. We incurred $0.6 million and $3.6 million in direct acquisition and integration costs of our Sonneborn business during the three months ended June 30, 2020 and 2019, respectively.

Depreciation and Amortization Expenses

Depreciation and amortization increased 3% from $126.9 million for the three months ended June 30, 2019 to $130.2 million for the three months ended June 30, 2020. This increase was due principally to depreciation and amortization attributable to capitalized improvement projects and capitalized refinery turnaround costs, partially offset by lower depreciation expense resulting from the impaired assets in the current quarter.

Long-lived Asset and Goodwill Impairments

During the three months ended June 30, 2020, we recorded long-lived asset impairment charges of $232.2 million that related to our Cheyenne Refinery and $204.7 million related to PCLI. During the three months ended June 30, 2019, we recorded a goodwill impairment charge of $152.7 million that related to PCLI. See Note 1 “Description of Business and Presentation of Financial Statements” in the Notes to Consolidated Financial Statements for additional information on these impairments.

Interest Income

Interest income for the three months ended June 30, 2020 was $1.5 million compared to $4.6 million for the three months ended June 30, 2019. This decrease was primarily due to lower interest rates on cash investments during the current year quarter.

Interest Expense

Interest expense was $32.7 million for the three months ended June 30, 2020 compared to $34.3 million for the three months ended June 30, 2019. This decrease was primarily due to lower market interest rates on HEP’s credit facility and HEP’s refinancing of its 6.0% senior notes due 2024, partially offset by an unrealized loss on the mark-to-market change of the fair value of the embedded derivative in our catalyst financing arrangements during the current year quarter. For the three months ended June 30, 2020 and 2019, interest expense included $12.1 million and $19.2 million, respectively, in interest costs attributable to HEP operations.

Gain on Sales-type Leases

During the second quarter of 2020, HEP and Delek US Holdings, Inc. renewed the original throughput agreement on specific HEP assets. Portions of the new throughput agreement meet the definition of sales-type leases, which resulted in an accounting gain of $33.8 million upon the initial recognition of the sales-type lease during the three months ended June 30, 2020.

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Gain on Foreign Currency Transactions

Remeasurement adjustments resulting from the foreign currency conversion of the intercompany financing notes payable by PCLI net of mark-to-market valuations on foreign exchange forward contracts with banks which hedge the foreign currency exposure on these intercompany notes were net gains of $2.3 million and $2.2 million for the three months ended June 30, 2020 and 2019, respectively. For the three months ended June 30, 2020 and 2019, gain on foreign currency transactions included a loss of $14.3 million and $7.1 million, respectively, on foreign exchange forward contracts (utilized as an economic hedge).

Income Taxes

For the three months ended June 30, 2020, we recorded an income tax benefit of $30.9 million compared to income tax expense of $89.3 million for the three months ended June 30, 2019. This decrease was due principally to a pre-tax loss during the three months ended June 30, 2020 compared to pre-tax earnings in the same period of 2019. Our effective tax rates were 17.0% and 29.2% for the three months ended June 30, 2020 and 2019, respectively. The year-over-year decrease in the effective tax rate is due principally to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes.

Results of Operations – Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Summary

Net loss attributable to HollyFrontier stockholders for the six months ended June 30, 2020 was $(481.3) million ($(2.97) per basic and diluted share), a $931.3 million decrease compared to net income of $450.0 million ($2.64 per basic and $2.62 per diluted share) for the six months ended June 30, 2019. Net income decreased due principally to long-lived asset impairment charges of $436.9 million, lower gross refining margins and lower refining segment sales volumes. For the six months ended June 30, 2020, lower of cost or market inventory reserve adjustments decreased pre-tax earnings by $290.6 million compared to an increase to pre-tax earnings of $184.5 million for the six months ended June 30, 2019. Refinery gross margins for the six months ended June 30, 2020 decreased to $10.00 per barrel sold from $16.39 for the six months ended June 30, 2019. The six months ended June 30, 2019 included a goodwill impairment charge of $152.7 million.

Sales and Other Revenues

Sales and other revenues decreased 37% from $8,679.9 million for the six months ended June 30, 2019 to $5,463.5 million for the six months ended June 30, 2020 due to a year-over-year decrease in sales prices and lower refined product sales volumes. Sales and other revenues for the six months ended June 30, 2020 and 2019 include $45.7 million and $59.5 million, respectively, in HEP revenues attributable to pipeline and transportation services provided to unaffiliated parties. Additionally, sales and other revenues included $877.1 million and $1,038.7 million in unaffiliated revenues related to our Lubricants and Specialty Products segment for the six months ended June 30, 2020 and 2019, respectively.

Cost of Products Sold

Total cost of products sold decreased 32% from $6,719.5 million for the six months ended June 30, 2019 to $4,561.3 million for the six months ended June 30, 2020 due principally to lower crude oil costs and lower refined product sales volumes. Additionally, we recognized a lower of cost or market inventory valuation charge of $290.6 million for the six months ended June 30, 2020 compared to a benefit of $184.5 million for the same period of 2019, resulting in a new $530.9 million lower of cost or market reserve at June 30, 2020. The lower of cost or market reserve at June 30, 2020 is based on market conditions and prices at that time.

Gross Refinery Margins

Gross refinery margin per barrel sold decreased 39% from $16.39 for the six months ended June 30, 2019 to $10.00 for the six months ended June 30, 2020. This was due to the effects of a decrease in the average per barrel sold sales price during the current year-to-date period, partially offset by decreased crude oil and feedstock prices. Gross refinery margin per barrel does not include the non-cash effects of lower of cost or market inventory valuation adjustments or depreciation and amortization. See “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 3 of Part I of this Form 10-Q for a reconciliation to the income statement of sales prices of products sold and cost of products purchased.

Operating Expenses

Operating expenses, exclusive of depreciation and amortization, decreased 5% from $664.8 million for the six months ended June 30, 2019 to $631.7 million for the six months ended June 30, 2020 due principally to lower repair and maintenance costs compared to prior period. Prior year period operating expenses included higher repair and maintenance costs related to a February 2019 fire in an FCC unit at our El Dorado Refinery.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 6% from $173.4 million for the six months ended June 30, 2019 to $163.1 million for the six months ended June 30, 2020 due principally to lower incentive compensation costs and employee travel-related expenses. We incurred $1.9 million and $16.2 million in direct acquisition and integration costs of our Sonneborn business during the six months ended June 30, 2020 and 2019, respectively.

Depreciation and Amortization Expenses

Depreciation and amortization increased 9% from $248.3 million for the six months ended June 30, 2019 to $270.8 million for the six months ended June 30, 2020. This increase was due principally to depreciation and amortization attributable to capitalized improvement projects and capitalized refinery turnaround costs, partially offset by lower depreciation expense resulting from the impaired assets in the current period.

Long-lived Asset and Goodwill Impairments

During the six months ended June 30, 2020, we recorded long-lived asset impairment charges of $232.2 million that related to our Cheyenne Refinery and $204.7 million related to PCLI. During the six months ended June 30, 2019, we recorded a goodwill impairment charge of $152.7 million that related to PCLI. See Note 1 “Description of Business and Presentation of Financial Statements” in the Notes to Consolidated Financial Statements for additional information on these impairments.

Interest Income

Interest income for the six months ended June 30, 2020 was $5.6 million compared to $11.0 million for the six months ended June 30, 2019. This decrease was primarily due to lower average cash balances and lower interest rates on cash investments.

Interest Expense

Interest expense was $55.3 million for the six months ended June 30, 2020 compared to $70.9 million for the six months ended June 30, 2019. This decrease was primarily due to lower market interest rates on HEP’s credit facility and HEP’s refinancing of its 6.0% senior notes due 2024. Additionally, we recorded an unrealized gain on the mark-to-market change in the fair value of the embedded derivative in our catalyst financing arrangements of $4.7 million for the six months ended June 30, 2020 compared to an unrealized loss of $1.3 million for the same period in 2019. For the six months ended June 30, 2020 and 2019, interest expense included $28.2 million and $38.3 million, respectively, in interest costs attributable to HEP operations.

Gain on Sales-type Leases

During the second quarter of 2020, HEP and Delek US Holdings, Inc. renewed the original throughput agreement on specific HEP assets. Portions of the new throughput agreement meet the definition of sales-type leases, which resulted in an accounting gain of $33.8 million upon the initial recognition of the sales-type lease during the six months ended June 30, 2020.

Loss on Early Extinguishment of Debt

For the six months ended June 30, 2020, HEP recorded a $25.9 million loss on the redemption of its $500 million aggregate principal amount of 6% senior notes maturing August 2024 at a redemption cost of $522.5 million.

Gain (Loss) on Foreign Currency Transactions

Remeasurement adjustments resulting from the foreign currency conversion of the intercompany financing notes payable by PCLI net of mark-to-market valuations on foreign exchange forward contracts with banks which hedge the foreign currency exposure on these intercompany notes were a loss of $1.9 million for the six months ended June 30, 2020 compared to a net gain of $4.5 million for the six months ended June 30, 2019. For the six months ended June 30, 2020 and 2019, gain / loss on foreign currency transactions included a gain of $19.2 million and a loss of $14.7 million, respectively, on foreign exchange forward contracts (utilized as an economic hedge).

Income Taxes

For the six months ended June 30, 2020, we recorded an income tax benefit of $193.1 million compared to income tax expense of $176.8 million for the six months ended June 30, 2019. This decrease was due principally to a pre-tax loss during the six months ended June 30, 2020 compared to pre-tax earnings in the same period of 2019. Our effective tax rates were 30.3% and 26.4% for the six months ended June 30, 2020 and 2019, respectively. The year-over-year increase in the effective tax rate is due principally to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes.

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LIQUIDITY AND CAPITAL RESOURCES

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, 2020, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $4.9 million under the HollyFrontier Credit Agreement.

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 term of each lease, and the lease payments are recorded as interest expense. The leases mature on February 1, 2021. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity.

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, 2020, HEP received advances totaling $168.0 million and repaid $138.5 million under the HEP Credit Agreement. At June 30, 2020, HEP was in compliance with all of its covenants, had outstanding borrowings of $995.0 million and no outstanding letters of credit under the HEP Credit Agreement.

HEP Senior Notes

On February 4, 2020, HEP closed a private placement of $500 million in aggregate principal amount of 5.0% HEP senior unsecured notes maturing February 2028. On February 5, 2020, HEP redeemed its existing $500 million aggregate principal amount of 6.0% senior notes maturing August 2024 at a redemption cost of $522.5 million. HEP recognized a $25.9 million early extinguishment loss consisting of a $22.5 million debt redemption premium and unamortized discount and financing costs of $3.4 million. HEP funded the $522.5 million redemption with proceeds from the issuance of its 5.0% senior notes and borrowings under the HEP Credit Agreement.

See Note 9 “Debt” in the Notes to Consolidated Financial Statements for additional information on our debt instruments.

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, 2020, HEP did not issue any common units under this program. As of June 30, 2020, HEP has issued 2,413,153 units under this program, providing $82.3 million in gross proceeds.

Liquidity

We believe our current cash and cash equivalents, along with future internally generated cash flow and funds available under our credit facilities, will provide sufficient resources to fund currently planned capital projects and our liquidity needs for the foreseeable future. We expect that, to the extent necessary, we can raise additional funds from time to time through equity or debt financings in the public and private capital markets. In addition, subject to our current cash conservation strategies as discussed above in “Outlook,” components of our growth strategy include the expansion of existing units at our facilities and selective acquisition of complementary assets for our refining operations intended to increase earnings and cash flow. We also expect to use cash for payment of cash dividends, which are at the discretion of our Board of Directors, and, once commodity prices and demand for products normalize, for the repurchases of our common stock under our share repurchase program.

Our standalone (excluding HEP) liquidity was over $2.2 billion at June 30, 2020, consisting of cash and cash equivalents totaling $883.6 million and an undrawn $1.35 billion credit facility maturing in 2022. Our earliest standalone (excluding HEP) debt maturity is $1.0 billion of senior notes in 2026.

We consider all highly-liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. These primarily consist of investments in conservative, highly-rated instruments issued by financial institutions, government and corporate entities with strong credit standings and money market funds.

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In November 2019, our Board of Directors approved a $1.0 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, 2020, we had not repurchased common stock 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. In order to preserve liquidity, we do not intend to repurchase common stock under our $1.0 billion share repurchase program until commodity prices and demand for products normalize.

Cash and cash equivalents increased $17.3 million for the six months ended June 30, 2020. Net cash provided by operating activities of $309.3 million exceeded net cash used by investing and financing activities of $131.7 million, and $155.5 million, respectively.

Cash Flows – Operating Activities

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Net cash flows provided by operating activities were $309.3 million for the six months ended June 30, 2020 compared to $969.6 million for the six months ended June 30, 2019, a decrease of $660.2 million. Net loss for the six months ended June 30, 2020 of $(443.7) million, was a decrease of $937.0 million compared to net income of $493.3 million for the six months ended June 30, 2019. Non-cash adjustments to net income consisting of depreciation and amortization, long-lived asset and goodwill impairments, lower of cost or market inventory valuation adjustment, earnings of equity method investments, inclusive of distributions, loss on early extinguishment of debt, gain on sales-type leases, gain / loss on sale of assets, deferred income taxes, equity-based compensation expense and fair value changes to derivative instruments totaled $877.5 million for the six months ended June 30, 2020 compared to $327.8 million for the same period in 2019. Adjusted for non-cash items, changes in working capital decreased operating cash flows by $103.3 million and increased operating cash flows by $246.9 million, for the six months ended June 30, 2020 and 2019, respectively. Additionally, for the six months ended June 30, 2020, turnaround expenditures decreased to $49.2 million from $110.3 million from the same period of 2019.

Cash Flows – Investing Activities and Planned Capital Expenditures

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Net cash flows used for investing activities were $131.7 million for the six months ended June 30, 2020 compared to $782.3 million for the six months ended June 30, 2019, a decrease of $650.6 million. Cash expenditures for properties, plants and equipment for the first six months of 2020 increased to $129.7 million from $120.5 million for the same period in 2019. These include HEP capital expenditures of $30.7 million and $17.8 million for the six months ended June 30, 2020 and 2019, respectively. Additionally, HEP invested $2.4 million in the Cushing Connect Pipeline & Terminal LLC joint venture. Prior year investing activities reflected a net cash outflow of $662.7 million upon the acquisition of Sonneborn.

Planned Capital Expenditures

HollyFrontier Corporation

Each year our Board of Directors approves our annual capital budget, which includes specific projects that management is authorized to undertake. Additionally, when conditions warrant or as new opportunities arise, additional projects may be approved. The funds appropriated for a particular capital project may be expended over a period of several years, depending on the time required to complete the project. Therefore, our planned capital expenditures for a given year consist of expenditures appropriated in that year’s capital budget plus expenditures for projects appropriated in prior years which have not yet been completed. Refinery turnaround spending is amortized over the useful life of the turnaround.

The refining industry is capital intensive and requires on-going investments to sustain our refining operations. This includes replacement of, or rebuilding, refinery units and components that extend the useful life. We also invest in projects that improve operational reliability and profitability via enhancements that improve refinery processing capabilities as well as production yield and flexibility. Our capital expenditures also include projects related to environmental, health and safety compliance and include initiatives as a result of federal and state mandates.

Our refinery operations and related emissions are highly regulated at both federal and state levels, and we invest in our facilities as needed to remain in compliance with these standards. Additionally, when faced with new emissions or fuels standards, we seek to execute projects that facilitate compliance and also improve the operating costs and / or yields of associated refining processes.

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HEP

Each year the Holly Logistic Services, L.L.C. board of directors approves HEP’s annual capital budget, which specifies capital projects that HEP management is authorized to undertake. Additionally, at times when conditions warrant or as new opportunities arise, special projects may be approved. The funds allocated for a particular capital project may be expended over a period in excess of a year, depending on the time required to complete the project. Therefore, HEP’s planned capital expenditures for a given year consist of expenditures approved for capital projects included in its current year capital budget as well as, in certain cases, expenditures approved for capital projects in capital budgets for prior years. HEP expects the majority of the expansion capital budget in 2020 to be invested in the Cushing Connect joint venture. In addition, HEP may spend funds periodically to perform capital upgrades or additions to its assets where a customer reimburses HEP for such costs. The upgrades or additions would generally benefit the customer over the remaining life of the related service agreements.

Due to the COVID-19 pandemic and resulting decline in U.S. and global economic activities, we have reduced our 2020 expected total consolidated capital expenditures by approximately 15% from our approved annual capital budget. Expected capital and turnaround cash spending for 2020 is as follows:

        

	Expected Cash Spending Range
	(In millions)
HollyFrontier Capital Expenditures
Refining	$	202.0	$	221.0
Renewable Diesel Unit	150.0		180.0
Lubricants and Specialty Products	30.0		45.0
Turnarounds and catalyst	85.0		110.0
Total HollyFrontier	467.0		556.0
HEP
Maintenance	8.0		12.0
Expansion and joint venture investment	45.0		50.0
Refining unit turnarounds	5.0		7.0
Total HEP	58.0		69.0
Total	$	525.0	$	625.0

Cash Flows – Financing Activities

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Net cash flows used for financing activities were $155.5 million for the six months ended June 30, 2020 compared to $429.9 million for the six months ended June 30, 2019, a decrease of $274.3 million. During the six months ended June 30, 2020, we purchased $1.2 million of treasury stock and paid $114.4 million in dividends. Also during this period, HEP received $168.0 million and repaid $138.5 million under the HEP Credit Agreement, paid $522.5 million upon the redemption of HEP’s 6.0% senior notes and received $491.3 million in net proceeds from issuance of HEP 5.0% senior notes, paid distributions of $51.0 million to noncontrolling interests and received contributions from noncontrolling interests of $13.3 million. During the six months ended June 30, 2019, we purchased $267.0 million of treasury stock and paid $113.5 million in dividends. Also during this period, HEP received $175.0 million and repaid $156.5 million under the HEP Credit Agreement and paid distributions of $66.7 million to noncontrolling interests.

Contractual Obligations and Commitments

HollyFrontier Corporation

There were no significant changes to our long-term contractual obligations during the six months ended June 30, 2020.

HEP

In February 2020, HEP issued $500 million in aggregate principal amount of 5.0% HEP senior notes maturing February 2028 and redeemed its existing $500 million 6.0% senior notes maturing August 2024.

During the six months ended June 30, 2020, HEP had net borrowings of $29.5 million resulting in $995.0 million of outstanding borrowings under the HEP Credit Agreement at June 30, 2020.

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There were no other significant changes to HEP’s long-term contractual obligations during this period.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2019. Certain critical accounting policies that materially affect the amounts recorded in our consolidated financial statements include the use of the last-in, first-out (“LIFO”) method of valuing certain inventories, assessing the possible impairment of certain long-lived assets and goodwill, and assessing contingent liabilities for probable losses.

Inventory Valuation: Inventories related to our refining operations are stated at the lower of cost, using the 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.

At June 30, 2020, our lower of cost or market inventory valuation reserve was $530.9 million. This amount, or a portion thereof, is subject to reversal as a reduction to cost of products sold in subsequent periods as inventories giving rise to the reserve are sold, and a new reserve is established.

Inventories consisting of process chemicals, materials and maintenance supplies and RINs are stated at the lower of weighted-average cost or net realizable value. Inventories of our Petro-Canada Lubricants and Sonneborn businesses are stated at the lower of cost, using the FIFO method, or net realizable value.

Goodwill and Long-lived Assets: As of June 30, 2020, 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, $327.6 million and $312.9 million, respectively. 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.

For purposes of long-lived asset impairment evaluation, we have grouped our long-lived assets as follows: (i) our refinery asset groups, which include certain HEP logistics assets, (ii) our Lubricants and Specialty Products asset groups and (iii) our HEP asset groups, which comprises HEP assets not included in our refinery asset groups. These asset groups represent the lowest level for which independent cash flows can be identified. 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 and long-lived asset impairments

Due to the recent economic slowdown caused by the COVID-19 pandemic, we determined that indicators of potential goodwill impairment for our Refining and Lubricants and Specialty Products reporting units were present. In addition, we determined that these indicators were also evidence of potential long-lived asset impairments. These indicators included reductions in the prices of our finished goods and raw materials and the related decrease in our gross margins, as well as the recent decline in our common share price which has resulted in a decrease in our market capitalization. Additionally, our recent announcement of the conversion of our Cheyenne Refinery to renewable diesel production was also considered a triggering event requiring assessment of potential impairments to the carrying value of our Cheyenne Refinery asset group. During the second quarter of 2020, we performed interim goodwill and long-lived asset impairment testing as of May 31, 2020.

In performing our impairment tests of goodwill and long-lived assets we developed cash flow forecasts for each of our reporting units and asset groups. Significant judgment is involved in performing these fair value estimates since the results are based on forecasted financial information. The cash flow forecasts include significant assumptions such as planned utilization, end-user demand, selling prices, gross margins, operating costs and capital expenditures. Another key assumption applied to these forecasts to determine the fair value of a reporting unit or an asset group is the discount rate. The discount rate is intended to reflect the weighted average cost of capital for a market participant and the risks associated with the realization of the estimated future cash flows. Assumptions about the effects of the COVID-19 pandemic on future demand and market conditions are inherently subjective and difficult to forecast. Our fair value estimates are based on projected cash flows, which we believe to be reasonable.

As a result of our long-lived asset impairment testing, we determined that the carrying value of the long-lived assets of our Cheyenne Refinery and PCLI asset groups were not recoverable, and thus recorded long-lived asset impairment charges of $232.2 million and $204.7 million, respectively, in the second quarter of 2020. Our testing did not result in any other impairment of long-lived assets.

Our interim goodwill impairment testing indicated that the fair values of our Refining and Lubricants and Specialty Products reporting units were in excess of their respective carrying amounts ranging from 9% to 283%; therefore, there was no impairment of goodwill at our Refining and Lubricants and Specialty Products reporting units. Increasing the discount rate by 1.0% or reducing the terminal cash flow growth rate by 1.0% would not have changed the results of our goodwill impairment testing.

A reasonable expectation exists that further deterioration in our operating results or overall economic conditions could result in an impairment of goodwill and / or additional long-lived asset impairments at some point in the future. Future impairment charges could be material to our results of operations and financial condition. Our annual goodwill impairment testing is performed on July 1.

Contingencies

We are subject to proceedings, lawsuits and other claims related to environmental, labor, product and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.

RISK MANAGEMENT

We use certain strategies to reduce some commodity price and operational risks. We do not attempt to eliminate all market risk exposures when we believe that the exposure relating to such risk would not be significant to our future earnings, financial position, capital resources or liquidity or that the cost of eliminating the exposure would outweigh the benefit.

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.

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As of June 30, 2020, we have the following notional contract volumes related to all outstanding derivative instruments used to mitigate commodity price and foreign currency risk:

		Notional Contract Volumes by Year of Maturity
Derivative Instrument	Total Outstanding Notional	2020	2021	Unit of Measure
Natural gas price swaps - long	2,700,000	900,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	3,128,000	3,128,000	—	Barrels
NYMEX futures (WTI) - short	890,000	890,000	—	Barrels
Forward gasoline and diesel contracts - long	464,000	464,000	—	Barrels
Forward diesel contracts - short	200,000	200,000	—	Barrels
Foreign currency forward contracts	422,074,120	214,491,576	207,582,544	U.S. dollar
Forward commodity contracts (platinum) (1)	40,867	—	40,867	Troy ounces

(1) Represents an embedded derivative within our catalyst financing arrangements, which may be refinanced or require repayment under certain conditions. See Note 9 “Debt” in the Notes to Consolidated Financial Statements for additional information on these financing arrangements.

The following sensitivity analysis provides the hypothetical effects of market price fluctuations to the commodity positions hedged under our derivative contracts:

	Estimated Change in Fair Value at June 30
Commodity-based Derivative Contracts	2020		2019
	(In thousands)
Hypothetical 10% change in underlying commodity prices	$	2,826	$	2,902

Interest Rate Risk Management

The market risk inherent in our fixed-rate debt is the potential change arising from increases or decreases in interest rates as discussed below.

For the fixed rate HollyFrontier Senior Notes and HEP Senior Notes, changes in interest rates will generally affect fair value of the debt, but not earnings or cash flows. The outstanding principal, estimated fair value and estimated change in fair value (assuming a hypothetical 10% change in the yield-to-maturity rates) for this debt as of June 30, 2020 is presented below:

	Outstanding Principal		Estimated Fair Value		Estimated Change in Fair Value
	(In thousands)
HollyFrontier Senior Notes	$	1,000,000	$	1,105,120	$	20,828
HEP Senior Notes	$	500,000	$	477,835	$	17,322

For the variable rate HEP Credit Agreement, changes in interest rates would affect cash flows, but not the fair value. At June 30, 2020, outstanding borrowings under the HEP Credit Agreement were $995.0 million. A hypothetical 10% change in interest rates applicable to the HEP Credit Agreement would not materially affect cash flows.

Our operations are subject to hazards of petroleum processing operations, including fire, explosion and weather-related perils. We maintain various insurance coverages, including business interruption insurance, subject to certain deductibles. We are not fully insured against certain risks because such risks are not fully insurable, coverage is unavailable, or premium costs, in our judgment, do not justify such expenditures.

Financial information is reviewed on the counterparties in order to review and monitor their financial stability and assess their ongoing ability to honor their commitments under the derivative contracts. We have not experienced, nor do we expect to experience, any difficulty in the counterparties honoring their commitments.

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We have a risk management oversight committee consisting of members from our senior management. This committee oversees our risk enterprise program, monitors our risk environment and provides direction for activities to mitigate identified risks that may adversely affect the achievement of our goals.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

See “Risk Management” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles

Reconciliations of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to amounts reported under generally accepted accounting principles in financial statements.

Earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA, is calculated as net income (loss) 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.

Set forth below is our calculation of EBITDA.

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Net income (loss) attributable to HollyFrontier stockholders	$	(176,677	)	$	196,915		$	(481,300	)	$	449,970
Add interest expense	32,695			34,264			55,334			70,911
Subtract interest income	(1,506		)	(4,588		)	(5,579		)	(10,963		)
Add income tax expense (benefit)	(30,911		)	89,336			(193,077		)	176,841
Add depreciation and amortization	130,178			126,908			270,753			248,329
EBITDA	$	(46,221	)	$	442,835		$	(353,869	)	$	935,088

Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally accepted accounting principles in financial statements.

Refinery gross margin and net operating margin are non-GAAP performance measures that are used by our management and others to compare our refining performance to that of other companies in our industry. We believe these margin measures are helpful to investors in evaluating our refining performance on a relative and absolute basis. Refinery gross margin per produced barrel sold is total refining segment revenues less total refining segment cost of products sold, exclusive of lower of cost or market inventory valuation adjustments, divided by sales volumes of produced refined products sold. Net operating margin per barrel sold is the difference between refinery gross margin and refinery operating expenses per produced barrel sold. These two margins do not include the non-cash effects of long-lived asset impairment charges, lower of cost or market inventory valuation adjustments or depreciation and amortization. Each of these component performance measures can be reconciled directly to our consolidated statements of income. Other companies in our industry may not calculate these performance measures in the same manner.

Below are reconciliations to our consolidated statements of income for refinery net operating and gross margin and operating expenses, in each case averaged per produced barrel sold. Due to rounding of reported numbers, some amounts may not calculate exactly.

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Reconciliation of average refining segment net operating margin per produced barrel sold to refinery gross margin to total sales

and other revenues

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands, except per barrel amounts)
Consolidated
Net operating margin per produced barrel sold	$	1.57		$	13.72		$	3.44		$	9.99
Add average refinery operating expenses per produced barrel sold	6.87			5.92			6.56			6.40
Refinery gross margin per produced barrel sold	8.44			19.64			10.00			16.39
Times produced barrels sold (BPD)	382,910			469,100			417,600			446,190
Times number of days in period	91			91			182			181
Refining segment gross margin	294,090			838,394			760,032			1,323,663
Add (subtract) rounding	(23		)	34			150			(365		)
Total refining segment gross margin	294,067			838,428			760,182			1,323,298
Add refining segment cost of products sold	1,433,437			3,458,832			3,902,188			6,421,372
Refining segment sales and other revenues	1,727,504			4,297,260			4,662,370			7,744,670
Add lubricants and specialty products segment sales and other revenues	357,287			545,346			883,890			1,038,680
Add HEP segment sales and other revenues	114,807			130,751			242,661			265,248
Subtract corporate, other and eliminations	(136,668		)	(190,742		)	(325,446		)	(368,736		)
Sales and other revenues	$	2,062,930		$	4,782,615		$	5,463,475		$	8,679,862

Reconciliation of average refining segment operating expenses per produced barrel sold to total operating expenses

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands, except per barrel amounts)
Consolidated
Average refinery operating expenses per produced barrel sold	$	6.87		$	5.92		$	6.56		$	6.40
Times produced barrels sold (BPD)	382,910			469,100			417,600			446,190
Times number of days in period	91			91			182			181
Refinery operating expenses	239,384			252,714			498,581			516,866
Add (subtract) rounding	(25		)	1			(48		)	346
Total refining segment operating expenses	239,359			252,715			498,533			517,212
Add lubricants and specialty products segment operating expenses	47,840			59,122			101,971			112,681
Add HEP segment operating expenses	34,737			40,608			69,718			78,121
Subtract corporate, other and eliminations	(18,577		)	(19,193		)	(38,518		)	(43,170		)
Operating expenses (exclusive of depreciation and amortization)	$	303,359		$	333,252		$	631,704		$	664,844

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Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures. Our principal executive officer and principal financial officer have evaluated, as required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2020.

Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may become party to legal, regulatory or administrative proceedings or governmental investigations, including environmental and other matters. Damages or penalties may be sought from us in some matters and certain matters may require years to resolve. While the outcome and impact of these proceedings and investigations on us cannot be predicted with certainty, based on advice of counsel and information currently available to us, management believes that the resolution of these proceedings and investigations through settlement or adverse judgment will not either individually or in the aggregate have a material adverse effect on our financial condition, results of operations or cash flows.

The environmental proceedings are reported to comply with SEC regulations which require us to disclose proceedings arising under provisions regulating the discharge of materials into the environment or protecting the environment if we reasonably believe that such proceedings may result in monetary sanctions of $100,000 or more.

Environmental Matters

Cheyenne

HollyFrontier Cheyenne Refining LLC (“HFCR”) has been in discussions with the Wyoming Department of Environmental Quality (“WDEQ”) and the United States Environmental Protection Agency (“EPA”) relating to alleged violations of air quality emission limitations and requirements related to operation of certain refinery units at the Cheyenne Refinery.

Notices of Violations were issued by the WDEQ in late 2016 and 2018. On July 18, 2019, HFCR and WDEQ entered into a consent decree, and on August 9, 2019, HFCR paid penalties in the amount of $117,000 related to alleged violations of air quality limits that occurred during the second quarter of 2016 through the second quarter of 2017. Separately, on October 23, 2019, HFCR received a Notice of Violation from the WDEQ for possible violations of air quality standards during the first and second quarters of 2019. No penalty demand has yet been made by the WDEQ relating to such possible violations. HFCR and WDEQ are in discussions to resolve WDEQ’s alleged violations of air quality limits that occurred during the third quarter of 2017 through calendar year 2019.

On August 19, 2019 and October 30, 2019, HFCR received letters from the EPA providing a preliminary estimate of stipulated penalties related to the alleged violations that occurred during the third quarter of 2017 through the second quarter of 2019, pursuant to HFCR’s federal consent decree. HFCR responded to the EPA preliminary estimate of stipulated penalties related to the alleged violations that occurred during the third quarter of 2017 through calendar year 2018 in a letter dated September 18, 2019, followed by meetings with the EPA and the WDEQ on November 14, 2019 and December 4, 2019, to discuss an appropriate resolution of all alleged violations. HFCR settled the allegations in the EPA's August 19, 2019 and October 30, 2019 letters, and pursuant to a demand letter dated January 9, 2020, HFCR was assessed stipulated penalties totaling $700,000 pursuant to HFCR's federal consent decree. HFCR remitted payment of this amount to resolve the alleged violations.

El Dorado

HollyFrontier El Dorado Refining LLC (“HFEDR”) has been engaged in discussions with, and has responded to document requests from, the EPA, the U.S. Department of Justice (“DOJ”) and the State of Kansas regarding alleged Clean Air Act civil violations relating to flaring devices and other equipment at the refinery. Topics of the discussions included (a) three information requests for activities beginning in January 2009, (b) Risk Management Program compliance issues relating to a November 2014 inspection and subsequent events, (c) a Notice of Violation issued by the EPA in August 2017 and (d) possible late reporting under the Emergency Planning and Community Right-to-Know Act for the release of sulfur dioxide and visible emissions from October 2018. Some of the foregoing civil investigations resulted from fires that occurred at the El Dorado Refinery in September 2017, October 2018 and March 2019. An employee fatality occurred during the September 2017 event. On May 28, 2020, HFEDR reached a settlement in the form of a proposed consent decree with the EPA, the DOJ and the State of Kansas regarding the alleged Clean Air Act civil violations relating to flaring devices and other equipment at the refinery, as well as compliance with the Clean Air Act’s Risk Management Program (“RMP”).

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The proposed consent decree was lodged with the U.S. District Court for the District of Kansas, and the 30-day public comment period ended on July 18, 2020. On July 27, 2020, the EPA, the DOJ and the State of Kansas filed their Unopposed Motion to enter the Consent Decree with the U.S. District Court for the District of Kansas. The consent decree will become effective when entered by the district judge. Pursuant to the consent decree, among other terms and conditions, HFEDR is required to complete certain projects, implement protocols regarding the examination of its fired heaters and conduct a third party RMP audit of certain of its processes. In addition, HFEDR will be required to pay a civil penalty of $2 million to the United States and $2 million to the State of Kansas in two installments, the first half within 30 days of entry of the consent decree and the second within six months of entry of the consent decree. The proposed consent decree will resolve the alleged federal and state civil Clean Air Act liability for penalties and injunctive relief, other than potential civil penalties for RMP violations. Finally, as part of the settlement, a 2009 consent decree applicable to the refinery will be terminated.

The Occupational Safety and Health Administration (“OSHA”) conducted investigations into both the September 2017 and March 2019 events identified above, and HFEDR settled the OSHA claims related to those investigations in 2018 and 2019, respectively. In April 2019, HFEDR became aware that the EPA also initiated a criminal investigation into one or more of the foregoing events. HFEDR has received a grand jury subpoena requesting certain documents be provided to the EPA with respect to the September 2017 event. We are cooperating with this investigation.

Tulsa

HollyFrontier Tulsa Refining LLC (“HFTR”) operates under two Consent Decrees with the EPA and the Oklahoma Department of Environmental Quality (“ODEQ”) for the East and West Refineries. On December 13, 2017, during a meeting between the parties, ODEQ proposed stipulated penalties related to violations of the two Consent Decrees. The violations concern Clean Air Act regulated fuel gas and flare operations. On July 1, 2019, ODEQ issued a demand letter for stipulated penalties under the East Refinery Consent Decree as proposed in the 2017 meeting. In August 2019, HFTR paid the penalties set forth in the demand letter to ODEQ and the EPA satisfying the requirements of the East Refinery Consent Decree. On September 16, 2019, ODEQ issued a demand letter for stipulated penalties under the West Refinery Consent Decree. Following discussions with ODEQ, in a letter dated April 17, 2020, ODEQ reduced its September 2019 demand for stipulated penalties. In May 2020, HFTR paid to ODEQ and the EPA the penalty set forth in the April 17, 2020 demand letter, which satisfied the requirements of the West Refinery Consent Decree. Separately, on April 3, 2019, during a meeting between the parties, the EPA notified HFTR of potential monitoring violations of the Consent Decrees. HFTR is working with the ODEQ and the EPA to document a settlement agreement for the additional actions.

Federal Trade Commission

On July 23, 2019, the Federal Trade Commission (“FTC”) issued a Civil Investigative Demand and a related Subpoena Duces Tecum requesting we provide specified information relating to the Sonneborn acquisition that closed on February 1, 2019. We are in the process of responding to the FTC request. Based on the limited information that we have at this time, we are unable to predict the outcome of this request. On December 14, 2018, we received early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act from the FTC and Department of Justice with respect to the Sonneborn acquisition. On January 17, 2019, we received early termination of the applicable waiting period under the German antitrust laws with respect to the Sonneborn acquisition. Early termination is granted to transactions that the antitrust agencies determine raise no substantive competition concerns.

Renewable Fuel Standard

Various subsidiaries of HollyFrontier moved to intervene in four lawsuits brought by renewable fuel interest groups against the EPA in federal courts alleging violations of the Renewable Fuel Standard under the Clean Air Act and challenging the EPA’s handling of small refinery exemptions. We intervened to vigorously defend the EPA’s position on small refinery exemptions because we believe the EPA correctly applied applicable law to the matters at issue. The U.S. Court of Appeals for the DC Circuit dismissed one of these four lawsuits on November 12, 2019 for lack of jurisdiction. On January 24, 2020, the U.S. Court of Appeals for the Tenth Circuit vacated the small refinery exemptions granted to two of our refineries for 2016 and remanded the case to the EPA for further proceedings. On March 24, 2020, various subsidiaries of HollyFrontier filed a Petition for Rehearing with the U.S. Court of Appeals for the Tenth Circuit. On April 7, 2020, the Tenth Circuit denied our request to reconsider its decision, and on April 15, 2020, the Tenth Circuit entered its mandate, remanding the matter back to the EPA. It is not clear at this time what steps the EPA will take with respect to our 2016 small refinery exemptions, or how the case will impact future small refinery exemptions.

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Other

We are a party to various other litigation and proceedings that we believe, based on advice of counsel, will not either individually or in the aggregate have a materially adverse impact on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

Except for the additional risk factor below, there have been no material changes in our risk factors as previously disclosed in Part 1, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in Part II, “Item 1A. Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. You should carefully consider the risk factors discussed below and in our 2019 Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Our business depends on hydrocarbon supply and demand fundamentals, which can be adversely affected by numerous factors outside of our control, including the widespread outbreak of an illness, pandemic (like COVID-19) or any other public health crisis as well as actions taken by oil producers.

Our success depends on the demand for petroleum products such as transportation fuels and finished lubricant products, which is largely driven by the conditions of local and worldwide economies, and the supply of crude oil and other feedstocks. COVID-19’s spread across the globe and governmental actions in response thereto have negatively affected worldwide economic and commercial activity, reduced global demand for oil, gas and refined products, and created significant volatility and disruption of financial and commodity markets. Other factors currently impacting crude oil supply include production levels implemented by OPEC members, other large oil producers such as Russia and domestic and Canadian oil producers. The oversupply of crude oil in the market has caused certain domestic and Canadian oil producers from whom we source crude oil to shut-in their production, which could impact our ability to readily source crude oil once the stored crude oil is depleted. While there has been a recent stabilization in demand for refined products in the second quarter of 2020, this combination of events has contributed to an overall drop in prices for crude oil and refined products in the first half of 2020. In addition, the supply and demand for refined and finished lubricant products will depend on many other factors outside of our control, some of which include:

• changes in domestic and international demand for, and the marketability of, our refined and finished lubricant products due to governmental actions, including travel bans and restrictions, quarantines, shelter in place orders, and shutdowns, which could result in a full or partial shutdown of our facilities;

• increased price volatility, including the price we receive for refined and finished lubricant products;

• the health of our workforce, including contractors and subcontractors, and their access to our facilities, which could result in a full or partial shutdown of our facilities if a significant portion of the workforce at a facility is impacted;

• the ability or willingness of our vendors and suppliers to provide the equipment, parts, crude oil or other raw materials for our operations or otherwise fulfill their contractual obligations, which could reduce our production levels or otherwise cause our delay or failure to deliver refined or other finished lubricant products timely or at all or cause delay or failure to complete projects at our facilities;

• the ability or willingness of our customers to fulfill their contractual obligations or any material reduction in, or loss of, revenue from our customers;

• increased potential for the occurrence of operational hazards, including terrorism, cyberattacks or domestic vandalism, as well as information system failures or communication network disruptions;

• increased cost and reduced availability of capital for growth or capital expenditures;

• availability and operability of terminals, tankage and pipelines that store and transport crude oil and refined and finished lubricant products;

• delay by government authorities in issuing or maintaining permits necessary for our business or our capital projects;

• shareholder activism and activities by non-governmental organizations to limit sources of funding for the energy sector;

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• increased costs of operation in relation to the COVID-19 outbreak, which costs may not be fully recoverable or adequately covered by insurance; and

• the impact of any economic downturn, recession or other disruption of the U.S. and global economies and financial and commodity markets.

The spread of COVID-19 has caused us to significantly modify our business practices (including limiting employee and contractor presence at our work locations, restricting travel unless approved by senior leadership, quarantining employees when necessary, reducing our expected total consolidated capital expenditures for 2020 and reducing utilization at our refineries), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, contractors, customers, suppliers and communities. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be adversely impacted. In addition, a reasonable expectation exists that further deterioration in gross margins or a prolonged economic slowdown due to the COVID-19 pandemic could result in an additional impairment of assets or of goodwill at some point in the future. Such impairment charges could be material.

As the potential effects of COVID-19 are difficult to predict, the duration of any potential business disruption or the extent to which it may negatively affect our operating results is uncertain. Any potential impact will depend on future developments and new information that may emerge regarding the spread, severity and duration of the COVID-19 pandemic and the actions taken by authorities to contain it or manage its impact, all of which are beyond our control. In addition, if the volatility and seasonality in the oil and gas industry were to increase, the demand for our products and the prices that we will be able to charge for those products may decline. We are monitoring the situation to assess further possible implications to our business and to take actions in an effort to mitigate adverse consequences. These potential effects, while uncertain, could adversely affect our business, financial condition, results of operations and/or cash flows, as well as our ability to pay dividends to our shareholders.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Common Stock Repurchases Made in the Quarter

Under our common stock repurchase programs, repurchases are being made from time to time in the open market or privately negotiated transactions based on market conditions, securities law limitations and other factors. The following table includes repurchases made under these programs during the second quarter of 2020.

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 2020	—	$	—	—	$	1,000,000,000
May 2020	—	$	—	—	$	1,000,000,000
June 2020	—	$	—	—	$	1,000,000,000
Total for April to June 2020	—			—

Item 6. Exhibits

The Exhibit Index on page 62 of this Quarterly Report on Form 10-Q lists the exhibits that are filed or furnished, as applicable, as part of the Quarterly Report on Form 10-Q.

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Exhibit Index

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K filed July 8, 2011, File No. 1-03876).
3.2	Amended and Restated By-Laws of HollyFrontier Corporation (incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K filed February 20, 2014, File No. 1-03876).
10.1*+	Amended and Restated Consulting Agreement and Release, dated June 30, 2020, by and between HollyFrontier Corporation, HollyFrontier Payroll Services, Inc. and James Stump.
10.2+	HollyFrontier Corporation 2020 Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed May 15, 2020, File No. 1-03876).
10.3+	HollyFrontier Corporation 2020 Long Term Incentive Plan Sub-Plan for U.K. Employees (incorporated by reference to Exhibit 4.4 of Registrant’s Registration Statement on Form S-8 filed June 1, 2020, File No. 333-238835)
10.4*	Second Amendment to Third Amended and Restated Crude Pipelines and Tankage Agreement dated as of May 26, 2020, by and among HollyFrontier Navajo Refining LLC, HollyFrontier Woods Cross Refining LLC, HollyFrontier Refining & Marketing LLC, Holly Energy Partners - Operating, L.P., HEP Pipeline, L.L.C. and HEP Woods Cross, L.L.C.
10.5*	First Amendment to Fifth Amended and Restated Master Lease and Access Agreement dated as of August 4, 2020, effective as of January 23, 2020, by and among certain subsidiaries of Holly Energy Partners, L.P. and certain subsidiaries of HollyFrontier Corporation.
10.6+	Form of Restricted Stock Unit Agreement (for employees) (incorporated by reference to Exhibit 10.2 of Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, File No. 1-03876).
10.7+	Form of Performance Share Unit Agreement (incorporated by reference to Exhibit 10.3 of Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, File No. 1-03876).
31.1*	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
101++	The following financial information from HollyFrontier Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted as inline XBRL (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. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
104	Cover page Interactive Data File (formatted as inline XBRL and contained in exhibit 101).

* Filed herewith.

** Furnished herewith.

+ Constitutes management contracts or compensatory plans or arrangements.

++Filed electronically herewith.

62

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HOLLYFRONTIER CORPORATION
	(Registrant)
Date: August 6, 2020		/s/ Richard L. Voliva III
		Richard L.Voliva III
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: August 6, 2020		/s/ Indira Agarwal
		Indira Agarwal
		Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)

63

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED CONSULTING AGREEMENT AND RELEASE

This Amended and Restated Consulting Agreement and Release (“Agreement”) is between HollyFrontier Corporation and HollyFrontier Payroll Services, Inc., on behalf of themselves and their respective parents, subsidiaries, and affiliates (collectively, the “Company”), and me, James Stump. By signing this Agreement, I am agreeing to release all claims against the Company, and promising not to sue the Company in the future with respect to those released claims, all as described in more detail below. In exchange for my agreements and promises and the timely execution (and non-revocation) of the release of claims in the form set forth as Attachment B (the “Release”) which attachment is part of this Agreement, the Company has agreed to pay me Benefits (set forth on Attachment A) which I understand I would not receive unless I sign this Agreement. I acknowledge and agree to the following:

1.Retirement. I understand that my final day of employment with the Company will be on my Retirement Date set forth on Attachment A, which attachment is part of this Agreement. All salary and other benefits will cease at that time, except as otherwise provided in this Agreement.

2.Benefits. I understand that I am being separated from the payroll and that I have been offered Benefits (set forth on Attachment A) in exchange for signing and complying with the terms of this Agreement. This payment is subject to taxes and customary withholdings and will be paid within the time period set forth on Attachment A. I understand that payment will cease upon my breach of any part of this Agreement.

3.Release of Claims. I understand and agree that this Agreement is conditioned upon my timely execution and non-revocation of the Release. If I do not execute and return the Release to the HR Contact identified on Attachment A or if I revoke the Release within the revocation period set forth in the Release, this Agreement will be null and void, the Company will have no obligations hereunder, and my employment will end on my Retirement Date.

4.Legal Action and Legal Fees. I understand that I must pay the Company’s legal fees if I sue the Company for any claims waived and/or released in the Release or otherwise break my promises in this Agreement. I understand that I do not have to pay the Company’s legal fees under this paragraph, and that I will not be penalized in any way, if I challenge only my waiver and/or release of age discrimination claims under the Age Discrimination in Employment Act (ADEA).

5.Cooperation. I agree, upon the Company’s request, to reasonably cooperate in any Company or government investigation, arbitration and/or litigation regarding events that occurred during my employment with the Company. I understand that the Company will compensate me for any reasonable expenses I incur as a result of such cooperation, as long as I request such compensation in advance and in writing.

6.Certain Obligations. I understand that after my Retirement Date, I continue to be bound by my other obligations and promises to the Company, including, but not limited to, the obligations contained in the Company’s Code of Business Conduct and Ethics (the “Code”), and any intellectual property agreements signed by me, except as specifically modified by this Agreement. I also understand that this Agreement does not, however, limit me from providing information to the U.S. Securities and Exchange Commission and/or the Occupational Safety and Health Administration or another governmental agency, including as part of a whistleblower action and/or a report of possible violation(s) of any federal securities law.

I affirm my obligation to the Company not to disclose to any third party non-public Company information. I understand that this paragraph shall not apply to information that is required to be disclosed by law or to information provided to a government agency or entity acting in its official capacity.

7.Return of Property. In accordance with my existing and continuing obligations to the Company (including those obligations arising under the Code and any confidentiality, intellectual property and/or other agreements that I have previously signed), except as otherwise agreed to with the Company in writing, I agree that I have returned or will immediately return to the Company, within five (5) days of my execution of this Agreement or on my Retirement Date (whichever is later), all Company property, including building passes, credit cards, keys, telephones, company files, documents, records, computer access codes, computer programs, instruction manuals, business plans, and other property that I received, prepared, or helped to prepare in connection with my employment with the Company. I also agree that I will not keep and have not kept any copies, duplicates, reproductions, computer disks, or excerpts of any confidential or proprietary Company materials, documents or trade secrets.

8.Confidential Information. I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Proprietary Information (defined below), unless an officer of the Company authorizes me to do so in writing. I will obtain the Company’s written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that relates to my work while at the Company and/or that incorporates any Proprietary Information. I reaffirm that all Proprietary Information that I may have prepared or acquired during my employment is the sole property of the Company. The term “Proprietary Information” means and includes all confidential and/or proprietary knowledge, data or information of the Company, including trade secrets, inventions, ideas, processes, formulas, data, programs, know-how, improvements, discoveries, developments and designs and techniques. It also includes business information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, prices and costs, suppliers and customers as well as information regarding the identity, skills and compensation of other employees of the Company.

9.Statements Concerning the Company. I agree to refrain from publishing any oral or written statements about the Company or its directors, officers, employees, consultants, agents or representatives that (a) are slanderous, libelous or defamatory, or (b)  place the Company or any of its directors, officers, employees, consultants, agents or representatives in a false light before the public. Similarly, the Company shall refrain from publishing any oral or written statements about me that (a) are slanderous, libelous or defamatory, or (b) place me in a false light before the public. The foregoing shall not be violated by truthful statements in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings). A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded to me and to the Company under this provision are in addition to any and all rights and remedies otherwise afforded by law.

10.Update Social Media Sites. Within five (5) days following my Retirement Date, I will update any social networking sites, including, but not limited to, Twitter, Facebook, and LinkedIn, to indicate that I am no longer employed by the Company. In addition, within five (5) days following the end of the Consulting Period (as defined below), I will update any social networking sites, including, but not limited to, Twitter, Facebook, and LinkedIn, to indicate that I am no longer affiliated the Company.

11.Non-solicitation. I agree that from and after the date I receive this Agreement and for two (2) years after my Retirement Date, I will not, either directly or through others, (a) solicit or attempt to solicit, or assist any other person in soliciting, any employee of the Company to end his or her relationship with the Company; (b) recruit, hire or attempt to recruit or hire, or assist any other person in recruiting or hiring, any employee of the Company for a competing business; or (c) solicit, or assist any other person in soliciting, any consultant, vendor, contractor or customer of the Company, with whom I had contact or whose identity I learned as a result of my employment with the Company, to diminish or materially alter its relationship with the Company. I also will not provide the names or any other information about any employees of the Company to any person, recruiter or competing business. I understand and agree that for purposes of this Agreement, a customer is any person or entity to which the Company has provided goods or services at any time during the two (2) year period before my Retirement Date.

12. Consulting.

a. For the period beginning July 1, 2020 and continuing until the earlier of (a) the mechanical completion of the Company’s renewable diesel facility in Cheyenne (as determined by the Company), and (b) the termination of this Agreement (the “Consulting Period”), the Company will pay me a retainer of $49,000 per month (pro-rated for partial months) to provide services (the “Services”) that the Company may reasonably request from time to time in the capacity of an independent contractor, which Services shall include providing consultation and assistance with respect to the transition of duties and overseeing the conversion of the Cheyenne refinery to a renewable diesel facility. I will submit an invoice to the Company within five (5) business days following the end of each month in which the Consulting Period existed that contains a description of the Services provided during the calendar month to which the invoice relates, and the Company will pay the retainer for the applicable calendar month within thirty (30) days of its receipt of such invoice. At the request of the Company, I will also submit reasonable documentation evidencing the work performed during a prior calendar month. Subject to reasonable prior approval of the Company, the Company shall pay or reimburse me for all reasonable (in type and amount) and necessary business expenses incurred by me in the course of providing Services for the Company. I will furnish the Company with the documentation required by the Internal Revenue Code of 1986, as amended (or by any successor revenue statute) and the regulations thereunder in connection with all such expenses, including, without limitation, all approved business travel and entertainment expenses.

b. If the Consulting Period is not terminated prior to the mechanical completion of the Company’s Cheyenne renewable diesel facility, I am eligible for a completion bonus (the “Completion Bonus”) as follows:

Minimum	Target	Maximum
$50,000	$300,000	$600,000

The amount of the Completion Bonus will be based on safety, project timeline and budget metrics with respect to the Company’s Cheyenne renewable diesel facility conversion project and such metrics shall be determined by the Chief Executive Officer of the Company and conveyed to me within 90 days of my execution of this Agreement. To the extent earned pursuant to this Paragraph 12.b., the Completion Bonus will be paid within 15 days of themechanical completion of the Company’s Cheyenne renewable diesel facility as determined by the Chief Executive Officer of the Company, provided I continue to provide Services for the Company through such completion.

c. Notwithstanding the foregoing, the retainer arrangements set forth in this Paragraph 12 (and the Consulting Period) may be terminated at any time by the Company or me, with or without cause, upon written notice to the other party; provided, however, that if the Company terminates the retainer arrangements set forth in this Paragraph 12 without “cause” (as defined below) or I terminate this Agreement due to an act of cause by the Company, in each case on or prior to March 31, 2021, the Company shall pay me the unpaid retainer payment, at $49,000 per month (pro-rated for partial months), for each month until March 31, 2021, with monthly payments being made within thirty (30) days after the end of each applicable calendar month (; provided, however, any retainer that remains unpaid as of March 1 of any year will be paid no later than March 15 of such year; provided, further, that if I terminate this Agreement other than due to an act of cause by the Company or the Company terminates this Agreement for cause, I will forfeit any unpaid and unearned payments and any unvested equity awards held at such time. For purposes of this Paragraph 12, “cause” is defined as: (x) a party’s material breach of this Agreement to the extent such breach remains uncured (if capable of cure) after the other party has given such party notice in writing thereof and such party has failed to cure such breach within ten (10) business days; or (y) a party’s fraud, forgery, misrepresentation, dishonesty, errors or omissions that materially and adversely affects the other party. For purposes of section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) each installment payment payable pursuant to this Paragraph 12.c. will be treated as a separate payment.

d. In performing and providing the Services, I will comply with all applicable laws and with all applicable orders, rules and regulations of all duly constituted authorities.

e. For purposes of providing the Services to the Company and its subsidiaries, I shall at all times be an independent contractor during the Consulting Period. Nothing in this Agreement shall be construed as creating the relationship of principal and agent, or employer and employee, between the Company and me during the Consulting Period. During the Consulting Period, I shall have no authority to hire any persons on behalf of the Company, and any person whom I may employ shall be deemed to be solely my employee. I shall have control and management of the work under Paragraph 12 of this Agreement, and no right is reserved to the Company to direct or control the manner in which the work is performed, as distinguished from the result to be accomplished. Nothing herein contained shall be construed to authorize me to incur any debt, liability or obligation of any nature for or on behalf of the Company. I agree that any Services I perform shall be completed and delivered reasonably in accordance with requests provided to me by the Company from time to time and consistent with the policies and practices of the Company with respect to work performed on or with respect to its projects, property, or premises. Neither I nor my agents or employees, if any, shall be eligible to participate in any benefits or privileges given or extended by the Company to its employees (other than any benefits to which I may be entitled by virtue of my status as a former employee of the Company, prior to the beginning of the Consulting Period), including, but not limited to, pension, profit sharing, workers’ compensation insurance, unemployment insurance, other insurance, health, medical, life or disability benefits or coverage, or paid time off. I am responsible for paying any and all taxes owed on payments received by me pursuant to this Paragraph 12, and I shall indemnify and hold harmless the Company and its affiliates, and the foregoing entities’ respective representatives, for all claims, damages, costs and liabilities arising from my failure to do so. I agree to be solely responsible for (and to indemnify and hold harmless the Company and its affiliates for) my acts or omissions and the acts and omissions of my employees, if any, including acts or omissions during the performance of Services pursuant to this Agreement.

f. All proprietary technology and all financial, operating, and training ideas, processes, and materials, including works of expression and all copyrights in such works, relating to the Company’s current or potential business, that are developed, written, conceived of, or improved upon by me, singly or jointly, in connection with, as a result of, or otherwise incident to the performance of this Agreement (including in performing or providing the Services), shall be the sole property of the Company. Accordingly, I will disclose, deliver, and assign, and I do hereby assign, to the Company all of my right, title and interest in and to such patentable inventions, discoveries, and improvements, trade secrets, and all works subject to copyright. I agree to execute all documents and patent applications, to make all arrangements necessary to further document such ownership and/or assignment, and to take whatever other steps may be needed to give the Company the full benefit of them, both during the term of this Agreement and thereafter. I specifically agree that all copyrighted materials generated or developed as a result of my services under this Agreement, including, but not limited to, computer programs and documentation, shall be considered works made for hire under the copyright laws of the United States and that they shall, upon creation, be owned exclusively by the Company.

g. Unless approved by the Company in writing, all Services under this Agreement shall be provided by me and by no other person.

13.Non-Competition. The Company has provided me with access to Company Proprietary Information and will continue to provide me with access to new Company Proprietary Information during the period of my consulting duties described in Paragraph 12. I acknowledge and agree that I will know the Company’s Competitors as of the Retirement Date. Further, I acknowledge and agree that I have voluntarily agreed to the covenants set forth in this Paragraph 13. I further agree and acknowledge that the limitations and restrictions set forth herein, including geographical and temporal restrictions on certain competitive activities, are reasonable in all respects and not oppressive, shall not cause me undue hardship, and are material and substantial parts of this Agreement intended and necessary to prevent unfair competition and to protect the Company’s Proprietary Information, goodwill and substantial and legitimate business interests.

a. I agree that, following my Retirement Date and prior to and including the last date of the Consulting Period, I will not, without the prior written approval of the Chief Executive Officer of the Company, directly or indirectly, for me or on behalf of or in conjunction with any other person or entity of any nature:

i. Directly or indirectly own, manage, operate, join, become an officer, director, employee or consultant of, or otherwise be affiliated with any Competitor; or

ii. Appropriate any Business Opportunity of, or relating to, the Company located in the Market Area.

b. The covenants in this Paragraph 13, and each provision and portion hereof, are severable and separate, and the unenforceability of any specific covenant (or portion thereof) shall not affect the provisions of any other covenant (or portion thereof). Moreover, in the event any arbitrator or court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which such arbitrator or court deems reasonable, and this Agreement shall thereby be reformed.

c. For purposes of this Paragraph 13, the following terms shall have the following meanings:

i. “Business Opportunity” shall mean any commercial, investment or other business opportunity relating to a Competitor.

ii. “Competitor” shall mean any direct competitor to the Company’s refinery business, which shall include the refining of petroleum regardless of the end product (whether gasoline, diesel fuel, jet fuel, specialty lubricant products, specialty and modified asphalt or other refined products) or the manufacturing of renewable hydrocarbon biofuels (whether renewable diesel, renewable gasoline or other product), as of the Retirement Date.

iii. “Market Area” shall mean the United States.

14.Applicable Law. The laws of the State of Texas apply to this Agreement.

15.Enforceability. This Agreement is valid, even if any section or term is not enforceable. In the event that any one or more of the provisions contained in this Agreement shall for any reason be held to be unenforceable under the governing law, the rest of the Agreement shall continue to apply.

16.Waiver of Right to a Trial by Jury; Injunctive Relief. I understand that pursuant to this Agreement, I am giving up my right to a trial by jury. The Company also waives its right to a trial by jury.However, I recognize and agree that because of the difficulty of measuring economic losses to the Company as a result of a breach or threatened breach of the covenants set forth Paragraphs 8, 9, 11 and 13, and because of the immediate and irreparable damage that would be caused to the Company for which it would have no other adequate remedy, the Company shall be entitled to enforce such covenants, in the event of a breach or threatened breach, by injunctions and restraining orders from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall not be the Company’s exclusive remedy for a breach or threatened breach of the covenants set forth Paragraphs 8, 9, 11 and 13, but instead shall be in addition to all other rights and remedies available to the Company at law and equity.

17.Successors and Assigns. This Agreement is binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company and their successors and assigns. In the event of the material breach of this Agreement by the Company or any successor to the Company upon or following a “Change in Control” (as such term is defined in the Equity Awards described in Attachment A), in each case, on or prior to March 31, 2021, the amounts payable upon a termination by the Company of the Consulting Period without cause contemplated in Paragraph 12.c., will be paid as provided in Paragraph 12.c., and the benefits specified in Attached A (specifically, the pro-rated annual incentive bonus and vesting of the Equity Awards), to the extent such benefits were not previously paid or provided, will be paid within 60 days of such breach; provided, that, I must provide written notice to the Company or such successor of such breach within 15 days of its occurrence and the breach must remain uncured by the Company or such successor for 30 days; provided, that, for purposes of clarity, amounts payable pursuant to Paragraph 12, this Paragraph 17 or Attachment A are not intended to be duplicative and will only be paid once.

18.Entire Agreement. This Agreement and its attachments contain the entire agreement between the Company and me concerning the separation of my employment and the Services to be provided by me, except as set forth in Paragraph 6 above. In deciding to sign this Agreement, I am not relying on any statements or promises except those found in this Agreement. Except as set forth in Paragraph 6 above, this Agreement supersedes and replaces any prior agreements between the Company and me dealing with the same subjects, including the Consulting Agreement and Release agreed to by the Company on February 27, 2020.

19.Consultation with an Attorney. The Company has advised me, and hereby advises me in writing, to consult with an attorney, at my own expense, before signing this Agreement, and I have had the opportunity to do so.

20.Reaffirmation. If asked by the Company to re-execute and reaffirm my obligations under this Agreement (including the Release) on or after my Retirement Date, I agree to do so as one of my obligations under this Agreement and as a condition of receiving the Benefits set forth on Attachment A.

21.MMSEA. I have not, as of today, incurred any medical expenses as a Medicare beneficiary, and am not aware of any medical expenses that Medicare has paid on my behalf and for which the Company may be liable.

22.Mediation and Arbitration. With the exception of any alleged violation of Paragraphs 8, 9, 11 or 13 of this Agreement, any other controversy, dispute or claim arising out of or relating to this Agreement or its breach will first be settled through good faith negotiation. If the dispute cannot be settled through negotiation, the Company and I agree to attempt in good faith to settle the dispute by mediation administered by JAMS. If the Company and I are unsuccessful at resolving the dispute through mediation, we agree to binding arbitration administered by JAMS pursuant to its Employment Arbitration Rules & Procedures and subject to JAMS Policy on Employment Arbitration Minimum Standards of Procedural Fairness. Judgment on the award may be entered in any court having jurisdiction.

23.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Electronic copies of signatures shall be deemed to be original.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

BY SIGNING THIS AGREEMENT, I STATE THAT: (A) THE COMPANY ADVISED ME TO CONSULT AN ATTORNEY, AT MY OWN EXPENSE, AND THAT I HAVE HAD AN OPPORTUNITY TO DO SO BEFORE SIGNING THIS AGREEMENT; AND (B) THIS AGREEMENT IS WRITTEN IN A CLEAR AND STRAIGHT-FORWARD MANNER, THAT I UNDERSTAND ITS TERMS, AND THAT I HAVE MADE A VOLUNTARY DECISION TO SIGN IT.

Agreed to and accepted by, on this 30th day of June, 2020.

             EMPLOYEE:

/s/ James M. Stump

James M. Stump

Agreed to and accepted by, on this 30th day of June, 2020.

HollyFrontier Corporation

HollyFrontier Payroll Services, Inc.

/s/ Michael C. Jennings

Michael C. Jennings

CEO and President

ATTACHMENT A

Employee Name:             James Stump

Job Title:                 SVP, Refining

Retirement Date: June 30, 2020

Local HR Contact: Dale Kunneman

Benefits

The benefits noted in this section are conditioned upon your execution of the Agreement, your execution and non-revocation of the Release, and your continued employment through the Retirement Date. In addition, to be eligible for benefits noted on this Attachment A, you must satisfactorily perform your duties and remain in good standing with the Company through your Retirement Date.

Annual Incentive Bonus:

You will receive a pro-rated bonus based on nine months of service during the current performance period. Payment will be based on your actual performance and that of the Company, in each case as certified by the Compensation Committee of the Board of Directors in the fourth quarter of 2020. The pro-rated bonus will be paid within 45 days after such certification. The pro-rated bonus will be payable to you and reported on a Form W-2 and is subject to taxes and other withholdings.

Vesting of Long-Term Incentive Awards:

If you continuously comply with the restrictions set forth in Paragraphs 8, 9, 11 and 13 and continue to perform the consulting services set forth in Paragraph 12 (and such consulting arrangement is not terminated by the Company for cause) until March 31, 2021, then, on March 31, 2021, you will become fully vested in, and the restrictions will lapse on, the following awards (the “Equity Awards”) granted to you by HollyFrontier Corporation (and such awards will not be forfeited on your Retirement Date):

Restricted Stock Units

Grant DateRestricted Stock Units That Vest

November 7, 2017    3,939 (third tranche)    

November 6, 2018    5,090 shares (second and third tranche)                                    

Performance Share Units

Grant DatePerformance Stock Units That Vest

November 7, 2017    11,815 (at target)    

November 6, 2018    7,635 (at target)        

You acknowledge that the performance share units are being settled at target (in the amounts set forth above), and you will not be entitled to any additional shares based on certification of the performance goals set forth in the applicable award agreement by the Compensation Committee at a later date. Notwithstanding anything to the contrary in the award agreements evidencing the equity awards set forth above, you will not be entitled to the vesting or settlement of any awards during the Consulting Period. Any awards that would vest pursuant to their terms during the Consulting Period will instead vest on March 31, 2021 subject to your continued performance of the consulting services set forth in Paragraph 12 (and provided such consulting arrangement is not terminated by the Company for cause). In the event such consulting arrangement is terminated by the Company for cause such awards will be immediately forfeited to the Company and become null and void.

Settlement of these restricted stock units and performance units will be subject to tax withholdings and reported as income on a Form W-2.

Any other long-term incentive awards you hold as of your Retirement Date will become null and void on your Retirement Date.

COBRA Premiums:

The Company will provide to you a lump sum payment of $23,757.36 on your Retirement Date to cover 12 months of COBRA premiums. The amount will be payable to you and reported on a Form W-2, subject to taxes and other withholdings. The amount will be paid within thirty days after the latter of the date you sign this Agreement and the date you sign the Release (assuming you do not subsequently revoke the Release during the revocation period). You may use that payment to continue coverage under COBRA, to purchase other health care coverage, or for any other purpose. The regular COBRA procedures and rules will apply, and full COBRA premiums will be charged for continuation coverage for yourself and eligible dependents.

Unconditional Benefits

COBRA Coverage:

If you wish to participate in COBRA, you have 60 days from the termination of your current health benefits to make your election. You will be solely responsible for making a timely COBRA election and for paying all COBRA premiums in a timely manner. Please note that COBRA rates may change, and that the Company reserves the right to modify or replace benefit plans.

You will receive in the mail from TaxSaver after your Retirement Date, documents describing the COBRA health benefits available to you.  You will need to review the documents and elect COBRA during your eligible enrollment period if desired. If you elect to continue health benefits through COBRA, it will be your responsibility to pay the required premiums in a timely manner. 

Life Insurance and Accidental Death and Dismemberment Coverage:

The Cigna Life and AD&D products/coverage may be converted from group to individual coverage. To do so, you must apply directly to the insurance provider within thirty days after you lose coverage. Forms to convert to an individual policy will be mailed to you by Cigna.

Accrued and Unused Vacation Time:

You will receive the cash value of any accrued and remaining unused vacation as of your Retirement Date, which will be payable to you and reported on a Form W-2, subject to taxes and other withholding, within thirty days after the latter of the date you sign this Agreement and the date you sign the Release (assuming you do not subsequently revoke the Release during the revocation period).

401(k)Plan:

If you are a participant in the 401(k) Retirement Plan, the applicable plan rules will govern your options with respect to managing your account balance and/or receiving distributions, as applicable, under the plan. You may also contact Principal at 1-800-547-7754 if you have any general questions concerning options after retirement.

Non-Qualified Deferred Compensation Plan:

As a participant in the Non-Qualified Deferred Compensation Plan, the irrevocable election you have previously made regarding the treatment of your account balance at the time of retirement will govern the treatment of your account balance. You may also contact Principal at 1-800-999-4031 if you have any general questions concerning options after retirement.

Taxes:

All amounts payable will be subject to all applicable tax withholdings.

ATTACHMENT B

RELEASE OF CLAIMS

This Release of Claims (“Release”) is between HollyFrontier Corporation and HollyFrontier Payroll Services, Inc., on behalf of themselves and their respective parents, subsidiaries, and affiliates (collectively the “Company”), and me, James Stump. By signing this Release, I am agreeing to waive and release all claims against the Company and promising not to sue the Company in the future, all as described in more detail below. In exchange for my agreements and promises, the Company has agreed to pay the Benefits set forth on Attachment A which I understand I would not receive unless I sign and do not revoke this Release as described in Paragraph 3 below. I acknowledge and agree to the following:

1.    Waiver of Claims. I realize that there are various local, state, and federal laws, both statutory and common law, that may apply and/or relate to my employment or engagement with the Company. Such laws include, but are not limited to, Title VII of the Civil Rights Act of 1964, Sections 1981 through 1988 of Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974, the Immigration Reform and Control Act, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Worker Adjustment and Retraining Notification Act, the Fair Credit Reporting Act, the Family and Medical Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Genetic Information Nondiscrimination Act of 2008, and the Texas Commission on Human Rights Act (a/k/a Chapter 21 of the Texas Labor Code).

By signing this Release, I, on behalf of myself and anyone who may have the legal right to make claims on my behalf, release the Company, and its respective directors, officers, representatives, agents and employees, and any of the Company’s successors or predecessors, affiliates, or parent, subsidiary and related companies (collectively referred to as “Releasees”) from any and all claims, known or unknown, including claims for attorneys’ fees and costs, which relate to, or arise out of, my employment or separation from the Company, including any alleged violations of the laws listed above in this Paragraph 1. I understand that, subject to the limitations set forth in Paragraph 2 below, I am giving up all statutory, common law or contract claims and rights, including those that I am not currently aware of and those not mentioned in this Release, up to and through the date that I sign and deliver this Release to the Company. If any claim is not subject to release, I waive, to the extent permitted by law, any right or ability to be a class or collective action representative or to opt-in and/or otherwise participate in any putative or certified class, collective or multi-party actionor proceeding based on such a claim in which the Company or any other Releasee identified in this Release is a party.

2.    Certain Actions Not Prohibited. I understand that this Release does not prohibit or prevent me from filing a charge or participating, testifying, or assisting in investigations, hearings, or other proceedings conducted by the EEOC or the NLRB, or a similar agency enforcing federal, state or local anti-discrimination laws. However, to the maximum extent provided by law, I agree that if such an administrative claim is made to an anti-discrimination agency, I shall not be entitled to any individual damages, money, or other personal benefits as a result of such charge, investigation or proceeding. In addition, I understand that nothing in this Release prohibits me from (a) reporting possible violations of law (including securities laws) to any government agency or entity, including to the U.S. Congress, the U.S. Department of Justice, the U.S. Securities and Exchange Commission or any agency Inspector General; (b) making disclosures protected under federal whistleblower laws; or (c) otherwise fully participating in any federal whistleblower programs, including any such programs managed by the U.S. Securities and Exchange Commission and/or the Occupational Safety and Health Administration. This Release does not prohibit or prevent me from receiving individual monetary awards or other individual relief by virtue of participating in such whistleblower programs. Furthermore, I understand, and the Company hereby acknowledges and agrees that this Release does not prevent me from exercising my rights, if any, to (a) vested benefits under any pension or savings plan or deferred compensation plan; (b) COBRA benefits under Section 601-608 of ERISA; (c) receive pay for accrued but unused vacation; and/or (d) any right to my base salary through my Retirement Date.

3.    Revocation of This Release. I understand that, pursuant to the Older Workers Benefit Protection Act of 1990 (OWBPA), I have the right to consult an attorney at my own expense before signing this Release, and the Company has advised me (and hereby advises me in writing) to consult an attorney; I have at least twenty-one calendar days from the date I receive this Release to consider the Release before signing it; I may change my mind and revoke the Release within seven calendar days after signing it; and that the Release shall not go into effect until then. If I decide to revoke this Release, I understand that the Company must receive written notice of my decision before the seven calendar day period expires. I must provide that notice to the HR Contact identified on Attachment A before the time period expires.

4.    Applicable Law. The laws of the State of Texas apply to this Release.

BY SIGNING THIS RELEASE, I STATE THAT: (A) THE COMPANY ADVISED ME TO CONSULT AN ATTORNEY, AT MY OWN EXPENSE, AND THAT I HAVE HAD AN OPPORTUNITY TO DO SO, BEFORE SIGNING THIS RELEASE; (B) I UNDERSTAND THAT IN ORDER TO RECEIVE THE BENEFITS SET FORTH ON ATTACHMENT A TO THE AGREEMENT, I MUST SIGN AND RETURN THIS RELEASE TO THE COMPANY PRIOR TO JULY 3, 2020 BUT NO EARLIER THAN JUNE 30, 2020; (C) I UNDERSTAND THAT I HAVE SEVEN CALENDAR DAYS TO REVOKE THIS RELEASE AFTER SIGNING IT; AND (D) I ACKNOWLEDGE THAT THIS RELEASE IS WRITTEN IN A CLEAR AND STRAIGHT-FORWARD MANNER AND THAT I HAVE BEEN PROVIDED AT LEAST 21 DAYS TO CONSIDER IT, THAT I UNDERSTAND ALL OF ITS TERMS, AND THAT I HAVE MADE A VOLUNTARY DECISION TO SIGN IT.

Agreed to and accepted by, on this 30th day of June, 2020.

             EMPLOYEE:

/s/ James M. Stump

James M. Stump

Agreed to and accepted by, on this 30th day of June, 2020.

HollyFrontier Corporation

HollyFrontier Payroll Services, Inc.

/s/ Michael C. Jennings

Michael C. Jennings

CEO and President

Consulting Agreement and Release – Stump

EX-10.4

Exhibit 10.4

SECOND AMENDMENT

TO THIRD AMENDED AND RESTATED

CRUDE PIPELINES AND TANKAGE AGREEMENT

This Second Amendment to Third Amended and Restated Crude Pipelines and Tankage Agreement (this “Amendment”) is entered into on May 26, 2020, to be effective as of May 26, 2020 (the “Second Amendment Effective Date”) by and among:

1.HollyFrontier Navajo Refining LLC, a Delaware limited liability company (“Navajo Refining”),

2.HollyFrontier Woods Cross Refining LLC, a Delaware limited liability company (“Holly Refining – Woods Cross”),

3.HollyFrontier Refining & Marketing LLC, a Delaware limited liability company (“HFRM”, together with Navajo Refining and Holly Refining – Woods Cross, the “HollyFrontier Entities”),

4.Holly Energy Partners - Operating, L.P., a Delaware limited partnership (the “Operating Partnership”),

5.HEP Pipeline, L.L.C., a Delaware limited liability company (“HEP Pipeline”), and

6.HEP Woods Cross, L.L.C., a Delaware limited liability company (“HEP Woods Cross”, together with the Operating Partnership and HEP Pipeline, the “Partnership Entities”).

Each of the HollyFrontier Entities and the Partnership Entities are individually referred to herein as a “Party” and collectively as the “Parties.”

WHEREAS, the Parties desire to amend certain provisions of the Third Amended and Restated Crude Pipelines and Tankage Agreement, effective as of March 12, 2015, (as amended to date, the “Agreement”) by and among the HollyFrontier Entities and the Partnership Entities as set forth herein; and

WHEREAS, HEP Pipeline has constructed and installed the system upgrades and HFRM has agreed to reimburse HEP Pipeline for the cost of such upgrades all as provided herein;

NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties hereby agree as follows:

ARTICLE 1AMENDMENTS

1.1Amendment to Section 2.Section 2 of the Agreement is hereby amended by adding subsection (w) as follows:

“(w)    Hobbs System Expansion.

(i)    Effective as of the Hobbs Expansion Commencement Date, the HollyFrontier Entities shall pay to the Partnership Entities a pump-over fee of $0.22 per barrel for all barrels received at the Hobbs Station terminal in Hobbs, New Mexico from Plains Pipeline, L.P. (the “Hobbs Pump-Over Fee”). The Hobbs Pump-Over Fee shall (A) remain in effect until the Partnership Entities have received aggregate Hobbs Pump-Over Fees in respect of the Hobbs System Expansion equal to $600,000, and (B) be in addition to the Minimum Trunk Pipeline Revenue Commitment.

(ii)    From the Hobbs Expansion Commencement Date until the last day of the month following the month in which the Partnership Entities have received the full amount to which they are entitled with respect to the Hobbs System Expansion, the Partnership Entities shall provide the HollyFrontier Entities with written notice of their calculation of the Hobbs Pump-Over Fee by no later than 30 days following the end of each calendar month. The notice will include an aggregate balance of the Hobbs Pump-Over Fees paid by the HollyFrontier Entities since the Hobbs Expansion Commencement Date.

(iii)    If the HollyFrontier Entities disagree with the Partnership Entities’ calculations in respect of the Hobbs Pump-Over Fee, then HollyFrontier Entities will notify the Partnership Entities and a senior officer of HollyFrontier and a senior officer of the Partnership will negotiate in good faith to resolve any differences with respect to such calculations. If such differences are not resolved within 30 days following the Partnership Entities’ delivery to the HollyFrontier Entities of the Hobbs Pump-Over Fee calculations, the HollyFrontier Entities and the Partnership Entities shall submit any and all matters which remain in dispute to arbitration in accordance with Section 12(e).”

1.2Amendment to Section 6. Section 6 of the Agreement is hereby amended by adding the following to the end thereof:

“If the amount contemplated in Section 2(w)(i) has not been paid to the Partnership Entities at the time this Agreement is terminated in accordance with its terms, then, notwithstanding anything in this Agreement to the contrary, any amounts then owing in respect of Section 2(w)(i) shall be paid to the Partnership Entities not later than the third business day following such termination.”

1.3Amendment to Annex A.

(i)    Annex A to the Agreement is hereby amended to add the following definition in the proper alphabetical sequence:

“Hobbs Expansion Commencement Date” means June 1, 2020.

“Hobbs System Expansion” means the following construction in 2020: (A) connection facilities at the Hobbs Station terminal in New Mexico allowing for additional third party crude deliveries to such terminal and (B) additional pumps and pumping capacity to the Hobbs to Lovington 8-inch pipeline enabling an additional 10,000 barrels per day of Crude Oil to be transported between the Hobbs Station terminal in Hobbs, New Mexico and the Lovington Refinery.

(ii)    Annex A to the Agreement is hereby amended to add the following definitions to the defined term table in proper alphabetical sequence:

Term	Section
“Hobbs Pump-Over Fee”	Section 2(w)(i)

ARTICLE 2

MISCELLANEOUS

2.1Counterparts. This Amendment may be executed in counterparts each of which shall be deemed an original. An executed counterpart of this Amendment transmitted by facsimile shall be equally as effective as a manually executed counterpart.

2.2Successors and Assigns. Section 12(b) of the Agreement is hereby incorporated by reference into this Section 2.2, mutatis mutandis.

2.3Entire Agreement. The Agreement, as amended by this Amendment, contains the entire agreement between the Parties as to the subject matter of the Agreement and, except as provided for in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect as originally written.

[Remainder of page intentionally left blank. Signature pages follow.]

IN WITNESS WHEREOF, the undersigned Parties have executed this Amendment as of the date first written above to be effective as of the Second Amendment Effective Date.

PARTNERSHIP ENTITIES:

HOLLY ENERGY PARTNERS - OPERATING, L.P.

HEP WOODS CROSS, L.L.C.

HEP PIPELINE, L.L.C.

By:     /s/ Richard L. Voliva III    

Name: Richard L. Voliva III

Title:     President

HOLLYFRONTIER ENTITIES:

HOLLYFRONTIER NAVAJO REFINING LLC

HOLLYFRONTIER WOODS CROSS REFINING LLC

By:     /s/ Thomas G. Creery    

Name: Thomas G. Creery

Title:     Senior Vice President, Commercial

HOLLYFRONTIER REFINING & MARKETING LLC

By:     /s/ Thomas G. Creery    

Thomas G. Creery

President

1

EX-10.5

FIRST AMENDMENT TO

FIFTH AMENDED AND RESTATED MASTER

LEASE AND ACCESS AGREEMENT

This First Amendment to Fifth Amended and Restated Master Lease and Access Agreement (this “Amendment”) is entered into as of August 4, 2020 to be effective 12:01 a.m. Central Time (the “Effective Time”) on January 23, 2020 (the “Effective Date”) by and between the Parties whose signatures are set forth below.

WHEREAS, on October 29, 2018, the Parties entered into that certain Fifth Amended and Restated Master Lease and Access Agreement (the “Agreement”). Capitalized terms used but not otherwise defined in this Amendment have the meanings ascribed to such terms in the Agreement.

WHEREAS, the Parties now desire to amend certain provisions of the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the premises and the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as of the Effective Date, the Parties hereby amend the Agreement as follows:

1.Incorporation of Recitals. The recitals for this Amendment are fully incorporated herein by the reference thereto with the same force and effect as though recited herein.

2.Amendments. Exhibit E attached to the Agreement is hereby deleted and replaced in its entirety with Exhibit E attached to this Amendment. In addition, Exhibits E-8 and F-8 attached to this Amendment are hereby added to the Agreement.

3.     Counterparts. This Amendment may be executed in counterparts each of which shall be deemed an original. An executed counterpart of this Amendment transmitted by email shall be equally as effective as a manually executed counterpart.

4.    Successors and Assigns. This Amendment shall inure for the benefit of and shall be binding on each of the Parties and their respective successors and/or assigns.

5.    Entire Agreement. This Amendment contains the entire agreement between the Parties as to the subject matter hereof and, except as provided for in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Parties have executed this First Amendment to Fifth Amended and Restated Master Lease and Access Agreement to be effective as of the Effective Date.

Related Refinery Owners:

HOLLYFRONTIER EL DORADO REFINING LLC

HOLLYFRONTIER CHEYENNE REFINING LLC

HOLLYFRONTIER TULSA REFINING LLC

HOLLYFRONTIER WOODS CROSS REFINING LLC

HOLLYFRONTIER NAVAJO REFINING LLC

By: /s/ Thomas G. Creery            

Name: Thomas G. Creery

Title: Senior Vice President, Commercial

Relevant Asset Owners:

EL DORADO LOGISTICS LLC

EL DORADO OPERATING LLC

CHEYENNE LOGISTICS LLC

HEP TULSA LLC

WOODS CROSS OPERATING LLC

HEP WOODS CROSS, L.L.C.

HEP PIPELINE, L.L.C.

By: /s/ Richard L. Voliva III            

Name: Richard L. Voliva III

Title: President

Exhibit E

to

Fifth Amended and Restated Master Lease and Access Agreement

Applicable Term and Applicable Assets

Location	Applicable Term	Applicable Assets
El Dorado Refinery Complex
For El Dorado Logistics	Commencement Date: November 1, 2011 End Date: November 1, 2061 (midnight)	See Exhibit E-1
For El Dorado Operating	Commencement Date: November 1, 2015 End Date: November 1, 2065 (midnight)	See Exhibit E-8
Cheyenne Refinery Complex
For Cheyenne Logistics	Commencement Date: November 1, 2011 End Date: November 1, 2061 (midnight)	See Exhibit E-2
Tulsa Refinery Complex
Group 1 Assets and Group 2 Assets	Commencement Date: March 31, 2010 End Date: March 31, 2060 (midnight)	See Exhibit E-3
Tulsa West Tankage Assets and Receiving Pipelines	Commencement Date: March 31, 2016 End Date: March 31, 2066 (midnight)	See Exhibit E-3
Woods Cross Refinery Complex
For HEP Woods Cross	Commencement Date: February 29, 2008 End Date: February 28, 2058 (midnight)	Applicable Assets at Woods Cross Refinery Complex (excluding the Woods Cross Pipeline Pad) See Exhibit E-4
	Commencement Date: September 10, 2010 End Date: February 28, 2058 (midnight)	Woods Cross Pipeline Pad See Exhibit E-5
For Woods Cross Operating	Commencement Date: October 1, 2016 End Date: October 1, 2066 (midnight)	See Exhibit E-9
Navajo Refinery Complex
	Commencement Date: February 29, 2008 End Date: February 28, 2058 (midnight)	Applicable Assets at Navajo Refinery Complex (excluding the Truck Rack, the Artesia Blending Station and the Artesia Pump and Receiving Stations) See Exhibit E-6
	Commencement Date: September 10, 2010 End Date: February 28, 2058 (midnight)	Artesia Pump and Receiving Stations See Exhibit E-7
	Commencement Date: January 23, 2020 End Date: February 28, 2058 (midnight)	LACT Units #6007102, #6007103, and the easternmost LACT Unit located in Lane 3 on the land described on Exhibit F-8 and all related equipment See Exhibit E-8

Exhibit E-8

to

Fifth Amended and Restated Master Lease and Access Agreement

Applicable Assets: Navajo Refinery Complex

LACT Units #6007102, #6007102, and the easternmost LACT Unit located in Lane 3 on the land described on Exhibit F-8 and all related equipment

1. LACT Units #6007102, #6007103, and the easternmost LACT Unit located in Lane 3 on the land described on Exhibit F-8 and all related equipment

Exhibit F-8

to

Fifth Amended and Restated Master Lease and Access Agreement

Legal Description for Navajo Refinery Complex (LACT Units #6007102, 6007103, and the easternmost LACT Unit located in Lane 3 and related equipment)

Page 1

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael C. Jennings, certify that:

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 6, 2020	/s/ Michael C. Jennings
	Michael C. Jennings
	Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Richard L. Voliva III, certify that:

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.

Date: August 6, 2020	/s/ Richard L. Voliva III
	Richard L. Voliva III
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE

OFFICER UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the quarterly period ended June 30, 2020 and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael C. Jennings, Chief Executive Officer of HollyFrontier Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) 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 6, 2020	/s/ Michael C. Jennings
	Michael C. Jennings
	Chief Executive Officer and President

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL

OFFICER UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the quarterly period ended June 30, 2020 and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard L. Voliva III, Chief Financial Officer of HollyFrontier Corporation (the “Company”) hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) 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 6, 2020	/s/ Richard L. Voliva III
	Richard L. Voliva III
	Executive Vice President and Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 31, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	1-3876
Entity Registrant Name	HOLLYFRONTIER CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	75-1056913
Entity Address, Address Line One	2828 N. Harwood, Suite 1300
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75201
City Area Code	214
Local Phone Number	871-3555
Title of 12(b) Security	Common Stock $0.01 par value
Trading Symbol	HFC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		162,015,416
Entity Central Index Key	0000048039
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents (HEP: $18,913 and $13,287, respectively)	$ 902,509	$ 885,162
Accounts receivable: Product and transportation (HEP: $14,929 and $18,732, respectively)	540,818	834,771
Crude oil resales	52,567	44,914
Accounts receivable, total	593,385	879,685
Inventories: Crude oil and refined products	977,851	1,282,789
Materials, supplies and other (HEP: $935 and $833, respectively)	195,850	191,413
Inventories, total	1,173,701	1,474,202
Income taxes receivable	77,729	5,478
Prepayments and other (HEP: $6,970 and $6,795, respectively)	56,210	61,662
Total current assets	2,803,534	3,306,189
Properties, plants and equipment, at cost (HEP: $2,053,174 and $2,047,674, respectively)	7,052,866	7,237,297
Less accumulated depreciation (HEP: $(584,651) and $(552,786), respectively)	(2,567,686)	(2,414,585)
Operating lease right-of-use assets (HEP: $3,377 and $2,652, respectively)	390,497	467,109
Properties, plants and equipment, net	4,485,180	4,822,712
Other assets: Turnaround costs	359,203	521,278
Goodwill (HEP: $312,873 and $312,873, respectively)	2,373,912	2,373,907
Intangibles and other (HEP: $350,056 and $319,569, respectively)	651,494	673,646
Other assets, total	3,384,609	3,568,831
Total assets	11,063,820	12,164,841
Current liabilities:
Accounts payable (HEP $14,888 and $18,050, respectively)	870,695	1,215,555
Income taxes payable	18,759	27,965
Operating lease liabilities (HEP $3,766 and $3,608, respectively)	102,336	104,415
Accrued liabilities (HEP: $30,886 and $30,418, respectively)	341,252	337,993
Total current liabilities	1,333,042	1,685,928
Long-term debt (HEP: $1,486,648 and $1,462,031, respectively)	2,480,746	2,455,640
Noncurrent operating lease liability (HEP: $70,167 and $72,000, respectively)	318,955	364,420
Deferred income taxes (HEP: $432 and $424, respectively)	765,572	889,270
Other long-term liabilities (HEP: $58,351 and $59,021, respectively)	250,994	260,157
HollyFrontier stockholders' equity:
Preferred stock, $1.00 par value - 5,000,000 shares authorized; none issued	0	0
Common stock $.01 par value - 320,000,000 shares authorized; 256,042,554 shares issued as of June 30, 2020 and December 31, 2019	2,560	2,560
Additional capital	4,215,894	4,204,547
Retained earnings	4,148,390	4,744,120
Accumulated other comprehensive income	2,225	14,774
Common stock held in treasury, at cost - 94,144,334 and 94,196,029 shares as of June 30, 2020 and December 31, 2019, respectively	(2,986,487)	(2,987,808)
Total HollyFrontier stockholders' equity	5,382,582	5,978,193
Noncontrolling interest	531,929	531,233
Total equity	5,914,511	6,509,426
Total liabilities and equity	$ 11,063,820	$ 12,164,841

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Cash and cash equivalents (HEP: $18,913 and $13,287, respectively)	$ 902,509	$ 885,162
Accounts receivable: Product and transportation (HEP: $14,929 and $18,732, respectively)	540,818	834,771
Materials, supplies and other (HEP: $935 and $833, respectively)	195,850	191,413
Prepayments and other (HEP: $6,970 and $6,795, respectively)	56,210	61,662
Properties, plants and equipment, at cost (HEP: $2,053,174 and $2,047,674, respectively)	7,052,866	7,237,297
Less accumulated depreciation (HEP: $(584,651) and $(552,786), respectively)	(2,567,686)	(2,414,585)
Operating lease right-of-use assets (HEP: $3,377 and $2,652, respectively)	390,497	467,109
Goodwill (HEP: $312,873 and $312,873, respectively)	2,373,912	2,373,907
Intangibles and other (HEP: $350,056 and $319,569, respectively)	651,494	673,646
Accounts payable (HEP $14,888 and $18,050, respectively)	870,695	1,215,555
Operating lease liabilities (HEP $3,766 and $3,608, respectively)	102,336	104,415
Long-term debt (HEP: $1,486,648 and $1,462,031, respectively)	2,480,746	2,455,640
Deferred income taxes (HEP: $432 and $424, respectively)	765,572	889,270
Noncurrent operating lease liability (HEP: $70,167 and $72,000, respectively)	318,955	364,420
Other long-term liabilities (HEP: $58,351 and $59,021, respectively)	$ 250,994	$ 260,157
HollyFrontier Stockholders' Equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	320,000,000	320,000,000
Common stock, shares issued	0	256,042,554
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Treasury stock, shares	0	94,196,029
HEP
Cash and cash equivalents (HEP: $18,913 and $13,287, respectively)	$ 18,913	$ 13,287
Accounts receivable: Product and transportation (HEP: $14,929 and $18,732, respectively)	14,929	18,732
Materials, supplies and other (HEP: $935 and $833, respectively)	935	833
Prepayments and other (HEP: $6,970 and $6,795, respectively)	6,970	6,795
Properties, plants and equipment, at cost (HEP: $2,053,174 and $2,047,674, respectively)	2,053,174	2,047,674
Less accumulated depreciation (HEP: $(584,651) and $(552,786), respectively)	(584,651)	(552,786)
Operating lease right-of-use assets (HEP: $3,377 and $2,652, respectively)	3,377	2,652
Goodwill (HEP: $312,873 and $312,873, respectively)	312,873	312,873
Intangibles and other (HEP: $350,056 and $319,569, respectively)	350,056	319,569
Accounts payable (HEP $14,888 and $18,050, respectively)	14,888	18,050
Operating lease liabilities (HEP $3,766 and $3,608, respectively)	3,766	3,608
Accrued Liabilities (HEP: $22,555 and $27,240, respectively)	30,886	30,418
Long-term debt (HEP: $1,486,648 and $1,462,031, respectively)	1,486,648	1,462,031
Deferred income taxes (HEP: $432 and $424, respectively)	432	424
Noncurrent operating lease liability (HEP: $70,167 and $72,000, respectively)	70,167	72,000
Other long-term liabilities (HEP: $58,351 and $59,021, respectively)	$ 58,351	$ 59,021

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Consolidated Statements Of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Income Statements, Captions [Line Items]
Sales and other revenues	$ 2,062,930	$ 4,782,615	$ 5,463,475	$ 8,679,862
Operating costs and expenses:
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	1,576,996	3,704,884	4,270,722	6,904,089
Lower of cost or market inventory valuation adjustment	(269,904)	47,801	290,560	(184,545)
Costs of products sold, net	1,307,092	3,752,685	4,561,282	6,719,544
Operating expenses (exclusive of depreciation and amortization)	303,359	333,252	631,704	664,844
Selling, general and administrative expenses (exclusive of depreciation and amortization)	75,369	85,317	163,106	173,351
Depreciation and amortization	130,178	126,908	270,753	248,329
Long-lived Asset and Goodwill, Impairments	436,908	152,712	436,908	152,712
Total operating costs and expenses	2,252,906	4,450,874	6,063,753	7,958,780
Income from operations	(189,976)	331,741	(600,278)	721,082
Other income (expense):
Earnings of equity method investments	2,156	1,783	3,870	3,883
Interest income	1,506	4,588	5,579	10,963
Interest expense	(32,695)	(34,264)	(55,334)	(70,911)
Gain on sales-type leases	33,834	0	33,834	0
Loss on early extinguishment of debt	0	0	(25,915)	0
Gain (loss) on foreign currency transactions	2,285	2,213	(1,948)	4,478
Other, net	1,572	92	3,422	649
Other income (expense) total	8,658	(25,588)	(36,492)	(50,938)
Income before income taxes	(181,318)	306,153	(636,770)	670,144
Income tax expense (benefit):
Current	(65,607)	63,364	(77,047)	118,648
Deferred income taxes	34,696	25,972	(116,030)	58,193
Income tax expense (benefit)	(30,911)	89,336	(193,077)	176,841
Net income	(150,407)	216,817	(443,693)	493,303
Less net income attributable to noncontrolling interest	26,270	19,902	37,607	43,333
Net income attributable to HollyFrontier stockholders	$ (176,677)	$ 196,915	$ (481,300)	$ 449,970
Earnings per share attributable to HollyFrontier stockholders:
Basic	$ (1.09)	$ 1.16	$ (2.97)	$ 2.64
Diluted	$ (1.09)	$ 1.15	$ (2.97)	$ 2.62
Average number of common shares outstanding:
Basic	161,889	169,356	161,882	170,100
Diluted	161,889	170,547	161,882	171,264

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Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ (150,407)	$ 216,817	$ (443,693)	$ 493,303
Other comprehensive income (loss)
Foreign Currency Translation Adjustment	11,710	9,160	(9,876)	13,523
Change in fair value of cash flow hedging instruments	1,513	(693)	(5,235)	14,897
Reclassification adjustments to net income on settlement of cash flow hedging instruments	5,401	(5,321)	(1,175)	(6,963)
Net unrealized gain (loss) on hedging instruments	6,914	(6,014)	(6,410)	7,934
Post-retirement Healthcare Plan Gain (Loss)		72	(45)
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, before Tax		2	3
Net change in post-retirement benefit obligations	0	74	(42)	0
Other comprehensive income (loss) before income taxes	18,624	3,220	(16,328)	21,457
Income tax expense (benefit)	4,250	416	(3,779)	4,878
Other comprehensive (income) loss	14,374	2,804	(12,549)	16,579
Total comprehensive income	(136,033)	219,621	(456,242)	509,882
Less noncontrolling interest in comprehensive income	26,270	19,902	37,607	43,333
Comprehensive income attributable to HollyFrontier stockholders	$ (162,303)	$ 199,719	$ (493,849)	$ 466,549

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Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income	$ (150,407)	$ (443,693)	$ 493,303
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	130,178	270,753	248,329
Long-lived Asset and Goodwill, Impairments	436,908	436,908	152,712
Lower of cost or market inventory valuation adjustment	(269,904)	290,560	(184,545)
Earnings of equity method investments, inclusive of distributions		(1,298)	0
Loss on early extinguishment of debt	0	25,915	0
Gain on sales-type lease	(33,834)	(33,834)	0
(Gain) loss on sale of assets		(357)	73
Deferred income taxes	34,696	(116,030)	58,193
Equity-based compensation expense		14,289	21,562
Change in fair value - derivative instruments		(9,377)	31,454
(Increase) decrease in current assets:
Accounts receivable		281,011	(72,300)
Inventories		(764)	(6,708)
Income taxes receivable		(72,382)	(26,835)
Prepayments and other		9,704	14,020
Increase (decrease) in current liabilities:
Accounts payable		(314,892)	292,893
Income taxes payable		(9,268)	7,826
Accrued liabilities		3,340	38,003
Turnaround expenditures		(49,248)	(110,273)
Other, net		27,965	11,843
Net cash provided by (used for) operating activities		309,302	969,550
Cash flows from investing activities:
Additions to properties, plants and equipment		(98,996)	(102,717)
Purchase of business, net of cash acquired		0	(662,665)
Investment in equity company - HEP		(2,400)	0
Other, net		470	825
Net Cash Provided by (Used in) Investing Activities		(131,666)	(782,309)
Cash flows from financing activities:
Borrowings under credit agreement		168,000	175,000
Repayments under credit agreement		(138,500)	(156,500)
Proceeds from issuance of senior notes - HEP		500,000	0
Proceeds from issuance of common units - HEP		(522,500)	0
Purchase of treasury stock		(1,243)	(266,996)
Dividends		(114,430)	(113,508)
Contribution from Joint Venture Partner		13,263	0
Proceeds from disgorgement of stockholder short-swing profits	603
Shares withheld for tax withholding obligations		(843)	(783)
Deferred financing costs		(8,714)	0
Proceeds from (Payments for) Other Financing Activities		456	(374)
Net cash used for financing activities		(155,519)	(429,864)
Effect of exchange rate on cash flow		(4,770)	2,515
Cash and cash equivalents:
Increase (decrease) for the period		17,347	(240,108)
Beginning of period		885,162	1,154,752
End of period	902,509	902,509	914,644
Cash paid during the period for:
Interest		(64,003)	(67,620)
Income taxes, net		(4,738)	(138,587)
HEP
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	24,008	47,986
Long-lived Asset and Goodwill, Impairments			0
Lower of cost or market inventory valuation adjustment	$ 0	0	0
Cash flows from investing activities:
Additions to properties, plants and equipment		(30,740)	(17,752)
Cash flows from financing activities:
Payments to Noncontrolling Interests		$ (51,008)	$ (66,703)

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Consolidated Statements Of Equity (Unaudited) Consolidated Statements Of Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Treasury Stock [Member]	Noncontrolling Interest [Member]
Beginning Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Dec. 31, 2018	$ 6,459,059	$ 2,560	$ 4,196,125	$ 4,196,902	$ 13,623	$ (2,490,639)	$ 540,488
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	276,486			253,055			23,431
Dividends	(56,849)			(56,849)
Distributions to noncontrolling interest holders	(33,673)						(33,673)
Other comprehensive income (loss), net of tax	13,775				13,775
Issuance of common stock under incentive compensation plans, net of forfeitures			3			(3)
Equity-based compensation	9,374		8,713				661
Purchase of treasury stock	(73,225)					(73,225)
Purchase of HEP units for restricted grants	(373)						(373)
Ending Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Mar. 31, 2019	6,594,574	2,560	4,204,841	4,393,108	27,398	(2,563,867)	530,534
Beginning Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Dec. 31, 2018	6,459,059	2,560	4,196,125	4,196,902	13,623	(2,490,639)	540,488
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	493,303
Other comprehensive income (loss), net of tax	16,579
Ending Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2019	6,530,999	2,560	4,216,305	4,533,364	30,202	(2,769,284)	517,852
Beginning Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Mar. 31, 2019	6,594,574	2,560	4,204,841	4,393,108	27,398	(2,563,867)	530,534
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	216,817			196,915			19,902
Dividends	(56,659)			(56,659)
Distributions to noncontrolling interest holders	(33,030)						(33,030)
Other comprehensive income (loss), net of tax	2,804				2,804
Allocated equity on common unit issuances, net of tax	(140)						(140)
Issuance of common stock under incentive compensation plans, net of forfeitures			(138)			138
Equity-based compensation	12,188		11,602				586
Purchase of treasury stock	(205,555)					(205,555)
Ending Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2019	6,530,999	2,560	4,216,305	4,533,364	30,202	(2,769,284)	517,852
Beginning Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Dec. 31, 2019	6,509,426	2,560	4,204,547	4,744,120	14,774	(2,987,808)	531,233
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(293,286)			(304,623)			11,337
Dividends	(57,248)			(57,248)
Distributions to noncontrolling interest holders	(33,918)						(33,918)
Other comprehensive income (loss), net of tax	(26,923)				(26,923)
Issuance of common stock under incentive compensation plans, net of forfeitures			(2,037)			2,037
Equity-based compensation	6,330		5,824				506
Purchase of treasury stock	(1,062)					(1,062)
Purchase of HEP units for restricted grants	(145)						(145)
Contributions from noncontrolling interests	7,304						7,304
Ending Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Mar. 31, 2020	6,110,478	2,560	4,208,334	4,382,249	(12,149)	(2,986,833)	516,317
Beginning Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Dec. 31, 2019	6,509,426	2,560	4,204,547	4,744,120	14,774	(2,987,808)	531,233
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(443,693)
Other comprehensive income (loss), net of tax	(12,549)
Ending Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2020	5,914,511	2,560	4,215,894	4,148,390	2,225	(2,986,487)	531,929
Beginning Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Mar. 31, 2020	6,110,478	2,560	4,208,334	4,382,249	(12,149)	(2,986,833)	516,317
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(150,407)			(176,677)			26,270
Dividends	(57,182)			(57,182)
Distributions to noncontrolling interest holders	(17,090)						(17,090)
Other comprehensive income (loss), net of tax	14,374				14,374
Issuance of common stock under incentive compensation plans, net of forfeitures			(527)			527
Equity-based compensation	7,959		7,484				475
Purchase of treasury stock	(181)					(181)
Purchase of HEP units for restricted grants	(2)						(2)
Contributions from noncontrolling interests	5,959						5,959
Reclamation of stockholder short-swing profit	603
Ending Balance, Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2020	$ 5,914,511	$ 2,560	$ 4,215,894	$ 4,148,390	$ 2,225	$ (2,986,487)	$ 531,929

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Consolidated Statements Of Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.35	$ 0.35	$ 0.33	$ 0.33

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Description of Business and Presentation of Financial Statements

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description Of Business And Presentation Of Financial Statements

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.

For the six months ended June 30, 2020, we recorded an income tax benefit of $193.1 million compared to income tax expense of $176.8 million for the six months ended June 30, 2019. This decrease was due principally to a pre-tax loss during the six months ended June 30, 2020 compared to pre-tax earnings in the same period of 2019. Our effective tax rates were 30.3% and 26.4% for the six months ended June 30, 2020 and 2019, respectively. The year-over-year increase in the effective tax rate is due principally to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes.

Income Tax Accounting

In December 2019, Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes,” was issued which eliminates some exceptions to the general approach in ASC Topic 740 “Income Taxes” and also provides clarification of other aspects of ASC 740. We adopted this standard effective January 1, 2020 on a prospective basis, and recognized an income tax benefit for the six months ended June 30, 2020 based upon the application of our estimated annual effective tax rate to our pre-tax loss.

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Holly Energy Partners

6 Months Ended

Jun. 30, 2020

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, as well as other third-party refineries, in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. Additionally, as of June 30, 2020, HEP owned 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”); Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”) and Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), the owner of a crude oil storage terminal in Cushing, Oklahoma and a to-be-constructed pipeline that will run from Cushing, Oklahoma to our Tulsa Refineries.

At June 30, 2020, 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 by 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 81% of HEP’s total revenues for the six months ended June 30, 2020. 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 9 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.

Cushing Connect Joint Venture

In October 2019, HEP Cushing LLC (“HEP Cushing”), a wholly-owned subsidiary of HEP, and Plains Marketing, L.P. (“PMLP”), a wholly-owned subsidiary of Plains All American Pipeline, L.P. (“Plains”), formed a 50/50 joint venture, Cushing Connect, for (i) the development and construction of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that will connect the Cushing, Oklahoma crude oil hub to our Tulsa Refineries and (ii) the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma (the “Cushing Connect Terminal”). The Cushing Connect Terminal was fully in service beginning in April 2020, and the Cushing Connect Pipeline is expected to be placed in service during the first quarter of 2021. Long-term commercial agreements have been entered into to support the Cushing Connect assets.

Cushing Connect will contract with an affiliate of HEP to manage the construction and operation of the Cushing Connect Pipeline and with an affiliate of Plains to manage the operation of the Cushing Connect Terminal. The total investment in Cushing Connect will be shared proportionately among the partners, and HEP estimates its share of the cost of the Cushing Connect Terminal contributed by Plains and Cushing Connect Pipeline construction costs are approximately $65.0 million.

Cushing Connect and its two subsidiaries, Cushing Connect Pipeline and Cushing Connect Terminal, are each VIE’s because they do not have sufficient equity at risk to finance their activities without additional financial support. HEP is the primary beneficiary of two of these entities as HEP is constructing and will operate the Cushing Connect Pipeline, and HEP has more ability to direct the activities that most significantly impact the financial performance of Cushing Connect and Cushing Connect Pipeline. Therefore, HEP consolidates these two entities. HEP is not the primary beneficiary of Cushing Connect Terminal, which HEP accounts for using the equity method of accounting.

Transportation Agreements

HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2021 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, 2020, these agreements result in minimum annualized payments to HEP of $351.1 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.

Lessor Accounting

Our consolidated statements of income reflect lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor.

One of HEP’s throughput agreements with Delek US Holdings, Inc. (“Delek”) was renewed during the three months ended June 30, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, HEP recognized a gain on sales-type leases totaling $33.8 million, during the three months ended June 30, 2020. This sales-type lease transaction, including the related gain, was a non-cash transaction.

Lease income recognized was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Operating lease revenues	$	5,442	$	8,267	$	13,732	$	16,466
Gain on sales-type leases	$	33,834	$	—	$	33,834	$	—
Sales-type lease interest income	$	642	$	—	$	642	$	—
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable	$	286	$	—	$	286	$	—

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, 2020, HEP did not issue any common units under this program. As of June 30, 2020, HEP has issued 2,413,153 common units under this program, providing $82.3 million in gross proceeds.

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Revenues from Contracts with Customers

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenues

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:    

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	1,385,246	$	3,633,966	$	3,863,593	$	6,441,407
Specialty lubricant products (2)	340,284		507,183		811,237		951,525
Asphalt, fuel oil and other products (3)	145,298		248,861		346,641		467,718
Total refined product revenues	1,870,828		4,390,010		5,021,471		7,860,650
Excess crude oil revenues (4)	163,394		350,683		363,173		733,313
Transportation and logistic services	19,244		28,382		45,670		59,520
Other revenues (5)	9,464		13,540		33,161		26,379
Total sales and other revenues	$	2,062,930	$	4,782,615	$	5,463,475	$	8,679,862

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Refined product revenues by market
United States
Mid-Continent	$	867,660	$	2,361,969	$	2,400,584	$	4,092,474
Southwest	436,073		1,008,806		1,170,248		1,858,955
Rocky Mountains	274,973		613,063		743,752		1,128,398
Northeast	110,909		148,116		270,733		276,007
Canada	120,870		174,772		303,523		352,127
Europe, Asia and Latin America	60,343		83,284		132,631		152,689
Total refined product revenues	$	1,870,828	$	4,390,010	$	5,021,471	$	7,860,650

(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 $131.9 million and $13.4 million, respectively, for the three months ended June 30, 2020, $280.7 million and $65.9 million, respectively for the six months ended June 30, 2020, $210.7 million and $38.2 million, respectively, for the three months ended June 30, 2019, and $380.6 million and $87.2 million, respectively, for the six months ended June 30, 2019.

(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.

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, 2020 and 2019.

	Six Months Ended June 30,
	2020			2019
	(In thousands)
Balance at January 1	$	4,652		$	132
Sonneborn acquisition	—			6,463
Increase	16,115			10,813
Recognized as revenue	(14,980		)	(12,906		)
Balance at June 30	$	5,787		$	4,502

As of June 30, 2020, 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 2024. 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:

	Remainder of 2020	2021	2022	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	10,398	15,958	12,799	24,465	63,620

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 revenues through 2025. Annual minimum revenues attributable to HEP’s third-party contracts as of June 30, 2020 are presented below:

	Remainder of 2020		2021		2022		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	13,164	$	21,942	$	10,954	$	20,293	$	66,353

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Fair Value Measurements

6 Months Ended

Jun. 30, 2020

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:

• (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.

The carrying amounts of derivative instruments and RINs credit obligations at June 30, 2020 and December 31, 2019 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
June 30, 2020
Assets:
Commodity price swaps	$	3,561	$	—	$	3,561	$	—
Commodity forward contracts	4,219		—		4,219		—
Foreign currency forward contracts	7,361		—		7,361		—
Total assets	$	15,141	$	—	$	15,141	$	—
Liabilities:
NYMEX futures contracts	$	6,987	$	6,987	$	—	$	—
Commodity price swaps	395		—		395		—
Commodity forward contracts	6,156		—		6,156		—
RINs credit obligations (1)	5,349		—		5,349		—
Total liabilities	$	18,887	$	6,987	$	11,900	$	—

				Fair Value by Input Level
		Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
December 31, 2019
Assets:
Commodity price swaps		$	13,455	$	—	$	13,455	$	—
Commodity forward contracts		4,133		—		4,133		$	—
Total assets		$	17,588	$	—	$	17,588	$	—
Liabilities:
NYMEX futures contracts		$	2,578	$	2,578	$	—	$	—
Commodity price swaps		1,230		—		1,230		—
Commodity forward contracts		3,685		—		3,685		—
Foreign currency forward contracts		6,722		—		6,722		—
Total liabilities		$	14,215	$	2,578	$	11,637	$	—

(1) Represent obligations for RINs credits for which we did not have sufficient quantities at June 30, 2020 to satisfy our EPA regulatory blending requirements.

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.

Nonrecurring Fair Value Measurements

During the three months ended June 30, 2020, we recognized long-lived asset impairment charges based on fair value measurements utilized during our goodwill and long-lived asset impairment testing (see Note 1). The fair value measurements were based on a combination of valuation methods including discounted cash flows, the guideline public company and guideline transaction methods and obsolescence adjusted replacement costs, all of which are Level 3 inputs.

During the three months ended June 30, 2020, HEP recognized a gain on sales-type leases (see Note 2). The estimated fair value of the underlying leased assets at contract inception and the present value of the estimated unguaranteed residual asset at the end of the lease term were used in determining the net investment in leases and related recognized gain on sales-type leases. The asset valuation estimates included Level 3 inputs based on a replacement cost valuation method.

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Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated as net income (loss) 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 stock units and performance share units. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income (loss) attributable to HollyFrontier stockholders:

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
	(In thousands, except per share data)
Net income (loss) attributable to HollyFrontier stockholders	$	(176,677	)	$	196,915	$	(481,300	)	$	449,970
Participating securities’ (restricted stock) share in earnings	—			283		—			647
Net income (loss) attributable to common shares	$	(176,677	)	$	196,632	$	(481,300	)	$	449,323
Average number of shares of common stock outstanding	161,889			169,356		161,882			170,100
Effect of dilutive variable restricted stock units and performance share units (1)	—			1,191		—			1,164
Average number of shares of common stock outstanding assuming dilution	161,889			170,547		161,882			171,264
Basic earnings (loss) per share	$	(1.09	)	$	1.16	$	(2.97	)	$	2.64
Diluted earnings (loss) per share	$	(1.09	)	$	1.15	$	(2.97	)	$	2.62
(1) Excludes anti-dilutive restricted and performance share units of:	590			160		585			131

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-Based Compensation

We have a principal share-based compensation plan (the “2020 Long-Term Incentive Plan”), which allows us to grant new equity awards until February 12, 2030. We also have a long-term incentive compensation plan which expires pursuant to its terms on December 31, 2020 and will continue to govern outstanding equity awards granted thereunder; however, as of February 12, 2020, no new awards are being granted under this plan. The compensation cost charged against income for these plans was $8.1 million and $11.9 million for the three months ended June 30, 2020 and 2019, respectively, and $12.9 million and $20.8 million for the six months ended June 30, 2020 and 2019, 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 $0.5 million and $0.6 million for the three months ended June 30, 2020 and 2019, respectively, and $1.0 million and $1.2 million for the six months ended June 30, 2020 and 2019, respectively.

Restricted Stock Units

Under our long-term incentive plan, we grant certain officers and other key employees restricted stock unit awards, which are payable in stock or cash and generally vest 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. Upon vesting, restrictions on the 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 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 unit activity during the six months ended June 30, 2020 is presented below:

Restricted Stock Units	Grants		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2020	1,101,781		$	53.30
Granted	62,776		35.58
Vested	(79,956	)	44.30
Forfeited	(59,494	)	53.41
Converted from performance share units	19,450		38.13
Outstanding at June 30, 2020	1,044,557		52.48		$	30,501

For the six months ended June 30, 2020, restricted stock units vested having a grant date fair value of $3.5 million. As of June 30, 2020, there was $23.2 million of total unrecognized compensation cost related to non-vested restricted stock unit grants. That cost is expected to be recognized over a weighted-average period of 1.2 years.

Performance Share Units

Under our long-term incentive 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 or cash paid under these awards can range from zero to 200% of target award amounts. Holders of performance share units have the right to receive dividend equivalents and other distributions with respect to such performance share units based on the target level of payout.

A summary of performance share unit activity and changes during the six months ended June 30, 2020 is presented below:

Performance Share Units	Grants
Outstanding at January 1, 2020	375,588
Vested	(12,129	)
Forfeited	(18,766	)
Converted to restricted stock units	(19,450	)
Outstanding at June 30, 2020	325,243

For the six months June 30, 2020, we issued 7,889 shares of common stock, representing a 100% payout on vested performance share units having a grant date fair value of $0.5 million. As of June 30, 2020, there was $8.3 million of total unrecognized compensation cost related to non-vested performance share units having a grant date fair value of $58.07 per unit. That cost is expected to be recognized over a weighted-average period of 1.6 years.

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Inventories

6 Months Ended

Jun. 30, 2020

Inventory, Net [Abstract]

Inventories

Inventories

Inventories consist of the following components:

	June 30, 2020			December 31, 2019
	(In thousands)
Crude oil	$	537,863		$	489,169
Other raw materials and unfinished products(1)	301,956			394,045
Finished products(2)	668,955			639,938
Lower of cost or market reserve	(530,923		)	(240,363		)
Process chemicals(3)	33,677			36,786
Repair and maintenance supplies and other (4)	162,173			154,627
Total inventory	$	1,173,701		$	1,474,202

(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.

Our inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $530.9 million and $240.4 million at June 30, 2020 and December 31, 2019, respectively. The December 31, 2019 market reserve of $240.4 million was reversed due to the sale of inventory quantities that gave rise to the 2019 reserve. A new market reserve of $530.9 million was established as of June 30, 2020 based on market conditions and prices at that time. The effect of the change in lower of cost or market reserve was a decrease to cost of products sold totaling $269.9 million for the three months ended June 30, 2020 and an increase to cost of products sold totaling $47.8 million for the three months ended June 30, 2019, respectively, and an increase to cost of products sold totaling $290.6 million for the six months ended June 30, 2020 and a decrease to cost of products sold totaling $184.5 million for the six months ended June 30, 2019, respectively.

At June 30, 2020, the LIFO value of inventory, net of the lower of cost or market reserve, was equal to current costs.

In connection with our announcement of the conversion of our Cheyenne Refinery to renewable diesel production, we recorded a reserve of $6.2 million against our repair and maintenance supplies inventory. This charge was recorded in operating expenses in the second quarter of 2020.

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Environmental

6 Months Ended

Jun. 30, 2020

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 $0.4 million and $2.3 million for the three months ended June 30, 2020 and 2019, respectively, and $2.0 million and $3.7 million for the six months ended June 30, 2020 and 2019, respectively, for environmental remediation obligations. The accrued environmental liability reflected in our consolidated balance sheets was $115.6 million and $117.7 million at June 30, 2020 and December 31, 2019, respectively, of which $94.1 million and $95.6 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

6 Months Ended

Jun. 30, 2020

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, 2020, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $4.9 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, 2020, HEP received advances totaling $168.0 million and repaid $138.5 million under the HEP Credit Agreement. At June 30, 2020, HEP was in compliance with all of its covenants, had outstanding borrowings of $995.0 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 term of each lease, and the lease payments are recorded as interest expense. The leases mature on February 1, 2021. Upon maturity, we must either satisfy the obligation at fair market value or refinance to extend the maturity. These financing arrangements are recorded at a Level 2 fair value totaling $35.0 million and $40.0 million at June 30, 2020 and December 31, 2019, respectively, and are included in “Accrued liabilities” in our consolidated balance sheets. See Note 4 for additional information on Level 2 inputs.

HEP Senior Notes

On February 4, 2020, HEP closed a private placement of $500 million in aggregate principal amount of 5.0% HEP senior unsecured notes maturing February 2028 (the “HEP Senior Notes”). On February 5, 2020, HEP redeemed its existing $500 million aggregate principal amount of 6.0% senior notes maturing August 2024 at a redemption cost of $522.5 million. HEP recognized a $25.9 million early extinguishment loss consisting of a $22.5 million debt redemption premium and unamortized discount and financing costs of $3.4 million. HEP funded the $522.5 million redemption with proceeds from the issuance of its 5.0% senior notes and borrowings under the HEP Credit Agreement.

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. HEP was in compliance with the restrictive covenants for the HEP Senior Notes as of June 30, 2020. At any time when the HEP Senior Notes are rated investment grade by either Moody’s or 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 at varying premiums over face value 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:

	June 30, 2020			December 31, 2019
	(In thousands)
HollyFrontier 5.875% Senior Notes
Principal	$	1,000,000		$	1,000,000
Unamortized discount and debt issuance costs	(5,902		)	(6,391		)
	994,098			993,609
HEP Credit Agreement	995,000			965,500
HEP 5.0% Senior Notes
Principal	500,000			—
Unamortized discount and debt issuance costs	(8,352		)	—
	491,648			—
HEP 6.0% Senior Notes
Principal	—			500,000
Unamortized discount and debt issuance costs	—			(3,469		)
	—			496,531
Total HEP long-term debt	1,486,648			1,462,031
Total long-term debt	$	2,480,746		$	2,455,640

The fair values of the senior notes are as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
HollyFrontier senior notes	$	1,105,120	$	1,127,610
HEP senior notes	$	477,835	$	522,045

These fair values are based on a Level 2 input. See Note 4 for additional information on Level 2 inputs.

We capitalized interest attributable to construction projects of $0.8 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively.

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Derivative Instruments And Hedging Activities

6 Months Ended

Jun. 30, 2020

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 hedging instruments under hedge accounting:

	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,
	2020		2019				2020			2019
	(In thousands)
Commodity contracts	$	6,914	$	(6,014	)	Sales and other revenues	$	(5,403	)	$	—
						Cost of products sold	459			5,674
						Operating expenses	(457		)	(353		)
Total	$	6,914	$	(6,014	)		$	(5,401	)	$	5,321

	Net 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,
	2020			2019			2020			2019
	(In thousands)
Commodity contracts	$	(6,410	)	$	7,934	Sales and other revenues	$	49		$	(1,799	)
						Cost of products sold	2,289			9,295
						Operating expenses	(1,163		)	(533		)
Total	$	(6,410	)	$	7,934		$	1,175		$	6,963

Economic Hedges

We have commodity contracts including contracts to lock in basis spread differentials on forecasted purchases of crude oil, NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory and forward purchase and sell contracts 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 9 could require repayment under certain conditions based on the future pricing 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:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended June 30,						Six Months Ended June 30,
		2020			2019			2020		2019
		(In thousands)
Commodity contracts	Cost of products sold	$	(7,180	)	$	338		$	17,909	$	(7,079	)
	Interest expense	(5,100		)	741			4,712		(1,275		)
Foreign currency contracts	Gain (loss) on foreign currency transactions	(14,315		)	(7,090		)	19,160		(14,696		)
	Total	$	(26,595	)	$	(6,011	)	$	41,781	$	(23,050	)

As of June 30, 2020, we have the following notional contract volumes related to outstanding derivative instruments:

		Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional	2020	2021	Unit of Measure
Derivatives Designated as Hedging Instruments
Natural gas price swaps - long	2,700,000	900,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	2,392,000	2,392,000	—	Barrels
Forward diesel contracts - short	200,000	200,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	890,000	890,000	—	Barrels
Crude oil price swaps (basis spread) - long	736,000	736,000	—	Barrels
Forward gasoline and diesel contracts - long	464,000	464,000	—	Barrels
Foreign currency forward contracts	422,074,120	214,491,576	207,582,544	U.S. dollar
Forward commodity contracts (platinum)	40,867	—	40,867	Troy ounces

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position							Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet			Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
June 30, 2020
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	1,800	$	(1,194	)	$	606	$	395	$	—	$	395
Commodity forward contracts	—		—			—		2,134		—		2,134
	$	1,800	$	(1,194	)	$	606	$	2,529	$	—	$	2,529
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—		$	—	$	6,987	$	—	$	6,987
Commodity price swap contracts	2,955		—			2,955		—		—		—
Commodity forward contracts	4,219		—			4,219		4,022		—		4,022
Foreign currency forward contracts	9,765		(2,404		)	7,361		—		—		—
	$	16,939	$	(2,404	)	$	14,535	$	11,009	$	—	$	11,009
Total net balance						$	15,141					$	13,538
Balance sheet classification:	Prepayment and other					$	15,141	Accrued liabilities				$	13,143
								Other long-term liabilities				395
						$	15,141					$	13,538

	Derivatives in Net Asset Position							Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet			Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2019
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	7,526	$	(1,784	)	$	5,742	$	1,230	$	—	$	1,230
	$	7,526	$	(1,784	)	$	5,742	$	1,230	$	—	$	1,230
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—		$	—	$	2,578	$	—	$	2,578
Commodity price swap contracts	7,713		—			7,713		—		—		—
Commodity forward contracts	4,133		—			4,133		3,685		—		3,685
Foreign currency forward contracts	—		—			—		6,722		—		6,722
	$	11,846	$	—		$	11,846	$	12,985	$	—	$	12,985
Total net balance						$	17,588					$	14,215
Balance sheet classification:	Prepayment and other					$	17,588	Accrued liabilities				$	12,985
								Other long-term liabilities				1,230
						$	17,588					$	14,215

At June 30, 2020, we had a pre-tax net unrealized loss of $1.9 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 loss of $1.5 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

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Equity

Equity

In November 2019, our Board of Directors approved a $1.0 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, 2020, we had not repurchased common stock 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, 2020 and 2019, we withheld 29,587 and 2,484, respectively, shares of our common stock from certain employees. These withholdings were made under the terms of restricted stock unit and performance share unit agreements upon vesting, at which time, we concurrently made cash payments to fund payroll and income taxes on behalf of officers and employees who elected to have shares withheld from vested amounts to pay such taxes.

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Other Comprehensive Income

6 Months Ended

Jun. 30, 2020

Other Comprehensive Income (Loss) [Abstract]

Other Comprehensive Income

Other Comprehensive Income

The components and allocated tax effects of other comprehensive income are as follows:

	Before-Tax			Tax Expense (Benefit)			After-Tax
	(In thousands)
Three Months Ended June 30, 2020
Net change in foreign currency translation adjustment	$	11,710		$	2,488		$	9,222
Net unrealized gain on hedging instruments	6,914			1,762			5,152
Other comprehensive income attributable to HollyFrontier stockholders	$	18,624		$	4,250		$	14,374
Three Months Ended June 30, 2019
Net change in foreign currency translation adjustment	$	9,160		$	1,950		$	7,210
Net unrealized loss on hedging instruments	(6,014		)	(1,534		)	(4,480		)
Net change in pension and other post-retirement benefit obligations	74			—			74
Other comprehensive income attributable to HollyFrontier stockholders	$	3,220		$	416		$	2,804
Six Months Ended June 30, 2020
Net change in foreign currency translation adjustment	$	(9,876	)	$	(2,139	)	$	(7,737	)
Net unrealized loss on hedging instruments	(6,410		)	(1,636		)	(4,774		)
Net change in pension and other post-retirement benefit obligations	(42		)	(4		)	(38		)
Other comprehensive loss attributable to HollyFrontier stockholders	$	(16,328	)	$	(3,779	)	$	(12,549	)
Six Months Ended June 30, 2019
Net change in foreign currency translation adjustment	$	13,523		$	2,855		$	10,668
Net unrealized gain on hedging instruments	7,934			2,023			5,911
Other comprehensive income attributable to HollyFrontier stockholders	$	21,457		$	4,878		$	16,579

The following table presents the income statement line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):

AOCI Component	Gain (Loss) Reclassified From AOCI						Income Statement Line Item
	Three Months Ended June 30,
	2020			2019
	(In thousands)
Hedging instruments:
Commodity price swaps	$	(5,403	)	$	—		Sales and other revenues
	459			5,674			Cost of products sold
	(457		)	(353		)	Operating expenses
	(5,401		)	5,321
	(1,377		)	1,357			Income tax expense (benefit)
Total reclassifications for the period	$	(4,024	)	$	3,964		Net of tax
	Six Months Ended June 30,
	2020			2019
Hedging instruments:
Commodity price swaps	$	49		$	(1,799	)	Sales and other revenues
	2,289			9,295			Cost of products sold
	(1,163		)	(533		)	Operating expenses
	1,175			6,963
	300			1,776			Income tax expense
Total reclassifications for the period	$	875		$	5,187		Net of tax

Accumulated other comprehensive income (loss) in the equity section of our consolidated balance sheets includes:

	June 30, 2020			December 31, 2019
	(In thousands)
Foreign currency translation adjustment	$	(9,924	)	$	(2,187	)
Unrealized loss on pension obligation	(1,798		)	(1,733		)
Unrealized gain on post-retirement benefit obligations	15,360			15,333
Unrealized gain (loss) on hedging instruments	(1,413		)	3,361
Accumulated other comprehensive income	$	2,225		$	14,774

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Post-retirement Plan

6 Months Ended

Jun. 30, 2020

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Post-retirement Plans

Post-retirement Plans

PCLI has union and non-union pension plans which are closed to new entrants. In addition, Sonneborn employees in the Netherlands have a defined benefit pension plan which was frozen and all plan participants became inactive in 2016. Our net periodic pension expense consisted of the following components:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Service cost - benefit earned during the period	$	1,072		$	1,198		$	2,200		$	2,397
Interest cost on projected benefit obligations	413			440			856			877
Expected return on plan assets	(976		)	(811		)	(2,009		)	(1,621		)
Amortization of loss	—			830			—			1,660
Net periodic pension expense	$	509		$	1,657		$	1,047		$	3,313

The expected long-term annual rates of return on plan assets are 5.75% and 1.50% for the PCLI and Sonneborn plans, respectively. These rates were used in measuring 2020 net periodic benefit costs.

We have post-retirement healthcare and other benefits that are available to certain of our employees who satisfy certain age and service requirements. The net periodic benefit credit of our post-retirement healthcare and other benefits plans consisted of the following components

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Service cost – benefit earned during the period	$	446		$	386		$	899		$	771
Interest cost on projected benefit obligations	233			266			471			531
Amortization of prior service credit	(870		)	(870		)	(1,741		)	(1,741		)
Amortization of (gain) loss	12			(22		)	25			(44		)
Net periodic post-retirement credit	$	(179	)	$	(240	)	$	(346	)	$	(483	)

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.

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Contingencies

6 Months Ended

Jun. 30, 2020

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 materially adverse effect on our financial condition, results of operations or cash flows.

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, 2020, 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.

During 2017, 2018 and 2019, the EPA granted the Cheyenne Refinery and Woods Cross Refinery each a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2016, 2017 and 2018, respectively, calendar years. As a result, the Cheyenne Refinery’s and Woods Cross Refinery’s gasoline and diesel production are not subject to the Renewable Volume Obligation for the respective years. Upon each exemption granted, we increased our inventory of RINs and reduced our cost of products sold.

In 2019, various subsidiaries of HollyFrontier moved to intervene in four lawsuits brought by renewable fuel interest groups against the EPA in federal courts alleging violations of the RFS under the Clean Air Act and challenging the EPA’s handling of small refinery exemptions. We intervened to vigorously defend the EPA’s position on small refinery exemptions because we believe the EPA correctly applied applicable law to the matters at issue. The U.S. Court of Appeals for the DC Circuit dismissed one of these four lawsuits on November 12, 2019 for lack of jurisdiction. On January 24, 2020, the U.S. Court of Appeals for the Tenth Circuit vacated the small refinery exemptions granted to two of our refineries for 2016 and remanded the case to the EPA for further proceedings. On March 24, 2020, various subsidiaries of HollyFrontier filed a Petition for Rehearing with the U.S. Court of Appeals for the Tenth Circuit. On April 7, 2020, the Tenth Circuit denied our request to reconsider its decision, and on April 15, 2020, the Tenth Circuit entered its mandate, remanding the matter back to the EPA. It is not clear at this time what steps the EPA will take with respect to our 2016 small refinery exemptions, and we are unable to estimate the costs we may incur, if any, at this time. It is also not clear how the case will impact future small refinery exemptions. It is too early to assess whether the remaining two cases are expected to have any impact on us.

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Segment Information

6 Months Ended

Jun. 30, 2020

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 the 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 and Red Giant Oil, one of the largest suppliers of locomotive engine oil in North America. Also, effective with our acquisition that closed February 1, 2019, the Lubricants and Specialty Products segment 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 refinery processing units in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. As of June 30, 2020, 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, the Cheyenne Pipeline and Cushing Connect. 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, 2019.

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Three Months Ended June 30, 2020
Sales and other revenues:
Revenues from external customers	$	1,690,042		$	353,644		$	19,244	$	—		$	2,062,930
Intersegment revenues	37,462			3,643			95,563		(136,668		)	—
	$	1,727,504		$	357,287		$	114,807	$	(136,668	)	$	2,062,930
Cost of products sold (exclusive of lower of cost or market inventory)	$	1,433,437		$	258,347		$	—	$	(114,788	)	$	1,576,996
Lower of cost or market inventory valuation adjustment	$	(269,904	)	$	—		$	—	$	—		$	(269,904	)
Operating expenses	$	239,359		$	47,840		$	34,737	$	(18,577	)	$	303,359
Selling, general and administrative expenses	$	32,811		$	35,919		$	2,535	$	4,104		$	75,369
Depreciation and amortization	$	81,694		$	19,779		$	24,008	$	4,697		$	130,178
Long-lived asset impairment (1)	$	215,242		$	204,708		$	16,958	$	—		$	436,908
Income (loss) from operations	$	(5,135	)	$	(209,306	)	$	36,569	$	(12,104	)	$	(189,976	)
Earnings of equity method investments	$	—		$	—		$	2,156	$	—		$	2,156
Capital expenditures	$	12,102		$	4,311		$	11,798	$	17,776		$	45,987
Three Months Ended June 30, 2019
Sales and other revenues:
Revenues from external customers	$	4,208,776		$	545,346		$	28,382	$	111		$	4,782,615
Intersegment revenues	88,484			—			102,369		(190,853		)	—
	$	4,297,260		$	545,346		$	130,751	$	(190,742	)	$	4,782,615
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,458,832		$	415,353		$	—	$	(169,301	)	$	3,704,884
Lower of cost or market inventory valuation adjustment	$	47,801		$	—		$	—	$	—		$	47,801
Operating expenses	$	252,715		$	59,122		$	40,608	$	(19,193	)	$	333,252
Selling, general and administrative expenses	$	29,638		$	42,087		$	1,988	$	11,604		$	85,317
Depreciation and amortization	$	76,225		$	23,020		$	24,241	$	3,422		$	126,908
Goodwill impairment	$	—		$	152,712		$	—	$	—		$	152,712
Income (loss) from operations	$	432,049		$	(146,948	)	$	63,914	$	(17,274	)	$	331,741
Earnings of equity method investments	$	—		$	—		$	1,783	$	—		$	1,783
Capital expenditures	$	33,899		$	9,331		$	7,034	$	6,470		$	56,734

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Six Months Ended June 30, 2020
Sales and other revenues:
Revenues from external customers	$	4,540,662		$	877,143		$	45,670	$	—		$	5,463,475
Intersegment revenues	121,708			6,747			196,991		(325,446		)	—
	$	4,662,370		$	883,890		$	242,661	$	(325,446	)	$	5,463,475
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,902,188		$	649,727		$	—	$	(281,193	)	$	4,270,722
Lower of cost or market inventory valuation adjustment	$	290,560		$	—		$	—	$	—		$	290,560
Operating expenses	$	498,533		$	101,971		$	69,718	$	(38,518	)	$	631,704
Selling, general and administrative expenses	$	63,811		$	84,881		$	5,237	$	9,177		$	163,106
Depreciation and amortization	$	171,873		$	41,828		$	47,986	$	9,066		$	270,753
Long-lived asset impairment (1)	$	215,242		$	204,708		$	16,958	$	—		$	436,908
Income (loss) from operations	$	(479,837	)	$	(199,225	)	$	102,762	$	(23,978	)	$	(600,278	)
Earnings of equity method investments	$	—		$	—		$	3,870	$	—		$	3,870
Capital expenditures	$	65,116		$	13,392		$	30,740	$	20,488		$	129,736
Six Months Ended June 30, 2019
Sales and other revenues:
Revenues from external customers	$	7,581,442		$	1,038,680		$	59,520	$	220		$	8,679,862
Intersegment revenues	163,228			—			205,728		(368,956		)	—
	$	7,744,670		$	1,038,680		$	265,248	$	(368,736	)	$	8,679,862
Cost of products sold (exclusive of lower of cost or market inventory)	$	6,421,372		$	804,370		$	—	$	(321,653	)	$	6,904,089
Lower of cost or market inventory valuation adjustment	$	(184,545	)	$	—		$	—	$	—		$	(184,545	)
Operating expenses	$	517,212		$	112,681		$	78,121	$	(43,170	)	$	664,844
Selling, general and administrative expenses	$	56,615		$	81,806		$	4,608	$	30,322		$	173,351
Depreciation and amortization	$	150,640		$	43,191		$	48,071	$	6,427		$	248,329
Goodwill impairment	$	—		$	152,712		$	—	$	—		$	152,712
Income (loss) from operations	$	783,376		$	(156,080	)	$	134,448	$	(40,662	)	$	721,082
Earnings of equity method investments	$	—		$	—		$	3,883	$	—		$	3,883
Capital expenditures	$	75,662		$	17,190		$	17,752	$	9,865		$	120,469

(1) The results of our HEP reportable segment for the three and six months ended June 30, 2020 include a long-lived asset impairment charge attributed to HEP’s logistics assets at our Cheyenne Refinery.

	Refining		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
June 30, 2020
Cash and cash equivalents	$	15,652	$	189,571	$	18,913	$	678,373	$	902,509
Total assets	$	6,327,809	$	1,910,431	$	2,215,053	$	610,527	$	11,063,820
Long-term debt	$	—	$	—	$	1,486,648	$	994,098	$	2,480,746
December 31, 2019
Cash and cash equivalents	$	9,755	$	169,277	$	13,287	$	692,843	$	885,162
Total assets	$	7,189,094	$	2,223,418	$	2,205,437	$	546,892	$	12,164,841
Long-term debt	$	—	$	—	$	1,462,031	$	993,609	$	2,455,640

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Description of Business and Presentation of Financial Statements (Policy)

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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 expected credit losses from current economic conditions and management’s expectations of future economic conditions. Credit losses are charged to the allowance for doubtful accounts when an account is deemed uncollectible. Our allowance for doubtful accounts was $3.4 million at June 30, 2020 and $4.5 million at December 31, 2019.

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. 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, 2020, 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, $327.6 million and $312.9 million, respectively. See Note 15 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 the reporting unit over the related fair value.

For purposes of long-lived asset impairment evaluation, we have grouped our long-lived assets as follows: (i) our refinery asset groups, which include certain HEP logistics assets, (ii) our Lubricants and Specialty Products asset groups and (iii) our HEP asset groups, which comprises HEP assets not included in our refinery asset groups. These asset groups represent the lowest level for which independent cash flows can be identified. 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.

Indicators of goodwill and long-lived asset impairment

Due to the recent economic slowdown caused by the COVID-19 pandemic, we determined that indicators of potential goodwill impairment for our Refining and Lubricants and Specialty Products reporting units were present. In addition, we determined that these indicators were also evidence of potential long-lived asset impairments. These indicators included reductions in the prices of our finished goods and raw materials and the related decrease in our gross margins, as well as the recent decline in our common share price which has resulted in a decrease in our market capitalization. Additionally, our recent announcement of the conversion of our Cheyenne Refinery to renewable diesel production was also considered a triggering event requiring assessment of potential impairments to the carrying value of our Cheyenne Refinery asset group. During the second quarter of 2020, we performed interim goodwill and long-lived asset impairment testing as of May 31, 2020.

Long-lived asset impairment testing

As a result of our long-lived asset impairment testing, we determined that the carrying value of the long-lived assets of our Cheyenne Refinery and PCLI asset groups were not recoverable, and thus recorded long-lived asset impairment charges of $232.2 million and $204.7 million, respectively, in the second quarter of 2020. Our testing did not result in any other impairment of long-lived assets.

The estimated fair values of the Cheyenne Refinery and PCLI asset groups were determined using a combination of the income and cost approaches. The income approach was based on management’s best estimates of the expected future cash flows over the remaining useful life of the asset group. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and economic obsolescence. These fair value measurements involve significant unobservable inputs (Level 3 inputs). See Note 4 for further discussion of Level 3 inputs.

Goodwill impairment testing

The estimated fair values of our Refining and Lubricants and Specialty Products reporting units were derived using a combination of income and market approaches. The income approach reflects expected future cash flows based on estimated forecasted production levels, selling prices, gross margins, operating costs and capital expenditures. Our market approaches include 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 4 for further discussion of Level 3 inputs.

Our interim goodwill impairment testing indicated that the fair values of our Refining and Lubricants and Specialty Products reporting units were in excess of their respective carrying amounts ranging from 9% to 283%; therefore, there was no impairment of goodwill at our Refining and Lubricants and Specialty Products reporting units.

A reasonable expectation exists that further deterioration in our operating results or overall economic conditions could result in an impairment of goodwill and / or additional long-lived assets impairments at some point in the future. Future impairment charges could be material to our results of operations and financial condition. Our annual goodwill impairment testing is performed on July 1.

During the second quarter of 2019, we recorded a goodwill impairment charge of $152.7 million to fully impair the goodwill of the PCLI reporting unit included in our Lubricants and Specialty Products segment.

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.

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

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, 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 15 for additional information on our segments.

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.

For the six months ended June 30, 2020, we recorded an income tax benefit of $193.1 million compared to income tax expense of $176.8 million for the six months ended June 30, 2019. This decrease was due principally to a pre-tax loss during the six months ended June 30, 2020 compared to pre-tax earnings in the same period of 2019. Our effective tax rates were 30.3% and 26.4% for the six months ended June 30, 2020 and 2019, respectively. The year-over-year increase in the effective tax rate is due principally to the relationship between the pre-tax results and the earnings attributable to the noncontrolling interest that is not included in income for tax purposes.

Income Tax Accounting

In December 2019, Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes,” was issued which eliminates some exceptions to the general approach in ASC Topic 740 “Income Taxes” and also provides clarification of other aspects of ASC 740. We adopted this standard effective January 1, 2020 on a prospective basis, and recognized an income tax benefit for the six months ended June 30, 2020 based upon the application of our estimated annual effective tax rate to our pre-tax loss.

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, 2020 and 2019, we received proceeds of $20.4 million and $12.6 million, respectively, and subsequently repaid $21.7 million and $12.9 million, respectively, under these sell / buy transactions.

Credit Loss, Financial Instrument

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. We adopted this standard effective January 1, 2020, at which time our review of historic and expected credit losses resulted in a decrease of $3.2 million in our reserve for doubtful accounts. Based upon our assessment of the potential impact of current and forecasted conditions, we increased our reserve for doubtful accounts by $2.1 million during the six months ended June 30, 2020. Assumptions about the potential effects of the COVID-19 pandemic on our estimate of expected credit losses are inherently subjective and difficult to forecast. However, we believe that our current estimate of allowance for doubtful accounts to be reasonable based upon current information and forecasts.

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Revenues from Contracts with Customers (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregated Revenues

Disaggregated revenues were as follows:    

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels (1)	$	1,385,246	$	3,633,966	$	3,863,593	$	6,441,407
Specialty lubricant products (2)	340,284		507,183		811,237		951,525
Asphalt, fuel oil and other products (3)	145,298		248,861		346,641		467,718
Total refined product revenues	1,870,828		4,390,010		5,021,471		7,860,650
Excess crude oil revenues (4)	163,394		350,683		363,173		733,313
Transportation and logistic services	19,244		28,382		45,670		59,520
Other revenues (5)	9,464		13,540		33,161		26,379
Total sales and other revenues	$	2,062,930	$	4,782,615	$	5,463,475	$	8,679,862

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Refined product revenues by market
United States
Mid-Continent	$	867,660	$	2,361,969	$	2,400,584	$	4,092,474
Southwest	436,073		1,008,806		1,170,248		1,858,955
Rocky Mountains	274,973		613,063		743,752		1,128,398
Northeast	110,909		148,116		270,733		276,007
Canada	120,870		174,772		303,523		352,127
Europe, Asia and Latin America	60,343		83,284		132,631		152,689
Total refined product revenues	$	1,870,828	$	4,390,010	$	5,021,471	$	7,860,650

(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 $131.9 million and $13.4 million, respectively, for the three months ended June 30, 2020, $280.7 million and $65.9 million, respectively for the six months ended June 30, 2020, $210.7 million and $38.2 million, respectively, for the three months ended June 30, 2019, and $380.6 million and $87.2 million, respectively, for the six months ended June 30, 2019.

(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.

Schedule of Changes to Contract Liabilities

The following table presents changes to our contract liabilities during the six months ended June 30, 2020 and 2019.

	Six Months Ended June 30,
	2020			2019
	(In thousands)
Balance at January 1	$	4,652		$	132
Sonneborn acquisition	—			6,463
Increase	16,115			10,813
Recognized as revenue	(14,980		)	(12,906		)
Balance at June 30	$	5,787		$	4,502

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:

	Remainder of 2020	2021	2022	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	10,398	15,958	12,799	24,465	63,620

Annual minimum revenues attributable to HEP’s third-party contracts as of June 30, 2020 are presented below:

	Remainder of 2020		2021		2022		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	13,164	$	21,942	$	10,954	$	20,293	$	66,353

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

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, 2020 and December 31, 2019 were as follows:

			Fair Value by Input Level
	Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
June 30, 2020
Assets:
Commodity price swaps	$	3,561	$	—	$	3,561	$	—
Commodity forward contracts	4,219		—		4,219		—
Foreign currency forward contracts	7,361		—		7,361		—
Total assets	$	15,141	$	—	$	15,141	$	—
Liabilities:
NYMEX futures contracts	$	6,987	$	6,987	$	—	$	—
Commodity price swaps	395		—		395		—
Commodity forward contracts	6,156		—		6,156		—
RINs credit obligations (1)	5,349		—		5,349		—
Total liabilities	$	18,887	$	6,987	$	11,900	$	—

				Fair Value by Input Level
		Carrying Amount		Level 1		Level 2		Level 3
	(In thousands)
December 31, 2019
Assets:
Commodity price swaps		$	13,455	$	—	$	13,455	$	—
Commodity forward contracts		4,133		—		4,133		$	—
Total assets		$	17,588	$	—	$	17,588	$	—
Liabilities:
NYMEX futures contracts		$	2,578	$	2,578	$	—	$	—
Commodity price swaps		1,230		—		1,230		—
Commodity forward contracts		3,685		—		3,685		—
Foreign currency forward contracts		6,722		—		6,722		—
Total liabilities		$	14,215	$	2,578	$	11,637	$	—

(1) Represent obligations for RINs credits for which we did not have sufficient quantities at June 30, 2020 to satisfy our EPA regulatory blending requirements.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2020

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 (loss) attributable to HollyFrontier stockholders:

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
	(In thousands, except per share data)
Net income (loss) attributable to HollyFrontier stockholders	$	(176,677	)	$	196,915	$	(481,300	)	$	449,970
Participating securities’ (restricted stock) share in earnings	—			283		—			647
Net income (loss) attributable to common shares	$	(176,677	)	$	196,632	$	(481,300	)	$	449,323
Average number of shares of common stock outstanding	161,889			169,356		161,882			170,100
Effect of dilutive variable restricted stock units and performance share units (1)	—			1,191		—			1,164
Average number of shares of common stock outstanding assuming dilution	161,889			170,547		161,882			171,264
Basic earnings (loss) per share	$	(1.09	)	$	1.16	$	(2.97	)	$	2.64
Diluted earnings (loss) per share	$	(1.09	)	$	1.15	$	(2.97	)	$	2.62
(1) Excludes anti-dilutive restricted and performance share units of:	590			160		585			131

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Summary Of Restricted Stock Activity

A summary of restricted stock unit activity during the six months ended June 30, 2020 is presented below:

Restricted Stock Units	Grants		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2020	1,101,781		$	53.30
Granted	62,776		35.58
Vested	(79,956	)	44.30
Forfeited	(59,494	)	53.41
Converted from performance share units	19,450		38.13
Outstanding at June 30, 2020	1,044,557		52.48		$	30,501

Summary Of Performance Share Unit Activity

A summary of performance share unit activity and changes during the six months ended June 30, 2020 is presented below:

Performance Share Units	Grants
Outstanding at January 1, 2020	375,588
Vested	(12,129	)
Forfeited	(18,766	)
Converted to restricted stock units	(19,450	)
Outstanding at June 30, 2020	325,243

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Inventories (Tables)

6 Months Ended

Jun. 30, 2020

Inventory, Net [Abstract]

Inventory Components

Inventories consist of the following components:

	June 30, 2020			December 31, 2019
	(In thousands)
Crude oil	$	537,863		$	489,169
Other raw materials and unfinished products(1)	301,956			394,045
Finished products(2)	668,955			639,938
Lower of cost or market reserve	(530,923		)	(240,363		)
Process chemicals(3)	33,677			36,786
Repair and maintenance supplies and other (4)	162,173			154,627
Total inventory	$	1,173,701		$	1,474,202

(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.

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Debt (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Carrying Amounts Of Long-Term Debt

The carrying amounts of long-term debt are as follows:

	June 30, 2020			December 31, 2019
	(In thousands)
HollyFrontier 5.875% Senior Notes
Principal	$	1,000,000		$	1,000,000
Unamortized discount and debt issuance costs	(5,902		)	(6,391		)
	994,098			993,609
HEP Credit Agreement	995,000			965,500
HEP 5.0% Senior Notes
Principal	500,000			—
Unamortized discount and debt issuance costs	(8,352		)	—
	491,648			—
HEP 6.0% Senior Notes
Principal	—			500,000
Unamortized discount and debt issuance costs	—			(3,469		)
	—			496,531
Total HEP long-term debt	1,486,648			1,462,031
Total long-term debt	$	2,480,746		$	2,455,640

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The fair values of the senior notes are as follows:

	June 30, 2020		December 31, 2019
	(In thousands)
HollyFrontier senior notes	$	1,105,120	$	1,127,610
HEP senior notes	$	477,835	$	522,045

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Derivative Instruments And Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2020

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 hedging instruments under hedge accounting:

	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,
	2020		2019				2020			2019
	(In thousands)
Commodity contracts	$	6,914	$	(6,014	)	Sales and other revenues	$	(5,403	)	$	—
						Cost of products sold	459			5,674
						Operating expenses	(457		)	(353		)
Total	$	6,914	$	(6,014	)		$	(5,401	)	$	5,321

	Net 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,
	2020			2019			2020			2019
	(In thousands)
Commodity contracts	$	(6,410	)	$	7,934	Sales and other revenues	$	49		$	(1,799	)
						Cost of products sold	2,289			9,295
						Operating expenses	(1,163		)	(533		)
Total	$	(6,410	)	$	7,934		$	1,175		$	6,963

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:

	Gain (Loss) Recognized in Earnings
Derivatives Not Designated as Hedging Instruments	Income Statement Location	Three Months Ended June 30,						Six Months Ended June 30,
		2020			2019			2020		2019
		(In thousands)
Commodity contracts	Cost of products sold	$	(7,180	)	$	338		$	17,909	$	(7,079	)
	Interest expense	(5,100		)	741			4,712		(1,275		)
Foreign currency contracts	Gain (loss) on foreign currency transactions	(14,315		)	(7,090		)	19,160		(14,696		)
	Total	$	(26,595	)	$	(6,011	)	$	41,781	$	(23,050	)

Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges

As of June 30, 2020, we have the following notional contract volumes related to outstanding derivative instruments:

		Notional Contract Volumes by Year of Maturity
	Total Outstanding Notional	2020	2021	Unit of Measure
Derivatives Designated as Hedging Instruments
Natural gas price swaps - long	2,700,000	900,000	1,800,000	MMBTU
Crude oil price swaps (basis spread) - long	2,392,000	2,392,000	—	Barrels
Forward diesel contracts - short	200,000	200,000	—	Barrels
Derivatives Not Designated as Hedging Instruments
NYMEX futures (WTI) - short	890,000	890,000	—	Barrels
Crude oil price swaps (basis spread) - long	736,000	736,000	—	Barrels
Forward gasoline and diesel contracts - long	464,000	464,000	—	Barrels
Foreign currency forward contracts	422,074,120	214,491,576	207,582,544	U.S. dollar
Forward commodity contracts (platinum)	40,867	—	40,867	Troy ounces

Schedule of Fair Value and Balance Sheet Location of Outstanding Derivatives

The following table presents the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.

	Derivatives in Net Asset Position							Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet			Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
June 30, 2020
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	1,800	$	(1,194	)	$	606	$	395	$	—	$	395
Commodity forward contracts	—		—			—		2,134		—		2,134
	$	1,800	$	(1,194	)	$	606	$	2,529	$	—	$	2,529
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—		$	—	$	6,987	$	—	$	6,987
Commodity price swap contracts	2,955		—			2,955		—		—		—
Commodity forward contracts	4,219		—			4,219		4,022		—		4,022
Foreign currency forward contracts	9,765		(2,404		)	7,361		—		—		—
	$	16,939	$	(2,404	)	$	14,535	$	11,009	$	—	$	11,009
Total net balance						$	15,141					$	13,538
Balance sheet classification:	Prepayment and other					$	15,141	Accrued liabilities				$	13,143
								Other long-term liabilities				395
						$	15,141					$	13,538

	Derivatives in Net Asset Position							Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet			Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet		Net Liabilities Recognized in Balance Sheet
			(In thousands)
December 31, 2019
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	7,526	$	(1,784	)	$	5,742	$	1,230	$	—	$	1,230
	$	7,526	$	(1,784	)	$	5,742	$	1,230	$	—	$	1,230
Derivatives not designated as cash flow hedging instruments:
NYMEX futures contracts	$	—	$	—		$	—	$	2,578	$	—	$	2,578
Commodity price swap contracts	7,713		—			7,713		—		—		—
Commodity forward contracts	4,133		—			4,133		3,685		—		3,685
Foreign currency forward contracts	—		—			—		6,722		—		6,722
	$	11,846	$	—		$	11,846	$	12,985	$	—	$	12,985
Total net balance						$	17,588					$	14,215
Balance sheet classification:	Prepayment and other					$	17,588	Accrued liabilities				$	12,985
								Other long-term liabilities				1,230
						$	17,588					$	14,215

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Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2020

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:

	Before-Tax			Tax Expense (Benefit)			After-Tax
	(In thousands)
Three Months Ended June 30, 2020
Net change in foreign currency translation adjustment	$	11,710		$	2,488		$	9,222
Net unrealized gain on hedging instruments	6,914			1,762			5,152
Other comprehensive income attributable to HollyFrontier stockholders	$	18,624		$	4,250		$	14,374
Three Months Ended June 30, 2019
Net change in foreign currency translation adjustment	$	9,160		$	1,950		$	7,210
Net unrealized loss on hedging instruments	(6,014		)	(1,534		)	(4,480		)
Net change in pension and other post-retirement benefit obligations	74			—			74
Other comprehensive income attributable to HollyFrontier stockholders	$	3,220		$	416		$	2,804
Six Months Ended June 30, 2020
Net change in foreign currency translation adjustment	$	(9,876	)	$	(2,139	)	$	(7,737	)
Net unrealized loss on hedging instruments	(6,410		)	(1,636		)	(4,774		)
Net change in pension and other post-retirement benefit obligations	(42		)	(4		)	(38		)
Other comprehensive loss attributable to HollyFrontier stockholders	$	(16,328	)	$	(3,779	)	$	(12,549	)
Six Months Ended June 30, 2019
Net change in foreign currency translation adjustment	$	13,523		$	2,855		$	10,668
Net unrealized gain on hedging instruments	7,934			2,023			5,911
Other comprehensive income attributable to HollyFrontier stockholders	$	21,457		$	4,878		$	16,579

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”):

AOCI Component	Gain (Loss) Reclassified From AOCI						Income Statement Line Item
	Three Months Ended June 30,
	2020			2019
	(In thousands)
Hedging instruments:
Commodity price swaps	$	(5,403	)	$	—		Sales and other revenues
	459			5,674			Cost of products sold
	(457		)	(353		)	Operating expenses
	(5,401		)	5,321
	(1,377		)	1,357			Income tax expense (benefit)
Total reclassifications for the period	$	(4,024	)	$	3,964		Net of tax
	Six Months Ended June 30,
	2020			2019
Hedging instruments:
Commodity price swaps	$	49		$	(1,799	)	Sales and other revenues
	2,289			9,295			Cost of products sold
	(1,163		)	(533		)	Operating expenses
	1,175			6,963
	300			1,776			Income tax expense
Total reclassifications for the period	$	875		$	5,187		Net of tax

Accumulated Other Comprehensive Loss In Equity

Accumulated other comprehensive income (loss) in the equity section of our consolidated balance sheets includes:

	June 30, 2020			December 31, 2019
	(In thousands)
Foreign currency translation adjustment	$	(9,924	)	$	(2,187	)
Unrealized loss on pension obligation	(1,798		)	(1,733		)
Unrealized gain on post-retirement benefit obligations	15,360			15,333
Unrealized gain (loss) on hedging instruments	(1,413		)	3,361
Accumulated other comprehensive income	$	2,225		$	14,774

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Post-retirement Plan (Tables)

6 Months Ended

Jun. 30, 2020

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Schedule of Costs of Retirement Plans

Our net periodic pension expense consisted of the following components:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Service cost - benefit earned during the period	$	1,072		$	1,198		$	2,200		$	2,397
Interest cost on projected benefit obligations	413			440			856			877
Expected return on plan assets	(976		)	(811		)	(2,009		)	(1,621		)
Amortization of loss	—			830			—			1,660
Net periodic pension expense	$	509		$	1,657		$	1,047		$	3,313

Net Periodic Pension Expense

The net periodic benefit credit of our post-retirement healthcare and other benefits plans consisted of the following components

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(In thousands)
Service cost – benefit earned during the period	$	446		$	386		$	899		$	771
Interest cost on projected benefit obligations	233			266			471			531
Amortization of prior service credit	(870		)	(870		)	(1,741		)	(1,741		)
Amortization of (gain) loss	12			(22		)	25			(44		)
Net periodic post-retirement credit	$	(179	)	$	(240	)	$	(346	)	$	(483	)

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule Of Segment Reporting Information

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Three Months Ended June 30, 2020
Sales and other revenues:
Revenues from external customers	$	1,690,042		$	353,644		$	19,244	$	—		$	2,062,930
Intersegment revenues	37,462			3,643			95,563		(136,668		)	—
	$	1,727,504		$	357,287		$	114,807	$	(136,668	)	$	2,062,930
Cost of products sold (exclusive of lower of cost or market inventory)	$	1,433,437		$	258,347		$	—	$	(114,788	)	$	1,576,996
Lower of cost or market inventory valuation adjustment	$	(269,904	)	$	—		$	—	$	—		$	(269,904	)
Operating expenses	$	239,359		$	47,840		$	34,737	$	(18,577	)	$	303,359
Selling, general and administrative expenses	$	32,811		$	35,919		$	2,535	$	4,104		$	75,369
Depreciation and amortization	$	81,694		$	19,779		$	24,008	$	4,697		$	130,178
Long-lived asset impairment (1)	$	215,242		$	204,708		$	16,958	$	—		$	436,908
Income (loss) from operations	$	(5,135	)	$	(209,306	)	$	36,569	$	(12,104	)	$	(189,976	)
Earnings of equity method investments	$	—		$	—		$	2,156	$	—		$	2,156
Capital expenditures	$	12,102		$	4,311		$	11,798	$	17,776		$	45,987
Three Months Ended June 30, 2019
Sales and other revenues:
Revenues from external customers	$	4,208,776		$	545,346		$	28,382	$	111		$	4,782,615
Intersegment revenues	88,484			—			102,369		(190,853		)	—
	$	4,297,260		$	545,346		$	130,751	$	(190,742	)	$	4,782,615
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,458,832		$	415,353		$	—	$	(169,301	)	$	3,704,884
Lower of cost or market inventory valuation adjustment	$	47,801		$	—		$	—	$	—		$	47,801
Operating expenses	$	252,715		$	59,122		$	40,608	$	(19,193	)	$	333,252
Selling, general and administrative expenses	$	29,638		$	42,087		$	1,988	$	11,604		$	85,317
Depreciation and amortization	$	76,225		$	23,020		$	24,241	$	3,422		$	126,908
Goodwill impairment	$	—		$	152,712		$	—	$	—		$	152,712
Income (loss) from operations	$	432,049		$	(146,948	)	$	63,914	$	(17,274	)	$	331,741
Earnings of equity method investments	$	—		$	—		$	1,783	$	—		$	1,783
Capital expenditures	$	33,899		$	9,331		$	7,034	$	6,470		$	56,734

	Refining			Lubricants and Specialty Products			HEP		Corporate, Other and Eliminations			Consolidated Total
	(In thousands)
Six Months Ended June 30, 2020
Sales and other revenues:
Revenues from external customers	$	4,540,662		$	877,143		$	45,670	$	—		$	5,463,475
Intersegment revenues	121,708			6,747			196,991		(325,446		)	—
	$	4,662,370		$	883,890		$	242,661	$	(325,446	)	$	5,463,475
Cost of products sold (exclusive of lower of cost or market inventory)	$	3,902,188		$	649,727		$	—	$	(281,193	)	$	4,270,722
Lower of cost or market inventory valuation adjustment	$	290,560		$	—		$	—	$	—		$	290,560
Operating expenses	$	498,533		$	101,971		$	69,718	$	(38,518	)	$	631,704
Selling, general and administrative expenses	$	63,811		$	84,881		$	5,237	$	9,177		$	163,106
Depreciation and amortization	$	171,873		$	41,828		$	47,986	$	9,066		$	270,753
Long-lived asset impairment (1)	$	215,242		$	204,708		$	16,958	$	—		$	436,908
Income (loss) from operations	$	(479,837	)	$	(199,225	)	$	102,762	$	(23,978	)	$	(600,278	)
Earnings of equity method investments	$	—		$	—		$	3,870	$	—		$	3,870
Capital expenditures	$	65,116		$	13,392		$	30,740	$	20,488		$	129,736
Six Months Ended June 30, 2019
Sales and other revenues:
Revenues from external customers	$	7,581,442		$	1,038,680		$	59,520	$	220		$	8,679,862
Intersegment revenues	163,228			—			205,728		(368,956		)	—
	$	7,744,670		$	1,038,680		$	265,248	$	(368,736	)	$	8,679,862
Cost of products sold (exclusive of lower of cost or market inventory)	$	6,421,372		$	804,370		$	—	$	(321,653	)	$	6,904,089
Lower of cost or market inventory valuation adjustment	$	(184,545	)	$	—		$	—	$	—		$	(184,545	)
Operating expenses	$	517,212		$	112,681		$	78,121	$	(43,170	)	$	664,844
Selling, general and administrative expenses	$	56,615		$	81,806		$	4,608	$	30,322		$	173,351
Depreciation and amortization	$	150,640		$	43,191		$	48,071	$	6,427		$	248,329
Goodwill impairment	$	—		$	152,712		$	—	$	—		$	152,712
Income (loss) from operations	$	783,376		$	(156,080	)	$	134,448	$	(40,662	)	$	721,082
Earnings of equity method investments	$	—		$	—		$	3,883	$	—		$	3,883
Capital expenditures	$	75,662		$	17,190		$	17,752	$	9,865		$	120,469

(1) The results of our HEP reportable segment for the three and six months ended June 30, 2020 include a long-lived asset impairment charge attributed to HEP’s logistics assets at our Cheyenne Refinery.

	Refining		Lubricants and Specialty Products		HEP		Corporate, Other and Eliminations		Consolidated Total
	(In thousands)
June 30, 2020
Cash and cash equivalents	$	15,652	$	189,571	$	18,913	$	678,373	$	902,509
Total assets	$	6,327,809	$	1,910,431	$	2,215,053	$	610,527	$	11,063,820
Long-term debt	$	—	$	—	$	1,486,648	$	994,098	$	2,480,746
December 31, 2019
Cash and cash equivalents	$	9,755	$	169,277	$	13,287	$	692,843	$	885,162
Total assets	$	7,189,094	$	2,223,418	$	2,205,437	$	546,892	$	12,164,841
Long-term debt	$	—	$	—	$	1,462,031	$	993,609	$	2,455,640

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Description of Business and Presentation of Financial Statements (Details) $ in Thousands		3 Months Ended			6 Months Ended
	Feb. 01, 2019 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) Petroleum_Refineries mi	Jun. 30, 2019 USD ($)	Jan. 01, 2020 USD ($)	Dec. 31, 2019 USD ($)
Ownership Interest By Project Type [Line Items]
Allowance for Doubtful Accounts, Premiums and Other Receivables			$ 2,100		$ 2,100		$ 3,200
Income Tax Expense (Benefit)			(30,911)	$ 89,336	$ (193,077)	$ 176,841
Effective Income Tax Rate Reconciliation, Percent					30.30%	26.40%
Number of refineries located in Tulsa, Oklahoma | Petroleum_Refineries					2
Refinery Distance From Main City [Miles] | mi					65
Impairment of Intangible Assets, Finite-lived			232,200
Restructuring and Related Cost, Accelerated Depreciation			2,200
Restructuring and Related Cost, Cost Incurred to Date			$ 1,100		$ 1,100
Restructuring and Related Cost, Number of Positions Eliminated, Inception to Date			200		200
Restructuring Reserve, Current			$ 3,700		$ 3,700
Impairment of Long-Lived Assets Held-for-use			204,700		436,908
Allowance for doubtful accounts reserve			3,400		3,400			$ 4,500
Goodwill			2,373,912		2,373,912			2,373,907
Proceeds from inventory repurchase agreements					20,400	$ 12,600
Payments under inventory repurchase agreements					(21,700)	(12,900)
Business Combination, Consideration Transferred	$ 701,600				2,400	0
Payments to Acquire Businesses, Net of Cash Acquired	662,700				0	662,665
Assets Acquired and Liabilities Assumed, Cash and Equivalents	38,900
Assets Acquired and Liabilities Assumed, Current Assets	139,400
Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	168,200
Business Combination Goodwill not Deductible for Income Taxes	282,300
Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	231,500
Assets Acquired and Liabilities Assumed, Current Liabilities	47,900
Assets Acquired and Liabilities Assumed, Noncurrent Liabilities	$ 110,800
Business Combination, Integration Related Costs			600	3,600	1,900	16,200
Long-lived Asset and Goodwill, Impairments			436,908	152,712	436,908	152,712
Refining
Ownership Interest By Project Type [Line Items]
Impairment of Long-Lived Assets Held-for-use					215,242
Goodwill			1,733,500		1,733,500
Long-lived Asset and Goodwill, Impairments			215,242	0		0
Lubricants and other specialty products - acquisition
Ownership Interest By Project Type [Line Items]
Goodwill			327,600		327,600
HEP
Ownership Interest By Project Type [Line Items]
Impairment of Long-Lived Assets Held-for-use					16,958
Goodwill			312,900		$ 312,900
Long-lived Asset and Goodwill, Impairments			16,958	$ 0
HEP
Ownership Interest By Project Type [Line Items]
Percentage of ownership in variable interest entity					57.00%
Goodwill			312,873		$ 312,873			$ 312,873
Long-lived Asset and Goodwill, Impairments						$ 0
Subsequent Event [Member]
Ownership Interest By Project Type [Line Items]
Restructuring and Related Cost, Accelerated Depreciation		$ 3,700
Inventories [Member]
Ownership Interest By Project Type [Line Items]
Restructuring Reserve			$ 6,200		$ 6,200

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Holly Energy Partners (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) Customers shares	Jun. 30, 2019 USD ($)
Holly Energy Partners Entity [Line Items]
Operating Leases, Income Statement, Lease Revenue	$ 5,442	$ 8,267	$ 13,732	$ 16,466
Equity Method Investment, Ownership Percentage	50.00%		50.00%
Capital Expenditures Incurred but Not yet Paid			$ 65,000
Common Unit Issuance Program			$ 200,000
Common Stock, Shares, Issued | shares			2,413,153
Proceeds from issuance of common units - HEP			$ 82,300
Sales-type Lease, Selling Profit (Loss)	$ 33,834	$ 0	33,834	$ 0
Sales-type Lease, Interest Income	642		642
Variable Lease, Payment	$ 286		$ 286
UNEV Pipeline [Member]
Holly Energy Partners Entity [Line Items]
Equity Method Investment, Ownership Percentage	75.00%		75.00%
Osage Pipeline [Member] [Member]
Holly Energy Partners Entity [Line Items]
Equity Method Investment, Ownership Percentage	50.00%		50.00%
HEP
Holly Energy Partners Entity [Line Items]
Percentage of ownership in variable interest entity			57.00%
HEP number of significant customers | Customers			2
HFC Percentage of HEP Revenues			81.00%
Long-term Purchase Commitment with HEP			$ 351,100

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Revenues from Contracts with Customers - Schedule of Disaggregated Revenues (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Sales and other revenues		$ 2,062,930	$ 4,782,615	$ 5,463,475	$ 8,679,862
Mid-Continent
Disaggregation of Revenue [Line Items]
Sales and other revenues		867,660	2,361,969	2,400,584	4,092,474
Southwest
Disaggregation of Revenue [Line Items]
Sales and other revenues		436,073	1,008,806	1,170,248	1,858,955
Rocky Mountains
Disaggregation of Revenue [Line Items]
Sales and other revenues		274,973	613,063	743,752	1,128,398
Northeast
Disaggregation of Revenue [Line Items]
Sales and other revenues		110,909	148,116	270,733	276,007
Canada
Disaggregation of Revenue [Line Items]
Sales and other revenues		120,870	174,772	303,523	352,127
Europe and Asia
Disaggregation of Revenue [Line Items]
Sales and other revenues		60,343	83,284	132,631	152,689
Transportation fuels
Disaggregation of Revenue [Line Items]
Sales and other revenues	[1]	1,385,246	3,633,966	3,863,593	6,441,407
Specialty lubricant products
Disaggregation of Revenue [Line Items]
Sales and other revenues	[2]	340,284	507,183	811,237	951,525
Asphalt, fuel oil and other products (3)
Disaggregation of Revenue [Line Items]
Sales and other revenues	[3]	145,298	248,861	346,641	467,718
Total refined product revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues		1,870,828	4,390,010	5,021,471	7,860,650
Excess crude oil revenues
Disaggregation of Revenue [Line Items]
Sales and other revenues	[4]	163,394	350,683	363,173	733,313
Transportation and logistic services
Disaggregation of Revenue [Line Items]
Sales and other revenues		19,244	28,382	45,670	59,520
Other revenues (5)
Disaggregation of Revenue [Line Items]
Sales and other revenues	[5]	9,464	13,540	33,161	26,379
Refining
Disaggregation of Revenue [Line Items]
Sales and other revenues		1,690,042	4,208,776	4,540,662	7,581,442
Refining | Asphalt, fuel oil and other products (3)
Disaggregation of Revenue [Line Items]
Sales and other revenues		131,900	210,700	280,700	380,600
Lubricants and other specialty products
Disaggregation of Revenue [Line Items]
Sales and other revenues		353,644	545,346	877,143	1,038,680
Lubricants and other specialty products | Asphalt, fuel oil and other products (3)
Disaggregation of Revenue [Line Items]
Sales and other revenues		$ 13,400	$ 38,200	$ 65,900	$ 87,200

[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 $131.9 million and $13.4 million, respectively, for the three months ended June 30, 2020, $280.7 million and $65.9 million, respectively for the six months ended June 30, 2020, $210.7 million and $38.2 million, respectively, for the three months ended June 30, 2019

[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.

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Revenues from Contracts with Customers - Contract Liabilities Rollforward (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Change In Contract With Customer, Liability [Roll Forward]
Contract with Customer, Liability	$ 4,652	$ 132
Sonneborn acquisition		6,463
Contract With Customer, Liability, Increase	16,115	10,813
Contract with Customer, Liability, Revenue Recognized	(14,980)	(12,906)
Contract with Customer, Liability	$ 5,787	$ 4,502

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Revenues from Contracts with Customers - Performance Obligations Volume (Details) bbl in Thousands	Jun. 30, 2020 bbl
Revenue from Contract with Customer [Abstract]
Aggregate minimum volumes, performance obligations expected to be sold	63,620
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue from Contract with Customer [Abstract]
Aggregate minimum volumes, performance obligations expected to be sold	10,398
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue from Contract with Customer [Abstract]
Aggregate minimum volumes, performance obligations expected to be sold	15,958
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue from Contract with Customer [Abstract]
Aggregate minimum volumes, performance obligations expected to be sold	12,799
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue from Contract with Customer [Abstract]
Aggregate minimum volumes, performance obligations expected to be sold	24,465
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period

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Revenues from Contracts with Customers - Performance Obligations (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, expected timing of satisfaction, period
Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 66,353
Third-Party Customer | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 13,164
Remaining performance obligation, expected timing of satisfaction, period	6 months
Third-Party Customer | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 21,942
Remaining performance obligation, expected timing of satisfaction, period	1 year
Third-Party Customer | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 10,954
Remaining performance obligation, expected timing of satisfaction, period	1 year
Third-Party Customer | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
HEP contractual minimum revenues, performance obligations expected to be satisfied	$ 20,293
Remaining performance obligation, expected timing of satisfaction, period

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Revenues from Contracts with Customers - Performance Obligations Total (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Third-Party Customer
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 66,353

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Fair Value Measurements (Estimated Fair Values Of Debt Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Level 1 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	$ 0	$ 0
Financial Liabilities Fair Value Disclosure	6,987	2,578
Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	15,141	17,588
Financial Liabilities Fair Value Disclosure	11,900	11,637
Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	15,141	17,588
Financial Liabilities Fair Value Disclosure	18,887	14,215
Commodity [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	3,561
Commodity [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	3,561
Nymex Futures Contracts [Member] | Level 1 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	6,987	2,578
Nymex Futures Contracts [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	0
Nymex Futures Contracts [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	6,987	2,578
Foreign Exchange Forward [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	7,361
Financial Liabilities Fair Value Disclosure	395	6,722
Foreign Exchange Forward [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	7,361
Financial Liabilities Fair Value Disclosure	395	6,722
Commodity Contract [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure		13,455
Financial Liabilities Fair Value Disclosure		1,230
Commodity Contract [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure		13,455
Financial Liabilities Fair Value Disclosure		1,230
Forward Contracts [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	4,219	4,133
Financial Liabilities Fair Value Disclosure	6,156	3,685
Forward Contracts [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Assets Fair Value Disclosure	4,219	4,133
Financial Liabilities Fair Value Disclosure	6,156	$ 3,685
Renewable Energy Program [Member] | Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	5,349
Renewable Energy Program [Member] | Reported Value Measurement [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	$ 5,349

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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, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Net income attributable to HollyFrontier stockholders	$ (176,677)	$ 196,915	$ (481,300)	$ 449,970
Participating securities’ (restricted stock) share in earnings	0	283	0	647
Net income (loss) attributable to common shares	$ (176,677)	$ 196,632	$ (481,300)	$ 449,323
Average number of shares of common stock outstanding	161,889	169,356	161,882	170,100
Effect of dilutive variable restricted shares and performance share units	0	1,191	0	1,164
Average number of shares of common stock outstanding assuming dilution	161,889	170,547	161,882	171,264
Basic earnings (loss) per share	$ (1.09)	$ 1.16	$ (2.97)	$ 2.64
Diluted earnings (loss) per share	$ (1.09)	$ 1.15	$ (2.97)	$ 2.62
Excludes anti-dilutive restricted and performance share units of:	590	160	585	131

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Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Expense	$ 8.1	$ 11.9	$ 12.9	$ 20.8
HEP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Expense	0.5	$ 0.6	1.0	$ 1.2
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			3.5
Total unrecognized compensation cost related to non-vested grants	23.2		$ 23.2
Total unrecognized compensation cost, weighted-average period of recognition, years			1 year 2 months 12 days
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			$ 0.5
Total unrecognized compensation cost related to non-vested grants	$ 8.3		$ 8.3
Total unrecognized compensation cost, weighted-average period of recognition, years			1 year 7 months 6 days

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Stock-Based Compensation (Summary Of Restricted Stock Activity) (Details) - Restricted Stock [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $	$ 3,500
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	1 year 2 months 12 days
Outstanding at January 1, 2020 (non-vested) | shares	1,101,781
Granted | shares	62,776
Vesting (transfer/conversion to common stock) | shares	(79,956)
Forfeited | shares	(59,494)
Outstanding at June 30, 2020 (non-vested) | shares	1,044,557
Outstanding at January 1, 2020 (non-vested), Weighted Average Grant Date Fair Value | $ / shares	$ 53.30
Granted, Weighted Average Grant Date Fair Value | $ / shares	35.58
Vesting and transfer of ownership to recipients, Weighted Average Grant Date Fair Value | $ / shares	44.30
Forfeited, Weighted Average Grant Date Fair Value, per share | $ / shares	53.41
Outstanding at June 30, 2020 (non-vested), Weighted Average Grant Date Fair Value | $ / shares	$ 52.48
Aggregate Intrinsic Value | $	$ 30,501
Share-based Compensation Arrangement by Share-based Payment Award, Options, Other Increases (Decreases) in Period | shares	19,450
Share-based Compensation Arrangements by Share-based Payment Award, Options, Other Share Increase (Decrease) in Period, Weighted Average Exercise Price | $ / shares	$ 38.13

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Stock-Based Compensation (Summary Of Performance Share Unit Activity) (Details) - Performance Shares [Member] $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Shares, Issued	7,889
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $	$ 0.5
Outstanding at January 1, 2020 (non-vested)	375,588
Vesting and transfer of ownership to recipients	(12,129)
Forfeited	(18,766)
Outstanding at June 30, 2020 (non-vested)	325,243
Total unrecognized compensation cost related to non-vested grants | $	$ 8.3
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 58.07
Total unrecognized compensation cost, weighted-average period of recognition, years	1 year 7 months 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Other Increases (Decreases) in Period	(19,450)
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage Of Share Units Awarded Ultimately Issued	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage Of Share Units Awarded Ultimately Issued	200.00%

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Inventories (Details) - USD ($) $ in Thousands		Jun. 30, 2020	Dec. 31, 2019
Inventories
Crude Oil		$ 537,863	$ 489,169
Other raw materials and unfinished products	[1]	301,956	394,045
Finished products	[2]	668,955	639,938
Lower of cost or market reserve		(530,923)	(240,363)
Process chemicals	[3]	33,677	36,786
Repair and maintenance supplies and other	[4]	162,173	154,627
Inventories, total		$ 1,173,701	$ 1,474,202

[1] (1) Other raw materials and unfinished products include feedstocks and blendstocks, other than crude.

[2] (2) Finished products include gasolines, jet fuels, diesels, lubricants, asphalts, LPG’s and residual fuels.

[3] (3) Process chemicals include additives and other chemicals.

[4] (4) Includes RINs.

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Inventories (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Inventory [Line Items]
Lower of Cost or Market Inventory Reserve	$ (530,900)		$ (530,900)		$ (240,400)
Inventory Valuation Reserves	530,923		530,923		$ 240,363
Lower of cost or market inventory valuation adjustment	(269,904)	$ 47,801	290,560	$ (184,545)
Inventories [Member]
Inventory [Line Items]
Restructuring Reserve	$ 6,200		$ 6,200

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Environmental (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Loss Contingencies [Line Items]
Environmental remediation costs	$ 0.4	$ 2.3	$ 2.0	$ 3.7
Accrued environmental liability	115.6		$ 115.6		$ 117.7
Estimated time frame to remediate contigency			P30Y
Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Accrued environmental liability	$ 94.1		$ 94.1		$ 95.6

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Debt (Narrative) (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2020	Jun. 30, 2019	Feb. 04, 2020
Debt Instrument [Line Items]
Extinguishment of Debt, Amount	$ 522,500,000
Loss on early extinguishment of debt	0		$ 0		$ (25,915,000)	$ 0
Maximum borrowing capacity under revolving credit agreement	1,350,000,000				1,350,000,000
Letters of Credit Outstanding, Amount	4,900,000				4,900,000
Proceeds from Long-term Lines of Credit					168,000,000.0	175,000,000
Repayments of Long-term Lines of Credit					138,500,000	156,500,000
Borrowings outstanding under revolving credit agreement		$ 965,500,000
Sale Leaseback Transaction, Net Proceeds, Financing Activities	35,000,000.0	40,000,000.0		$ 32,500,000
Capitalized Interest Costs	800,000		$ 500,000		1,400,000	$ 1,100,000
Debt Redemption Premium	22,500,000
Unamortized Discount (Premium) and Debt Issuance Costs, Net	$ 3,400,000				$ 3,400,000
Five Point Eight Seven Five Percentage Senior Notes Due Two Thousand Twenty-Six [Member] [Member]
Debt Instrument [Line Items]
Stated interest rate, senior notes	5.875%				5.875%
Senior notes	$ 1,000,000,000	1,000,000,000			$ 1,000,000,000
Six Percent Senior Notes Due Two Thousand Twenty Four [Member]
Debt Instrument [Line Items]
Senior notes		$ 500,000,000
Debt Instrument, Interest Rate, Effective Percentage		6.00%
Five Percent Senior Notes Due Two Thousand Twenty Eight [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount							$ 500,000,000
Debt Instrument, Interest Rate, Effective Percentage							5.00%
HEP
Debt Instrument [Line Items]
Maximum borrowing capacity under revolving credit agreement	1,400,000,000				1,400,000,000
Line of Credit Facility, Capacity Available for Trade Purchases	50,000,000				50,000,000
Line of credit facility, accordion feature	$ 300,000,000				$ 300,000,000
HEP | Six Percent Senior Notes Due Two Thousand Twenty Four [Member]
Debt Instrument [Line Items]
Senior notes		$ 500,000,000

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Debt (Carrying Amounts Of Long-Term Debt) (Details) - USD ($)	Jun. 30, 2020	Feb. 04, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
HEP Credit Agreement			$ 965,500,000
Total long-term debt	$ 2,480,746,000		2,455,640,000
Long-term debt	2,480,746,000		2,455,640,000
Five Point Eight Seven Five Percentage Senior Notes Due Two Thousand Twenty-Six [Member] [Member]
Debt Instrument [Line Items]
Principal	1,000,000,000		1,000,000,000
Unamortized discount	(5,902,000)		(6,391,000)
Total long-term debt	994,098,000		993,609,000
Five Percent Senior Notes Due Two Thousand Twenty Eight [Member]
Debt Instrument [Line Items]
Unamortized discount	(8,352,000)
Debt Instrument, Face Amount		$ 500,000,000
Total long-term debt	491,648,000
Six Percent Senior Notes Due Two Thousand Twenty Four [Member]
Debt Instrument [Line Items]
Principal			500,000,000
Unamortized discount			(3,469,000)
Total long-term debt			496,531,000
HEP
Debt Instrument [Line Items]
HEP Credit Agreement	995,000,000.0
Long-term Debt and Lease Obligation	1,486,648,000		1,462,031,000
Level 2 [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	11,900,000		11,637,000
Level 2 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	1,105,120,000		1,127,610,000
Level 2 [Member] | Senior Notes [Member] | HEP
Debt Instrument [Line Items]
Financial Liabilities Fair Value Disclosure	$ 477,835,000		$ 522,045,000

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Derivative Instruments And Hedging Activities Derivatives and Hedging Instruments Gains Losses due to Settlements Hedge Ineffectiveness (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Trading Activity, Gains and Losses, Net [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	$ 6,914	$ (6,014)	$ (6,410)	$ 7,934
Sales and other revenues	2,062,930	4,782,615	5,463,475	8,679,862
Cost of products sold	1,576,996	3,704,884	4,270,722	6,904,089
Reclassification out of Accumulated Other Comprehensive Income [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Other Cost and Expense, Operating	(5,401)	5,321	1,175	6,963
Commodity Contract [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	6,914	(6,014)	(6,410)	7,934
Commodity Contract [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Sales and other revenues	(5,403)	0	49	(1,799)
Cost of products sold	459	5,674	2,289	9,295
Operating Expenses	$ (457)	$ (353)	$ (1,163)	$ (533)

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Derivative Instruments And Hedging Activities Volumes related to price risk purchase derivatives (Details)	6 Months Ended
	Jun. 30, 2020 USD ($) bbl XPT ( )
Platinum, Ounces
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Derivative forward contract - platinum |	40,867
Platinum, Ounces | Maturing in Year Two [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Derivative forward contract - platinum |	40,867
Not Designated as Hedging Instrument [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 422,074,120
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	214,491,576
Not Designated as Hedging Instrument [Member] | Maturing in Year Two [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 207,582,544
Not Designated as Hedging Instrument [Member] | Platinum, Ounces | Maturing in Next Twelve Months [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Derivative forward contract - platinum |	0
Not Designated as Hedging Instrument [Member] | NYMEX WTI Short [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net | bbl	890,000
Not Designated as Hedging Instrument [Member] | NYMEX WTI Short [Member] | Maturing in Next Twelve Months [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net | bbl	890,000
Not Designated as Hedging Instrument [Member] | NYMEX WTI Short [Member] | Maturing in Year Two [Member]
Price Risk Derivatives for Future Purchases Notional Contract Volumes [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net | bbl	0

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Derivative Instruments And Hedging Activities Schedule of Realized Gain (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	$ 6,914	$ (6,014)	$ (6,410)	$ 7,934
Sales and other revenues	2,062,930	4,782,615	5,463,475	8,679,862
Gain (Loss) on Price Risk Hedge Ineffectiveness	(26,595)	(6,011)	41,781	(23,050)
Cost of products sold	1,576,996	3,704,884	4,270,722	6,904,089
Commodity Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized Gain (Loss) on Cash Flow Hedging Instruments	6,914	(6,014)	(6,410)	7,934
Commodity Contract [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Price Risk Hedge Ineffectiveness	(7,180)	338	17,909	(7,079)
Commodity Contract [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Price Risk Hedge Ineffectiveness	(5,100)	741	4,712	(1,275)
Foreign Currency Gain (Loss) [Member] | Other Nonoperating Income (Expense) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Price Risk Hedge Ineffectiveness	(14,315)	(7,090)	19,160	(14,696)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other Cost and Expense, Operating	(5,401)	5,321	1,175	6,963
Reclassification out of Accumulated Other Comprehensive Income [Member] | Commodity Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Sales and other revenues	(5,403)	0	49	(1,799)
Cost of products sold	459	5,674	2,289	9,295
Operating Expenses	$ (457)	$ (353)	$ (1,163)	$ (533)

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Derivative Instruments And Hedging Activities Notional Contracts by Derivative Type (Details)	6 Months Ended
	Jun. 30, 2020 USD ($) MMBTU bbl XPT ( )
Platinum, Ounces
Economic hedges by derivative type [Line Items]
Derivative forward contract - platinum |	40,867
Maturing in Year Two [Member] | Platinum, Ounces
Economic hedges by derivative type [Line Items]
Derivative forward contract - platinum |	40,867
Designated as Hedging Instrument [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	2,700,000
Designated as Hedging Instrument [Member] | Price Risk Derivative [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	2,392,000
Designated as Hedging Instrument [Member] | Natural Gas Liquids [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	200,000
Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	900,000
Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Price Risk Derivative [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	2,392,000
Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Natural Gas Liquids [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	200,000
Designated as Hedging Instrument [Member] | Maturing in Year Two [Member] | Natural Gas [Member]
Economic hedges by derivative type [Line Items]
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU	1,800,000
Designated as Hedging Instrument [Member] | Maturing in Year Two [Member] | Price Risk Derivative [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	0
Not Designated as Hedging Instrument [Member]
Economic hedges by derivative type [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 422,074,120
Not Designated as Hedging Instrument [Member] | Forward gasoline and diesel contracts [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	464,000
Not Designated as Hedging Instrument [Member] | Crude Oil [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	736,000
Not Designated as Hedging Instrument [Member] | NYMEX WTI Short [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	890,000
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member]
Economic hedges by derivative type [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 214,491,576
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Forward gasoline and diesel contracts [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	464,000
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Platinum, Ounces
Economic hedges by derivative type [Line Items]
Derivative forward contract - platinum |	0
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | Crude Oil [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	736,000
Not Designated as Hedging Instrument [Member] | Maturing in Next Twelve Months [Member] | NYMEX WTI Short [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	890,000
Not Designated as Hedging Instrument [Member] | Maturing in Year Two [Member]
Economic hedges by derivative type [Line Items]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | $	$ 207,582,544
Not Designated as Hedging Instrument [Member] | Maturing in Year Two [Member] | Crude Oil [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	0
Not Designated as Hedging Instrument [Member] | Maturing in Year Two [Member] | NYMEX WTI Short [Member]
Economic hedges by derivative type [Line Items]
Price Risk Fair Value Hedge Derivative, at Fair Value, Net	0

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Derivative Instruments And Hedging Activities (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Derivative [Line Items]
Net unrealized loss in accumulated other comprehensive income related to accounting hedges	$ (1.9)
Net unrealized loss to be transferred from accumulated other comprehensive income to statement of income	$ (1.5)

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Derivative Instruments And Hedging Activities Interest Rate Swaps (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative [Line Items]
Interest expense	$ 32,695	$ 34,264	$ 55,334	$ 70,911

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Derivative Instruments And Hedging Activities (Summary Of Balance Sheet Locations And Related Fair Values Of Outstanding Derivative Instruments) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Jun. 30, 2020
Derivative [Line Items]
Derivative Asset Fair Value Net Asset	$ 17,588	$ 15,141
Derivative Liability Fair Value Net Liability	14,215	13,538
Accrued Liabilities [Member]
Derivative [Line Items]
Derivative Liability Fair Value Net Liability	12,985	13,143
Prepayments And Other [Member]
Derivative [Line Items]
Derivative Asset Fair Value Net Asset	17,588	15,141
Other Noncurrent Liabilities [Member]
Derivative [Line Items]
Derivative Liability Fair Value Net Liability	1,230	395
Forward Contracts [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset		0
Derivative Asset Fair Value Gross Liability		0
Derivative Asset Fair Value Net Asset		0
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	7,526	1,800
Derivative Asset Fair Value Gross Liability	(1,784)	(1,194)
Derivative Asset Fair Value Net Asset	5,742	606
Derivative Liability Fair Value Gross Liability	1,230	2,529
Derivative Liability Fair Value Gross Asset	0	0
Derivative Liability Fair Value Net Liability	1,230	2,529
Designated as Hedging Instrument [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative Liability Fair Value Gross Liability		2,134
Derivative Liability Fair Value Gross Asset		0
Derivative Liability Fair Value Net Liability		2,134
Designated as Hedging Instrument [Member] | Commodity Contract [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	7,526	1,800
Derivative Asset Fair Value Gross Liability	(1,784)	(1,194)
Derivative Asset Fair Value Net Asset	5,742	606
Derivative Liability Fair Value Gross Liability	1,230	395
Derivative Liability Fair Value Gross Asset	0	0
Derivative Liability Fair Value Net Liability	1,230	395
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	11,846	16,939
Derivative Asset Fair Value Gross Liability	0	(2,404)
Derivative Asset Fair Value Net Asset	11,846	14,535
Derivative Liability Fair Value Gross Liability	12,985	11,009
Derivative Instruments Not Designated as Hedging Instruments, Loss	0
Derivative Liability Fair Value Gross Asset	0	0
Derivative Liability Fair Value Net Liability	12,985	11,009
Not Designated as Hedging Instrument [Member] | Nymex Futures Contracts [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Asset Fair Value Gross Liability	0	0
Derivative Asset Fair Value Net Asset	0	0
Derivative Liability Fair Value Gross Liability	2,578	6,987
Derivative Liability Fair Value Gross Asset		0
Derivative Liability Fair Value Net Liability	2,578	6,987
Not Designated as Hedging Instrument [Member] | NYMEX WTI Short [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	7,713	2,955
Derivative Asset Fair Value Gross Liability	0	0
Derivative Asset Fair Value Net Asset	7,713	2,955
Derivative Liability Fair Value Gross Liability	0	0
Derivative Liability Fair Value Gross Asset		0
Derivative Liability Fair Value Net Liability	0	0
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	4,133	4,219
Derivative Asset Fair Value Gross Liability	0	0
Derivative Asset Fair Value Net Asset	4,133	4,219
Derivative Liability Fair Value Gross Liability	3,685	4,022
Derivative Liability Fair Value Gross Asset	0	0
Derivative Liability Fair Value Net Liability	3,685	4,022
Not Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	9,765
Derivative Asset Fair Value Gross Liability		(2,404)
Derivative Asset Fair Value Net Asset	0	7,361
Derivative Liability Fair Value Gross Liability	6,722	0
Derivative Liability Fair Value Gross Asset		0
Derivative Liability Fair Value Net Liability	$ 6,722	$ 0

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Equity (Changes To Equity) (Details) - shares	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased			1,000,000,000.0
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation	29,587	2,484

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Other Comprehensive Income (Components And Allocated Tax Effects Of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Other Comprehensive Income (Loss) Components and Tax Effects [Line Items]
Net change in foreign currency translation adjustment, before Tax	$ 11,710		$ 9,160		$ (9,876)	$ 13,523
Net unrealized gain (loss) on hedging instruments	6,914		(6,014)		(6,410)	7,934
Net change in foreign currency translation adjustment, tax	2,488		1,950		(2,139)	2,855
Net unrealized gain (loss) on hedging instruments, tax expense (benefit)	1,762		(1,534)		(1,636)	2,023
Net change in foreign currency translation, net of tax	9,222		7,210		(7,737)	10,668
Net unrealized gain (loss) on hedging instruments, after tax	5,152		(4,480)		(4,774)	5,911
Reclassification Adjustment from AOCI, before Tax			74		(42)
Gain (Loss) Arising During Period, Tax			0		(4)
Gain (Loss) Arising During Period, after Tax			74		(38)
Other Comprehensive Income (Loss), before Tax	18,624		3,220		(16,328)	21,457
Other Comprehensive Income (Loss), Tax	4,250		416		(3,779)	4,878
Other comprehensive income (loss), net of tax	$ 14,374	$ (26,923)	$ 2,804	$ 13,775	$ (12,549)	$ 16,579

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Other Comprehensive Income (Accumulated Other Comprehensive Loss In Equity) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sales and other revenues	$ 2,062,930		$ 4,782,615		$ 5,463,475	$ 8,679,862
Cost of products sold	1,576,996		3,704,884		4,270,722	6,904,089
Operating expenses	(303,359)		(333,252)		(631,704)	(664,844)
Income before income taxes	(181,318)		306,153		(636,770)	670,144
Income tax expense (benefit)	(30,911)		89,336		(193,077)	176,841
Other comprehensive income (loss), net of tax	14,374	$ (26,923)	2,804	$ 13,775	(12,549)	16,579
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other comprehensive income (loss), net of tax	(4,024)		3,964		875	5,187
Reclassification out of Accumulated Other Comprehensive Income [Member] | Commodity Contract [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sales and other revenues	(5,403)		0		49	(1,799)
Cost of products sold	459		5,674		2,289	9,295
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income taxes	(5,401)		5,321		1,175	6,963
Income tax expense (benefit)	(1,377)		1,357		300	1,776
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Commodity Contract [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sales and other revenues	(5,403)		0		49	(1,799)
Cost of products sold	459		5,674		2,289	9,295
Operating expenses	$ (457)		$ (353)		$ (1,163)	$ (533)

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Other Comprehensive Income Other Comprehensive Income (Balance Sheet Components) (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Other Comprehensive Income (Loss), Tax [Abstract]
Foreign currency translation adjustment	$ (9,924)	$ (2,187)
Unrealized loss on pension obligation	(1,798)	(1,733)
Unrealized gain on post-retirement benefit obligations	15,360	15,333
Unrealized loss on hedging instruments	(1,413)	3,361
Accumulated other comprehensive income	$ 2,225	$ 14,774

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Post-retirement Plan (Narrative) (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Expected Long-term Rate of Return on Plan Assets	1.50%
Business Combination Acquiree PCLI [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Expected Long-term Rate of Return on Plan Assets		5.75%

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Post-retirement Plan (Net Periodic Pension Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Service Cost	$ 1,072	$ 1,198	$ 2,200	$ 2,397
Interest cost on projected benefit obligations	413	440	856	877
Expected return on plan assets	(976)	(811)	(2,009)	(1,621)
Amortization of (gain) loss	0	830	0	1,660
Net periodic pension expense	509	1,657	1,047	3,313
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Service Cost	446	386	899	771
Interest cost on projected benefit obligations	233	266	471	531
Amortization of prior service credit	(870)	(870)	(1,741)	(1,741)
Amortization of (gain) loss	12	(22)	25	(44)
Net periodic post-retirement credit	$ (179)	$ (240)	$ (346)	$ (483)

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Contingencies Contingencies (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Contingency claim [Abstract]
Business Interruption Insurance Recoveries	$ 56.0

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Segment Information (Narrative) (Details)	3 Months Ended
	Jun. 30, 2020
Segment Reporting Information [Line Items]
Number of Reportable Segments	3
Equity Method Investment, Ownership Percentage	50.00%
UNEV Pipeline [Member]
Segment Reporting Information [Line Items]
Equity Method Investment, Ownership Percentage	75.00%

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Segment Information (Schedule Of Segment Reporting Information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Revenues from external customers	$ 2,062,930	$ 4,782,615	$ 5,463,475	$ 8,679,862
Intersegment Revenues	0	0	0	0
Revenues	2,062,930	4,782,615	5,463,475	8,679,862
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	1,576,996	3,704,884	4,270,722	6,904,089
Lower of cost or market inventory valuation adjustment	(269,904)	47,801	290,560	(184,545)
Operating expenses	303,359	333,252	631,704	664,844
Selling, general and administrative expenses	75,369	85,317	163,106	173,351
Depreciation and amortization	130,178	126,908	270,753	248,329
Impairment of Long-Lived Assets Held-for-use	204,700		436,908
Long-lived Asset and Goodwill, Impairments	436,908	152,712	436,908	152,712
Income from operations	(189,976)	331,741	(600,278)	721,082
Earnings of equity method investments	2,156	1,783	3,870	3,883
Capital expenditures	45,987	56,734	129,736	120,469
Cash, cash equivalents, and total investments in marketable securities	902,509		902,509		$ 885,162
Total assets	11,063,820		11,063,820		12,164,841
Long-term debt	2,480,746		2,480,746		2,455,640
Refining
Segment Reporting Information [Line Items]
Revenues from external customers	1,690,042	4,208,776	4,540,662	7,581,442
Intersegment Revenues	37,462	88,484	121,708	163,228
Revenues	1,727,504	4,297,260	4,662,370	7,744,670
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	1,433,437	3,458,832	3,902,188	6,421,372
Lower of cost or market inventory valuation adjustment	(269,904)	47,801	290,560	(184,545)
Operating expenses	239,359	252,715	498,533	517,212
Selling, general and administrative expenses	32,811	29,638	63,811	56,615
Depreciation and amortization	81,694	76,225	171,873	150,640
Impairment of Long-Lived Assets Held-for-use			215,242
Long-lived Asset and Goodwill, Impairments	215,242	0		0
Income from operations	(5,135)	432,049	(479,837)	783,376
Earnings of equity method investments	0	0	0	0
Capital expenditures	12,102	33,899	65,116	75,662
Cash, cash equivalents, and total investments in marketable securities	15,652		15,652		9,755
Total assets	6,327,809		6,327,809		7,189,094
Long-term debt	0		0		0
Lubricants and other specialty products
Segment Reporting Information [Line Items]
Revenues from external customers	353,644	545,346	877,143	1,038,680
Intersegment Revenues	3,643	0	6,747	0
Revenues	357,287	545,346	883,890	1,038,680
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	258,347	415,353	649,727	804,370
Lower of cost or market inventory valuation adjustment	0	0	0	0
Operating expenses	47,840	59,122	101,971	112,681
Selling, general and administrative expenses	35,919	42,087	84,881	81,806
Depreciation and amortization	19,779	23,020	41,828	43,191
Impairment of Long-Lived Assets Held-for-use			204,708
Long-lived Asset and Goodwill, Impairments	204,708	152,712		152,712
Income from operations	(209,306)	(146,948)	(199,225)	(156,080)
Earnings of equity method investments	0	0	0	0
Capital expenditures	4,311	9,331	13,392	17,190
Cash, cash equivalents, and total investments in marketable securities	189,571		189,571		169,277
Total assets	1,910,431		1,910,431		2,223,418
Long-term debt	0		0		0
HEP
Segment Reporting Information [Line Items]
Depreciation and amortization				48,071
Impairment of Long-Lived Assets Held-for-use			16,958
Long-lived Asset and Goodwill, Impairments	16,958	0
Corporate, Other and Eliminations
Segment Reporting Information [Line Items]
Revenues from external customers	0	111	0	220
Intersegment Revenues	(136,668)	(190,853)	(325,446)	(368,956)
Revenues	(136,668)	(190,742)	(325,446)	(368,736)
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	(114,788)	(169,301)	(281,193)	(321,653)
Lower of cost or market inventory valuation adjustment	0	0	0	0
Operating expenses	(18,577)	(19,193)	(38,518)	(43,170)
Selling, general and administrative expenses	4,104	11,604	9,177	30,322
Depreciation and amortization	4,697	3,422	9,066	6,427
Impairment of Long-Lived Assets Held-for-use			0
Long-lived Asset and Goodwill, Impairments	0	0		0
Income from operations	(12,104)	(17,274)	(23,978)	(40,662)
Earnings of equity method investments	0	0	0	0
Capital expenditures	17,776	6,470	20,488	9,865
Cash, cash equivalents, and total investments in marketable securities	678,373		678,373		692,843
Total assets	610,527		610,527		546,892
Long-term debt	994,098		994,098		993,609
HEP
Segment Reporting Information [Line Items]
Revenues from external customers	19,244	28,382	45,670	59,520
Intersegment Revenues	95,563	102,369	196,991	205,728
Revenues	114,807	130,751	242,661	265,248
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)	0	0	0	0
Lower of cost or market inventory valuation adjustment	0	0	0	0
Operating expenses	34,737	40,608	69,718	78,121
Selling, general and administrative expenses	2,535	1,988	5,237	4,608
Depreciation and amortization	24,008	24,241	47,986
Long-lived Asset and Goodwill, Impairments				0
Income from operations	36,569	63,914	102,762	134,448
Earnings of equity method investments	2,156	1,783	3,870	3,883
Capital expenditures	11,798	$ 7,034	30,740	$ 17,752
Cash, cash equivalents, and total investments in marketable securities	18,913		18,913		13,287
Total assets	2,215,053		2,215,053		2,205,437
Long-term debt	$ 1,486,648		$ 1,486,648		$ 1,462,031