Derivatives (Tables)

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

At December 31, 2022, our open commodity derivative contracts represented (in thousands of barrels):

Contract type	Purchases	Sales	Net
Futures	50,892	(51,147)	(255)
Swaps	1,524	(2,014)	(490)
Total	52,416	(53,161)	(745)

Schedule of Derivative Instruments

The following table provides information on these option collars at our refineries as of December 31, 2022:

	2022
Average barrels per month	67,500
Weighted-average strike price - floor (in dollars)	$	69.01
Weighted-average strike price - ceiling (in dollars)	$	92.36
Commencement date	January 2023
Expiry date	December 2023

Fair Value, Assets Measured on Recurring Basis

The following table provides information on the fair value amounts (in thousands) of these derivatives as of December 31, 2022 and 2021 and their placement within our consolidated balance sheets.

		December 31,
	Balance Sheet Location	2022		2021
		Asset (Liability)
Commodity derivatives (1)	Prepaid and other current assets	$	495	$	1,260
Commodity derivatives	Other accrued liabilities	(10,989)		(1,431)
J. Aron repurchase obligation derivative	Obligations under inventory financing agreements	(12,156)		(15,151)
MLC terminal obligation derivative	Obligations under inventory financing agreements	14,435		(22,170)

_________________________________________________________

(1)Does not include cash collateral of $40.8 million and $6.1 million recorded in Prepaid and other current assets as of December 31, 2022, and December 31, 2021, respectively, and $9.5 million in Other long-term assets as of both December 31, 2022 and December 31, 2021.

Fair value amounts by hierarchy level as of December 31, 2022 and 2021 are presented gross in the tables below (in thousands):

	December 31, 2022
	Level 1		Level 2		Level 3		Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives	$	161,541	$	8,369	$	—	$	169,910	$	(169,415)	$	495
Liabilities
Commodity derivatives	$	(172,529)	$	(7,875)	$	—	$	(180,404)	$	169,415	$	(10,989)
J. Aron repurchase obligation derivative	—		—		(12,156)		(12,156)		—		(12,156)
MLC terminal obligation derivative	—		—		14,435		14,435		—		14,435
Gross environmental credit obligations (2)	—		(549,791)		—		(549,791)		—		(549,791)
Total (3)	$	(172,529)	$	(557,666)	$	2,279	$	(727,916)	$	169,415	$	(558,501)

	December 31, 2021
	Level 1		Level 2		Level 3		Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives	$	4,283	$	4,513	$	—	$	8,796	$	(7,536)	$	1,260
Liabilities
Commodity derivatives	$	(3,964)	$	(5,003)	$	—	$	(8,967)	$	7,536	$	(1,431)
J. Aron repurchase obligation derivative	—		—		(15,151)		(15,151)		—		(15,151)
MLC terminal obligation derivative	—		—		(22,170)		(22,170)		—		(22,170)
Gross environmental credit obligations (2)	—		(311,014)		—		(311,014)		—		(311,014)
Total (3)	$	(3,964)	$	(316,017)	$	(37,321)	$	(357,302)	$	7,536	$	(349,766)

_________________________________________________________

(1)Does not include cash collateral of $50.3 million and $15.6 million as of December 31, 2022 and 2021, respectively, included within Prepaid and other current assets and Other long-term assets on our consolidated balance sheets.

(2)Does not include RINs assets and other environmental credits of $258.2 million and $120.1 million presented as Inventories on our consolidated balance sheet and stated at the lower of cost and net realizable value as of December 31, 2022 and 2021, respectively.

(3)The interest rate derivative was settled in February 2021, therefore, there is no asset or liability related to the interest rate derivative on December 31, 2022 or 2021. Please read Note 14—Derivatives for further information.

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following table summarizes the pre-tax gains (losses) recognized in Net income (loss) on our consolidated statements of operations resulting from changes in fair value of derivative instruments not designated as hedges charged directly to earnings (in thousands):

		Year Ended December 31,
	Statement of Operations Classification	2022		2021		2020
Commodity derivatives	Cost of revenues (excluding depreciation)	$	(65,814)	$	(22,417)	$	(51,902)
J. Aron repurchase obligation derivative	Cost of revenues (excluding depreciation)	2,995		5,646		(20,970)
MLC terminal obligation derivative	Cost of revenues (excluding depreciation)	(49,636)		(73,256)		39,820
Interest rate derivatives	Interest expense and financing costs, net	—		104		(2,265)