DERIVATIVES

9 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The Company uses derivative instruments to mitigate certain exposures to commodity price risk. On July 31, 2023, the Company terminated the third amended and restated inventory intermediation agreement (the “Third Inventory Intermediation Agreement”). Prior to its termination, the Third Inventory Intermediation Agreement contained purchase obligations for certain volumes of crude oil, intermediates, and refined products. The purchase obligations related to crude oil, intermediates and refined products under this agreement were derivative instruments designated as fair value hedges in order to hedge the commodity price volatility of certain refinery inventory. The fair value of these purchase obligation derivatives was based on market prices of the underlying crude oil, intermediates, and refined products. The level of activity for these derivatives was based on the level of operating inventories.

The Company also enters into economic hedges primarily consisting of commodity derivative contracts that are not designated as hedges and are used to manage price volatility in certain crude oil and feedstock inventories as well as crude oil, feedstock, and refined product sales or purchases. The objective in entering into economic hedges is consistent with the objectives discussed above for fair value hedges. As of September 30, 2024, there were 40,804,000 barrels of crude oil and 4,449,000 barrels of refined products (23,774,000 and 5,351,000, respectively, as of December 31, 2023), outstanding under short and long term commodity derivative contracts not designated as hedges representing the notional value of the contracts.

The Company also uses derivative instruments to mitigate the risk associated with the price of credits needed to comply with various governmental and regulatory environmental compliance programs. For such contracts that represent derivatives, the Company elects the normal purchase normal sale exception under ASC 815, Derivatives and Hedging, and therefore does not record them at fair value.

The following tables provide information regarding the fair values of derivative instruments as of September 30, 2024 and December 31, 2023, and the line items in the Condensed Consolidated Balance Sheets in which fair values are reflected.


Description	Balance Sheet Location	Fair Value Asset/(Liability)
		(in millions)
Derivatives not designated as hedging instruments:
September 30, 2024:
Commodity contracts	Accounts receivable	$	(3.2)

December 31, 2023:
Commodity contracts	Accounts receivable	$	33.2

The following table provides information regarding gains or losses recognized in income on derivative instruments and the line items in the Condensed Consolidated Statements of Operations in which such gains and losses are reflected.


Description	Location of Gain or (Loss) Recognized in Income on Derivatives	Gain or (Loss) Recognized in Income on Derivatives
		(in millions)
Derivatives designated as hedging instruments:
For the three months ended September 30, 2024:

Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	—
For the three months ended September 30, 2023:

Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	(16.6)
For the nine months ended September 30, 2024:

Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	—
For the nine months ended September 30, 2023:

Derivatives included within the inventory intermediation agreement obligations	Cost of products and other	$	(25.1)

Derivatives not designated as hedging instruments:
For the three months ended September 30, 2024:

Commodity contracts	Cost of products and other	$	9.8
For the three months ended September 30, 2023:

Commodity contracts	Cost of products and other	$	(28.5)
For the nine months ended September 30, 2024:
Commodity contracts	Cost of products and other	$	12.3
For the nine months ended September 30, 2023:
Commodity contracts	Cost of products and other	$	9.7

Hedged items designated in fair value hedges:
For the three months ended September 30, 2024:

Crude oil, intermediate and refined product inventory	Cost of products and other	$	—
For the three months ended September 30, 2023:

Crude oil, intermediate and refined product inventory	Cost of products and other	$	16.6
For the nine months ended September 30, 2024:

Crude oil, intermediate and refined product inventory	Cost of products and other	$	—
For the nine months ended September 30, 2023:

Crude oil, intermediate and refined product inventory	Cost of products and other	$	25.1

The Company had no ineffectiveness related to the fair value hedges for the three and nine months ended September 30, 2024 or the three and nine months ended September 30, 2023.