QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: | ||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page | |||||
PART I. FINANCIAL INFORMATION | |||||
March 31, 2024 (Unaudited) and December 31, 2023 | |||||
Three Months Ended March 31, 2024 and 2023 | |||||
Three Months Ended March 31, 2024 and 2023 | |||||
Three Months Ended March 31, 2024 and 2023 | |||||
Three Months Ended March 31, 2024 and 2023 | |||||
March 31, 2024 | December 31, 2023 | |||||||||||||
(Unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable: Product and transportation | ||||||||||||||
Crude oil resales | ||||||||||||||
Inventories: Crude oil and refined products | ||||||||||||||
Materials, supplies and other | ||||||||||||||
Income taxes receivable | ||||||||||||||
Prepayments and other | ||||||||||||||
Total current assets | ||||||||||||||
Properties, plants and equipment, at cost | ||||||||||||||
Less: accumulated depreciation | ( | ( | ||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Other assets: Turnaround costs | ||||||||||||||
Goodwill | ||||||||||||||
Intangibles and other | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Income taxes payable | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Accrued liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net | ||||||||||||||
Noncurrent operating lease liabilities | ||||||||||||||
Deferred income taxes | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and Contingencies (see Note 13) | ||||||||||||||
Equity: | ||||||||||||||
HF Sinclair stockholders’ equity: | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock $ | ||||||||||||||
Additional capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Common stock held in treasury, at cost – | ( | ( | ||||||||||||
Total HF Sinclair stockholders’ equity | ||||||||||||||
Noncontrolling interest | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Sales and other revenues | $ | $ | ||||||||||||
Operating costs and expenses: | ||||||||||||||
Cost of products sold (exclusive of depreciation and amortization): | ||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | ||||||||||||||
Lower of cost or market inventory valuation adjustment | ( | |||||||||||||
Operating expenses (exclusive of depreciation and amortization) | ||||||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Total operating costs and expenses | ||||||||||||||
Income from operations | ||||||||||||||
Other income (expense): | ||||||||||||||
Earnings of equity method investments | ||||||||||||||
Interest income | ||||||||||||||
Interest expense | ( | ( | ||||||||||||
Gain on foreign currency transactions | ||||||||||||||
Gain on sale of assets and other | ||||||||||||||
( | ( | |||||||||||||
Income before income taxes: | ||||||||||||||
Income tax expense: | ||||||||||||||
Current | ||||||||||||||
Deferred | ||||||||||||||
Net income | ||||||||||||||
Less: net income attributable to noncontrolling interest | ||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | $ | ||||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ | ||||||||||||
Average number of common shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive income (loss): | ||||||||||||||
Foreign currency translation adjustment | ( | |||||||||||||
Hedging instruments: | ||||||||||||||
Change in fair value of cash flow hedging instruments | ( | |||||||||||||
Reclassification adjustments to net income on settlement of cash flow hedging instruments | ||||||||||||||
Net unrealized gain on hedging instruments | ||||||||||||||
Pension and other post-retirement benefit obligations: | ||||||||||||||
Pension plans (gain) loss reclassified to net income | ( | |||||||||||||
Post-retirement healthcare plans gain reclassified to net income | ( | ( | ||||||||||||
Retirement restoration plan loss reclassified to net income | ||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | ( | ||||||||||||
Other comprehensive income (loss) before income taxes | ( | |||||||||||||
Income tax expense (benefit) | ( | |||||||||||||
Other comprehensive income (loss) | ( | |||||||||||||
Total comprehensive income | ||||||||||||||
Less: noncontrolling interest in comprehensive income | ||||||||||||||
Comprehensive income attributable to HF Sinclair stockholders | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Lower of cost or market inventory valuation adjustment | ( | |||||||||||||
Earnings of equity method investments, inclusive of distributions | ( | ( | ||||||||||||
Gain on sale of assets | ( | ( | ||||||||||||
Deferred income taxes | ||||||||||||||
Equity-based compensation expense | ||||||||||||||
Change in fair value – derivative instruments | ( | |||||||||||||
(Increase) decrease in current assets: | ||||||||||||||
Accounts receivable | ( | |||||||||||||
Inventories | ( | |||||||||||||
Income taxes receivable | ||||||||||||||
Prepayments and other | ||||||||||||||
Increase (decrease) in current liabilities: | ||||||||||||||
Accounts payable | ( | |||||||||||||
Income taxes payable | ||||||||||||||
Accrued liabilities | ||||||||||||||
Turnaround expenditures | ( | ( | ||||||||||||
Other, net | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Additions to properties, plants and equipment | ( | ( | ||||||||||||
Proceeds from sale of assets | ||||||||||||||
Investment in Osage Pipe Line Company LLC | ( | ( | ||||||||||||
Distributions from equity method investments in excess of equity earnings | ||||||||||||||
Net cash used for investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Borrowings under credit agreements | ||||||||||||||
Repayments under credit agreements | ( | ( | ||||||||||||
Purchase of treasury stock | ( | ( | ||||||||||||
Dividends | ( | ( | ||||||||||||
Distributions to noncontrolling interests | ( | ( | ||||||||||||
Payments on finance leases | ( | ( | ||||||||||||
Net cash used for financing activities | ( | ( | ||||||||||||
Effect of exchange rate on cash flow | ( | |||||||||||||
Cash and cash equivalents: | ||||||||||||||
Decrease for the period | ( | ( | ||||||||||||
Beginning of period | ||||||||||||||
End of period | $ | $ | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Cash paid during the period for: | ||||||||||||||
Interest | $ | ( | $ | ( | ||||||||||
Income taxes, net | $ | ( | $ | ( | ||||||||||
Decrease in accrued and unpaid capital expenditures | $ | ( | $ | ( |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares under incentive compensation plans | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock, inclusive of excise tax | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares under incentive compensation plans | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock, inclusive of excise tax | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(In thousands) | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Properties, plants and equipment, at cost | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Intangibles and other |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues by type | ||||||||||||||
Refined product revenues | ||||||||||||||
Transportation fuels (1) | $ | $ | ||||||||||||
Specialty lubricant products (2) | ||||||||||||||
Asphalt, fuel oil and other products (3) | ||||||||||||||
Total refined product revenues | ||||||||||||||
Excess crude oil revenues (4) | ||||||||||||||
Renewable diesel revenues (5) | ||||||||||||||
Transportation and logistics services | ||||||||||||||
Marketing revenues (6) | ||||||||||||||
Other revenues (7) | ||||||||||||||
Total sales and other revenues | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Refined product revenues by market | ||||||||||||||
United States: | ||||||||||||||
Mid-Continent | $ | $ | ||||||||||||
Southwest | ||||||||||||||
Rocky Mountains | ||||||||||||||
Northeast | ||||||||||||||
Canada | ||||||||||||||
Europe, Asia and Latin America | ||||||||||||||
Total refined product revenues | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Balance at January 1 | $ | $ | ||||||||||||
Increase | ||||||||||||||
Recognized as revenue | ( | ( | ||||||||||||
Balance at March 31 | $ | $ |
Remainder of 2024 | 2025 | 2026 | Thereafter | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Refined product sales volumes (barrels) |
Remainder of 2024 | 2025 | 2026 | Thereafter | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Midstream operations contractual minimum revenues | $ | $ | $ | $ | $ |
Fair Value by Input Level | ||||||||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Commodity forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity price swaps | ||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||
RINs credit obligations (1) | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Fair Value by Input Level | ||||||||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Commodity price swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | $ | ||||||||||||
Participating securities’ share in earnings (1) | ||||||||||||||
Net income attributable to common shares | $ | $ | ||||||||||||
Average number of shares of common stock outstanding | ||||||||||||||
Average number of shares of common stock outstanding assuming dilution | ||||||||||||||
Basic earnings per share | $ | $ | ||||||||||||
Diluted earnings per share | $ | $ | ||||||||||||
Restricted Stock Units | Performance Share Units | |||||||||||||
Outstanding at January 1, 2024 | ||||||||||||||
Granted (1) | ||||||||||||||
Vested | ( | ( | ||||||||||||
Forfeited | ( | ( | ||||||||||||
Outstanding at March 31, 2024 | ||||||||||||||
(1) Weighted average grant date fair value per unit | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Crude oil | $ | $ | ||||||||||||
Other raw materials and unfinished products (1) | ||||||||||||||
Finished products (2) | ||||||||||||||
Lower of cost or market reserve | ( | ( | ||||||||||||
Process chemicals (3) | ||||||||||||||
Repair and maintenance supplies and other (4) | ||||||||||||||
Total inventory | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
(In thousands) | ||||||||||||||
HollyFrontier | ||||||||||||||
$ | $ | |||||||||||||
HF Sinclair | ||||||||||||||
HEP | ||||||||||||||
HEP Credit Agreement | ||||||||||||||
Unamortized discount and debt issuance costs | ( | ( | ||||||||||||
Total long-term debt, net | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
(In thousands) | ||||||||||||||
HF Sinclair, HollyFrontier and HEP Senior Notes | $ | $ |
Net Unrealized Gain Recognized in OCI | Loss Reclassified into Earnings | |||||||||||||||||||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Three Months Ended March 31, | Income Statement Location | Three Months Ended March 31, | |||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||
Commodity contracts | $ | $ | Sales and other revenues | $ | ( | $ | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( |
Gain (Loss) Recognized in Earnings | ||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Income Statement Location | Three Months Ended March 31, | ||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Commodity contracts | Cost of products sold | $ | ( | $ | ||||||||||||||||
Operating expenses | ( | ( | ||||||||||||||||||
Interest expense | ||||||||||||||||||||
Foreign currency contracts | Gain on foreign currency transactions | |||||||||||||||||||
Total | $ | ( | $ | ( |
Notional Contract Volumes by Year of Maturity | ||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Total Outstanding Notional | 2024 | 2025 | Unit of Measure | ||||||||||||||||||||||
NYMEX futures (WTI) - short | Barrels | |||||||||||||||||||||||||
Forward gasoline and diesel contracts - long | Barrels | |||||||||||||||||||||||||
Foreign currency forward contracts | U.S. dollar | |||||||||||||||||||||||||
Forward commodity contracts (platinum) | Troy ounces | |||||||||||||||||||||||||
Natural gas price swaps (basis spread) - long | MMBTU | |||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||||||||||||||
March 31, 2024 | ||||||||||||||||||||||||||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commodity price swap contracts | ||||||||||||||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | ( | |||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance sheet classification: | $ | $ |
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, 2023 | ||||||||||||||||||||||||||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commodity price swap contracts | ||||||||||||||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance sheet classification: | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Number of shares repurchased (1) | ||||||||||||||
Cash paid for shares repurchased (in thousands) | $ | $ | ||||||||||||
Before-Tax | Tax Expense (Benefit) | After-Tax | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months Ended March 31, 2024 | ||||||||||||||||||||
Net change in foreign currency translation adjustment | $ | ( | $ | ( | $ | ( | ||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | ( | ( | |||||||||||||||||
Other comprehensive loss attributable to HF Sinclair stockholders | $ | ( | $ | ( | $ | ( | ||||||||||||||
Three Months Ended March 31, 2023 | ||||||||||||||||||||
Net change in foreign currency translation adjustment | $ | $ | $ | |||||||||||||||||
Net unrealized gain on hedging instruments | ||||||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | ( | ( | |||||||||||||||||
Other comprehensive income attributable to HF Sinclair stockholders | $ | $ | $ | |||||||||||||||||
AOCI Component | Gain (Loss) Reclassified From AOCI | Statement of Income Line Item | ||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Hedging instruments: | ||||||||||||||||||||
Commodity price swaps | $ | ( | $ | ( | Sales and other revenues | |||||||||||||||
( | Income tax benefit | |||||||||||||||||||
( | ( | Net of tax | ||||||||||||||||||
Other post-retirement benefit obligations: | ||||||||||||||||||||
Pension obligations | ( | Gain on sale of assets and other | ||||||||||||||||||
( | Income tax expense (benefit) | |||||||||||||||||||
( | Net of tax | |||||||||||||||||||
Post-retirement healthcare obligations | Gain on sale of assets and other | |||||||||||||||||||
Income tax expense | ||||||||||||||||||||
Net of tax | ||||||||||||||||||||
Retirement restoration plan | ( | ( | Gain on sale of assets and other | |||||||||||||||||
( | ( | Income tax benefit | ||||||||||||||||||
( | ( | Net of tax | ||||||||||||||||||
Total reclassifications for the period | $ | ( | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Foreign currency translation adjustment | $ | ( | $ | ( | ||||||||||
Unrealized loss on pension obligations | ||||||||||||||
Unrealized gain on post-retirement benefit obligations | ||||||||||||||
Accumulated other comprehensive loss | $ | ( | $ | ( |
Refining | Renewables | Marketing | Lubricants & Specialties | Midstream | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Intersegment revenues and other (1) | ( | — | ||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | $ | ( | $ | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||
Operating expenses | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Earnings (loss) of equity method investments | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Intersegment revenues and other (1) | ( | — | ||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Operating expenses | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended March 31, | Change from 2023 | |||||||||||||||||||||||||
2024 | 2023 | Change | Percent | |||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||
Sales and other revenues | $ | 7,027,145 | $ | 7,565,142 | $ | (537,997) | (7) | % | ||||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||
Cost of products sold (exclusive of depreciation and amortization): | ||||||||||||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 5,926,500 | 6,104,057 | (177,557) | (3) | % | |||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | (219,370) | 47,597 | (266,967) | (561) | % | |||||||||||||||||||||
5,707,130 | 6,151,654 | (444,524) | (7) | % | ||||||||||||||||||||||
Operating expenses (exclusive of depreciation and amortization) | 607,112 | 639,383 | (32,271) | (5) | % | |||||||||||||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 103,374 | 95,913 | 7,461 | 8 | % | |||||||||||||||||||||
Depreciation and amortization | 198,729 | 173,983 | 24,746 | 14 | % | |||||||||||||||||||||
Total operating costs and expenses | 6,616,345 | 7,060,933 | (444,588) | (6) | % | |||||||||||||||||||||
Income from operations | 410,800 | 504,209 | (93,409) | (19) | % | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Earnings of equity method investments | 7,346 | 3,882 | 3,464 | 89 | % | |||||||||||||||||||||
Interest income | 22,179 | 19,935 | 2,244 | 11 | % | |||||||||||||||||||||
Interest expense | (40,691) | (45,822) | 5,131 | (11) | % | |||||||||||||||||||||
Gain on foreign currency transactions | 443 | 870 | (427) | (49) | % | |||||||||||||||||||||
Gain on sale of assets and other | 2,019 | 1,631 | 388 | 24 | % | |||||||||||||||||||||
(8,704) | (19,504) | 10,800 | (55) | % | ||||||||||||||||||||||
Income before income taxes | 402,096 | 484,705 | (82,609) | (17) | % | |||||||||||||||||||||
Income tax expense | 85,474 | 99,700 | (14,226) | (14) | % | |||||||||||||||||||||
Net income | 316,622 | 385,005 | (68,383) | (18) | % | |||||||||||||||||||||
Less net income attributable to noncontrolling interest | 1,958 | 31,739 | (29,781) | (94) | % | |||||||||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | 314,664 | $ | 353,266 | $ | (38,602) | (11) | % | ||||||||||||||||||
Earnings per share attributable to HF Sinclair stockholders: | ||||||||||||||||||||||||||
Basic | $ | 1.57 | $ | 1.79 | $ | (0.22) | (12) | % | ||||||||||||||||||
Diluted | $ | 1.57 | $ | 1.79 | $ | (0.22) | (12) | % | ||||||||||||||||||
Cash dividends declared per common share | $ | 0.50 | $ | 0.45 | $ | 0.05 | 11 | % | ||||||||||||||||||
Average number of common shares outstanding: | ||||||||||||||||||||||||||
Basic | 198,710 | 195,445 | 3,265 | 2 | % | |||||||||||||||||||||
Diluted | 198,710 | 195,445 | 3,265 | 2 | % |
March 31, 2024 | December 31, 2023 | |||||||||||||
(Unaudited) | ||||||||||||||
(In thousands) | ||||||||||||||
Cash and cash equivalents | $ | 1,240,860 | $ | 1,353,747 | ||||||||||
Working capital | $ | 3,404,525 | $ | 3,371,905 | ||||||||||
Total assets | $ | 17,915,990 | $ | 17,716,265 | ||||||||||
Total debt | $ | 2,678,645 | $ | 2,739,083 | ||||||||||
Total equity | $ | 10,276,089 | $ | 10,237,298 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Net cash provided by operating activities | $ | 316,895 | $ | 177,705 | ||||||||||
Net cash used for investing activities | $ | (91,372) | $ | (100,237) | ||||||||||
Net cash used for financing activities | $ | (335,460) | $ | (379,110) | ||||||||||
Capital expenditures | $ | 89,108 | $ | 100,069 | ||||||||||
EBITDA (1) | $ | 617,379 | $ | 652,836 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Mid-Continent Region | ||||||||||||||
Crude charge (BPD) (1) | 259,030 | 211,390 | ||||||||||||
Refinery throughput (BPD) (2) | 273,890 | 231,260 | ||||||||||||
Sales of produced refined products (BPD) (3) | 272,460 | 205,010 | ||||||||||||
Refinery utilization (4) | 99.6 | % | 81.3 | % | ||||||||||
Average per produced barrel (5) | ||||||||||||||
Refinery gross margin | $ | 10.47 | $ | 20.06 | ||||||||||
Refinery operating expenses (6) | 6.40 | 9.28 | ||||||||||||
Net operating margin | $ | 4.07 | $ | 10.78 | ||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 6.37 | $ | 8.23 | ||||||||||
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Mid-Continent Region | ||||||||||||||
Feedstocks: | ||||||||||||||
Sweet crude oil | 50 | % | 65 | % | ||||||||||
Sour crude oil | 25 | % | 15 | % | ||||||||||
Heavy sour crude oil | 19 | % | 11 | % | ||||||||||
Other feedstocks and blends | 6 | % | 9 | % | ||||||||||
Total | 100 | % | 100 | % | ||||||||||
Sales of produced refined products: | ||||||||||||||
Gasolines | 52 | % | 49 | % | ||||||||||
Diesel fuels | 32 | % | 29 | % | ||||||||||
Jet fuels | 6 | % | 8 | % | ||||||||||
Fuel oil | 1 | % | 1 | % | ||||||||||
Asphalt | 3 | % | 4 | % | ||||||||||
Base oils | 4 | % | 5 | % | ||||||||||
LPG and other | 2 | % | 4 | % | ||||||||||
Total | 100 | % | 100 | % | ||||||||||
West Region | ||||||||||||||
Crude charge (BPD) (1) | 345,900 | 287,110 | ||||||||||||
Refinery throughput (BPD) (2) | 369,410 | 326,870 | ||||||||||||
Sales of produced refined products (BPD) (3) | 359,010 | 310,950 | ||||||||||||
Refinery utilization (4) | 82.8 | % | 68.7 | % | ||||||||||
Average per produced barrel (5) | ||||||||||||||
Refinery gross margin | $ | 14.39 | $ | 25.28 | ||||||||||
Refinery operating expenses (6) | 9.59 | 11.81 | ||||||||||||
Net operating margin | $ | 4.80 | $ | 13.47 | ||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 9.32 | $ | 11.23 | ||||||||||
Feedstocks: | ||||||||||||||
Sweet crude oil | 32 | % | 32 | % | ||||||||||
Sour crude oil | 43 | % | 40 | % | ||||||||||
Heavy sour crude oil | 12 | % | 11 | % | ||||||||||
Black wax crude oil | 7 | % | 5 | % | ||||||||||
Other feedstocks and blends | 6 | % | 12 | % | ||||||||||
Total | 100 | % | 100 | % | ||||||||||
Sales of produced refined products: | ||||||||||||||
Gasolines | 53 | % | 57 | % | ||||||||||
Diesel fuels | 32 | % | 31 | % | ||||||||||
Jet fuels | 5 | % | 4 | % | ||||||||||
Fuel oil | 2 | % | 2 | % | ||||||||||
Asphalt | 2 | % | 2 | % | ||||||||||
LPG and other | 6 | % | 4 | % | ||||||||||
Total | 100 | % | 100 | % |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Consolidated | ||||||||||||||
Crude charge (BPD) (1) | 604,930 | 498,500 | ||||||||||||
Refinery throughput (BPD) (2) | 643,300 | 558,130 | ||||||||||||
Sales of produced refined products (BPD) (3) | 631,470 | 515,960 | ||||||||||||
Refinery utilization (4) | 89.2 | % | 73.5 | % | ||||||||||
Average per produced barrel (5) | ||||||||||||||
Refinery gross margin | $ | 12.70 | $ | 23.20 | ||||||||||
Refinery operating expenses (6) | 8.22 | 10.81 | ||||||||||||
Net operating margin | $ | 4.48 | $ | 12.39 | ||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 8.06 | $ | 9.99 |
Feedstocks: | ||||||||||||||
Sweet crude oil | 39 | % | 46 | % | ||||||||||
Sour crude oil | 36 | % | 30 | % | ||||||||||
Heavy sour crude oil | 15 | % | 10 | % | ||||||||||
Black wax crude oil | 4 | % | 3 | % | ||||||||||
Other feedstocks and blends | 6 | % | 11 | % | ||||||||||
Total | 100 | % | 100 | % | ||||||||||
Sales of produced refined products: | ||||||||||||||
Gasolines | 53 | % | 54 | % | ||||||||||
Diesel fuels | 32 | % | 30 | % | ||||||||||
Jet fuels | 6 | % | 6 | % | ||||||||||
Fuel oil | 1 | % | 1 | % | ||||||||||
Asphalt | 2 | % | 3 | % | ||||||||||
Base oils | 2 | % | 2 | % | ||||||||||
LPG and other | 4 | % | 4 | % | ||||||||||
Total | 100 | % | 100 | % |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Renewables | ||||||||||||||
Sales volumes (in thousand gallons) | 61,172 | 46,012 | ||||||||||||
Average per produced gallon (1) | ||||||||||||||
Renewables gross margin | $ | 0.15 | $ | 0.77 | ||||||||||
Renewables operating expenses (2) | 0.43 | 0.68 | ||||||||||||
Net operating margin | $ | (0.28) | $ | 0.09 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Marketing | ||||||||||||||
Number of branded sites at period end (1) | 1,547 | 1,511 | ||||||||||||
Sales volumes (in thousand gallons) | 321,010 | 328,407 | ||||||||||||
Gross margin per gallon of sales (2) | $ | 0.07 | $ | 0.04 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Lubricants & Specialties | ||||||||||||||
Sales of produced refined products (BPD) | 31,104 | 31,790 | ||||||||||||
Sales of produced refined products: | ||||||||||||||
Finished products | 49 | % | 50 | % | ||||||||||
Base oils | 27 | % | 29 | % | ||||||||||
Other | 24 | % | 21 | % | ||||||||||
Total | 100 | % | 100 | % |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Midstream | ||||||||||||||
Volumes (BPD) | ||||||||||||||
Pipelines: | ||||||||||||||
Affiliates—refined product pipelines | 164,628 | 143,002 | ||||||||||||
Affiliates—intermediate pipelines | 138,071 | 114,326 | ||||||||||||
Affiliates—crude pipelines | 441,454 | 473,712 | ||||||||||||
744,153 | 731,040 | |||||||||||||
Third parties—refined product pipelines | 36,723 | 40,431 | ||||||||||||
Third parties—crude pipelines | 162,493 | 175,984 | ||||||||||||
943,369 | 947,455 | |||||||||||||
Terminals and loading racks: | ||||||||||||||
Affiliates | 788,919 | 686,845 | ||||||||||||
Third parties | 33,110 | 42,462 | ||||||||||||
822,029 | 729,307 | |||||||||||||
Total for pipelines and terminals assets (BPD) | 1,765,398 | 1,676,762 |
Expected Cash Spending Range | |||||
(In millions) | |||||
HF Sinclair Capital Expenditures | |||||
Refining | $ | 235.0 | |||
Renewables | 5.0 | ||||
Lubricants & Specialties | 40.0 | ||||
Marketing | 10.0 | ||||
Midstream | 30.0 | ||||
Corporate | 65.0 | ||||
Turnarounds and catalyst | 415.0 | ||||
Total sustaining | $ | 800.0 | |||
Growth capital | 75.0 | ||||
Total | $ | 875.0 |
Notional Contract Volumes by Year of Maturity | ||||||||||||||||||||||||||
Derivative Instrument | Total Outstanding Notional | 2024 | 2025 | Unit of Measure | ||||||||||||||||||||||
NYMEX futures (WTI) - short | 2,575,000 | 2,575,000 | — | Barrels | ||||||||||||||||||||||
Forward gasoline and diesel contracts - long | 1,190,000 | 1,190,000 | — | Barrels | ||||||||||||||||||||||
Foreign currency forward contracts | 386,671,810 | 281,628,809 | 105,043,001 | U.S. dollar | ||||||||||||||||||||||
Forward commodity contracts (platinum) (1) | 36,969 | 14,549 | 22,420 | Troy ounces | ||||||||||||||||||||||
Natural gas price swaps (basis spread) - long | 3,300,000 | 3,300,000 | — | MMBTU | ||||||||||||||||||||||
Derivative Fair Value Gain (Loss) at March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
10% increase in underlying commodity prices | $ | (21,478) | $ | (10,696) | ||||||||||
10% decrease in underlying commodity prices | $ | 21,478 | $ | 10,290 |
Outstanding Principal | Estimated Fair Value | Estimated Change in Fair Value | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
HF Sinclair, HollyFrontier and HEP Senior Notes | $ | 2,300,000 | $ | 2,268,035 | $ | 39,171 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | 314,664 | $ | 353,266 | ||||||||||
Add interest expense | 40,691 | 45,822 | ||||||||||||
Subtract interest income | (22,179) | (19,935) | ||||||||||||
Add income tax expense | 85,474 | 99,700 | ||||||||||||
Add depreciation and amortization | 198,729 | 173,983 | ||||||||||||
EBITDA | $ | 617,379 | $ | 652,836 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands, except per barrel amounts) | ||||||||||||||
Consolidated | ||||||||||||||
Refining segment sales and other revenues | $ | 6,204,245 | $ | 6,718,615 | ||||||||||
Refining segment cost of products sold (exclusive of lower of cost or market inventory adjustment) | 5,474,522 | 5,641,131 | ||||||||||||
Lower of cost or market inventory adjustment | (220,558) | — | ||||||||||||
950,281 | 1,077,484 | |||||||||||||
Add (subtract) lower of cost or market inventory adjustment | (220,558) | — | ||||||||||||
Refinery gross margin | $ | 729,723 | $ | 1,077,484 | ||||||||||
Refining segment operating expenses | $ | 472,086 | $ | 501,759 | ||||||||||
Produced barrels sold (BPD) | 631,470 | 515,960 | ||||||||||||
Refinery gross margin per produced barrel sold | $ | 12.70 | $ | 23.20 | ||||||||||
Less average refinery operating expenses per produced barrel sold | 8.22 | 10.81 | ||||||||||||
Net operating margin per produced barrel sold | $ | 4.48 | $ | 12.39 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands, except per gallon amounts) | ||||||||||||||
Renewables segment sales and other revenues | $ | 239,559 | $ | 298,016 | ||||||||||
Renewables segment cost of products sold (exclusive of lower of cost or market inventory adjustment) | 230,273 | 262,738 | ||||||||||||
Lower of cost or market inventory adjustment | 1,188 | 47,597 | ||||||||||||
8,098 | (12,319) | |||||||||||||
Add (subtract) lower of cost or market inventory adjustment | 1,188 | 47,597 | ||||||||||||
Renewables gross margin | $ | 9,286 | $ | 35,278 | ||||||||||
Renewables segment operating expense | $ | 26,461 | $ | 31,371 | ||||||||||
Produced gallons sold (in thousand gallons) | 61,172 | 46,012 | ||||||||||||
Renewables gross margin per produced gallon sold | $ | 0.15 | $ | 0.77 | ||||||||||
Less average renewables operating expense per produced gallon sold | 0.43 | 0.68 | ||||||||||||
Net operating margin per produced gallon sold | $ | (0.28) | $ | 0.09 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands, except per gallon amounts) | ||||||||||||||
Marketing segment sales and other revenues | $ | 775,807 | $ | 937,385 | ||||||||||
Marketing segment cost of products sold | 752,530 | 924,049 | ||||||||||||
Marketing gross margin | $ | 23,277 | $ | 13,336 | ||||||||||
Sales volumes (in thousand gallons) | 321,010 | 328,407 | ||||||||||||
Marketing segment gross margin per gallon sold | $ | 0.07 | $ | 0.04 |
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 (1) | ||||||||||||||||||||||
January 2024 | 454,380 | $ | 55.02 | 454,380 | $ | 651,422,872 | ||||||||||||||||||||
February 2024 | 1,061,946 | $ | 56.50 | 1,061,946 | $ | 591,422,923 | ||||||||||||||||||||
March 2024 | 1,414,416 | $ | 57.36 | 1,414,416 | $ | 510,294,423 | ||||||||||||||||||||
Total for January to March 2024 | 2,930,742 | 2,930,742 |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
10.1 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
23.1* | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
99.1* | ||||||||
101++ | The following financial information from HF Sinclair Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, 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). | |||||||
HF SINCLAIR CORPORATION | |||||||||||
(Registrant) | |||||||||||
Date: May 8, 2024 | /s/ Atanas H. Atanasov | ||||||||||
Atanas H. Atanasov | |||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||||||||||
Date: May 8, 2024 | /s/ Indira Agarwal | ||||||||||
Indira Agarwal | |||||||||||
Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) |
May 8, 2024 | /s/ Timothy Go | |||||||
Timothy Go | ||||||||
Chief Executive Officer and President |
Date: May 8, 2024 | /s/ Atanas H. Atanasov | |||||||
Atanas H. Atanasov | ||||||||
Executive Vice President and Chief Financial Officer |
Date: May 8, 2024 | /s/ Timothy Go | |||||||
Timothy Go | ||||||||
Chief Executive Officer and President |
Date: May 8, 2024 | /s/ Atanas H. Atanasov | |||||||
Atanas H. Atanasov | ||||||||
Executive Vice President and Chief Financial Officer |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Sales and other revenues | $ | 31,964,395 | $ | 38,204,839 | $ | 18,389,142 | ||||||||||||||
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) | 25,784,449 | 30,680,013 | 15,567,052 | |||||||||||||||||
Lower of cost or market inventory valuation adjustment | 270,419 | 52,412 | (310,123) | |||||||||||||||||
26,054,868 | 30,732,425 | 15,256,929 | ||||||||||||||||||
Operating expenses (exclusive of depreciation and amortization) | 2,438,148 | 2,334,893 | 1,517,478 | |||||||||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 498,240 | 426,485 | 362,010 | |||||||||||||||||
Depreciation and amortization | 770,573 | 656,787 | 503,539 | |||||||||||||||||
Total operating costs and expenses | 29,761,829 | 34,150,590 | 17,639,956 | |||||||||||||||||
Income from operations | 2,202,566 | 4,054,249 | 749,186 | |||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Earnings (loss) of equity method investments | 17,369 | (260) | 12,432 | |||||||||||||||||
Interest income | 93,468 | 30,179 | 4,019 | |||||||||||||||||
Interest expense | (190,796) | (175,628) | (125,175) | |||||||||||||||||
Gain on business interruption insurance settlement | — | 15,202 | — | |||||||||||||||||
Gain on tariff settlement | — | — | 51,500 | |||||||||||||||||
Gain on early extinguishment of debt | — | 604 | — | |||||||||||||||||
Gain (loss) on foreign currency transactions | 2,530 | (1,637) | (2,938) | |||||||||||||||||
Gain on sale of assets and other | 27,370 | 13,337 | 98,128 | |||||||||||||||||
(50,059) | (118,203) | 37,966 | ||||||||||||||||||
Income before income taxes | 2,152,507 | 3,936,046 | 787,152 | |||||||||||||||||
Income tax expense | 441,612 | 894,872 | 123,898 | |||||||||||||||||
Net income | 1,710,895 | 3,041,174 | 663,254 | |||||||||||||||||
Less net income attributable to noncontrolling interest | 121,229 | 118,506 | 104,930 | |||||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | 1,589,666 | $ | 2,922,668 | $ | 558,324 | ||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 8.29 | $ | 14.28 | $ | 3.39 | ||||||||||||||
Diluted | $ | 8.29 | $ | 14.28 | $ | 3.39 | ||||||||||||||
Cash dividends declared per common share | $ | 1.80 | $ | 1.20 | $ | 0.35 | ||||||||||||||
Average number of common shares outstanding: | ||||||||||||||||||||
Basic | 190,035 | 202,566 | 162,569 | |||||||||||||||||
Diluted | 190,035 | 202,566 | 162,569 |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net cash provided by operating activities | $ | 2,297,235 | $ | 3,777,159 | $ | 406,682 | ||||||||||||||
Net cash used for investing activities | $ | (371,323) | $ | (774,488) | $ | (1,327,219) | ||||||||||||||
Net cash used for financing activities | $ | (2,243,882) | $ | (1,560,759) | $ | (211,803) | ||||||||||||||
Capital expenditures | $ | 385,413 | $ | 524,007 | $ | 813,409 | ||||||||||||||
EBITDA (1) | $ | 2,899,179 | $ | 4,619,776 | $ | 1,306,917 |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 (8) | 2021 (9) | ||||||||||||||||||
Mid-Continent Region | ||||||||||||||||||||
Crude charge (BPD) (1) | 237,510 | 283,160 | 260,350 | |||||||||||||||||
Refinery throughput (BPD) (2) | 256,810 | 299,380 | 276,430 | |||||||||||||||||
Sales of produced refined products (BPD) (3) | 248,330 | 280,800 | 265,470 | |||||||||||||||||
Refinery utilization (4) | 91.4 | % | 108.9 | % | 100.1 | % | ||||||||||||||
Average per produced barrel sold (5) | ||||||||||||||||||||
Refinery gross margin | $ | 17.31 | $ | 21.82 | $ | 9.40 | ||||||||||||||
Refinery operating expenses (6) | 6.92 | 6.10 | 6.32 | |||||||||||||||||
Net operating margin | $ | 10.39 | $ | 15.72 | $ | 3.08 | ||||||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 6.69 | $ | 5.72 | $ | 6.07 | ||||||||||||||
Feedstocks: | ||||||||||||||||||||
Sweet crude oil | 56 | % | 58 | % | 61 | % | ||||||||||||||
Sour crude oil | 20 | % | 20 | % | 15 | % | ||||||||||||||
Heavy sour crude oil | 16 | % | 16 | % | 18 | % | ||||||||||||||
Other feedstocks and blends | 8 | % | 6 | % | 6 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 (8) | 2021 (9) | ||||||||||||||||||
Mid-Continent Region | ||||||||||||||||||||
Sales of refined products: | ||||||||||||||||||||
Gasolines | 51 | % | 51 | % | 52 | % | ||||||||||||||
Diesel fuels | 30 | % | 33 | % | 33 | % | ||||||||||||||
Jet fuels | 6 | % | 6 | % | 5 | % | ||||||||||||||
Fuel oil | 1 | % | 1 | % | 1 | % | ||||||||||||||
Asphalt | 4 | % | 3 | % | 3 | % | ||||||||||||||
Base oils | 4 | % | 4 | % | 4 | % | ||||||||||||||
LPG and other | 4 | % | 2 | % | 2 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||||||||||
West Region | ||||||||||||||||||||
Crude charge (BPD) (1) | 330,030 | 323,820 | 140,370 | |||||||||||||||||
Refinery throughput (BPD) (2) | 360,200 | 347,590 | 155,440 | |||||||||||||||||
Sales of produced refined products (BPD) (3) | 353,950 | 347,540 | 158,630 | |||||||||||||||||
Refinery utilization (4) | 79.0 | % | 81.4 | % | 82.7 | % | ||||||||||||||
Average per produced barrel sold (5) | ||||||||||||||||||||
Refinery gross margin | $ | 23.69 | $ | 30.16 | $ | 13.06 | ||||||||||||||
Refinery operating expenses (6) | 9.69 | 8.96 | 7.35 | |||||||||||||||||
Net operating margin | $ | 14.00 | $ | 21.20 | $ | 5.71 | ||||||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 9.53 | $ | 8.96 | $ | 8.43 | ||||||||||||||
Feedstocks: | ||||||||||||||||||||
Sweet crude oil | 30 | % | 28 | % | 22 | % | ||||||||||||||
Sour crude oil | 45 | % | 50 | % | 58 | % | ||||||||||||||
Heavy sour crude oil | 11 | % | 10 | % | 1 | % | ||||||||||||||
Black wax crude oil | 6 | % | 5 | % | 10 | % | ||||||||||||||
Other feedstocks and blends | 8 | % | 7 | % | 9 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||||||||||
Sales of refined products: | ||||||||||||||||||||
Gasolines | 54 | % | 53 | % | 54 | % | ||||||||||||||
Diesel fuels | 31 | % | 32 | % | 35 | % | ||||||||||||||
Jet fuels | 6 | % | 5 | % | 1 | % | ||||||||||||||
Fuel oil | 2 | % | 3 | % | 3 | % | ||||||||||||||
Asphalt | 2 | % | 3 | % | 4 | % | ||||||||||||||
LPG and other | 5 | % | 4 | % | 3 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||||||||||
Consolidated | ||||||||||||||||||||
Crude charge (BPD) (1) | 567,540 | 606,980 | 400,720 | |||||||||||||||||
Refinery throughput (BPD) (2) | 617,010 | 646,970 | 431,870 | |||||||||||||||||
Sales of produced refined products (BPD) (3) | 602,280 | 628,340 | 424,100 | |||||||||||||||||
Refinery utilization (4) | 83.7 | % | 92.3 | % | 93.1 | % | ||||||||||||||
Average per produced barrel (5) | ||||||||||||||||||||
Refinery gross margin | $ | 21.06 | $ | 26.43 | $ | 10.77 | ||||||||||||||
Refinery operating expenses (6) | 8.55 | 7.68 | 6.71 | |||||||||||||||||
Net operating margin | $ | 12.51 | $ | 18.75 | $ | 4.06 | ||||||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 8.35 | $ | 7.46 | $ | 6.59 | ||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 (8) | 2021 (9) | ||||||||||||||||||
Consolidated | ||||||||||||||||||||
Feedstocks: | ||||||||||||||||||||
Sweet crude oil | 42 | % | 42 | % | 47 | % | ||||||||||||||
Sour crude oil | 34 | % | 36 | % | 31 | % | ||||||||||||||
Heavy sour crude oil | 13 | % | 13 | % | 12 | % | ||||||||||||||
Black wax crude oil | 3 | % | 3 | % | 4 | % | ||||||||||||||
Other feedstocks and blends | 8 | % | 6 | % | 6 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||||||||||
Sales of refined products: | ||||||||||||||||||||
Gasolines | 53 | % | 52 | % | 53 | % | ||||||||||||||
Diesel fuels | 30 | % | 32 | % | 34 | % | ||||||||||||||
Jet fuels | 6 | % | 6 | % | 4 | % | ||||||||||||||
Fuel oil | 1 | % | 2 | % | 1 | % | ||||||||||||||
Asphalt | 3 | % | 3 | % | 3 | % | ||||||||||||||
Base oils | 2 | % | 2 | % | 2 | % | ||||||||||||||
LPG and other | 5 | % | 3 | % | 3 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Renewables | ||||||||||||||
Sales volumes (in thousand gallons) | 215,510 | 136,204 | ||||||||||||
Average per produced gallon (1) | ||||||||||||||
Renewables gross margin | $ | 0.50 | $ | 0.30 | ||||||||||
Renewables operating expenses (2) | 0.51 | 0.82 | ||||||||||||
Net operating margin | $ | (0.01) | $ | (0.52) |
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Marketing | ||||||||||||||
Number of branded sites at period end (1) | 1,540 | 1,513 | ||||||||||||
Sales volumes (in thousand gallons) | 1,441,607 | 1,118,444 | ||||||||||||
Margin per gallon of sales (2) | $ | 0.07 | $ | 0.06 |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Lubricants & Specialties | ||||||||||||||||||||
Sales of produced barrels sold (BPD) | 30,210 | 32,530 | 34,016 | |||||||||||||||||
Sales of produced refined products: | ||||||||||||||||||||
Finished products | 50 | % | 51 | % | 51 | % | ||||||||||||||
Base oils | 27 | % | 28 | % | 27 | % | ||||||||||||||
Other | 23 | % | 21 | % | 22 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Midstream | ||||||||||||||||||||
Volumes (BPD) | ||||||||||||||||||||
Pipelines: | ||||||||||||||||||||
Affiliates—refined product pipelines | 152,462 | 143,303 | 108,767 | |||||||||||||||||
Affiliates—intermediate pipelines | 110,720 | 129,295 | 125,225 | |||||||||||||||||
Affiliates—crude pipelines | 437,586 | 456,797 | 279,514 | |||||||||||||||||
700,768 | 729,395 | 513,506 | ||||||||||||||||||
Third parties—refined product pipelines | 38,834 | 38,000 | 49,356 | |||||||||||||||||
Third parties—crude pipelines | 197,659 | 144,478 | 129,084 | |||||||||||||||||
937,261 | 911,873 | 691,946 | ||||||||||||||||||
Terminals and loading racks: | ||||||||||||||||||||
Affiliates | 728,128 | 560,038 | 391,698 | |||||||||||||||||
Third parties | 42,567 | 38,211 | 51,184 | |||||||||||||||||
770,695 | 598,249 | 442,882 | ||||||||||||||||||
Total for pipelines and terminals (BPD) | 1,707,956 | 1,510,122 | 1,134,828 | |||||||||||||||||
Expected Cash Spending | |||||
(In millions) | |||||
HF Sinclair | |||||
Refining | $ | 235.0 | |||
Renewables | 5.0 | ||||
Lubricants & Specialties | 40.0 | ||||
Marketing | 10.0 | ||||
Midstream | 30.0 | ||||
Corporate | 65.0 | ||||
Turnarounds and catalyst | 415.0 | ||||
Total sustaining | 800.0 | ||||
Growth capital | 75.0 | ||||
Total capital | $ | 875.0 |
Payments Due by Period | ||||||||||||||||||||||||||||||||
Contractual Obligations and Commitments | Total | 2024 | 2025 & 2026 | 2027 & 2028 | Thereafter | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
HF Sinclair Corporation | ||||||||||||||||||||||||||||||||
Long-term debt - principal (1) | $ | 2,755,500 | $ | — | $ | 1,455,500 | $ | 900,000 | $ | 400,000 | ||||||||||||||||||||||
Long-term debt - interest (1) | 490,770 | 159,500 | 229,250 | 70,520 | 31,500 | |||||||||||||||||||||||||||
Financing arrangements (2) | 37,043 | 37,043 | — | — | — | |||||||||||||||||||||||||||
Supply agreements (3) | 987,658 | 541,729 | 435,072 | 9,038 | 1,819 | |||||||||||||||||||||||||||
Transportation and storage agreements (4) | 2,173,435 | 237,534 | 444,719 | 411,226 | 1,079,956 | |||||||||||||||||||||||||||
Operating and finance leases (5) | 563,919 | 133,381 | 141,768 | 78,250 | 210,520 | |||||||||||||||||||||||||||
Other long-term obligations | 179,368 | 45,412 | 49,179 | 22,148 | 62,629 | |||||||||||||||||||||||||||
Total | $ | 7,187,693 | $ | 1,154,599 | $ | 2,755,488 | $ | 1,491,182 | $ | 1,786,424 |
Contract Description | Total Outstanding Notional | Unit of Measure | ||||||||||||
NYMEX futures (WTI) - short | 640,000 | Barrels | ||||||||||||
Forward gasoline contracts - long | 800,000 | Barrels | ||||||||||||
Foreign currency forward contracts | 387,613,367 | U.S. dollar | ||||||||||||
Forward commodity contracts (platinum) (1) | 36,969 | Troy ounces | ||||||||||||
Natural gas price swaps (basis spread) - long | 6,667,000 | MMBTU |
Derivative Fair Value Gain (Loss) at December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
10% increase in underlying commodity prices | $ | (4,682) | $ | (3,502) | ||||||||||
10% decrease in underlying commodity prices | $ | 4,682 | $ | 3,298 |
Outstanding Principal | Estimated Fair Value | Estimated Change in Fair Value | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
HF Sinclair, HollyFrontier and HEP Senior Notes | $ | 2,300,000 | $2,271,856 | $ | 41,358 |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | 1,589,666 | $ | 2,922,668 | $ | 558,324 | ||||||||||||||
Add interest expense | 190,796 | 175,628 | 125,175 | |||||||||||||||||
Subtract interest income | (93,468) | (30,179) | (4,019) | |||||||||||||||||
Add income tax expense | 441,612 | 894,872 | 123,898 | |||||||||||||||||
Add depreciation and amortization | 770,573 | 656,787 | 503,539 | |||||||||||||||||
EBITDA | $ | 2,899,179 | $ | 4,619,776 | $ | 1,306,917 |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||||||
Refining segment sales and other revenues | $ | 28,672,604 | $ | 34,412,909 | $ | 16,358,558 | ||||||||||||||
Refining segment cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 24,042,807 | 28,350,823 | 14,691,246 | |||||||||||||||||
Lower of cost or market inventory valuation adjustment | 220,558 | — | (318,353) | |||||||||||||||||
4,409,239 | 6,062,086 | 1,985,665 | ||||||||||||||||||
Add (subtract) lower of cost or market inventory valuation adjustment | 220,558 | — | (318,353) | |||||||||||||||||
Refinery gross margin | $ | 4,629,797 | $ | 6,062,086 | $ | 1,667,312 | ||||||||||||||
Refining segment operating expenses | $ | 1,879,656 | $ | 1,761,445 | $ | 1,038,300 | ||||||||||||||
Produced barrels sold (BPD) | 602,280 | 628,340 | 424,100 | |||||||||||||||||
Refinery gross margin per produced barrel sold | $ | 21.06 | $ | 26.43 | $ | 10.77 | ||||||||||||||
Less average refinery operating expenses per produced barrel sold | 8.55 | 7.68 | 6.71 | |||||||||||||||||
Net operating margin per produced barrel sold | $ | 12.51 | $ | 18.75 | $ | 4.06 |
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands, except for per gallon amounts) | ||||||||||||||
Renewables segment sales and other revenues | $ | 1,188,990 | $ | 1,015,499 | ||||||||||
Renewables segment cost of products sold | 1,080,919 | 974,167 | ||||||||||||
Lower of cost or market inventory valuation adjustment | 49,861 | 52,412 | ||||||||||||
58,210 | (11,080) | |||||||||||||
Add lower of cost or market inventory valuation adjustment | 49,861 | 52,412 | ||||||||||||
Renewables gross margin | $ | 108,071 | $ | 41,332 | ||||||||||
Renewables operating expenses | $ | 109,056 | $ | 111,974 | ||||||||||
Produced gallons sold (in thousand gallons) | 215,510 | 136,204 | ||||||||||||
Renewables gross margin per produced gallon sold | $ | 0.50 | $ | 0.30 | ||||||||||
Less operating expenses per produced gallon sold | 0.51 | 0.82 | ||||||||||||
Net operating margin per produced gallon sold | $ | (0.01) | $ | (0.52) |
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Marketing segment sales and other revenues | $ | 4,146,292 | $ | 3,911,922 | ||||||||||
Marketing segment cost of products sold | 4,050,759 | 3,845,625 | ||||||||||||
Marketing gross margin | $ | 95,533 | $ | 66,297 | ||||||||||
Sales volumes (in thousand gallons) | 1,441,607 | 1,118,444 | ||||||||||||
Marketing segment gross margin per gallon sold | $ | 0.07 | $ | 0.06 |
Page Reference | |||||
Consolidated Balance Sheets at December 31, 2023 and 2022 | |||||
Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 | |||||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 | |||||
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 | |||||
Consolidated Statements of Equity for the years ended December 31, 2023, 2022 and 2021 | |||||
Notes to Consolidated Financial Statements | 82 |
Valuation of Goodwill | |||||
Description of the Matter | At December 31, 2023, the Company’s goodwill was $2,978 million, including goodwill assigned to the Refining, Renewables, Marketing, Lubricants & Specialties, and Midstream segments of $1,977 million, $159 million, $164 million, $246 million, and $432 million, respectively. As described in Note 1 and Note 11 of the consolidated financial statements, goodwill is tested for impairment at least annually on July 1 at the reporting unit level or more frequently if events or changes in circumstances indicate the asset might be impaired. | ||||
Auditing management’s goodwill impairment testing was complex and highly judgmental for the Company’s El Dorado Refinery reporting unit due to the significant estimation required to determine the fair value of this reporting unit. In particular, the fair value estimates were sensitive to significant assumptions, such as revenue, gross margins, and EBITDA, and discount rates which are affected by expectations about future market or economic conditions. These assumptions have a significant effect on the fair value estimates. | |||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's goodwill impairment testing process. For example, we tested controls over management's review of the significant inputs and assumptions used in determining the reporting unit fair value. | ||||
To test the estimated fair value of the Company’s El Dorado Refinery reporting unit, we performed audit procedures with the support of a valuation specialist that included, among others, assessing the methodologies used and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to relevant industry and economic trends, published forward prices, historical operating results and other relevant factors. We performed sensitivity analyses on significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions. We also tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company. |
December 31, | |||||||||||
2023 | 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable: Product and transportation | |||||||||||
Crude oil resales | |||||||||||
Inventories: Crude oil and refined products | |||||||||||
Materials, supplies and other | |||||||||||
Income taxes receivable | |||||||||||
Prepayments and other | |||||||||||
Total current assets | |||||||||||
Properties, plants and equipment, at cost | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Operating lease right-of-use assets | |||||||||||
Other assets: Turnaround costs | |||||||||||
Goodwill | |||||||||||
Intangibles and other | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Income taxes payable | |||||||||||
Operating lease liabilities | |||||||||||
Current debt | |||||||||||
Accrued liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Noncurrent operating lease liabilities | |||||||||||
Deferred income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Commitments and contingencies (Note 19) | |||||||||||
Equity: | |||||||||||
HF Sinclair stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock $ | |||||||||||
Additional capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Common stock held in treasury, at cost - | ( | ( | |||||||||
Total HF Sinclair stockholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Sales and other revenues | $ | $ | $ | |||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||
Cost of products sold (exclusive of depreciation and amortization): | ||||||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | ||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | ( | |||||||||||||||||||
Operating expenses (exclusive of depreciation and amortization) | ||||||||||||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Total operating costs and expenses | ||||||||||||||||||||
Income from operations | ||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Earnings (loss) of equity method investments | ( | |||||||||||||||||||
Interest income | ||||||||||||||||||||
Interest expense | ( | ( | ( | |||||||||||||||||
Gain on business interruption insurance settlement | ||||||||||||||||||||
Gain on tariff settlement | ||||||||||||||||||||
Gain on early extinguishment of debt | ||||||||||||||||||||
Gain (loss) on foreign currency transactions | ( | ( | ||||||||||||||||||
Gain on sale of assets and other | ||||||||||||||||||||
( | ( | |||||||||||||||||||
Income before income taxes | ||||||||||||||||||||
Income tax expense (benefit): | ||||||||||||||||||||
Current | ( | |||||||||||||||||||
Deferred | ||||||||||||||||||||
Net income | ||||||||||||||||||||
Less net income attributable to noncontrolling interest | ||||||||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | $ | $ | |||||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | $ | $ | |||||||||||||||||
Diluted | $ | $ | $ | |||||||||||||||||
Average number of common shares outstanding: | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Diluted |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net income | $ | $ | $ | |||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | ||||||||||||||||||
Hedging instruments: | ||||||||||||||||||||
Change in fair value of cash flow hedging instruments | ( | ( | ( | |||||||||||||||||
Reclassification adjustments to net income on settlement of cash flow hedging instruments | ||||||||||||||||||||
Net unrealized gain on hedging instruments | ||||||||||||||||||||
Pension and other post-retirement benefit obligations: | ||||||||||||||||||||
Actuarial gain (loss) on pension plans | ( | |||||||||||||||||||
Pension plans (gain) loss reclassified to net income | ( | ( | ||||||||||||||||||
Actuarial gain on post-retirement healthcare plans | ||||||||||||||||||||
Post-retirement healthcare plans gain reclassified to net income | ( | ( | ( | |||||||||||||||||
Actuarial gain (loss) on retirement restoration plan | ( | |||||||||||||||||||
Retirement restoration plan loss reclassified to net income | ||||||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | |||||||||||||||||||
Other comprehensive income (loss) before income taxes | ( | ( | ||||||||||||||||||
Income tax expense (benefit) | ( | ( | ||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||||||||
Total comprehensive income | ||||||||||||||||||||
Less noncontrolling interest in comprehensive income | ||||||||||||||||||||
Comprehensive income attributable to HF Sinclair stockholders | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income | $ | $ | $ | |||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | ( | |||||||||||||||||||
Earnings of equity method investments, inclusive of distributions | ||||||||||||||||||||
Gain on early extinguishment of debt | ( | |||||||||||||||||||
Gain on sale of assets | ( | ( | ( | |||||||||||||||||
Deferred income taxes | ||||||||||||||||||||
Equity-based compensation expense | ||||||||||||||||||||
Change in fair value – derivative instruments | ( | |||||||||||||||||||
(Increase) decrease in current assets: | ||||||||||||||||||||
Accounts receivable | ( | ( | ( | |||||||||||||||||
Inventories | ( | ( | ||||||||||||||||||
Income taxes receivable | ( | ( | ||||||||||||||||||
Prepayments and other | ( | ( | ||||||||||||||||||
Increase (decrease) in current liabilities: | ||||||||||||||||||||
Accounts payable | ( | |||||||||||||||||||
Income taxes payable | ( | |||||||||||||||||||
Accrued liabilities | ( | |||||||||||||||||||
Turnaround expenditures | ( | ( | ( | |||||||||||||||||
Other, net | ( | ( | ||||||||||||||||||
Net cash provided by operating activities | ||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Additions to properties, plants and equipment | ( | ( | ( | |||||||||||||||||
Additions to properties, plants and equipment – HEP | ( | ( | ( | |||||||||||||||||
Acquisitions, net of cash acquired | ( | ( | ||||||||||||||||||
Proceeds from sale of assets | ||||||||||||||||||||
HEP investment in Osage Pipe Line Company LLC | ( | ( | ||||||||||||||||||
Distributions in excess of equity in earnings of equity investments | ||||||||||||||||||||
Net cash used for investing activities | ( | ( | ( | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Borrowings under credit agreements | ||||||||||||||||||||
Repayments under credit agreements | ( | ( | ( | |||||||||||||||||
Proceeds from issuance of senior notes – HEP | ||||||||||||||||||||
Redemption of senior notes | ( | ( | ||||||||||||||||||
Purchase of treasury stock | ( | ( | ( | |||||||||||||||||
Dividends | ( | ( | ( | |||||||||||||||||
Distributions to noncontrolling interest | ( | ( | ( | |||||||||||||||||
Contribution from noncontrolling interests | ||||||||||||||||||||
Payments on finance leases | ( | ( | ( | |||||||||||||||||
HEP Merger Transaction consideration | ( | |||||||||||||||||||
Deferred financing costs | ( | ( | ( | |||||||||||||||||
Other, net | ( | ( | ( | |||||||||||||||||
Net cash provided by (used for) financing activities | ( | ( | ( | |||||||||||||||||
Effect of exchange rate on cash flow | ( | ( | ||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Increase (decrease) for the period | ( | ( | ||||||||||||||||||
Beginning of period | ||||||||||||||||||||
End of period | $ | $ | $ | |||||||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||||||
Cash (paid) received during the period for: | ||||||||||||||||||||
Interest | $ | ( | $ | ( | $ | ( | ||||||||||||||
Income taxes, net | $ | ( | $ | ( | $ | |||||||||||||||
Decrease in accrued and unpaid capital expenditures | $ | ( | $ | ( | $ | ( |
HF Sinclair Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Shares | Amount | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares under incentive compensation plans | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase of HEP units for equity grants | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares for HFC Transactions | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares under incentive compensation plans | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury stock | ( | ( | — | ( | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of HEP units for equity grants | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Equity attributable to HEP common unit issuance, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of remaining UNEV interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
HEP Merger Transaction | — | — | ( | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares under incentive compensation plans | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock, inclusive of excise tax | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of HEP units for equity grants | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
Balance at December 31, 2023 | ||||||||||||||||||||
Underlying Equity | Recorded Investment Balance | Difference | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Equity Method Investments | ||||||||||||||||||||
Osage Pipe Line Company, LLC | $ | $ | $ | ( | ||||||||||||||||
Cheyenne Pipeline, LLC | ( | |||||||||||||||||||
Cushing Connect Terminal Holdings LLC | ||||||||||||||||||||
Pioneer Investments Corp. | ( | |||||||||||||||||||
Saddle Butte Pipeline III, LLC | ||||||||||||||||||||
Total | $ | $ | $ | ( |
Balance at December 31, 2022 | ||||||||||||||||||||
Underlying Equity | Recorded Investment Balance | Difference | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Equity Method Investments | ||||||||||||||||||||
Osage Pipe Line Company, LLC | $ | $ | $ | ( | ||||||||||||||||
Cheyenne Pipeline, LLC | ( | |||||||||||||||||||
Cushing Connect Terminal Holdings LLC | ||||||||||||||||||||
Pioneer Investments Corp. | ( | |||||||||||||||||||
Saddle Butte Pipeline III, LLC | ||||||||||||||||||||
Total | $ | $ | $ | ( |
Purchase Consideration (in thousands except for per share amounts) | ||||||||
Shares of HF Sinclair common stock issued | ||||||||
Closing price per share of HFC common stock (1) | $ | |||||||
Purchase consideration paid in HF Sinclair common stock | ||||||||
Shares of HEP common units issued to REH Company | ||||||||
Closing price per share of HEP common units (2) | $ | |||||||
Purchase consideration paid in HEP common units | ||||||||
Total equity consideration | ||||||||
Cash consideration paid by HEP | ||||||||
Cash consideration received by HF Sinclair | ( | |||||||
Total cash consideration | ||||||||
Total purchase consideration | $ |
(In thousands) | ||||||||
Assets Acquired | ||||||||
Accounts receivable | $ | |||||||
Inventories: Crude oil and refined products | ||||||||
Inventories: Materials, supplies and other | ||||||||
Properties, plants and equipment | ||||||||
Operating lease right-of-use assets | ||||||||
Other assets: Intangibles and other | ||||||||
Total assets acquired | $ | |||||||
Liabilities Assumed | ||||||||
Accounts payable | $ | |||||||
Operating lease liabilities | ||||||||
Accrued liabilities | ||||||||
Noncurrent operating lease liabilities | ||||||||
Deferred income taxes | ||||||||
Other long-term liabilities | ||||||||
Total liabilities assumed | $ | |||||||
Net assets acquired | $ | |||||||
Goodwill | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Operating leases: | ||||||||||||||
Operating lease right-of-use assets | $ | $ | ||||||||||||
Operating lease liabilities | ||||||||||||||
Noncurrent operating lease liabilities | ||||||||||||||
Total operating lease liabilities | $ | $ | ||||||||||||
Finance leases: | ||||||||||||||
Properties, plants and equipment, at cost | $ | $ | ||||||||||||
Accumulated amortization | ( | ( | ||||||||||||
$ | $ | |||||||||||||
$ | $ | |||||||||||||
Total finance lease liabilities | $ | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Weighted average remaining lease term (in years) | ||||||||||||||
Operating leases | ||||||||||||||
Finance leases | ||||||||||||||
Weighted average discount rate | ||||||||||||||
Operating leases | % | % | ||||||||||||
Finance leases | % | % |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating lease expense | $ | $ | $ | |||||||||||||||||
Finance lease expense: | ||||||||||||||||||||
Amortization of right-of-use assets | ||||||||||||||||||||
Interest on lease liabilities | ||||||||||||||||||||
Variable lease cost | ||||||||||||||||||||
Total lease expense | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||||||
Operating cash flows from operating leases | $ | $ | $ | |||||||||||||||||
Operating cash flows from finance leases | $ | $ | $ | |||||||||||||||||
Financing cash flows from finance leases | $ | $ | $ | |||||||||||||||||
Right-of-use assets obtained in exchange for lease obligations: | ||||||||||||||||||||
Operating leases | $ | $ | $ | |||||||||||||||||
Finance leases | $ | $ | $ | |||||||||||||||||
Operating | Finance | |||||||||||||
(In thousands) | ||||||||||||||
2024 | $ | $ | ||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
2027 | ||||||||||||||
2028 | ||||||||||||||
Thereafter | ||||||||||||||
Future minimum lease payments | ||||||||||||||
Less: imputed interest | ||||||||||||||
Total lease obligations | ||||||||||||||
Less: current obligations | ||||||||||||||
Long-term lease obligations | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating lease revenues | $ | $ | $ | |||||||||||||||||
Sales-type lease interest income | $ | $ | $ | |||||||||||||||||
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable | $ | $ | $ |
Operating | Sales-type | |||||||||||||
(In thousands) | ||||||||||||||
2024 | $ | $ | ||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
2027 | ||||||||||||||
2028 | ||||||||||||||
Thereafter | ||||||||||||||
Total lease payment receipts | $ | |||||||||||||
Less: imputed interest | ( | |||||||||||||
Unguaranteed residual assets at end of leases | ||||||||||||||
Net investment in leases | $ |
December 31, 2023 | December 31, 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Lease receivables | $ | $ | ||||||||||||
Unguaranteed residual assets | ||||||||||||||
Net investment in leases | $ | $ |
Years Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Cash and cash equivalents | |||||||||||
Properties, plants and equipment, at cost | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Intangibles and other |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues by type | ||||||||||||||||||||
Refined product revenues | ||||||||||||||||||||
Transportation fuels (1) | $ | $ | $ | |||||||||||||||||
Specialty lubricant products (2) | ||||||||||||||||||||
Asphalt, fuel oil and other products (3) | ||||||||||||||||||||
Total refined product revenues | ||||||||||||||||||||
Excess crude oil revenues (4) | ||||||||||||||||||||
Renewable diesel revenues (5) | ||||||||||||||||||||
Transportation and logistic services | ||||||||||||||||||||
Marketing revenues (6) | ||||||||||||||||||||
Other revenues (7) | ||||||||||||||||||||
Total sales and other revenues | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Refined product revenues by market | ||||||||||||||||||||
United States | ||||||||||||||||||||
Mid-Continent | $ | $ | $ | |||||||||||||||||
Southwest | ||||||||||||||||||||
Rocky Mountains | ||||||||||||||||||||
Northeast | ||||||||||||||||||||
Canada | ||||||||||||||||||||
Europe, Asia and Latin America | ||||||||||||||||||||
Total refined product revenues | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance at January 1 | $ | $ | $ | |||||||||||||||||
Increase | ||||||||||||||||||||
Recognized as revenue | ( | ( | ( | |||||||||||||||||
Balance at December 31 | $ | $ | $ |
2024 | 2025 | 2026 | Thereafter | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Refined product sales volumes (barrels) |
2024 | 2025 | 2026 | Thereafter | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Midstream operations contractual minimum revenues | $ | $ | $ | $ | $ |
Carrying Amount | Fair Value by Input Level | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Commodity price swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Carrying Amount | Fair Value by Input Level | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Commodity price swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
RINs receivable (1) | ||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity collar contracts | ||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
RINs credit obligations (1) | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Net income attributable to HF Sinclair stockholders | $ | $ | $ | |||||||||||||||||
Participating securities’ share in earnings (1) | ||||||||||||||||||||
Net income attributable to common shares | $ | $ | $ | |||||||||||||||||
Average number of shares of common stock outstanding | ||||||||||||||||||||
Average number of shares of common stock outstanding assuming dilution | ||||||||||||||||||||
Basic earnings per share | $ | $ | $ | |||||||||||||||||
Diluted earnings per share | $ | $ | $ | |||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Compensation expense: | ||||||||||||||||||||
Restricted stock units | $ | $ | $ | |||||||||||||||||
Performance stock units | ||||||||||||||||||||
Total compensation expense | $ | $ | $ | |||||||||||||||||
Tax benefit recognized on compensation expense | $ | $ | $ |
Restricted Stock Units | Grants | Weighted Average Grant Date Fair Value | ||||||||||||
Outstanding at January 1, 2023 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Converted from performance share units | $ | |||||||||||||
Outstanding at December 31, 2023 | $ |
Performance Share Units | Grants | Weighted Average Grant Date Fair Value | ||||||||||||
Outstanding at January 1, 2023 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Converted to restricted stock units | ( | $ | ||||||||||||
Outstanding at December 31, 2023 | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Crude oil | $ | $ | ||||||||||||
Other raw materials and unfinished products (1) | ||||||||||||||
Finished products (2) | ||||||||||||||
Lower of cost or market reserve | ( | ( | ||||||||||||
Process chemicals (3) | ||||||||||||||
Repairs and maintenance supplies and other (4) | ||||||||||||||
Total inventory | $ | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Land, buildings and improvements | $ | $ | ||||||||||||
Refining facilities | ||||||||||||||
Pipelines and terminals | ||||||||||||||
Transportation vehicles | ||||||||||||||
Other fixed assets | ||||||||||||||
Construction in progress | ||||||||||||||
Accumulated depreciation | ( | ( | ||||||||||||
$ | $ |
Refining | Renewables | Marketing | Lubricants & Specialties | Midstream | Total | |||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Goodwill disposal and other changes | ( | ( | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Goodwill | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Accumulated impairment losses | ( | ( | ( | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
December 31 | ||||||||||||||||||||
Useful Life | 2023 | 2022 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Customer relationships | $ | $ | ||||||||||||||||||
Transportation agreements | ||||||||||||||||||||
Trademarks, patents and other | ||||||||||||||||||||
Accumulated amortization | ( | ( | ||||||||||||||||||
Total intangibles, net | $ | $ |
(In thousands) | |||||
2024 | $ | ||||
2025 | $ | ||||
2026 | $ | ||||
2027 | $ | ||||
2028 | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
HollyFrontier | ||||||||||||||
$ | $ | |||||||||||||
HF Sinclair | ||||||||||||||
$ | $ | |||||||||||||
HEP | ||||||||||||||
HEP Credit Agreement | ||||||||||||||
Less current debt (1) | ( | |||||||||||||
Unamortized discount and debt issuance costs (1) | ( | ( | ||||||||||||
Total long-term debt (2) | $ | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
HollyFrontier and HF Sinclair Senior Notes | $ | $ | ||||||||||||
HEP Senior Notes | $ | $ |
Years Ending December 31, | (In thousands) | ||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total | $ |
Net Unrealized Gain Recognized in OCI | Gain (Loss) Reclassified into Earnings | |||||||||||||||||||||||||||||||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Years Ended December 31, | Income Statement Location | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Commodity contracts | $ | $ | $ | Sales and other revenues | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ( | $ | ( | $ | ( |
Gain (Loss) Recognized in Earnings | ||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Years Ended December 31, | |||||||||||||||||||||||||
Income Statement Location | 2023 | 2022 | 2021 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Commodity contracts | Cost of products sold | $ | $ | ( | $ | ( | ||||||||||||||||||||
Operating expenses | ( | ( | ||||||||||||||||||||||||
Interest expense | ( | |||||||||||||||||||||||||
Foreign currency contracts | Gain (loss) on foreign currency transactions | ( | ( | |||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( |
Total Outstanding Notional | Unit of Measure | |||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||
NYMEX futures (WTI) - short | Barrels | |||||||||||||
Forward gasoline contracts - long | Barrels | |||||||||||||
Foreign currency forward contracts | U. S. dollar | |||||||||||||
Forward commodity contracts (platinum) | Troy ounces | |||||||||||||
Natural gas price swaps (basis spread) - long | MMBTU | |||||||||||||
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, 2023 | ||||||||||||||||||||||||||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commodity price swap contracts | ||||||||||||||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance sheet classification: | $ | $ |
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, 2022 | ||||||||||||||||||||||||||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commodity price swap contracts | ||||||||||||||||||||||||||||||||||||||
Commodity collar contracts | ||||||||||||||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance sheet classification: | $ | $ | ||||||||||||||||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Current | ||||||||||||||||||||
Federal | $ | $ | $ | ( | ||||||||||||||||
State | ( | |||||||||||||||||||
Foreign | ||||||||||||||||||||
Deferred | ||||||||||||||||||||
Federal | ||||||||||||||||||||
State | ||||||||||||||||||||
Foreign | ( | |||||||||||||||||||
$ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Tax computed at statutory rate | $ | $ | $ | |||||||||||||||||
State income taxes, net of federal tax benefit | ||||||||||||||||||||
Noncontrolling interest in net income | ( | ( | ( | |||||||||||||||||
Effect of change in state rate | ( | ( | ||||||||||||||||||
Nontaxable permanent differences | ( | |||||||||||||||||||
CARES Act benefits | ( | |||||||||||||||||||
Foreign rate differential | ||||||||||||||||||||
Federal tax credits | ( | ( | ( | |||||||||||||||||
US tax on non-US operations | ||||||||||||||||||||
Other | ( | |||||||||||||||||||
$ | $ | $ |
December 31, 2023 | ||||||||||||||||||||
Assets | Liabilities | Total | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||
Properties, plants, equipment and intangibles (due primarily to tax in excess of book depreciation) | $ | — | $ | ( | $ | ( | ||||||||||||||
Lease obligation | — | |||||||||||||||||||
Accrued employee benefits | — | |||||||||||||||||||
Accrued post-retirement benefits | — | |||||||||||||||||||
Accrued environmental costs | — | |||||||||||||||||||
Hedging instruments | — | |||||||||||||||||||
Inventory differences | — | ( | ( | |||||||||||||||||
Deferred turnaround costs | — | ( | ( | |||||||||||||||||
Net operating loss and tax credit carryforwards | — | |||||||||||||||||||
Valuation allowance | — | ( | ( | |||||||||||||||||
Other | — | ( | ( | |||||||||||||||||
Total | $ | $ | ( | $ | ( |
December 31, 2022 | ||||||||||||||||||||
Assets | Liabilities | Total | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||
Properties, plants, equipment and intangibles (due primarily to tax in excess of book depreciation) | $ | — | $ | ( | $ | ( | ||||||||||||||
Lease obligation | — | |||||||||||||||||||
Accrued employee benefits | — | |||||||||||||||||||
Accrued post-retirement benefits | — | |||||||||||||||||||
Accrued environmental costs | — | |||||||||||||||||||
Hedging instruments | — | |||||||||||||||||||
Inventory differences | — | ( | ( | |||||||||||||||||
Deferred turnaround costs | — | ( | ( | |||||||||||||||||
Net operating loss and tax credit carryforwards | — | |||||||||||||||||||
Investment in HEP | — | ( | ( | |||||||||||||||||
Valuation allowance | — | ( | ( | |||||||||||||||||
Other | — | ( | ( | |||||||||||||||||
Total | $ | $ | ( | $ | ( |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance at January 1 | $ | $ | $ | |||||||||||||||||
Reductions for tax positions of prior years | ( | ( | ||||||||||||||||||
Settlements | ( | |||||||||||||||||||
Lapse of statute of limitations | ( | ( | ( | |||||||||||||||||
Balance at December 31 | $ | $ | $ |
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Number of shares repurchased (1) | ||||||||||||||
Cash paid for shares repurchased (in thousands) | $ | $ | ||||||||||||
Before-Tax | Tax Expense (Benefit) | After-Tax | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Year Ended December 31, 2023 | ||||||||||||||||||||
Net change in foreign currency translation adjustment | $ | $ | $ | |||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | |||||||||||||||||||
Other comprehensive income attributable to HF Sinclair stockholders | $ | $ | $ | |||||||||||||||||
Year Ended December 31, 2022 | ||||||||||||||||||||
Net change in foreign currency translation adjustment | $ | ( | $ | ( | $ | ( | ||||||||||||||
Net unrealized gain on hedging instruments | ||||||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ||||||||||||||||||||
Other comprehensive loss attributable to HF Sinclair stockholders | $ | ( | $ | ( | $ | ( | ||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||
Net change in foreign currency translation adjustment | $ | ( | $ | ( | $ | ( | ||||||||||||||
Net unrealized gain on hedging instruments | ||||||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | ( | ( | |||||||||||||||||
Other comprehensive loss attributable to HF Sinclair stockholders | $ | ( | $ | ( | $ | ( |
AOCI Component | Gain (Loss) Reclassified From AOCI | Income Statement Line Item | ||||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Hedging instruments: | ||||||||||||||||||||||||||
Commodity price swaps | $ | ( | $ | ( | $ | ( | Sales and other revenues | |||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||
( | ( | ( | ||||||||||||||||||||||||
( | ( | ( | Income tax expense (benefit) | |||||||||||||||||||||||
( | ( | ( | Net of tax | |||||||||||||||||||||||
Other post-retirement benefit obligations: | ||||||||||||||||||||||||||
Pension obligations | ( | Other, net | ||||||||||||||||||||||||
( | Income tax expense (benefit) | |||||||||||||||||||||||||
( | Net of tax | |||||||||||||||||||||||||
Post-retirement healthcare obligations | Other, net | |||||||||||||||||||||||||
Income tax expense (benefit) | ||||||||||||||||||||||||||
Net of tax | ||||||||||||||||||||||||||
Retirement restoration plan | ( | ( | ( | Other, net | ||||||||||||||||||||||
( | ( | ( | Income tax expense (benefit) | |||||||||||||||||||||||
( | ( | ( | Net of tax | |||||||||||||||||||||||
Total reclassifications for the period | $ | ( | $ | ( | $ | ( |
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Foreign currency translation adjustment | $ | ( | $ | ( | ||||||||||
Unrealized gain (loss) on pension obligations | ( | |||||||||||||
Unrealized gain on post-retirement benefit obligations | ||||||||||||||
Accumulated other comprehensive loss | $ | ( | $ | ( |
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Change in plans' benefit obligations | ||||||||||||||
Pension plans benefit obligation - beginning of period | $ | $ | ||||||||||||
Service cost | ||||||||||||||
Interest cost | ||||||||||||||
Actuarial gain | ( | |||||||||||||
Benefits paid | ( | ( | ||||||||||||
Settlements | ( | |||||||||||||
Transfer from other plans | ||||||||||||||
Foreign currency exchange rate changes | ( | |||||||||||||
Pension plans benefit obligation - end of year | $ | $ | ||||||||||||
Change in pension plans assets | ||||||||||||||
Fair value of plans assets - beginning of period | $ | $ | ||||||||||||
Return on plans assets | ( | |||||||||||||
Employer contributions | ||||||||||||||
Benefits paid | ( | ( | ||||||||||||
Transfer payments | ||||||||||||||
Settlements | ( | |||||||||||||
Foreign currency exchange rate changes | ( | |||||||||||||
Fair value of plans assets - end of year | $ | $ | ||||||||||||
Funded status | ||||||||||||||
Over (Under)-funded balance | $ | $ | ( | |||||||||||
Amounts recognized in consolidated balance sheets | ||||||||||||||
Intangibles and other | $ | $ | ||||||||||||
Other long-term liabilities | ( | ( | ||||||||||||
$ | $ | ( | ||||||||||||
Amounts recognized in accumulated other comprehensive loss | ||||||||||||||
Cumulative actuarial loss | $ | ( | $ | ( |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Projected benefit obligation | $ | $ | ||||||||||||
Fair value of plan assets | $ | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Accumulated benefit obligation | $ | $ | ||||||||||||
Fair value of plan assets | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Service cost - benefit earned during the period | $ | $ | $ | |||||||||||||||||
Interest cost on projected benefit obligations | ||||||||||||||||||||
Expected return on plans assets | ( | ( | ( | |||||||||||||||||
Amortization of gain | ( | ( | ||||||||||||||||||
Settlements | ||||||||||||||||||||
Net periodic pension expense | $ | $ | $ |
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed income | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Change in plans' benefit obligation | ||||||||||||||
Post-retirement plans' benefit obligation - beginning of year | $ | $ | ||||||||||||
Service cost | ||||||||||||||
Interest cost | ||||||||||||||
Benefits paid | ( | ( | ||||||||||||
Actuarial gain | ( | ( | ||||||||||||
Foreign currency exchange rate changes | ( | |||||||||||||
Post-retirement plans' benefit obligation - end of year | $ | $ | ||||||||||||
Change in plan assets | ||||||||||||||
Fair value of plan assets - beginning of year | $ | $ | ||||||||||||
Employer contributions | ||||||||||||||
Participant contributions | ||||||||||||||
Benefits paid | ( | ( | ||||||||||||
Fair value of plan assets - end of year | $ | $ | ||||||||||||
Funded status | ||||||||||||||
Under-funded balance | $ | ( | $ | ( | ||||||||||
Amounts recognized in consolidated balance sheets | ||||||||||||||
Accrued liabilities | $ | ( | $ | ( | ||||||||||
Other long-term liabilities | ( | ( | ||||||||||||
$ | ( | $ | ( | |||||||||||
Amounts recognized in accumulated other comprehensive loss | ||||||||||||||
Cumulative actuarial gain | $ | $ | ||||||||||||
Prior service credit | ||||||||||||||
Total | $ | $ |
December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Discount rate | ||||||||||||||
Current health care trend rate | ||||||||||||||
Ultimate health care trend rate | ||||||||||||||
Year rate reaches ultimate trend rate |
Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Service cost – benefit earned during the year | $ | $ | $ | |||||||||||||||||
Interest cost on projected benefit obligations | ||||||||||||||||||||
Amortization of prior service credit | ( | ( | ( | |||||||||||||||||
Amortization of (gain) loss | ( | |||||||||||||||||||
Net periodic post-retirement credit | $ | ( | $ | ( | $ | ( |
(In thousands) | ||||||||
2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total | $ |
Refining | Renewables | Marketing | Lubricants & Specialties | Midstream | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Intersegment revenues and other (1) | ( | — | ||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Operating expenses | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ | $ |
Refining | Renewables | Marketing | Lubricants & Specialties | Midstream | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Intersegment revenues and other (1) | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
Loss of equity method investments | $ | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Refining | Renewables | Lubricants & Specialties | Midstream | Corporate, Other and Eliminations | Consolidated Total | |||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Intersegment revenues and other (1) | ( | — | ||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | $ | ( | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||
Operating expenses | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Preferred stock par value (in USD per share) | $ 1.00 | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Common stock par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 | 320,000,000 |
Common stock, shares issued (in shares) | 223,231,546 | 223,231,546 | 223,231,546 |
Common stock held in treasury (in shares) | 26,077,193 | 23,235,599 | 26,152,344 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Statement [Abstract] | |||||
Sales and other revenues | $ 7,027,145 | $ 7,565,142 | $ 31,964,395 | $ 38,204,839 | $ 18,389,142 |
Cost of products sold (exclusive of depreciation and amortization): | |||||
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment) | 5,926,500 | 6,104,057 | 25,784,449 | 30,680,013 | 15,567,052 |
Lower of cost or market inventory valuation adjustment | (219,370) | 47,597 | 270,419 | 52,412 | (310,123) |
Cost of products sold (exclusive of depreciation and amortization) | 5,707,130 | 6,151,654 | 26,054,868 | 30,732,425 | 15,256,929 |
Operating expenses (exclusive of depreciation and amortization) | 607,112 | 639,383 | 2,438,148 | 2,334,893 | 1,517,478 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 103,374 | 95,913 | 498,240 | 426,485 | 362,010 |
Depreciation and amortization | 198,729 | 173,983 | 770,573 | 656,787 | 503,539 |
Total operating costs and expenses | 6,616,345 | 7,060,933 | 29,761,829 | 34,150,590 | 17,639,956 |
Income from operations | 410,800 | 504,209 | 2,202,566 | 4,054,249 | 749,186 |
Other income (expense): | |||||
Earnings of equity method investments | 7,346 | 3,882 | 17,369 | (260) | 12,432 |
Interest income | 22,179 | 19,935 | 93,468 | 30,179 | 4,019 |
Interest expense | (40,691) | (45,822) | (190,796) | (175,628) | (125,175) |
Gain on business interruption insurance settlement | 0 | 15,202 | 0 | ||
Gain on tariff settlement | 0 | 0 | 51,500 | ||
Loss on early extinguishment of debt | 0 | 604 | 0 | ||
Gain on foreign currency transactions | 443 | 870 | 2,530 | (1,637) | (2,938) |
Gain on sale of assets and other | 2,019 | 1,631 | 27,370 | 13,337 | 98,128 |
Other income (expense) total | (8,704) | (19,504) | (50,059) | (118,203) | 37,966 |
Income before income taxes: | 402,096 | 484,705 | 2,152,507 | 3,936,046 | 787,152 |
Income tax expense: | |||||
Current | 70,705 | 84,395 | 249,062 | 841,704 | (4,672) |
Deferred | 14,769 | 15,305 | 192,550 | 53,168 | 128,570 |
Income tax expense (benefit) total | 85,474 | 99,700 | 441,612 | 894,872 | 123,898 |
Net income | 316,622 | 385,005 | 1,710,895 | 3,041,174 | 663,254 |
Less: net income attributable to noncontrolling interest | 1,958 | 31,739 | 121,229 | 118,506 | 104,930 |
Net income attributable to HF Sinclair stockholders | $ 314,664 | $ 353,266 | $ 1,589,666 | $ 2,922,668 | $ 558,324 |
Earnings per share: | |||||
Basic (in USD per share) | $ 1.57 | $ 1.79 | $ 8.29 | $ 14.28 | $ 3.39 |
Diluted (in USD per share) | $ 1.57 | $ 1.79 | $ 8.29 | $ 14.28 | $ 3.39 |
Average number of common shares outstanding: | |||||
Basic (in shares) | 198,710 | 195,445 | 190,035 | 202,566 | 162,569 |
Diluted (in shares) | 198,710 | 195,445 | 190,035 | 202,566 | 162,569 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Cash flows from operating activities: | |||||
Net income | $ 316,622 | $ 385,005 | $ 1,710,895 | $ 3,041,174 | $ 663,254 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 198,729 | 173,983 | 770,573 | 656,787 | 503,539 |
Lower of cost or market inventory valuation adjustment | (219,370) | 47,597 | 270,419 | 52,412 | (310,123) |
Earnings of equity method investments, inclusive of distributions | (3,821) | (1,799) | 8,093 | 19,769 | 0 |
Early extinguishment loss on debt | 0 | (604) | 0 | ||
Gain on sale of assets | (782) | (414) | (6,879) | (2,118) | (89,765) |
Deferred income taxes | 14,769 | 15,305 | 192,550 | 53,168 | 128,570 |
Equity-based compensation expense | 5,380 | 3,325 | 41,135 | 30,318 | 39,273 |
Change in fair value – derivative instruments | (7,764) | 15,402 | 16,555 | 9,989 | (34,096) |
(Increase) decrease in current assets: | |||||
Accounts receivable | (92,036) | 86,369 | (17,131) | (4,282) | (614,407) |
Inventories | 1,120 | (280,263) | 30,246 | (224,421) | (344,559) |
Income taxes receivable | 13,462 | 10,494 | (2,691) | 42,641 | (6,415) |
Prepayments and other | 1,263 | 28,007 | 8,062 | (40,810) | (18,672) |
Increase (decrease) in current liabilities: | |||||
Accounts payable | 64,664 | (220,018) | (108,859) | 194,424 | 612,410 |
Income taxes payable | 48,689 | 51,697 | 925 | (17,169) | 23,158 |
Accrued liabilities | 30,655 | 32,424 | (29,619) | 78,349 | 83,602 |
Turnaround expenditures | (70,379) | (163,734) | (555,697) | (144,759) | (214,431) |
Other, net | 15,694 | (5,675) | (31,342) | 32,291 | (14,656) |
Net cash provided by operating activities | 316,895 | 177,705 | 2,297,235 | 3,777,159 | 406,682 |
Cash flows from investing activities: | |||||
Additions to properties, plants and equipment | (89,108) | (100,069) | (353,451) | (485,043) | (725,073) |
Acquisitions, net of cash acquired | 0 | (251,448) | (624,332) | ||
Proceeds from sale of assets | 811 | 1,572 | 17,361 | 3,344 | 106,357 |
Investment in Osage Pipe Line Company LLC | (5,000) | (2,500) | |||
Distributions from equity method investments in excess of equity earnings | 1,925 | 760 | 4,211 | 10,623 | 4,165 |
Net cash used for investing activities | (91,372) | (100,237) | (371,323) | (774,488) | (1,327,219) |
Cash flows from financing activities: | |||||
Borrowings under credit agreements | 0 | 42,000 | 60,000 | 510,000 | 555,500 |
Repayments under credit agreements | (61,500) | (58,500) | (272,500) | (682,000) | (629,000) |
Redemption of senior notes - HEP | (307,827) | (41,420) | 0 | ||
Purchase of treasury stock | (169,612) | (245,566) | (999,282) | (1,371,700) | (7,058) |
Dividends | (99,353) | (87,987) | (340,736) | (255,928) | (57,663) |
Distributions to noncontrolling interests | (2,395) | (25,986) | (102,523) | (96,192) | (75,395) |
Contributions from noncontrolling interests | 0 | 0 | 23,194 | ||
Payments on finance leases | (2,600) | (3,071) | (11,923) | (11,713) | (3,990) |
HEP Merger Transaction consideration | (267,592) | 0 | 0 | ||
Deferred financing costs | (899) | (9,273) | (14,500) | ||
Other, net | (600) | (2,533) | (2,891) | ||
Net cash used for financing activities | (335,460) | (379,110) | (2,243,882) | (1,560,759) | (211,803) |
Effect of exchange rate on cash flow | (2,950) | 1,506 | 6,651 | (11,290) | (1,534) |
Cash and cash equivalents: | |||||
Decrease for the period | (112,887) | (300,136) | (311,319) | 1,430,622 | (1,133,874) |
Beginning of period | 1,353,747 | 1,665,066 | 1,665,066 | 234,444 | 1,368,318 |
End of period | 1,240,860 | 1,364,930 | 1,353,747 | 1,665,066 | 234,444 |
Cash paid during the period for: | |||||
Interest | (23,600) | (25,934) | (203,063) | (160,409) | (136,429) |
Income taxes, net | (7,644) | (22,010) | (250,815) | (816,379) | 19,760 |
Decrease in accrued and unpaid capital expenditures | $ (5,678) | $ (17,819) | (5,924) | (31,714) | (15,319) |
HEP | |||||
Cash flows from investing activities: | |||||
Additions to properties, plants and equipment | (31,962) | (38,964) | (88,336) | ||
Investment in Osage Pipe Line Company LLC | (7,482) | (13,000) | 0 | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of senior notes - HEP | $ 0 | $ 400,000 | $ 0 |
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Statement of Stockholders' Equity [Abstract] | |||||
Dividends declared per common share (in USD per share) | $ 0.50 | $ 0.45 | $ 1.80 | $ 1.20 | $ 0.35 |
Description of Business and Presentation of Financial Statements |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business and Presentation of Financial Statements | Description of Business and Presentation of Financial Statements References herein to HF Sinclair, “we,” “our,” “ours,” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions. References herein to Holly Energy Partners, L.P. (“HEP”) with respect to time periods prior to the closing of the HEP Merger Transaction (as defined below) on December 1, 2023 refer to HEP and its consolidated subsidiaries. We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. We provide petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry. 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 and we supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. We produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries. On December 1, 2023, pursuant to the Agreement and Plan of Merger, dated as of August 15, 2023 (the “Merger Agreement”), by and among HEP, HF Sinclair, Navajo Pipeline Co., L.P., a Delaware limited partnership and an indirect wholly owned subsidiary of HF Sinclair (“HoldCo”), Holly Apple Holdings LLC, a Delaware limited liability company and a wholly owned subsidiary of HoldCo (“Merger Sub”), HEP Logistics Holdings, L.P., a Delaware limited partnership and the general partner of HEP (“HLH”), and Holly Logistic Services, L.L.C., a Delaware limited liability company and the general partner of HLH (the “General Partner”), Merger Sub merged with and into HEP, with HEP surviving as an indirect, wholly owned subsidiary of HF Sinclair (the “HEP Merger Transaction”). Under the terms of the Merger Agreement, each outstanding common unit representing a limited partner interest in HEP (an “HEP common unit”), other than the HEP common units already owned by HF Sinclair and its subsidiaries, was converted into the right to receive 0.315 shares of HF Sinclair common stock and $4.00 in cash, without interest. The Merger Agreement consideration totaled $267.6 million in cash and resulted in the issuance of 21,072,326 shares of HF Sinclair common stock from treasury stock. The HEP Merger Transaction was accounted for in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 810, “Consolidation.” Since we controlled HEP both before and after the HEP Merger Transaction, the changes in our ownership interest in HEP resulting from the HEP Merger Transaction were accounted for as an equity transaction, and no gain or loss was recognized in our Consolidated Statements of Income. The tax effects of the HEP Merger Transaction were recorded as adjustments to deferred income taxes and additional capital consistent with ASC 740, “Income Taxes.” For a description of our existing indebtedness, as well as associated changes in connection with the HEP Merger Transaction, see Note 9. 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 March 31, 2024, the consolidated results of income, comprehensive income and statements of equity for the three months ended March 31, 2024 and 2023, and consolidated cash flows for the three months ended March 31, 2024 and 2023 in accordance with the rules and regulations of the Securities and Exchange Commission (“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, 2023, and with our audited consolidated financial statements as of and for the year ended December 31, 2023, included in Exhibit 99.1 to this Quarterly Report on Form 10-Q. Accounts Receivable: Our accounts receivable primarily consist of amounts due from customers that are primarily from sales of refined products and renewable diesel. 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 expected credit losses 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 expected credit losses when an account is deemed uncollectible. Our allowance for expected credit losses was $2.8 million at March 31, 2024, and $3.2 million at December 31, 2023. 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. Inventories related to our renewables business are stated at the lower of cost, using the LIFO method for feedstock and unfinished and finished renewable 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 method or net realizable value. Inventories consisting of process chemicals, materials and maintenance supplies and 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 that 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 sheets. Finance leases are included in “Properties, plants and equipment, at cost,” “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheets. 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 consolidated balance sheets. 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, as a lessor, we do not separate the non-lease (service) component in contracts in which the lease component is the dominant component. We treat these combined components as an operating lease. We bifurcate the consideration received for sales-type lease contracts between lease and service revenue, with the service component accounted for within the scope of ASC 606, “Revenue from Contracts with Customers.” Lessor: Our consolidated statements of income reflect the lease revenue we recognize from contracts with third parties in which we are the lessor. As the lessor, we classify customer contracts that contain leases into one of three categories: operating leases, direct finance leases, or sales-type leases. This classification is determined by evaluating key factors such as the lease term, the fair value of the underlying asset, and the residual value of the underlying assets. Revenue Recognition: Revenues on refined products, branded fuel sales, renewable diesel, 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 & Specialties 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 & Specialties 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. Our Midstream business recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, we have certain throughput agreements that specify minimum volume requirements, whereby we bill 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, we recognize 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. We recognize the service portion of these deficiency payments as revenue when we do 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. We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the consolidated statements of income. Such adjustments are not recorded in the Lubricants & Specialties segment operations, but in Corporate and Other. See Note 14 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. We account for U.S. tax on global intangible low-taxed income in the period in which it is incurred. Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have the 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 three months ended March 31, 2024, we recorded income tax expense of $85.5 million compared to $99.7 million for the three months ended March 31, 2023. This decrease was principally due to lower pre-tax income during the three months ended March 31, 2024, compared to the same period of 2023. Our effective tax rates were 21.3% and 20.6% for the three months ended March 31, 2024 and 2023, respectively. The difference between the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2024 is primarily due to the relationship between pre-tax results and non-taxable permanent differences. The difference in the U.S. federal statutory rate and the effective tax rate for the three months ended March 31, 2023 was primarily due to the impact of federal tax credits and the relationship between 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 sale are recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. We received proceeds of $6.3 million for each of the three months ended March 31, 2024 and 2023, and subsequently repaid $6.6 million and $7.0 million, respectively, under these sell/buy transactions. Accounting Pronouncements - Not Yet Adopted In November 2023, Accounting Standards Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures” was issued. ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This aims to provide more decision-useful information to stakeholders by giving a clearer picture of the costs incurred by each reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures. In December 2023, ASU 2023-09, “Improvements to Income Tax Disclosures” was issued. ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures.
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Description of Business and Summary of Significant Accounting Policies Description of Business: References herein to HF Sinclair Corporation (“HF Sinclair”) include HF Sinclair and its consolidated subsidiaries. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions. References herein to HF Sinclair “we,” “our,” “ours” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier Corporation (“HollyFrontier”) and its consolidated subsidiaries and do not include Hippo Holding LLC (now known as Sinclair Holding LLC), the parent company of Sinclair Oil LLC, Sinclair Transportation Company LLC or their respective consolidated subsidiaries (collectively, the “Acquired Sinclair Businesses”). References herein to HF Sinclair “we,” “our,” “ours” and “us” with respect to time periods from and after March 14, 2022 include the operations of the Acquired Sinclair Businesses. Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to December 31, 2023 includes the combined business operations of HollyFrontier and the Acquired Sinclair Businesses. References herein to Holly Energy Partners, L.P. (“HEP”) with respect to time periods prior to the closing of the HEP Merger Transaction (as defined below) on December 1, 2023 refer to HEP and its consolidated subsidiaries. We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. We provide petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry. 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 and we supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. We produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries. On December 1, 2023, pursuant to the Agreement and Plan of Merger dated as of August 15, 2023 (the “Merger Agreement”) by and among HEP, HF Sinclair, Navajo Pipeline Co., L.P., a Delaware limited partnership and an indirect wholly owned subsidiary of HF Sinclair (“HoldCo”), Holly Apple Holdings LLC, a Delaware limited liability company and a wholly owned subsidiary of HoldCo (“Merger Sub”), HEP Logistics Holdings, L.P., a Delaware limited partnership and the general partner of HEP (“HLH”), and Holly Logistic Services, L.L.C., a Delaware limited liability company and the general partner of HLH, Merger Sub merged with and into HEP, with HEP surviving as an indirect, wholly owned subsidiary of HF Sinclair (the “HEP Merger Transaction”). Under the terms of the Merger Agreement, each outstanding common unit representing a limited partner interest in HEP (an “HEP common unit”), other than the HEP common units already owned by HF Sinclair and its subsidiaries, was converted into the right to receive 0.315 shares of HF Sinclair common stock and $4.00 in cash, without interest. The Merger Agreement consideration totaled $267.6 million in cash and resulted in the issuance of 21,072,326 shares of HF Sinclair common stock from treasury stock. The HEP Merger Transaction was accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation.” Since we controlled HEP both before and after the HEP Merger Transaction, the changes in our ownership interest in HEP resulting from the HEP Merger Transaction were accounted for as an equity transaction, and no gain or loss was recognized in our Consolidated Statements of Income. The tax effects of the HEP Merger Transaction were recorded as adjustments to deferred income taxes and additional capital consistent with ASC 740, “Income Taxes.” For a description of our existing indebtedness, as well as changes thereto associated with the HEP Merger Transaction, see Note 13. In connection with the HEP Merger Transaction, for the year ended December 31, 2023, we incurred $23.5 million in incremental direct acquisition and integration costs that principally relate to legal, advisory and other professional fees and are presented as selling, general and administrative expenses in our statements of income. On May 4, 2021, HollyFrontier Puget Sound Refining LLC (now known as HF Sinclair Puget Sound Refining LLC), a wholly owned subsidiary of HollyFrontier, entered into a sale and purchase agreement with Equilon Enterprises LLC d/b/a Shell Oil Products US (“Shell”) to acquire Shell’s Puget Sound refinery and related assets, including the on-site cogeneration facility and related logistics assets (the “Puget Sound Refinery”). The acquisition closed on November 1, 2021. See Note 2 for additional information. On April 27, 2021, our wholly owned subsidiary, 7037619 Canada Inc., entered into a contract for sale of real property in Mississauga, Ontario for base consideration of $98.8 million, or CAD 125 million. The transaction closed on September 15, 2021, and we recorded a gain on sale of assets totaling $86.0 million for the year ended December 31, 2021, which was recognized in “Gain on sale of assets and other” on our consolidated statements of income. During the first quarter of 2021, we initiated a restructuring within our Lubricants & Specialties segment. As a result of this restructuring, we recorded $7.8 million in employee severance costs for the year ended December 31, 2021, which were recognized primarily as selling, general and administrative expenses in our Lubricants & Specialties segment. In the third quarter of 2020, we permanently ceased petroleum refining operations at our Cheyenne, Wyoming refinery (the “Cheyenne Refinery”) and subsequently began converting certain assets at our Cheyenne Refinery to renewable diesel production. In connection with the cessation of petroleum refining operations at our Cheyenne Refinery, we recognized $1.7 million and $25.8 million in decommissioning expense for the years ended December 31, 2022 and 2021, respectively. We also recognized $1.0 million in employee severance costs for the year ended December 31, 2021. These charges were all recognized in operating expenses in our Corporate and Other segment. Principles of Consolidation: Our consolidated financial statements include our accounts and the accounts of partnerships and joint ventures that we control through an ownership interest greater than 50% or through a controlling financial interest with respect to variable interest entities. All significant intercompany transactions and balances have been eliminated. Variable Interest Entities: A variable interest entity (“VIE”) is a legal entity whose equity owners do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the equity holders lack the power, through voting rights, to direct the activities that most significantly impact the entity's financial performance, the obligation to absorb the entity's expected losses or rights to expected residual returns. See Note 4 for additional information. Use of Estimates: The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash Equivalents: We consider all highly liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost, which approximates market value and are primarily invested in highly-rated instruments issued by government or municipal entities with strong credit standings. Balance Sheet Offsetting: We purchase and sell inventories of crude oil with certain same-parties that are net settled in accordance with contractual net settlement provisions. Our policy is to present such balances on a net basis since it presents our accounts receivables and payables consistent with our contractual settlement provisions. Accounts Receivable: Our accounts receivable primarily consist of amounts due from customers that are primarily from sales of refined products and renewable diesel. 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 expected credit losses 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 expected credit losses when an account is deemed uncollectible. Our allowance for expected credit losses was $3.2 million at December 31, 2023 and $7.7 million at December 31, 2022. Accounts receivable attributable to crude oil resales generally represent the sale of excess crude oil to other purchasers and / or users in cases when our crude oil supplies are in excess of our immediate needs as well as certain reciprocal buy / sell exchanges of crude oil. At times we enter into such buy / sell exchanges to facilitate the delivery of quantities to certain locations. In many cases, we enter into net settlement agreements relating to the buy / sell arrangements, which may mitigate credit risk. 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. Inventories related to our renewable business are stated at the lower of cost, using the LIFO method for feedstock and unfinished and finished renewable products, or market. Cost, consisting of raw material, transportation and conversion costs, is determined using the LIFO inventory valuation methodology and market is determined using current replacement costs. Under the LIFO method, the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. 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 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 sheets. Finance leases are included in “Properties, plants and equipment, at cost” and “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheets. 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 sheets. 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, as a lessor, we do not separate the non-lease (service) component in contracts in which the lease component is the dominant component. We treat these combined components as an operating lease. We bifurcate the consideration received for sales-type lease contracts between lease and service revenue, with the service component accounted for within the scope of ASC 606, “Revenue from Contracts with Customers”. Derivative Instruments: All derivative instruments are recognized as either assets or liabilities on our consolidated balance sheets and are measured at fair value. Changes in the derivative instrument's fair value are recognized in earnings unless specific hedge accounting criteria are met. Cash flows from all our derivative activity are reported in the operating section on our consolidated statements of cash flows. See Note 14 for additional information. Properties, Plants and Equipment: Properties, plants and equipment are stated at cost. Depreciation is provided by the straight-line method over the estimated useful lives of the assets, primarily 15 to 32 years for refining, pipeline and terminal facilities, 10 to 40 years for buildings and improvements, 5 to 30 years for other fixed assets and 5 years for vehicles. Asset Retirement Obligations: We record legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and / or the normal operation of long-lived assets. The fair value of the estimated cost to retire a tangible long-lived asset is recorded as a liability with the associated retirement costs capitalized as part of the asset's carrying amount in the period in which it is incurred and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, we record the liability when sufficient information is available to estimate the liability's fair value. Certain of our refining assets have no recorded liability for asset retirement obligations since the timing of any retirement and related costs are currently indeterminable. Our asset retirement obligations were $64.6 million and $61.8 million at December 31, 2023 and 2022, respectively, which are included in “Other long-term liabilities” on our consolidated balance sheets. Accretion expense was insignificant for the years ended December 31, 2023, 2022 and 2021. Asset retirement obligations assumed in the Sinclair Transactions, as defined in Note 2, were $6.2 million. Intangibles, Goodwill and Long-lived Assets: Intangible assets are assets (other than financial assets) that lack physical substance, and goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill acquired in a business combination and intangibles with indefinite useful lives are not amortized, whereas intangible assets with finite useful lives are amortized on a straight-line basis. Goodwill and intangible assets that are not subject to amortization are tested for impairment 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 carrying amount of the reporting unit is greater than its fair value, 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. The carrying amount of our intangible assets and goodwill may fluctuate from period to period due to the effects of foreign currency translation adjustments on goodwill and intangible assets assigned to our Lubricants & Specialties segment. For purposes of long-lived asset impairment evaluation, we group our long-lived assets as follows: (i) our refinery asset groups, which include certain logistics assets, (ii) our renewables products asset groups, (iii) our Lubricants & Specialties asset groups, (iv) our Marketing assets and (v) our Midstream asset groups, which is comprised of logistics 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 such 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. See Note 11 for additional information regarding goodwill and intangible assets. Equity Method Investments: We account for investments in which we have a noncontrolling interest, yet have significant influence over the entity, using the equity method of accounting, whereby we record our pro-rata share of earnings of these companies and contributions to and distributions from the joint ventures as adjustments to our investment balance. The following table summarizes our recorded investment compared to its share of underlying equity for each of its investee. The differences are being amortized as adjustments to our pro-rata share of earnings in the joint ventures.
Revenue Recognition: Revenues on refined product, branded fuel sales, renewable diesel 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 specialties 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 specialties 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. Our midstream business recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, we have certain throughput agreements that specify minimum volume requirements, whereby we bill 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, we recognize 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. We recognize the service portion of these deficiency payments as revenue when we do 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. Cost Classifications: Costs of products sold include the cost of crude oil, other feedstocks, blendstocks and purchased finished products, inclusive of transportation costs. We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as cost of products sold. Additionally, we enter into buy / sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at cost. Operating expenses include direct costs of labor, maintenance materials and services, utilities and other direct operating costs. Selling, general and administrative expenses include compensation, professional services and other support costs. Deferred Maintenance Costs: Our refinery units require regular major maintenance and repairs which are commonly referred to as “turnarounds.” Catalysts used in certain refinery processes also require regular “change-outs.” The required frequency of the maintenance varies by unit and by catalyst, but generally occurs no less than once every five years. Turnaround costs are deferred and amortized over the period until the next scheduled turnaround. Other repairs and maintenance costs are expensed when incurred. Deferred turnaround and catalyst amortization expense was $238.7 million, $159.3 million and $136.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. Environmental Costs: Environmental costs are charged to 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 clean-up 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. 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. We accrue for contingencies when it is probable that a loss has occurred and when the amount of that loss is reasonably estimable. 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. 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. We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of such intercompany financing amounts to functional currencies are recorded as gains or losses as a component of other income (expense) on our consolidated statements of income. Such adjustments are not recorded to the Lubricants & Specialties segment operations, but to Corporate and Other. See Note 20 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. We account for U.S. tax on global intangible low-taxed income in the period in which it is incurred. Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter. Inventory Repurchase Obligations: We periodically enter into same-party sell / buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell / buy transactions are accounted for as inventory repurchase obligations under which proceeds received under the initial sell is recognized as inventory repurchase obligations that are subsequently reversed when the inventories are repurchased. For the years ended December 31, 2023, 2022 and 2021, we received proceeds of $25.7 million, $42.1 million and $43.5 million, respectively, and subsequently repaid $27.4 million, $42.8 million and $45.4 million, respectively, under these sell / buy transactions. Accounting Pronouncements - Recently Adopted In October 2021, Accounting Standards Update (“ASU”) 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” was issued requiring that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers.” We adopted this standard effective January 1, 2023, but did not have a business combination under the scope of ASC 805, “Business Combinations” for the year ended December 31, 2023. Accounting Pronouncements - Not Yet Adopted In November 2023, ASU 2023-07, “Improvements to Reportable Segment Disclosures” was issued. ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This aims to provide more decision-useful information to stakeholders by giving a clearer picture of the costs incurred by each reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures. In December 2023, ASU 2023-09, “Improvements to Income Tax Disclosures” was issued. ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures.
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Cushing Connect Joint Venture | Cushing Connect Joint Venture In 2019, HEP Cushing LLC (“HEP Cushing”), then a wholly owned subsidiary of HEP and now a wholly owned subsidiary of HF Sinclair, and Plains Marketing, L.P., a wholly owned subsidiary of Plains All American Pipeline, L.P. (“Plains”) formed a 50/50 joint venture, Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), for (i) the development, construction, ownership and operation of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that connects 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” and together with Cushing Connect and the Cushing Connect Pipeline, the “Cushing Connect Joint Venture”). The Cushing Connect Terminal was fully in service beginning in April 2020, and the Cushing Connect Pipeline was placed in service during the third quarter of 2021. Long-term commercial agreements have been entered into to support the Cushing Connect assets. Cushing Connect entered into a contract with an affiliate of HEP, now a subsidiary of HF Sinclair, to manage the 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 was generally shared proportionately among the partners. However, HEP was solely responsible for any Cushing Connect Pipeline construction costs that exceeded the budget by more than 10%. HEP’s share of the cost of the Cushing Connect Terminal contributed by Plains and Cushing Connect Pipeline construction costs was approximately $74.0 million. Cushing Connect and its two subsidiaries, Cushing Connect Pipeline and Cushing Connect Terminal, are variable interest entities (“VIE”) as defined under GAAP. A VIE is a legal entity whose equity owners do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the equity holders lack the power, through voting rights, to direct the activities that most significantly impact the entity’s financial performance, the obligation to absorb the entity’s expected losses or rights to expected residual returns. Cushing Connect and its two subsidiaries are VIEs because they did not originally have sufficient equity at risk to finance their activities without additional financial support. We are the primary beneficiary of two of these entities as HEP constructed and operates the Cushing Connect Pipeline, and we have more ability to direct the activities that most significantly impact the financial performance of Cushing Connect and Cushing Connect Pipeline. Therefore, we consolidate these two entities. We are not the primary beneficiary of Cushing Connect Terminal, which we account for using the equity method of accounting. Our maximum exposure to loss as a result of our involvement with Cushing Connect Terminal is not expected to be material due to the long-term terminalling agreements in place to support operations. With the exception of the assets of HEP Cushing, creditors of the Cushing Connect Joint Venture legal entities have no recourse to our assets. Any recourse to HEP Cushing would be limited to the extent of HEP Cushing’s assets, which other than its investment in the Cushing Connect Joint Venture, are not significant. Furthermore, our creditors have no recourse to the assets of the Cushing Connect Joint Venture legal entities. The most significant assets of Cushing Connect and Cushing Connect Pipeline that are available to settle only their obligations, along with their most significant liabilities for which their creditors do not have recourse to our general credit, were:
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Cushing Connect Joint Venture In 2019, HEP Cushing LLC, then a wholly owned subsidiary of HEP and now a wholly owned subsidiary of HF Sinclair, and Plains Marketing, L.P., a wholly owned subsidiary of Plains All American Pipeline, L.P. (“Plains”) formed a 50/50 joint venture, Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), for (i) the development, construction, ownership and operation of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that connects 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” and together with Cushing Connect and the Cushing Connect Pipeline, the “Cushing Connect Joint Venture”). The Cushing Connect Terminal was fully in-service beginning in April 2020, and the Cushing Connect Pipeline was placed in service during the third quarter of 2021. Long-term commercial agreements have been entered into to support the Cushing Connect assets. Cushing Connect entered into a contract with an affiliate of HEP, now a subsidiary of HF Sinclair, to manage the 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 was generally shared proportionately among the partners. However, HEP was solely responsible for any Cushing Connect Pipeline construction costs that exceeded the budget by more than 10%. HEP’s share of the cost of the Cushing Connect Terminal contributed by Plains and Cushing Connect Pipeline construction costs was approximately $74.0 million. Cushing Connect and its two subsidiaries, Cushing Connect Pipeline and Cushing Connect Terminal are each VIEs as defined under GAAP. A VIE is a legal entity whose equity owners do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the equity holders lack the power, through voting rights, to direct the activities that most significantly impact the entity's financial performance, the obligation to absorb the entity's expected losses or rights to expected residual returns. Cushing Connect and its two subsidiaries are each VIE’s because they did not originally have sufficient equity at risk to finance their activities without additional financial support. We are the primary beneficiary of two of these entities as HEP constructed and operates the Cushing Connect Pipeline, and we have more ability to direct the activities that most significantly impact the financial performance of Cushing Connect and Cushing Connect Pipeline. Therefore, we consolidate these two entities. We are not the primary beneficiary of Cushing Connect Terminal, which we account for using the equity method of accounting. Our maximum exposure to loss as a result of our involvement with Cushing Connect Terminal is not expected to be material due to the long-term terminalling agreements in place to support operations. With the exception of the assets of HEP Cushing, creditors of the Cushing Connect Joint Venture legal entities have no recourse to our assets. Any recourse to HEP Cushing would be limited to the extent of HEP Cushing's assets, which other than its investment in Cushing Connect Joint Venture, are not significant. Furthermore, our creditors have no recourse to the assets of the Cushing Connect Joint Venture legal entities. The most significant assets of Cushing Connect and Cushing Connect Pipeline that are available to settle only their obligations, along with their most significant liabilities for which their creditors do not have recourse to our general credit, were:
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Revenues |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Substantially all revenue-generating activities relate to sales of refined products, branded fuel, renewable diesel and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to our logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties. Disaggregated revenues were as follows:
(1)Transportation fuels revenues are attributable to our Refining segment’s wholesale marketing of gasoline, diesel and jet fuel. (2)Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids. (3)Revenues from asphalt, fuel oil and other products include amounts attributable to our Refining and Lubricants & Specialties segments of $422.0 million and $61.3 million, respectively, for the three months ended March 31, 2024, and $386.8 million and $53.6 million, respectively, for the three months ended March 31, 2023. (4)Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries. (5)Renewable diesel revenues are attributable to our Renewables segment. (6)Marketing revenues consist primarily of branded gasoline and diesel fuel. (7)Other revenues are principally attributable to our Refining segment. Our consolidated balance sheets reflect contract liabilities related to unearned revenues attributable to future service obligations under our third-party transportation agreements and production agreements from our Sonneborn operations. The following table presents changes to our contract liabilities:
As of March 31, 2024, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialties to be sold ratably at market prices through 2032. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under ASC 606-10-50-14A. Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:
Additionally, we have long-term contracts with third-party customers that specify minimum volumes of product to be transported through our pipelines and terminals that result in fixed-minimum annual revenues through 2033. Annual minimum revenues attributable to our third-party contracts as of March 31, 2024, are presented below:
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Revenues Substantially all revenue-generating activities relate to sales of refined product, branded fuel, renewable diesel and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties. Disaggregated revenues were as follows:
(1)Transportation fuels revenues are attributable to our Refining segment wholesale marketing 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 & Specialties segments of $1,928.6 million and $238.4 million, respectively, for the year ended December 31, 2023. For the year ended December 31, 2022 such revenues attributable to our Refining and Lubricants & Specialties were $1,827.3 million and $314.8 million, respectively. For the year ended December 31, 2021 such revenue attributable to our Refining and Lubricants & Specialties segments were $724.3 million and $224.3 million, respectively. (4)Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries. (5)Renewable diesel revenues are attributable to our Renewables segment. (6)Marketing segment revenues consist primarily of branded gasoline and diesel fuel. (7)Other revenues are principally attributable to our Refining segment. Our consolidated balance sheets reflect contract liabilities related to unearned revenues attributable to future service obligations under our third-party transportation agreements and production agreements from our Sonneborn operations. The following table presents changes to contract liabilities:
As of December 31, 2023, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialties to be sold ratably at market prices through 2032. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under ASC 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, which include branded sales volumes assumed upon our acquisition of the Acquired Sinclair Businesses:
Additionally, we have long-term contracts with third-party customers that specify minimum volumes of product to be transported through our pipelines and terminals that result in fixed-minimum annual revenues through 2033. Annual minimum revenues attributable to our third-party contracts as of December 31, 2023 are presented below:
For the years ended December 31, 2023, 2022 and 2021, we had one customer, Shell, together with certain of its affiliates, that accounted for 10% or more of our total annual revenues at approximately 12%, 15% and 13%, respectively, which were primarily generated through our Refining segment operations.
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Fair Value Measurements |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements 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 March 31, 2024 and December 31, 2023 were as follows:
(1)Represent obligations for RINs credits for which we did not have sufficient quantities at March 31, 2024 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements. Level 1 Fair Value Measurements Our New York Mercantile Exchange (“NYMEX”) futures contracts are exchange-traded and are measured and recorded at fair value using quoted market prices, a Level 1 input. Level 2 Fair Value Measurements Derivative instruments consisting of foreign currency forward contracts, commodity price swaps, commodity collar contracts 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. The fair value of the commodity collar contracts is based on forward natural gas prices. The fair value of the forward sales and purchase contracts is computed using quoted forward commodity prices. The fair value of foreign currency forward contracts is based on values provided by a third party, which were derived using market quotes for similar type instruments, a Level 2 input. RINs credit obligations are valued based on current market prices.
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Fair Value Measurements 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 receivable and credit obligations at December 31, 2023 and 2022 were as follows:
(1)REH Company was financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing of the Sinclair Transactions. See Note 2 for additional information on RINs credit obligations assumed in the Sinclair Transactions. Level 1 Fair Value Measurements Our New York Mercantile Exchange (“NYMEX”) futures contracts are exchange traded and are measured and recorded at fair value using quoted market prices, a Level 1 input. Level 2 Fair Value Measurements Derivative instruments consisting of foreign currency forward contracts, commodity price swaps, commodity collar contracts 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. The fair value of the commodity collar contracts is based on forward natural gas prices. The fair value of the forward sales and purchase contracts are computed using quoted forward commodity 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 years ended December 31, 2022 and 2021, we recognized assets and liabilities based on fair value measurements for the Sinclair Transactions and the acquisition of Puget Sound Refinery (see Note 2). 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.
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated as net income attributable to HF Sinclair stockholders, adjusted for participating securities’ share in earnings divided by the average number of shares of common stock outstanding. Diluted earnings per share includes the incremental shares resulting from certain share-based awards. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HF Sinclair stockholders:
(1)Unvested restricted stock unit awards and unvested performance share units that settle in HF Sinclair common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HF Sinclair. Participating earnings represent the distributed and undistributed earnings of HF Sinclair attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so.
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Earnings Per Share Basic earnings per share is calculated as net income attributable to HF Sinclair stockholders, adjusted for participating securities’ share in earnings divided by the average number of shares of common stock outstanding. Diluted earnings per share includes the incremental shares resulting from certain share-based awards. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HF Sinclair stockholders:
(1)Unvested restricted stock unit awards and unvested performance share units that settle in HF Sinclair common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HF Sinclair. Participating earnings represent the distributed and undistributed earnings of HF Sinclair attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so.
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Stock-Based Compensation |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation We have a principal share-based compensation plan, the HF Sinclair Corporation Amended and Restated 2020 Long Term Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of unrestricted and restricted stock, restricted stock units, other stock-based awards, stock options, performance awards, substitute awards, cash awards and stock appreciation rights. The restricted stock unit awards generally vest over a period of to three years. Upon vesting, restrictions on the restricted stock units lapse at which time they convert to common shares or cash. The performance share units generally vest over a period of three years and are payable in stock or cash upon meeting certain financial and performance criteria. The number of shares ultimately issued or cash paid for the performance share units can range from zero to 200% of target award amounts. The holders of unvested restricted stock units and performance share units have the right to receive dividends. We also have a stock compensation deferral plan that allows non-employee directors to defer settlement of vested stock granted under our share-based compensation plan. The compensation cost for these plans was $5.8 million and $3.3 million for the three months ended March 31, 2024 and 2023, respectively. Additionally, prior to the HEP Merger Transaction, HEP maintained an equity-based compensation plan for the General Partner’s non-employee directors and certain executives and employees. Compensation costs attributable to HEP’s equity-based compensation plan was $0.4 million for the three months ended March 31, 2023. A summary of restricted stock units and performance share units activity during the three months ended March 31, 2024, is presented below:
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Stock-Based Compensation We have a principal share-based compensation plan (the HF Sinclair Corporation Amended and Restated 2020 Long Term Incentive Plan, the “2020 Plan”). The 2020 Plan provides for the grant of unrestricted and restricted stock, restricted stock units, other stock-based awards, stock options, performance awards, substitute awards, cash awards and stock appreciation rights. Subject to adjustment for certain events, an aggregate of 6,368,930 of these awards may be issued pursuant to awards granted under the 2020 Plan. We also have a stock compensation deferral plan which allows non-employee directors to defer settlement of vested stock granted under our share-based compensation plan. 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. Share-based awards paid in cash upon vesting are accounted for as liability awards and recorded at fair value at the end of each reporting period with a mark-to-mark adjustment recognized in earnings. The stock-based compensation expense and associated tax benefit were as follows:
Additionally, prior to the HEP Merger Transaction, HEP maintained an equity-based compensation plan for Holly Logistic Services, L.L.C.'s non-employee directors and certain executives and employees (the “HEP LTIP”). Compensation cost attributable to HEP’s equity-based compensation plan was $1.5 million, $1.9 million and $2.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. In connection with the HEP Merger Transaction, on December 4, 2023, HF Sinclair registered additional shares of HF Sinclair common stock under the 2020 Plan pursuant to General Instruction E of Form S-8, which authorized the 2020 Plan’s assumption of authorized but unissued HEP common units remaining under the HEP LTIP at the time of the HEP Merger Transaction, adjusted to reflect the applicable exchange rate pursuant to the HEP Merger Transaction. Restricted Stock Units Under the 2020 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 to three years. 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 year ended December 31, 2023 is presented below:
For the years ended December 31, 2023, 2022 and 2021, restricted stock units vested having a grant date fair value of $21.3 million, $26.5 million and $28.4 million, respectively. For the years ended December 31, 2022 and 2021, we granted restricted stock units having a weighted average grant date fair value of $59.41 and $33.95, respectively. As of December 31, 2023, there was $28.9 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 1.5 years. For the years ended December 31, 2023, 2022 and 2021, we paid $3.9 million, $5.8 million and $3.4 million, respectively, in cash equal to the value of the stock award on the vest date to certain employees to settle 71,589, 96,005 and 105,459 restricted stock units, respectively. Performance Share Units Under the 2020 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 HF Sinclair 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 year ended December 31, 2023 is presented below:
For the year ended December 31, 2023, we issued 375,376 shares of common stock, representing a payout of up to 125% on vested performance share units having a grant date fair value of $7.3 million. For the years ended December 31, 2022 and 2021, we issued common stock upon the vesting of the performance share units having a grant date fair value of $6.2 million and $4.5 million, respectively. As of December 31, 2023, there was $20.1 million of total unrecognized compensation cost related to non-vested performance share units. That cost is expected to be recognized over a weighted-average period of 2.2 years. For the years ended December 31, 2023 and 2022, we paid $1.2 million and $0.7 million, respectively, in cash equal to the value of the stock award on the vest date to certain employees to settle 23,587 and 12,108 performance share units, respectively.
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Inventories |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of the following components:
(1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude. (2)Finished products include gasolines, jet fuels, diesels, renewable diesels, lubricants, asphalts, LPG’s and residual fuels. (3)Process chemicals include additives and other chemicals. (4)Includes RINs. At March 31, 2024, the LIFO value of our Refining segment inventories was equal to cost. The December 31, 2023, market reserve of $220.6 million reversed resulting in a decrease to cost of products sold totaling $220.6 million for the three months ended March 31, 2024. Our Renewables segment inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $112.2 million and $111.0 million at March 31, 2024 and December 31, 2023, respectively. A new market reserve of $112.2 million as of March 31, 2024, was based on market conditions and prices at that time. The effect of the change in the lower of cost or market reserve was an increase to cost of products sold totaling $1.2 million for the three months ended March 31, 2024, and an increase to cost of products sold totaling $47.6 million for the three months ended March 31, 2023.
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Inventories Inventories consist of the following components:
(1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude. (2)Finished products include gasolines, jet fuels, diesels, renewable diesels, lubricants, asphalts, LPG’s and residual fuels. (3)Process chemicals include additives and other chemicals. (4)Includes RINs. Our Refining segment inventories that are valued at the lower of LIFO cost or market reflect a new market reserve of $220.6 million that was established as of December 31, 2023 based on market conditions and prices at that time. The effect of the change in the lower of cost or market reserve was an increase to cost of products sold totaling $220.6 million for the year ended December 31, 2023. The excess replacement cost over the LIFO value of our Refining segment inventories was $39.0 million at December 31, 2022. For the year ended December 31, 2021, we recorded a decrease to cost of products sold of $318.9 million due to the effect of the change in the lower of cost or market reserve recorded on our Refining segment inventories at that time. Our Renewables segment inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $111.0 million and $61.2 million at December 31, 2023 and 2022, respectively. A new market reserve of $111.0 million as of December 31, 2023 was based on market conditions and prices at that time. The effect of the change in the lower of cost or market reserve was an increase of cost of products sold totaling $49.9 million and $52.4 million for the years ended December 31, 2023 and 2022, respectively.
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Environmental |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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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, environmental remediation, cleanup and other obligations are 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 expenses of $1.8 million and $13.3 million for the three months ended March 31, 2024 and 2023, respectively, for environmental remediation obligations. The accrued environmental liability reflected on our consolidated balance sheets was $191.6 million and $195.4 million at March 31, 2024 and December 31, 2023, respectively, of which $164.4 million and $161.4 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. 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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Environmental We expensed $26.5 million, $13.4 million and $7.8 million for the years ended December 31, 2023, 2022 and 2021, respectively, for environmental remediation obligations. The accrued environmental liability reflected on our consolidated balance sheets was $195.4 million and $192.3 million at December 31, 2023 and 2022, respectively, of which $161.4 million and $170.0 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. Accrued environmental liabilities assumed in the Sinclair Transactions were $72.2 million at the acquisition date and an associated receivable from third parties of $21.5 million. 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 |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt HF Sinclair Credit Agreement We have a $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the “HF Sinclair Credit Agreement”). The HF Sinclair 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 March 31, 2024, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $0.3 million under the HF Sinclair Credit Agreement. Indebtedness under the HF Sinclair Credit Agreement bears interest, at our option, based on the currency of such indebtedness at either (a) a base rate equal to the highest of the Federal Funds Effective Rate (as defined in the HF Sinclair Credit Agreement) plus 0.5%, Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for a one-month interest period plus 1% and the prime rate (as publicly announced from time to time by the administrative agent), as applicable, plus an applicable margin (ranging from 0.25% to 1.125%), (b) the CDOR Rate (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%), (c) the Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) or (d) the Daily Simple RFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%). In each case, the applicable margin is based on HF Sinclair’s debt rating assigned by Standard & Poor’s Financial Services LLC and Moody’s Investors Service, Inc. HEP Credit Agreement Our wholly owned subsidiary, HEP, has a $1.2 billion senior secured revolving credit facility maturing in July 2025 (the “HEP Credit Agreement”). In connection with the consummation of the HEP Merger Transaction, we amended the HEP Credit Agreement to, among other things, (a) provide a guaranty from us and terminate all guaranties from subsidiaries of HEP, (b) amend the definition of “Investment Grade Rating” (as defined in the HEP Credit Agreement) to reference the credit rating of our senior unsecured indebtedness, (c) eliminate the requirement to deliver separate audited and unaudited financial statements for HEP and its subsidiaries and only provide certain segment-level reporting for HEP with any compliance certificate delivered in accordance with the HEP Credit Agreement and (d) amend certain covenants to eliminate certain restrictions on (i) amendments to intercompany contracts, (ii) transactions with us and our subsidiaries and (iii) investments in and contributions, dividends, transfers and distributions to us and our subsidiaries. The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general corporate purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has an accordion feature that allows us to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. At March 31, 2024, we were in compliance with all of its covenants, had outstanding borrowings of $394.0 million and no outstanding letters of credit under the HEP Credit Agreement. Prior to the Investment Grade Date (as defined in the HEP Credit Agreement), indebtedness under the HEP Credit Agreement bears interest, at our option, at either (a) the Alternate Base Rate (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 0.75% to 1.75%) or (b) Adjusted Term SOFR (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 1.75% to 2.75%). In each case, the applicable margin is based upon the Total Leverage Ratio (as defined in the HEP Credit Agreement). The weighted average interest rate in effect under the HEP Credit Agreement on our borrowings was 7.05% as of March 31, 2024. Senior Notes At March 31, 2024, our senior notes consisted of the following: •$202.900 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HollyFrontier 5.875% Senior Notes”), •$74.966 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HollyFrontier 4.500% Senior Notes” and, collectively, with the HollyFrontier 5.875% Senior Notes, the “HollyFrontier Senior Notes”), •$797.100 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HF Sinclair 5.875% Senior Notes”), •$325.034 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HF Sinclair 4.500% Senior Notes”), •$498.879 million in aggregate principal amount of 5.000% senior notes maturing February 2028 (the “HF Sinclair 5.000% Senior Notes”), •$399.875 million in aggregate principal amount of 6.375% senior notes maturing April 2027 (the “HF Sinclair 6.375% Senior Notes” and, collectively with the HF Sinclair 5.875% Senior Notes, HF Sinclair 4.500% Senior Notes and HF Sinclair 5.000% Senior Notes, the “HF Sinclair Senior Notes”), •$1.121 million in aggregate principal amount of 5.000% senior notes maturing February 2028 (the “HEP 5.000% Senior Notes”), and •$0.125 million in aggregate principal amount of 6.375% senior notes maturing April 2027 (the “HEP 6.375% Senior Notes” and, collectively with the HEP 5.000% Senior Notes, the “HEP Senior Notes”). Our unsecured senior notes and unsubordinated obligations rank equally with all future unsecured and unsubordinated indebtedness. Further, we may from time to time seek to retire some or all of our outstanding debt or debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and will depend on prevailing market conditions, our liquidity requirements and other factors. HF Sinclair Financing Arrangements 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 cash. 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 current leases mature in one year or less. 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 $34.3 million and $37.0 million at March 31, 2024 and December 31, 2023, respectively, and are included in “Accrued liabilities” on our consolidated balance sheets. See Note 4 for additional information on Level 2 inputs. HF Sinclair may, from time to time, issue letters of credit pursuant to uncommitted letters of credit facilities with its lenders. At March 31, 2024, there were no letters of credit outstanding under such credit facilities. The carrying amounts of long-term debt are as follows:
The fair values of the senior notes are as follows:
These fair values are based on a Level 2 input. See Note 4 for additional information on Level 2 inputs. We capitalized $0.7 million and $1.2 million for the three months ended March 31, 2024 and 2023, respectively, of interest attributable to construction projects.
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Debt HF Sinclair Credit Agreement We have a $1.65 billion senior unsecured revolving credit facility maturing in April 2026 (the “HF Sinclair Credit Agreement”). The HF Sinclair 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 December 31, 2023, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $0.3 million under the HF Sinclair Credit Agreement. Indebtedness under the HF Sinclair Credit Agreement bears interest, at our option based on the currency of such indebtedness at either (a) a base rate equal to the highest of the Federal Funds Effective Rate (as defined in the HF Sinclair Credit Agreement) plus half of 1%, Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) for a one-month interest period plus 1% and the prime rate (as publicly announced from time to time by the administrative agent), as applicable, plus an applicable margin (ranging from 0.25% - 1.125%), (b) the CDOR Rate (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%), (c) the Spread Adjusted Term SOFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) or (d) the Daily Simple RFR (as defined in the HF Sinclair Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%). In each case, the applicable margin is based on HF Sinclair's debt rating assigned by Standard & Poor’s Financial Services LLC and Moody’s Investors Service, Inc. HEP Credit Agreement Our wholly owned subsidiary, HEP, has a $1.2 billion senior secured revolving credit facility maturing in July 2025 (the “HEP Credit Agreement”). In connection with the consummation of the HEP Merger Transaction, we amended the HEP Credit Agreement to, among other things, (a) provide a guaranty from us and terminated all guaranties from subsidiaries of HEP, (b) amended the definition of “Investment Grade Rating” (as defined in the HEP Credit Agreement) to reference the credit rating of our senior unsecured indebtedness, (c) eliminated the requirement to deliver separate audited and unaudited financial statements for HEP and its subsidiaries and only provide certain segment-level reporting for HEP with any compliance certificate delivered in accordance with the HEP Credit Agreement and (d) amended certain covenants to eliminate certain restrictions on (i) amendments to intercompany contracts, (ii) transactions with us and our subsidiaries and (iii) investments in and contributions, dividends, transfers and distributions to us and our subsidiaries. The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general corporate purposes. It is also available to fund letters of credit up to a $50 million sub-limit and has an accordion feature that allows us to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. At December 31, 2023, we were in compliance with all of its covenants, had outstanding borrowings of $455.5 million and no outstanding letters of credit under the HEP Credit Agreement. Prior to the Investment Grade Date (as defined in the HEP Credit Agreement), indebtedness under the HEP Credit Agreement bears interest, at our option, at either (a) the Alternate Base Rate (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 0.75% - 1.75%) or (b) Adjusted Term SOFR (as defined in the HEP Credit Agreement) plus an applicable margin (ranging from 1.75% - 2.75%). In each case, the applicable margin is based upon the Total Leverage Ratio (as defined in the HEP Credit Agreement). The weighted average interest rate in effect under the HEP Credit Agreement on our borrowings was 7.08% and 6.32% as of December 31, 2023 and 2022, respectively. HEP Senior Notes Exchange On December 4, 2023, we completed our offers to exchange any and all outstanding HEP 5.000% senior notes maturing February 2028 (the “HEP 5.000% Senior Notes”) and HEP 6.375% senior notes maturing April 2027 (the “HEP 6.375% Senior Notes” and, collectively with the HEP 5.000% Senior Notes, the “HEP Senior Notes”) for the HF Sinclair 5.000% senior notes maturing February 2028 (the “HF Sinclair 5.000% Senior Notes”) and the HF Sinclair 6.375% senior notes maturing April 2027 (the “HF Sinclair 6.375% Senior Notes”, and, collectively with the HF Sinclair 5.000% Senior Notes, the “New HF Sinclair Senior Notes”) to be issued by HF Sinclair with registration rights and cash. In connection with the exchange offers, HEP amended the indenture governing the HEP Senior Notes to eliminate (i) substantially all of the restrictive covenants, (ii) certain of the events which may lead to an “Event of Default”, (iii) the SEC reporting covenant and (iv) the requirement of HEP to offer to purchase the HEP Senior Notes upon a change of control. The New HF Sinclair Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness. Each series of the New HF Sinclair Senior Notes has the same interest rate, interest payment dates, maturity date and redemption terms as the corresponding series of HEP Senior Notes. The New HF Sinclair Senior Notes were issued in exchange for the HEP Senior Notes pursuant to a private exchange offer exempt from registration under the Securities Act of 1933, as amended. Senior Notes At December 31, 2023, our senior notes consisted of the following: •$202.900 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HollyFrontier 5.875% Senior Notes”), •$74.966 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HollyFrontier 4.500% Senior Notes” and, collectively with the HollyFrontier 5.875% Senior Notes, the “HollyFrontier Senior Notes”), •$797.100 million in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “HF Sinclair 5.875% Senior Notes”), •$325.034 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “HF Sinclair 4.500% Senior Notes”), •$498.879 million in aggregate principal amount of HF Sinclair 5.000% Senior Notes, •$399.875 million in aggregate principal amount of HF Sinclair 6.375% Senior Notes (collectively with the HF Sinclair 5.875% Senior Notes, HF Sinclair 4.500% Senior Notes and HF Sinclair 5.000% Senior Notes, the “HF Sinclair Senior Notes”), •$1.121 million in aggregate principal amount of HEP 5.000% Senior Notes and •$0.125 million in aggregate principal amount of HEP 6.375% Senior Notes. Our senior notes are unsecured and unsubordinated obligations of ours and rank equally with all future unsecured and unsubordinated indebtedness. In October 2023, we repaid at maturity our $59.6 million aggregate principal amount HollyFrontier 2.625% senior notes maturing October 2023 (the “HollyFrontier 2.625% Senior Notes”) and $248.2 million aggregate principal amount HF Sinclair 2.625% senior notes maturing October 2023 (the “HF Sinclair 2.625% Senior Notes”). During the fourth quarter of 2022, we made open market repurchases of HF Sinclair 2.625% Senior Notes and HollyFrontier 2.625% Senior Notes that resulted in the extinguishment of $42.2 million in principal of the HF Sinclair 2.625% Senior Notes and fifteen thousand dollars in principal of the HollyFrontier 2.625% Senior Notes. Total cash consideration paid to repurchase the principal amount outstanding, excluding accrued interest, totaled $41.4 million, and we recognized a $0.6 million gain on the extinguishment of debt during the year ended December 31, 2022. Further, we may from time to time seek to retire some or all of our outstanding debt or debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, may be material and will depend on prevailing market conditions, our liquidity requirements and other factors. HF Sinclair Financing Arrangements 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 cash. 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 current leases mature in one year or less. 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 $37.0 million and $39.8 million at December 31, 2023 and 2022, respectively, and are included in “Accrued liabilities” on our consolidated balance sheets. See Note 6 for additional information on Level 2 inputs. HF Sinclair may, from time to time, issue letters of credit pursuant to uncommitted letters of credit facilities with its lenders. At December 31, 2023, there were no letters of credit outstanding under such credit facilities. The carrying amounts of outstanding debt are as follows:
(1)The 2.625% HollyFrontier Senior Notes and HF Sinclair 2.625% Senior Notes, inclusive of unamortized discount and debt issuance costs of $0.9 million at December 31, 2022 were due October 2023 and were classified as current debt on our consolidated balance sheets. (2)At December 31, 2022, total HF Sinclair standalone long-term debt, which excluded HEP long-term debt, was $1.4 billion. The fair values of the senior notes are as follows:
These fair values are based on a Level 2 input. See Note 6 for additional information on Level 2 inputs. Principal maturities of outstanding debt as of December 31, 2023 are as follows:
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Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Commodity Price Risk Management Our primary market risk is commodity price risk. We are exposed to market risks related to the volatility in crude oil and refined products, as well as volatility in the price of natural gas used in our refining operations. We periodically enter into derivative contracts in the form of commodity price swaps, collar contracts, 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 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 periodically have swap contracts to lock in basis spread differentials on forecasted purchases of crude oil and 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 (loss). 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:
Economic Hedges We have commodity contracts including NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory and basis swap contracts to mitigate exposure to natural gas price volatility and forward purchase and sell contracts of refined products, as well as periodically have contracts to lock in basis spread differentials on forecasted purchases of crude oil and collar contracts to mitigate exposure to natural gas price volatility, 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 earnings. The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:
As of March 31, 2024, we have the following notional contract volumes related to outstanding derivative instruments:
The following tables present the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.
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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, collar contracts, 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 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 had swap contracts serving as cash flow hedges against price risk on forecasted purchases of natural gas that matured as of December 31, 2021. We also periodically have swap contracts to lock in basis spread differentials on forecasted purchases of crude oil and 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 (loss). 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:
Economic Hedges We have commodity contracts including NYMEX futures contracts to lock in prices on forecasted purchases and sales of inventory and basis swap contracts to mitigate exposure to natural gas price volatility and forward purchase and sell contracts of refined products, as well as periodically have contracts to lock in basis spread differentials on forecasted purchases of crude oil and collar contracts to mitigate exposure to natural gas price volatility, 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 13 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 earnings. The following table presents the pre-tax effect on earnings due to maturities and fair value adjustments of our economic hedges:
As of December 31, 2023, we have the following notional contract volumes related to outstanding derivative instruments (all maturing in 2024):
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 on our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.
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Stockholders' Equity |
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Dec. 31, 2023 |
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Stockholders' Equity | Stockholders’ Equity In August 2023, our Board of Directors approved a $1.0 billion share repurchase program (the “August 2023 Share Repurchase Program”), which replaced all existing share repurchase programs at that time. The August 2023 Share Repurchase Program authorized us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company were also authorized under this share repurchase program, subject to REH Company’s interest in selling its shares and other limitations. As of March 31, 2024, we had remaining authorization to repurchase up to $510.3 million under the August 2023 Share Repurchase Program. On April 1, 2024, we repurchased 5,000,000 shares of our outstanding common stock from REH Company in a privately negotiated transaction under the August 2023 Share Repurchase Program and pursuant to the Stock Purchase Agreement, dated April 1, 2024 (the “April 2024 Stock Purchase Agreement”), between us and REH Company. The price paid under the April Stock Purchase Agreement was $59.22 per share resulting in an aggregate purchase price of $296.1 million. The purchase price was funded with cash on hand. As of May 7, 2024, we had repurchased $785.8 million under the August 2023 Share Repurchase Program. On May 7, 2024, our Board of Directors approved a new $1.0 billion share repurchase program (the “May 2024 Share Repurchase Program”), which replaced all existing share repurchase programs, including the approximately $214.2 million remaining under the August 2023 Share Repurchase Program. The May 2024 Share Repurchase Program authorizes us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company are also authorized under the May 2024 Share Repurchase Program, subject to REH Company’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. 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. The May 2024 Share Repurchase Program may be discontinued at any time by our Board of Directors. The following table presents the total open market and privately negotiated purchases of shares under our share repurchase programs for the three months ended March 31, 2024 and 2023:
(1) During the three months ended March 31, 2024, 1,516,326 shares were repurchased for $85.0 million, pursuant to privately negotiated repurchases from REH Company. During the three months ended March 31, 2023, 1,969,279 shares were repurchased for $100.0 million pursuant to privately negotiated repurchases from REH Company. During the three months ended March 31, 2024 and 2023, we withheld 58,082 and 16,200 shares, respectively, of our common stock under the terms of stock-based compensation agreements to provide funds for the payment of payroll and income taxes due at the vesting of share-based awards. On May 8, 2024, our Board of Directors announced that it declared a regular quarterly dividend in the amount of $0.50 per share, payable on June 5, 2024 to holders of record of common stock on May 22, 2024.
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Stockholders' Equity In September 2022, our Board of Directors approved a $1.0 billion share repurchase program (the “September 2022 Share Repurchase Program”), which replaced all existing share repurchase programs at that time, authorizing us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company were also authorized under the September 2022 Share Repurchase Program, subject to REH Company’s interest in selling its shares and other limitations. As of August 15, 2023, we had repurchased $995.0 million under the September 2022 Share Repurchase Program. On August 15, 2023, our Board of Directors approved a new $1.0 billion share repurchase program (the “August 2023 Share Repurchase Program”), which replaced all existing share repurchase programs, including the $5.0 million remaining authorization under the September 2022 Share Repurchase Program. The August 2023 Share Repurchase Program authorizes us to repurchase common stock in the open market or through privately negotiated transactions. Privately negotiated repurchases from REH Company are also authorized under the August 2023 Share Repurchase Program, subject to REH Company’s interest in selling its shares and other limitations. The timing and amount of share repurchases, including those from REH Company, will depend on market conditions and corporate, tax, regulatory and other relevant considerations. 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. The August 2023 Share Repurchase Program may be discontinued at any time by our Board of Directors. On January 3, 2024, we repurchased 454,380 shares of our outstanding common stock from REH Company in a privately negotiated transaction under the August 2023 Share Repurchase Program and pursuant to the Stock Purchase Agreement, dated January 3, 2024 (the “January Stock Purchase Agreement”), between us and REH Company. The price paid by us under the January Stock Purchase Agreement was $55.02 per share resulting in an aggregate purchase price of $25.0 million. The purchase price was funded with cash on hand. On February 8, 2024, we repurchased 1,061,946 shares of our outstanding common stock from REH Company in a privately negotiated transaction under the August 2023 Share Repurchase Program and pursuant to the Stock Purchase Agreement, dated February 8, 2024 (the “February Stock Purchase Agreement”), between us and REH Company. The price paid by us under the February Stock Purchase Agreement was $56.50 per share resulting in an aggregate purchase price of $60.0 million. The purchase price was funded with cash on hand. As of February 15, 2024, we had remaining authorization to repurchase up to $591.4 million under the August 2023 Share Repurchase Program. The following table presents total open market and privately negotiated purchases of shares under our share repurchase programs for the years ended December 31, 2023 and 2022.
(1) During the years ended December 31, 2023 and 2022, 15,515,302 and 14,407,274 shares, respectively, were repurchased for $810.6 million and $750.0 million, respectively, pursuant to privately negotiated repurchases from REH Company. On December 14, 2022, we agreed to repurchase an aggregate of 1,000,000 shares of our outstanding common stock from a registered broker for an aggregate purchase price of $48.6 million (the “December 2022 Repurchase”). The purchase price was funded with cash on hand. The shares repurchased are held as treasury stock. The December 2022 Repurchase was made in connection with the sale by REH Company of approximately 5,000,000 shares of common stock, inclusive of the 1,000,000 shares we repurchased, in an unregistered block trade permitted under applicable securities laws (such sale, the “Sale”). In connection with the Sale, REH Company agreed to customary “lock-up” restrictions that expired 60 days following the date of the Sale, subject to waiver by the broker and certain exceptions, including, but not limited to, privately negotiated sales or transfers of common stock to us from REH Company. The December 2022 Repurchase was made pursuant to separate authorization from our Board of Directors and not as part of the September 2022 Share Repurchase Program, and accordingly, did not reduce the remaining authorization thereunder. During the years ended December 31, 2023, 2022 and 2021, we withheld 332,741, 278,025, and 217,151 shares, respectively, of our common stock from certain employees in the amounts of $18.1 million, $16.5 million and $7.1 million, respectively. 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 (Loss) |
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Dec. 31, 2023 |
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Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The components and allocated tax effects of other comprehensive income (loss) are as follows:
The following table presents the statements of income line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
Accumulated other comprehensive loss in the equity section of our consolidated balance sheets includes:
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Other Comprehensive Income (Loss) The components and allocated tax effects of other comprehensive income (loss) are as follows:
The following table presents the statement of income line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
Accumulated other comprehensive loss in the equity section of our consolidated balance sheets includes:
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Contingencies |
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Dec. 31, 2023 |
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Contingencies | Contingencies 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 the 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. During 2017 and 2019, the EPA granted the Cheyenne, Wyoming refinery (the “Cheyenne Refinery”) and the refinery in Woods Cross, Utah (the “Woods Cross Refinery”) each a one-year small refinery exemption from the Renewable Fuel Standard program requirements for the 2016 and 2018, respectively, compliance years. As a result, the Cheyenne Refinery’s and Woods Cross Refinery’s gasoline and diesel production were 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. On April 7, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross Refinery and Cheyenne Refinery for the 2018 compliance year. On June 3, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross Refinery and Cheyenne Refinery for the 2016 compliance year and denying small refinery exemption petitions for our Woods Cross Refinery and Cheyenne Refinery for the 2019 and 2020 compliance years. Certain of our subsidiaries are currently pursuing legal challenges to the EPA’s decisions to reverse its grant of small refinery exemptions for the 2016 and 2018 compliance years. The first lawsuit, filed against the EPA on May 6, 2022, and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2018 small refinery exemption petitions overturned. The second lawsuit, filed against the EPA on August 5, 2022, and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2016 small refinery exemption petitions overturned and to have the EPA’s denial of our 2019 and 2020 small refinery exemption petitions reversed. In addition, pursuant to the June 2022 and April 2022 decisions, respectively, the EPA established an alternative compliance demonstration to not impose obligations on small refineries that had exemptions reversed for the 2016 and 2018 compliance years. On June 24, 2022, Growth Energy filed two lawsuits in the U.S. Court of Appeals for the DC Circuit against the EPA, challenging the alternative compliance demonstration for the 2016 and 2018 compliance years. On July 25, 2022, certain of our subsidiaries intervened on behalf of the EPA to aid the defense of the EPA’s alternative compliance demonstration decision. It is too early to predict the outcome of these matters. We are unable to estimate the costs we may incur, if any, at this time.
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Contingencies and Contractual Commitments 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. During the year ended December 31, 2023, we recognized a gain of $15.0 million, which is reflected in our Refining segment, from the settlement of a preservation of property claim related to winter storm Uri that occurred in the first quarter of 2021. Additionally, during the year ended December 31, 2022, we recognized a gain of $15.2 million, which is reflected in our Corporate and Other segment, from the related to winter storm Uri that occurred in the first quarter of 2021. Pursuant to the Business Combination Agreement, all pre-closing RINs obligations of REH Company’s subsidiaries (which are now subsidiaries of HF Sinclair as a result of the HFC Transactions) remained with REH Company. REH Company was required to transfer to HF Sinclair the number of each applicable type of RIN required for REH Company to demonstrate compliance for any pre-closing obligations it retained by the deadlines set forth in the Business Combination Agreement. If REH Company did not deliver all the required RINs by the applicable deadline, then, within five days following the delivery of an invoice therefor, REH Company was required to pay to HF Sinclair the amount of all out-of-pocket costs and expenses incurred by HF Sinclair to comply with REH Company’s pre-closing obligations prior to such deadline, including the price of any RINs purchased by HF Sinclair. In relation to this, 2,570,000 shares of HF Sinclair common stock, out of the purchase consideration paid to REH Company, were held in escrow to secure REH Company’s RINs credit obligations under Section 6.22 of the Business Combination Agreement and were released in January 2024 upon their satisfaction of the RINs credit obligation relating thereto. The 5,290,000 HEP common units that were also held in escrow to secure REH Company's RINs credit obligations were released to REH Company in April 2023 upon their satisfaction of the RINs credit obligations relating thereto. During 2017 and 2019, the EPA granted the Cheyenne Refinery and the refinery in Woods Cross, Utah (the “Woods Cross Refinery”) each a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2016 and 2018, respectively, compliance 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. On April 7, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2018 compliance year. On June 3, 2022, the EPA issued a decision reversing the grant of small refinery exemptions for our Woods Cross and Cheyenne refineries for the 2016 compliance year and denying small refinery exemption petitions for our Woods Cross and Cheyenne refineries for the 2019 and 2020 compliance years. Various subsidiaries of HollyFrontier are currently pursuing legal challenges to the EPA’s decisions to reverse its grant of small refinery exemptions for the 2016 and 2018 compliance years. The first lawsuit, filed against the EPA on May 6, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2018 small refinery exemption petitions overturned. The second lawsuit, filed against the EPA on August 5, 2022 and currently pending before the U.S. Court of Appeals for the DC Circuit, seeks to have the EPA’s reversal of our 2016 small refinery exemption petitions overturned and to have the EPA’s denial of our 2019 and 2020 small refinery exemption petitions reversed. In addition, for both the 2016 and 2018 compliance years, pursuant to the June 2022 and April 2022 decisions, respectively, the EPA established an alternative compliance demonstration for small refineries pursuant to which the EPA is not imposing any obligations for the small refineries whose exemptions were reversed. On June 24, 2022, Growth Energy filed two lawsuits in the U.S. Court of Appeals for the DC Circuit against the EPA challenging the alternative compliance demonstration for the 2016 and 2018 compliance years. On July 25, 2022, various subsidiaries of HollyFrontier intervened on behalf of the EPA to aid the defense of the EPA’s alternative compliance demonstration decision. It is too early to predict the outcome of these matters. We are unable to estimate the costs we may incur, if any, at this time. We have been party to multiple proceedings before the Federal Energy Regulatory Commission (“FERC”) challenging the rates charged by SFPP, L.P. (“SFPP”) on its East Line pipeline facilities from El Paso, Texas to Phoenix, Arizona. In March 2018, FERC ruled that SFPP, as a master limited partnership, was prohibited from including an allowance for investor income taxes in the cost of service underlying its East Line rates. We reached a negotiated settlement with SFPP that provides for a payment to us of $51.5 million. FERC approved the settlement on December 31, 2020 subject to a rehearing period that resulted in a settlement effective date of February 2, 2021. Under the terms of the settlement agreement, SFPP made the $51.5 million payment to us on February 10, 2021 we recorded as “Gain on tariff settlement” on our consolidated statements of income for the year ended December 31, 2021. Contractual Commitments We have various long-term agreements (entered in the normal course of business) to purchase crude oil, natural gas, feedstocks and other resources to ensure we have adequate supplies to operate our refineries. The substantial majority of our purchase obligations are based on market prices or rates. These contracts expire in 2024 through 2028. We also have long-term agreements with third parties for the transportation and storage of crude oil, natural gas and feedstocks to our refineries and for terminal and storage services that expire in 2024 through 2038. At December 31, 2023, the minimum future transportation and storage fees under transportation agreements having terms in excess of one year are as follows:
Transportation and storage costs incurred under these agreements totaled $200.5 million, $180.2 million and $160.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
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Segment Information |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our operations are organized into five reportable segments: Refining, Renewables, Marketing, Lubricants & Specialties and Midstream. Our operations that are not included in one of these five reportable 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 our El Dorado, Tulsa, Navajo, Woods Cross, Puget Sound, Parco and Casper refineries and HF Sinclair Asphalt Company LLC (“Asphalt”). Refining activities involve the purchase and refining of crude oil and wholesale 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 Mountains extending into the Pacific Northwest geographic regions of the United States. Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma. The Renewables segment represents the operations of our Cheyenne renewable diesel unit (“RDU”), the pre-treatment unit at our Artesia, New Mexico facility, the Artesia RDU, and the Sinclair RDU. The Marketing segment represents branded fuel sales to Sinclair branded sites in the United States and licensing fees for the use of the Sinclair brand at additional locations throughout the country. The Marketing segment also includes branded fuel sales to non-Sinclair branded sites from legacy HollyFrontier Corporation (“HollyFrontier”) agreements and revenues from other marketing activities. Our branded sites are located in several states across the United States with the highest concentration of the sites located in our West and Mid-Continent regions. The Lubricants & Specialties segment represents Petro-Canada Lubricants Inc.’s production operations, located in Mississauga, Ontario, which 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 and Europe. Additionally, the Lubricants & Specialties 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 the operations of Red Giant Oil Company LLC, one of the leading suppliers of locomotive engine oil in North America. Also, the Lubricants & Specialties 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 Midstream segment includes all of the operations of HEP, which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, and terminals, tankage and loading rack facilities in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. The Midstream segment also includes 50% ownership interests in each of Osage Pipeline Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas, Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming, and Cushing Connect, a 25.12% ownership interest in Saddle Butte Pipeline III, LLC, the owner of a pipeline running from the Powder River Basin to Casper, Wyoming, and a 49.995% ownership interest in Pioneer Investments Corp., the owner of a pipeline running from Sinclair, Wyoming to the North Salt Lake City, Utah Terminal. Revenues from the Midstream 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. Beginning in the first quarter of 2024, our Refining segment acquired from our Midstream segment the refinery processing units at our El Dorado and Woods Cross refineries. Additionally, we amended an intercompany agreement between certain of our subsidiaries within the Refining, Lubricants & Specialties and Midstream segments. As a result, we have revised our Refining, Lubricants & Specialties and Midstream segment information for the periods presented. See Part II, Item 5 “Other Information” of this Quarterly Report on Form 10-Q for additional information on the segment recast. 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, 2023.
(1) Includes income earned by certain of our subsidiaries in the Midstream segment related to intercompany transportation agreements with certain of our subsidiaries in the Refining and Lubricants & Specialties segments that represent leases. These transactions eliminate in consolidation.
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Segment Information Our operations are organized into five reportable segments: Refining, Renewables, Marketing, Lubricants & Specialties and Midstream. Our operations that are not included in one of these five reportable segments are included in Corporate and Other. Intersegment transactions are eliminated on 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. As a result of the Sinclair Transactions that closed on March 14, 2022, the operations of the Acquired Sinclair Businesses are reported in the Refining, Renewables, Marketing and Midstream segments. The Refining segment represents the operations of our El Dorado, Tulsa, Navajo and Woods Cross refineries and HF Sinclair Asphalt Company LLC (“Asphalt”). Also, effective with our acquisition that closed on November 1, 2021, the Refining segment includes our Puget Sound Refinery, and effective with our acquisition that closed on March 14, 2022, includes our Parco and Casper refineries. Refining activities involve the purchase and refining of crude oil and wholesale 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 Mountains extending into the Pacific Northwest geographic regions of the United States. Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma. The Renewables segment represents the operations of our Cheyenne renewable diesel unit (“RDU”), which was mechanically complete in the fourth quarter of 2021 and operational in the first quarter of 2022, the pre-treatment unit at our Artesia, New Mexico facility, which was completed and operational in the first quarter of 2022 and the Artesia RDU, which was completed and operational in the second quarter of 2022. Also, effective with the Sinclair Transactions that closed on March 14, 2022, the Renewables segment includes the Sinclair RDU. Effective with the Sinclair Transactions that closed on March 14, 2022, the Marketing segment represents branded fuel sales to Sinclair branded sites in the United States and licensing fees for the use of the Sinclair brand at additional locations throughout the country. The Marketing segment also includes branded fuel sales to non-Sinclair branded sites from legacy HollyFrontier agreements and revenues from other marketing activities. Our branded sites are located in several states across the United States with the highest concentration of the sites located in our West and Mid-Continent regions. The Lubricants & Specialties segment represents PCLI 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 and Europe. Additionally, the Lubricants & Specialties 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 the operations of Red Giant Oil Company LLC, one of the largest suppliers of locomotive engine oil in North America. Also, the Lubricants & Specialties 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 Midstream segment includes all of the operations of HEP, which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, and terminals, tankage and loading rack facilities in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. The Midstream segment also includes 50% ownership interests in each of the Osage Pipeline, the Cheyenne Pipeline and Cushing Connect, and a 25.12% ownership interest in the Saddle Butte Pipeline and a 49.995% ownership interest in the Pioneer Pipeline. Revenues from the Midstream 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. The accounting policies for our segments are the same as those described in the summary of significant accounting policies (see Note 1). The following is a summary of the financial information of our reportable segments reconciled to the amounts reported in the consolidated financial statements.
(1) Includes income earned by certain of our subsidiaries in the Midstream segment related to intercompany transportation agreements with certain of our subsidiaries in the Refining and Lubricants & Specialties segments that represent leases. These transactions eliminate in consolidation.
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions On March 14, 2022 (the “Closing Date”), HollyFrontier and HEP announced the establishment of HF Sinclair as the new parent holding company of HollyFrontier and HEP and their subsidiaries, and the completion of their respective acquisitions of Sinclair Oil Corporation (now known as Sinclair Oil LLC) and Sinclair Transportation Company LLC (“STC”) from The Sinclair Companies (now known as REH Company and referred to herein as “REH Company”). On the Closing Date, pursuant to that certain Business Combination Agreement, dated as of August 2, 2021 (as amended on March 14, 2022, the “Business Combination Agreement”), by and among HollyFrontier, HF Sinclair, Hippo Merger Sub, Inc., a wholly owned subsidiary of HF Sinclair (“Parent Merger Sub”), REH Company, and Hippo Holding LLC (now known as Sinclair Holding LLC), a wholly owned subsidiary of REH Company (the “Target Company”), HF Sinclair completed its previously announced acquisition of the Target Company by effecting (a) a holding company merger in accordance with Section 251(g) of the Delaware General Corporation Law whereby HollyFrontier merged with and into Parent Merger Sub, with HollyFrontier surviving such merger as a direct wholly owned subsidiary of HF Sinclair (the “HFC Merger”) and (b) immediately following the HFC Merger, a contribution whereby REH Company contributed all of the equity interests of the Target Company to HF Sinclair in exchange for shares of HF Sinclair, resulting in the Target Company becoming a direct wholly owned subsidiary of HF Sinclair (the “HFC Transactions”). In connection with the closing of the HFC Transactions, HF Sinclair issued 60,230,036 shares of HF Sinclair common stock, par value $0.01 per share, to REH Company, representing 27% of the pro forma equity of HF Sinclair with a value of approximately $2,149 million based on HollyFrontier’s fully diluted shares of common stock outstanding and closing stock price on March 11, 2022. Pursuant to the Business Combination Agreement, REH Company made a $77.5 million cash payment to HF Sinclair, inclusive of final working capital adjustments, which reduced the aggregate transaction value to approximately $2,072 million. Of the 60,230,036 shares of HF Sinclair common stock, 2,570,000 shares were held in escrow to secure REH Company’s RINs credit obligations under Section 6.22 of the Business Combination Agreement. As of December 31, 2023, REH Company had satisfied their RINs credit obligations to HF Sinclair and the corresponding shares were released from escrow in January 2024. Additionally, on the Closing Date, and immediately prior to the consummation of the HFC Transactions, HEP completed its acquisition of STC, REH Company’s integrated crude and refined products midstream business, and issued 21,000,000 HEP common units and paid cash consideration of $329.0 million, inclusive of final working capital adjustments, to REH Company in exchange for all the outstanding equity interests of STC (the “HEP Transaction” and together with the HFC Transactions, the “Sinclair Transactions”). Of these 21,000,000 HEP common units, 5,290,000 units were held in escrow and were released to REH Company in April 2023 upon their satisfaction of the corresponding RINs credit obligations to HF Sinclair under Section 6.22 of the Business Combination Agreement. HollyFrontier’s (now HF Sinclair's) senior management team continues to operate the combined company. Pursuant to that certain stockholders agreement (the “Stockholders Agreement”) by and among HF Sinclair, REH Company and the stockholders of REH Company (together with REH Company and each of their permitted transferees, the “REH Parties”), REH Company was granted the right to nominate, and has nominated, two directors to our Board of Directors at the Closing Date who continued to serve on our Board of Directors as of December 31, 2023. The REH Company stockholders also agreed to certain customary lock up (which expired in June 2023), voting and standstill restrictions, as well as customary registration rights, for the HF Sinclair common stock issued to the stockholders of REH Company. HF Sinclair is headquartered in Dallas, Texas, with combined business offices in Salt Lake City, Utah. Under the terms of the Business Combination Agreement, HF Sinclair acquired REH Company’s refining, branded marketing, renewables, and midstream businesses. At the time of closing, the branded marketing business supplied high-quality fuels to more than 1,300 Sinclair branded stations and licensed the use of the Sinclair brand at more than 300 additional locations throughout the United States. The renewables business includes the operation of a renewable diesel unit located in Sinclair, Wyoming. The refining business includes two Rocky Mountains-based refineries located in Casper, Wyoming and Sinclair, Wyoming. Under the terms of the Contribution Agreement, HEP acquired STC, REH Company’s integrated crude and refined products pipelines and terminal assets, including approximately 1,200 miles of integrated crude and refined product pipeline supporting the Sinclair refineries and third parties, eight product terminals and two crude terminals with approximately 4.5 million barrels of operated storage. In addition, HEP acquired STC’s interests in three pipeline joint ventures for crude gathering and product offtake including: Saddle Butte Pipeline III, LLC (at the time of closing, a 25.06%, and currently, a 25.12% non-operated interest); Pioneer Investments Corp. (49.995% non-operated interest); and UNEV Pipeline (the 25% non-operated interest not already owned by HEP, resulting in UNEV Pipeline, LLC (“UNEV”) becoming a wholly owned subsidiary of HEP). The addition of the Acquired Sinclair Businesses to the HollyFrontier business created a combined company with increased scale and ability to diversify and is expected to drive growth through the expanded refining and renewables business. In addition, the HFC Transactions added an integrated branded wholesale distribution network to our business. The Sinclair Transactions were accounted for as a business combination using the acquisition method of accounting, with the assets acquired and liabilities assumed at their respective acquisition date fair values at the effective date, with the excess consideration recorded as goodwill. The following tables present the purchase consideration and final purchase price allocation of the assets acquired and liabilities assumed on March 14, 2022:
(1)Based on the HollyFrontier closing stock price on March 11, 2022. (2)Based on the HEP closing unit price on March 11, 2022.
The final purchase price allocation resulted in the recognition of $685.9 million in goodwill. Our Refining, Renewables, Marketing and Midstream segments recognized $244.0 million, $159.0 million, $163.8 million and $119.1 million of goodwill, respectively. The goodwill recognized was primarily attributable to operating and administrative synergies and net deferred tax liabilities arising from the differences between the estimated fair values of assets and liabilities and the tax basis of these assets and liabilities. There are qualitative assumptions of long-term factors that this acquisition creates for our stockholders, including increased scale and diversification that is expected to drive growth through the expanded refining and renewables businesses and the addition of an integrated branded wholesale distribution network. This goodwill was not deductible for income tax purposes. The fair value measurements for properties, plants and equipment were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements. The fair value of properties, plants and equipment was based on the combination of the cost and market approaches. Key assumptions in the cost approach include determining the replacement cost by evaluating recent published data and adjusting replacement cost for physical deterioration, functional, and economic obsolescence. We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties. The fair value of crude oil and refined products inventory was based on market prices as of the acquisition date. Intangibles include the Sinclair trade name, fuel agreements and customer relationships totaling $221.4 million that are being amortized on a straight-line basis over a range of to twenty-year period. The intangible assets were valued using the income approach. The fair value of equity method investments totaled $234.3 million and was based on a combination of valuation methods including discounted cash flows and the guideline public company method. Accrued liabilities included $70.6 million of RINs credit obligations, including 2022 obligations through the Closing Date, which were valued based on market prices for RINs at the effective date, a Level 2 input. REH Company is financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing. This receivable totaled $68.4 million and was valued based on market prices for RINs at the effective date. During the year ended December 31, 2023, we purchased RINs for an aggregate amount of $36.0 million, on behalf of REH Company from third parties at applicable market prices in connection with our provision of services to REH Company under the transition services agreement that we and REH Company entered into at the closing of the Sinclair Transactions. We acted as an agent in these RINs transactions and did not recognize sales or cost of products sold as a result. During the year ended December 31, 2023, we recognized sales of $21.2 million related to the sale of RINs to REH Company based on applicable market prices. All other fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements. The fair values of all other current receivable and payables were equivalent to their carrying values due to their short-term nature. Our consolidated financial and operating results reflect the Acquired Sinclair Businesses operations beginning March 14, 2022. Our results of operations included revenue and income from operations of $9,835.0 million and $865.1 million, respectively, for the period from March 14, 2022 through December 31, 2022 related to the Acquired Sinclair Businesses operations. During the years ended December 31, 2023 and 2022, we incurred $15.8 million and $52.9 million, respectively, in incremental direct acquisition and integration costs that principally relate to legal, advisory and other professional fees and are presented as selling, general and administrative expenses in our consolidated statements of income. Puget Sound Refinery On May 4, 2021, HollyFrontier Puget Sound Refining LLC (now known as HF Sinclair Puget Sound Refining LLC), a wholly owned subsidiary of HollyFrontier, entered into a sale and purchase agreement with Shell to acquire the Puget Sound Refinery. The acquisition closed on November 1, 2021 for aggregate cash consideration of $624.3 million, which consists of a base cash purchase price of $350.0 million, hydrocarbon inventory of $277.9 million and other closing adjustments and accrued liabilities of $3.6 million (the “Puget Sound Acquisition”). This transaction was accounted for as a business combination, using the acquisition method, with the aggregate cash consideration allocated to the acquisition date fair value of assets and liabilities acquired. In connection with the Puget Sound Acquisition, we incurred $12.2 million of acquisition and integration costs during the year ended December 31, 2021, which are included in selling, general and administrative expenses on the consolidated statements of income. Our consolidated financial and operating results reflect the Puget Sound Refinery operations beginning November 1, 2021. Our results of operations include revenue and loss from operations of $603.1 million and $8.3 million, respectively, for the period from November 1, 2021 through December 31, 2021 related to these operations.
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Leases |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Lessee We have operating and finance leases for land, buildings, pipelines, storage tanks, transportation and other equipment for our operations. Our leases have remaining terms of to 56 years, some of which include options to extend the leases for up to 10 years. Certain of our leases for pipeline assets include provisions for variable payments which are based on a measure of throughput and also contain a provision for the lessor to adjust the rate per barrel periodically over the life of the lease. These variable costs are not included in the initial measurement of ROU assets and lease liabilities. The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheets.
Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of December 31, 2023, minimum future lease payments of our operating and finance lease obligations were as follows:
As of December 31, 2023, we entered into certain leases that have not yet commenced. Such leases include a 15-year lease for a manufacturing and distribution facility, with estimated future undiscounted lease payments of $62.8 million, expected to commence in the first quarter of 2024. Lessor Our consolidated statements of income reflect lease revenue recognized by our midstream operations for contracts with third parties in which we are the lessor. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. Lease income recognized was as follows:
For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments in which we are a lessor to third-party contracts as of December 31, 2023 were as follows:
Net investment in sales-type leases recorded on our consolidated balance sheets was composed of the following:
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Leases | Leases Lessee We have operating and finance leases for land, buildings, pipelines, storage tanks, transportation and other equipment for our operations. Our leases have remaining terms of to 56 years, some of which include options to extend the leases for up to 10 years. Certain of our leases for pipeline assets include provisions for variable payments which are based on a measure of throughput and also contain a provision for the lessor to adjust the rate per barrel periodically over the life of the lease. These variable costs are not included in the initial measurement of ROU assets and lease liabilities. The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheets.
Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of December 31, 2023, minimum future lease payments of our operating and finance lease obligations were as follows:
As of December 31, 2023, we entered into certain leases that have not yet commenced. Such leases include a 15-year lease for a manufacturing and distribution facility, with estimated future undiscounted lease payments of $62.8 million, expected to commence in the first quarter of 2024. Lessor Our consolidated statements of income reflect lease revenue recognized by our midstream operations for contracts with third parties in which we are the lessor. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. Lease income recognized was as follows:
For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments in which we are a lessor to third-party contracts as of December 31, 2023 were as follows:
Net investment in sales-type leases recorded on our consolidated balance sheets was composed of the following:
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Leases | Leases Lessee We have operating and finance leases for land, buildings, pipelines, storage tanks, transportation and other equipment for our operations. Our leases have remaining terms of to 56 years, some of which include options to extend the leases for up to 10 years. Certain of our leases for pipeline assets include provisions for variable payments which are based on a measure of throughput and also contain a provision for the lessor to adjust the rate per barrel periodically over the life of the lease. These variable costs are not included in the initial measurement of ROU assets and lease liabilities. The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheets.
Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of December 31, 2023, minimum future lease payments of our operating and finance lease obligations were as follows:
As of December 31, 2023, we entered into certain leases that have not yet commenced. Such leases include a 15-year lease for a manufacturing and distribution facility, with estimated future undiscounted lease payments of $62.8 million, expected to commence in the first quarter of 2024. Lessor Our consolidated statements of income reflect lease revenue recognized by our midstream operations for contracts with third parties in which we are the lessor. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. Lease income recognized was as follows:
For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments in which we are a lessor to third-party contracts as of December 31, 2023 were as follows:
Net investment in sales-type leases recorded on our consolidated balance sheets was composed of the following:
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Leases | Leases Lessee We have operating and finance leases for land, buildings, pipelines, storage tanks, transportation and other equipment for our operations. Our leases have remaining terms of to 56 years, some of which include options to extend the leases for up to 10 years. Certain of our leases for pipeline assets include provisions for variable payments which are based on a measure of throughput and also contain a provision for the lessor to adjust the rate per barrel periodically over the life of the lease. These variable costs are not included in the initial measurement of ROU assets and lease liabilities. The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheets.
Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of December 31, 2023, minimum future lease payments of our operating and finance lease obligations were as follows:
As of December 31, 2023, we entered into certain leases that have not yet commenced. Such leases include a 15-year lease for a manufacturing and distribution facility, with estimated future undiscounted lease payments of $62.8 million, expected to commence in the first quarter of 2024. Lessor Our consolidated statements of income reflect lease revenue recognized by our midstream operations for contracts with third parties in which we are the lessor. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. Lease income recognized was as follows:
For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments in which we are a lessor to third-party contracts as of December 31, 2023 were as follows:
Net investment in sales-type leases recorded on our consolidated balance sheets was composed of the following:
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Properties, Plants and Equipment |
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Properties, Plants and Equipment | Properties, Plants and Equipment The components of properties, plants and equipment are as follows:
We capitalized interest attributable to construction projects of $4.3 million, $6.2 million and $15.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Depreciation expense was $474.3 million, $442.2 million and $329.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.
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Goodwill and Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangibles | Goodwill and Intangibles Goodwill As of December 31, 2023, our goodwill balance was $3.0 billion. 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 & Specialties segment. The following is a summary of our goodwill by segment:
We performed our annual goodwill impairment testing quantitatively as of July 1, 2023 and determined there was no impairment of goodwill attributable to our reporting units. Furthermore, there was no impairment of goodwill during the years ended December 31, 2022 and 2021. Intangibles The carrying amounts of our intangible assets presented in “Intangibles and other” on our consolidated balance sheets are as follows:
Amortization expense was $55.1 million, $51.0 million and $35.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Estimated future amortization expense related to the intangible assets at December 31, 2023 is as follows:
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Income Taxes |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The provision for income taxes is comprised of the following:
The statutory federal income tax rate applied to pre-tax book income reconciles to income tax expense as follows:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Our deferred income tax assets and liabilities as of December 31, 2023 and 2022 are as follows:
We have tax benefits attributable to net operating losses of $17.6 million in Luxembourg that can be carried forward 16 years which will begin expiring in 2034. We also have tax benefits attributable to net operating losses of $11.2 million in the Netherlands that can be carried forward indefinitely, and tax benefits attributable to net operating losses in China of $3.5 million which can be carried forward five years. We have reflected a valuation allowance of $10.6 million in 2023 and $3.7 million in 2022, with respect to net operating carryforwards that primarily relate to losses in Luxembourg and China. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
At December 31, 2023, 2022 and 2021, there were $1.2 million, $1.4 million, and $54.6 million, respectively, of unrecognized tax benefits that, if recognized, would affect our effective tax rate. Unrecognized tax benefits are adjusted in the period in which new information about a tax position becomes available or the final outcome differs from the amount recorded. Approximately $0.7 million of the unrecognized tax benefits relates to claims filed with the U.S. Internal Revenue Service (“IRS”) on the federal income tax treatment of refundable biodiesel/ethanol blending tax credits for prior years. We filed suit related to these claims in the Federal District Court of Dallas in March of 2022; the suit was stayed pending the outcome of controlling cases in the U.S. Court of Appeals for the Fifth Circuit, which were decided in favor of the IRS and were not appealed. As such precedent is controlling for us, we intend to file a motion to dismiss those claims controlled by such precedent in the Federal District Court of Dallas during 2024. We recognize interest and penalties relating to liabilities for unrecognized tax benefits as an element of tax expense. We have not recorded any penalties related to our uncertain tax positions as we believe that it is more likely than not that there will not be any assessment of penalties. We are subject to U.S. and Canadian federal income tax, Oklahoma, Oregon, Kansas, New Mexico, Iowa, Arizona, Utah, Colorado and Nebraska income tax and to income tax of multiple other state and local jurisdictions. We have substantially concluded all state and local income tax matters for tax years through 2019. Other than the federal claim noted above and to the extent of the federal net operating loss carried back to 2015 from 2020, we have materially concluded all U.S. federal income tax matters for tax years through December 31, 2019. We are currently under audit with the Canada Revenue Agency for the 2018, 2019, and 2020 tax years and the IRS for the 2020 and 2021 tax years.
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Pension and Post-retirement Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Post-retirement Plans | Pension and Post-retirement Plans Certain Petro-Canada Lubricants Inc. (“PCLI”) employees are participants in union and non-union pension plans, which are closed to new entrants. Effective June 30, 2022, we ceased to accrue additional benefits under these plans, at which time the plan was fully frozen. During 2023, we had partial settlements in the union and non-union pension plans. We expect the remaining benefits will be settled by the end of 2024. In addition, Sonneborn employees in the Netherlands have a defined benefit pension plan which was frozen and all plan participants became inactive in 2016. The plan assets are in the form of a third-party insurance contract that is valued based on the assets held by the insurer and insures a value which approximates the accrued benefits related to the plan’s accumulated benefit obligation. At that time, a new plan was established to provide future indexation benefits to participants who had accrued benefits under the expiring arrangements. The following table sets forth the changes in the benefit obligation and plan assets of our PCLI pension plans and Sonneborn Netherlands plans for the years ended December 31, 2023 and 2022.
The accumulated benefit obligation was $72.6 million and $90.4 million at December 31, 2023 and 2022, respectively, which are also the measurement dates used for our pension plans. The following tables provide information regarding pension plans with a projected benefit obligation and accumulated benefit obligation in excess of the fair value of plan assets:
The weighted average assumption used to determine the end of period benefit obligation for the PCLI plans for the year ended December 31, 2023 were discount rates of 4.60% to 4.65%. The weighted average assumptions used to determine the end of period benefit obligation for the PCLI plans for the year ended December 31, 2022 were discount rates of 3.70% to 4.44%. For the years ended December 31, 2023 and 2022, the weighted average assumption used to determine end of period benefit obligations for Sonneborn were discount rates of 3.60% and 4.20%, respectively. Net periodic pension expense consisted of the following components:
The components, other than service cost, of our net periodic pension expense are recorded in Other, net on our consolidated statements of income. The following table presents the fair values of PCLI’s pension plans’ assets, by level within the fair value hierarchy, as of December 31, 2023 and 2022.
See Note 6 for additional information on Level 1 and 2 inputs. The expected long-term rate of return on plan assets is 4.60% to 4.65% for the PCLI pension plans and is based on a target investment of 100% in fixed income. We expect to contribute $0.2 million to the Sonneborn pension plans in 2024. PCLI and Sonneborn pension plan benefit payments, which reflect expected future service, are expected to be paid as follows: $1.9 million in 2024, $0.8 million in 2025, $0.9 million in 2026, $0.9 million in 2027, $1.0 million in 2028 and $6.0 million in 2029 to 2033. Benefit payments expected to be paid in 2024 include the estimate of the net present value of all expected benefit payments to be paid out once the PCLI union and non-union pension plans windup has been finalized. Post-retirement Healthcare Plans We have post-retirement healthcare and other benefits plans that are available to certain of our employees who satisfy certain age and service requirements. These plans are unfunded and provide differing levels of healthcare benefits dependent upon hire date and work location. Not all of our employees are covered by these plans at December 31, 2023. The following table sets forth the changes in the benefit obligation and plan assets of our post-retirement healthcare plans for the years ended December 31, 2023 and 2022:
Benefit payments, which reflect expected future service, are expected to be paid as follows: $1.7 million in 2024; $2.5 million in 2025; $2.5 million in 2026; $2.5 million in 2027; $2.7 million in 2028; and $13.2 million in 2029 through 2033. The weighted average assumptions used to determine end of period benefit obligations:
Net periodic post-retirement credit consisted of the following components:
The components, other than service cost, of our net periodic post-retirement credit are recorded in Other, net on our consolidated statements of income. Prior service credits are amortized over the average remaining effective period to obtain full benefit eligibility for participants. Defined Contribution Plans We have defined contribution plans that cover substantially all qualified employees in the U.S., Canada and the Netherlands. Our contributions are based on an employee's eligible compensation and years of service. We also partially match our employees’ contributions. We expensed $80.8 million, $73.7 million and $45.0 million for the years ended December 31, 2023, 2022 and 2021, respectively, in connection with these plans.
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Description of Business and Presentation of Financial Statements (Policies) |
3 Months Ended | 12 Months Ended |
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Description of Business | References herein to HF Sinclair, “we,” “our,” “ours,” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions. References herein to Holly Energy Partners, L.P. (“HEP”) with respect to time periods prior to the closing of the HEP Merger Transaction (as defined below) on December 1, 2023 refer to HEP and its consolidated subsidiaries. We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. We provide petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry. 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 and we supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. We produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries.
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Description of Business: References herein to HF Sinclair Corporation (“HF Sinclair”) include HF Sinclair and its consolidated subsidiaries. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HF Sinclair and its consolidated subsidiaries or to HF Sinclair or an individual subsidiary and not to any other person, with certain exceptions. References herein to HF Sinclair “we,” “our,” “ours” and “us” with respect to time periods prior to March 14, 2022 refer to HollyFrontier Corporation (“HollyFrontier”) and its consolidated subsidiaries and do not include Hippo Holding LLC (now known as Sinclair Holding LLC), the parent company of Sinclair Oil LLC, Sinclair Transportation Company LLC or their respective consolidated subsidiaries (collectively, the “Acquired Sinclair Businesses”). References herein to HF Sinclair “we,” “our,” “ours” and “us” with respect to time periods from and after March 14, 2022 include the operations of the Acquired Sinclair Businesses. Unless otherwise specified, the financial statements included herein include financial information for HF Sinclair, which for the time period from March 14, 2022 to December 31, 2023 includes the combined business operations of HollyFrontier and the Acquired Sinclair Businesses. References herein to Holly Energy Partners, L.P. (“HEP”) with respect to time periods prior to the closing of the HEP Merger Transaction (as defined below) on December 1, 2023 refer to HEP and its consolidated subsidiaries. We are an independent energy company that produces and markets high-value light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. We own and operate refineries located in Kansas, Oklahoma, New Mexico, Wyoming, Washington and Utah. We provide petroleum product and crude oil transportation, terminalling, storage and throughput services to our refineries and the petroleum industry. 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 and we supply high-quality fuels to more than 1,500 branded stations and license the use of the Sinclair brand at more than 300 additional locations throughout the country. We produce renewable diesel at two of our facilities in Wyoming and our facility in New Mexico. In addition, our subsidiaries produce and market base oils and other specialized lubricants in the United States, Canada and the Netherlands, and export products to more than 80 countries.
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Basis of Accounting | 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 March 31, 2024, the consolidated results of income, comprehensive income and statements of equity for the three months ended March 31, 2024 and 2023, and consolidated cash flows for the three months ended March 31, 2024 and 2023 in accordance with the rules and regulations of the Securities and Exchange Commission (“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, 2023, and with our audited consolidated financial statements as of and for the year ended December 31, 2023, included in Exhibit 99.1 to this Quarterly Report on Form 10-Q.
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Accounts Receivable | Accounts Receivable: Our accounts receivable primarily consist of amounts due from customers that are primarily from sales of refined products and renewable diesel. 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 expected credit losses 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 expected credit losses when an account is deemed uncollectible. | Accounts Receivable: Our accounts receivable primarily consist of amounts due from customers that are primarily from sales of refined products and renewable diesel. 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 expected credit losses 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 expected credit losses when an account is deemed uncollectible. Our allowance for expected credit losses was $3.2 million at December 31, 2023 and $7.7 million at December 31, 2022. Accounts receivable attributable to crude oil resales generally represent the sale of excess crude oil to other purchasers and / or users in cases when our crude oil supplies are in excess of our immediate needs as well as certain reciprocal buy / sell exchanges of crude oil. At times we enter into such buy / sell exchanges to facilitate the delivery of quantities to certain locations. In many cases, we enter into net settlement agreements relating to the buy / sell arrangements, which may mitigate credit risk.
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Inventories | Inventories: Inventories related to our refining operations are stated at the lower of cost, using the last-in, first-out (“LIFO”) method for crude oil and unfinished and finished refined products or market. Inventories related to our renewables business are stated at the lower of cost, using the LIFO method for feedstock and unfinished and finished renewable 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 method or net realizable value. Inventories consisting of process chemicals, materials and maintenance supplies and RINs are stated at the lower of weighted average cost or net realizable value.
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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. Inventories related to our renewable business are stated at the lower of cost, using the LIFO method for feedstock and unfinished and finished renewable products, or market. Cost, consisting of raw material, transportation and conversion costs, is determined using the LIFO inventory valuation methodology and market is determined using current replacement costs. Under the LIFO method, the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. 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 RINs are stated at the lower of weighted-average cost or net realizable value.
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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 that 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 sheets. Finance leases are included in “Properties, plants and equipment, at cost,” “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheets. 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 consolidated balance sheets. 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, as a lessor, we do not separate the non-lease (service) component in contracts in which the lease component is the dominant component. We treat these combined components as an operating lease. We bifurcate the consideration received for sales-type lease contracts between lease and service revenue, with the service component accounted for within the scope of ASC 606, “Revenue from Contracts with Customers.”
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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 sheets. Finance leases are included in “Properties, plants and equipment, at cost” and “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheets. 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 sheets. 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, as a lessor, we do not separate the non-lease (service) component in contracts in which the lease component is the dominant component. We treat these combined components as an operating lease. We bifurcate the consideration received for sales-type lease contracts between lease and service revenue, with the service component accounted for within the scope of ASC 606, “Revenue from Contracts with Customers”.
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Lessor | Lessor: Our consolidated statements of income reflect the lease revenue we recognize from contracts with third parties in which we are the lessor. As the lessor, we classify customer contracts that contain leases into one of three categories: operating leases, direct finance leases, or sales-type leases. This classification is determined by evaluating key factors such as the lease term, the fair value of the underlying asset, and the residual value of the underlying assets. | |
Revenue Recognition | Revenue Recognition: Revenues on refined products, branded fuel sales, renewable diesel, 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 & Specialties 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 & Specialties 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. Our Midstream business recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, we have certain throughput agreements that specify minimum volume requirements, whereby we bill 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, we recognize 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. We recognize the service portion of these deficiency payments as revenue when we do not expect it will be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer. Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.
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Revenue Recognition: Revenues on refined product, branded fuel sales, renewable diesel 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 specialties 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 specialties 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. Our midstream business recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, we have certain throughput agreements that specify minimum volume requirements, whereby we bill 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, we recognize 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. We recognize the service portion of these deficiency payments as revenue when we do not expect it will be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer. Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 30 days of the date of invoice.
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Foreign Currency Translation | Foreign Currency Translation: Assets and liabilities recorded in foreign currencies are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expense accounts are translated using the weighted average exchange rates during the period presented. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income. We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of intercompany financing amounts to functional currencies are recorded as gains and losses as a component of other income (expense) in the consolidated statements of income. Such adjustments are not recorded in the Lubricants & Specialties segment operations, but in Corporate and Other. See Note 14 for additional information on our segments.
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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. We have intercompany notes that were issued to fund certain of our foreign businesses. Remeasurement adjustments resulting from the conversion of such intercompany financing amounts to functional currencies are recorded as gains or losses as a component of other income (expense) on our consolidated statements of income. Such adjustments are not recorded to the Lubricants & Specialties segment operations, but to Corporate and Other. See Note 20 for additional information on our segments.
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Income Taxes | Income Taxes: Provisions for income taxes include deferred taxes resulting from temporary differences in income for financial and tax purposes, using the liability method of accounting for income taxes. The liability method requires the effect of tax rate changes on deferred income taxes to be reflected in the period in which the rate change was enacted. The liability method also requires that deferred tax assets be reduced by a valuation allowance unless it is more likely than not that the assets will be realized. We account for U.S. tax on global intangible low-taxed income in the period in which it is incurred. Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have the appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.
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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. We account for U.S. tax on global intangible low-taxed income in the period in which it is incurred. Potential interest and penalties related to income tax matters are recognized in income tax expense. We believe we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter.
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Inventory Repurchase Obligations | Inventory Repurchase Obligations: We periodically enter into same-party sell/buy transactions, whereby we sell certain refined product inventory and subsequently repurchase the inventory in order to facilitate delivery to certain locations. Such sell/buy transactions are accounted for as inventory repurchase obligations, under which proceeds received under the initial sale are recognized as an inventory repurchase obligation that is subsequently reversed when the inventory is repurchased. | 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 inventory repurchase obligations that are subsequently reversed when the inventories are repurchased. |
Accounting Pronouncements - Not Yet Adopted | Accounting Pronouncements - Not Yet Adopted In November 2023, Accounting Standards Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures” was issued. ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This aims to provide more decision-useful information to stakeholders by giving a clearer picture of the costs incurred by each reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures. In December 2023, ASU 2023-09, “Improvements to Income Tax Disclosures” was issued. ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures.
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Accounting Pronouncements - Recently Adopted In October 2021, Accounting Standards Update (“ASU”) 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” was issued requiring that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers.” We adopted this standard effective January 1, 2023, but did not have a business combination under the scope of ASC 805, “Business Combinations” for the year ended December 31, 2023. Accounting Pronouncements - Not Yet Adopted In November 2023, ASU 2023-07, “Improvements to Reportable Segment Disclosures” was issued. ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This aims to provide more decision-useful information to stakeholders by giving a clearer picture of the costs incurred by each reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures. In December 2023, ASU 2023-09, “Improvements to Income Tax Disclosures” was issued. ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. We are assessing the impact of this guidance on our disclosures.
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Fair Value Measurements | 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.
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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.
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Consolidation, Policy | Principles of Consolidation: Our consolidated financial statements include our accounts and the accounts of partnerships and joint ventures that we control through an ownership interest greater than 50% or through a controlling financial interest with respect to variable interest entities. All significant intercompany transactions and balances have been eliminated. | |
Consolidation, Variable Interest Entity, Policy | Variable Interest Entities: A variable interest entity (“VIE”) is a legal entity whose equity owners do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the equity holders lack the power, through voting rights, to direct the activities that most significantly impact the entity's financial performance, the obligation to absorb the entity's expected losses or rights to expected residual returns. | |
Use of Estimates, Policy | Use of Estimates: The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
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Cash and Cash Equivalents, Policy | Cash Equivalents: We consider all highly liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost, which approximates market value and are primarily invested in highly-rated instruments issued by government or municipal entities with strong credit standings.
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Balance Sheet Offsetting | Balance Sheet Offsetting: We purchase and sell inventories of crude oil with certain same-parties that are net settled in accordance with contractual net settlement provisions. Our policy is to present such balances on a net basis since it presents our accounts receivables and payables consistent with our contractual settlement provisions.
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Derivatives, Policy | Derivative Instruments: All derivative instruments are recognized as either assets or liabilities on our consolidated balance sheets and are measured at fair value. Changes in the derivative instrument's fair value are recognized in earnings unless specific hedge accounting criteria are met. Cash flows from all our derivative activity are reported in the operating section on our consolidated statements of cash flows. See Note 14 for additional information.
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Property, Plant and Equipment, Policy | Properties, Plants and Equipment: Properties, plants and equipment are stated at cost. Depreciation is provided by the straight-line method over the estimated useful lives of the assets, primarily 15 to 32 years for refining, pipeline and terminal facilities, 10 to 40 years for buildings and improvements, 5 to 30 years for other fixed assets and 5 years for vehicles.
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Asset Retirement Obligation | Asset Retirement Obligations: We record legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and / or the normal operation of long-lived assets. The fair value of the estimated cost to retire a tangible long-lived asset is recorded as a liability with the associated retirement costs capitalized as part of the asset's carrying amount in the period in which it is incurred and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, we record the liability when sufficient information is available to estimate the liability's fair value. Certain of our refining assets have no recorded liability for asset retirement obligations since the timing of any retirement and related costs are currently indeterminable.
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Goodwill | Intangibles, Goodwill and Long-lived Assets: Intangible assets are assets (other than financial assets) that lack physical substance, and goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired and liabilities assumed. Goodwill acquired in a business combination and intangibles with indefinite useful lives are not amortized, whereas intangible assets with finite useful lives are amortized on a straight-line basis. Goodwill and intangible assets that are not subject to amortization are tested for impairment 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 carrying amount of the reporting unit is greater than its fair value, 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. The carrying amount of our intangible assets and goodwill may fluctuate from period to period due to the effects of foreign currency translation adjustments on goodwill and intangible assets assigned to our Lubricants & Specialties segment. For purposes of long-lived asset impairment evaluation, we group our long-lived assets as follows: (i) our refinery asset groups, which include certain logistics assets, (ii) our renewables products asset groups, (iii) our Lubricants & Specialties asset groups, (iv) our Marketing assets and (v) our Midstream asset groups, which is comprised of logistics 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 such 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. See Note 11 for additional information regarding goodwill and intangible assets.
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Equity Method Investments | Equity Method Investments: We account for investments in which we have a noncontrolling interest, yet have significant influence over the entity, using the equity method of accounting, whereby we record our pro-rata share of earnings of these companies and contributions to and distributions from the joint ventures as adjustments to our investment balance.
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Cost Classifications, Policy | Cost Classifications: Costs of products sold include the cost of crude oil, other feedstocks, blendstocks and purchased finished products, inclusive of transportation costs. We purchase crude oil that at times exceeds the supply needs of our refineries. Quantities in excess of our needs are sold at market prices to purchasers of crude oil that are recorded on a gross basis with the sales price recorded as revenues and the corresponding acquisition cost as cost of products sold. Additionally, we enter into buy / sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at cost. Operating expenses include direct costs of labor, maintenance materials and services, utilities and other direct operating costs. Selling, general and administrative expenses include compensation, professional services and other support costs.
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Maintenance Cost, Policy | Deferred Maintenance Costs: Our refinery units require regular major maintenance and repairs which are commonly referred to as “turnarounds.” Catalysts used in certain refinery processes also require regular “change-outs.” The required frequency of the maintenance varies by unit and by catalyst, but generally occurs no less than once every five years. Turnaround costs are deferred and amortized over the period until the next scheduled turnaround. Other repairs and maintenance costs are expensed when incurred. | |
Environmental Costs, Policy | Environmental Costs: Environmental costs are charged to 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 clean-up 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. | |
Commitments and Contingencies, Policy | 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. We accrue for contingencies when it is probable that a loss has occurred and when the amount of that loss is reasonably estimable. 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.
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Description of Business and Presentation of Financial Statements (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments | The following table summarizes our recorded investment compared to its share of underlying equity for each of its investee. The differences are being amortized as adjustments to our pro-rata share of earnings in the joint ventures.
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Cushing Connect Joint Venture (Tables) |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The most significant assets of Cushing Connect and Cushing Connect Pipeline that are available to settle only their obligations, along with their most significant liabilities for which their creditors do not have recourse to our general credit, were:
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The most significant assets of Cushing Connect and Cushing Connect Pipeline that are available to settle only their obligations, along with their most significant liabilities for which their creditors do not have recourse to our general credit, were:
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Revenues (Tables) |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregated Revenues | Disaggregated revenues were as follows:
(1)Transportation fuels revenues are attributable to our Refining segment’s wholesale marketing of gasoline, diesel and jet fuel. (2)Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids. (3)Revenues from asphalt, fuel oil and other products include amounts attributable to our Refining and Lubricants & Specialties segments of $422.0 million and $61.3 million, respectively, for the three months ended March 31, 2024, and $386.8 million and $53.6 million, respectively, for the three months ended March 31, 2023. (4)Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries. (5)Renewable diesel revenues are attributable to our Renewables segment. (6)Marketing revenues consist primarily of branded gasoline and diesel fuel. (7)Other revenues are principally attributable to our Refining segment.
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Disaggregated revenues were as follows:
(1)Transportation fuels revenues are attributable to our Refining segment wholesale marketing 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 & Specialties segments of $1,928.6 million and $238.4 million, respectively, for the year ended December 31, 2023. For the year ended December 31, 2022 such revenues attributable to our Refining and Lubricants & Specialties were $1,827.3 million and $314.8 million, respectively. For the year ended December 31, 2021 such revenue attributable to our Refining and Lubricants & Specialties segments were $724.3 million and $224.3 million, respectively. (4)Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries. (5)Renewable diesel revenues are attributable to our Renewables segment. (6)Marketing segment revenues consist primarily of branded gasoline and diesel fuel. (7)Other revenues are principally attributable to our Refining segment.
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Schedule of Changes to Contract Liabilities | The following table presents changes to our contract liabilities:
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The following table presents changes to contract liabilities:
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Schedules of Aggregate Minimum Volumes Expected to Be Sold Under Long-term Sales Contracts | Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:
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Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows, which include branded sales volumes assumed upon our acquisition of the Acquired Sinclair Businesses:
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Fair Value Measurements (Tables) |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurements of Asset and Liability Instruments | The carrying amounts of derivative instruments and RINs credit obligations at March 31, 2024 and December 31, 2023 were as follows:
(1)Represent obligations for RINs credits for which we did not have sufficient quantities at March 31, 2024 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.
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The carrying amounts of derivative instruments and RINs receivable and credit obligations at December 31, 2023 and 2022 were as follows:
(1)REH Company was financially responsible for satisfaction of RINs credit obligations for all periods prior to the closing of the Sinclair Transactions. See Note 2 for additional information on RINs credit obligations assumed in the Sinclair Transactions.
|
Earnings Per Share (Tables) |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Earnings Per Share | The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HF Sinclair stockholders:
(1)Unvested restricted stock unit awards and unvested performance share units that settle in HF Sinclair common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HF Sinclair. Participating earnings represent the distributed and undistributed earnings of HF Sinclair attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so.
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The following is a reconciliation of the denominators of the basic and diluted per share computations for net income attributable to HF Sinclair stockholders:
(1)Unvested restricted stock unit awards and unvested performance share units that settle in HF Sinclair common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HF Sinclair. Participating earnings represent the distributed and undistributed earnings of HF Sinclair attributable to the participating securities. Unvested restricted stock unit awards and performance share units do not participate in undistributed net losses as they are not contractually obligated to do so.
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Stock-Based Compensation (Tables) |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Restricted Stock Activity | A summary of restricted stock units and performance share units activity during the three months ended March 31, 2024, is presented below:
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A summary of restricted stock unit activity during the year ended December 31, 2023 is presented below:
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Schedule Of Performance Share Activity | A summary of restricted stock units and performance share units activity during the three months ended March 31, 2024, is presented below:
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A summary of performance share unit activity and changes during the year ended December 31, 2023 is presented below:
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Share-Based Payment Arrangement, Expensed and Capitalized, Amount | The stock-based compensation expense and associated tax benefit were as follows:
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Inventories (Tables) |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory Components | Inventories consist of the following components:
(1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude. (2)Finished products include gasolines, jet fuels, diesels, renewable diesels, lubricants, asphalts, LPG’s and residual fuels. (3)Process chemicals include additives and other chemicals. (4)Includes RINs.
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Inventories consist of the following components:
(1)Other raw materials and unfinished products include feedstocks and blendstocks, other than crude. (2)Finished products include gasolines, jet fuels, diesels, renewable 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) |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Carrying Amounts | The carrying amounts of long-term debt are as follows:
The fair values of the senior notes are as follows:
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The carrying amounts of outstanding debt are as follows:
(1)The 2.625% HollyFrontier Senior Notes and HF Sinclair 2.625% Senior Notes, inclusive of unamortized discount and debt issuance costs of $0.9 million at December 31, 2022 were due October 2023 and were classified as current debt on our consolidated balance sheets. (2)At December 31, 2022, total HF Sinclair standalone long-term debt, which excluded HEP long-term debt, was $1.4 billion. The fair values of the senior notes are as follows:
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Schedule of Maturities of Long-Term Debt | Principal maturities of outstanding debt as of December 31, 2023 are as follows:
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Derivative Instruments and Hedging Activities (Tables) |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Unrealized Gain (Loss) Recognized in OCI and Gain (Loss) Reclassified into Earnings | 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:
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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:
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Schedule of Gain (Loss) Recognized in Earnings | The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:
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The following table presents the pre-tax effect on earnings due to maturities and fair value adjustments of our economic hedges:
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Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges | As of March 31, 2024, we have the following notional contract volumes related to outstanding derivative instruments:
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As of December 31, 2023, we have the following notional contract volumes related to outstanding derivative instruments (all maturing in 2024):
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables present the fair value and balance sheet locations of our outstanding derivative instruments. These amounts are presented on a gross basis with offsetting balances that reconcile to a net asset or liability position in our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.
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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 on our consolidated balance sheets. We present on a net basis to reflect the net settlement of these positions in accordance with provisions of our master netting arrangements.
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Stockholders' Equity (Tables) |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchases of Shares under Share Repurchase Program | The following table presents the total open market and privately negotiated purchases of shares under our share repurchase programs for the three months ended March 31, 2024 and 2023:
(1) During the three months ended March 31, 2024, 1,516,326 shares were repurchased for $85.0 million, pursuant to privately negotiated repurchases from REH Company. During the three months ended March 31, 2023, 1,969,279 shares were repurchased for $100.0 million pursuant to privately negotiated repurchases from REH Company.
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The following table presents total open market and privately negotiated purchases of shares under our share repurchase programs for the years ended December 31, 2023 and 2022.
(1) During the years ended December 31, 2023 and 2022, 15,515,302 and 14,407,274 shares, respectively, were repurchased for $810.6 million and $750.0 million, respectively, pursuant to privately negotiated repurchases from REH Company.
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Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Other Comprehensive Income (Loss), before Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components and Allocated Tax Effects of OCI | The components and allocated tax effects of other comprehensive income (loss) are as follows:
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The components and allocated tax effects of other comprehensive income (loss) are as follows:
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Schedule of Income Statement Line Items Effects Out of AOCI | The following table presents the statements of income line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
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The following table presents the statement of income line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
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Schedule of AOCI in Equity | Accumulated other comprehensive loss in the equity section of our consolidated balance sheets includes:
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Accumulated other comprehensive loss in the equity section of our consolidated balance sheets includes:
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Contingencies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Transportation and Storage Fees Under Agreement | At December 31, 2023, the minimum future transportation and storage fees under transportation agreements having terms in excess of one year are as follows:
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Segment Information (Tables) |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 |
Dec. 31, 2023 |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Segment Reporting Information |
(1) Includes income earned by certain of our subsidiaries in the Midstream segment related to intercompany transportation agreements with certain of our subsidiaries in the Refining and Lubricants & Specialties segments that represent leases. These transactions eliminate in consolidation.
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The following is a summary of the financial information of our reportable segments reconciled to the amounts reported in the consolidated financial statements.
(1) Includes income earned by certain of our subsidiaries in the Midstream segment related to intercompany transportation agreements with certain of our subsidiaries in the Refining and Lubricants & Specialties segments that represent leases. These transactions eliminate in consolidation.
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Acquisitions (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Consideration and Allocation | The following tables present the purchase consideration and final purchase price allocation of the assets acquired and liabilities assumed on March 14, 2022:
(1)Based on the HollyFrontier closing stock price on March 11, 2022. (2)Based on the HEP closing unit price on March 11, 2022.
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Balance Sheet Information | The following table presents the amounts and balance sheet locations of our operating and financing leases recorded on our consolidated balance sheets.
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Schedule of Components of Lease Expense and Supplemental Cash Flow Information | Supplemental balance sheet information related to our leases was as follows:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
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Schedule of Operating and Finance Lease Maturities | As of December 31, 2023, minimum future lease payments of our operating and finance lease obligations were as follows:
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Schedule of Lease Income | Lease income recognized was as follows:
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Schedule of Minimum Undiscounted Lease Payments | Annual minimum undiscounted lease payments in which we are a lessor to third-party contracts as of December 31, 2023 were as follows:
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Schedule of Net Investments in Operating Leases | Net investment in sales-type leases recorded on our consolidated balance sheets was composed of the following:
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Properties, Plants and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Property, Plants and Equipment | The components of properties, plants and equipment are as follows:
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Goodwill and Intangibles (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill by Segment | The following is a summary of our goodwill by segment:
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Schedule of Intangible Assets | The carrying amounts of our intangible assets presented in “Intangibles and other” on our consolidated balance sheets are as follows:
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Schedule of Estimated Future Amortization Expense Related to Intangible Assets | Estimated future amortization expense related to the intangible assets at December 31, 2023 is as follows:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Provision For Income Taxes | The provision for income taxes is comprised of the following:
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Schedule of Effective Tax Rate to Income Tax Expense (Benefit) | The statutory federal income tax rate applied to pre-tax book income reconciles to income tax expense as follows:
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Schedule of Deferred Income Tax Assets And Liabilities | Our deferred income tax assets and liabilities as of December 31, 2023 and 2022 are as follows:
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Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Pension and Post-retirement Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Benefit Obligation and Plan Assets to PCLI Pension Plans | The following table sets forth the changes in the benefit obligation and plan assets of our PCLI pension plans and Sonneborn Netherlands plans for the years ended December 31, 2023 and 2022.
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Schedule of Projected Benefit Obligation in Excess of Fair Value | The following tables provide information regarding pension plans with a projected benefit obligation and accumulated benefit obligation in excess of the fair value of plan assets:
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Schedule of Accumulated Benefit Obligation in Excess of Fair Value | The following tables provide information regarding pension plans with a projected benefit obligation and accumulated benefit obligation in excess of the fair value of plan assets:
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Schedule of Net Periodic Pension Expense | Net periodic pension expense consisted of the following components:
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Schedule of Pension Plan Assets | The following table presents the fair values of PCLI’s pension plans’ assets, by level within the fair value hierarchy, as of December 31, 2023 and 2022.
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Schedule of Changes in Benefit Obligation and Plan Assets to Post-Retirement Healthcare Plans | The following table sets forth the changes in the benefit obligation and plan assets of our post-retirement healthcare plans for the years ended December 31, 2023 and 2022:
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Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations | The weighted average assumptions used to determine end of period benefit obligations:
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Schedule of Net Periodic Post-Retirement Credit | Net periodic post-retirement credit consisted of the following components:
|
Cushing Connect Joint Venture - Narrative (Details) - HEP - Cushing Connect bbl in Thousands, $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
bbl
| |
Holly Energy Partners Entity [Line Items) | |
Barrels of crude oil per day | 160 |
Barrels of crude oil, value | 1,500 |
Percent of budget which construction costs payable by HEP | 10.00% |
Expected construction costs | $ | $ 74.0 |
Cushing Connect Joint Venture - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Holly Energy Partners Entity [Line Items) | |||
Cash and cash equivalents | $ 1,240,860 | $ 1,353,747 | $ 1,665,066 |
Properties, plants and equipment, at cost | 10,609,735 | 10,533,432 | 10,146,652 |
Less: accumulated depreciation | (4,021,845) | (3,906,600) | (3,457,747) |
Intangibles and other | 977,257 | 972,272 | 982,718 |
Variable Interest Entity, Not Primary Beneficiary | Cushing Connect | |||
Holly Energy Partners Entity [Line Items) | |||
Cash and cash equivalents | 916 | 1,536 | 2,147 |
Properties, plants and equipment, at cost | 102,979 | 102,936 | 102,635 |
Less: accumulated depreciation | (8,907) | (8,022) | (4,484) |
Intangibles and other | $ 31,674 | $ 32,473 | $ 34,746 |
Revenues - Schedule Contract Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Change In Contract With Customer, Liability [Roll Forward] | |||||
Balance at beginning of period | $ 7,533 | $ 10,722 | $ 10,722 | $ 9,278 | $ 6,738 |
Increase | 5,693 | 5,159 | 21,381 | 32,040 | 32,301 |
Recognized as revenue | (6,115) | (5,744) | (24,570) | (30,596) | (29,761) |
Balance at end of period | $ 7,111 | $ 10,137 | $ 7,533 | $ 10,722 | $ 9,278 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Earnings Per Share [Abstract] | |||||
Net income attributable to HF Sinclair stockholders | $ 314,664 | $ 353,266 | $ 1,589,666 | $ 2,922,668 | $ 558,324 |
Participating securities' share in earnings | 1,969 | 2,925 | 14,045 | 29,465 | 7,465 |
Net income attributable to common shares | $ 312,695 | $ 350,341 | $ 1,575,621 | $ 2,893,203 | $ 550,859 |
Average number of shares of common stock outstanding (in shares) | 198,710 | 195,445 | 190,035 | 202,566 | 162,569 |
Average number of shares of common stock outstanding assuming dilution (in shares) | 198,710 | 195,445 | 190,035 | 202,566 | 162,569 |
Basic earnings per share (in USD per share) | $ 1.57 | $ 1.79 | $ 8.29 | $ 14.28 | $ 3.39 |
Diluted earnings per share (in USD per share) | $ 1.57 | $ 1.79 | $ 8.29 | $ 14.28 | $ 3.39 |
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Compensation cost attributable to share-based compensation plans | $ 5,800 | $ 3,300 | $ 42,212 | $ 35,947 | $ 42,044 |
Tax benefit recognized on compensation expense | 10,203 | 8,918 | 10,545 | ||
Restricted Stock Units | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Compensation cost attributable to share-based compensation plans | 30,067 | 27,264 | 29,453 | ||
Performance Share Units | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Compensation cost attributable to share-based compensation plans | $ 12,145 | $ 8,683 | $ 12,591 |
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Inventories | |||
Crude oil | $ 798,070 | $ 858,411 | $ 818,737 |
Other raw materials and unfinished products | 743,302 | 683,066 | 842,855 |
Finished products | 1,438,867 | 1,435,817 | 1,252,984 |
Lower of cost or market reserve | (112,200) | (331,570) | (61,151) |
Process chemicals | 38,731 | 50,917 | 53,900 |
Repair and maintenance supplies and other | 224,115 | 225,190 | 307,203 |
Total inventory | $ 3,130,885 | $ 2,921,831 | $ 3,214,528 |
Inventories - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Inventory [Line Items] | |||||
Inventory valuation reserves | $ 112,200 | $ 331,570 | $ 61,151 | ||
Refining | |||||
Inventory [Line Items] | |||||
Inventory valuation reserves | 220,600 | ||||
Increase (decrease) to cost of products sold | (220,600) | 220,600 | $ (318,900) | ||
Excess of replacement cost over LIFO value of inventory | 39,000 | ||||
Renewables | |||||
Inventory [Line Items] | |||||
Inventory valuation reserves | 112,200 | 111,000 | 61,200 | ||
Increase (decrease) to cost of products sold | $ 1,200 | $ 47,600 | $ 49,900 | $ 52,400 |
Environmental (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Mar. 14, 2022 |
|
Loss Contingencies [Line Items] | ||||||
Environmental remediation costs | $ 1.8 | $ 13.3 | $ 26.5 | $ 13.4 | $ 7.8 | |
Accrued environmental liability | 191.6 | 195.4 | 192.3 | |||
Sinclair Merger | ||||||
Loss Contingencies [Line Items] | ||||||
Third party receivable associated with environmental liabilities assumed in transaction | $ 21.5 | |||||
Accrued environmental liabilities assumed in transaction | $ 72.2 | |||||
Other Noncurrent Liabilities | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued environmental liability | $ 164.4 | $ 161.4 | $ 170.0 |
Debt - Principal Maturities of Outstanding Debt (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2024 | $ 0 |
2025 | 455,500 |
2026 | 1,000,000 |
2027 | 400,000 |
2028 | 500,000 |
Thereafter | 400,000 |
Total long-term debt (2) | $ 2,755,500 |
Derivative Instruments and Hedging Activities - Location of Gain (Loss) in Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Net Unrealized Gain Recognized in OCI | $ 0 | $ 271 | $ 0 | $ 326 | $ 31 |
Loss Reclassified into Earnings | (4,287) | (1) | (3,236) | (5,288) | (17,579) |
Commodity contracts | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Net Unrealized Gain Recognized in OCI | 0 | 271 | 0 | 326 | 31 |
Commodity contracts | Sales and other revenues | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Loss Reclassified into Earnings | $ (4,287) | $ (1) | (3,236) | (5,288) | (19,239) |
Commodity contracts | Operating expenses | |||||
Trading Activity, Gains and Losses, Net [Line Items] | |||||
Loss Reclassified into Earnings | $ 0 | $ 0 | $ 1,660 |
Stockholders' Equity - Schedule of Share Repurchases (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Class of Stock [Line Items] | ||||
Number of shares repurchased (in shares) | 2,930,742 | 4,793,857 | 18,779,880 | 25,716,042 |
Cash paid for shares repurchased | $ 166,128 | $ 240,323 | $ 974,474 | $ 1,313,006 |
REH Company | ||||
Class of Stock [Line Items] | ||||
Number of shares repurchased (in shares) | 1,516,326 | 1,969,279 | 15,515,302 | 14,407,274 |
Cash paid for shares repurchased | $ 85,000 | $ 100,000 | $ 810,600 | $ 750,000 |
Contingencies - Schedule of Minimum Future Fees Under Agreement (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2024 | $ 237,534 |
2025 | 241,403 |
2026 | 203,316 |
2027 | 203,484 |
2028 | 207,742 |
Thereafter | 1,079,956 |
Total | $ 2,173,435 |
Segment Information - Narrative (Details) - segment |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 14, 2022 |
|
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 5 | 5 | |
HEP | Osage Pipeline | |||
Segment Reporting Information [Line Items] | |||
Equity method investment, ownership percentage | 50.00% | 50.00% | |
HEP | Cheyenne Pipeline | |||
Segment Reporting Information [Line Items] | |||
Equity method investment, ownership percentage | 50.00% | 50.00% | |
HEP | Cushing Connect | |||
Segment Reporting Information [Line Items] | |||
Equity method investment, ownership percentage | 50.00% | 50.00% | |
HEP | Saddle Butte Pipeline | |||
Segment Reporting Information [Line Items] | |||
Equity method investment, ownership percentage | 25.12% | 25.12% | 25.06% |
HEP | Pioneer Pipeline | |||
Segment Reporting Information [Line Items] | |||
Equity method investment, ownership percentage | 49.995% | 49.995% | 49.995% |
Leases - Narrative (Details) $ in Millions |
Dec. 31, 2023
USD ($)
|
---|---|
Lessee, Lease, Description [Line Items] | |
Future undiscounted lease payments under leases | $ 62.8 |
Lease not yet commenced, term | 15 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 56 years |
Operating lease renewal term | 10 years |
Leases - Supplemental Balance Sheet Schedule (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Operating leases: | |||
Operating lease right-of-use assets | $ 390,566 | $ 348,006 | $ 351,068 |
Operating lease liabilities | 97,973 | 106,973 | 109,926 |
Noncurrent operating lease liabilities | $ 309,370 | 249,479 | 254,215 |
Total operating lease liabilities | 356,452 | 364,141 | |
Finance leases: | |||
Properties, plants and equipment, at cost | 108,746 | 81,454 | |
Accumulated amortization | (25,271) | (21,434) | |
Properties, plants and equipment, net | $ 83,475 | $ 60,020 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | |
Accrued liabilities | $ 10,842 | $ 10,722 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities | |
Other long-term liabilities | $ 74,860 | $ 50,361 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities | |
Total finance lease liabilities | $ 85,702 | $ 61,083 | |
Weighted average remaining lease term (in years) | |||
Operating leases | 7 years 10 months 24 days | 7 years 2 months 12 days | |
Finance leases | 8 years 8 months 12 days | 7 years 9 months 18 days | |
Weighted average discount rate | |||
Operating leases | 5.00% | 4.20% | |
Finance leases | 5.80% | 4.20% |
Leases - Components of Lease Expense Schedule (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Leases [Abstract] | |||
Operating lease expense | $ 120,552 | $ 116,769 | $ 117,292 |
Finance lease expense: | |||
Amortization of right-of-use assets | 13,007 | 13,003 | 4,295 |
Interest on lease liabilities | 3,156 | 2,593 | 733 |
Variable lease cost | 12,968 | 4,448 | 3,645 |
Total lease expense | $ 149,683 | $ 136,813 | $ 125,965 |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows from operating leases | $ 127,923 | $ 126,048 | $ 129,577 | ||
Operating cash flows from finance leases | 3,156 | 2,593 | 733 | ||
Financing cash flows from finance leases | $ 2,600 | $ 3,071 | 11,923 | 11,713 | 3,990 |
Right-of-use assets obtained in exchange for lease obligations: | |||||
Operating leases | 103,352 | 61,403 | 147,718 | ||
Finance leases | $ 38,061 | $ 6,149 | $ 64,334 |
Leases - Schedule of Operating and Finance Lease Maturities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Operating | |||
2024 | $ 118,006 | ||
2025 | 65,436 | ||
2026 | 50,145 | ||
2027 | 31,644 | ||
2028 | 24,398 | ||
Thereafter | 163,651 | ||
Future minimum lease payments | 453,280 | ||
Less: imputed interest | 96,828 | ||
Total operating lease liabilities | 356,452 | $ 364,141 | |
Less: current obligations | $ 97,973 | 106,973 | 109,926 |
Noncurrent operating lease liabilities | $ 309,370 | 249,479 | 254,215 |
Finance | |||
2024 | 15,375 | ||
2025 | 13,650 | ||
2026 | 12,537 | ||
2027 | 11,442 | ||
2028 | 10,766 | ||
Thereafter | 46,869 | ||
Future minimum lease payments | 110,639 | ||
Less: imputed interest | 24,937 | ||
Total finance lease liabilities | 85,702 | 61,083 | |
Less: current obligations | 10,842 | 10,722 | |
Long-term lease obligations | $ 74,860 | $ 50,361 |
Leases - Schedule of Lease Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Leases [Abstract] | |||
Operating lease revenues | $ 16,879 | $ 14,346 | $ 15,281 |
Sales-type lease interest income | 1,634 | 2,515 | 2,545 |
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable | $ 1,325 | $ 1,782 | $ 2,162 |
Leases - Schedule of Minimum Undiscounted Lease Payments (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Operating | |
2024 | $ 12,994 |
2025 | 3,441 |
2026 | 0 |
2027 | 0 |
2028 | 0 |
Thereafter | 0 |
Total lease payment receipts | 16,435 |
Sales-type | |
2024 | 2,170 |
2025 | 2,170 |
2026 | 2,170 |
2027 | 2,170 |
2028 | 2,170 |
Thereafter | 13,560 |
Total lease payment receipts | 24,410 |
Less: imputed interest | (15,945) |
Total lease receivable | 8,465 |
Unguaranteed residual assets at end of leases | 25,180 |
Net investment in leases | $ 33,645 |
Leases - Schedule of Net Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
Lease receivables | $ 18,830 | $ 23,797 |
Unguaranteed residual assets | 14,815 | 10,383 |
Net investment in leases | $ 33,645 | $ 34,180 |
Properties, Plants and Equipment - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Property, Plant and Equipment [Abstract] | |||||
Capitalized interest | $ 0.7 | $ 1.2 | $ 4.3 | $ 6.2 | $ 15.2 |
Depreciation expense | $ 474.3 | $ 442.2 | $ 329.4 |
Goodwill and Intangibles - Narrative (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Jul. 01, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2024 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 2,977,744,000 | $ 2,978,315,000 | $ 2,977,511,000 | ||
Impairment of goodwill | $ 0 | 0 | $ 0 | ||
Amortization expense | $ 55,100,000 | $ 51,000,000 | $ 35,600,000 |
Goodwill and Intangibles - Schedule of Estimated Future Amortization Expense for Intangible Assets (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 55,261 |
2025 | 55,261 |
2026 | 46,499 |
2027 | 40,753 |
2028 | $ 34,253 |
Income Taxes - Provision For Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Current | |||||
Federal | $ 179,677 | $ 674,977 | $ (33,206) | ||
State | 24,419 | 108,993 | (1,802) | ||
Foreign | 44,966 | 57,734 | 30,336 | ||
Deferred | |||||
Federal | 154,996 | 38,535 | 94,353 | ||
State | 31,285 | 21,121 | 1,386 | ||
Foreign | 6,269 | (6,488) | 32,831 | ||
Income tax expense (benefit) total | $ 85,474 | $ 99,700 | $ 441,612 | $ 894,872 | $ 123,898 |
Income Taxes - Reconciliation Of Effective Tax Rate (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | |||||
Tax computed at statutory rate | $ 452,027 | $ 826,570 | $ 165,302 | ||
State income taxes, net of federal tax benefit | 55,734 | 123,442 | 13,588 | ||
Noncontrolling interest in net income | (29,386) | (28,726) | (25,931) | ||
Effect of change in state rate | 0 | (15,800) | (13,342) | ||
Nontaxable permanent differences | (49,420) | 0 | 0 | ||
CARES Act benefits | 0 | 0 | (10,384) | ||
Foreign rate differential | 5,753 | 6,608 | 331 | ||
Federal tax credits | (5,344) | (23,853) | (29,777) | ||
US tax on non-US operations | 7,239 | 12,920 | 18,547 | ||
Other | 5,009 | (6,289) | 5,564 | ||
Income tax expense (benefit) total | $ 85,474 | $ 99,700 | $ 441,612 | $ 894,872 | $ 123,898 |
Income Taxes - Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Properties, plants, equipment and intangibles (due primarily to tax in excess of book depreciation) | $ (1,171,633) | $ (1,032,048) |
Lease obligation | 106,161 | 129,727 |
Accrued employee benefits | 20,260 | 17,665 |
Accrued post-retirement benefits | 9,985 | 9,951 |
Accrued environmental costs | 42,916 | 37,868 |
Hedging instruments | 1,791 | 3,260 |
Inventory differences | (164,178) | (230,112) |
Deferred turnaround costs | (155,833) | (88,574) |
Net operating loss and tax credit carryforwards | 35,294 | 27,963 |
Investment in HEP | (134,160) | |
Deferred Tax Assets, Valuation Allowance | (10,614) | (3,691) |
Other | (11,279) | (14) |
Total deferred income tax assets | 216,407 | 226,434 |
Total deferred income tax liabilities | (1,513,537) | (1,488,599) |
Total deferred income tax assets and liabilities, net | $ (1,297,130) | $ (1,262,165) |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance | $ 10,614 | $ 3,691 | ||
Unrecognized tax benefits | 1,225 | $ 1,354 | $ 54,605 | $ 54,899 |
Unrecognized tax benefit from claims filed with IRS | 700 | |||
Foreign Tax Authority | Luxembourg | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating losses | 17,600 | |||
Foreign Tax Authority | Netherlands | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating losses | 11,200 | |||
Foreign Tax Authority | China | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating losses | $ 3,500 |
Income Taxes - Reconciliation Of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized tax benefits, balance at beginning of Period | $ 1,354 | $ 54,605 | $ 54,899 |
Reductions for tax positions of prior years | 0 | (53,023) | (49) |
Settlements | 0 | 0 | (125) |
Lapse of statute of limitations | (129) | (228) | (120) |
Unrecognized tax benefits, balance at end of Period | $ 1,225 | $ 1,354 | $ 54,605 |
Pension and Post-retirement Plans - Projected and Accumulated Benefit Obligations (Details) - Unrealized loss on pension obligations - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 24,579 | $ 90,443 |
Fair value of plan assets | 23,808 | 87,466 |
Accumulated benefit obligation | 24,579 | 90,443 |
Fair value of plan assets | $ 23,808 | $ 87,466 |
Pension and Post-retirement Plans - Net Periodic Expense (Details) - Unrealized loss on pension obligations - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost - benefit earned during the period | $ 0 | $ 1,839 | $ 4,455 |
Interest cost on projected benefit obligations | 3,781 | 3,086 | 2,740 |
Expected return on plans assets | (3,140) | (3,223) | (3,031) |
Amortization of (gain) loss | 0 | (208) | (407) |
Settlements | 1,378 | 0 | 0 |
Net periodic pension expense | $ 2,019 | $ 1,494 | $ 3,757 |
Pension and Post-retirement Plans - Weighted Average Assumptions Used to Determine End of Period Benefit Obligations (Details) - Unrealized gain on post-retirement benefit obligations |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.60% | 4.20% |
Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.60% | 4.95% |
Current health care trend rate | 6.00% | 6.00% |
Ultimate health care trend rate | 4.00% | 4.00% |
Year rate reaches ultimate trend rate | 2035 | 2027 |
Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.81% | 5.10% |
Current health care trend rate | 6.75% | 7.00% |
Ultimate health care trend rate | 4.00% | 4.00% |
Year rate reaches ultimate trend rate | 2041 | 2041 |
Pension and Post-retirement Plans - Net Periodic Credit (Details) - Unrealized gain on post-retirement benefit obligations - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost - benefit earned during the period | $ 1,604 | $ 2,081 | $ 2,324 |
Interest cost on projected benefit obligations | 1,340 | 990 | 782 |
Amortization of prior service credit | (3,481) | (3,472) | (3,481) |
Amortization of (gain) loss | (378) | 32 | 153 |
Net periodic post-retirement credit | $ (915) | $ (369) | $ (222) |
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