Derivative Instruments And Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table presents the pre-tax effect on other comprehensive income (“OCI”) and earnings due to fair value adjustments and maturities of commodity price swaps and forward sales under hedge accounting:

	Unrealized Gain (Loss) Recognized in OCI			Gain (Loss) Recognized in Earnings Due to Settlements				Gain (Loss) Attributable to Hedge Ineffectiveness Recognized in Earnings
				Location	Amount			Location	Amount
	(In thousands)
Three Months Ended June 30, 2016
Change in fair value	$	(5,138	)
Loss reclassified to earnings due to settlements	21,910			Sales and other revenunes	$	(15,897	)
Amortization of discontinued hedges reclassified to earnings	270			Operating expenses	(6,283		)	Operating expenses	$	—
Total	$	17,042			$	(22,180	)		$	—
Three Months Ended June 30, 2015
Change in fair value	$	8,501		Sales and other revenues	$	49,752
Gain reclassified to earnings due to settlements	(14,802		)	Cost of products sold	(30,964		)	Sales and other revenues	$	(140	)
Amortization of discontinued hedges reclassified to earnings	270			Operating expenses	(4,256		)	Cost of products sold	2,494
Total	$	(6,031	)		$	14,532			$	2,354
Six Months Ended June 30, 2016
Change in fair value	$	(17,059	)
Loss reclassified to earnings due to settlements	32,966			Sales and other revenues	$	(20,653	)
Amortization of discontinued hedge reclassified to earnings	540			Operating expenses	(12,853		)	Operating expenses	$	—
Total	$	16,447			$	(33,506	)		$	—
Six Months Ended June 30, 2015
Change in fair value	$	(5,647	)	Sales and other revenues	$	98,932		Sales and other revenues	$	(274	)
Gain reclassified to earnings due to settlements	(19,494		)	Cost of products sold	(71,733		)	Cost of products sold	3,738
Amortization of discontinued hedge reclassified to earnings	540			Operating expenses	(8,245		)	Operating expenses	547
Total	$	(24,601	)		$	18,954			$	4,011

Schedule of Notional Amounts of Outstanding Derivatives Serving as Cash Flow Hedges

As of June 30, 2016, we have the following notional contract volumes related to outstanding derivative instruments serving as cash flow hedges against price risk on forecasted transactions:

		Notional Contract Volumes by Year of Maturity
Derivative Instruments	Total Outstanding Notional	2016	2017	Unit of Measure
Natural gas price swaps - long	14,400,000	4,800,000	9,600,000	MMBTU
Forward diesel contracts - short	75,000	75,000	—	Barrels
Physical crude contracts - short	275,000	275,000	—	Barrels

Schedule of Realized Gain (Loss)

The following table presents the pre-tax effect on income due to maturities and fair value adjustments of our economic hedges:

	Three Months Ended June 30,					Six Months Ended June 30,
Location of Gain (Loss) Recognized in Earnings	2016		2015			2016		2015
	(In thousands)
Cost of products sold	$	828	$	5,292		$	1,302	$	27,574
Operating expenses	8,083		(248		)	4,614		(544		)
Total	$	8,911	$	5,044		$	5,916	$	27,030

Schedule of Notional Amounts of Outstanding Derivatives Serving as Economic Hedges

As of June 30, 2016, we have the following notional contract volumes related to our outstanding derivative contracts serving as economic hedges:

		Notional Contract Volumes by Year of Maturity
Derivative Instrument	Total Outstanding Notional	2016	2017	Unit of Measure
Crude price swaps (basis spread) - long	6,983,000	5,888,000	1,095,000	Barrels
Natural gas price swaps (basis spread) - long	15,462,000	5,154,000	10,308,000	MMBTU
Natural gas price swaps - long	14,400,000	4,800,000	9,600,000	MMBTU
Natural gas price swaps - short	14,400,000	4,800,000	9,600,000	MMBTU
NYMEX futures (WTI) - short	910,000	710,000	200,000	Barrels

Schedule of Interest Rate Hedges

The following table presents the pre-tax effect on other comprehensive income and earnings due to fair value adjustments and maturities of HEP’s interest rate swaps under hedge accounting:

	Unrealized Gain (Loss) Recognized in OCI			Loss Recognized in Earnings Due to Settlements
				Location	Amount
	(In thousands)
Three Months Ended June 30, 2016
Interest rate swaps
Change in fair value	$	(255	)
Loss reclassified to earnings due to settlements	113			Interest expense	$	(113	)
Total	$	(142	)		$	(113	)
Three Months Ended June 30, 2015
Interest rate swaps
Change in fair value	$	(306	)
Loss reclassified to earnings due to settlements	528			Interest expense	$	(528	)
Total	$	222			$	(528	)
Six Months Ended June 30, 2016
Interest rate swaps
Change in fair value	$	(938	)
Loss reclassified to earnings due to settlements	343			Interest expense	$	(343	)
Total	$	(595	)		$	(343	)
Six Months Ended June 30, 2015
Interest rate swaps
Change in fair value	$	(1,586	)
Loss reclassified to earnings due to settlements	1,059			Interest expense	$	(1,059	)
Total	$	(527	)		$	(1,059	)

Schedule of Fair Value and Balance Sheet Location of Outstanding Derivatives

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

	Derivatives in Net Asset Position							Derivatives in Net Liability Position
	Gross Assets		Gross Liabilities Offset in Balance Sheet			Net Assets Recognized in Balance Sheet		Gross Liabilities		Gross Assets Offset in Balance Sheet			Net Liabilities Recognized in Balance Sheet
			(In thousands)
June 30, 2016
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—		$	—	$	22,448	$	—		$	22,448
Forward contracts	442		—			442		933		—			933
Interest rate swap contracts	—		—			—		405		—			405
	$	442	$	—		$	442	$	23,786	$	—		$	23,786
Derivatives not designated as cash flow hedging instruments:
Commodity price swap contracts	$	2,231	$	(1,648	)	$	583	$	23,082	$	(20,940	)	$	2,142
NYMEX futures contracts	115		—			115		—		—			—
Forward contracts	—		—			—		—		—			—
	$	2,346	$	(1,648	)	$	698	$	23,082	$	(20,940	)	$	2,142
Total net balance						$	1,140						$	25,928
Balance sheet classification:								Accrued liabilities					$	16,471
	Prepayment and other					$	1,140	Other long-term liabilities					9,457
						$	1,140						$	25,928

	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, 2015
Derivatives designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	38,755	$	—		$	38,755
Interest rate swap contracts	304		—		304		114		—			114
	$	304	$	—	$	304	$	38,869	$	—		$	38,869
Derivatives not designated as cash flow hedging instruments:
Commodity price swap contracts	$	—	$	—	$	—	$	60,196	$	(37,118	)	$	23,078
NYMEX futures contracts	3,469		—		3,469		—		—			—
	$	3,469	$	—	$	3,469	$	60,196	$	(37,118	)	$	23,078
Total net balance					$	3,773						$	61,947
Balance sheet classification:	Prepayment and other				$	3,469	Accrued liabilities					$	36,976
	Intangibles and other				304		Other long-term liabilities					24,971
					$	3,773						$	61,947