Revenues from Contracts with Customers

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues

Substantially all revenue-generating activities relate to sales of refined product and excess crude oil inventories sold at market prices (variable consideration) under contracts with customers. Additionally, we have revenues attributable to HEP logistics services provided under petroleum product and crude oil pipeline transportation, processing, storage and terminalling agreements with third parties.

Disaggregated revenues were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Revenues by type
Refined product revenues
Transportation fuels⁽¹⁾	$	3,354,927	$	3,598,815	$	9,796,334	$	10,193,218
Specialty lubricant products ⁽²⁾	461,669		422,760		1,413,194		1,237,002
Asphalt, fuel oil and other products ⁽³⁾	299,305		288,013		767,023		741,139
Total refined product revenues	4,115,901		4,309,588		11,976,551		12,171,359
Excess crude oil revenues ⁽⁴⁾	264,675		422,122		997,988		1,074,928
Transportation and logistic services	29,868		25,596		89,388		77,799
Other revenues ⁽⁵⁾	14,384		13,493		40,763		46,376
Total sales and other revenues	$	4,424,828	$	4,770,799	$	13,104,690	$	13,370,462



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Refined product revenues by market
United States
Mid-Continent	$	2,191,014	$	2,337,689	$	6,283,488	$	6,458,935
Southwest	913,326		1,016,771		2,772,281		2,865,324
Rocky Mountains	611,003		627,542		1,739,401		1,869,414
Northeast	151,919		85,344		427,926		261,380
Canada	184,784		190,727		536,911		563,088
Europe, Asia and Latin America	63,855		51,515		216,544		153,218
Total refined product revenues	$	4,115,901	$	4,309,588	$	11,976,551	$	12,171,359


(1)	Transportation fuels consist of gasoline, diesel and jet fuel.


(2)	Specialty lubricant products consist of base oil, waxes, finished lubricants and other specialty fluids.

(3)

Asphalt, fuel oil and other products revenue include revenues attributable to our Refining and Lubricants and Specialty Products segments of $231.4 million and $67.9 million, respectively, for the three months ended September 30, 2019, $612.0 million and $155.0 million, respectively, for the nine months ended September 30, 2019, $234.9 million and $53.1 million, respectively, for the three months ended September 30, 2018, and $589.7 million and $151.4 million, respectively, for the nine months ended September 30, 2018.


(4)	Excess crude oil revenues represent sales of purchased crude oil inventory that at times exceeds the supply needs of our refineries.


(5)	Other revenues are principally attributable to our Refining segment.

Our consolidated balance sheet reflects contract liabilities related to unearned revenues attributable to future service obligations under HEP’s third-party transportation agreements and production agreements from the acquisition of Sonneborn on February 1, 2019. The following table presents changes to our contract liabilities during the nine months ended September 30, 2019.



	January 1, 2019		Sonneborn Acquisition	Increase		Recognized as Revenue			September 30, 2019
	(In thousands)
Accrued liabilities	$	132	6,463	$	19,255	$	(21,135	)	$	4,715

As of September 30, 2019, we have long-term contracts with customers that specify minimum volumes of gasoline, diesel, lubricants and specialty products to be sold ratably at market prices through 2021. Such volumes are typically nominated in the month preceding delivery and delivered ratably throughout the following month. Future prices are subject to market fluctuations and therefore, we have elected the exemption to exclude variable consideration under these contracts under Accounting Standards Codification 606-10-50-14A. Aggregate minimum volumes expected to be sold (future performance obligations) under our long-term product sales contracts with customers are as follows:



	Remainder of 2019	2020	2021	Thereafter	Total
	(In thousands)
Refined product sales volumes (barrels)	5,610	7,964	1,847	—	15,421

Additionally, HEP has long-term contracts with third-party customers that specify minimum volumes of product to be transported through its pipelines and terminals that result in fixed-minimum annual revenues through 2022. Annual minimum revenues attributable to HEP’s third-party contracts as of September 30, 2019 are presented below:



	Remainder of 2019		2020		2021		Thereafter		Total
	(In thousands)
HEP contractual minimum revenues	$	10,695	$	28,238	$	22,822	$	38,575	$	100,330