(Mark One) | |||||
ANNUAL 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 |
Item | Page | ||||
PART I | |||||
PART II | |||||
6. [Reserved] | |||||
PART III | |||||
PART IV | |||||
Index to Exhibits | |||||
Signatures |
Years Ended December 31, | ||||||||||||||||||||
2021 (8) | 2020 | 2019 | ||||||||||||||||||
Consolidated | ||||||||||||||||||||
Crude charge (BPD) (1) | 400,720 | 365,190 | 388,860 | |||||||||||||||||
Refinery throughput (BPD) (2) | 431,870 | 395,080 | 417,570 | |||||||||||||||||
Sales of produced refined products (BPD) (3) | 424,100 | 391,670 | 414,370 | |||||||||||||||||
Refinery utilization (4) | 93.1 | % | 90.2 | % | 96.0 | % | ||||||||||||||
Average per produced barrel sold (5) | ||||||||||||||||||||
Refinery gross margin | $ | 10.89 | $ | 7.29 | $ | 15.92 | ||||||||||||||
Refinery operating expenses (6) | 7.04 | 6.05 | 6.12 | |||||||||||||||||
Net operating margin | $ | 3.85 | $ | 1.24 | $ | 9.80 | ||||||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 6.92 | $ | 6.00 | $ | 6.07 | ||||||||||||||
Feedstocks: | ||||||||||||||||||||
Sweet crude oil | 47 | % | 48 | % | 45 | % | ||||||||||||||
Sour crude oil | 31 | % | 29 | % | 34 | % | ||||||||||||||
Heavy sour crude oil | 12 | % | 11 | % | 10 | % | ||||||||||||||
Black wax crude oil | 4 | % | 4 | % | 4 | % | ||||||||||||||
Other feedstocks and blends | 6 | % | 8 | % | 7 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Consolidated | ||||||||||||||||||||
Sales of refined products: | ||||||||||||||||||||
Gasolines | 53 | % | 54 | % | 52 | % | ||||||||||||||
Diesel fuels | 34 | % | 34 | % | 34 | % | ||||||||||||||
Jet fuels | 4 | % | 3 | % | 4 | % | ||||||||||||||
Fuel oil | 1 | % | 1 | % | 2 | % | ||||||||||||||
Asphalt | 3 | % | 4 | % | 3 | % | ||||||||||||||
Base oils | 2 | % | 2 | % | 2 | % | ||||||||||||||
LPG and other | 3 | % | 2 | % | 3 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||||||||||||||
Crude charge (BPD) (1) | 260,350 | 241,140 | 254,010 | |||||||||||||||||
Refinery throughput (BPD) (2) | 276,430 | 257,030 | 268,500 | |||||||||||||||||
Sales of produced refined products (BPD) (3) | 265,470 | 248,320 | 259,310 | |||||||||||||||||
Refinery utilization (4) | 100.1 | % | 92.7 | % | 97.7 | % | ||||||||||||||
Average per produced barrel sold (5) | ||||||||||||||||||||
Refinery gross margin | $ | 9.44 | $ | 5.17 | $ | 13.71 | ||||||||||||||
Refinery operating expenses (6) | 6.42 | 5.46 | 5.77 | |||||||||||||||||
Net operating margin | $ | 3.02 | $ | (0.29) | $ | 7.94 | ||||||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 6.17 | $ | 5.27 | $ | 5.58 | ||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||||||||||||||
Feedstocks: | ||||||||||||||||||||
Sweet crude oil | 61 | % | 58 | % | 55 | % | ||||||||||||||
Sour crude oil | 15 | % | 19 | % | 24 | % | ||||||||||||||
Heavy sour crude oil | 18 | % | 17 | % | 16 | % | ||||||||||||||
Other feedstocks and blends | 6 | % | 6 | % | 5 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Mid-Continent Region (El Dorado and Tulsa Refineries) | ||||||||||||||||||||
Sales of refined products: | ||||||||||||||||||||
Gasolines | 52 | % | 52 | % | 51 | % | ||||||||||||||
Diesel fuels | 33 | % | 34 | % | 32 | % | ||||||||||||||
Jet fuels | 5 | % | 4 | % | 7 | % | ||||||||||||||
Fuel oil | 1 | % | 1 | % | 1 | % | ||||||||||||||
Asphalt | 3 | % | 3 | % | 3 | % | ||||||||||||||
Base oils | 4 | % | 4 | % | 4 | % | ||||||||||||||
LPG and other | 2 | % | 2 | % | 2 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2021 (8) | 2020 | 2019 | ||||||||||||||||||
West Region (Puget Sound, Navajo and Woods Cross Refineries) | ||||||||||||||||||||
Crude charge (BPD) (1) | 140,370 | 124,050 | 134,850 | |||||||||||||||||
Refinery throughput (BPD) (2) | 155,440 | 138,050 | 149,070 | |||||||||||||||||
Sales of produced refined products (BPD) (3) | 158,630 | 143,350 | 155,060 | |||||||||||||||||
Refinery utilization (4) | 82.7 | % | 85.6 | % | 93.0 | % | ||||||||||||||
Average per produced barrel sold (5) | ||||||||||||||||||||
Refinery gross margin | $ | 13.32 | $ | 10.97 | $ | 19.62 | ||||||||||||||
Refinery operating expenses (6) | 8.09 | 7.07 | 6.69 | |||||||||||||||||
Net operating margin | $ | 5.23 | $ | 3.90 | $ | 12.93 | ||||||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 9.27 | $ | 7.34 | $ | 6.96 |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
West Region (Puget Sound, Navajo and Woods Cross Refineries) | ||||||||||||||||||||
Feedstocks: | ||||||||||||||||||||
Sweet crude oil | 22 | % | 30 | % | 26 | % | ||||||||||||||
Sour crude oil | 58 | % | 49 | % | 52 | % | ||||||||||||||
Heavy sour crude oil | 1 | % | — | % | — | % | ||||||||||||||
Black wax crude oil | 10 | % | 11 | % | 12 | % | ||||||||||||||
Other feedstocks and blends | 9 | % | 10 | % | 10 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
West Region (Puget Sound, Navajo and Woods Cross Refineries) | ||||||||||||||||||||
Sales of refined products: | ||||||||||||||||||||
Gasolines | 54 | % | 56 | % | 53 | % | ||||||||||||||
Diesel fuels | 35 | % | 35 | % | 37 | % | ||||||||||||||
Jet fuels | 1 | % | — | % | — | % | ||||||||||||||
Fuel oil | 3 | % | 3 | % | 3 | % | ||||||||||||||
Asphalt | 4 | % | 4 | % | 4 | % | ||||||||||||||
LPG and other | 3 | % | 2 | % | 3 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Lubricants and Specialty Products | ||||||||||||||||||||
Throughput (BPD) | 19,177 | 19,645 | 20,251 | |||||||||||||||||
Sales of produced refined products (BPD) | 34,016 | 32,902 | 34,827 | |||||||||||||||||
Sales of produced refined products: | ||||||||||||||||||||
Finished products | 51 | % | 49 | % | 49 | % | ||||||||||||||
Base oils | 27 | % | 26 | % | 27 | % | ||||||||||||||
Other | 22 | % | 25 | % | 24 | % | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % |
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 | ||||||||||||||||||||||
October 2021 | — | $ | — | — | $ | 1,000,000,000 | ||||||||||||||||||||
November 2021 | — | $ | — | — | $ | 1,000,000,000 | ||||||||||||||||||||
December 2021 | — | $ | — | — | $ | 1,000,000,000 | ||||||||||||||||||||
Total for October to December 2021 | — | — |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Sales and other revenues | $ | 18,389,142 | $ | 11,183,643 | $ | 17,486,578 | ||||||||||||||
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) | 15,567,052 | 9,158,805 | 13,918,384 | |||||||||||||||||
Lower of cost or market inventory valuation adjustment | (310,123) | 78,499 | (119,775) | |||||||||||||||||
15,256,929 | 9,237,304 | 13,798,609 | ||||||||||||||||||
Operating expenses (exclusive of depreciation and amortization) | 1,517,478 | 1,300,277 | 1,394,052 | |||||||||||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 362,010 | 313,600 | 354,236 | |||||||||||||||||
Depreciation and amortization | 503,539 | 520,912 | 509,925 | |||||||||||||||||
Goodwill and long-lived asset impairments | — | 545,293 | 152,712 | |||||||||||||||||
Total operating costs and expenses | 17,639,956 | 11,917,386 | 16,209,534 | |||||||||||||||||
Income (loss) from operations | 749,186 | (733,743) | 1,277,044 | |||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Earnings of equity method investments | 12,432 | 6,647 | 5,180 | |||||||||||||||||
Interest income | 4,019 | 7,633 | 22,139 | |||||||||||||||||
Interest expense | (125,175) | (126,527) | (143,321) | |||||||||||||||||
Gain on business interruption insurance settlement | — | 81,000 | — | |||||||||||||||||
Gain tariff settlement | 51,500 | — | — | |||||||||||||||||
Gain on sales-type leases | — | 33,834 | — | |||||||||||||||||
Loss on early extinguishment of debt | — | (25,915) | — | |||||||||||||||||
Gain (loss) on foreign currency transactions | (2,938) | 2,201 | 5,449 | |||||||||||||||||
Gain on sale of assets and other | 98,128 | 7,824 | 5,013 | |||||||||||||||||
37,966 | (13,303) | (105,540) | ||||||||||||||||||
Income (loss) before income taxes | 787,152 | (747,046) | 1,171,504 | |||||||||||||||||
Income tax expense (benefit) | 123,898 | (232,147) | 299,152 | |||||||||||||||||
Net income (loss) | 663,254 | (514,899) | 872,352 | |||||||||||||||||
Less net income attributable to noncontrolling interest | 104,930 | 86,549 | 99,964 | |||||||||||||||||
Net income (loss) attributable to HollyFrontier stockholders | $ | 558,324 | $ | (601,448) | $ | 772,388 | ||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||
Basic | $ | 3.39 | $ | (3.72) | $ | 4.64 | ||||||||||||||
Diluted | $ | 3.39 | $ | (3.72) | $ | 4.61 | ||||||||||||||
Cash dividends declared per common share | $ | 0.35 | $ | 1.40 | $ | 1.34 | ||||||||||||||
Average number of common shares outstanding: | ||||||||||||||||||||
Basic | 162,569 | 161,983 | 166,287 | |||||||||||||||||
Diluted | 162,569 | 161,983 | 167,385 |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net cash provided by operating activities | $ | 406,682 | $ | 457,931 | $ | 1,548,611 | ||||||||||||||
Net cash used for investing activities | $ | (1,327,219) | $ | (330,162) | $ | (972,914) | ||||||||||||||
Net cash provided by (used for) financing activities | $ | (211,803) | $ | 353,226 | $ | (848,255) | ||||||||||||||
Capital expenditures | $ | 813,409 | $ | 330,160 | $ | 293,763 | ||||||||||||||
EBITDA (1) | $ | 1,306,917 | $ | (193,789) | $ | 1,702,647 |
Years Ended December 31, | ||||||||||||||||||||
2021 (8) | 2020 | 2019 | ||||||||||||||||||
Consolidated | ||||||||||||||||||||
Crude charge (BPD) (1) | 400,720 | 365,190 | 388,860 | |||||||||||||||||
Refinery throughput (BPD) (2) | 431,870 | 395,080 | 417,570 | |||||||||||||||||
Sales of produced refined products (BPD) (3) | 424,100 | 391,670 | 414,370 | |||||||||||||||||
Refinery utilization (4) | 93.1 | % | 90.2 | % | 96.0 | % | ||||||||||||||
Average per produced barrel (5) | ||||||||||||||||||||
Refinery gross margin | $ | 10.89 | $ | 7.29 | $ | 15.92 | ||||||||||||||
Refinery operating expenses (6) | 7.04 | 6.05 | 6.12 | |||||||||||||||||
Net operating margin | $ | 3.85 | $ | 1.24 | $ | 9.80 | ||||||||||||||
Refinery operating expenses per throughput barrel (7) | $ | 6.92 | $ | 6.00 | $ | 6.07 |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Lubricants and Specialty Products | ||||||||||||||||||||
Throughput (BPD) | 19,177 | 19,645 | 20,251 | |||||||||||||||||
Sales of produced barrels sold (BPD) | 34,016 | 32,902 | 34,827 | |||||||||||||||||
Rack Back (1) | Rack Forward (2) | Eliminations (3) | Total Lubricants and Specialty Products | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||||||||
Sales and other revenues | $ | 1,005,152 | $ | 2,378,332 | $ | (822,872) | $ | 2,560,612 | ||||||||||||||||||
Cost of products sold | $ | 646,107 | $ | 1,992,567 | $ | (822,872) | $ | 1,815,802 | ||||||||||||||||||
Operating expenses | $ | 120,750 | $ | 131,706 | $ | — | $ | 252,456 | ||||||||||||||||||
Selling, general and administrative expenses | $ | 27,071 | $ | 143,084 | $ | — | $ | 170,155 | ||||||||||||||||||
Depreciation and amortization | $ | 28,093 | $ | 51,674 | $ | — | $ | 79,767 | ||||||||||||||||||
Income from operations | $ | 183,131 | $ | 59,301 | $ | — | $ | 242,432 | ||||||||||||||||||
Year Ended December 31, 2020 | ||||||||||||||||||||||||||
Sales and other revenues | $ | 505,424 | $ | 1,667,809 | $ | (370,023) | $ | 1,803,210 | ||||||||||||||||||
Cost of products sold | $ | 456,194 | $ | 1,185,116 | $ | (370,023) | $ | 1,271,287 | ||||||||||||||||||
Operating expenses | $ | 96,463 | $ | 119,605 | $ | — | $ | 216,068 | ||||||||||||||||||
Selling, general and administrative expenses | $ | 22,276 | $ | 135,540 | $ | — | $ | 157,816 | ||||||||||||||||||
Depreciation and amortization | $ | 29,071 | $ | 51,585 | $ | — | $ | 80,656 | ||||||||||||||||||
Goodwill and long-lived asset impairments (4) | $ | 167,017 | $ | 119,558 | $ | — | $ | 286,575 | ||||||||||||||||||
Income (loss) from operations | $ | (265,597) | $ | 56,405 | $ | — | $ | (209,192) | ||||||||||||||||||
Year Ended December 31, 2019 | ||||||||||||||||||||||||||
Sales and other revenues | $ | 661,523 | $ | 1,883,920 | $ | (452,915) | $ | 2,092,528 | ||||||||||||||||||
Cost of products sold | $ | 620,660 | $ | 1,412,291 | $ | (452,915) | $ | 1,580,036 | ||||||||||||||||||
Operating expenses | $ | 116,984 | $ | 114,539 | $ | — | $ | 231,523 | ||||||||||||||||||
Selling, general and administrative expenses | $ | 31,854 | $ | 136,741 | $ | — | $ | 168,595 | ||||||||||||||||||
Depreciation and amortization | $ | 37,001 | $ | 51,780 | $ | — | $ | 88,781 | ||||||||||||||||||
Goodwill impairment (5) | $ | 152,712 | $ | — | $ | — | $ | 152,712 | ||||||||||||||||||
Income (loss) from operations | $ | (297,688) | $ | 168,569 | $ | — | $ | (129,119) |
Expected Cash Spending Range | |||||||||||
(In millions) | |||||||||||
HollyFrontier Capital Expenditures | |||||||||||
Refining | $ | 250.0 | $ | 270.0 | |||||||
Renewables | 225.0 | 300.0 | |||||||||
Lubricants and Specialty Products | 45.0 | 60.0 | |||||||||
Turnarounds and catalyst | 70.0 | 100.0 | |||||||||
Total HollyFrontier | 590.0 | 730.0 | |||||||||
HEP | |||||||||||
Maintenance | 15.0 | 20.0 | |||||||||
Expansion and joint venture investment | 5.0 | 10.0 | |||||||||
Refining unit turnarounds | 35.0 | 50.0 | |||||||||
Total HEP | 55.0 | 80.0 | |||||||||
Total | $ | 645.0 | $ | 810.0 |
Payments Due by Period | ||||||||||||||||||||||||||||||||
Contractual Obligations and Commitments | Total | 2022 | 2023 & 2024 | 2025 & 2026 | Thereafter | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
HollyFrontier Corporation | ||||||||||||||||||||||||||||||||
Long-term debt - principal (1) | $ | 1,750,000 | $ | — | $ | 350,000 | $ | 1,000,000 | $ | 400,000 | ||||||||||||||||||||||
Long-term debt - interest (2) | 423,267 | 85,938 | 160,391 | 109,438 | 67,500 | |||||||||||||||||||||||||||
Financing arrangements (3) | 37,367 | 37,367 | — | — | — | |||||||||||||||||||||||||||
Supply agreements (4) | 2,466,944 | 902,423 | 1,173,045 | 391,476 | — | |||||||||||||||||||||||||||
Transportation and storage agreements (5) | 1,627,800 | 166,456 | 328,025 | 293,544 | 839,775 | |||||||||||||||||||||||||||
Operating and finance leases (6) | 476,950 | 127,978 | 188,105 | 52,286 | 108,581 | |||||||||||||||||||||||||||
Other long-term obligations | 17,712 | 11,907 | 5,013 | 792 | — | |||||||||||||||||||||||||||
6,800,040 | 1,332,069 | 2,204,579 | 1,847,536 | 1,415,856 | ||||||||||||||||||||||||||||
Holly Energy Partners | ||||||||||||||||||||||||||||||||
Long-term debt - principal (7) | 1,340,000 | — | — | 840,000 | 500,000 | |||||||||||||||||||||||||||
Long-term debt - interest (8) | 222,456 | 44,700 | 89,400 | 61,273 | 27,083 | |||||||||||||||||||||||||||
Operating and finance leases (6) | 105,019 | 8,025 | 15,403 | 13,627 | 67,964 | |||||||||||||||||||||||||||
Other agreements | 13,276 | 2,746 | 5,246 | 1,271 | 4,013 | |||||||||||||||||||||||||||
1,680,751 | 55,471 | 110,049 | 916,171 | 599,060 | ||||||||||||||||||||||||||||
Total | $ | 8,480,791 | $ | 1,387,540 | $ | 2,314,628 | $ | 2,763,707 | $ | 2,014,916 |
Contract Description | Total Outstanding Notional | Unit of Measure | ||||||||||||
NYMEX futures (WTI) - short | 495,000 | Barrels | ||||||||||||
Forward gasoline contracts - long | 40,000 | Barrels | ||||||||||||
Forward crude oil contracts - short | 70,000 | Barrels | ||||||||||||
Foreign currency forward contracts | 450,686,305 | U.S. dollar | ||||||||||||
Forward commodity contracts (platinum) (1) | 38,723 | Troy ounces |
Estimated Change in Fair Value at December 31, | ||||||||||||||
Derivative Contracts | 2021 | 2020 | ||||||||||||
(In thousands) | ||||||||||||||
Hypothetical 10% change in underlying commodity prices | $ | 3,705 | $ | 344 |
Outstanding Principal | Estimated Fair Value | Estimated Change in Fair Value | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
HollyFrontier Senior Notes | $ | 1,750,000 | $ | 1,912,753 | $ | 23,495 | ||||||||||||||
HEP Senior Notes | $ | 500,000 | $ | 502,705 | $ | 12,948 |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net income (loss) attributable to HollyFrontier stockholders | $ | 558,324 | $ | (601,448) | $ | 772,388 | ||||||||||||||
Add (subtract) income tax provision | 123,898 | (232,147) | 299,152 | |||||||||||||||||
Add interest expense | 125,175 | 126,527 | 143,321 | |||||||||||||||||
Subtract interest income | (4,019) | (7,633) | (22,139) | |||||||||||||||||
Add depreciation and amortization | 503,539 | 520,912 | 509,925 | |||||||||||||||||
EBITDA | $ | 1,306,917 | $ | (193,789) | $ | 1,702,647 |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||||||
Consolidated | ||||||||||||||||||||
Net operating margin per produced barrel sold | $ | 3.85 | $ | 1.24 | $ | 9.80 | ||||||||||||||
Add average refinery operating expenses per produced barrel sold | 7.04 | 6.05 | 6.12 | |||||||||||||||||
Refinery gross margin per produced barrel sold | $ | 10.89 | $ | 7.29 | $ | 15.92 | ||||||||||||||
Times produced barrels sold (BPD) | 424,100 | 391,670 | 414,370 | |||||||||||||||||
Times number of days in period | 365 | 366 | 365 | |||||||||||||||||
Refining gross margin | $ | 1,685,734 | $ | 1,045,030 | $ | 2,407,821 | ||||||||||||||
Add (subtract) rounding | (238) | 523 | 215 | |||||||||||||||||
West and Mid-Continent regions gross margin | 1,685,496 | 1,045,553 | 2,408,036 | |||||||||||||||||
Add West and Mid-Continent regions cost of products sold | 14,673,062 | 7,992,047 | 12,062,661 | |||||||||||||||||
Add Cheyenne Refinery sales and other revenues | — | 501,589 | 1,126,091 | |||||||||||||||||
Refining segment sales and other revenues | 16,358,558 | 9,539,189 | 15,596,788 | |||||||||||||||||
Add lubricants and specialty products segment sales and other revenues | 2,560,612 | 1,803,210 | 2,092,528 | |||||||||||||||||
Add HEP segment sales and other revenues | 494,495 | 497,848 | 532,777 | |||||||||||||||||
Subtract corporate, other and eliminations | (1,024,523) | (656,604) | (735,515) | |||||||||||||||||
Sales and other revenues | $ | 18,389,142 | $ | 11,183,643 | $ | 17,486,578 |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(Dollars in thousands, except per barrel amounts) | ||||||||||||||||||||
Consolidated | ||||||||||||||||||||
Average refinery operating expenses per produced barrel sold | $ | 7.04 | $ | 6.05 | $ | 6.12 | ||||||||||||||
Times produced barrels sold (BPD) | 424,100 | 391,670 | 414,370 | |||||||||||||||||
Times number of days in period | 365 | 366 | 365 | |||||||||||||||||
Refinery operating expenses | $ | 1,089,767 | $ | 867,275 | $ | 925,620 | ||||||||||||||
Add (subtract) rounding | 657 | (381) | (338) | |||||||||||||||||
West and Mid-Continent regions operating expenses | 1,090,424 | 866,894 | 925,282 | |||||||||||||||||
Add Cheyenne Refinery operating expenses | — | 121,151 | 170,206 | |||||||||||||||||
Total refining segment operating expenses | 1,090,424 | 988,045 | 1,095,488 | |||||||||||||||||
Add lubricants and specialty products segment operating expenses | 252,456 | 216,068 | 231,523 | |||||||||||||||||
Add HEP segment operating expenses | 170,524 | 147,692 | 161,996 | |||||||||||||||||
Subtract corporate, other and eliminations | 4,074 | (51,528) | (94,955) | |||||||||||||||||
Operating expenses (exclusive of depreciation and amortization) | $ | 1,517,478 | $ | 1,300,277 | $ | 1,394,052 |
Page Reference | |||||
Consolidated Balance Sheets at December 31, 2021 and 2020 | |||||
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 | |||||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 | |||||
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 | |||||
Consolidated Statements of Equity for the years ended December 31, 2021, 2020 and 2019 | |||||
Notes to Consolidated Financial Statements |
Valuation of Goodwill | |||||
Description of the Matter | At December 31, 2021, the Company’s goodwill was $2,293 million, including goodwill assigned to the Refining, Lubricants and Specialty Products, and HEP segments of $1,733 million, $247 million, and $313 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 long-term growth rates, gross margins, 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 methodologies 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 of 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 unit to the market capitalization of the Company. | |||||
Environmental Liabilities | |||||
Description of the Matter | At December 31, 2021, the Company’s accrual for environmental liabilities was $117 million, of which $99 million was classified as other long-term liabilities. As described in Note 1 and Note 12 of the consolidated financial statements, these accruals include remediation and monitoring costs expected to be incurred over an extended period of time. Liabilities are recorded when site restoration and environmental remediation, cleanup and other obligations are either known or considered probable and can be reasonably estimated. | ||||
Auditing management’s estimates for environmental liabilities was challenging and highly judgmental due to the significant judgment required to develop assumptions related to future costs expected for the remediation of environmental obligations. In particular, the liability estimates require judgment with respect to costs, time frame and extent of required remedial and clean-up activities. | |||||
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 accrued environmental liability cost estimate and review process. | ||||
To test management’s accrued environmental liabilities, we performed audit procedures that included, among others, obtaining a rollforward of the environmental liabilities reflecting activity in the accruals for the past year, performing a look back analysis comparing the prior year short-term accrual estimates to actual current year expenditures, and comparing actual expenditures made to supporting invoices and cash payments. We also utilized an environmental specialist to assist in our evaluation of certain environmental site accruals, including the testing of a sample of cost estimates by inspecting relevant supporting documentation and performing a search of publicly filed records with environmental agencies to test the completeness of environmental liabilities. |
Valuation of Personal Property Assets in the Puget Sound Refinery Acquisition | |||||
Description of the Matter | During 2021, the Company completed its acquisition of the Puget Sound Refinery for aggregate cash consideration of $624.3 million, as disclosed in Note 2 to the consolidated financial statements. The transaction was accounted for as a business combination. Of the total assets acquired and liabilities assumed, the Company acquired $394.2 million of properties, plant, and equipment which was made up of real property, personal property and right of use assets. | ||||
Auditing management's accounting for the acquisition of the Puget Sound Refinery was complex and highly judgmental due to the significant estimation required to determine the fair value of certain properties, plant and equipment. In particular, the fair value estimates for the Puget Sound Refinery personal property were sensitive to significant assumptions around economic and functional obsolescence factors. 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 the Company's controls over the valuation of the personal property assets related to the acquisition. For example, we tested controls over management’s review of the valuation models and the underlying assumptions used to develop estimated values of these assets. | ||||
To test the estimated fair value of the personal property, our audit procedures included, among others, evaluating the Company’s selection of the valuation methodology, evaluating the significant assumptions used by the Company and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved valuation specialists to assist with our evaluation of the methodologies used by the Company and significant assumptions included in the fair value estimates. Specifically, our valuation specialists assisted by comparing those assumptions to current industry and market data and developing an expected range of values based on significant inputs and assumptions to assess reasonableness of the Company’s estimates. |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents (HEP: $ | $ | $ | |||||||||
Accounts receivable: Product and transportation (HEP: $ | |||||||||||
Crude oil resales | |||||||||||
Inventories: Crude oil and refined products | |||||||||||
Materials, supplies and other (HEP: $ | |||||||||||
Income taxes receivable | |||||||||||
Prepayments and other (HEP: $ | |||||||||||
Total current assets | |||||||||||
Properties, plants and equipment, at cost (HEP: $ | |||||||||||
Less accumulated depreciation (HEP: $( | ( | ( | |||||||||
Operating lease right-of-use assets (HEP: $ | |||||||||||
Other assets: Turnaround costs | |||||||||||
Goodwill (HEP: $ | |||||||||||
Intangibles and other (HEP: $ | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable (HEP: $ | $ | $ | |||||||||
Income taxes payable | |||||||||||
Operating lease liabilities (HEP $ | |||||||||||
Accrued liabilities (HEP: $ | |||||||||||
Total current liabilities | |||||||||||
Long-term debt (HEP: $ | |||||||||||
Noncurrent operating lease liabilities (HEP $ | |||||||||||
Deferred income taxes (HEP: $ | |||||||||||
Other long-term liabilities (HEP: $ | |||||||||||
Commitments and contingencies (Note 19) | |||||||||||
Equity: | |||||||||||
HollyFrontier stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock $ | |||||||||||
Additional capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income | |||||||||||
Common stock held in treasury, at cost - | ( | ( | |||||||||
Total HollyFrontier stockholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
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 | ||||||||||||||||||||
Goodwill and long-lived asset impairments | ||||||||||||||||||||
Total operating costs and expenses | ||||||||||||||||||||
Income (loss) from operations | ( | |||||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Earnings of equity method investments | ||||||||||||||||||||
Interest income | ||||||||||||||||||||
Interest expense | ( | ( | ( | |||||||||||||||||
Gain on business interruption insurance settlement | ||||||||||||||||||||
Gain on tariff settlement | ||||||||||||||||||||
Gain on sales-type leases | ||||||||||||||||||||
Loss on early extinguishment of debt | ( | |||||||||||||||||||
Gain (loss) on foreign currency transactions | ( | |||||||||||||||||||
Gain on sale of assets and other | ||||||||||||||||||||
( | ( | |||||||||||||||||||
Income (loss) before income taxes | ( | |||||||||||||||||||
Income tax expense (benefit): | ||||||||||||||||||||
Current | ( | ( | ||||||||||||||||||
Deferred | ( | |||||||||||||||||||
( | ||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||
Less net income attributable to noncontrolling interest | ||||||||||||||||||||
Net income (loss) attributable to HollyFrontier stockholders | $ | $ | ( | $ | ||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||
Basic | $ | $ | ( | $ | ||||||||||||||||
Diluted | $ | $ | ( | $ | ||||||||||||||||
Average number of common shares outstanding: | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Diluted |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Foreign currency translation adjustment | ( | |||||||||||||||||||
Hedging instruments: | ||||||||||||||||||||
Change in fair value of cash flow hedging instruments | ( | ( | ||||||||||||||||||
Reclassification adjustments to net income (loss) on settlement of cash flow hedging instruments | ( | |||||||||||||||||||
Net unrealized gain (loss) on hedging instruments | ( | ( | ||||||||||||||||||
Pension and other post-retirement benefit obligations: | ||||||||||||||||||||
Actuarial gain (loss) on pension plans | ( | |||||||||||||||||||
Pension plans gain reclassified to net income (loss) | ( | ( | ||||||||||||||||||
Actuarial gain (loss) on post-retirement healthcare plans | ( | ( | ||||||||||||||||||
Post-retirement healthcare plans gain reclassified to net income (loss) | ( | ( | ( | |||||||||||||||||
Actuarial gain (loss) on retirement restoration plan | ( | ( | ||||||||||||||||||
Retirement restoration plan loss reclassified to net income (loss) | ||||||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | ( | ( | |||||||||||||||||
Other comprehensive income (loss) before income taxes | ( | ( | ||||||||||||||||||
Income tax benefit | ( | ( | ( | |||||||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||||||||
Total comprehensive income (loss) | ( | |||||||||||||||||||
Less noncontrolling interest in comprehensive income | ||||||||||||||||||||
Comprehensive income (loss) attributable to HollyFrontier stockholders | $ | $ | ( | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Goodwill and long-lived asset impairments | ||||||||||||||||||||
Lower of cost or market inventory valuation adjustment | ( | ( | ||||||||||||||||||
Earnings of equity method investments, inclusive of distributions | ( | |||||||||||||||||||
Loss on early extinguishment of debt | ||||||||||||||||||||
Gain on sales-type leases | ( | |||||||||||||||||||
(Gain) loss 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 | ( | ( | ||||||||||||||||||
Investment in equity company - HEP | ( | ( | ||||||||||||||||||
Proceeds from sale of assets | ||||||||||||||||||||
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 – HFC | ||||||||||||||||||||
Proceeds from issuance of senior notes – HEP | ||||||||||||||||||||
Redemption of senior notes - HEP | ( | |||||||||||||||||||
Purchase of treasury stock | ( | ( | ( | |||||||||||||||||
Dividends | ( | ( | ( | |||||||||||||||||
Distributions to noncontrolling interest | ( | ( | ( | |||||||||||||||||
Contribution from noncontrolling interests | ||||||||||||||||||||
Payments on finance leases | ( | ( | ( | |||||||||||||||||
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 | $ | $ | ( | $ | ( | |||||||||||||||
Increase (decrease) in accrued and unpaid capital expenditures | $ | ( | $ | $ |
HollyFrontier Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Equity attributable to HEP common unit issuances, net of tax | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock under incentive compensation plans, net of forfeitures | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Purchase of HEP units for restricted grants | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock under incentive compensation plans | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Purchase of HEP units for restricted grants | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock under incentive compensation plans | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Purchase of HEP units for restricted grants | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | $ |
(In thousands) | |||||
Assets Acquired | |||||
Inventories: Crude oil and refined products | $ | ||||
Inventories: Materials, supplies and other | |||||
Properties, plants and equipment (1) | |||||
Other assets | |||||
Total assets acquired | $ | ||||
Liabilities Assumed | |||||
Accrued and other current liabilities (1) | $ | ||||
Other long-term liabilities (1) | |||||
Total liabilities assumed | |||||
Net assets acquired | $ |
Years Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Sales and other revenues | $ | $ | ||||||||||||
Net income (loss) attributable to HollyFrontier stockholders | $ | $ | ( |
Years Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Sales and other revenues | $ | $ | ||||||||||||
Income (loss) from operations | $ | $ | ( |
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(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, | ||||||||||||||
2021 | 2020 | |||||||||||||
Weighted average remaining lease term (in years) | ||||||||||||||
Operating leases | ||||||||||||||
Finance leases | ||||||||||||||
Weighted average discount rate | ||||||||||||||
Operating leases | % | % | ||||||||||||
Finance leases | % | % |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(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, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(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) | ||||||||||||||
2022 | $ | $ | ||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
Thereafter | ||||||||||||||
Future minimum lease payments | ||||||||||||||
Less: imputed interest | ||||||||||||||
Total lease obligations | ||||||||||||||
Less: current obligations | ||||||||||||||
Long-term lease obligations | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating lease revenues | $ | $ | $ | |||||||||||||||||
Gain on sales-type leases | $ | $ | $ | |||||||||||||||||
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) | ||||||||||||||
2022 | $ | $ | ||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
Thereafter | ||||||||||||||
Total lease payment receipts | $ | |||||||||||||
Less: imputed interest | ( | |||||||||||||
Unguaranteed residual assets at end of leases | ||||||||||||||
Net investment in leases | $ |
December 31, 2021 | December 31, 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Lease receivables | $ | $ | ||||||||||||
Unguaranteed residual assets | ||||||||||||||
Net investment in leases | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(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) | ||||||||||||||||||||
Transportation and logistic services | ||||||||||||||||||||
Other revenues (5) | ||||||||||||||||||||
Total sales and other revenues | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Refined product revenues by market | ||||||||||||||||||||
United States | ||||||||||||||||||||
Mid-Continent | $ | $ | $ | |||||||||||||||||
Southwest | ||||||||||||||||||||
Rocky Mountains/Pacific Northwest | ||||||||||||||||||||
Northeast | ||||||||||||||||||||
Canada | ||||||||||||||||||||
Europe, Asia and Latin America | ||||||||||||||||||||
Total refined product revenues | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance at January 1 | $ | $ | $ | |||||||||||||||||
Sonneborn acquisition | ||||||||||||||||||||
Increase | ||||||||||||||||||||
Recognized as revenue | ( | ( | ( | |||||||||||||||||
Balance at December 31 | $ | $ | $ |
2022 | 2023 | 2024 | 2025 | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Refined product sales volumes (barrels) |
2022 | 2023 | 2024 | 2025 | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
HEP contractual minimum revenues | $ | $ | $ | $ | $ |
Carrying Amount | Fair Value by Input Level | |||||||||||||||||||||||||
Financial Instrument | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Commodity forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
RINs credit obligations (1) | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Carrying Amount | Fair Value by Input Level | |||||||||||||||||||||||||
Financial Instrument | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Commodity forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Commodity price swaps | ||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Net income (loss) attributable to HollyFrontier stockholders | $ | $ | ( | $ | ||||||||||||||||
Participating securities’ share in earnings (1) | ||||||||||||||||||||
Net income (loss) attributable to common shares | $ | $ | ( | $ | ||||||||||||||||
Average number of shares of common stock outstanding | ||||||||||||||||||||
Effect of dilutive variable restricted stock units and performance share units | ||||||||||||||||||||
Average number of shares of common stock outstanding assuming dilution | ||||||||||||||||||||
Basic earnings (loss) per share | $ | $ | ( | $ | ||||||||||||||||
Diluted earnings (loss) per share | $ | $ | ( | $ | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(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, 2021 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Outstanding at December 31, 2021 | $ |
Performance Share Units | Grants | Weighted Average Grant Date Fair Value | ||||||||||||
Outstanding at January 1, 2021 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Outstanding at December 31, 2021 | $ |
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(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, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Land, buildings and improvements | $ | $ | ||||||||||||
Refining facilities | ||||||||||||||
Pipelines and terminals | ||||||||||||||
Transportation vehicles | ||||||||||||||
Other fixed assets | ||||||||||||||
Construction in progress | ||||||||||||||
Accumulated depreciation | ( | ( | ||||||||||||
$ | $ |
Refining | Lubricants and Specialty Products | HEP | Total | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | ||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ||||||||||||||||||||||
Balance at December 31, 2021 | ||||||||||||||||||||||||||
Goodwill | $ | $ | $ | $ | ||||||||||||||||||||||
Accumulated impairment losses | ( | ( | ( | |||||||||||||||||||||||
$ | $ | $ | $ |
December 31 | ||||||||||||||||||||
Useful Life | 2021 | 2020 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Customer relationships | $ | $ | ||||||||||||||||||
Transportation agreements | ||||||||||||||||||||
Trademarks, patents and other | ||||||||||||||||||||
Accumulated amortization | ( | ( | ||||||||||||||||||
Total intangibles, net | $ | $ |
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
HollyFrontier | ||||||||||||||
$ | $ | |||||||||||||
Unamortized discount and debt issuance costs | ( | ( | ||||||||||||
Total HollyFrontier long-term debt | ||||||||||||||
HEP Credit Agreement | ||||||||||||||
HEP | ||||||||||||||
Principal | ||||||||||||||
Unamortized discount and debt issuance costs | ( | ( | ||||||||||||
Total HEP long-term debt | ||||||||||||||
Total long-term debt | $ | $ |
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
HollyFrontier Senior Notes | $ | $ | ||||||||||||
HEP Senior Notes | $ | $ |
Years Ending December 31, | (In thousands) | ||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total | $ |
Net Unrealized Gain (Loss) Recognized in OCI | Gain (Loss) Reclassified into Earnings | |||||||||||||||||||||||||||||||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments | Years Ended December 31, | Statement of Operations Location | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Commodity contracts | $ | $ | ( | $ | ( | Sales and other revenues | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Cost of products sold | ||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ |
Gain (Loss) Recognized in Earnings | ||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Years Ended December 31, | |||||||||||||||||||||||||
Statement of Operations Location | 2021 | 2020 | 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Commodity contracts | Cost of products sold | $ | ( | $ | $ | ( | ||||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||||||||
Foreign currency contracts | Gain (loss) on foreign currency transactions | ( | ( | ( | ||||||||||||||||||||||
Total | $ | ( | $ | $ | ( |
Total Outstanding Notional | Unit of Measure | |||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||
Forward crude oil contracts - short | Barrels | |||||||||||||
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 |
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, 2021 | ||||||||||||||||||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Commodity forward contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | ( | |||||||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance sheet classification: | Prepayment and other | $ | Accrued liabilities | $ |
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, 2020 | ||||||||||||||||||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Commodity price swap contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Derivatives not designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
NYMEX futures contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commodity forward contracts | ||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Total net balance | $ | $ | ||||||||||||||||||||||||||||||||||||
Balance sheet classification: | Prepayments and other | $ | Accrued liabilities | $ | ||||||||||||||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Current | ||||||||||||||||||||
Federal | $ | ( | $ | ( | $ | |||||||||||||||
State | ( | ( | ||||||||||||||||||
Foreign | ||||||||||||||||||||
Deferred | ||||||||||||||||||||
Federal | ( | |||||||||||||||||||
State | ( | |||||||||||||||||||
Foreign | ( | ( | ||||||||||||||||||
$ | $ | ( | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(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 | ( | |||||||||||||||||||
CARES Act benefits | ( | ( | ||||||||||||||||||
Foreign rate differential | ( | |||||||||||||||||||
Federal tax credits | ( | |||||||||||||||||||
US tax on non-US operations | ||||||||||||||||||||
Effect of nondeductible goodwill impairment charge | ||||||||||||||||||||
Other | ( | |||||||||||||||||||
$ | $ | ( | $ |
December 31, 2021 | ||||||||||||||||||||
Assets | Liabilities | Total | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||
Properties, plants and equipment (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 | $ | $ | ( | $ | ( |
December 31, 2020 | ||||||||||||||||||||
Assets | Liabilities | Total | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||
Properties, plants and equipment (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, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance at January 1 | $ | $ | $ | |||||||||||||||||
Additions for tax positions of prior years | ||||||||||||||||||||
Reductions for tax positions of prior years | ( | ( | ( | |||||||||||||||||
Settlements | ( | |||||||||||||||||||
Lapse of statute of limitations | ( | ( | ||||||||||||||||||
Balance at December 31 | $ | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Common shares outstanding at January 1 | ||||||||||||||||||||
Vesting of performance units | ||||||||||||||||||||
Vesting of restricted stock and restricted stock units | ||||||||||||||||||||
Forfeitures of restricted stock | ( | |||||||||||||||||||
Purchase of treasury stock (1) | ( | ( | ( | |||||||||||||||||
Common shares outstanding at December 31 |
Before-Tax | Tax Expense (Benefit) | After-Tax | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
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 HollyFrontier stockholders | $ | ( | $ | ( | $ | ( | ||||||||||||||
Year Ended December 31, 2020 | ||||||||||||||||||||
Net change in foreign currency translation adjustment | $ | $ | $ | |||||||||||||||||
Net unrealized loss on hedging instruments | ( | ( | ( | |||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | ( | ( | |||||||||||||||||
Other comprehensive loss attributable to HollyFrontier stockholders | $ | ( | $ | ( | $ | ( | ||||||||||||||
Year Ended December 31, 2019 | ||||||||||||||||||||
Net change in foreign currency translation adjustment | $ | $ | $ | |||||||||||||||||
Net unrealized loss on hedging instruments | ( | ( | ( | |||||||||||||||||
Net change in pension and other post-retirement benefit obligations | ( | ( | ( | |||||||||||||||||
Other comprehensive income attributable to HollyFrontier stockholders | $ | $ | ( | $ |
AOCI Component | Gain (Loss) Reclassified From AOCI | Statement of Operations Line Item | ||||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Hedging instruments: | ||||||||||||||||||||||||||
Commodity price swaps | $ | ( | $ | ( | $ | ( | Sales and other revenues | |||||||||||||||||||
Cost of products sold | ||||||||||||||||||||||||||
( | ( | Operating expenses | ||||||||||||||||||||||||
( | ( | |||||||||||||||||||||||||
( | ( | Income tax expense (benefit) | ||||||||||||||||||||||||
( | ( | Net of tax | ||||||||||||||||||||||||
Other post-retirement benefit obligations: | ||||||||||||||||||||||||||
Pension obligations | Other, net | |||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Net of tax | ||||||||||||||||||||||||||
Post-retirement healthcare obligations | Other, net | |||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Net of tax | ||||||||||||||||||||||||||
Retirement restoration plan | ( | ( | ( | Other, net | ||||||||||||||||||||||
( | ( | ( | Income tax benefit | |||||||||||||||||||||||
( | ( | ( | Net of tax | |||||||||||||||||||||||
Total reclassifications for the period | $ | ( | $ | $ |
Years Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Foreign currency translation adjustment | $ | ( | $ | |||||||||||
Unrealized loss on pension obligations | ( | |||||||||||||
Unrealized gain on post-retirement benefit obligations | ||||||||||||||
Unrealized loss on hedging instruments | ( | ( | ||||||||||||
Accumulated other comprehensive income | $ | $ |
Years Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Change in plans' benefit obligations | ||||||||||||||
Pension plans benefit obligation - beginning of period | $ | $ | ||||||||||||
Service cost | ||||||||||||||
Interest cost | ||||||||||||||
Actuarial (gain) loss | ( | |||||||||||||
Benefits paid | ( | ( | ||||||||||||
Curtailment | ( | |||||||||||||
Contractual termination benefits | ||||||||||||||
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 | ||||||||||||||
Foreign currency exchange rate changes | ( | |||||||||||||
Fair value of plans assets - end of year | $ | $ | ||||||||||||
Funded status | ||||||||||||||
Under-funded balance | $ | ( | $ | ( | ||||||||||
Amounts recognized in consolidated balance sheets | ||||||||||||||
Other long-term liabilities | $ | ( | $ | ( | ||||||||||
Amounts recognized in accumulated other comprehensive income | ||||||||||||||
Cumulative actuarial loss | $ | ( | $ | ( |
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Projected benefit obligation | $ | $ | ||||||||||||
Fair value of plan assets | $ | $ |
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Accumulated benefit obligation | $ | $ | ||||||||||||
Fair value of plan assets | $ | $ |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Service cost - benefit earned during the period | $ | $ | $ | |||||||||||||||||
Interest cost on projected benefit obligations | ||||||||||||||||||||
Expected return on plans assets | ( | ( | ( | |||||||||||||||||
Amortization of gain | ( | ( | ||||||||||||||||||
Curtailment | ( | |||||||||||||||||||
Contractual termination benefits | ||||||||||||||||||||
Net periodic pension expense | $ | $ | $ |
December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Fixed income | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Years Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
(In thousands) | ||||||||||||||
Change in plans' benefit obligation | ||||||||||||||
Post-retirement plans' benefit obligation - beginning of year | $ | $ | ||||||||||||
Service cost | ||||||||||||||
Interest cost | ||||||||||||||
Benefits paid | ( | ( | ||||||||||||
Actuarial (gain) loss | ( | |||||||||||||
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 income | ||||||||||||||
Cumulative actuarial loss | $ | ( | $ | ( | ||||||||||
Prior service credit | ||||||||||||||
Total | $ | $ |
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Discount rate | ||||||||||||||
Current health care trend rate | ||||||||||||||
Ultimate health care trend rate | ||||||||||||||
Year rate reaches ultimate trend rate |
Years Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
(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) | ||||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total | $ |
Refining | Lubricants and Specialty Products | HEP | Corporate, Other and Eliminations (2) | Consolidated Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Intersegment revenues | ( | |||||||||||||||||||||||||||||||
$ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Year Ended December 31, 2020 | ||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Intersegment revenues | ( | |||||||||||||||||||||||||||||||
$ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Goodwill and long-lived asset impairment (1) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Income (loss) from operations | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Year Ended December 31, 2019 | ||||||||||||||||||||||||||||||||
Sales and other revenues: | ||||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Intersegment revenues | ( | |||||||||||||||||||||||||||||||
$ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Goodwill impairment | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Income (loss) from operations | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||
Earnings of equity method investments | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ |
Refining | Lubricants and Specialty Products | HEP | Corporate, Other and Eliminations | Consolidated Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | $ |
Page in Form 10-K | |||||
Report of Independent Registered Public Accounting Firm | |||||
Consolidated Balance Sheets at December 31, 2021 and 2020 | |||||
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 | |||||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 | |||||
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 | |||||
Consolidated Statements of Equity for the years ended December 31, 2021, 2020 and 2019 | |||||
Notes to Consolidated Financial Statements |
Exhibit Number | Description | |||||||
2.1† | ||||||||
2.2† | ||||||||
2.3† | ||||||||
2.4† | ||||||||
2.5† | ||||||||
2.6 | ||||||||
2.7† | ||||||||
2.8† | ||||||||
2.9† | ||||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
4.4 | ||||||||
4.5* |
Exhibit Number | Description | |||||||
10.13 | ||||||||
10.14 | ||||||||
10.15 | ||||||||
10.16 | ||||||||
10.17 | ||||||||
10.18 | ||||||||
10.19 | ||||||||
10.20 | ||||||||
10.21 | ||||||||
10.22 | ||||||||
10.23 | ||||||||
10.24 | ||||||||
10.25 |
Exhibit Number | Description | |||||||
10.26 | ||||||||
10.27 | ||||||||
10.28 | ||||||||
10.29 | ||||||||
10.30 | ||||||||
10.31 | ||||||||
10.32 | ||||||||
10.33† | ||||||||
10.34+ | ||||||||
10.35+ | ||||||||
10.36+ | ||||||||
10.37+ | ||||||||
10.38+ | ||||||||
10.39+ | ||||||||
10.40+ | ||||||||
10.41+ |
Exhibit Number | Description | |||||||
10.42+ | ||||||||
10.43+ | ||||||||
10.44+ | ||||||||
10.45+ | ||||||||
10.46+ | ||||||||
10.47+* | ||||||||
10.48+* | ||||||||
10.49+* | ||||||||
10.50+ | ||||||||
10.51+ | ||||||||
10.52+ | ||||||||
10.53+ | ||||||||
10.54+ | ||||||||
10.55+* | ||||||||
10.56+* | ||||||||
10.57+ | ||||||||
10.58+ | ||||||||
10.59+ | ||||||||
21.1* | ||||||||
23.1* | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** |
Exhibit Number | Description | |||||||
101++ | The following financial information from Registrant's Annual Report on Form 10-K for its fiscal year ended December 31, 2020, 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, (v) Consolidated Statements of Equity, and (vi) 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). |
HOLLYFRONTIER CORPORATION | |||||||||||
(Registrant) | |||||||||||
Date: February 23, 2022 | /s/ Michael C. Jennings | ||||||||||
Michael C. Jennings | |||||||||||
Chief Executive Officer |
Signature | Capacity | Date | ||||||||||||
/s/ Michael C. Jennings | Chief Executive Officer and | February 23, 2022 | ||||||||||||
Michael C. Jennings | Director | |||||||||||||
/s/ Richard L. Voliva III | Executive Vice President and | February 23, 2022 | ||||||||||||
Richard L. Voliva III | Chief Financial Officer | |||||||||||||
(Principal Financial Officer) | ||||||||||||||
/s/ Indira Agarwal | Vice President, Controller and | February 23, 2022 | ||||||||||||
Indira Agarwal | Chief Accounting Officer | |||||||||||||
(Principal Accounting Officer) | ||||||||||||||
/s/ Franklin Myers | Chairman of the Board | February 23, 2022 | ||||||||||||
Franklin Myers | ||||||||||||||
/s/ Anne-Marie N. Ainsworth | Director | February 23, 2022 | ||||||||||||
Anne-Marie N. Ainsworth | ||||||||||||||
/s/ Anna C. Catalano | Director | February 23, 2022 | ||||||||||||
Anna C. Catalano | ||||||||||||||
/s/ Leldon Echols | Director | February 23, 2022 | ||||||||||||
Leldon Echols | ||||||||||||||
/s/ Manuel J. Fernandez | Director | February 23, 2022 | ||||||||||||
Manuel J. Fernandez | ||||||||||||||
/s/ R. Craig Knocke | Director | February 23, 2022 | ||||||||||||
R. Craig Knocke | ||||||||||||||
/s/ Robert J. Kostelnik | Director | February 23, 2022 | ||||||||||||
Robert J. Kostelnik | ||||||||||||||
/s/ James H. Lee | Director | February 23, 2022 | ||||||||||||
James H. Lee | ||||||||||||||
/s/ Michael E. Rose | Director | February 23, 2022 | ||||||||||||
Michael E. Rose | ||||||||||||||
BORROWER: | HOLLYFRONTIER CORPORATION | ||||
By: /s/ John Harrison | |||||
Name: John Harrison | |||||
Title: Vice President, Finance, Strategy, and Treasurer |
MUFG BANK, LTD., as the Administrative Agent | |||||
By: /s/ Lawrence Blat | |||||
Name: Lawrence Blat | |||||
Title: Authorized Signatory | |||||
MUFG BANK, LTD., as the Swingline Lender, an Issuing Bank and a Lender | |||||
By: /s/ Christopher Facenda | |||||
Name: Christopher Facenda | |||||
Title: Authorized Signatory |
WELLS FARGO BANK, N.A., as the Syndication Agent, an Issuing Bank and a Lender | |||||
By: /s/ Borden Tennant | |||||
Name: Borden Tennant | |||||
Title: Vice President |
BANK OF AMERICA, N.A., as a Co-Documentation Agent, an Issuing Bank and a Lender | |||||
By: /s/ Alia Qaddumi | |||||
Name: Alia Qaddumi | |||||
Title: Director |
CITIBANK, N.A., as a Co-Documentation Agent, an Issuing Bank and a Lender | |||||
By: /s/ Gabe Juarez | |||||
Name: Gabe Juarez | |||||
Title: Vice President |
THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as a Co-Documentation Agent, an Issuing Bank and a Lender | |||||
By: /s/ Michael Borowiecki | |||||
Name: Michael Borowiecki | |||||
Title: Authorized Signatory |
THE BANK OF NOVA SCOTIA, HOUSTON BRANCH, as a Co-Documentation Agent and a Lender | |||||
By: /s/ Donovan Crandall | |||||
Name: Donovan Crandall | |||||
Title: Managing Director |
SUMITOMO MITSUI BANKING CORPORATION, as a Co-Documentation Agent and a Lender | |||||
By: /s/ Jeffrey Cobb | |||||
Name: Jeffrey Cobb | |||||
Title: Director |
TRUIST BANK, as a Co-Documentation Agent and a Lender | |||||
By: /s/ Samantha Sanford | |||||
Name: Samantha Sanford | |||||
Title: Vice President |
GOLDMAN SACHS BANK USA, as a Lender | |||||
By: /s/ Dan Martis | |||||
Name: Dan Martis | |||||
Title: Authorized Signatory |
U.S. BANK NATIONAL ASSOCIATION, as a Lender | |||||
By: /s/ John Prigge | |||||
Name: John Prigge | |||||
Title: Senior Vice President |
BNP PARIBAS, as a Lender | |||||
By: /s/ Joseph Onischuk | |||||
Name: Joseph Onischuk | |||||
Title: Managing Director | |||||
By: /s/ Nicolas Anberree | |||||
Name: Nicolas Anberree | |||||
Title: Director |
BARCLAYS BANK, PLC, as a Lender | |||||
By: /s/ May Huang | |||||
Name: May Huang | |||||
Title: Assistant Vice President |
COMERICA BANK, as a Lender | |||||
By: /s/ Gerald R. Finney Jr. | |||||
Name: Gerald R. Finney Jr. | |||||
Title: Senior Vice President |
CITIZENS BANK N.A., as a Lender | |||||
By: /s/ John Corley | |||||
Name: John Corley | |||||
Title: Director |
ARTICLE I DEFINITIONS | |||||
Section 1.01 Defined Terms | |||||
Section 1.02 Classification of Loans and Borrowings | |||||
Section 1.03 Terms Generally | |||||
Section 1.04 Accounting Terms; GAAP | |||||
Section 1.05 Letter of Credit Amounts | |||||
Section 1.06 Exchange Rates; Currency Equivalents | |||||
Section 1.07 Rates. | |||||
Section 1.08 Divisions. | |||||
ARTICLE II THE CREDITS | |||||
Section 2.01 Commitments | |||||
Section 2.02 Commitment Increase | |||||
Section 2.03 Swingline Loans | |||||
Section 2.04 Loans and Borrowings | |||||
Section 2.05 Requests for Borrowings | |||||
Section 2.06 Letters of Credit | |||||
Section 2.07 Funding of Borrowings | |||||
Section 2.08 Interest Elections | |||||
Section 2.09 Termination and Reduction of Commitments | |||||
Section 2.10 Repayment of Loans; Evidence of Debt | |||||
Section 2.11 Prepayment of Loans | |||||
Section 2.12 Fees | |||||
Section 2.13 Interest | |||||
Section 2.14 Alternate Rate of Interest | |||||
Section 2.15 Increased Costs | |||||
Section 2.16 Break Funding Payments | |||||
Section 2.17 Taxes | |||||
Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of Setoffs | |||||
Section 2.19 Mitigation Obligations; Replacement of Lenders |
Section 2.20 Illegality | |||||
Section 2.21 Extension of Maturity Date | |||||
Section 2.22 Defaulting Lenders | |||||
Section 2.23 Currency Indemnity | |||||
Section 2.24 Benchmark Replacement Setting. | |||||
ARTICLE III REPRESENTATIONS AND WARRANTIES | |||||
Section 3.01 Organization; Powers | |||||
Section 3.02 Authorization; Enforceability | |||||
Section 3.03 Governmental Approvals; No Conflicts | |||||
Section 3.04 Financial Condition | |||||
Section 3.05 Environmental Matters | |||||
Section 3.06 No Event of Default | |||||
Section 3.07 Investment Company Status | |||||
Section 3.08 Taxes | |||||
Section 3.09 ERISA | |||||
Section 3.10 Disclosure | |||||
Section 3.11 Anti-Corruption Laws and Sanctions; Use of Proceeds | |||||
Section 3.12 No Material Adverse Change | |||||
Section 3.13 Litigation | |||||
Section 3.14 Subsidiaries | |||||
ARTICLE IV CONDITIONS | |||||
Section 4.01 Revolving Effective Date | |||||
Section 4.02 Each Credit Event | |||||
ARTICLE V AFFIRMATIVE COVENANTS | |||||
Section 5.01 Financial Statements and Other Information | |||||
Section 5.02 Notices of Material Events | |||||
Section 5.03 Existence; Conduct of Business | |||||
Section 5.04 Payment of Obligations | |||||
Section 5.05 Maintenance of Properties; Insurance | |||||
Section 5.06 Books and Records; Inspection Rights | |||||
Section 5.07 Compliance with Laws | |||||
Section 5.08 Use of Proceeds of Loans and Letters of Credit | |||||
Section 5.09 Subsidiary Guarantors | |||||
ARTICLE VI NEGATIVE COVENANTS | |||||
Section 6.01 Indebtedness |
Section 6.02 Liens | |||||
Section 6.03 Fundamental Changes | |||||
Section 6.04 Hedging Agreements | |||||
Section 6.05 Transactions with Affiliates | |||||
Section 6.06 Subsidiary Distributions | |||||
Section 6.07 Financial Covenant | |||||
ARTICLE VII EVENTS OF DEFAULT | |||||
Section 7.01 Events of Default | |||||
ARTICLE VIII THE ADMINISTRATIVE AGENT | |||||
Section 8.01 Agency. | |||||
Section 8.02 Erroneous Payments. | |||||
ARTICLE IX MISCELLANEOUS | |||||
Section 9.01 Notices | |||||
Section 9.02 Waivers; Amendments | |||||
Section 9.03 Expenses; Indemnity; Damage Waiver | |||||
Section 9.04 Successors and Assigns | |||||
Section 9.05 Survival | |||||
Section 9.06 Counterparts; Integration; Effectiveness | |||||
Section 9.07 Severability | |||||
Section 9.08 Right of Setoff | |||||
Section 9.09 Subsidiary Guarantees | |||||
Section 9.10 Governing Law; Jurisdiction; Consent to Service of Process | |||||
Section 9.11 Waiver of Jury Trial | |||||
Section 9.12 Headings | |||||
Section 9.13 Confidentiality | |||||
Section 9.14 Interest Rate Limitation | |||||
Section 9.15 USA PATRIOT Act | |||||
Section 9.16 No Advisory or Fiduciary Responsibility | |||||
Section 9.17 Acknowledgement Regarding Any Supported QFCs | |||||
Section 9.18 Acknowledgement and Consent to Bail-In of Affected Financial Institutions |
Schedule 1.01 | Pricing Schedule | ||||
Schedule 2.01 | Applicable Percentages, Commitments and Multicurrency Commitments | ||||
Schedule 2.06 | Outstanding Letters of Credit | ||||
Schedule 3.14 | Subsidiaries | ||||
Schedule 6.01 | Existing Indebtedness of Subsidiaries | ||||
Schedule 6.02(j) | Existing Liens | ||||
Exhibit A | Form of Assignment and Assumption | ||||
Exhibit B | Notice of Commitment Increase | ||||
Exhibit C | Form of Borrowing Request | ||||
Exhibit D | Form of Promissory Note | ||||
Exhibit E | Form of Subsidiary Guarantee |
HOLLYFRONTIER CORPORATION, a Delaware corporation, as Borrower | |||||
By: | |||||
Name: | |||||
Title: |
MUFG BANK, LTD., as the Administrative Agent, the Swingline Lender, an Issuing Bank and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
WELLS FARGO BANK, N.A., as the Syndication Agent, an Issuing Bank and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
BANK OF AMERICA, N.A., as a Co-Documentation Agent, an Issuing Bank and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
CITIBANK, N.A., as a Co-Documentation Agent, an Issuing Bank and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as a Co-Documentation Agent, an Issuing Bank and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
THE BANK OF NOVA SCOTIA, HOUSTON BRANCH, as a Co-Documentation Agent and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
SUMITOMO MITSUI BANKING CORPORATION, as a Co-Documentation Agent and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
TRUIST BANK, as a Co-Documentation Agent and a Lender | |||||
By: | |||||
Name: | |||||
Title: |
GOLDMAN SACHS BANK USA, as a Lender | |||||
By: | |||||
Name: | |||||
Title: |
U.S. BANK NATIONAL ASSOCIATION, as a Lender | |||||
By: | |||||
Name: | |||||
Title: |
BNP PARIBAS, as a Lender | |||||
By: | |||||
Name: | |||||
Title: | |||||
By: | |||||
Name: | |||||
Title: |
BARCLAYS BANK, PLC, as a Lender | |||||
By: | |||||
Name: | |||||
Title: |
COMERICA BANK, as a Lender | |||||
By: | |||||
Name: | |||||
Title: |
CITIZENS BANK N.A., as a Lender | |||||
By: | |||||
Name: | |||||
Title: |
Level | Debt Rating of S&P (or then equivalent rating) | Debt Rating of Moody’s (or then equivalent rating) | ABR Margin | CDOR Margin | Eurocurrency and Transitioned RFR Margin | Commitment Fee | ||||||||||||||
I | BBB+ | Baa1 | 0.25% | 1.25% | 1.25% | 0.150% | ||||||||||||||
II | BBB | Baa2 | 0.375% | 1.375% | 1.375% | 0.175% | ||||||||||||||
III | BBB- | Baa3 | 0.625% | 1.625% | 1.625% | 0.225% | ||||||||||||||
IV | BB+ | Ba1 | 0.875% | 1.875% | 1.875% | 0.275% | ||||||||||||||
V | BB or lower | Ba2 or lower | 1.125% | 2.125% | 2.125% | 0.350% |
Subsidiary | Jurisdiction of Organization | Equity Holder and % Held by Each | ||||||
7037619 Canada Inc. | Canada | Petro-Canada Lubricants Inc. (100%) | ||||||
Artesia PTU LLC | Delaware | HollyFrontier Renewables Holding Company LLC (100%) | ||||||
Artesia Renewable Diesel Company LLC | Delaware | HollyFrontier Renewables Holding Company LLC (100%) | ||||||
Black Eagle LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Cheyenne Renewable Diesel Company LLC | Delaware | HollyFrontier Renewables Holding Company LLC (100%) | ||||||
Eagle Consolidation LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
El Paso Operating LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Ethanol Management Company LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Frontier Pipeline LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Frontier Refining & Marketing LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Holly Petroleum, Inc. | Delaware | HollyFrontier Corporation (100%) | ||||||
Holly Realty, LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Holly Refining Communications, Inc. | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Asphalt Company LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Cheyenne Refining LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Cyprus Limited | Cyprus | HollyFrontier Luxembourg Holding Company (100%) | ||||||
HollyFrontier El Dorado Refining LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier LSP Brand Strategies LLC | Delaware | HollyFrontier LSP Holdings LLC (100%) | ||||||
HollyFrontier LSP Europe B.V. | Netherlands | HollyFrontier Netherlands B.V. (100%) | ||||||
HollyFrontier LSP Holdings LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier LSP Latin America Holdings LLC | Delaware | HollyFrontier LSP Holdings LLC (100%) | ||||||
HollyFrontier LSP Mexico S. de R.L. de C.V. | Mexico | HollyFrontier LSP Holdings LLC (99.99%); HollyFrontier LSP Latin America Holdings LLC (0.01%) | ||||||
HollyFrontier LSP Services LLC | Delaware | HollyFrontier LSP US Holdings LLC (100%) | ||||||
HollyFrontier LSP US Holdings LLC | Delaware | HollyFrontier LSP Holdings LLC (100%) | ||||||
HollyFrontier Luxembourg Holding Company | Luxembourg | HollyFrontier LSP Holdings LLC (100%) | ||||||
HollyFrontier Mexico Services S. de R.L. de C.V. | Mexico | HollyFrontier LSP Holdings LLC (99.99%); HollyFrontier LSP Latin America Holdings LLC (0.01%) | ||||||
HollyFrontier Navajo Refining LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Netherlands B.V. | Netherlands | HollyFrontier Luxembourg Holding Company (100%) | ||||||
HollyFrontier Payroll Services, Inc. | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Refining & Marketing LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Renewables Holding Company LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Renewables Marketing LLC | Delaware | HollyFrontier Renewables Holding Company LLC (100%) | ||||||
HollyFrontier Transportation LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HollyFrontier Tulsa Refining LLC | Delaware | HollyFrontier Corporation (100%) |
HollyFrontier Woods Cross Refining LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Hollymarks, LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
HRM Realty, LLC | Delaware | HollyFrontier Corporation (100%) | ||||||
Jia Shi Lubricants Trading (Shanghai) Co., Ltd. | China | HollyFrontier Luxembourg Holding Company (100%) | ||||||
Lea Refining Company | Delaware | HollyFrontier Navajo Refining LLC (100%) | ||||||
Navajo Holdings, Inc. | New Mexico | HollyFrontier Corporation (100%) | ||||||
Navajo Pipeline Co., L.P. | Delaware | Navajo Pipeline LP, L.L.C. (99.5%); Navajo Pipeline GP, L.L.C. (0.5%) | ||||||
Navajo Pipeline GP, L.L.C. | Delaware | Navajo Holdings, Inc. (100%) | ||||||
Navajo Pipeline LP, L.L.C. | Delaware | Navajo Holdings, Inc. (100%) | ||||||
Petro-Canada America Lubricants LLC | Delaware | HollyFrontier LSP US Holdings LLC (100%) | ||||||
Petro-Canada Europe Lubricants Limited | United Kingdom | HollyFrontier Luxembourg Holding Company (100%) | ||||||
Petro-Canada Lubricants Inc. | Canada | HollyFrontier Luxembourg Holding Company (100%) | ||||||
Qingdao Sonneborn Refined Products Co., Ltd. | China | Jia Shi Lubricants Trading (Shanghai) Co., Ltd. (100%) | ||||||
Red Giant Oil Company LLC | Delaware | HollyFrontier LSP US Holdings LLC (100%) | ||||||
Sonneborn do Brasil Representacoes Comerciais LTDA | Brazil | HollyFrontier LSP Holdings LLC (99.99%); HollyFrontier LSP Latin America Holdings LLC (0.01%) | ||||||
Sonneborn Refined Products B.V. | Netherlands | HollyFrontier Netherlands B.V. (100%) | ||||||
Sonneborn US Holdings LLC | Delaware | HollyFrontier LSP US Holdings LLC (100%) | ||||||
Sonneborn, LLC | Delaware | Sonneborn US Holdings LLC (100%) | ||||||
Aggregate Amount of Commitment/Loans for all Lenders | Amount of Commitment/Loans Assigned | Amount of Multicurrency Commitment/Multicurrency Loans Assigned | Applicable Percentage of Commitment/Loans Assigned2 | ||||||||
$ | $ | $ | % | ||||||||
$ | $ | $ | % | ||||||||
$ | $ | $ | % |
ASSIGNOR: | |||||
[NAME OF ASSIGNOR] | |||||
By: | |||||
Name: | |||||
Title: | |||||
ASSIGNEE: | |||||
[NAME OF ASSIGNEE] | |||||
By: | |||||
Name: | |||||
Title: | |||||
Consented to and Accepted: | |||||
MUFG BANK, LTD., as Administrative Agent, Swingline Lender and Issuing Bank | |||||
By: | |||||
Name: | |||||
Title: | |||||
WELLS FARGO BANK, NATIONAL ASSOCIATION, as an Issuing Bank | |||||
By: | |||||
Name: | |||||
Title: | |||||
BANK OF AMERICA, N.A., as an Issuing Bank | |||||
By: | |||||
Name: | |||||
Title: | |||||
CITIBANK, N.A., as an Issuing Bank | |||||
By: | |||||
Name: | |||||
Title: | |||||
THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as an Issuing Bank | |||||
By: | |||||
Name: | |||||
Title: |
[If additional Issuing Banks, add additional signature blocks for consent] |
[Consented to:]3 | |||||
HOLLYFRONTIER CORPORATION, as Borrower | |||||
By: | |||||
Name: | |||||
Title: |
Very truly yours, | |||||
HOLLYFRONTIER CORPORATION | |||||
By: | |||||
Name: | |||||
Title: |
On [_________], acknowledged by:5 | |||||
MUFG BANK, LTD., as Administrative Agent | |||||
By: | |||||
Name: | |||||
Title: |
Very truly yours, | |||||
HOLLYFRONTIER CORPORATION | |||||
By: | |||||
Name: | |||||
Title: |
HOLLYFRONTIER CORPORATION | |||||
By: | |||||
Name: | |||||
Title: |
GUARANTORS | ||||||||
[NAME OF GUARANTOR] | ||||||||
By: | ||||||||
Name: Title: |
ACKNOWLEDGED AND AGREED as of the date first above written: MUFG BANK, LTD., as Administrative Agent | ||||||||
By: | ||||||||
Name: Title: |
[NAME OF GUARANTOR] | ||||||||
By: | ||||||||
Name: Title: |
ACKNOWLEDGED AND AGREED as of the date first above written: MUFG BANK, LTD., as Administrative Agent | ||||||||
By: | ||||||||
Name: Title: |
Ranking of the Company within Peer Group | ROCE Performance Percentage | ||||
90th Percentile or Better | Maximum (200% of Target) | ||||
<90th Percentile But Better than 50th Percentile | Interpolate between 100% and 200% | ||||
50th Percentile | Target (100%) | ||||
<50th Percentile But Better than 25th Percentile | Interpolate between 25% and 100% | ||||
25th Percentile | 25% of Target (Minimum) | ||||
<25th Percentile | Zero |
Ranking of the Company within Peer Group | TSR Performance Percentage | ||||
90th Percentile or Better | Maximum (200% of Target) | ||||
<90th Percentile But Better than 50th Percentile | Interpolate between 100% and 200% | ||||
50th Percentile | Target (100%) | ||||
<50th Percentile But Better than 25th Percentile | Interpolate between 25% and 100% | ||||
25th Percentile | 25% of Target (Minimum) | ||||
<25th Percentile | Zero |
Grantee: | ______________________ | ||||
Date of Grant: | ________________ ___, 2021 (“Date of Grant”) | ||||
Number of Restricted Stock Units: | ______________________ | ||||
Vesting Schedule: | The RSUs granted pursuant to the Agreement will become vested and be nonforfeitable as of December 1, 2022; provided, that, you continue to serve as a member of the Board to such date. Shares will be issued with respect to the RSUs as set forth in Section 6 of the Agreement (which Shares when issued will be transferable and nonforfeitable). All of the RSUs awarded to you pursuant to this Notice of Grant of Restricted Stock Units shall become fully vested upon (a) your death (b) your Retirement in 2022, (c) your Disability, or (d) the occurrence of a Change in Control, provided you are then serving as a member of the Board immediately prior to the Change in Control. |
Grantee: | ______________________ | ||||
Date of Grant: | __________ __, 2021 (“Date of Grant”) | ||||
Number of Restricted Stock Units: | ______________________ | ||||
Vesting Schedule: | The restrictions on all of the RSUs granted pursuant to the Agreement will expire and the RSUs will vest according to the following schedule (or on the first business day thereafter if the date below falls on a weekend) (each such date, a “Regular Vesting Date”); provided, that (except as otherwise provided in Section 6 of your Agreement) you remain in the employ of the Company or its subsidiaries continuously from the Date of Grant through such Regular Vesting Dates (as determined under the Agreement). |
On Each of the Following Regular Vesting Dates | Cumulative Portion of RSUs that will become Vested | ||||
December 1, 2022 | One-third | ||||
December 1, 2023 | One-third | ||||
December 1, 2024 | One-third |
State or Country of | |||||
Name of Entity | Incorporation or Organization | ||||
7037619 Canada Inc. | Canada | ||||
Artesia PTU LLC | Delaware | ||||
Artesia Renewable Diesel Company LLC | Delaware | ||||
Black Eagle LLC | Delaware | ||||
Cheyenne Logistics LLC (1) | Delaware | ||||
Cheyenne Renewable Diesel Company LLC | Delaware | ||||
Cushing Connect Pipeline & Terminal LLC (joint venture) (1) | Delaware | ||||
Cushing Connect Pipeline Holdings LLC (joint venture subsidiary) (1) | Delaware | ||||
Cushing Connect Terminal Holdings LLC (joint venture subsidiary) (1) | Delaware | ||||
Eagle Consolidation LLC | Delaware | ||||
El Dorado Logistics LLC (1) | Delaware | ||||
El Dorado Operating LLC (1) | Delaware | ||||
El Dorado Osage LLC (1) | Delaware | ||||
El Paso Operating LLC | Delaware | ||||
Ethanol Management Company LLC | Delaware | ||||
Frontier Aspen LLC (f/k/a HEP Casper SLC LLC) (1) | Delaware | ||||
Frontier Pipeline LLC | Delaware | ||||
Frontier Refining & Marketing LLC | Delaware | ||||
HEP Cheyenne LLC (1) | Delaware | ||||
HEP Cushing LLC (f/k/a HEP Cheyenne Shortline LLC) (1) | Delaware | ||||
HEP El Dorado LLC (1) | Delaware | ||||
HEP Fin-Tex/Trust-River, L.P. (1) | Texas | ||||
HEP Logistics GP, L.L.C (1) | Delaware | ||||
HEP Logistics Holdings, L.P. | Delaware | ||||
HEP Mountain Home, L.L.C. (1) | Delaware | ||||
HEP Navajo Southern, L.P. (1) | Delaware | ||||
HEP Oklahoma LLC (1) | Delaware | ||||
HEP Pipeline Assets, Limited Partnership (1) | Delaware | ||||
HEP Pipeline GP, L.L.C. (1) | Delaware | ||||
HEP Pipeline, L.L.C. (1) | Delaware | ||||
HEP Refining Assets, L.P. (1) | Delaware | ||||
HEP Refining GP, L.L.C. (1) | Delaware | ||||
HEP Refining, L.L.C. (1) | Delaware | ||||
HEP Tulsa LLC (1) | Delaware | ||||
HEP UNEV Holdings LLC (1) | Delaware | ||||
HEP UNEV Pipeline LLC (1) | Delaware | ||||
HEP Woods Cross, L.L.C. (1) | Delaware | ||||
Hippo Merger Sub, Inc. | Delaware | ||||
Hippo Parent Corporation | Delaware | ||||
Holly Energy Finance Corp. (1) | Delaware | ||||
Holly Energy Holdings LLC (1) | Delaware | ||||
Holly Energy Partners – Operating, L.P. (1) | Delaware | ||||
Holly Energy Partners, L.P. (1) | Delaware | ||||
Holly Energy Storage – Lovington LLC (1) | Delaware | ||||
Holly Logistic Services, L.L.C. | Delaware | ||||
Holly Logistics Limited LLC | Delaware | ||||
Holly Petroleum, Inc. | Delaware | ||||
Holly Refining Communications, Inc. | Delaware | ||||
HollyFrontier Asphalt Company LLC | Delaware | ||||
HollyFrontier Cheyenne Refining LLC | Delaware |
HollyFrontier Cyprus Limited | Cyprus | ||||
HollyFrontier El Dorado Refining LLC | Delaware | ||||
HollyFrontier Holdings LLC | Delaware | ||||
HollyFrontier LSP Brand Strategies LLC | Delaware | ||||
HollyFrontier LSP Europe B. V. (f/k/a Petro-Canada Lubricants Netherlands B.V.) | Netherlands | ||||
HollyFrontier LSP Holdings LLC | Delaware | ||||
HollyFrontier LSP Latin America Holdings LLC | Delaware | ||||
HollyFrontier LSP Mexico S. de R.L. de C.V. | Mexico | ||||
HollyFrontier LSP Services LLC | Delaware | ||||
HollyFrontier LSP US Holdings LLC | Delaware | ||||
HollyFrontier Luxembourg Holding Company | Luxembourg | ||||
HollyFrontier Navajo Refining LLC | Delaware | ||||
HollyFrontier Netherlands B.V. | Netherlands | ||||
HollyFrontier Payroll Services, Inc. | Delaware | ||||
HollyFrontier Puget Sound Refining LLC | Delaware | ||||
HollyFrontier Refining & Marketing LLC | Delaware | ||||
HollyFrontier Renewables Holding Company LLC (f/k/a HollyFrontier Midstream Holding Company Inc.) | Delaware | ||||
HollyFrontier Renewables Marketing LLC | Delaware | ||||
HollyFrontier Services LLC | Delaware | ||||
HollyFrontier Transportation LLC | Delaware | ||||
HollyFrontier Tulsa Refining LLC | Delaware | ||||
HollyFrontier Woods Cross Refining LLC | Delaware | ||||
Hollymarks, LLC | Delaware | ||||
HRM Realty, LLC | Delaware | ||||
Jia Shi Lubricants Trading (Shanghai) Co. Ltd. | China | ||||
Lea Refining Company | Delaware | ||||
Lovington-Artesia, L.L.C. (1) | Delaware | ||||
Navajo Holdings, Inc. | New Mexico | ||||
Navajo Pipeline Co., L.P. (1) | Delaware | ||||
Navajo Pipeline GP, L.L.C. | Delaware | ||||
Navajo Pipeline LP, L.L.C. | Delaware | ||||
NWNAL LLC (1) | Delaware | ||||
Osage Pipe Line Company, LLC (joint venture) (1) | Delaware | ||||
Petro-Canada America Lubricants LLC (2) | Delaware | ||||
Petro-Canada Europe Lubricants Limited | U.K. | ||||
Petro-Canada Lubricants Inc. | Canada | ||||
Qingdao Sonneborn Refined Products Co., Ltd. | China | ||||
Red Giant Oil Company LLC | Delaware | ||||
Roadrunner Pipeline, L.L.C. (1) | Delaware | ||||
SLC Pipeline LLC (f/k/a HEP SLC, LLC) (1) | Delaware | ||||
Sonneborn do Brasil Reprecentacoes Comerciais LTDA | Brazil | ||||
Sonneborn Refined Products B.V. | Netherlands | ||||
Sonneborn US Holdings LLC | Delaware | ||||
Sonneborn, LLC | Delaware | ||||
UNEV Pipeline, LLC (joint venture) (1) | Delaware | ||||
Wainoco Oil and Gas Company | Delaware | ||||
Wainoco Resources, Inc. | Delaware | ||||
Woods Cross Operating LLC (1) | Delaware |
Date: February 23, 2022 | /s/ Michael C. Jennings | |||||||
Michael C. Jennings | ||||||||
Chief Executive Officer |
Date: February 23, 2022 | /s/ Richard L. Voliva III | |||||||
Richard L. Voliva III | ||||||||
Executive Vice President and Chief Financial Officer |
Date: February 23, 2022 | /s/ Michael C. Jennings | |||||||
Michael C. Jennings | ||||||||
Chief Executive Officer |
Date: February 23, 2022 | /s/ Richard L. Voliva III | |||||||
Richard L. Voliva III | ||||||||
Executive Vice President and Chief Financial Officer |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Dallas, Texas |
Consolidated Statements Of Equity (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per common share (in USD per share) | $ 0.35 | $ 1.40 | $ 1.34 |
Description of Business and Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business: References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Annual Report on Form 10-K has been written in the first person. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries. We are an independent petroleum refiner and marketer that produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products and specialty and modified asphalt. As of December 31, 2021, we owned and operated petroleum refineries located in Kansas, Oklahoma, New Mexico, Utah and Washington, and 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. In addition, we produce base oils and other specialized lubricants in the United States, Canada and the Netherlands, with retail and wholesale marketing of our products through a global sales network with locations in Canada, the United States, Europe, China and Latin America. We also own a 57% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. On August 2, 2021, HollyFrontier, Hippo Parent Corporation, a wholly owned subsidiary of HollyFrontier (“New Parent”), Hippo Merger Sub, Inc., a wholly owned subsidiary of New Parent, The Sinclair Companies (“Sinclair”), and Hippo Holding LLC, a wholly owned subsidiary of Sinclair (the “Target Company”), entered into a business combination agreement, pursuant to which HollyFrontier will acquire the Target Company. On May 4, 2021, HollyFrontier Puget Sound Refining LLC, a wholly owned subsidiary of HollyFrontier Corporation, 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. On November 12, 2018, we entered into an equity purchase agreement to acquire 100% of the issued and outstanding capital stock of Sonneborn US Holdings Inc. and 100% of the membership rights in Sonneborn Coöperatief U.A. (collectively, “Sonneborn”). The acquisition closed on February 1, 2019. See Note 2 for additional information on these acquisitions. 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 operations. During the first quarter of 2021, we initiated a restructuring within our Lubricants and Specialty Products 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 and Specialty Products 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 $25.8 million in decommissioning expense and $1.0 million in employee severance costs for the year ended December 31, 2021, which were recognized in operating expenses in our Corporate and Other segment. During the second quarter of 2020, we recorded long-lived asset impairment charges of $232.2 million related to our Cheyenne Refinery asset group. Also, we recognized $24.7 million in decommissioning expense and $3.8 million in employee severance costs for the year ended December 31, 2020. Additionally, we recorded a reserve of $9.0 million against our repair and maintenance supplies inventory. These decommissioning, inventory reserve and severance costs were recognized in operating expenses, of which $24.8 million was recorded in our Refining segment and $12.7 million was recorded in our Corporate and Other segment. During the second quarter of 2020, we also initiated and completed a corporate restructuring. As a result of this restructuring, we recorded $3.7 million in employee severance costs, which were recognized primarily as operating expenses in our Refining segment and selling, general and administrative 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: HEP is a VIE as defined under U.S. generally accepted accounting principles (“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. As the general partner of HEP, we have the sole ability to direct the activities of HEP that most significantly impact HEP's financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP. In 2019, HEP Cushing LLC, a wholly-owned subsidiary of HEP, 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 Pipeline & Terminal LLC and its two subsidiaries, Cushing Connect Pipeline and Cushing Connect Terminal, are each VIE’s because they do not have sufficient equity at risk to finance their activities without additional financial support. HEP is the primary beneficiary of two of these entities as HEP constructed and operates the Cushing Connect Pipeline, and HEP has more ability to direct the activities that most significantly impact the financial performance of Cushing Connect Pipeline & Terminal LLC and Cushing Connect Pipeline. Therefore, HEP consolidates these two entities. HEP is not the primary beneficiary of Cushing Connect Terminal, which HEP accounts for using the equity method of accounting. Use of Estimates: The preparation of financial statements in accordance with 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 consist of amounts due from customers that are primarily companies in the petroleum industry. 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 $3.7 million at December 31, 2021 and $3.4 million at December 31, 2020. 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 renewable identification numbers (“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 sheet. Finance leases are included in “Properties, plants and equipment, at cost” and “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheet. 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 sheet. 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, HEP, as a lessor, does not separate the non-lease (service) component in contracts in which the lease component is the dominant component. HEP treats these combined components as an operating lease. 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 statement 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 $52.5 million and $42.6 million at December 31, 2021 and 2020, respectively, which are included in “Other long-term liabilities” on our consolidated balance sheets. Accretion expense was insignificant for the years ended December 31, 2021, 2020 and 2019. Asset retirement obligations assumed in the Puget Sound Acquisition, as defined in Note 2, were $8.5 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 and Specialty Products 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 HEP logistics assets, (ii) our Lubricants and Specialty Products asset groups and (iii) our HEP asset groups, which comprises HEP 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 the 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 our goodwill and long-lived assets including impairment charges recorded during the years ended December 31, 2020 and 2019. 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 and contributions to and distributions from joint ventures as adjustments to our investment balance. HEP has a 50% interest in Osage Pipe Line Company, LLC and a 50% interest in Cheyenne Pipeline, LLC. HEP also accounts for Cushing Connect Terminal, a subsidiary of the Cushing Connect Pipeline & Terminal LLC joint venture, using the equity method of accounting, as HEP does not have the ability to direct the activities that most significantly impact the entity. As of December 31, 2021, HEP's underlying equity and recorded investment balances in the joint ventures are $90.8 million and $116.4 million respectively. The differences are being amortized as adjustments to HEP's pro-rata share of earnings in the joint ventures. Revenue Recognition: Revenues on refined product 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 specialty products 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 specialty products 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. HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain throughput agreements that specify minimum volume requirements, whereby HEP bills 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, HEP recognizes 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. HEP recognizes the service portion of these deficiency payments as revenue when HEP does 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 is every to 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 $136.9 million, $158.4 million and $141.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. Environmental Costs: 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 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 operations. Such adjustments are not recorded to the Lubricants and Specialty Products 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, 2021, 2020 and 2019, we received proceeds of $43.5 million, $44.9 million and $52.1 million and subsequently repaid $45.4 million, $46.4 million and $49.2 million, respectively, under these sell / buy transactions. Accounting Pronouncements - Not Yet Adopted In October 2021, Accounting Standards Update 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 Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.” This standard is effective for fiscal years beginning after December 15, 2022, and early adoption is permitted. We will evaluate the impact of this standard and consider early adoption, if applicable.
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Acquisitions |
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Acquisitions | Acquisitions Puget Sound Refinery On May 4, 2021, our wholly owned subsidiary, HollyFrontier Puget Sound Refining LLC, 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 statement of operations. The following summarizes the Puget Sound Refinery fair value of assets acquired and liabilities assumed on November 1, 2021:
(1)Properties, plant and equipment include $61.5 million of financing lease ROU assets. Current and noncurrent financing lease liabilities were $7.9 million and $53.6 million, respectively. 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 economic and functional 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. 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. The following unaudited pro forma combined condensed financial data for the years ended December 31, 2021 and 2020 was derived from our historical financial statements giving effect to the Puget Sound Acquisition as if it had occurred on January 1, 2020. The below information reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including the depreciation of the Puget Sound Refinery’s fair-valued properties, plants and equipment and the estimated tax impacts of the pro forma adjustments. Additionally, pro forma earnings include certain non-recurring charges, the substantial majority of which consist of transaction costs related to financial advisors, legal advisors, financial advisory and professional accounting services. The pro forma results of operations do not include any cost savings or other synergies that may result from the Puget Sound Acquisition. The pro forma combined condensed financial data has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Puget Sound Acquisition taken place on January 1, 2020 and is not intended to be a projection of future results.
The following pro forma information for the years ended December 31, 2021 and 2020 presents the revenues and operating income (loss) for our Refining segment assuming the Puget Sound Acquisition had occurred on January 1, 2020.
Sinclair HFC Transactions: On August 2, 2021, HollyFrontier, Hippo Parent Corporation, a wholly owned subsidiary of HollyFrontier (“New Parent”), Hippo Merger Sub, Inc., a wholly owned subsidiary of New Parent (“Parent Merger Sub”), The Sinclair Companies (“Sinclair”), and Hippo Holding LLC, a wholly owned subsidiary of Sinclair (the “Target Company”), entered into a business combination agreement (the “Business Combination Agreement”). Pursuant to the Business Combination Agreement, HollyFrontier will acquire the Target Company by effecting (a) a holding company merger in accordance with Section 251(g) of the Delaware General Corporation Law whereby HollyFrontier will merge with and into Parent Merger Sub, with HollyFrontier surviving such merger as a direct wholly owned subsidiary of New Parent (the “HFC Merger”) and (b) immediately following the HFC Merger, a contribution whereby Sinclair will contribute all of the equity interests of the Target Company to New Parent in exchange for shares of New Parent, resulting in the Target Company becoming a direct wholly owned subsidiary of New Parent (the “Sinclair Oil Acquisition” and together with the HFC Merger, the “HFC Transactions”). Under the terms of the Business Combination Agreement, at the effective time of the HFC Merger, (a) each share of common stock of HollyFrontier, par value $0.01 per share, will be automatically converted into one share of common stock of New Parent, par value $0.01 per share (“New Parent Common Stock”) and (b) immediately thereafter, Sinclair will contribute the equity interests in the Target Company to New Parent in exchange for 60,230,036 shares of New Parent Common Stock, subject to adjustment if, as a condition to obtaining antitrust clearance for the Sinclair Transactions (as defined below), HollyFrontier agrees to divest certain Woods Cross Refinery assets and the sales price for such assets does not exceed a threshold provided in the Business Combination Agreement. On a pro forma basis following the closing, Sinclair is expected to own 26.75% of the outstanding common stock of New Parent, and HollyFrontier’s current stockholders are expected to hold in the aggregate 73.25% of the outstanding common stock of New Parent, based on HollyFrontier’s outstanding shares of common stock as of July 30, 2021. Consummation of the HFC Transactions is subject to satisfaction or waiver of certain customary conditions, including, among others, the satisfaction of certain required regulatory consents and approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (the “HSR Act”); and the consummation of the HEP Transactions (as defined below), which will occur immediately prior to the HFC Transactions (the HEP Transactions, together with the HFC Transactions, the “Sinclair Transactions”). On August 23, 2021, each of HollyFrontier and Sinclair filed its respective premerger notification and report regarding the Sinclair Transactions with the U.S. Department of Justice and the U.S. Federal Trade Commission (the “FTC”) under the HSR Act. On September 22, 2021, HollyFrontier and Sinclair each received a request for additional information and documentary material (“Second Request”) from the FTC in connection with the FTC’s review of the Sinclair Transactions. Issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both HollyFrontier and Sinclair have substantially complied with the Second Request, unless the waiting period is terminated earlier by the FTC or the parties otherwise commit not to close the Sinclair Transactions for some additional period of time. HollyFrontier and Sinclair are cooperating with the FTC staff in its review and are working diligently to satisfy the closing conditions as soon as possible. The Business Combination Agreement automatically terminates if the HEP Transactions are terminated and contains other customary termination rights. In the event that certain events occur under specified circumstances outlined in the Business Combination Agreement, HollyFrontier could be required to pay Sinclair a termination fee equal to $200 million or $35 million as reimbursement for expenses. Upon closing of the Sinclair Transactions, HollyFrontier’s existing senior management team will operate the combined company. Under the definitive agreements, Sinclair will be granted the right to nominate two directors to the New Parent board of directors at the closing. The Sinclair stockholders have also agreed to certain customary lock up, voting and standstill restrictions, as well as customary registration rights, for the New Parent Common Stock to be issued to the stockholders of Sinclair. The new company will be headquartered in Dallas, Texas, with combined business offices in Salt Lake City, Utah. Following the consummation of the HFC Merger, New Parent will assume HollyFrontier’s listing on the New York Stock Exchange and will be renamed “HF Sinclair Corporation”. HEP Transactions: On August 2, 2021, HEP, Sinclair, and Sinclair Transportation Company, a wholly owned subsidiary of Sinclair (“STC”), entered into a contribution agreement (the “Contribution Agreement”) pursuant to which the Partnership will acquire all of the outstanding shares of STC in exchange for 21 million newly issued common limited partner units of HEP and cash consideration equal to $325 million (the “HEP Transactions”). The cash consideration for the HEP Transactions is subject to customary adjustments at closing for working capital of STC. The number of HEP common limited partner units to be issued to Sinclair at closing is subject to downward adjustment if, as a condition to obtaining antitrust clearance for the Sinclair Transactions, HEP agrees to divest a portion of its equity interest in UNEV Pipeline, LLC and the sales price for such interests does not exceed the threshold provided in the Contribution Agreement. The Contribution Agreement contains customary representations, warranties and covenants of HEP, Sinclair and STC. The HEP Transactions are expected to close in 2022, subject to the satisfaction or waiver of certain customary conditions, including, among others, the receipt of certain required regulatory consents and approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the consummation of the HFC Transactions. The Contribution Agreement automatically terminates if the HFC Transactions are terminated and contains other customary termination rights, including a termination right for each of the Partnership and Sinclair if, under certain circumstances, the closing does not occur by May 2, 2022 (the “Outside Date”), except that the Outside Date can be extended by either party by up to two 90 day periods to obtain any required antitrust clearance. Upon closing of the HEP Transactions, HEP’s existing senior management team will continue to operate HEP. Under the definitive agreements, Sinclair will be granted the right to nominate one director to the HEP board of directors at the closing. The Sinclair stockholders have also agreed to certain customary lock up restrictions and registration rights for the HEP common limited partner units to be issued to the stockholders of Sinclair. HEP will continue to operate under the name Holly Energy Partners, L.P. On August 2, 2021, in connection with the Sinclair Transactions, HEP and HollyFrontier entered into a Letter Agreement (“Letter Agreement”) pursuant to which, among other things, HEP and HollyFrontier agreed, upon the consummation of the Sinclair Transactions, to enter into amendments to certain of the agreements by and among HEP and HollyFrontier, including the master throughput agreement, to include within the scope of such agreements the assets to be acquired by HEP pursuant to the Contribution Agreement. In addition, the Letter Agreement provides that if, as a condition to obtaining antitrust clearance for the Sinclair Transactions, HollyFrontier enters into a definitive agreement to divest its Woods Cross Refinery, then HEP would sell certain assets located at, or relating to, the Woods Cross Refinery to HollyFrontier in exchange for cash consideration equal to $232.5 million plus the certain accounts receivable of HEP in respect of such assets, with such sale to be effective immediately prior to the closing of the sale of the Woods Cross Refinery by HollyFrontier. The Letter Agreement also provides that HEP’s right to future revenues from HollyFrontier in respect of such Woods Cross Refinery assets will terminate at the closing of such sale. Sonneborn On November 12, 2018, we entered into an equity purchase agreement to acquire Sonneborn. The acquisition closed on February 1, 2019. Aggregate consideration totaled $701.6 million and consisted of $662.7 million in cash paid at acquisition, net of cash acquired. Sonneborn is a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes with manufacturing facilities in the United States and Europe. This transaction was accounted for as a business combination using the acquisition method of accounting, with the purchase price allocated to the fair value of the acquired Sonneborn assets and liabilities as of the February 1, 2019 acquisition date, with the excess purchase price recorded as goodwill. This goodwill was assigned to our Lubricants and Specialty Products segment and is not deductible for income tax purposes. Fair values were as follows: cash and cash equivalents $38.9 million, current assets $139.4 million, properties, plants and equipment $168.2 million, goodwill $282.3 million, intangibles and other noncurrent assets $231.5 million, current liabilities $47.9 million and deferred income tax and other long-term liabilities $110.8 million. Intangibles included customer relationships, trademarks, patents and technical know-how totaling $214.6 million that are being amortized on a straight-line basis over a 12-year period. Our consolidated financial and operating results reflect the Sonneborn operations beginning February 1, 2019. Our results of operations include revenue and income before income taxes of $340.3 million and $5.1 million, respectively, for the period from February 1, 2019 through December 31, 2019 related to these operations.
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Leases |
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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 58 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, 2021, minimum future lease payments of our operating and finance lease obligations were as follows:
Lessor Our consolidated statements of operations reflect lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and HEP believes these assets will continue to have value when the current agreements expire due to HEP's risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. One of HEP’s throughput agreements with Delek US Holdings, Inc. (“Delek”) was partially renewed during the year ended December 31, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, HEP recognized a gain on sales-type leases totaling $33.8 million during the year ended December 31, 2020. This sales-type lease transaction, including the related gain, was a non-cash transaction. Lease income recognized was as follows:
For HEP’s sales-type leases, HEP included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of HEP’s 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. HEP 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 HEP is a lessor to third-party contracts as of December 31, 2021 were as follows:
Net investment in sales-type leases recorded on our consolidated balance sheet 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 58 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, 2021, minimum future lease payments of our operating and finance lease obligations were as follows:
Lessor Our consolidated statements of operations reflect lease revenue recognized by HEP for contracts with third parties in which HEP is the lessor. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and HEP believes these assets will continue to have value when the current agreements expire due to HEP's risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. One of HEP’s throughput agreements with Delek US Holdings, Inc. (“Delek”) was partially renewed during the year ended December 31, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, HEP recognized a gain on sales-type leases totaling $33.8 million during the year ended December 31, 2020. This sales-type lease transaction, including the related gain, was a non-cash transaction. Lease income recognized was as follows:
For HEP’s sales-type leases, HEP included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of HEP’s 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. HEP 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 HEP is a lessor to third-party contracts as of December 31, 2021 were as follows:
Net investment in sales-type leases recorded on our consolidated balance sheet was composed of the following:
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Holly Energy Partners |
12 Months Ended |
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Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Holly Energy Partners | Holly Energy Partners HEP is a publicly held master limited partnership that owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations, as well as other third-party refineries, in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. Additionally, as of December 31, 2021, HEP owned a 75% interest in UNEV Pipeline, LLC (“UNEV”), the owner of a pipeline running from Woods Cross, Utah to Las Vegas, Nevada and associated product terminals, and a 50% ownership interest in each of Osage Pipe Line Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas (the “Osage Pipeline”); Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”) and Cushing Connect Pipeline & Terminal LLC (“Cushing Connect”), the owner of a crude oil storage terminal in Cushing, Oklahoma and a pipeline that runs from Cushing, Oklahoma to our Tulsa Refineries. At December 31, 2021, we owned a 57% limited partner interest and a non-economic general partner interest in HEP. As the general partner of HEP, we have the sole ability to direct the activities that most significantly impact HEP's financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP. HEP has two primary customers (including us) and generates revenues by charging tariffs for transporting petroleum products and crude oil though its pipelines, by charging fees for terminalling refined products and other hydrocarbons, and by storing and providing other services at its storage tanks and terminals. Under our long-term transportation agreements with HEP (discussed further below), we accounted for 79% of HEP’s total revenues for the year ended December 31, 2021. We do not provide financial or equity support through any liquidity arrangements and / or debt guarantees to HEP. HEP has outstanding debt under a senior secured revolving credit agreement and its senior notes. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. See Note 13 for a description of HEP’s debt obligations. HEP has risk associated with its operations. If a major customer of HEP were to terminate its contracts or fail to meet desired shipping or throughput levels for an extended period of time, revenue would be reduced and HEP could suffer substantial losses to the extent that a new customer is not found. In the event that HEP incurs a loss, our operating results will reflect HEP’s loss, net of intercompany eliminations, to the extent of our ownership interest in HEP at that point in time. Cushing Connect Joint Venture In October 2019, HEP Cushing LLC, a wholly-owned subsidiary of HEP, 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, 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”) 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”). The Cushing Connect Terminal was fully in service beginning in April 2020, and the Cushing Connect Pipeline was placed in service at the end of 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 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 will be shared proportionately among the partners. However, HEP is solely responsible for any Cushing Connect Pipeline construction costs that exceed 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 are approximately $70.0 million to $75.0 million. Transportation Agreements HEP serves our refineries under long-term pipeline, terminal and tankage throughput agreements and refinery processing tolling agreements expiring from 2022 through 2036. Under these agreements, we pay HEP fees to transport, store and process throughput volumes of refined products, crude oil and feedstocks on HEP's pipelines, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to HEP including UNEV (a consolidated subsidiary of HEP). Under these agreements, the agreed upon tariff rates are subject to annual tariff rate adjustments on July 1 at a rate based upon the percentage change in Producer Price Index or Federal Energy Regulatory Commission index. As of December 31, 2021, these agreements required minimum annualized payments to HEP of $352.8 million. Our transactions with HEP and fees paid under our transportation agreements with HEP and UNEV are eliminated and have no impact on our consolidated financial statements.
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Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | RevenuesSubstantially 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:
(1)Transportation fuels consist of gasoline, diesel and jet fuel. For the year ended December 31, 2020, $1.6 million is reported in our Corporate and Other segment. (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 $724.3 million and $224.3 million, respectively, for the year ended December 31, 2021. For the year ended December 31, 2020 such revenues attributable to our Refining, Lubricants and Specialty Products and Corporate and Other segments were $533.5 million, $135.4 million and $3.5 million respectively. For the year ended December 31, 2019 such revenue attributable to our Refining and Lubricants and Specialty Products segments were $808.9 million and $216.8 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)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 HEP’s third-party transportation agreements and production agreements from our Sonneborn operations. The following table presents changes to contract liabilities:
As of December 31, 2021, 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 2025. 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 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, 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 2025. Annual minimum revenues attributable to HEP’s third-party contracts as of December 31, 2021 are presented below:
For the year ended December 31, 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 13%. We had no customers which had accounted for over 10% of our annual revenues for the years ended December 31, 2020 or 2019.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Our financial instruments measured at fair value on a recurring basis consist of derivative instruments and RINs credit obligations. 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 were as follows:
(1)Represent obligations for RINs credits for which we did not have sufficient quantities at December 31, 2021 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements. Level 1 Financial Instruments Our NYMEX futures contracts are exchange traded and are measured and recorded at fair value using quoted market prices, a Level 1 input. Level 2 Financial Instruments Derivative instruments consisting of foreign currency forward contracts, commodity price swaps 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 forward sales and purchase contracts are computed using quoted forward commodity prices. RINs credit obligations are valued based on current market RINs 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 year ended December 31, 2020, we recognized goodwill and long-lived asset impairment charges based on fair value measurements utilized during our goodwill and long-lived asset impairment testing (see Note 11). 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. During the year ended December 31, 2020, HEP recognized a gain on sales-type leases (see Note 3). The estimated fair value of the underlying leased assets at contract inception and the present value of the estimated unguaranteed residual asset at the end of the lease term were used in determining the net investment in leases and related recognized gain on sales-type leases. The asset valuation estimates included Level 3 inputs based on a replacement cost valuation method.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated as net income (loss) attributable to HollyFrontier 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 (loss) attributable to HollyFrontier stockholders:
(1)Unvested restricted stock unit awards and unvested performance share units that settle in HollyFrontier common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HollyFrontier. Participating earnings represent the distributed and undistributed earnings of HollyFrontier 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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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation We have a principal share-based compensation plan (the “2020 Long-Term Incentive Plan”) that 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 6,019,255 of these awards may be issued pursuant to awards granted under the 2020 Long-Term Incentive Plan. We also have a long-term incentive compensation plan which expired pursuant to its terms on December 31, 2020, but continues to govern outstanding equity awards granted thereunder and the plan will be terminated following the settlement of all outstanding awards granted thereunder. 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. In July 2021, we adopted a stock compensation deferral plan which allows non-employee directors to defer settlement of vested stock granted under our share-based compensation plan. This plan was effective October 1, 2021. The compensation expense and associated tax benefit were as follows:
Additionally, HEP maintains a share-based compensation plan for Holly Logistic Services, L.L.C.'s non-employee directors and certain executives and employees. Compensation cost attributable to HEP’s share-based compensation plan was $2.6 million, $2.2 million and $2.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. Restricted Stock Units Under our long-term incentive 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 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, 2021 is presented below:
For the years ended December 31, 2021, 2020 and 2019, restricted stock and restricted stock units vested having a grant date fair value of $28.4 million, $28.2 million and $30.9 million, respectively. For the years ended December 31, 2020 and 2019, we granted restricted stock units having a weighted average grant date fair value of $22.20 and $52.62, respectively. As of December 31, 2021, there was $29.7 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 1.6 years. For the years ended December 31, 2021, 2020 and 2019, we paid $3.4 million, $1.3 million and $1.7 million, respectively, in cash equal to the value of the stock award on the vest date to certain employees to settle 105,459, 55,222 and 32,648, respectively, restricted stock units. Performance Share Units Under our long-term incentive 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 HollyFrontier 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, 2021 is presented below:
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Inventories |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventory consists 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, lubricants, asphalts, LPG’s and residual fuels. (3)Process chemicals include additives and other chemicals. (4)Includes RINs Our inventories that are valued at the lower of LIFO cost or market reflect a valuation reserve of $318.9 million at December 31, 2020. The December 31, 2020 market reserve of $318.9 million was reversed due to the sale of inventory quantities that gave rise to the 2020 reserve. The effect of the change in the lower of cost or market reserve was a decrease to cost of products sold totaling $310.1 million for the year ended December 31, 2021, an increase of $78.5 million for the year ended December 31, 2020 and a decrease of $119.8 million for the year ended December 31, 2019. At December 31, 2021, the replacement cost of our refining inventories exceeded the LIFO carrying value. The excess of replacement cost over the LIFO value of inventory was $111.1 million at December 31, 2021. For the year ended December 31, 2020, we recognized a charge of $36.9 million to cost of products sold as we liquidated certain quantities of LIFO inventory at our Cheyenne Refinery that were carried at historical acquisition costs above market prices at the time of liquidation. In the fourth quarter of 2021, we built renewable feedstock inventory in connection with our Cheyenne renewable diesel unit and as of December 31, 2021, the market value was below the LIFO carrying value. As a result, we recorded a lower of cost or market inventory valuation reserve of $8.7 million. During the three months ended September 30, 2019, the EPA granted the Cheyenne Refinery and the Woods Cross Refinery each a one-year small refinery exemption from the Renewable Fuel Standard (“RFS”) program requirements for the 2018 calendar year end. As a result, the Cheyenne Refinery’s and the Woods Cross Refinery’s gasoline and diesel production are not subject to the Renewable Volume Obligation (“RVO”) for 2018. In the third quarter of 2019, we increased our inventory of RINs and reduced our cost of products sold by $36.6 million representing the net cost of the RINs charge to cost of products sold in 2018, less the loss incurred for selling 2018 vintage RINs in excess of those which we can use subject to the 20% carryover limit.
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Properties, Plants and Equipment |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 $15.2 million, $4.1 million and $2.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. Depreciation expense was $329.4 million, $333.0 million and $334.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.
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Goodwill, Long-lived Asset and Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Long-lived Asset and Intangibles | Goodwill, Long-lived Assets and Intangibles Goodwill and long-lived assets As of December 31, 2021, our goodwill balance was $2.3 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 and Specialty Products segment. The following is a summary of our goodwill by segment:
We performed our annual goodwill impairment testing quantitatively as of July 1, 2021 and determined there was no impairment of goodwill attributable to our reporting units. Additionally, there was no impairment of long-lived assets during the years ended December 31, 2021 and 2019. See below for discussion of our goodwill impairments recognized in 2020 and 2019 and long-lived assets impairment recognized in 2020. During the second quarter of 2020, we determined that indicators of potential goodwill and long-lived asset impairments were present and performed recoverability testing for long-lived assets and an interim test for goodwill impairment as of May 31, 2020. Impairment indicators included the recent economic slowdown caused by the COVID-19 pandemic, reductions in the prices of our finished goods and raw materials and the related decrease in our gross margins, as well as the recent decline in our market capitalization. Additionally, our second quarter 2020 announcement of the planned conversion of our Cheyenne Refinery to renewable diesel production was also considered a triggering event requiring assessment of potential impairments to the carrying value of our Cheyenne Refinery asset group. As a result of our long-lived asset recoverability testing, we determined that the carrying value of the long-lived assets of our Cheyenne Refinery and PCLI asset groups were not recoverable, and thus recorded long-lived asset impairment charges of $232.2 million and $204.7 million, respectively, in the second quarter of 2020. Our interim goodwill impairment testing indicated that there was no impairment of goodwill at our Refining and Lubricants and Specialty Products reporting units as of May 31, 2020. The estimated fair values of the Cheyenne Refinery and PCLI asset groups were determined using a combination of the income and cost approaches. The income approach was based on management’s best estimates of the expected future cash flows over the remaining useful life of the asset group. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and economic obsolescence. These fair value measurements involve significant unobservable inputs (Level 3 inputs). See Note 6 for further discussion of Level 3 inputs. During the fourth quarter of 2020, we incurred long-lived asset impairment charges of $26.5 million for construction-in-progress, consisting primarily of engineering work for potential upgrades to certain processing units at our Tulsa and El Dorado Refineries. During the fourth quarter of 2020, we concluded not to pursue these projects in light of recent economic and market conditions. Additionally, in the fourth quarter of 2020, our annual budgeting process identified downward forecast revisions specific to the Sonneborn reporting unit within our Lubricants and Specialty Products segment; largely from declines in gross margin as compared to historic levels and an increase in forecasted capital expenditures. As such, we concluded it was more likely than not that the carrying value of the Sonneborn reporting unit exceeded its fair value, and we performed an interim quantitative test for goodwill impairment as of December 1, 2020. As a result of our impairment testing, we recognized a goodwill impairment charge of $81.9 million during the fourth quarter of 2020 for the Sonneborn reporting unit. No other reporting units required an interim impairment test during the fourth quarter of 2020. During the year ended December 31, 2019, we recorded a goodwill impairment charge of $152.7 million to fully impair the goodwill of the PCLI reporting unit included in our Lubricants and Specialty Products segment. The estimated fair values of our reporting units tested quantitatively were derived using a combination of income and market approaches. The income approach reflects expected future cash flows based on estimated forecasted production levels, selling prices, gross margins, operating costs and capital expenditures. Our market approaches include both the guideline public company and guideline transaction methods. Both methods utilize pricing multiples derived from historical market transactions of other like kind assets. These fair value measurements involve significant unobservable inputs (Level 3 inputs). See Note 6 for further discussion of Level 3 inputs. A reasonable expectation exists that further deterioration in our operating results or overall economic conditions could result in an impairment of goodwill and / or additional long-lived assets impairments at some point in the future. Future impairment charges could be material to our results of operations and financial condition. Intangibles The carrying amounts of our intangible assets presented in “Intangibles and other” on our consolidated balance sheets are as follows:
Amortization expense was $35.6 million, $34.1 million and $33.8 million for the years ended December 31, 2021, 2020 and 2019, respectively and expected to approximate $34.4 million for each of the next five years.
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Environmental |
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Dec. 31, 2021 | |
Environmental Expense and Liabilities [Abstract] | |
Environmental | EnvironmentalWe expensed $7.8 million, $7.1 million and $11.2 million for the years ended December 31, 2021, 2020 and 2019, respectively, for environmental remediation obligations. The accrued environmental liability reflected on our consolidated balance sheets was $117.2 million and $115.0 million at December 31, 2021 and 2020, respectively, of which $99.1 million and $94.0 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 (up to 30 years for certain projects). Estimated liabilities could increase in the future when the results of ongoing investigations become known, are considered probable and can be reasonably estimated. |
Debt |
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Debt | Debt HollyFrontier Credit Agreement On April 30, 2021, we amended our $1.35 billion senior unsecured revolving credit facility to extend the maturity date to April 30, 2026 (the “HollyFrontier Credit Agreement”). On December 27, 2021, the HollyFrontier Credit Agreement was further amended to provide an alternative reference rate for loans denominated in Euros and Sterling and to further supplement the reference rate replacement procedures for loans denominated in U.S. dollars following the anticipated cessation of LIBOR. The HollyFrontier 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, 2021, we were in compliance with all covenants, had no outstanding borrowings and had outstanding letters of credit totaling $2.3 million under the HollyFrontier Credit Agreement. Indebtedness under the HollyFrontier Credit Agreement bears interest, at our option, at either (a) the alternate base rate (as defined in the HollyFrontier Credit Agreement) plus an applicable margin (ranging from 0.25% - 1.125%), (b) the LIBO Rate (as defined in the HollyFrontier Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%), or c) the CDOR Rate (as defined in the HollyFrontier Credit Agreement) plus an applicable margin (ranging from 1.25% to 2.125%) for Canadian dollar denominated borrowings. HEP Credit Agreement On April 30, 2021, HEP amended its $1.4 billion senior secured revolving credit facility decreasing the commitments under the facility to $1.2 billion and extending the maturity to July 27, 2025 (the “HEP Credit Agreement”). The HEP Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments, working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit and continues to provide for an accordion feature that allows HEP to increase the commitments under the HEP Credit Agreement up to a maximum amount of $1.7 billion. At December 31, 2021, HEP was in compliance with all of its covenants, had outstanding borrowings of $840.0 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 HEP’s option, at either (a) the alternate base rate (as defined in the HEP Credit Agreement) plus an applicable margin or (b) the Eurodollar Rate (as defined in the HEP Credit Agreement) plus an applicable margin. In each case, the applicable margin is based upon HEP’s Total Leverage Ratio (as defined in the HEP Credit Agreement). The weighted average interest rate in effect under the HEP Credit Agreement on HEP’s borrowings was 2.35% and 2.58% as of December 31, 2021 and 2020, respectively. HEP’s obligations under the HEP Credit Agreement are collateralized by substantially all of HEP’s assets and are guaranteed by HEP's material wholly-owned subsidiaries. Any recourse to the general partner would be limited to the extent of HEP Logistics Holdings, L.P.’s assets, which other than its investment in HEP are not significant. HEP’s creditors have no recourse to our other assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. HollyFrontier Senior Notes In September 2020, we completed a public offering of $350.0 million in aggregate principal amount of 2.625% senior notes maturing October 2023 (the “2.625% Senior Notes”) and $400.0 million in aggregate principal amount of 4.500% senior notes maturing October 2030 (the “4.500% Senior Notes”). As a result, as of December 31, 2021, our outstanding senior notes consist of $1.0 billion in aggregate principal amount of 5.875% senior notes maturing April 2026 (the “5.875% Senior Notes”), the 2.625% Senior Notes and the 4.500% Senior Notes (collectively, the “HollyFrontier Senior Notes”). The HollyFrontier Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinated indebtedness. HollyFrontier 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 $37.4 million and $43.9 million at December 31, 2021 and 2020, respectively, and are included in “Accrued liabilities” on our consolidated balance sheets. See Note 6 for additional information on Level 2 inputs. HEP Senior Notes In February 2020, HEP closed a private placement of $500.0 million in aggregate principal amount of 5.0% HEP senior unsecured notes maturing in February 2028 (the “HEP Senior Notes”). Subsequently, in February 2020, HEP redeemed its existing $500.0 million aggregate principal amount of 6.0% senior notes maturing August 2024 at a redemption cost of $522.5 million. HEP recognized a $25.9 million early extinguishment loss consisting of a $22.5 million debt redemption premium and unamortized discount and financing costs of $3.4 million. The HEP Senior Notes are unsecured and impose certain restrictive covenants, including limitations on HEP’s ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates, and enter into mergers. HEP was in compliance with the restrictive covenants for the HEP Senior Notes as of December 31, 2021. At any time when the HEP Senior Notes are rated investment grade by either Moody’s or Standard & Poor’s and no default or event of default exists, HEP will not be subject to many of the foregoing covenants. Additionally, HEP has certain redemption rights under the HEP Senior Notes. Indebtedness under the HEP Senior Notes is guaranteed by HEP’s wholly-owned subsidiaries. HEP’s creditors have no recourse to our assets. Furthermore, our creditors have no recourse to the assets of HEP and its consolidated subsidiaries. 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 6 for additional information on Level 2 inputs. Principal maturities of long-term debt as of December 31, 2021 are as follows:
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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, 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. 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 forward purchase and sell contracts, as well as periodically have contracts to lock in basis spread differentials on forecasted purchases of crude oil and swap contracts to lock in the crack spread of WTI and gasoline, 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, 2021, we have the following notional contract volumes related to outstanding derivative instruments (all maturing in 2022):
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.
At December 31, 2021, we had a pre-tax net unrealized loss of $0.3 million classified in accumulated other comprehensive income that relates to all accounting hedges having contractual maturities through 2022, which, assuming commodity prices remain unchanged, will be effectively transferred from accumulated other comprehensive income into the statement of operations as the hedging instruments contractually mature over the next three-month period.
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Income Taxes |
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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 (benefit) 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, 2021 and 2020 are as follows:
We have federal income tax credits of $16.9 million that can be carried forward 20 years and state income tax credits of $24.4 million that can be carried forward at least 16 years. We also have tax benefits attributable to net operating losses of $16.0 million in Luxembourg that can be carried forward 16 years which will begin expiring in 2034. We have reflected a valuation allowance of $3.2 million in 2021 and $8.6 million in 2020 with respect to net operating carryforwards that primarily relate to losses in Luxembourg. Additionally, we have tax benefits attributable to net operating loss carryforwards of $10.9 million for state income tax purposes with various carryforward periods of 10 years or longer. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
At December 31, 2021, 2020 and 2019, there were $54.6 million, $54.9 million, and $56.6 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 $53.7 million of the unrecognized tax benefits relates to claims filed with the IRS on the federal income tax treatment of refundable biodiesel/ethanol blending tax credits for certain prior years. The issues related to the claims are complex and uncertain, and we cannot conclude that it is more likely than not that we will sustain the claims. Therefore, no tax benefit has been recognized for the filed claims. During the next 12 months, it is reasonably possible that an ultimate resolution regarding these claims could reduce unrecognized tax benefits (due to possible court rulings in favor of the IRS). 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, Kansas, New Mexico, Iowa, Arizona, Utah, Colorado and Nebraska income tax and to income tax of multiple other state jurisdictions. We have substantially concluded all state and local income tax matters for tax years through 2017. Other than the federal claim noted above, we have materially concluded all U.S. federal income tax matters for tax years through December 31, 2017.
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Stockholders' Equity |
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Stockholders' Equity | Stockholders' Equity Shares of our common stock outstanding and activity for the years ended December 31, 2021, 2020 and 2019 are presented below:
(1)Includes 217,151, 283,047 and 415,466 shares, respectively, withheld 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, as well as other stock repurchases under separate authority from our Board of Directors. In November 2019, our Board of Directors approved a $1.0 billion share repurchase program, which replaced all existing share repurchase programs authorizing us to repurchase common stock in the open market or through privately negotiated transactions. The timing and amount of stock repurchases will depend on market conditions and corporate, regulatory and other relevant considerations. This program may be discontinued at any time by our Board of Directors. As of December 31, 2021, we had not repurchased common stock under this stock repurchase program, and we do not intend to repurchase common stock under this program until completion of our ongoing renewables capital projects and completion of the Sinclair Transactions. 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. During the years ended December 31, 2021, 2020 and 2019, we withheld shares of our common stock from certain employees in the amounts of $7.1 million, $7.6 million and $21.9 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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Other Comprehensive Income (Loss), before Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The components and allocated tax effects of other comprehensive income are as follows:
The following table presents the statement of operations line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes:
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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 PlansCertain PCLI employees are participants in union and non-union pension plans which are closed to new entrants. It is our intention that, effective June 30, 2022, no additional benefits will be accrued under these plans, and the plans will become frozen and employees will be transitioned to a defined contribution plan. Accordingly, these changes have been accounted for as curtailments and contractual termination benefits. 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, 2021 and 2020.
The accumulated benefit obligation was $118.4 million and $119.2 million at December 31, 2021 and 2020, 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 assumptions used to determine end of period benefit obligations for the PCLI plans for the years ended December 31, 2021 and 2020 were discount rates of 3.00% and 2.60%, respectively, and rates of future compensation increases of 3.00% for each year. For the years ended December 31, 2021 and 2020, the weighted average assumption used to determine end of period benefit obligations for Sonneborn were discount rates of 1.40% and 1.10%, 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 operations. The following table presents the fair values of PCLI’s pension plans’ assets, by level within the fair value hierarchy, as of December 31, 2021 and 2020.
See Note 6 for additional information on Level 1 and 2 inputs. The expected long-term rate of return on plan assets is 3.25% for the PCLI pension plans, and is based on a target investment mix of 16% equities, 75% fixed income, 5% real estate and infrastructure and 4% other. We expect to contribute $3.6 million to the PCLI and Sonneborn pensions plans in 2022. Benefit payments, which reflect expected future service, are expected to be paid as follows: $2.5 million in 2022, $2.9 million in 2023, $3.3 million in 2024, $87.6 million in 2025, $0.9 million in 2026 and $5.4 million in 2027 to 2031. Benefit payments expected to be paid in 2025 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, 2021. 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, 2021 and 2020:
Benefit payments, which reflect expected future service, are expected to be paid as follows: $0.8 million in 2022; $2.1 million in 2023; $2.2 million in 2024; $2.2 million in 2025; $2.3 million in 2026; and $11.5 million in 2027 through 2031. 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 operations. Prior service credits are amortized over the average remaining effective period to obtain full benefit eligibility for participants. Retirement Restoration Plan We have an unfunded retirement restoration plan that provides for additional payments from us so that total retirement plan benefits for certain executives will be maintained at the levels provided in the retirement plan before the application of Internal Revenue Code limitations. We expensed $0.1 million for each of the years ended December 31, 2021, 2020 and 2019 in connection with this plan. The accrued liability reflected on the consolidated balance sheets was $2.3 million and $2.5 million at December 31, 2021 and 2020, respectively. As of December 31, 2021, the projected benefit obligation under this plan was $2.3 million. Annual benefit payments of $0.2 million are expected to be paid through 2031, which reflect expected future service. 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 $45.0 million, $43.3 million and $30.3 million for the years ended December 31, 2021, 2020 and 2019, respectively, in connection with these plans.
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Contingencies And Contractual Commitments |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies and Contractual Commitments | 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. We filed a business interruption claim with our insurance carriers related to a loss at our Woods Cross Refinery that occurred in the first quarter 2018. During the year ended December 31, 2020, we reached a final settlement agreement regarding the amounts owed to us pursuant to our business interruption coverage, and we recognized a gain of $81.0 million, which is reflected in our Corporate and Other segment. During 2017, 2018 and 2019, the EPA granted the Cheyenne Refinery and Woods Cross Refinery each a one-year small refinery exemption from the RFS program requirements for the 2016, 2017 and 2018, respectively, calendar 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. Various subsidiaries of HollyFrontier are currently intervenors in two lawsuits brought by renewable fuel interest groups against the EPA in federal courts alleging violations of the Renewable Fuel Standard under the Clean Air Act and challenging the EPA’s handling of small refinery exemptions. We intervened to vigorously defend the EPA’s position on small refinery exemptions because we believe the EPA correctly applied applicable law to the matters at issue. The first lawsuit is before the Tenth Circuit and challenges the relief the EPA afforded to the Cheyenne refinery following the grant of small refinery exemptions. The matter is fully briefed and remains pending before that court. The second lawsuit is currently pending before the DC Circuit. On August 25, 2021, the EPA filed a motion to voluntarily remand the matter to the EPA. We did not oppose this motion. The DC Circuit granted EPA’s motion for a voluntary remand, but ordered the agency to issue decisions on the challenged 2018 small refinery exemption decisions within 90 days of the court’s December 8, 2021 order or 90 days from the submission of supplemental materials by the small refineries so long as a decision is made within 120 days of the court’s order. HollyFrontier was also recently an intervenor in another lawsuit filed in the Tenth Circuit challenging the grant of small refinery exemptions to the Cheyenne and Woods Cross refineries for the 2016 compliance year. On January 24, 2020, the U.S. Court of Appeals for the Tenth Circuit vacated the small refinery exemptions granted to the Cheyenne and Woods Cross refineries for 2016 and remanded the case to the EPA for further proceedings. On April 15, 2020, the Tenth Circuit issued its mandate, remanding the matter back to the EPA. On September 4, 2020, various subsidiaries of HollyFrontier filed a Petition for a Writ of Certiorari with the U.S. Supreme Court seeking review of the Tenth Circuit decision. On January 8, 2021, the U.S. Supreme Court granted HollyFrontier’s petition. The oral argument occurred on April 27, 2021. The U.S. Supreme Court issued its opinion in this matter on June 25, 2021 and reversed the Tenth Circuit. On July 27, 2021, the Tenth Circuit recalled the mandate it issued to the EPA on April 15, 2020, and vacated its January 24, 2020 judgment. On July 29, 2021, the Tenth Circuit issued an order and judgment confirming that it recalled its mandate and vacated its previous judgment in this case, and returned jurisdiction to the EPA without vacating the exemption decisions. On August 19, 2021, the EPA filed a motion for clarification of the Tenth Circuit’s mandate. The Tenth Circuit denied the EPA’s motion on August 26, 2021, and therefore the matter is now solely before the EPA. We are unable to estimate the costs we may incur, if any, at this time. It is too early to assess how the U.S. Supreme Court decision will impact future small refinery exemptions or whether the remaining cases are expected to have any impact on us. 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. As of December 31, 2020, we had no enforceable right to collect any of the settlement. Accordingly, recognition of a gain occurred when the uncertainties were resolved on February 2, 2021, and we recorded as "Gain on tariff settlement" on our consolidated statements of operations 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 2022 through 2025. 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 2022 through 2039. At December 31, 2021, 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 |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our operations are organized into three reportable segments: Refining, Lubricants and Specialty Products and HEP. Our operations that are not included in the Refining, Lubricants and Specialty Products and HEP 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. The Refining segment represents the operations of our El Dorado, Tulsa, Navajo and Woods Cross refineries, HollyFrontier Asphalt Company LLC (“HFC Asphalt”) and also our recently acquired Puget Sound Refinery from the closing date on November 1, 2021 (aggregated as a reportable segment). Refining activities involve the purchase and refining of crude oil and wholesale and branded 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. HFC Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma. The Refining segment also included the operations of our Cheyenne refinery until it permanently ceased petroleum refining operations during the third quarter of 2020. Beginning in the fourth quarter of 2020, activities associated with the conversion of our Cheyenne refinery to renewable diesel production, along with the construction of renewable diesel and pre-treatment units in Artesia, New Mexico were reported in Corporate and Other. The Cheyenne renewable diesel unit was mechanically complete in the fourth quarter of 2021. The pre-treatment unit is expected to be completed in the first quarter of 2022, and the Artesia renewable diesel unit is expected to be completed in the second quarter of 2022. Beginning in the first quarter of 2022, renewable diesel operations will cease to be reported in Corporate and Other and will be reported under a new Renewables segment. The Lubricants and Specialty Products segment involves Petro-Canada Lubricants Inc.’s (“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, Europe and China. Additionally, the Lubricants and Specialty Products 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, one of the largest suppliers of locomotive engine oil in North America. Also, effective with our acquisition that closed February 1, 2019, the Lubricants and Specialty Products 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 HEP segment includes all of the operations of HEP, which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. The HEP segment also includes a 75% ownership interest in UNEV (a consolidated subsidiary of HEP) and 50% ownership interest in each of the Osage Pipeline, the Cheyenne Pipeline and Cushing Connect. Revenues from the HEP 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. Due to certain basis differences, our reported amounts for the HEP segment may not agree to amounts reported in HEP’s periodic public filings. The accounting policies for our segments are the same as those described in the summary of significant accounting policies, except that our Refining segment balance sheet excluded intercompany ROU assets and liabilities for operating leases prior to December 31, 2021 (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)The results of our HEP reportable segment for the year ended December 31, 2020 include a long-lived asset impairment charge attributed to HEP’s logistics assets at our Cheyenne Refinery. (2)For the year ended December 31, 2021, Corporate and Other includes $55.4 million of operating expenses and $510.8 million of capital expenditures related to the construction of our renewable diesel units. For the year ended December 31, 2020, Corporate and Other includes $3.9 million of operating expenses and $65.1 million of capital expenditures related to the construction of our renewable diesel units. Also, for the year ended December 31, 2020, Corporate and Other includes $14.0 million of decommissioning and other shutdown costs related to our Cheyenne Refinery. In addition, for the year ended December 31, 2020, Corporate and Other includes $11.4 million in other operating costs related to our Cheyenne facility.
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Description of Business and Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business: References herein to HollyFrontier Corporation (“HollyFrontier”) include HollyFrontier and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s (“SEC”) “Plain English” guidelines, this Annual Report on Form 10-K has been written in the first person. In these financial statements, the words “we,” “our,” “ours” and “us” refer only to HollyFrontier and its consolidated subsidiaries or to HollyFrontier or an individual subsidiary and not to any other person, with certain exceptions. Generally, the words “we,” “our,” “ours” and “us” include Holly Energy Partners, L.P. (“HEP”) and its subsidiaries as consolidated subsidiaries of HollyFrontier, unless when used in disclosures of transactions or obligations between HEP and HollyFrontier or its other subsidiaries. These financial statements contain certain disclosures of agreements that are specific to HEP and its consolidated subsidiaries and do not necessarily represent obligations of HollyFrontier. When used in descriptions of agreements and transactions, “HEP” refers to HEP and its consolidated subsidiaries. We are an independent petroleum refiner and marketer that produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products and specialty and modified asphalt. As of December 31, 2021, we owned and operated petroleum refineries located in Kansas, Oklahoma, New Mexico, Utah and Washington, and 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. In addition, we produce base oils and other specialized lubricants in the United States, Canada and the Netherlands, with retail and wholesale marketing of our products through a global sales network with locations in Canada, the United States, Europe, China and Latin America. We also own a 57% limited partner interest and a non-economic general partner interest in HEP, a variable interest entity (“VIE”). HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountains geographic regions of the United States. On August 2, 2021, HollyFrontier, Hippo Parent Corporation, a wholly owned subsidiary of HollyFrontier (“New Parent”), Hippo Merger Sub, Inc., a wholly owned subsidiary of New Parent, The Sinclair Companies (“Sinclair”), and Hippo Holding LLC, a wholly owned subsidiary of Sinclair (the “Target Company”), entered into a business combination agreement, pursuant to which HollyFrontier will acquire the Target Company. On May 4, 2021, HollyFrontier Puget Sound Refining LLC, a wholly owned subsidiary of HollyFrontier Corporation, 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. On November 12, 2018, we entered into an equity purchase agreement to acquire 100% of the issued and outstanding capital stock of Sonneborn US Holdings Inc. and 100% of the membership rights in Sonneborn Coöperatief U.A. (collectively, “Sonneborn”). The acquisition closed on February 1, 2019. See Note 2 for additional information on these acquisitions. 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 operations. During the first quarter of 2021, we initiated a restructuring within our Lubricants and Specialty Products 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 and Specialty Products 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 $25.8 million in decommissioning expense and $1.0 million in employee severance costs for the year ended December 31, 2021, which were recognized in operating expenses in our Corporate and Other segment. During the second quarter of 2020, we recorded long-lived asset impairment charges of $232.2 million related to our Cheyenne Refinery asset group. Also, we recognized $24.7 million in decommissioning expense and $3.8 million in employee severance costs for the year ended December 31, 2020. Additionally, we recorded a reserve of $9.0 million against our repair and maintenance supplies inventory. These decommissioning, inventory reserve and severance costs were recognized in operating expenses, of which $24.8 million was recorded in our Refining segment and $12.7 million was recorded in our Corporate and Other segment. During the second quarter of 2020, we also initiated and completed a corporate restructuring. As a result of this restructuring, we recorded $3.7 million in employee severance costs, which were recognized primarily as operating expenses in our Refining segment and selling, general and administrative expenses in our Corporate and Other segment.
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Principles of Consolidation | 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 Entity | Variable Interest Entities: HEP is a VIE as defined under U.S. generally accepted accounting principles (“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. As the general partner of HEP, we have the sole ability to direct the activities of HEP that most significantly impact HEP's financial performance, and therefore as HEP's primary beneficiary, we consolidate HEP. In 2019, HEP Cushing LLC, a wholly-owned subsidiary of HEP, 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 Pipeline & Terminal LLC and its two subsidiaries, Cushing Connect Pipeline and Cushing Connect Terminal, are each VIE’s because they do not have sufficient equity at risk to finance their activities without additional financial support. HEP is the primary beneficiary of two of these entities as HEP constructed and operates the Cushing Connect Pipeline, and HEP has more ability to direct the activities that most significantly impact the financial performance of Cushing Connect Pipeline & Terminal LLC and Cushing Connect Pipeline. Therefore, HEP consolidates these two entities. HEP is not the primary beneficiary of Cushing Connect Terminal, which HEP accounts for using the equity method of accounting.
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Use of Estimates | Use of Estimates: The preparation of financial statements in accordance with 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 | 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 | 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 | Accounts Receivable: Our accounts receivable consist of amounts due from customers that are primarily companies in the petroleum industry. 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 $3.7 million at December 31, 2021 and $3.4 million at December 31, 2020. 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 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 renewable identification numbers (“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 sheet. Finance leases are included in “Properties, plants and equipment, at cost” and “Accrued liabilities” and “Other long-term liabilities” on our consolidated balance sheet. 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 sheet. 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, HEP, as a lessor, does not separate the non-lease (service) component in contracts in which the lease component is the dominant component. HEP treats these combined components as an operating lease.
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Derivative Instruments | 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 statement of cash flows. See Note 14 for additional information. |
Property, Plant and Equipment | 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 | 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 $52.5 million and $42.6 million at December 31, 2021 and 2020, respectively, which are included in “Other long-term liabilities” on our consolidated balance sheets. Accretion expense was insignificant for the years ended December 31, 2021, 2020 and 2019. Asset retirement obligations assumed in the Puget Sound Acquisition, as defined in Note 2, were $8.5 million. |
Intangibles, Goodwill and Long-lived Assets | 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 and Specialty Products 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 HEP logistics assets, (ii) our Lubricants and Specialty Products asset groups and (iii) our HEP asset groups, which comprises HEP 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 the 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 our goodwill and long-lived assets including impairment charges recorded during the years ended December 31, 2020 and 2019.
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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 and contributions to and distributions from joint ventures as adjustments to our investment balance. HEP has a 50% interest in Osage Pipe Line Company, LLC and a 50% interest in Cheyenne Pipeline, LLC. HEP also accounts for Cushing Connect Terminal, a subsidiary of the Cushing Connect Pipeline & Terminal LLC joint venture, using the equity method of accounting, as HEP does not have the ability to direct the activities that most significantly impact the entity. As of December 31, 2021, HEP's underlying equity and recorded investment balances in the joint ventures are $90.8 million and $116.4 million respectively. The differences are being amortized as adjustments to HEP's pro-rata share of earnings in the joint ventures. |
Revenue Recognition | Revenue Recognition: Revenues on refined product 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 specialty products 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 specialty products 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. HEP recognizes revenues as products are shipped through its pipelines and terminals and as other services are rendered. Additionally, HEP has certain throughput agreements that specify minimum volume requirements, whereby HEP bills 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, HEP recognizes 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. HEP recognizes the service portion of these deficiency payments as revenue when HEP does 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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Cost Classifications | 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 | 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 is every to 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 $136.9 million, $158.4 million and $141.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Environmental Costs | Environmental Costs: 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 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 | 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 | 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 operations. Such adjustments are not recorded to the Lubricants and Specialty Products 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 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 sell is recognized as inventory repurchase obligations that are subsequently reversed when the inventories are repurchased. For the years ended December 31, 2021, 2020 and 2019, we received proceeds of $43.5 million, $44.9 million and $52.1 million and subsequently repaid $45.4 million, $46.4 million and $49.2 million, respectively, under these sell / buy transactions. |
Accounting Pronouncements - Not Yet Adopted | Accounting Pronouncements - Not Yet Adopted In October 2021, Accounting Standards Update 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 Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.” This standard is effective for fiscal years beginning after December 15, 2022, and early adoption is permitted. We will evaluate the impact of this standard and consider early adoption, if applicable.
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Fair Value Measurement | Our financial instruments measured at fair value on a recurring basis consist of derivative instruments and RINs credit obligations. 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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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Acquired | The following summarizes the Puget Sound Refinery fair value of assets acquired and liabilities assumed on November 1, 2021:
(1)Properties, plant and equipment include $61.5 million of financing lease ROU assets. Current and noncurrent financing lease liabilities were $7.9 million and $53.6 million, respectively.
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Schedule of Business Combination Proforma Results | The pro forma combined condensed financial data has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Puget Sound Acquisition taken place on January 1, 2020 and is not intended to be a projection of future results.
The following pro forma information for the years ended December 31, 2021 and 2020 presents the revenues and operating income (loss) for our Refining segment assuming the Puget Sound Acquisition had occurred on January 1, 2020.
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Leases (Tables) |
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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.
Supplemental balance sheet information related to our leases was as follows:
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Schedule of Components of Lease Expense and Supplemental Cash Flow Information | 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, 2021, 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 HEP is a lessor to third-party contracts as of December 31, 2021 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 sheet was composed of the following:
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Revenues (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregated Revenues | Disaggregated revenues were as follows:
(1)Transportation fuels consist of gasoline, diesel and jet fuel. For the year ended December 31, 2020, $1.6 million is reported in our Corporate and Other segment. (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 $724.3 million and $224.3 million, respectively, for the year ended December 31, 2021. For the year ended December 31, 2020 such revenues attributable to our Refining, Lubricants and Specialty Products and Corporate and Other segments were $533.5 million, $135.4 million and $3.5 million respectively. For the year ended December 31, 2019 such revenue attributable to our Refining and Lubricants and Specialty Products segments were $808.9 million and $216.8 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)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 contract liabilities:
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Schedule 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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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements Of Asset and Liability Instruments | The carrying amounts of derivative instruments and RINs credit obligations were as follows:
(1)Represent obligations for RINs credits for which we did not have sufficient quantities at December 31, 2021 to satisfy our Environmental Protection Agency (“EPA”) regulatory blending requirements.
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 (loss) attributable to HollyFrontier stockholders:
(1)Unvested restricted stock unit awards and unvested performance share units that settle in HollyFrontier common stock represent participating securities because they participate in nonforfeitable dividends or distributions with the common stockholders of HollyFrontier. Participating earnings represent the distributed and undistributed earnings of HollyFrontier 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) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Activity | The compensation expense and associated tax benefit were as follows:
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Schedule of Restricted Stock Activity | A summary of restricted stock unit activity during the year ended December 31, 2021 is presented below:
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Schedule Of Performance Share Activity | A summary of performance share unit activity and changes during the year ended December 31, 2021 is presented below:
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Inventories (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory Components | Inventory consists 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, lubricants, asphalts, LPG’s and residual fuels. (3)Process chemicals include additives and other chemicals. (4)Includes RINs
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Properties, Plants and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, Long-lived Asset and Intangibles (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
These fair values are based on a Level 2 input. See Note 6 for additional information on Level 2 inputs.
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Schedule of Principal Maturities of Long-Term Debt | Principal maturities of long-term debt as of December 31, 2021 are as follows:
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Derivative Instruments and Hedging Activities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Schedule of Gain (Loss) Recognized in Earnings | 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 December 31, 2021, we have the following notional contract volumes related to outstanding derivative instruments (all maturing in 2022):
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | 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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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 (benefit) 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, 2021 and 2020 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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Stockholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules Shares of Common Stock Outstanding Activity | Shares of our common stock outstanding and activity for the years ended December 31, 2021, 2020 and 2019 are presented below:
(1)Includes 217,151, 283,047 and 415,466 shares, respectively, withheld 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, as well as other stock repurchases under separate authority from our Board of Directors.
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Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 are as follows:
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Schedule of Income Statement Line Items Effects Out of AOCI | The following table presents the statement of operations line item effects for reclassifications out of accumulated other comprehensive income (“AOCI”):
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Schedule of AOCI in Equity | Accumulated other comprehensive income in the equity section of our consolidated balance sheets includes:
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Pension and Post-retirement Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2021 and 2020.
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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, 2021 and 2020.
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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, 2021 and 2020:
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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:
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Contingencies And Contractual Commitments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Transportation and Storage Fees Under Agreement | At December 31, 2021, 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) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information | The accounting policies for our segments are the same as those described in the summary of significant accounting policies, except that our Refining segment balance sheet excluded intercompany ROU assets and liabilities for operating leases prior to December 31, 2021 (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)The results of our HEP reportable segment for the year ended December 31, 2020 include a long-lived asset impairment charge attributed to HEP’s logistics assets at our Cheyenne Refinery. (2)For the year ended December 31, 2021, Corporate and Other includes $55.4 million of operating expenses and $510.8 million of capital expenditures related to the construction of our renewable diesel units. For the year ended December 31, 2020, Corporate and Other includes $3.9 million of operating expenses and $65.1 million of capital expenditures related to the construction of our renewable diesel units. Also, for the year ended December 31, 2020, Corporate and Other includes $14.0 million of decommissioning and other shutdown costs related to our Cheyenne Refinery. In addition, for the year ended December 31, 2020, Corporate and Other includes $11.4 million in other operating costs related to our Cheyenne facility.
|
Acquisitions - Schedule of Assets and Liabilities Acquired (Details) - Puget Sound Refinery $ in Thousands |
Nov. 01, 2021
USD ($)
|
---|---|
Assets Acquired | |
Properties, plants and equipment | $ 394,237 |
Other assets | 10,400 |
Total assets acquired | 703,984 |
Liabilities Assumed | |
Accrued and other current liabilities | 12,524 |
Other long-term liabilities | 67,128 |
Total liabilities assumed | 79,652 |
Net assets acquired | 624,332 |
Financing lease ROU assets | 61,500 |
Current finance lease liabilities | 7,900 |
Noncurrent finance lease liabilities | 53,600 |
Crude Oil and Refined Products | |
Assets Acquired | |
Inventories | 277,887 |
Materials, Supplies and Other | |
Assets Acquired | |
Inventories | $ 21,460 |
Acquisitions - Schedule of Pro Forma Results (Details) - Puget Sound Refinery - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Business Acquisition [Line Items] | ||
Sales and other revenues | $ 21,476,142 | $ 13,183,620 |
Net income (loss) attributable to HollyFrontier stockholders | 601,210 | (802,234) |
Refining | ||
Business Acquisition [Line Items] | ||
Sales and other revenues | 19,445,558 | 11,539,166 |
Income (loss) from operations | $ 509,450 | $ (934,061) |
Leases - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | |||
Gain on sales-type leases | $ 0 | $ 33,834 | $ 0 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term | 58 years | ||
Operating lease renewal term | 10 years |
Leases - Supplemental Balance Sheet Schedule (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating leases: | ||
Operating lease right-of-use assets | $ 396,191 | $ 350,548 |
Operating lease liabilities | 110,606 | 97,937 |
Noncurrent operating lease liabilities | 308,747 | 285,785 |
Total operating lease liabilities | 419,353 | 383,722 |
Finance leases: | ||
Properties, plants and equipment, at cost | 75,885 | 24,321 |
Accumulated amortization | (8,945) | (5,713) |
Properties, plants and equipment, net | $ 66,940 | $ 18,608 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Properties, plants and equipment, net | Properties, plants and equipment, net |
Accrued liabilities | $ 10,510 | $ 1,916 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities (HEP: $18,479 and $29,518, respectively) | Accrued liabilities (HEP: $18,479 and $29,518, respectively) |
Other long-term liabilities | $ 56,556 | $ 5,097 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities (HEP: $43,033 and $55,105, respectively) | Other long-term liabilities (HEP: $43,033 and $55,105, respectively) |
Total finance lease liabilities | $ 67,066 | $ 7,013 |
Weighted average remaining lease term (in years) | ||
Operating leases | 7 years 4 months 24 days | 7 years 2 months 12 days |
Finance Leases | 8 years 7 months 6 days | 3 years 3 months 18 days |
Weighted average discount rate | ||
Operating leases | 3.80% | 4.10% |
Finance leases | 3.90% | 5.30% |
Leases - Components of Lease Expense Schedule (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Operating lease expense | $ 117,292 | $ 121,608 | $ 112,770 |
Finance lease expense: | |||
Amortization of right-of-use assets | 4,295 | 4,400 | 1,543 |
Interest on lease liabilities | 733 | 415 | 334 |
Variable lease cost | 3,645 | 3,580 | 4,449 |
Total lease expense | $ 125,965 | $ 130,003 | $ 119,096 |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 129,577 | $ 126,313 | $ 116,980 |
Operating cash flows from finance leases | 733 | 415 | 334 |
Financing cash flows from finance leases | 3,990 | 2,995 | 1,551 |
Operating leases | 147,718 | 18,823 | 121,750 |
Finance leases | $ 64,334 | $ 4,085 | $ 2,096 |
Leases - Schedule of Operating and Finance Lease Maturities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating | ||
2022 | $ 122,907 | |
2023 | 106,008 | |
2024 | 77,770 | |
2025 | 29,589 | |
2026 | 22,046 | |
Thereafter | 143,337 | |
Future minimum lease payments | 501,657 | |
Less: imputed interest | 82,304 | |
Total operating lease liabilities | 419,353 | $ 383,722 |
Less: current obligations | 110,606 | 97,937 |
Noncurrent operating lease liabilities | 308,747 | 285,785 |
Finance | ||
2022 | 13,096 | |
2023 | 11,438 | |
2024 | 8,292 | |
2025 | 7,567 | |
2026 | 6,711 | |
Thereafter | 33,208 | |
Future minimum lease payments | 80,312 | |
Less: imputed interest | 13,246 | |
Total finance lease liabilities | 67,066 | 7,013 |
Less: current obligations | 10,510 | 1,916 |
Long-term lease obligations | $ 56,556 | $ 5,097 |
Leases - Schedule of Lease Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Operating lease revenues | $ 15,281 | $ 22,636 | $ 33,242 |
Gain on sales-type leases | 0 | 33,834 | 0 |
Sales-type lease interest income | 2,545 | 1,928 | 0 |
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable | $ 2,162 | $ 1,690 | $ 0 |
Leases - Schedule of Minimum Undiscounted Lease Payments (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating | ||
2022 | $ 9,810 | |
2023 | 9,676 | |
2024 | 9,676 | |
2025 | 2,681 | |
2026 | 0 | |
Thereafter | 0 | |
Total lease payment receipts | 31,843 | |
Sales-type | ||
2022 | 2,955 | |
2023 | 2,955 | |
2024 | 2,955 | |
2025 | 2,955 | |
2026 | 2,955 | |
Thereafter | 24,380 | |
Total lease payment receipts | 39,155 | |
Less: imputed interest | (29,716) | |
Total lease receivable | 9,439 | |
Unguaranteed residual assets at end of leases | 25,182 | |
Net investment in leases | $ 34,621 | $ 35,030 |
Leases - Schedule of Net Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Lease receivables | $ 24,962 | $ 26,045 |
Unguaranteed residual assets | 9,659 | 8,985 |
Net investment in leases | $ 34,621 | $ 35,030 |
Revenues - Schedule of Contract Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Change In Contract With Customer, Liability [Roll Forward] | |||
Balance at beginning of period | $ 6,738 | $ 4,652 | $ 132 |
Increase | 32,301 | 28,746 | 26,751 |
Recognized as revenue | (29,761) | (26,660) | (28,694) |
Balance at end of period | 9,278 | 6,738 | 4,652 |
Sonneborn | |||
Change In Contract With Customer, Liability [Roll Forward] | |||
Sonneborn acquisition | $ 0 | $ 0 | $ 6,463 |
Earnings Per Share - Schedule Of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Earnings Per Share [Abstract] | |||
Net income (loss) attributable to HollyFrontier stockholders | $ 558,324 | $ (601,448) | $ 772,388 |
Participating securities' share in earnings | 7,465 | 1,811 | 1,034 |
Net income (loss) attributable to common shares | $ 550,859 | $ (603,259) | $ 771,354 |
Average number of shares of common stock outstanding (in shares) | 162,569 | 161,983 | 166,287 |
Effect of dilutive variable restricted stock units and performance share units (in shares) | 0 | 0 | 1,098 |
Average number of shares of common stock outstanding assuming dilution (in shares) | 162,569 | 161,983 | 167,385 |
Basic earnings (loss) per share (in USD per share) | $ 3.39 | $ (3.72) | $ 4.64 |
Diluted earnings (loss) per share (in USD per share) | $ 3.39 | $ (3.72) | $ 4.61 |
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total compensation expense | $ 42,044 | $ 29,669 | $ 41,512 |
Tax benefit recognized on compensation expense | 10,545 | 3,965 | 13,253 |
Restricted stock units | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total compensation expense | 29,453 | 23,539 | 26,833 |
Performance stock units | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total compensation expense | $ 12,591 | $ 6,130 | $ 14,679 |
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Crude oil | $ 630,873 | $ 451,967 |
Other raw materials and unfinished products | 530,067 | 260,495 |
Finished products | 726,930 | 595,696 |
Lower of cost or market reserve | (8,739) | (318,862) |
Process chemicals | 43,025 | 35,006 |
Repairs and maintenance supplies and other | 199,972 | 149,174 |
Total inventory | $ 2,122,128 | $ 1,173,476 |
Inventories - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Inventory [Line Items] | ||||
Inventory valuation reserves | $ 8,739 | $ 318,862 | ||
Lower of cost or market inventory valuation adjustment | (310,123) | 78,499 | $ (119,775) | |
Increase (decrease) in costs of products sold | $ 36,600 | 111,100 | $ 36,900 | |
Cheyenne Refinery | ||||
Inventory [Line Items] | ||||
Inventory valuation reserves | $ 8,700 |
Properties, Plants and Equipment - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Abstract] | |||
Capitalized interest | $ 15.2 | $ 4.1 | $ 2.5 |
Depreciation expense | $ 329.4 | $ 333.0 | $ 334.2 |
Environmental (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Loss Contingencies [Line Items] | |||
Environmental remediation costs | $ 7.8 | $ 7.1 | $ 11.2 |
Accrued environmental liability | $ 117.2 | 115.0 | |
Period for environmental remediation | 30 years | ||
Other Noncurrent Liabilities | |||
Loss Contingencies [Line Items] | |||
Accrued environmental liability | $ 99.1 | $ 94.0 |
Debt - Principal Maturities Of Long-Term Debt (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2022 | $ 0 |
2023 | 350,000 |
2024 | 0 |
2025 | 840,000 |
2026 | 1,000,000 |
Thereafter | 900,000 |
Total | $ 3,090,000 |
Derivative Instruments and Hedging Activities - Pre-tax effect on Income Due to Maturities and Fair Value Adjustments of Economic Hedges (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as hedging instruments | $ (15,106) | $ 7,096 | $ (32,332) |
Commodity contracts | Cost of products sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as hedging instruments | (22,909) | 18,646 | (8,475) |
Commodity contracts | Interest expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as hedging instruments | 11,816 | (4,250) | (6,427) |
Foreign currency contracts | Foreign currency contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives not designated as hedging instruments | $ (4,013) | $ (7,300) | $ (17,430) |
Derivative Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Derivative [Line Items] | ||
Pre-tax net unrealized loss | $ (5,687,885) | $ (5,168,361) |
Unrealized loss on hedging instruments | ||
Derivative [Line Items] | ||
Pre-tax net unrealized loss | $ 300 |
Income Taxes - Provision For Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Current | |||
Federal | $ (33,206) | $ (59,452) | $ 187,134 |
State | (1,802) | (5,391) | 29,547 |
Foreign | 30,336 | 9,423 | 3,805 |
Deferred | |||
Federal | 94,353 | (64,836) | 77,916 |
State | 1,386 | (52,872) | 26,073 |
Foreign | 32,831 | (59,019) | (25,323) |
Total income tax provision | $ 123,898 | $ (232,147) | $ 299,152 |
Income Taxes - Reconciliation Of Effective Tax Rate (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Tax computed at statutory rate | $ 165,302 | $ (156,880) | $ 246,013 |
State income taxes, net of federal tax benefit | 13,588 | (41,566) | 47,259 |
Noncontrolling interest in net income | (25,931) | (21,799) | (25,494) |
Effect of change in state rate | (13,342) | 0 | 0 |
CARES Act benefits | (10,384) | (19,837) | 0 |
Foreign rate differential | 331 | (14,294) | 0 |
Federal tax credits | (29,777) | 0 | 0 |
US tax on non-US operations | 18,547 | 0 | 0 |
Effect of nondeductible goodwill impairment charge | 0 | 16,573 | 32,069 |
Other | 5,564 | 5,656 | (695) |
Income tax expense (benefit) total | $ 123,898 | $ (232,147) | $ 299,152 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance | $ (3,165) | $ (8,577) | ||
Unrecognized tax benefits | 54,605 | $ 54,899 | $ 56,621 | $ 53,752 |
Unrecognized tax benefit from claims filed with IRS | 53,700 | |||
Domestic Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax credits | 16,900 | |||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax credits | 24,400 | |||
Net operating losses | 10,900 | |||
Foreign Tax Authority | Luxembourg | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating losses | $ 16,000 |
Income Taxes - Reconciliation Of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized tax benefits, balance at beginning of Period | $ 54,899 | $ 56,621 | $ 53,752 |
Additions for tax positions of prior years | 0 | 6 | 2,893 |
Reductions for tax positions of prior years | (49) | (1,500) | (24) |
Settlements | (125) | 0 | 0 |
Lapse of statute of limitations | (120) | (228) | 0 |
Unrecognized tax benefits, balance at end of Period | $ 54,605 | $ 54,899 | $ 56,621 |
Stockholders' Equity - Changes To Equity (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Increase (Decrease) in Common Shares Outstanding [Roll Forward] | |||
Common shares outstanding at beginning of period (in shares) | 162,413,660 | 161,846,525 | 172,121,491 |
Vesting of performance units (in shares) | 67,846 | 296,801 | 592,602 |
Vesting of restricted stock and restricted stock units (in shares) | 737,091 | 553,381 | 412,465 |
Forfeitures of restricted stock (in shares) | 0 | 0 | (13,807) |
Purchase of treasury stock (in shares) | (217,151) | (283,047) | (11,266,226) |
Common shares outstanding at end of period (in shares) | 163,001,446 | 162,413,660 | 161,846,525 |
Shares withheld under terms of agreements (in shares) | 217,151 | 283,047 | 415,466 |
Stockholders' Equity - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Nov. 30, 2019 |
|
Stockholders' Equity Note [Abstract] | ||||
Authorized share repurchase | $ 1,000.0 | |||
Value of shares withheld | $ 7.1 | $ 7.6 | $ 21.9 |
Pension and Post-retirement Plans - Projected and Accumulated Benefit Obligations (Details) - Pension obligations - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 35,963 | $ 79,866 |
Fair value of project plan assets | 33,966 | 77,035 |
Accumulated benefit obligation | 35,249 | 41,654 |
Fair value of accumulated plan assets | $ 33,966 | $ 39,105 |
Pension and Post-retirement Plans - Net Periodic Expense (Details) - Pension obligations - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 4,455 | $ 3,929 | $ 4,135 |
Interest cost | 2,740 | 2,772 | 3,026 |
Expected return on plans assets | (3,031) | (4,578) | (3,840) |
Amortization of (gain) loss | (407) | (422) | 0 |
Curtailment | 0 | (137) | 0 |
Contractual termination benefits | 0 | 915 | 0 |
Net periodic pension expense | $ 3,757 | $ 2,479 | $ 3,321 |
Pension and Post-retirement Plans - Weighted Average Assumptions Used to Determine End of Period Benefit Obligations (Details) - Post-retirement healthcare obligations |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 1.40% | 1.10% |
Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 2.29% | 1.88% |
Current health care trend rate | 6.00% | 5.50% |
Ultimate health care trend rate | 4.00% | 4.50% |
Year rate reaches ultimate trend rate | 2023 | 2022 |
Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.10% | 2.60% |
Current health care trend rate | 7.25% | 6.00% |
Ultimate health care trend rate | 4.50% | 5.00% |
Year rate reaches ultimate trend rate | 2041 | 2023 |
Pension and Post-retirement Plans - Net Periodic Credit (Details) - Post-retirement healthcare obligations - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 2,324 | $ 1,616 | $ 1,582 |
Interest cost | 782 | 870 | 1,029 |
Amortization of prior service credit | (3,481) | (3,481) | (3,481) |
Amortization of (gain) loss | 153 | (83) | (106) |
Net periodic post-retirement credit | $ (222) | $ (1,078) | $ (976) |
Contingencies And Contractual Commitments - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Feb. 10, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Gain on business interruption insurance settlement | $ 81.0 | |||
Proceeds from legal settlement | $ 51.5 | |||
Transportation and storage costs | $ 160.5 | $ 139.0 | $ 144.8 |
Contingencies And Contractual Commitments - Schedule of Minimum Future Fees Under Agreement (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Transportation and Storage Contracts, Fiscal Year Maturity | |
2022 | $ 166,456 |
2023 | 164,518 |
2024 | 163,507 |
2025 | 163,972 |
2026 | 129,572 |
Thereafter | 839,775 |
Total | $ 1,627,800 |
Segment Information - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021
segment
| |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 3 |
Osage Pipeline | |
Segment Reporting Information [Line Items] | |
Equity method investment, ownership percentage | 50.00% |
UNEV Pipeline | |
Segment Reporting Information [Line Items] | |
Equity method investment, ownership percentage | 75.00% |
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