XML 33 R17.htm IDEA: XBRL DOCUMENT v3.22.2
Derivatives
 6 Months Ended
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
Commodity Derivatives
    Our condensed consolidated balance sheets present derivative assets and liabilities on a net basis. Please read Note 11—Fair Value Measurements for the gross fair value and net carrying value of our derivative instruments. Our cash margin that is required as collateral deposits cannot be offset against the fair value of open contracts except in the event of default.
    Our open futures and over-the-counter (“OTC”) swaps at June 30, 2022, will settle by March 2023. At June 30, 2022, our open commodity derivative contracts represented (in thousands of barrels):
Contract typePurchasesSalesNet
Futures12,007 (13,192)(1,185)
Swaps1,000 (2,530)(1,530)
Total13,007 (15,722)(2,715)
At June 30, 2022, we also had option collars that economically hedge a portion of our internally consumed fuel at our refineries. The following table provides information on these option collars at our refineries as of June 30, 2022:
June 30, 2022
Average barrels per month75,000 
Weighted-average strike price - floor (in dollars)$59.34 
Weighted-average strike price - ceiling (in dollars)$75.36 
Earliest commencement dateJanuary 2022
Furthest expiry dateDecember 2022
Interest Rate Derivatives
    We are exposed to interest rate volatility in our ABL Revolver, Term Loan B Facility, Supply and Offtake Agreement, and Washington Refinery Intermediation Agreement. We may utilize interest rate swaps to manage our interest rate risk. In May 2019, we entered into an interest rate swap at an average fixed rate of 3.91% in exchange for the floating interest rate on the notional amounts due under the Retail Property Term Loan. This swap was set to expire on April 1, 2024, the maturity date of the Retail Property Term Loan. On February 23, 2021, we terminated and repaid all amounts outstanding under the Retail Property Term Loan and the related interest rate swap. At June 30, 2022, and December 31, 2021, we did not hold any interest rate derivative instruments.
    The following table provides information on the fair value amounts (in thousands) of these derivatives as of June 30, 2022, and December 31, 2021, and their placement within our condensed consolidated balance sheets.
Balance Sheet LocationJune 30, 2022December 31, 2021
Asset (Liability)
Commodity derivatives (1)Prepaid and other current assets$33,864 $1,260 
Commodity derivativesOther accrued liabilities(41,347)(1,431)
J. Aron repurchase obligation derivativeObligations under inventory financing agreements(45,191)(15,151)
MLC terminal obligation derivativeObligations under inventory financing agreements36,699 (22,170)
_________________________________________________________
(1)Does not include cash collateral of $72.2 million and $6.1 million recorded in Prepaid and other current assets as of June 30, 2022, and December 31, 2021, respectively, and $9.5 million in Other long-term assets as of both June 30, 2022, and December 31, 2021.
    The following table summarizes the pre-tax gains (losses) recognized in Net income (loss) on our condensed consolidated statements of operations resulting from changes in fair value of derivative instruments not designated as hedges charged directly to earnings (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Statement of Operations Location2022202120222021
Commodity derivativesCost of revenues (excluding depreciation)$(39,024)$(10,223)$(57,478)$(9,592)
J. Aron repurchase obligation derivativeCost of revenues (excluding depreciation)13,229 (4,542)(30,040)(5,317)
MLC terminal obligation derivativeCost of revenues (excluding depreciation)(25,796)(31,229)(90,192)(55,601)
Interest rate derivativesInterest expense and financing costs, net— — — 104