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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value Assets Acquired and Liabilities Assumed

The fair values of the assets acquired and liabilities assumed as a result of the Billings Acquisition were estimated as of June 1, 2023, the date of the acquisition, using valuation techniques described in notes (1) through (5) below.

									Valuation
			Fair Value						Technique
			(in thousands)
Net working capital excluding operating leases			$	294,507					(1)
Property, plant, and equipment			259,088						(2)
Operating lease right-of-use assets			3,562						(3)
Refining and logistics equity investments			86,600						(4)
Other long-term assets			4,094						(1)
Current operating lease liabilities			(2,081)						(3)
Long-term operating lease liabilities			(1,481)						(3)
Environmental liabilities			(18,869)						(5)
Total			$	625,420

(1)Current assets acquired and liabilities assumed were recorded at their net realizable value. Other long-term assets includes preliminary costs for future turnarounds that were recently incurred and were recorded at their net realizable values.

(2)The fair value of personal property was estimated using the cost approach. Key assumptions in the cost approach include determining the replacement cost by evaluating recent purchases of comparable assets or published data, and adjusting replacement cost for economic and functional obsolescence, location, normal useful lives, and capacity (if applicable). The fair value of real property was estimated using the market approach. Key assumptions in the market approach include

determining the asset value by evaluating recent purchases of comparable assets under similar circumstances. We consider this to be a Level 3 fair value measurement.

(3)Operating lease right-of-use assets and liabilities were recognized based on the present value of lease payments over the lease term using the incremental borrowing rate at acquisition of 9.6%.

(4)The fair value of our investments in YELP and YPLC were determined using a combination of the income approach and the market approach. Under the income approach, we estimated the present value of expected future cash flows using a market participant discount rate. Under the market approach, we estimated fair value using observable multiples for comparable companies in the investments’ industries. These valuation methods require us to make significant estimates and assumptions regarding future cash flows, capital projects, commodity prices, long-term growth rates, and discount rates. We consider this to be a Level 3 fair value measurement.

(5)Environmental liabilities are based on management’s best estimates of probable future costs using currently available information. We consider this to be a Level 3 fair value measurement.

Schedule of Fair Value Amounts by Hierarchy Level

Fair value amounts by hierarchy level as of June 30, 2024, and December 31, 2023, are presented gross in the tables below (in thousands):

			June 30, 2024
			Level 1						Level 2						Level 3						Gross Fair Value						Effect of Counter-Party Netting						Net Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives			$	61,947					$	120,617					$	—					$	182,564					$	(173,638)					$	8,926
Interest rate derivatives			—						61						—						61						—						61
Total			$	61,947					$	120,678					$	—					$	182,625					$	(173,638)					$	8,987
Liabilities
Commodity derivatives			$	(53,445)					$	(150,637)					$	—					$	(204,082)					$	173,638					$	(30,444)
Citi repurchase obligation derivative			—						—						(409)						(409)						—						(409)
Gross environmental credit obligations (2) (3)			—						(10,352)						—						(10,352)						—						(10,352)
Total liabilities			$	(53,445)					$	(160,989)					$	(409)					$	(214,843)					$	173,638					$	(41,205)

			December 31, 2023
			Level 1						Level 2						Level 3						Gross Fair Value						Effect of Counter-Party Netting						Net Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives			$	100,074					$	175,191					$	—					$	275,265					$	(231,909)					$	43,356
Liabilities
Commodity derivatives			$	(92,417)					$	(140,022)					$	—					$	(232,439)					$	231,909					$	(530)
J. Aron repurchase obligation derivative			—						—						(392)						(392)						—						(392)
Interest rate derivatives			—						(821)						—						(821)						—						(821)
Gross environmental credit obligations (2) (3)			—						(54,245)						—						(54,245)						—						(54,245)
Total liabilities			$	(92,417)					$	(195,088)					$	(392)					$	(287,897)					$	231,909					$	(55,988)

_________________________________________________________

(1)Does not include cash collateral of $2.4 million and $31.3 million as of June 30, 2024 and December 31, 2023, respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

(2)Does not include RINs assets and other environmental credits of $179.3 million and $237.6 million included in Inventories and Other long-term assets on our condensed consolidated balance sheet and stated at the lower of cost and net realizable value as of June 30, 2024 and December 31, 2023, respectively.

(3)Does not include environmental liabilities of $206.5 million and $232.7 million satisfied by internally generated or purchased environmental credits and presented at the carrying value of these credits included in Other Accrued Liabilities and Other liabilities on our condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, respectively.

Schedule of Roll Forward of Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis

A roll forward of Level 3 derivative instruments measured at fair value on a recurring basis is as follows (in thousands):

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Balance, at beginning of period			$	(22,208)					$	(5,979)					$	(392)					$	2,279
Settlements			(661)						(12,243)						(661)						(16,858)
Total losses included in earnings (1)			22,460						12,638						644						8,995
Balance, at end of period			$	(409)					$	(5,584)					$	(409)					$	(5,584)

_________________________________________________________

(1)Included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

Schedule of Carrying Value and Fair Value of Long-term Debt and Other Financial Instruments

The carrying value and fair value of long-term debt and other financial instruments as of June 30, 2024 and December 31, 2023 are as follows (in thousands):

			June 30, 2024
			Carrying Value						Fair Value
ABL Credit Facility due 2028 (2)			$	525,000					$	525,000
Term Loan Credit Agreement due 2030 (1)			529,324						544,483
Other long-term debt (1)			4,431						4,111

			December 31, 2023
			Carrying Value						Fair Value
ABL Credit Facility due 2028 (2)			$	115,000					$	115,000
Term Loan Credit Agreement due 2030 (1)			531,112						545,875
Other long-term debt (1)			4,746						4,387

_________________________________________________________

(1)The fair value measurements of the Term Loan Credit Agreement and Other long-term debt are considered Level 2 measurements in the fair value hierarchy as discussed below.

(2)The fair value measurements of the ABL Credit Facility are considered Level 3 measurements in the fair value hierarchy.

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-Section 50
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Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
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-Section 50
-Paragraph 2
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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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-Topic 820
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-Name Accounting Standards Codification
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-Publisher FASB
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