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Derivatives | 9 Months Ended
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Sep. 30, 2024
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 13—Fair Value Measurements for the gross fair value and net carrying value of our derivative instruments. Our open futures and over-the-counter (“OTC”) swaps expire in April 2026. At September 30, 2024, our open commodity derivative contracts represented (in thousands of barrels):
Contract Type |  | Purchases |  | Sales |  | Net
Futures |  | 97,459 |  |  | (99,115) |  |  | (1,656) |
Swaps |  | 9,047 |  |  | (13,697) |  |  | (4,650) |
Total |  | 106,506 |  |  | (112,812) |  |  | (6,306) |
At September 30, 2024, 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 September 30, 2024:
|  | 2024 |  | 2025
Total open option collars |  | 549 |  | 2,430
Weighted-average strike price - floor (in dollars) |  | $62.55 |  | $58.15
Weighted-average strike price - ceiling (in dollars) |  | $86.64 |  | $83.68
Earliest commencement date |  | October 2024 |  | January 2025
Furthest expiry date |  | December 2024 |  | December 2025
Interest Rate Derivatives We are exposed to interest rate volatility in our ABL Credit Facility, Term Loan Credit Agreement, and the Inventory Intermediation Agreement. We may utilize interest rate swaps to manage our interest rate risk. On April 12, 2023, we entered into an interest rate collar transaction to manage our interest rate risk related to the Term Loan Credit Agreement. The interest rate collar agreement reduces variable interest rate risk from May 31, 2023, through May 31, 2026, with a notional amount of $300.0 million as of September 30, 2024. The terms of the agreement provide for an interest rate cap of 5.50% and floor of 2.30%, based on the three month SOFR as of the fixing date. The interest rate collar transaction expires on May 31, 2026. The following table provides information on the fair value amounts (in thousands) of these derivatives as of September 30, 2024 and December 31, 2023, and their placement within our condensed consolidated balance sheets.
| Balance Sheet Location |  | September 30, 2024 |  | December 31, 2023
|  |  | Asset (Liability)
Commodity derivatives (1) | Prepaid and other current assets |  | $ | 21,035 |  |  | $ | 43,356 |
Commodity derivatives (2) | Other accrued liabilities |  | (5,047) |  |  | (530) |
Commodity derivatives | Other liabilities |  | (4,042) |  |  | — |
J. Aron repurchase obligation derivative | Obligations under inventory financing agreements |  | — |  |  | (392) |
Citi repurchase obligation derivative | Obligations under inventory financing agreements |  | 503 |  |  | — |
Interest rate derivatives | Other liabilities |  | (516) |  |  | (821) |
_________________________________________________________ (1)Does not include cash collateral of $32.4 million and $21.8 million recorded in Prepaid and other current assets as of September 30, 2024 and December 31, 2023, respectively, and $9.5 million in Other long-term assets as of December 31, 2023. As of September 30, 2024, we had no cash collateral recorded in Other long-term assets. Does not include $9.8 million recorded in Prepaid and other current assets as of September 30, 2024 related to realized derivatives receivable. (2)Does not include $27.2 million recorded in Other accrued liabilities as of December 31, 2023 related to realized derivatives payable. As of September 30, 2024, we had no realized derivatives payable recorded in Other accrued liabilities. 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 September 30, |  | Nine Months Ended September 30,
| Statement of Operations Location |  | 2024 |  | 2023 |  | 2024 |  | 2023
Commodity derivatives | Cost of revenues (excluding depreciation) |  | $ | 43,705 |  |  | $ | (72,131) |  |  | $ | 5,778 |  |  | $ | (78,859) |
J. Aron repurchase obligation derivative | Cost of revenues (excluding depreciation) |  | — |  |  | (51,344) |  |  | 1,053 |  |  | (45,816) |
Citi repurchase obligation derivative | Cost of revenues (excluding depreciation) |  | 912 |  |  | — |  |  | 503 |  |  | — |
MLC terminal obligation derivative | Cost of revenues (excluding depreciation) |  | — |  |  | (37,616) |  |  | — |  |  | (34,149) |
Interest rate derivatives | Interest expense and financing costs, net |  | (576) |  |  | 121 |  |  | 305 |  |  | 664 |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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