XML 23 R12.htm IDEA: XBRL DOCUMENT
v3.24.2

Derivative Instruments | 6 Months Ended
--- | ---
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | 5. Derivative Instruments We are exposed to a variety of risks, including, but not limited to, changes in the prices of commodities that we buy or sell, changes in foreign currency exchange rates, changes in interest rates, and the creditworthiness of each of our counterparties. While we attempt to mitigate these fluctuations through hedging, such hedges may not be fully effective. Our risk management program includes the following types of derivative instruments: Fair Value Hedges. Derivative contracts we hold to hedge the risk of changes in the price of our inventory. Cash Flow Hedges. Derivative contracts we execute to mitigate the risk of price and interest rate volatility in forecasted transactions. Non-designated Derivatives. Derivatives we primarily transact to mitigate the risk of market price fluctuations in swaps or futures contracts, as well as certain forward fixed price purchase and sale contracts to hedge the risk of currency rate fluctuations and for portfolio optimization. The following table summarizes the gross notional values of our derivative contracts used for risk management purposes (in millions):
|  | Unit |  | June 30, 2024
Commodity contracts |  |  |  |
Long |  | BBL |  | 81.2 |
Short |  | BBL |  | (82.8) |
Foreign currency exchange contracts |  |  |  |
Sell U.S. dollar, buy other currencies |  | USD |  | (1,142.8) |
Buy U.S. dollar, sell other currencies |  | USD |  | 1,024.8 |
Interest rate contracts |  |  |  |
Interest rate swap |  | USD |  | 300.0 |
The majority of our foreign currency exchange contracts and the volume related to our commodities contracts are expected to settle within the next twelve months and our interest rate swap agreement matures in March 2025. Assets and Liabilities The following table presents the gross fair value of our derivative instruments and their locations on the Condensed Consolidated Balance Sheets (in millions):
| Condensed Consolidated Balance Sheets Location |  | Gross Derivative Assets |  | Gross Derivative Liabilities
Derivative Instruments |  | June 30, 2024 |  | December 31, 2023 |  | June 30, 2024 |  | December 31, 2023
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |
Commodity contracts | Other non-current assets |  | $ | — |  |  | $ | 0.3 |  |  | $ | — |  |  | $ | — |
| Short-term derivative liabilities, net |  | 5.2 |  |  | 24.8 |  |  | 4.8 |  |  | 20.9 |
Interest rate contracts | Short-term derivative assets, net |  | 10.5 |  |  | 12.7 |  |  | — |  |  | — |
| Other non-current assets |  | — |  |  | 2.2 |  |  | — |  |  | — |
Total derivatives designated as hedging instruments |  | 15.6 |  |  | 39.9 |  |  | 4.8 |  |  | 20.9 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |
Commodity contracts | Short-term derivative assets, net |  | 263.4 |  |  | 343.9 |  |  | 76.9 |  |  | 73.1 |
| Other non-current assets |  | 107.2 |  |  | 139.8 |  |  | 17.8 |  |  | 17.2 |
| Short-term derivative liabilities, net |  | 132.6 |  |  | 161.8 |  |  | 264.1 |  |  | 340.0 |
| Other long-term liabilities |  | 97.3 |  |  | 121.2 |  |  | 169.1 |  |  | 217.9 |
Foreign currency contracts | Short-term derivative assets, net |  | 13.4 |  |  | 24.7 |  |  | 11.8 |  |  | 9.8 |
| Other non-current assets |  | 0.5 |  |  | 0.6 |  |  | 0.2 |  |  | 0.5 |
| Short-term derivative liabilities, net |  | 1.2 |  |  | 8.7 |  |  | 6.3 |  |  | 18.3 |
| Other long-term liabilities |  | 0.2 |  |  | — |  |  | 0.3 |  |  | — |
Total derivatives not designated as hedging instruments |  | 615.8 |  |  | 800.8 |  |  | 546.6 |  |  | 676.8 |
Total derivatives |  | $ | 631.4 |  |  | $ | 840.7 |  |  | $ | 551.4 |  |  | $ | 697.8 |
For information regarding our derivative instruments measured at fair value after netting and collateral, see Note 6. Fair Value Measurements. The following amounts were recorded on our Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges (in millions):
Line item in the Consolidated Balance Sheets in which the hedged item is included |  | Carrying Amount of Hedged Assets/(Liabilities) |  | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset/(Liabilities)
|  | June 30, 2024 |  | December 31, 2023 |  | June 30, 2024 |  | December 31, 2023
Inventory |  | $ | 62.5 |  |  | $ | 55.3 |  |  | $ | 1.6 |  |  | $ | (1.3) |
Earnings and Other Comprehensive Income (Loss) Derivatives Designated as Hedging Instruments The following table presents, on a pre-tax basis, the location and amount of gains (losses) on fair value and cash flow hedges recognized in income in our Condensed Consolidated Statements of Income and Comprehensive Income (in millions):
|  | For the Three Months Ended
|  | June 30, 2024 |  | June 30, 2023
|  | Revenue |  | Cost of revenue |  | Interest expense and other financing costs, net |  | Revenue |  | Cost of revenue |  | Interest expense and other financing costs, net
Total amounts of income and expense line items in which the effects of fair value or cash flow hedged are recorded |  | $ | 10,965.2 |  |  | $ | 10,720.0 |  |  | $ | 27.5 |  |  | $ | 10,980.7 |  |  | $ | 10,699.0 |  |  | $ | 32.5 |
Gains (losses) on fair value hedge relationships: |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |
Hedged item |  | — |  |  | 1.1 |  |  | — |  |  | — |  |  | (1.0) |  |  | — |
Derivatives designated as hedging instruments |  | — |  |  | 1.1 |  |  | — |  |  | — |  |  | 1.4 |  |  | — |
Amount excluded from effectiveness testing recognized in earnings based on amortization approach |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Gains (losses) on cash flow hedge relationships: |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income |  | — |  |  | (0.2) |  |  | — |  |  | 1.7 |  |  | (1.4) |  |  | — |
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Interest rate contracts: |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income |  | — |  |  | — |  |  | 3.7 |  |  | — |  |  | — |  |  | 3.9 |
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total amount of income and expense line items excluding the impact of hedges |  | $ | 10,965.2 |  |  | $ | 10,722.0 |  |  | $ | 31.2 |  |  | $ | 10,979.0 |  |  | $ | 10,698.0 |  |  | $ | 36.3 |
|  | For the Six Months Ended
|  | June 30, 2024 |  | June 30, 2023
|  | Revenue |  | Cost of revenue |  | Interest expense and other financing costs, net |  | Revenue |  | Cost of revenue |  | Interest expense and other financing costs, net
Total amounts of income and expense line items in which the effects of fair value or cash flow hedged are recorded |  | $ | 21,916.6 |  |  | $ | 21,417.2 |  |  | $ | 56.4 |  |  | $ | 23,462.3 |  |  | $ | 22,917.9 |  |  | $ | 66.8 |
Gains (losses) on fair value hedge relationships: |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |
Hedged item |  | — |  |  | 3.2 |  |  | — |  |  | — |  |  | (4.3) |  |  | — |
Derivatives designated as hedging instruments |  | — |  |  | (2.2) |  |  | — |  |  | — |  |  | 5.2 |  |  | — |
Amount excluded from effectiveness testing recognized in earnings based on amortization approach |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Gains (losses) on cash flow hedge relationships: |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income |  | — |  |  | (0.6) |  |  | — |  |  | 0.9 |  |  | (1.2) |  |  | — |
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Interest rate contracts: |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income |  | — |  |  | — |  |  | 7.4 |  |  | — |  |  | — |  |  | 5.7 |
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total amount of income and expense line items excluding the impact of hedges |  | $ | 21,916.6 |  |  | $ | 21,417.6 |  |  | $ | 63.8 |  |  | $ | 23,461.4 |  |  | $ | 22,917.7 |  |  | $ | 72.5 |
The following table presents, on a pre-tax basis, the amounts not recorded in Accumulated other comprehensive income (loss) due to intra-period settlement but recognized in Revenue and Cost of revenue in our Condensed Consolidated Statements of Income and Comprehensive Income (in millions):
Gain (Loss) Not Recorded in Accumulated other comprehensive income (loss) Due to Intra-Period Settlement |  |  |  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| Location |  | 2024 |  | 2023 |  | 2024 |  | 2023
Commodity contracts |  | Revenue |  | $ | 0.9 |  |  | $ | — |  |  | $ | 1.3 |  |  | $ | (0.1) |
Commodity contracts |  | Cost of revenue |  | $ | 0.5 |  |  | $ | (3.8) |  |  | $ | (1.1) |  |  | $ | (5.8) |
For the six months ended June 30, 2024 and 2023, there were no gains or losses recognized in earnings related to our fair value or cash flow hedges that were excluded from the assessment of hedge effectiveness. As of June 30, 2024, on a pre-tax basis, $0.2 million is scheduled to be reclassified from Accumulated other comprehensive income (loss) over the next twelve months as a decrease to Revenue related to designated commodity cash flow hedges that will mature within the next twelve months. The following tables present the effect and financial statement location of our derivative instruments in cash flow hedging relationships on Accumulated other comprehensive income (loss) and in our Condensed Consolidated Statements of Income and Comprehensive Income (in millions):
Amount of Gain (Loss) Recognized in Accumulated other comprehensive income (loss), Net of Income Tax (Expense) Benefit |  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Commodity contracts (Revenue) |  | $ | — |  |  | $ | (0.1) |  |  | $ | (0.1) |  |  | $ | 0.7 |
Commodity contracts (Cost of revenue) |  | 0.3 |  |  | 0.1 |  |  | 0.1 |  |  | (0.3) |
Interest rate contracts (Interest expense and other financing costs, net) |  | 0.6 |  |  | 3.8 |  |  | $ | 2.2 |  |  | $ | 3.2 |
Total gain (loss) |  | $ | 0.8 |  |  | $ | 3.9 |  |  | $ | 2.2 |  |  | $ | 3.6 |
Amount of Gain (Loss) Reclassified from Accumulated other comprehensive income (loss) into Net income (loss), Net of Income Tax (Expense) Benefit |  |  |  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| Location |  | 2024 |  | 2023 |  | 2024 |  | 2023
Commodity contracts |  | Revenue |  | $ | — |  |  | $ | 1.2 |  |  | $ | — |  |  | $ | 0.8 |
Commodity contracts |  | Cost of revenue |  | (0.1) |  |  | (0.9) |  |  | (0.4) |  |  | (1.0) |
Interest rate contracts |  | Interest expense and other financing costs, net |  | 2.8 |  |  | 2.6 |  |  | 5.5 |  |  | 4.9 |
Total gain (loss) |  | $ | 2.7 |  |  | $ | 2.8 |  |  | $ | 5.0 |  |  | $ | 4.6 |
Derivatives Not Designated as Hedging Instruments The following table presents the amount and financial statement location in our Condensed Consolidated Statements of Income and Comprehensive Income of realized and unrealized gains (losses) recognized on derivative instruments not designated as hedging instruments (in millions):
Derivative Instruments - Non-designated |  |  |  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| Location |  | 2024 |  | 2023 |  | 2024 |  | 2023
Commodity contracts |  | Revenue |  | $ | (46.8) |  |  | $ | (52.4) |  |  | $ | (124.9) |  |  | $ | (142.8) |
|  | Cost of revenue |  | (3.0) |  |  | (11.3) |  |  | 3.1 |  |  | (18.5) |
|  |  |  | (49.8) |  |  | (63.8) |  |  | (121.8) |  |  | (161.2) |
Foreign currency contracts |  | Revenue |  | 0.1 |  |  | (2.1) |  |  | (0.4) |  |  | (5.6) |
|  | Other (expense), net |  | (2.0) |  |  | (3.0) |  |  | (4.1) |  |  | 0.8 |
|  |  |  | (1.9) |  |  | (5.1) |  |  | (4.5) |  |  | (4.9) |
Total gain (loss) |  | $ | (51.7) |  |  | $ | (68.8) |  |  | $ | (126.3) |  |  | $ | (166.1) |
Credit-Risk-Related Contingent Features We enter into derivative contracts which may require us to post collateral periodically. Certain of these derivative contracts contain credit-risk-related contingent clauses which are triggered by credit events, such as a credit downgrade or if certain defined financial ratios fall below an established threshold. The occurrence of these credit events may require us to post additional collateral or immediately settle the derivative instrument. The following table presents the potential collateral requirements for derivative liabilities with credit-risk-contingent features (in millions):
|  | June 30, 2024 |  | December 31, 2023
Net derivative liability positions with credit contingent features |  | $ | 76.5 |  |  | $ | 99.1 |
Collateral posted and held by our counterparties |  | — |  |  | — |
Maximum additional potential collateral requirements |  | $ | 76.5 |  |  | $ | 99.1 |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration