v3.22.2.2
Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information Segment InformationEffective the first quarter of 2022, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our businesses. Accordingly, we created two new reportable segments, Renewables and Marketing. Our operations are now organized into five reportable segments, Refining, Renewables, Marketing, Lubricants and Specialty Products and HEP. Our operations that are not included in one of these five reportable segments are included in Corporate and Other. Intersegment transactions are eliminated in 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.
As a result of the Sinclair Transactions that closed on March 14, 2022, the operations of the Acquired Sinclair Businesses are reported in the Refining, Renewables, Marketing and HEP segments.

The Refining segment represents the operations of our El Dorado, Tulsa, Navajo and Woods Cross refineries and HF Sinclair Asphalt Company LLC (“Asphalt”). Also, effective with our acquisition that closed on November 1, 2021, the Refining segment includes our Puget Sound refinery, and effective with our acquisition that closed on March 14, 2022, includes our Sinclair (also referred to as Parco) and Casper refineries. Refining activities involve the purchase and refining of crude oil and wholesale 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. Asphalt operates various asphalt terminals in Arizona, New Mexico and Oklahoma.

The Renewables segment represents the operations of the Cheyenne renewable diesel unit (“RDU”), which was mechanically complete in the fourth quarter of 2021 and fully operational in the first quarter of 2022, the pre-treatment unit (“PTU”) at our Artesia, New Mexico facility, which was completed and fully operational in the first quarter of 2022 and the Artesia RDU, which was completed and fully operational in the second quarter of 2022. Also, effective with our acquisition that closed on March 14, 2022, the Renewables segment includes the Sinclair RDU. During the construction phase of our RDUs and PTU, operating expense and capital expenditures were reported in the Corporate and Other segment, and this financial information has been retrospectively adjusted to reflect our current segment presentation.

Effective with our acquisition that closed on March 14, 2022, the Marketing segment includes branded fuel sales through more than 300 distributors to more than 1,300 branded sites in the United States and licensing fees for the use of the Sinclair brand at more than 300 additional locations throughout the country.

The Lubricants and Specialty Products segment represents 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 Company LLC, one of the largest suppliers of locomotive engine oil in North America. Also, 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 50% ownership interests in each of the Osage Pipeline, the Cheyenne Pipeline and Cushing Connect, a 25.06% ownership interest in the Saddle Butte Pipeline and a 49.995% ownership interest in the Pioneer Pipeline. 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 in HollyFrontier’s Annual Report on Form 10-K for the year ended December 31, 2021.

As discussed above, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. As a result of these changes, assets by segment are no longer a measure used to assess the performance of the segments by our chief operating decision maker and thus are not reported in our disclosures.
RefiningRenewablesMarketingLubricants and Specialty ProductsHEPCorporate, Other
and Eliminations		Consolidated
Total
(In thousands)
Three Months Ended September 30, 2022
Sales and other revenues:
Revenues from external customers$8,230,606 $254,952 $1,266,681 $820,630 $26,133 $— $10,599,002 
Intersegment revenues1,405,180 100,708 — 2,809 122,869 (1,631,566)— 
$9,635,786 $355,660 $1,266,681 $823,439 $149,002 $(1,631,566)$10,599,002 
Cost of products sold (exclusive of lower of cost or market inventory)$7,680,153 $345,588 $1,255,119 $696,864 $— $(1,602,471)$8,375,253 
Lower of cost or market inventory valuation adjustment$— $16,847 $— $— $— $— $16,847 
Operating expenses$474,631 $23,427 $— $69,506 $60,471 $(23,444)$604,591 
Selling, general and administrative expenses$34,353 $873 $1,351 $41,833 $3,750 $20,517 $102,677 
Depreciation and amortization$102,599 $18,228 $6,355 $20,227 $25,846 $(1,282)$171,973 
Income (loss) from operations$1,344,050 $(49,303)$3,856 $(4,991)$58,935 $(24,886)$1,327,661 
Loss of equity method investments$— $— $— $— $(16,334)$— $(16,334)
Capital expenditures$37,653 $24,499 $1,487 $10,158 $7,948 $17,958 $99,703 
RefiningRenewablesLubricants and Specialty ProductsHEPCorporate, Other
and Eliminations		Consolidated
Total
(In thousands)
Three Months Ended September 30, 2021
Sales and other revenues:
Revenues from external customers$3,993,570 $— $666,033 $25,459 $(3)$4,685,059 
Intersegment revenues189,441 — 501 97,125 (287,067)— 
$4,183,011 $— $666,534 $122,584 $(287,070)$4,685,059 
Cost of products sold (exclusive of lower of cost or market inventory)$3,605,600 $— $482,533 $— $(265,275)$3,822,858 
Operating expenses $248,316 $13,117 $60,940 $42,793 $(12,646)$352,520 
Selling, general and administrative expenses$32,345 $— $41,476 $3,849 $13,386 $91,056 
Depreciation and amortization$77,890 $328 $19,226 $21,627 $2,149 $121,220 
Income (loss) from operations$218,860 $(13,445)$62,359 $54,315 $(24,684)$297,405 
Earnings of equity method investments$— $— $— $3,689 $— $3,689 
Capital expenditures$40,814 $141,302 $7,833 $19,217 $6,338 $215,504 
RefiningRenewablesMarketingLubricants and Specialty ProductsHEPCorporate, Other
and Eliminations		Consolidated
Total
(In thousands)
Nine Months Ended September 30, 2022
Sales and other revenues:
Revenues from external customers$23,442,162 $399,204 $2,880,024 $2,419,212 $79,310 $— $29,219,912 
Intersegment revenues2,988,372 198,401 — 9,177 325,660 (3,521,610)— 
$26,430,534 $597,605 $2,880,024 $2,428,389 $404,970 $(3,521,610)$29,219,912 
Cost of products sold (exclusive of lower of cost or market inventory)$21,709,048 $582,521 $2,837,583 $1,777,869 $— $(3,449,841)$23,457,180 
Lower of cost or market inventory valuation adjustment$— $42,839 $— $— $— $— $42,839 
Operating expenses$1,298,907 $79,796 $— $209,977 $156,994 $(57,522)$1,688,152 
Selling, general and administrative expenses$107,358 $2,746 $2,540 $127,137 $12,745 $71,448 $323,974 
Depreciation and amortization$300,060 $34,399 $11,274 $61,426 $73,803 $(344)$480,618 
Income (loss) from operations$3,015,161 $(144,696)$28,627 $251,980 $161,428 $(85,351)$3,227,149 
Loss of equity method investments$— $— $— $— $(7,261)$— $(7,261)
Capital expenditures$104,284 $210,793 $6,796 $24,553 $31,194 $39,823 $417,443 
RefiningRenewablesLubricants and Specialty ProductsHEPCorporate, Other
and Eliminations		Consolidated
Total
(In thousands)
Nine Months Ended September 30, 2021
Sales and other revenues:
Revenues from external customers$10,837,876 $— $1,850,786 $77,809 $4 $12,766,475 
Intersegment revenues455,089 — 9,500 298,193 (762,782)— 
$11,292,965 $— $1,860,286 $376,002 $(762,778)$12,766,475 
Cost of products sold (exclusive of lower of cost or market inventory)$9,986,862 $— $1,305,274 $— $(683,244)$10,608,892 
Lower of cost or market inventory valuation adjustment$(318,353)$— $— $— $(509)$(318,862)
Operating expenses $772,593 $37,169 $183,003 $126,226 $(32,371)$1,086,620 
Selling, general and administrative expenses$90,977 $— $124,612 $9,664 $25,532 $250,785 
Depreciation and amortization$245,910 $986 $58,499 $66,908 $(2,962)$369,341 
Income (loss) from operations$514,976 $(38,155)$188,898 $173,204 $(69,224)$769,699 
Earnings of equity method investments$— $— $— $8,875 $— $8,875 
Capital expenditures$114,325 $325,271 $17,534 $76,933 $14,282 $548,345