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78
Unrealized
Gain (Loss)
Recognized in
OCI
Gain (Loss) Recognized in
Earnings Due to Settlements
Gain (Loss) Attributable to
Hedge Ineffectiveness
Recognized in Earnings
Location Amount Location Amount
(In thousands)
Year Ended December 31, 2013
Commodity price swaps
Change in fair value $ (8,808) Sales and other
revenues $ (20,060) Sales and other
revenues $ 45
Gain reclassified to earnings due to
settlements (16,410) Cost of
products sold 38,949 Cost of
products sold 515
Amortization of discontinued hedges
reclassified to earnings 900 Operating
expenses (3,379)
Total $ (24,318) $ 15,510 $ 560
Year Ended December 31, 2012
Commodity price swaps
Change in fair value $ (248,399) Sales and other
revenues $ (98,750) Sales and other
revenues $ (491)
Loss reclassified to earnings due to
settlements 55,175 Cost of
products sold 43,575 Cost of
products sold (515)
Total $ (193,224) $ (55,175) $ (1,006)
Year Ended December 31, 2011
Commodity price swaps
Change in fair value $ 173,208
Loss reclassified to earnings due to
settlements 166 Operating
expenses $ (166) Cost of
products sold $ 446
Total $ 173,374 $ (166) $ 446
As of December 31, 2013, we have the following notional contract volumes related to outstanding derivative instruments serving
as cash flow hedges against price risk on forecasted purchases of natural gas and crude oil and sales of refined products:
Notional Contract Volumes by Year of Maturity
Derivative instruments
Total
Outstanding
Notional 2014 2015 2016 2017 Unit of
Measure
Natural gas - long 38,400,000 9,600,000 9,600,000 9,600,000 9,600,000 MMBTU
WTI crude oil - long 18,797,500 16,242,500 2,555,000 — — Barrels
Ultra-low sulfur diesel - short 15,512,500 12,957,500 2,555,000 — — Barrels
Sub octane gasoline - short 3,285,000 3,285,000 — — — Barrels
In the first quarter of 2013, we dedesignated certain commodity price swaps (long positions) that previously received hedge
accounting treatment. These contracts now serve as economic hedges against price risk on forecasted natural gas purchases totaling
38,400,000 MMBTU's to be purchased ratably through 2017. As of December 31, 2013, we have an unrealized loss of $4.3 million
classified in accumulated other comprehensive income that relates to the application of hedge accounting prior to dedesignation
that will be amortized as a charge to operating expenses as the contracts mature.
Economic Hedges
We also have swap contracts that serve as economic hedges (derivatives used for risk management, but not designated as accounting
hedges) to fix our purchase price on forecasted natural gas purchases, and to lock in the spread between WCS and WTI crude oil
on forecasted purchases of WCS. Also, we have NYMEX futures contracts to lock in prices on forecasted purchases of inventory.
These contracts are measured quarterly at fair value with offsetting adjustments (gains/losses) recorded directly to income.
Table of Contents HOLLYFRONTIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued