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Table of Contents HOLLYFRONTIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
65
As a result of these transactions and resulting HEP ownership changes, we adjusted additional capital and equity attributable to
HEP's noncontrolling interest holders to effectively reallocate a portion of HEP's equity among its unitholders.
NOTE 3: Financial Instruments
Our financial instruments consist of cash and cash equivalents, investments in marketable securities, accounts receivable, accounts
payable, debt and derivative instruments. The carrying amounts of cash and cash equivalents, accounts receivable and accounts
payable approximate fair value. HEP's outstanding credit agreement borrowings also approximate fair value as interest rates are
reset frequently at current interest rates.
Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability,
including assumptions about risk). GAAP categorizes inputs used in fair value measurements into three broad levels as follows:
• (Level 1) Quoted prices in active markets for identical assets or liabilities.
• (Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and
liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable
market data.
• (Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs.
The carrying amounts and estimated fair values of our investments in marketable securities, derivative instruments and senior
notes at December 31, 2014 and December 31, 2013 were as follows:
Fair Value by Input Level
Financial Instrument Carrying
Amount Fair Value Level 1 Level 2 Level 3
(In thousands)
December 31, 2014
Assets:
Marketable securities $ 474,110 $ 474,110 $ — $ 474,110 $ —
NYMEX futures contracts 17,619 17,619 17,619 — —
Commodity price swaps 208,296 208,296 — 208,296 —
HEP interest rate swaps 1,019 1,019 — 1,019 —
Total assets $ 701,044 $ 701,044 $ 17,619 $ 683,425 $ —
Liabilities:
Commodity price swaps $ 196,897 $ 196,897 $ — $ 196,897 $ —
HollyFrontier senior notes 154,144 155,250 — 155,250 —
HEP senior notes 296,579 291,000 — 291,000 —
HEP interest rate swaps 1,065 1,065 — 1,065 —
Total liabilities $ 648,685 $ 644,212 $ — $ 644,212 $ —