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Table of Contents HOLLYFRONTIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued
87
NOTE 17: Lease Commitments
We lease certain office and storage facilities, rail cars and other equipment under long-term operating leases, most of which contain
renewal options. At December 31, 2014, the minimum future rental commitments under operating leases having non-cancellable
lease terms in excess of one year are as follows:
(In thousands)
2015 $ 29,501
2016 27,893
2017 19,370
2018 12,262
2019 8,288
Thereafter 8,485
Total $ 105,799
Rental expense charged to operations was $58.9 million, $48.5 million and $42.6 million for the years ended December 31, 2014,
2013 and 2012, respectively. For the years ended December 31, 2014, 2013 and 2012, rental expense included $8.0 million, $8.3
million and $8.1 million, respectively, in costs attributable to the HEP operations.
NOTE 18: Contingencies and Contractual Commitments
We are a party to various litigation and legal proceedings which we believe, based on advice of counsel, will not either individually
or in the aggregate have a materially adverse effect on our financial condition, results of operations or cash flows.
In early February 2015, we received communications from the United Steelworkers Union representing employees at our El Dorado
and Woods Cross Refineries of its intention to commence a work stoppage in early May 2015 and could receive a similar
communication from the United Steelworkers Union representing employees at our Cheyenne Refinery. We have plans allowing
for the continued operations of all three refineries in the event the union does commence a work stoppage and believe such plans
are adequate to allow continued operations of all three refineries.
Pursuant to the 2007 Energy Independence and Security Act, the Environmental Protection Agency (“EPA”) promulgated the
Renewable Fuel Standard 2 (“RFS2”) regulations reflecting the increased volume of renewable fuels mandated to be blended into
the nation's fuel supply. The regulations, in part, require refiners to add annually increasing amounts of “renewable fuels” to their
petroleum products or purchase credits, known as renewable identification numbers (“RINs”), in lieu of such blending. The EPA
has not yet finalized the 2014 percentage standards under its RFS2 program. The estimated quantity of renewable fuels or RINs
that we are required to purchase and that have been accrued for as of and for the year ended December 31, 2014 are based on
quantities proposed by the EPA in November 2013.
Contractual Commitments
We have various long-term agreements (entered in the normal course of business) to purchase crude oil, natural gas, feedstocks
and other resources to ensure we have adequate supplies to operate our refineries. The substantial majority of our purchase
obligations are based on market prices or rates. These contracts expire in 2015 through 2025.
We also have long-term agreements with third parties for the transportation and storage of crude oil, natural gas and feedstocks
to our refineries and for terminal and storage services that expire in 2015 through 2033. At December 31, 2014, the minimum
future transportation and storage fees under transportation agreements having terms in excess of one year are as follows: