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Leases
 6 Months Ended
Jun. 30, 2022
Leases [Abstract]  
Leases Leases
    We have cancellable and non-cancellable finance and operating lease liabilities for the lease of land, vehicles, office space, retail facilities, and other facilities used in the storage and transportation of crude oil and refined products. Most of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 30 years or more. There are no material residual value guarantees associated with any of our leases.
    The following table provides information on the amounts (in thousands) of our right-of-use assets (“ROU assets”) and liabilities as of June 30, 2022 and December 31, 2021 and their placement within our condensed consolidated balance sheets:
Lease typeBalance Sheet LocationJune 30, 2022December 31, 2021
Assets
FinanceProperty, plant, and equipment$21,150 $20,556 
FinanceAccumulated amortization(9,362)(8,397)
FinanceProperty, plant, and equipment, net$11,788 $12,159 
OperatingOperating lease right-of-use assets333,057 383,824 
Total right-of-use assets$344,845 $395,983 
Liabilities
Current
FinanceOther accrued liabilities$1,714 $1,540 
OperatingOperating lease liabilities51,678 53,640 
Long-term
FinanceFinance lease liabilities7,214 7,691 
OperatingOperating lease liabilities287,648 335,094 
Total lease liabilities$348,254 $397,965 
The following table summarizes the weighted-average lease terms and discount rates of our leases as of June 30, 2022 and December 31, 2021:
June 30, 2022December 31, 2021
Weighted-average remaining lease term (in years)
Finance5.916.29
Operating9.8811.28
Weighted-average discount rate
Finance7.33 %7.46 %
Operating6.89 %6.70 %
The following table summarizes the lease costs and income recognized in our condensed consolidated statements of operations (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Lease cost (income) type2022202120222021
Finance lease cost
Amortization of finance lease ROU assets$484 $460 $968 $950 
Interest on lease liabilities162 149 323 323 
Operating lease cost21,993 23,367 44,247 45,744 
Variable lease cost1,491 1,633 2,737 3,405 
Short-term lease cost1,359 174 2,345 203 
Net lease cost$25,489 $25,783 $50,620 $50,625 
Operating lease income (1)$(3,219)$(727)$(4,065)$(1,489)
_________________________________________________________
(1)From time to time, we enter into lease arrangements where we are the lessor in order to utilize a portion of our fixed assets not currently used in our primary operations. All of these lessor leases are classified as operating leases, whereby we do not derecognize the underlying asset, and the income from our customers is recognized as revenue on a straight-line basis over the lease term. The majority of our lessor income comes from leases with lease terms of one year or less and the estimated future undiscounted cash flows from lessor income are not expected to be material.
    The following table summarizes the supplemental cash flow information related to leases as follows (in thousands):
Six Months Ended June 30,
Lease type20222021
Cash paid for amounts included in the measurement of liabilities
Financing cash flows from finance leases$761 $1,874 
Operating cash flows from finance leases311 325 
Operating cash flows from operating leases42,901 44,023 
Non-cash supplemental amounts
ROU assets obtained in exchange for new finance lease liabilities594 1,102 
ROU assets obtained in exchange for new operating lease liabilities13,692 87,331 
ROU assets terminated in exchange for release from operating lease liabilities32,902 113 
    The table below includes the estimated future undiscounted cash flows for finance and operating leases as of June 30, 2022 (in thousands):
For the year ending December 31, Finance leasesOperating leasesTotal
2022 (1)$1,133 $39,157 $40,290 
20232,286 64,249 66,535 
20241,955 53,762 55,717 
20251,794 49,532 51,326 
20261,327 44,599 45,926 
20271,097 42,523 43,620 
Thereafter1,582 153,056 154,638 
Total lease payments11,174 446,878 458,052 
Less amount representing interest(2,246)(107,552)(109,798)
Present value of lease liabilities$8,928 $339,326 $348,254 
_________________________________________________________
(1)Represents the period from July 1, 2022 to December 31, 2022.
    Additionally, we have $3.8 million and $6.1 million in future undiscounted cash flows for finance and operating leases that have not yet commenced, respectively. These leases are expected to commence when the lessor has made the equipment or location available to us to operate or begin construction, respectively.
Sale-Leaseback Transactions
In February and March 2021, PHL and Par Hawaii Property Company, LLC (collectively, the “Sellers”), both our wholly owned subsidiaries, and MDC Coast HI 1, LLC, a subsidiary of Realty Income Corporation (the “Buyer”), entered into sale-leaseback transactions with respect to twenty-two (22) retail convenience store/fuel station properties located in Hawaii. We recognized a gain of $63.9 million as a result of these transactions, which is included in Loss (gain) on sale of assets, net on our condensed consolidated statements of operations for the six months ended June 30, 2021.
Leases Leases
    We have cancellable and non-cancellable finance and operating lease liabilities for the lease of land, vehicles, office space, retail facilities, and other facilities used in the storage and transportation of crude oil and refined products. Most of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 30 years or more. There are no material residual value guarantees associated with any of our leases.
    The following table provides information on the amounts (in thousands) of our right-of-use assets (“ROU assets”) and liabilities as of June 30, 2022 and December 31, 2021 and their placement within our condensed consolidated balance sheets:
Lease typeBalance Sheet LocationJune 30, 2022December 31, 2021
Assets
FinanceProperty, plant, and equipment$21,150 $20,556 
FinanceAccumulated amortization(9,362)(8,397)
FinanceProperty, plant, and equipment, net$11,788 $12,159 
OperatingOperating lease right-of-use assets333,057 383,824 
Total right-of-use assets$344,845 $395,983 
Liabilities
Current
FinanceOther accrued liabilities$1,714 $1,540 
OperatingOperating lease liabilities51,678 53,640 
Long-term
FinanceFinance lease liabilities7,214 7,691 
OperatingOperating lease liabilities287,648 335,094 
Total lease liabilities$348,254 $397,965 
The following table summarizes the weighted-average lease terms and discount rates of our leases as of June 30, 2022 and December 31, 2021:
June 30, 2022December 31, 2021
Weighted-average remaining lease term (in years)
Finance5.916.29
Operating9.8811.28
Weighted-average discount rate
Finance7.33 %7.46 %
Operating6.89 %6.70 %
The following table summarizes the lease costs and income recognized in our condensed consolidated statements of operations (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Lease cost (income) type2022202120222021
Finance lease cost
Amortization of finance lease ROU assets$484 $460 $968 $950 
Interest on lease liabilities162 149 323 323 
Operating lease cost21,993 23,367 44,247 45,744 
Variable lease cost1,491 1,633 2,737 3,405 
Short-term lease cost1,359 174 2,345 203 
Net lease cost$25,489 $25,783 $50,620 $50,625 
Operating lease income (1)$(3,219)$(727)$(4,065)$(1,489)
_________________________________________________________
(1)From time to time, we enter into lease arrangements where we are the lessor in order to utilize a portion of our fixed assets not currently used in our primary operations. All of these lessor leases are classified as operating leases, whereby we do not derecognize the underlying asset, and the income from our customers is recognized as revenue on a straight-line basis over the lease term. The majority of our lessor income comes from leases with lease terms of one year or less and the estimated future undiscounted cash flows from lessor income are not expected to be material.
    The following table summarizes the supplemental cash flow information related to leases as follows (in thousands):
Six Months Ended June 30,
Lease type20222021
Cash paid for amounts included in the measurement of liabilities
Financing cash flows from finance leases$761 $1,874 
Operating cash flows from finance leases311 325 
Operating cash flows from operating leases42,901 44,023 
Non-cash supplemental amounts
ROU assets obtained in exchange for new finance lease liabilities594 1,102 
ROU assets obtained in exchange for new operating lease liabilities13,692 87,331 
ROU assets terminated in exchange for release from operating lease liabilities32,902 113 
    The table below includes the estimated future undiscounted cash flows for finance and operating leases as of June 30, 2022 (in thousands):
For the year ending December 31, Finance leasesOperating leasesTotal
2022 (1)$1,133 $39,157 $40,290 
20232,286 64,249 66,535 
20241,955 53,762 55,717 
20251,794 49,532 51,326 
20261,327 44,599 45,926 
20271,097 42,523 43,620 
Thereafter1,582 153,056 154,638 
Total lease payments11,174 446,878 458,052 
Less amount representing interest(2,246)(107,552)(109,798)
Present value of lease liabilities$8,928 $339,326 $348,254 
_________________________________________________________
(1)Represents the period from July 1, 2022 to December 31, 2022.
    Additionally, we have $3.8 million and $6.1 million in future undiscounted cash flows for finance and operating leases that have not yet commenced, respectively. These leases are expected to commence when the lessor has made the equipment or location available to us to operate or begin construction, respectively.
Sale-Leaseback Transactions
In February and March 2021, PHL and Par Hawaii Property Company, LLC (collectively, the “Sellers”), both our wholly owned subsidiaries, and MDC Coast HI 1, LLC, a subsidiary of Realty Income Corporation (the “Buyer”), entered into sale-leaseback transactions with respect to twenty-two (22) retail convenience store/fuel station properties located in Hawaii. We recognized a gain of $63.9 million as a result of these transactions, which is included in Loss (gain) on sale of assets, net on our condensed consolidated statements of operations for the six months ended June 30, 2021.