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Leases
 9 Months Ended
Sep. 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 September 30, 2022 and December 31, 2021 and their placement within our condensed consolidated balance sheets:
Lease typeBalance Sheet LocationSeptember 30, 2022December 31, 2021
Assets
FinanceProperty, plant, and equipment$21,150 $20,556 
FinanceAccumulated amortization(9,842)(8,397)
FinanceProperty, plant, and equipment, net$11,308 $12,159 
OperatingOperating lease right-of-use assets321,868 383,824 
Total right-of-use assets$333,176 $395,983 
Liabilities
Current
FinanceOther accrued liabilities$1,733 $1,540 
OperatingOperating lease liabilities47,906 53,640 
Long-term
FinanceFinance lease liabilities6,772 7,691 
OperatingOperating lease liabilities281,656 335,094 
Total lease liabilities$338,067 $397,965 
The following table summarizes the weighted-average lease terms and discount rates of our leases as of September 30, 2022 and December 31, 2021:
September 30, 2022December 31, 2021
Weighted-average remaining lease term (in years)
Finance5.756.29
Operating9.9111.28
Weighted-average discount rate
Finance7.35 %7.46 %
Operating6.80 %6.70 %
The following table summarizes the lease costs and income recognized in our condensed consolidated statements of operations (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Lease cost (income) type2022202120222021
Finance lease cost
Amortization of finance lease ROU assets$482 $489 $1,450 $1,439 
Interest on lease liabilities152 166 475 489 
Operating lease cost22,138 23,325 66,385 69,069 
Variable lease cost769 1,527 3,506 4,932 
Short-term lease cost1,266 138 3,611 341 
Net lease cost$24,807 $25,645 $75,427 $76,270 
Operating lease income (1)$(3,495)$(803)$(7,560)$(2,292)
_________________________________________________________
(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):
Nine Months Ended September 30,
Lease type20222021
Cash paid for amounts included in the measurement of liabilities
Financing cash flows from finance leases$1,203 $2,223 
Operating cash flows from finance leases464 492 
Operating cash flows from operating leases63,578 65,439 
Non-cash supplemental amounts
ROU assets obtained in exchange for new finance lease liabilities594 2,658 
ROU assets obtained in exchange for new operating lease liabilities19,014 95,229 
ROU assets terminated in exchange for release from operating lease liabilities32,902 800 
    The table below includes the estimated future undiscounted cash flows for finance and operating leases as of September 30, 2022 (in thousands):
For the year ending December 31, Finance leasesOperating leasesTotal
2022 (1)$557 $18,662 $19,219 
20232,286 66,153 68,439 
20241,955 55,672 57,627 
20251,794 50,189 51,983 
20261,327 45,142 46,469 
20271,097 42,940 44,037 
Thereafter1,582 153,307 154,889 
Total lease payments10,598 432,065 442,663 
Less amount representing interest(2,093)(102,503)(104,596)
Present value of lease liabilities$8,505 $329,562 $338,067 
_________________________________________________________
(1)Represents the period from October 1, 2022 to December 31, 2022.
    Additionally, we have $3.8 million and $48.2 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 nine months ended September 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 September 30, 2022 and December 31, 2021 and their placement within our condensed consolidated balance sheets:
Lease typeBalance Sheet LocationSeptember 30, 2022December 31, 2021
Assets
FinanceProperty, plant, and equipment$21,150 $20,556 
FinanceAccumulated amortization(9,842)(8,397)
FinanceProperty, plant, and equipment, net$11,308 $12,159 
OperatingOperating lease right-of-use assets321,868 383,824 
Total right-of-use assets$333,176 $395,983 
Liabilities
Current
FinanceOther accrued liabilities$1,733 $1,540 
OperatingOperating lease liabilities47,906 53,640 
Long-term
FinanceFinance lease liabilities6,772 7,691 
OperatingOperating lease liabilities281,656 335,094 
Total lease liabilities$338,067 $397,965 
The following table summarizes the weighted-average lease terms and discount rates of our leases as of September 30, 2022 and December 31, 2021:
September 30, 2022December 31, 2021
Weighted-average remaining lease term (in years)
Finance5.756.29
Operating9.9111.28
Weighted-average discount rate
Finance7.35 %7.46 %
Operating6.80 %6.70 %
The following table summarizes the lease costs and income recognized in our condensed consolidated statements of operations (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Lease cost (income) type2022202120222021
Finance lease cost
Amortization of finance lease ROU assets$482 $489 $1,450 $1,439 
Interest on lease liabilities152 166 475 489 
Operating lease cost22,138 23,325 66,385 69,069 
Variable lease cost769 1,527 3,506 4,932 
Short-term lease cost1,266 138 3,611 341 
Net lease cost$24,807 $25,645 $75,427 $76,270 
Operating lease income (1)$(3,495)$(803)$(7,560)$(2,292)
_________________________________________________________
(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):
Nine Months Ended September 30,
Lease type20222021
Cash paid for amounts included in the measurement of liabilities
Financing cash flows from finance leases$1,203 $2,223 
Operating cash flows from finance leases464 492 
Operating cash flows from operating leases63,578 65,439 
Non-cash supplemental amounts
ROU assets obtained in exchange for new finance lease liabilities594 2,658 
ROU assets obtained in exchange for new operating lease liabilities19,014 95,229 
ROU assets terminated in exchange for release from operating lease liabilities32,902 800 
    The table below includes the estimated future undiscounted cash flows for finance and operating leases as of September 30, 2022 (in thousands):
For the year ending December 31, Finance leasesOperating leasesTotal
2022 (1)$557 $18,662 $19,219 
20232,286 66,153 68,439 
20241,955 55,672 57,627 
20251,794 50,189 51,983 
20261,327 45,142 46,469 
20271,097 42,940 44,037 
Thereafter1,582 153,307 154,889 
Total lease payments10,598 432,065 442,663 
Less amount representing interest(2,093)(102,503)(104,596)
Present value of lease liabilities$8,505 $329,562 $338,067 
_________________________________________________________
(1)Represents the period from October 1, 2022 to December 31, 2022.
    Additionally, we have $3.8 million and $48.2 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 nine months ended September 30, 2021.