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Acquisitions | 6 Months Ended
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Jun. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Billings Acquisition On October 20, 2022, we and our subsidiaries Par Montana, LLC (“Par Montana”), Par Montana Holdings, LLC (“Par Montana Holdings”), and Par Rocky Mountain Midstream, LLC (“Par Rocky Mountain”, and together with Par Montana and Par Montana Holdings, the “Purchasers”), entered into an equity and asset purchase agreement (the “Purchase Agreement”) with Exxon Mobil Corporation, ExxonMobil Oil Corporation, and ExxonMobil Pipeline Company LLC (collectively, the “Sellers”) to purchase (i) the high-conversion, complex refinery located in Billings, Montana and certain associated distribution and logistics assets, (ii) the Sellers’ 65% limited partnership equity interest in YELP, and (iii) the Sellers’ 40% equity interest in YPLC for a base purchase price of $310.0 million plus the value of hydrocarbon inventory and adjusted working capital at closing (collectively, the “Billings Acquisition”). The Billings Acquisition enhances our fully integrated downstream network in the upper Rockies and Pacific Northwest. The Billings Acquisition increases scale and geographic diversification on the U.S. mainland and allows for efficient access to alternative markets. On June 1, 2023, we completed the Billings Acquisition for a total purchase price of approximately $638.2 million (before consideration of the preliminary working capital adjustment), consisting of a cash deposit of $30.0 million paid on October 20, 2022 upon execution of the Purchase Agreement and $608.2 million paid at closing on June 1, 2023. The preliminary working capital adjustment is $12.7 million, which will reduce the total purchase price. The Company funded the Billings Acquisition with cash on hand and borrowings from the ABL Credit Facility (as defined in Note 11—Debt) under the ABL Credit Facility (as defined in Note 11—Debt). We accounted for the Billings Acquisition as a business combination whereby the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. A summary of the preliminary fair value of the assets acquired and liabilities assumed is as follows (in thousands):
Trade accounts receivable | $ | 2,395 |
Inventories | 299,228 |
Property, plant, and equipment | 259,088 |
Operating lease right-of-use assets | 3,562 |
Investment in refining and logistics subsidiaries | 86,600 |
Other long-term assets | 4,094 |
Total assets (1) | 654,967 |
Current operating lease liabilities | 2,081 |
Other current liabilities | 7,056 |
Environmental liabilities | 18,869 |
Long-term operating lease liabilities | 1,481 |
Total liabilities | 29,487 |
Total | $ | 625,480 |
_______________________________________________________ (1)We allocated $531.7 million and $123.3 million of total assets to our refining and logistics segments, respectively. We have recorded a preliminary estimate of the fair value of the assets acquired and liabilities assumed and expect to finalize the purchase price allocation during the first part of 2024. The primary areas of the purchase price allocation that are not finalized as of June 30, 2023 relate to inventory, property, plant, and equipment, and the environmental liabilities. Any final valuation adjustments could change the fair values assigned to the assets acquired and liabilities assumed, resulting in a change to our condensed consolidated financial statements, which could be material. We incurred $5.1 million and $10.4 million of acquisition costs related to the Billings Acquisition for the three and six months ended June 30, 2023, respectively. These costs are included in Acquisition and integration costs on our condensed consolidated statements of operations. We assumed certain environmental liabilities associated with the Billings Acquisition, including costs related to hazardous waste corrective measures, ground and surface water sampling and monitoring. We expect to incur these costs over a 20 to 30 year period. The results of operations of the Montana refinery, newly acquired logistics assets in the Rockies region, and YELP and YPLC equity investments were included in our results beginning on June 1, 2023. For both of the three and six months ended June 30, 2023, our results of operations included revenues of $217.2 million and a net loss of $15.6 million related to these assets. The following unaudited pro forma financial information presents our consolidated revenues and net income (loss) as if the Billings Acquisition had been completed on January 1, 2022 (in thousands):
|  | Six Months Ended June 30,
|  | 2023 |  | 2022
Revenues |  | $ | 4,410,002 |  |  | $ | 4,733,450 |
Net income (loss) |  | 419,113 |  |  | (80,237) |
These pro forma results were based on estimates and assumptions that we believe are reasonable. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the Billings Acquisition been effective as of the dates presented, nor is it indicative of future operating results of the combined company. Pro forma adjustments include (i) incremental depreciation resulting from the estimated fair value of property, plant, and equipment acquired, (ii) transaction costs which were shifted from the six months ended June 30, 2023 to the six months ended June 30, 2022 and (iii) elimination of historical transactions between Par and the Montana assets.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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