20. SUBSEQUENT EVENTS
On June 4, 2012, Northern Tier Energy LP, an affiliate of the Company, was formed. Northern Tier Energy LP has a registration statement
on Form S-1 filed with the Securities and Exchange Commission in anticipation of an initial public offering.
On May 4, 2012, the Company
entered into a settlement agreement with Marathon in connection with the contingent consideration agreement (see Note 18). Under the terms of this settlement agreement, Marathon will receive $40 million of the net proceeds from Northern Tier Energy
LP’s initial public offering, and NT Holdings will redeem Marathon’s existing preferred interest with a portion of the net proceeds from this offering and issue Marathon a new $45 million preferred interest in NT Holdings in consideration
for relinquishing all claims with respect to earn-out payments under the contingent consideration agreement. The Company has also agreed, pursuant to the settlement agreement, to relinquish all claims to margin support payments under the contingent
consideration agreement. The settlement agreement is contingent upon the consummation of Northern Tier Energy LP’s initial public offering by no later than December 31, 2012.
On May 22, 2012 the Company paid an equity distribution in cash to NT Holdings in the amount of $40.0 million.
During the second quarter of 2012, the Company reset the price of its derivative contracts for the period of July 2012 through December 2012 and recognized a loss of approximately $92 million. The Company
plans to use a portion of the net proceeds of the initial public offering of Northern Tier Energy LP to settle this obligation. If this offering is not completed, the loss from resetting the price of the derivative contracts will be paid to the
counterparty on the same monthly schedule as the original contracts were scheduled to settle.