What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-06 compared with 2020-08-10 · 207 added, 193 removed, 899 unchanged (31% of the section changed)

4 unchanged sentences

(in thousands, except share data)

June 30, 2020

September 30, 2020

December 31, 2019

3 unchanged sentences

Total cash, cash equivalents, and restricted cash

Trade accounts receivable, net of allowances of $1.1 million and $1.2 million at June 30, 2020 and December 31, 2019, respectively

Trade accounts receivable, net of allowances of $1.1 million and $1.2 million at September 30, 2020 and December 31, 2019, respectively

Prepaid and other current assets

31 unchanged sentences

Common stock, $0.01 par value;

500,000,000 shares authorized at June 30, 2020 and December 31, 2019, 53,942,034 shares and 53,254,151 shares issued at June 30, 2020 and December 31, 2019, respectively

500,000,000 shares authorized at September 30, 2020 and December 31, 2019, 53,947,364 shares and 53,254,151 shares issued at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses

12 unchanged sentences

Change in value of common stock warrants

Equity earnings (losses) from Laramie Energy, LLC

Equity losses from Laramie Energy, LLC

Total other income (expense), net

Income (loss) before income taxes

Income tax benefit

Loss before income taxes

Income tax benefit (expense)

Net income (loss)

6 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

9 unchanged sentences

Stock-based compensation

Unrealized loss on derivative contracts

Equity (earnings) losses from Laramie Energy, LLC

Unrealized (gain) loss on derivative contracts

Equity losses from Laramie Energy, LLC

Net changes in operating assets and liabilities:

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Balance, June 30, 2019

Stock-based compensation

Purchase of common stock for retirement

Exercise of stock options

Balance, September 30, 2019

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (continued)

(in thousands)

Comprehensive

8 unchanged sentences

Balance, June 30, 2020

Stock-based compensation

Purchase of common stock for retirement

Balance, September 30, 2020

The issuance of common stock for the repurchase of a portion of our 5.00 % Convertible Senior Notes in the three months ended June 30, 2019 is presented net of a $ 12.3 million write-off associated with the equity component of the repurchased notes.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

Note 1 — Overview

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3) Logistics - We operate an extensive multi-modal logistics network spanning the Pacific, the Northwest, and the Rockies that primarily transports and stores our crude oil and refined products for our refineries and transports refined products to our retail sites or third-party purchasers.

As of June 30, 2020 , we owned a 46.0 % equity investment in Laramie Energy, LLC (“ Laramie Energy ”).

As of September 30, 2020 , we owned a 46.0 % equity investment in Laramie Energy, LLC (“ Laramie Energy ”).

Laramie Energy is focused on producing natural gas in Garfield, Mesa, and Rio Blanco Counties, Colorado.

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We are actively responding to these ongoing matters and many uncertainties remain.

Due to the rapid development and fluidity of the situation, the full magnitude of the COVID-19 impact on our estimates and assumptions, financial condition, future results of operations, and future cash flows and liquidity is uncertain and has been and may continue to be material.

Due to the rapid development and fluidity of the situation, the full magnitude of the COVID-19 pandemic’s impact on our estimates and assumptions, financial condition, future results of operations, and future cash flows and liquidity is uncertain and has been and may continue to be material.

Allowance for Credit Losses

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Credit limits and/or prepayment requirements are set based on such factors as the customer’s financial results, credit rating, payment history, and industry and are reviewed annually for customers with material credit limits.

Credit allowances are reviewed at least quarterly based on changes in the customer’s creditworthiness due to economic conditions, liquidity, and business strategy as publicly reported and through

Credit allowances are reviewed at least quarterly based on changes in the customer’s creditworthiness due to economic conditions, liquidity, and business strategy as publicly reported and through discussions between the customer and the Company.

We establish provisions for losses on trade receivables based on the estimated

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

discussions between the customer and the Company.

We establish provisions for losses on trade receivables based on the estimated credit loss we expect to incur over the life of the receivable.

As of June 30, 2020 and December 31, 2019 , trade receivables were $ 114.5 million and $ 228.7 million , net of allowances of $ 1.1 million and $ 1.2 million , respectively.

We did not have a material change in our allowances during the three and six months ended June 30, 2020 or 2019 .

For the Interim Periods Ended September 30, 2020 and 2019

credit loss we expect to incur over the life of the receivable.

We did not have a material change in our allowances on trade receivables during the three and nine months ended September 30, 2020 or 2019 .

Cost Classifications

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The following table summarizes depreciation and finance lease amortization expense excluded from each line item in our condensed consolidated statements of operations (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenues

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Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminated Step 2 from the current goodwill impairment test.

Under ASU 2017-04, an entity is no longer required to determine a goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business

Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

This ASU changed the policy under which we perform our goodwill impairment assessments by eliminating Step 2 of the test.

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

This ASU changed the policy under which we perform our goodwill impairment assessments by eliminating Step 2 of the test.

For the Interim Periods Ended September 30, 2020 and 2019

On January 1, 2020, we adopted ASU No.

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Note 3 — Investment in Laramie Energy, LLC

As of June 30, 2020 , we had a 46.0 % ownership interest in Laramie Energy .

As of September 30, 2020 , we had a 46.0 % ownership interest in Laramie Energy .

Laramie Energy is focused on producing natural gas in Garfield, Mesa, and Rio Blanco Counties, Colorado.

Laramie Energy has a $ 400 million revolving credit facility with a borrowing base currently set at $ 200.9 million that is secured by a lien on its natural gas and crude oil properties and related assets.

As of June 30, 2020 , the balance outstanding on the revolving credit facility was approximately $ 197.5 million .

As of September 30, 2020 , the balance outstanding on the revolving credit facility was approximately $ 200.0 million .

We are guarantors of Laramie Energy ’s credit facility, with recourse limited to the pledge of our equity interest in our wholly owned subsidiary, Par Piceance Energy Equity, LLC.

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Based on our evaluation, we determined that the estimated fair value of our investment in Laramie Energy was $ 1.9 million , compared to a carrying value of $ 47.2 million at March 31, 2020.

The fair value estimate was determined using a discounted cash flow analysis based on natural gas forward strip prices as of March 31, 2020 for the years 2020 and 2021 of the forecast, and a blend of forward strip pricing and third-party analyst pricing for years 2022 through 2028.

Other significant inputs used in the discounted cash flow analysis included proved and unproved reserves information, forecasts of operating expenditures, and the applicable discount rate.

1 unchanged sentence

The change in our equity investment in Laramie Energy is as follows (in thousands):

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Beginning balance

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

Summarized financial information for Laramie Energy is as follows (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

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Non-current liabilities

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Natural gas and oil revenues

Income from operations

Net income (loss)

Laramie Energy ’s net loss for the three and six months ended June 30, 2020 includes $ 10.0 million and $ 19.3 million of depreciation, depletion, and amortization (“DD&A”) and $ 4.1 million and $ 1.7 million of unrealized losses on derivative instruments, respectively.

Laramie Energy ’s net loss for the three and six months ended June 30, 2019 includes $ 21.0 million and $ 42.4 million of DD&A and $ 8.4 million and $ 11.1 million of unrealized gains on derivative instruments, respectively.

Loss from operations

Laramie Energy ’s net loss for the three and nine months ended September 30, 2020 includes $ 9.0 million and $ 28.3 million of depreciation, depletion, and amortization (“DD&A”) and $ 5.9 million and $ 7.6 million of unrealized losses on derivative instruments, respectively.

Laramie Energy ’s net loss for the three and nine months ended September 30, 2019 includes $ 20.7 million and $ 63.1 million of DD&A and $ 4.3 million of unrealized losses and $ 6.8 million of unrealized gains on derivative instruments, respectively.

Note 4 — Acquisitions

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In January 2019, we incurred $ 5.4 million of commitment fees associated with the funding of the Washington Acquisition .

Such commitment fees are presented as Debt extinguishment and commitment costs on our condensed consolidated statements of operations for the six months ended June 30, 2019.

Such commitment fees are presented as Debt extinguishment and commitment costs on our condensed consolidated statements of operations for the nine months ended September 30, 2019.

In connection with the consummation of the Washington Acquisition , we assumed the Washington Refinery Intermediation Agreement with Merrill Lynch Commodities, Inc.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

A summary of the fair value of the assets acquired and liabilities assumed is as follows (in thousands):

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As of December 31, 2019, we finalized the Washington Acquisition purchase price allocation.

We incurred $ 2.2 million of acquisition costs related to the Washington Acquisition for the six months ended June 30, 2019.

We incurred $ 2.2 million of acquisition costs related to the Washington Acquisition for the nine months ended September 30, 2019.

These costs are included in Acquisition and integration costs on our condensed consolidated statement of operations.

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Oil were included in our results beginning on January 11, 2019 .

For the three and six months ended June 30, 2019, our results of operations included revenues of $ 309.8 million and $ 555.6 million and income before income taxes of $ 23.2 million and $ 20.1 million related to U.S.

For the three and nine months ended September 30, 2019, our results of operations included revenues of $ 300.0 million and $ 855.6 million and income before income taxes of $ 29.4 million and $ 49.5 million related to U.S.

Oil , respectively.

The following unaudited pro forma financial information presents our consolidated revenues and net income (loss) as if the Washington Acquisition had been completed on January 1, 2018 (in thousands except per share information):

Six Months Ended June 30,

Income per share

Nine Months Ended September 30, 2019

Loss per share

These pro forma results were based on estimates and assumptions that we believe are reasonable.

They are not necessarily indicative of our consolidated results of operations in future periods or the results that actually would have been realized had we been a combined company during the periods presented.

The pro forma results for the six months ended June 30, 2019 include adjustments to remeasure U.S.

The pro forma results for the nine months ended September 30, 2019 include adjustments to remeasure U.S.

Oil ’s LIFO inventory reserve as if the Washington Acquisition had been completed on January 1, 2018, record interest and other debt extinguishment costs related to issuance of the Term Loan B and Par Pacific Term Loan , and to adjust U.S.

Oil ’s historical depreciation expense as a result of the fair value adjustment to Property, plant, and equipment, net.

Additionally, the pro forma results include the elimination of the $ 67.7 million tax benefit that was recognized by the Company

Oil ’s historical depreciation expense as a result of the fair value adjustment to Property, plant, and

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

in connection with the Washington Acquisition .

Including this tax benefit, the pro forma net income would have been $ 77.7 million and the pro forma earnings per share and diluted earnings per share would have been $ 1.55 and $ 1.54 per share, respectively.

For the Interim Periods Ended September 30, 2020 and 2019

equipment, net.

Additionally, the pro forma results include the elimination of the $ 67.0 million tax benefit that was recognized by the Company in connection with the Washington Acquisition .

Note 5 — Revenue Recognition

As of June 30, 2020 and December 31, 2019 , receivables from contracts with customers were $ 102.9 million and $ 214.5 million , respectively.

As of September 30, 2020 and December 31, 2019 , receivables from contracts with customers were $ 110.2 million and $ 214.5 million , respectively.

Our refining segment recognizes deferred revenues when cash payments are received in advance of delivery of products to the customer.

Deferred revenue was $ 3.0 million and $ 7.9 million as of June 30, 2020 and December 31, 2019 , respectively.

Deferred revenue was $ 6.0 million and $ 7.9 million as of September 30, 2020 and December 31, 2019 , respectively.

The following table provides information about disaggregated revenue by major product line and includes a reconciliation of the disaggregated revenues to total segment revenues (in thousands):

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Product or service:

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Total segment revenues (3)

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Product or service:

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Total segment revenues (3)

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Product or service:

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

Six Months Ended June 30, 2019

For the Interim Periods Ended September 30, 2020 and 2019

Nine Months Ended September 30, 2019

Product or service:

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Note 6 — Inventories

Inventories at June 30, 2020 consisted of the following (in thousands):

Inventories at September 30, 2020 consisted of the following (in thousands):

Titled Inventory

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Please read Note 9—Inventory Financing Agreements for further information.

Includes $ 17.8 million and $ 19.1 million of RINs and environmental credits as of June 30, 2020 and December 31, 2019 , respectively.

RINs and environmental obligations of $ 68.9 million and $ 22.8 million are included in Other accrued liabilities on our condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 , respectively.

As of June 30, 2020 , there was a $ 24.0 million reserve for the lower of cost or net realizable value of inventory.

Includes $ 20.8 million and $ 19.1 million of RINs and environmental credits, reported at cost, as of September 30, 2020 and December 31, 2019 , respectively.

RINs and environmental obligations of $ 87.1 million and $ 22.8 million , reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 , respectively.

As of September 30, 2020 , there was a $ 22.3 million reserve for the lower of cost or net realizable value of inventory.

As of December 31, 2019 , there was no reserve for the lower of cost or net realizable value of inventory.

Our last-in, first-out (“LIFO”) inventories, net of the lower of cost or net realizable reserve, were equal to current cost as of June 30, 2020 .

Our last-in, first-out (“LIFO”) inventories, net of the lower of cost or net realizable reserve, were equal to current cost as of September 30, 2020 .

As of December 31, 2019 , the excess of current replacement cost over the LIFO inventory carrying value at the Washington refinery was approximately $ 6.4 million .

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

Note 7 — Prepaid and Other Current Assets

Prepaid and other current assets at June 30, 2020 and December 31, 2019 consisted of the following (in thousands):

June 30, 2020

Prepaid and other current assets at September 30, 2020 and December 31, 2019 consisted of the following (in thousands):

September 30, 2020

December 31, 2019

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Note 8 — Goodwill

During the six months ended June 30, 2020 , the change in the carrying amount of goodwill was as follows (in thousands):

During the nine months ended September 30, 2020 , the change in the carrying amount of goodwill was as follows (in thousands):

Balance at December 31, 2019

Impairment expense

Balance at June 30, 2020

Balance at September 30, 2020

At March 31, 2020, we performed a quantitative goodwill impairment test of all of our reporting units due to (i) the global economic impact of the COVID-19 pandemic and (ii) a steep decline in current and forecasted prices and demand for crude oil and refined products.

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In assessing the fair value of the reporting units, we primarily utilized a market approach based on observable multiples for comparable companies within our industry.

Our refining reporting units in Hawaii and Washington were fully impaired and the goodwill associated with our retail reporting unit in Washington and Idaho was partially impaired, resulting in a charge of $ 67.9 million in our condensed consolidated statement of operations for the six months ended June 30, 2020 .

The goodwill impairment expense was allocated to the Refining segment ( $ 38.1 million ) and to the Retail segment ( $ 29.8 million ).

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The Supply and Offtake Agreements mature on May 31, 2021 and have a one -year extension option upon mutual agreement of the parties.

We are evaluating options to extend or replace the Supply and Offtake Agreements.

Under the Supply and Offtake Agreements, J.

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Aron will remit payments to these third parties for refinery procurement contracts for which we will become immediately obligated to reimburse J.

As of June 30, 2020 , we had no obligations due to J.

As of September 30, 2020 , we had no obligations due to J.

Aron under this contractual undertakings agreement.

On December 5, 2018 , we amended the Supply and Offtake Agreements to account for additional processing capacity to be provided by the Par West Hawaii refinery.

The amendment to the Supply and Offtake Agreements also (i) required us to increase our margin requirements by an aggregate $ 2.5 million by making certain additional margin payments on December 19, 2018 , March 1, 2019 , and June 3, 2019 , and (ii) only allows dividends, payments, or other distributions with respect to any equity interests in Par Hawaii Refining, LLC (“ PHR ”) in limited and restricted circumstances.

During the term of the Supply and Offtake Agreements, J.

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Aron prior to selling the refined products to our retail operations or to third parties.

The agreements also provide for the lease of crude oil and certain refined product storage facilities to J.

Following the expiration or termination of the Supply and Offtake Agreements, we are obligated to purchase the crude oil and refined product inventories then-owned by J.

Aron and located at the leased storage facilities at then-current

The agreements also provide for the lease of crude oil and certain refined product storage

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

market prices.

For the Interim Periods Ended September 30, 2020 and 2019

facilities to J.

Following the expiration or termination of the Supply and Offtake Agreements, we are obligated to purchase the crude oil and refined product inventories then-owned by J.

Aron and located at the leased storage facilities at then-current market prices.

Though title to the crude oil and certain refined product inventories resides with J.

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Aron based on current market prices.

For the three and six months ended June 30, 2020 , we received approximately $ 0.2 million of inventory intermediation benefits and incurred approximately $ 6.7 million of inventory intermediation fees related to the Supply and Offtake Agreements, respectively, which are included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

For the three and six months ended June 30, 2019 , we incurred approximately $ 10.2 million and $ 15.6 million of inventory intermediation fees related to the Supply and Offtake Agreements, respectively.

For the three and six months ended June 30, 2020 , Interest expense and financing costs, net , on our condensed consolidated statements of operations includes approximately $ 0.8 million and $ 2.1 million of expenses related to the Supply and Offtake Agreements, respectively.

For the three and six months ended June 30, 2019 , Interest expense and financing costs, net on our condensed consolidated statements of operations includes approximately $ 1.4 million and $ 3.1 million of expenses related to the Supply and Offtake Agreements, respectively.

For the three and nine months ended September 30, 2020 , we incurred approximately $ 2.2 million and $ 8.9 million of inventory intermediation fees related to the Supply and Offtake Agreements, respectively, which are included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

For the three and nine months ended September 30, 2019 , we incurred approximately $ 9.1 million and $ 24.7 million of inventory intermediation fees related to the Supply and Offtake Agreements, respectively.

For the three and nine months ended September 30, 2020 , Interest expense and financing costs, net , on our condensed consolidated statements of operations includes approximately $ 0.4 million and $ 2.5 million of expenses related to the Supply and Offtake Agreements, respectively.

For the three and nine months ended September 30, 2019 , Interest expense and financing costs, net on our condensed consolidated statements of operations includes approximately $ 1.3 million and $ 4.3 million of expenses related to the Supply and Offtake Agreements, respectively.

The Supply and Offtake Agreements also include a deferred payment arrangement (“Deferred Payment Arrangement”) whereby we can defer payments owed under the agreements up to the lesser of $ 165 million or 85 % of the eligible accounts receivable and inventory.

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Changes in the amount outstanding under the Deferred Payment Arrangement are included within Cash flows from financing activities on the condensed consolidated statements of cash flows.

As of June 30, 2020 and December 31, 2019 , the capacity of the Deferred Payment Arrangement was $ 75.6 million and $ 155.5 million , respectively.

As of June 30, 2020 and December 31, 2019 , we had $ 47.2 million and $ 97.5 million outstanding, respectively, under the Deferred Payment Arrangements.

As of September 30, 2020 and December 31, 2019 , the capacity of the Deferred Payment Arrangement was $ 66.5 million and $ 155.5 million , respectively.

As of September 30, 2020 and December 31, 2019 , we had $ 51.9 million and $ 97.5 million outstanding, respectively, under the Deferred Payment Arrangements.

Under the Supply and Offtake Agreements, we pay or receive certain fees from J.

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Aron was recorded as a reduction to our Obligations under inventory financing agreements as allowed under the Supply and Offtake Agreements.

As of June 30, 2020 and December 31, 2019 , the receivable was $ 1.1 million and $ 0.5 million , respectively.

As of September 30, 2020 and December 31, 2019 , the receivable was $ 0.8 million and $ 0.5 million , respectively.

Washington Refinery Intermediation Agreement

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On November 1, 2019 , we and MLC amended the Washington Refinery Intermediation Agreement and extended the term through June 30, 2021 , with an option for us to early terminate as early as March 31, 2021 .

We are evaluating options to extend or replace the Washington Refinery Intermediation Agreement .

During the remaining term of the Washington Refinery Intermediation Agreement , MLC will make receivable advances to U.S.

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We also agreed to pay an availability fee equal to 1.50 % of the unused capacity under the MLC receivable advances .

As part of the November 1, 2019 amendment, the availability fee was amended to equal 0.75 % of the unused capacity under the MLC receivable advances.

As of June 30, 2020 and December 31, 2019 , our outstanding balance under the MLC receivable advances was equal to our borrowing base of $ 41.6 million and $ 63.8 million , respectively.

Additionally, as of June 30,

As part of the November 1, 2019 amendment, the availability fee was amended to equal 0.75 % of the unused capacity

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

2020 and December 31, 2019 , we had approximately $ 72.2 million and $ 127.2 million in letters of credit outstanding through MLC ’s credit support, respectively.

For the three and six months ended June 30, 2020 , we incurred approximately $ 1.0 million and $ 2.1 million of inventory intermediation fees, respectively, related to the Washington Refinery Intermediation Agreement , which are included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

For the three and six months ended June 30, 2019 , we incurred approximately $ 0.9 million and $ 1.7 million of inventory intermediation fees related to the Washington Refinery Intermediation Agreement , respectively.

For the three and six months ended June 30, 2020 , Interest expense and financing costs, net on our condensed consolidated statements of operations includes approximately $ 0.7 million and $ 1.7 million of expenses related to the Washington Refinery Intermediation Agreement , respectively.

For the three and six months ended June 30, 2019 , Interest expense and financing costs, net on our condensed consolidated statements of operations includes approximately $ 1.5 million and $ 2.8 million of expenses related to the Washington Refinery Intermediation Agreement , respectively.

For the Interim Periods Ended September 30, 2020 and 2019

under the MLC receivable advances.

As of September 30, 2020 and December 31, 2019 , our outstanding balance under the MLC receivable advances was equal to our borrowing base of $ 48.5 million and $ 63.8 million , respectively.

Additionally, as of September 30, 2020 and December 31, 2019 , we had approximately $ 71.3 million and $ 127.2 million in letters of credit outstanding through MLC ’s credit support, respectively.

For the three and nine months ended September 30, 2020 , we incurred approximately $ 1.0 million and $ 3.1 million of inventory intermediation fees, respectively, related to the Washington Refinery Intermediation Agreement , which are included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

For the three and nine months ended September 30, 2019 , we incurred approximately $ 0.9 million and $ 2.7 million of inventory intermediation fees related to the Washington Refinery Intermediation Agreement , respectively.

For the three and nine months ended September 30, 2020 , Interest expense and financing costs, net on our condensed consolidated statements of operations includes approximately $ 0.5 million and $ 2.2 million of expenses related to the Washington Refinery Intermediation Agreement , respectively.

For the three and nine months ended September 30, 2019 , Interest expense and financing costs, net on our condensed consolidated statements of operations includes approximately $ 2.0 million and $ 4.8 million of expenses related to the Washington Refinery Intermediation Agreement , respectively.

The Supply and Offtake Agreements and the Washington Refinery Intermediation Agreement also provide us with the ability to economically hedge price risk on our inventories and crude oil purchases.

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The following table summarizes our outstanding debt (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

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Long-term debt, net of current maturities

As of June 30, 2020 and December 31, 2019 , we had $ 10.7 million and $ 0.2 million in letters of credit outstanding under the ABL Credit Facility , respectively, and $ 3.6 million in cash-collateralized letters of credit and surety bonds outstanding.

As of September 30, 2020 and December 31, 2019 , we had $ 0.1 million and $ 0.2 million in letters of credit outstanding under the ABL Credit Facility , respectively, and $ 3.6 million in cash-collateralized letters of credit and surety bonds outstanding.

Under the ABL Credit Facility , the indentures governing the 7.75% Senior Secured Notes and 12.875% Senior Secured Notes , and the Term Loan B Facility , our subsidiaries are restricted from paying dividends or making other equity distributions, subject to certain exceptions.

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The 7.75% Senior Secured Notes bear interest at a rate of 7.750 % per year (payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2018) and will mature on December 15, 2025 .

ABL Credit Facility

On December 21, 2017 , in connection with the issuance of the 7.75% Senior Secured Notes , Par Petroleum, LLC , Par Hawaii, LLC (“PHL,” formerly known as Par Hawaii, Inc.

and includes the assets previously owned by the dissolved entities Mid

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

Pac Petroleum, LLC and HIE Retail, LLC), Hermes Consolidated, LLC, and Wyoming Pipeline Company (collectively, the “ ABL Borrowers ”), entered into a Loan and Security Agreement dated as of December 21, 2017 (the “ ABL Credit Facility ”) with certain lenders and Bank of America, N.A., as administrative agent and collateral agent.

For the Interim Periods Ended September 30, 2020 and 2019

ABL Credit Facility

On December 21, 2017 , in connection with the issuance of the 7.75% Senior Secured Notes , Par Petroleum, LLC , Par Hawaii, LLC (“PHL,” formerly known as Par Hawaii, Inc.

and includes the assets previously owned by the dissolved entities Mid Pac Petroleum, LLC and HIE Retail, LLC), Hermes Consolidated, LLC, and Wyoming Pipeline Company (collectively, the “ ABL Borrowers ”), entered into a Loan and Security Agreement dated as of December 21, 2017 (the “ ABL Credit Facility ”) with certain lenders and Bank of America, N.A., as administrative agent and collateral agent.

The ABL Credit Facility provides for a revolving credit facility that provides for revolving loans and for the issuance of letters of credit (the “ ABL Revolver ”).

On July 24, 2018 , we amended the ABL Credit Facility to increase the maximum principal amount at any time outstanding of the ABL Revolver by $ 10 million to $ 85 million , subject to a borrowing base.

As of June 30, 2020 , the ABL Revolver had no outstanding balance and a borrowing base of approximately $ 43.3 million .

As of September 30, 2020 , the ABL Revolver had no outstanding balance and a borrowing base of approximately $ 48.8 million .

5.00% Convertible Senior Notes Due 2021

As of June 30, 2020 , the outstanding principal amount of the 5.00% Convertible Senior Notes was $ 48.7 million , the unamortized discount and deferred financing cost was $ 2.7 million , and the carrying amount of the liability component was $ 46.0 million .

As of September 30, 2020 , the outstanding principal amount of the 5.00% Convertible Senior Notes was $ 48.7 million , the unamortized discount and deferred financing cost was $ 2.0 million , and the carrying amount of the liability component was $ 46.6 million .

During May, June, and December 2019, we entered into privately negotiated exchange agreements with a limited number of holders (the “Noteholders”) to repurchase $ 66.3 million in aggregate principal amount of the 5.00% Convertible Senior Notes held by the Noteholders for an aggregate of $ 18.6 million in cash and approximately 3.2 million shares of our common stock with a fair value of $ 74.3 million .

We recognized a loss of approximately $ 3.7 million related to the May and June extinguishments of the repurchased 5.00% Convertible Senior Notes in the six months ended June 30, 2019.

We recognized a loss of approximately $ 3.7 million related to the May and June extinguishments of the repurchased 5.00% Convertible Senior Notes in the nine months ended September 30, 2019.

Term Loan B Facility

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We terminated and repaid all amounts outstanding under the Par Pacific Term Loan Agreement on March 29, 2019 using the proceeds of the Retail Property Term Loan (as defined below).

We recognized approximately $ 0.1 million of debt extinguishment costs related to the unamortized deferred financing costs associated with the Par Pacific Term Loan Agreement in the six months ended June 30, 2019.

Retail Property Term Loan

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

PHL Term Loan

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On June 5, 2020 , the Issuers completed the issuance and sale of $ 105 million in aggregate principal amount of 12.875% Senior Secured Notes in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended.

The net proceeds of $ 99.0 million from the sale will be used for general corporate purposes.

The net proceeds of $ 98.8 million from the sale were used for general corporate purposes.

The 12.875% Senior Secured Notes bear interest at an annual rate of 12.875 % per year (payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2021) and will mature on January 15, 2026 .

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Included within each of our debt agreements are affirmative and negative covenants, and customary cross default provisions, that require the repayment of amounts outstanding on demand unless the triggering payment default or acceleration is remedied, rescinded, or waived.

As of June 30, 2020 , we were in compliance with all of our debt instruments.

As of September 30, 2020 , we were in compliance with all of our debt instruments.

In connection with our shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission (“SEC”) on February 6, 2019 and declared effective on February 15, 2019 (“Registration Statement”), we may sell non-convertible debt securities and other securities in one or more offerings with an aggregate initial offering price of up to $ 750.0 million .

14 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

We have entered into forward purchase contracts for crude oil and forward purchases and sales contracts of refined products.

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Our open futures and OTC swaps expire at various dates through December 2020 .

At June 30, 2020 , our open commodity derivative contracts represented (in thousands of barrels):

At September 30, 2020 , our open commodity derivative contracts represented (in thousands of barrels):

Contract type

At June 30, 2020 , we also had option collars of 75 thousand barrels of crude oil per month that economically hedge our internally consumed fuel at our Hawaii refineries .

These option collars have a weighted-average strike price ranging from a floor of $ 48.77 per barrel to a ceiling of $ 65.00 per barrel and expire in December 2020 .

At September 30, 2020 , we also had option collars of 75 thousand barrels of crude oil per month that expire in December 2020 and 25 thousand barrels of crude oil per month that commence in January 2021 and expire in December 2021 to economically hedge our internally consumed fuel at our Hawaii refineries .

These option collars have a weighted-average strike price ranging from a floor of $ 48.77 per barrel to a ceiling of $ 65.00 per barrel and from a floor of $ 36.50 per barrel to a ceiling of $ 60.00 per barrel, respectively.

Interest Rate Derivatives

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We may utilize interest rate swaps to manage our interest rate risk.

As of June 30, 2020 , we had entered into an interest rate swap at an average fixed rate of 3.91 % in exchange for the floating interest rate and on the notional amounts due under the Retail Property Term Loan .

As of September 30, 2020 , we had entered into an interest rate swap at an average fixed rate of 3.91 % in exchange for the floating interest rate and on the notional amounts due under the Retail Property Term Loan .

This swap expires on April 1, 2024 , the maturity date of the Retail Property Term Loan .

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As such, we have accounted for this embedded derivative at fair value with changes in the fair value recorded in Interest expense and financing costs, net , on our condensed consolidated statements of operations.

As of June 30, 2020 , this embedded derivative was deemed to have a de minimis fair value.

The following table provides information on the fair value amounts (in thousands) of these derivatives as of June 30, 2020 and December 31, 2019 and their placement within our condensed consolidated balance sheets.

As of September 30, 2020 , this embedded derivative was deemed to have a de minimis fair value.

The following table provides information on the fair value amounts (in thousands) of these derivatives as of September 30, 2020 and December 31, 2019 and their placement within our condensed consolidated balance sheets.

Balance Sheet Location

June 30, 2020

September 30, 2020

December 31, 2019

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_________________________________________________________

Does not include cash collateral of $ 2.7 million and $ 10.3 million recorded in Prepaid and other current assets and $ 9.5 million and $ 9.5 million in Other long-term assets as of June 30, 2020 and December 31, 2019 , respectively.

Does not include cash collateral of $ 3.0 million and $ 10.3 million recorded in Prepaid and other current assets and $ 9.5 million and $ 9.5 million in Other long-term assets as of September 30, 2020 and December 31, 2019 , respectively.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

The following table summarizes the pre-tax gains (losses) recognized in Net income (loss) on our condensed consolidated statements of operations resulting from changes in fair value of derivative instruments not designated as hedges charged directly to earnings (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Statement of Operations Location

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As a result of this cashless transaction, 350,542 shares of common stock were issued.

As of June 30, 2020 , we had no common stock warrants outstanding.

As of September 30, 2020 , we had no common stock warrants outstanding.

Derivative Instruments

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Aron and MLC settlement prices are based on observable inputs, such as Brent/WTI indices, and contractual price differentials as defined in the Supply and Offtake Agreements and Washington Refinery Intermediation Agreement .

Such contractual differentials vary by location and by the type of product and range from a discount of $ 11.73 per barrel to a premium of $ 34.72 per barrel as of June 30, 2020 .

Such contractual differentials vary by location and by the type of product and range from a discount of $ 6.05 per barrel to a premium of $ 15.43 per barrel as of September 30, 2020 .

Contractual price differentials are considered unobservable inputs;

therefore, these embedded derivatives are classified as Level 3 instruments.

We do not have other commodity derivatives classified as Level 3 at June 30, 2020 or December 31, 2019 .

We do not have other commodity derivatives classified as Level 3 at September 30, 2020 or December 31, 2019 .

Please read Note 11—Derivatives for further information on derivatives.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

Financial Statement Impact

Fair value amounts by hierarchy level as of June 30, 2020 and December 31, 2019 are presented gross in the tables below (in thousands):

June 30, 2020

Fair value amounts by hierarchy level as of September 30, 2020 and December 31, 2019 are presented gross in the tables below (in thousands):

September 30, 2020

Gross Fair Value

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_________________________________________________________

Does not include cash collateral of $ 12.2 million and $ 19.8 million as of June 30, 2020 and December 31, 2019 , respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

Does not include cash collateral of $ 12.5 million and $ 19.8 million as of September 30, 2020 and December 31, 2019 , respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

A roll forward of Level 3 derivative instruments measured at fair value on a recurring basis is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Balance, at beginning of period

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Balance, at end of period

The carrying value and fair value of long-term debt and other financial instruments as of June 30, 2020 and December 31, 2019 are as follows (in thousands):

June 30, 2020

The carrying value and fair value of long-term debt and other financial instruments as of September 30, 2020 and December 31, 2019 are as follows (in thousands):

September 30, 2020

Carrying Value

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The fair value of the liability component of the 5.00% Convertible Senior Notes was determined using a discounted cash flow analysis in which the projected interest and principal payments were discounted at an estimated market yield for a similar debt instrument without the conversion feature.

The equity component was estimated based on the Black-Scholes model for a call option with strike price equal to the conversion price, a term matching the remaining life of the 5.00% Convertible Senior Notes , and an implied volatility based on market values of options outstanding as of June 30, 2020 .

The fair value of the 5.00% Convertible Senior Notes is considered a Level 2 measurement in the fair value hierarchy.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

inputs within the fair value hierarchy because the 7.75% Senior Secured Notes , Term Loan B Facility, and 12.875% Senior Secured Notes may not be actively traded.

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The Mid Pac Term Loan and PHL Term Loan are subject to fixed interest rates of 4.375 % and 2.750 % , respectively.

The carrying values of our Retail Property, Mid Pac, and PHL Term Loans were determined to approximate fair value as of June 30, 2020 and December 31, 2019 .

The carrying values of our Retail Property, Mid Pac, and PHL Term Loans were determined to approximate fair value as of September 30, 2020 and December 31, 2019 .

The fair value of all non-derivative financial instruments recorded in current assets, including cash and cash equivalents, restricted cash, and trade accounts receivable, and current liabilities, including accounts payable, approximate their carrying value due to their short-term nature.

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There are no material lease arrangements where we are the lessor and no material residual value guarantees associated with any of our leases.

The following table provides information on the amounts (in thousands, except lease term and discount rates) of our right-of-use assets (“ROU assets”) and liabilities as of June 30, 2020 and December 31, 2019 and their placement within our condensed consolidated balance sheets:

The following table provides information on the amounts (in thousands, except lease term and discount rates) of our right-of-use assets (“ROU assets”) and liabilities as of September 30, 2020 and December 31, 2019 and their placement within our condensed consolidated balance sheets:

Balance Sheet Location

June 30, 2020

September 30, 2020

December 31, 2019

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

The following table summarizes the lease costs recognized in our condensed consolidated statements of operations (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Lease cost type

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The following table summarizes the supplemental cash flow information related to leases as follows (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of liabilities

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ROU assets terminated in exchange for release from operating lease liabilities

The table below includes the estimated future undiscounted cash flows for finance and operating leases as of June 30, 2020 (in thousands):

The table below includes the estimated future undiscounted cash flows for finance and operating leases as of September 30, 2020 (in thousands):

For the year ending December 31,

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_________________________________________________________

Represents period from July 1, 2020 to December 31, 2020 .

Additionally, the Company has $ 8.8 million and $ 1.2 million in future undiscounted cash flows for multiple operating leases and three finance leases that have not yet commenced, respectively.

Represents period from October 1, 2020 to December 31, 2020 .

Additionally, the Company has $ 8.9 million and $ 1.1 million in future undiscounted cash flows for operating leases and finance leases that have not yet commenced, respectively.

These leases are expected to commence when the lessor has made the equipment or location available to the Company to operate or begin construction, respectively.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

Note 14 — Commitments and Contingencies

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These governmental entities may also propose or assess fines or require corrective actions for these asserted violations.

For example, on September 30, 2020, we entered into a consent agreement with the U.S.

Environmental Protection Agency (“EPA”) stemming from the EPA’s claim that we failed to comply with certain statutorily required operating procedures and management system and process safety requirements at our Par West refinery.

As a result of that consent agreement, we agreed to pay the EPA a penalty of $ 123,461 .

We intend to respond in a timely manner to all such communications and to take appropriate corrective action.

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Wyoming Refinery

Our Wyoming refinery is subject to a number of consent decrees, orders, and settlement agreements involving the U.S.

Environmental Protection Agency (“EPA”) and/or the Wyoming Department of Environmental Quality, some of which date back to the late 1970s and several of which remain in effect, requiring further actions at the Wyoming refinery.

Our Wyoming refinery is subject to a number of consent decrees, orders, and settlement agreements involving the EPA and/or the Wyoming Department of Environmental Quality, some of which date back to the late 1970s and several of which remain in effect, requiring further actions at the Wyoming refinery.

The largest cost component arising from these various decrees relates to the investigation, monitoring, and remediation of soil, groundwater, surface water, and sediment contamination associated with the facility’s historic operations.

Investigative work by Hermes Consolidated LLC, and its wholly owned subsidiary, Wyoming Pipeline Company (collectively, “WRC” or “Wyoming Refining”) and negotiations with the relevant agencies as to remedial approaches remain ongoing on a number of aspects of the contamination, meaning that investigation, monitoring, and remediation costs are not reasonably estimable for some elements of these efforts.

As of June 30, 2020 , we have accrued $ 16.0 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years .

As of September 30, 2020 , we have accrued $ 15.8 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years .

Additionally, we believe the Wyoming refinery will need to modify or close a series of wastewater impoundments in the next several years and replace those impoundments with a new wastewater treatment system.

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Any such controls could result in material increased compliance costs, additional operating restrictions for our business, and an increase in the cost of the products we produce, which could have a material adverse effect on our financial condition, results of operations, or cash flows.

Additionally, the EPA ’s final rule updating standards that control toxic air emissions from petroleum refineries imposed additional controls and monitoring requirements on flaring operations, storage tanks, sulfur recovery units, delayed coking units, and required fenceline monitoring.

Compliance with this rule has not had a material impact on our financial condition, results of operations, or cash flows to date.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

and required fenceline monitoring.

Compliance with this rule has not had a material impact on our financial condition, results of operations, or cash flows to date.

In 2007, the State of Hawaii passed Act 234, which required that GHG emissions be rolled back on a statewide basis to 1990 levels by the year 2020.

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The regulation allows for “partnering” with other facilities (principally power plants) that have already dramatically reduced greenhouse emissions or are on schedule to reduce CO 2 emissions in order to comply independently with the state’s Renewable Portfolio Standards.

The DOH’s GHG regulation allows, and the Hawaii refineries submitted, a GHG reduction plan, which includes an assessment of alternatives which demonstrates that additional reductions are not cost-effective or necessary because the State of Hawaii has already reached the 1990 levels according to a report prepared by the DOH in January 2019.

Accordingly, our Hawaii refineries submitted a GHG reduction plan that incorporates the partnering provisions and demonstrates that additional reductions are not cost-effective or necessary because of the Hawaii refineries’ shared baseline allocation and because the State of Hawaii has already reached the 1990 levels according to a report prepared by the DOH in January 2019.

In 2007, the U.S.

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and foreign-flagged ships.

Although the marine fuel regulations provided vessel operators with a few compliance options such as installation of on-board pollution controls and demonstration unavailability, many vessel operators will be forced to switch to a distillate fuel while operating within the Emission Control Area (“ECA”).

Beyond the 200 mile ECA, large ocean vessels are still allowed to burn marine fuel with up to 3.5% sulfur.

Our Hawaii refineries are capable of producing the 1% sulfur residual fuel oil that was previously required within the ECA.

Although our Hawaii refineries remain in a position to supply vessels traveling to and through Hawaii, the market for 0.1% sulfur distillate fuel and 3.5% sulfur residual fuel is much more competitive.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

to a distillate fuel while operating within the Emission Control Area (“ECA”).

Beyond the 200 mile ECA, large ocean vessels are still allowed to burn marine fuel with up to 3.5% sulfur.

Our Hawaii refineries are capable of producing the 1% sulfur residual fuel oil that was previously required within the ECA.

In addition to U.S.

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On February 27, 2018, the Bankruptcy Court entered its final decree closing the Chapter 11 bankruptcy cases of Delta and the other Debtors, discharging the trustee for the General Trust, and finding that all assets of the General Trust were resolved, abandoned, or liquidated and have been distributed in accordance with the requirements of the Plan.

In addition, the final decree required the Company or the General Trust, as applicable, to maintain the current accruals owed on account of the remaining claims of the U.S.

Government and Noble Energy, Inc.

In addition, the final decree

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

As of June 30, 2020 , two related claims totaling approximately $ 22.4 million remained to be resolved and we have accrued approximately $ 0.5 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end.

For the Interim Periods Ended September 30, 2020 and 2019

required the Company or the General Trust, as applicable, to maintain the current accruals owed on account of the remaining claims of the U.S.

Government and Noble Energy, Inc.

As of September 30, 2020 , two related claims totaling approximately $ 22.4 million remained to be resolved and we have accrued approximately $ 0.5 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end.

One of the two remaining claims was filed by the U.S.

8 unchanged sentences

2012 Long-term Incentive Plan and Stock Purchase Plan (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Restricted Stock Awards

1 unchanged sentence

Stock Option Awards

During the three and six months ended June 30, 2020 , we granted 28 thousand and 288 thousand shares of restricted stock and restricted stock units with a fair value of approximately $ 0.1 million and $ 5.3 million , respectively.

As of June 30, 2020 , there were approximately $ 9.3 million of total unrecognized compensation costs related to restricted stock awards and restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.9 years .

During the six months ended June 30, 2020 , we granted 279 thousand stock option awards with a weighted-average exercise price of $ 19.73 per share and no grants were made for the three months ended June 30, 2020 .

As of June 30, 2020 , there were approximately $ 3.7 million of total unrecognized compensation costs related to stock option awards, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.8 years .

During the six months ended June 30, 2020 , we granted 47 thousand performance restricted stock units to executive officers and no grants were made for the three months ended June 30, 2020 .

During the three and nine months ended September 30, 2020 , we granted 22 thousand and 310 thousand shares of restricted stock and restricted stock units with a fair value of approximately $ 0.2 million and $ 5.5 million , respectively.

As of September 30, 2020 , there were approximately $ 8.3 million of total unrecognized compensation costs related to restricted stock awards and restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.8 years .

During the nine months ended September 30, 2020 , we granted 279 thousand stock option awards with a weighted-average exercise price of $ 19.73 per share and no grants were made for the three months ended September 30, 2020 .

As of September 30, 2020 , there were approximately $ 3.2 million of total unrecognized compensation costs related to stock option awards, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.7 years .

During the nine months ended September 30, 2020 , we granted 47 thousand performance restricted stock units to executive officers and no grants were made for the three months ended September 30, 2020 .

These performance restricted stock units had a fair value of approximately $ 0.9 million and are subject to certain annual performance targets based on three-year-performance periods as defined by our Board of Directors.

As of June 30, 2020 , there were approximately $ 1.4 million of total unrecognized compensation costs related to the performance restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 2.1 years .

As of September 30, 2020 , there were approximately $ 1.2 million of total unrecognized compensation costs related to the performance restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.9 years .

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

Note 16 — Income (Loss) per Share

Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the sum of the weighted-average number of common shares outstanding and the weighted-average number of shares issuable under the common stock warrants, representing 161 thousand shares during the six months ended June 30, 2020 and 354 thousand shares during the three and six months ended June 30, 2019 , respectively.

Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the sum of the weighted-average number of common shares outstanding and the weighted-average number of shares issuable under the common stock warrants, representing 82 thousand shares during the nine months ended September 30, 2020 and 354 thousand shares during the three and nine months ended September 30, 2019 , respectively.

The common stock warrants are included in the calculation of basic income (loss) per share because they were issuable for minimal consideration.

1 unchanged sentence

The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss)

9 unchanged sentences

________________________________________________________

Participating securities include restricted stock that had been issued but has not yet vested during the three and six months ended June 30, 2019 .

Participating securities include restricted stock that had been issued but had not yet vested during the three and nine months ended September 30, 2019 .

These participating securities were fully vested as of December 31, 2019 .

Entities with a net loss from continuing operations are prohibited from including potential common shares in the computation of diluted per share amounts.

We have utilized the basic shares outstanding to calculate both basic and diluted loss per common share for the three and six months ended June 30, 2020 .

For each of the three and six months ended June 30, 2019 , our calculation of diluted shares outstanding excluded 8 thousand shares of unvested restricted stock.

Additionally, the calculation of diluted shares outstanding for the three and six months ended June 30, 2019 excluded 1.9 million and 1.8 million stock options, respectively.

We have utilized the basic shares outstanding to calculate both basic and diluted loss per common share for the three and nine months ended September 30, 2020 and the three months September 30, 2019.

For the nine months ended September 30, 2019 , our calculation of diluted shares outstanding excluded 160 thousand shares of unvested restricted stock and 1.8 million stock options.

As discussed in Note 10—Debt , we have the option of settling the 5.00% Convertible Senior Notes in cash or shares of common stock, or any combination thereof, upon conversion.

For the three and six months ended June 30, 2019 , diluted income per share was determined using the if-converted method.

Our calculation of diluted shares outstanding for the three months ended June 30, 2019 excluded 5.6 million common stock equivalents, as the effect would be anti-dilutive.

For the nine months ended September 30, 2019 , diluted income per share was determined using the if-converted method.

Our calculation of diluted shares outstanding for the nine months ended September 30, 2019 excluded 5.5 million common stock equivalents, respectively, as the effect would be anti-dilutive.

Note 17 — Income Taxes

1 unchanged sentence

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management continues to conclude that we did not meet the “more likely than not” requirement in order to recognize deferred tax assets on the remaining amounts and a valuation allowance has been recorded for substantially all of our net deferred tax assets at June 30, 2020 and December 31, 2019 .

We believe that any adjustment to our uncertain tax positions would no t have a material impact on our financial statements given the Company’s deferred tax and corresponding valuation allowance position as of June 30, 2020 and December 31, 2019 .

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

For the Interim Periods Ended September 30, 2020 and 2019

As of December 31, 2019 , we had approximately $ 1.4 billion in net operating loss carryforwards (“NOL carryforwards”);

8 unchanged sentences

Summarized financial information concerning reportable segments consists of the following (in thousands):

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Corporate, Eliminations and Other (1)

9 unchanged sentences

Loss before income taxes

Income tax benefit

Income tax expense

Capital expenditures

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

Three Months Ended June 30, 2019

For the Interim Periods Ended September 30, 2020 and 2019

Three Months Ended September 30, 2019

Corporate, Eliminations and Other (1)

6 unchanged sentences

Interest expense and financing costs, net

Debt extinguishment and commitment costs

Other income, net

Change in value of common stock warrants

Equity earnings from Laramie Energy, LLC

Income before income taxes

Equity losses from Laramie Energy, LLC

Loss before income taxes

Income tax benefit

1 unchanged sentence

________________________________________________________

Includes eliminations of intersegment revenues and cost of revenues of $ 61.8 million and $ 109.0 million for the three months ended June 30, 2020 and 2019 , respectively.

Six Months Ended June 30, 2020

Includes eliminations of intersegment revenues and cost of revenues of $ 69.9 million and $ 107.2 million for the three months ended September 30, 2020 and 2019 , respectively.

Nine Months Ended September 30, 2020

Corporate, Eliminations and Other (1)

16 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2020 and 2019

Six Months Ended June 30, 2019

For the Interim Periods Ended September 30, 2020 and 2019

Nine Months Ended September 30, 2019

Corporate, Eliminations and Other (1)

9 unchanged sentences

Change in value of common stock warrants

Equity earnings from Laramie Energy, LLC

Income before income taxes

Equity losses from Laramie Energy, LLC

Loss before income taxes

Income tax benefit

1 unchanged sentence

________________________________________________________

Includes eliminations of intersegment revenues and cost of revenues of $ 167.8 million and $ 208.8 million for the six months ended June 30, 2020 and 2019 , respectively.

Includes eliminations of intersegment revenues and cost of revenues of $ 237.7 million and $ 316.0 million for the nine months ended September 30, 2020 and 2019 , respectively.

Note 19 — Related Party Transactions

5 unchanged sentences

The Services Agreement has a term of one year and will be automatically extended for successive one -year periods unless terminated by either party at least 60 days prior to any extension date.

There were no costs incurred related to this agreement during the three and six months ended June 30, 2020 or 2019 .

There were no costs incurred related to this agreement during the three and nine months ended September 30, 2020 or 2019 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements