What changed in this filing

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Item 1A. Risk Factors

2021-03-08 compared with 2020-03-02 · 86 added, 78 removed, 333 unchanged (33% of the section changed)

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Any of these risks, such as fires, explosions, maritime disasters, security breaches, pipeline ruptures and spills, mechanical failure of equipment, and severe weather and natural disasters at our or third-party facilities could result in business interruptions or shutdowns and damage to our properties and the properties of others.

The scientific consensus suggests that some of these physical risks to our facilities and third party facilities, especially risks associated with extreme weather, may increase as a result of climate change.

A serious accident at our facilities could also result in serious injury or death to our employees or contractors and could expose us to significant liability for personal injury claims and reputational risk.

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• weather conditions, hurricanes, or other natural disasters.

For example, the Organization of the Petroleum Exporting Countries, or OPEC, has periodically cut production to support crude oil prices.

For example, the COVID-19 pandemic has resulted in significant demand reduction for crude oil and refined products, particularly in the Hawaii market, and abnormal volatility in oil commodity prices, which may continue for the foreseeable future.

In addition, the Organization of the Petroleum Exporting Countries (“OPEC”) has agreed to adjust downwards their overall production of crude oil through April 30, 2022, with the agreement to be reassessed in December 2021, to support crude oil prices.

And the Alberta government has previously mandated crude oil production cuts in a region where our Washington refinery sources crude oil.

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Price level changes during the periods between purchasing and selling these refined products could also have a material adverse effect on our business, financial condition, and results of operations.

Our business, financial condition, results of operations, and liquidity have been adversely affected by the COVID-19 pandemic that has caused, and is expected to continue to cause, the global slowdown of economic activity (including the decrease in demand for crude oil and the refined products that we produce and sell), disruptions in global supply chains,

and significant volatility and disruption of financial markets and that also has adversely affected workforces, customers, and regional and local economies.

Because the severity, magnitude, and duration of the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing, and difficult to predict, the impact on our business, results of operations, financial condition, and liquidity remains uncertain and difficult to predict.

As a result of the COVID-19 pandemic and the accompanying significant demand reduction for crude oil and refined products, particularly in the Hawaii market, our revenues have decreased from $5.4 billion in the year ended December 31, 2019 to $3.1 billion in the year ended December 31, 2020.

The ultimate impact of the COVID-19 pandemic on our results of operations and financial condition remains uncertain and depends on numerous evolving factors, many of which are not within our control, and which we may not be able to effectively respond to, including, but not limited to:

governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic (including restrictions on travel and transport, workforce pressures and social distancing, and stay-at-home orders);

the effect of the pandemic on economic activity and actions taken in response;

the effect on our customers and their demand for our products;

the effect of the pandemic on the creditworthiness of our customers;

national or global supply chain challenges or disruption;

workforce availability;

facility closures;

commodity cost volatility;

general economic uncertainty in key global markets and financial market volatility and ability to access capital markets;

global economic conditions and levels of economic growth;

and the pace of recovery when the COVID-19 pandemic subsides, as well as response to a potential reoccurrence.

Further, the COVID-19 pandemic, and the volatile regional and global economic conditions stemming from the pandemic, could also precipitate or aggravate the other risk factors that we identify in this Annual Report on Form 10-K, which could materially adversely affect our business, financial condition, results of operations (including revenues and profitability), and liquidity and/or stock price.

Additionally, COVID-19 may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

Instability in the global economic and political environment can lead to volatility in the cost and availability of crude oil and prices for refined products, which could adversely impact our results of operations.

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The integrity and protection of our customer, employee, and company data is critical to our business.

Our information systems are subject to damage or interruption from a number of potential sources including natural disasters, software viruses or other malware, power failures, cyber attacks, and other events.

Our information systems are subject to damage or interruption from a number of potential sources including natural disasters, ransomware, software viruses or other malware, power failures, cyber attacks, and other events.

To the extent that these information systems are under our control, we have implemented measures, such as virus protection software and intrusion detection systems, to address the outlined risks.

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Finally, federal legislation relating to cyber security threats could impose additional requirements on our operations.

Through our investment in Laramie Energy, we are subject to all of the risks of natural gas and oil exploration and production, but we lack the ability to control Laramie Energy’s operations.

Through our investment in Laramie Energy, we are subject to all of the risks of natural gas and oil exploration and production, but we lack the ability to control Laramie Energy’s operations and our ability to extract value is limited.

Through our investment in Laramie Energy, we are exposed to all of the risks inherent in natural gas and oil exploration and production, including the risks that:

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compliance with environmental and other governmental regulatory or legislative requirements could result in increased costs of operation or curtailment, delay, or cancellation of development and producing operations;

a decline in demand for natural gas and oil could adversely affect our financial condition and results of operations.

Our ability to extract value from our investment in Laramie Energy is limited.

The ability of Laramie Energy to make distributions to its owners, including us, is currently prohibited by the terms of Laramie Energy’s credit facility and the terms of its limited liability company agreement.

Further, if Laramie is not able to negotiate an extension on the maturity date of its credit facility, currently set to mature in December 2020, Laramie’s independent auditor’s opinion may contain a going concern qualification, which means that Laramie’s auditor believes there is substantial doubt that Laramie can continue as an on-going business for the next 12 months without such extension or additional financing.

Information concerning our natural gas and oil reserves is uncertain.

There are numerous uncertainties inherent in estimating quantities of proved reserves and cash flows from such reserves, including factors beyond our control.

Reserve engineering is a subjective process of estimating underground accumulations of natural gas and crude oil that cannot be measured in an exact manner.

The accuracy of an estimate of quantities of natural gas and crude oil reserves, or of cash flows attributable to such reserves, is a function of the available data, assumptions regarding future natural gas and crude oil prices, availability and terms of financing, expenditures for future development and exploitation activities, and engineering and geological interpretation and judgment.

Reserves and future cash flows may also be subject to material downward or upward revisions based upon production history, development and exploitation activities, natural gas and crude oil prices, and regulatory changes.

Actual future production, revenue, taxes, development expenditures, operating expenses, quantities of recoverable reserves, and value of cash flows from those reserves may vary significantly from our assumptions and estimates.

In addition, reserve engineers may make different estimates of reserves and cash flows based on the same data.

These uncertainties may inhibit our ability to finance development of our reserves in the future.

The estimated quantities of proved reserves and the discounted present value of future net cash flows attributable to those reserves as of December 31, 2019 , included herein, were prepared by independent reserve engineers in accordance with the rules of the SEC and are not intended to represent the fair market value of such reserves.

As required by the SEC, the estimated discounted present value of future net cash flows from proved reserves is generally based on prices and costs on the date of the estimate, while

actual future prices and costs may be materially higher or lower.

In addition, the 10% discount factor the SEC requires to be used to calculate discounted future net revenues for reporting purposes is not necessarily the most appropriate discount factor based on the cost of capital in effect from time to time and risks associated with our business and the natural gas and oil industry in general.

Under current SEC requirements, subject to limited exceptions, proved undeveloped reserves may only be booked if they relate to wells scheduled to be drilled and developed within five years of the date of booking.

This rule may limit our potential to book additional proved undeveloped reserves we own indirectly through our equity investment in Laramie Energy.

Moreover, we may be required to write down our proved undeveloped reserves we own indirectly through our equity investment in Laramie Energy, or we may be required to write down previously disclosed proved undeveloped reserves, if Laramie Energy does not drill and develop those reserves within the required five-year time frame.

and a decline in demand for natural gas and oil could adversely affect our financial condition and results of operations.

Additionally, the ability of Laramie Energy to make distributions to its owners, including us, is currently prohibited by the terms of Laramie Energy’s credit facility and the terms of its limited liability company agreement.

REGULATORY RISK

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Renewable fuels mandates may reduce demand for the petroleum fuels we produce, which could have a material adverse effect on our business results of operations and financial condition.

The EPA has issued RFS mandates, requiring refiners such as us to blend renewable fuels into the petroleum fuels we produce and sell in the U.S.

During 2019, we received a $3.4 million and $1.9 million benefit and incurred a $5.7 million expense for RINs purchases for our Hawaii, Wyoming, and Washington refineries, respectively.

On December 19, 2019, the EPA issued final volume mandates for the year 2020 and biomass-based diesel for 2021.

All but biomass-based diesel are below the statutory mandates, with biomass-based diesel significantly greater than the statutory floor of 1.0 billion gallons.

We expect to incur costs of approximately $10 to $20 million due to renewable volume obligations in 2020 for our refineries, which amount will be offset by RINs generated by our refineries to the extent we blend renewable fuels into our fuels.

The RFS program sets annual quotas for the quantity of renewable fuels that must be blended into transportation fuels consumed in the U.S.

A RIN is assigned to each gallon of renewable fuel produced in or imported into the U.S.

As a producer of petroleum-based transportation fuels, we are obligated to blend renewable fuels into the petroleum fuels we produce and sell in the U.S.

To the extent we do not, we are required to purchase RINs in the market to satisfy our obligations under the RFS program.

During 2020, we incurred $107.2 million of RINs expense for our Hawaii, Wyoming, and Washington refineries.

The EPA did not meet its November 30, 2020 statutory deadline to set 2021 renewable volume obligations (“RVO”), and to date, has not issued a proposed rule for the 2021 RVO other than biomass-based diesel.

While there are statutory targets still in place, the ultimate RVO for 2021 and the potential associated expense remain uncertain until the RVO is set.

In addition, as a result of the annual volume mandates, we may experience a decrease in demand for refined products due to refined products being replaced by renewable fuels.

Ongoing litigation regarding the standards for 2017, 2018, and 2019 creates some potential that the final volumes of renewable fuels that the EPA established will be revised for one or more of those years.

We are exposed to the volatility in the market price of RINs and are unable to predict the future prices of RINs.

RINs prices are dependent upon a variety of factors, including EPA regulations, the availability of RINs for purchase, and levels of transportation fuels produced, which can vary significantly from quarter to quarter.

The ultimate outcome of the 2021 RVO rule will also likely affect RIN prices.

If sufficient RINs are unavailable for purchase, if we have to pay a significantly higher price for RINs, or if we are otherwise unable to meet the EPA’s RFS mandates, our results of operations and cash flows could be adversely affected.

The current administration has also been critical of exemptions from the RFS mandates granted to small

refineries during the previous administration.

While litigation over the issue is currently before the U.S.

Supreme Court, the EPA under the current administration may be less willing to grant such waivers going forward and may increase the RVO in future years.

To the extent fewer waivers are granted in the future or the RVO is increased, the demand for and the price of RINs would likely also increase, and our results of operations and cash flows could be adversely affected.

Ongoing litigation and regulatory activity regarding the standards for 2016, 2017, 2018, 2019, and 2020 creates some potential that the final volumes of renewable fuels that the EPA established will be revised for one or more of those years.

In addition, the EPA is considering changes to the existing RFS program regulations and other regulatory initiatives under the RFS program that could impact future standards.

Although uncertain, any of these events may cause the price of RINs to rise and result in additional costs in connection with RFS compliance for 2017, 2018, and 2019, costs that exceed our estimates in connection with RFS compliance for 2020, and/or increased compliance costs in future years.

Although uncertain, any of these events may cause the price of RINs to rise and result in additional costs in connection with RFS compliance for prior years, costs that exceed our estimates in connection with RFS compliance for 2021, and/or increased compliance costs in future years.

Such increased costs could be material and may have a material adverse impact on our business, financial condition, and results of operations.

Finally, while there is no current regulatory standard that authenticates RINs that may be purchased on the open market from third parties, we believe that the RINs we purchase are from reputable sources, are valid, and serve to demonstrate compliance with applicable RFS requirements.

All RIN transactions are recorded in the EPA Moderated Transaction System (“EMTS”).

Under this system, purchasers of RINs are required to self-certify their validity without verification by the EPA, and are responsible for any invalid RINs submitted to the EPA for compliance.

We believe that the RINs we purchase are from reputable sources, are valid, and serve to demonstrate compliance with applicable RFS requirements.

However, if this belief proves incorrect and the RINs that we purchase are not valid or in compliance with applicable RFS requirements, our financial condition and cash flows may be adversely affected.

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in April 2016, requires countries to review and “represent a progression” in their intended nationally determined contributions (which set GHG emission reduction goals) every five years beginning in 2020.

In November 2019, the current U.S.

administration served notice on the United Nations that the U.S.

would withdraw from the Paris Agreement in 2020.

There are no guarantees that the Paris Agreement will not be re-implemented in the U.S.

or re-implemented in part by specific U.S.

states or local governments.

In November 2020, the United States’ previously-announced withdrawal from the Paris Agreement became effective.

On January 20, 2021, President Biden announced that the United States would be reentering the Paris Agreement.

This reentry became effective on February 19, 2021.

Restrictions on emissions of methane or carbon dioxide that have been or may be imposed in various U.S.

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Facilities required to obtain PSD permits for their GHG emissions will also be required to meet “best available control technology” standards, which will be established by the states or, in some instances, by the EPA on a case-by-case basis.

In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified large GHG emission sources in the U.S., including petroleum refineries and certain onshore petroleum and natural gas production activities, on an annual basis.

In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified large GHG emission sources in the U.S.,

including petroleum refineries and certain onshore petroleum and natural gas production activities, on an annual basis.

We monitor for GHG emissions at our refineries and believe we are in substantial compliance with the applicable GHG reporting requirements.

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Other states, including Washington, are proposing, or have already promulgated, low carbon fuel standards or similar initiatives to reduce emissions from the transportation sector.

We could also face increased climate-related litigation with respect

to our operations or products.

If we are unable to pass the costs of compliance on to our customers, sufficient credits are unavailable for purchase, we have to pay a significantly higher price for credits, or if we are otherwise unable to meet our compliance obligation, our financial condition and results of operations could be adversely affected.

We could also face increased climate-related litigation with respect to our operations or products.

If we are unable to pass the costs of compliance on to our customers, sufficient credits are unavailable for purchase, we have to pay a significantly higher price for credits, or we are otherwise unable to meet our compliance obligation, our financial condition and results of operations could be adversely affected.

Federal, regional, and state climate change and air emissions goals and regulatory programs are complex, subject to change, and create uncertainty due to a number of factors including technological feasibility, legal challenges, and potential changes in federal policy.

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New regulations or changes in existing regulations could result in increased compliance expenditures.

For example, in 2019 Washington enacted a law that limits crude oil by rail deliveries through a cap on off-loadings from existing facilities and new specifications regarding the vapor pressure of crudes permitted to be shipped through the state.

These or other regulations that require the reduction of volatile or flammable constituents in crude oil that is transported by rail, change the design or standards for rail cars used to transport the crude oil we purchase, change the routing or scheduling of trains carrying crude oil, or require any other changes that detrimentally affect the economics of delivering North American crude oil by rail, could increase the time required to move crude oil from production areas to our refineries, increase the cost of rail transportation, and decrease the efficiency of shipments of crude oil by rail within our operations.

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Investigative work by 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 December 31, 2019 , we have accrued $16.5 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 December 31, 2020, we have accrued $16.3 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 to replace those impoundments with a new wastewater treatment system.

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We may incur significant costs and liabilities resulting from performance of pipeline integrity programs and related repairs.

PHMSA has established a series of rules requiring pipeline operators to develop and implement integrity management programs for hazardous liquid pipelines that, in the event of a pipeline leak or rupture, could affect high consequence areas (“HCAs”), which are areas where a release could have the most significant adverse consequences, including high-population areas, certain drinking water sources, and unusually sensitive ecological areas.

Pipeline and Hazardous Materials Safety Administration (“PHMSA”) has established a series of rules requiring pipeline operators to develop and implement integrity management programs for hazardous liquid pipelines that, in the event of a pipeline leak or rupture, could affect high consequence areas (“HCAs”), which are areas where a release could have the most significant adverse consequences, including high-population areas, certain drinking water sources, and unusually sensitive ecological areas.

These regulations require operators of covered pipelines to:

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As a result, we are more susceptible to regional economic conditions than the operations of more geographically diversified competitors and any unforeseen events or circumstances that affect our operating areas could also materially adversely affect our revenues and our business and operating results.

These factors include, among other things, changes in the economy, weather conditions, demographics and population, increased supply of refined products from competitors, and reductions in the supply of crude oil.

These factors include, among other things, changes in the economy, weather conditions, demographics and population, refined product mix demand, increased supply of refined products from competitors, and reductions in the supply of crude oil.

We must make substantial capital expenditures at our refineries and related assets to maintain their reliability and efficiency.

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Unlike these oil companies, we must purchase all of our crude oil from unaffiliated sources.

Because these oil companies benefit from increased commodity

prices, have greater access to capital, and have stronger capital structures, they are able to better withstand poor and volatile market conditions, such as a lower refining margin environment, shortages of crude oil and other feedstocks, or extreme price fluctuations.

Because these oil companies benefit from increased commodity prices, have greater access to capital, and have stronger capital structures, they are able to better withstand poor and volatile market conditions, such as a lower refining margin environment, shortages of crude oil and other feedstocks, or extreme price fluctuations.

Additionally, non-traditional retailers such as supermarkets, club stores, and mass merchants are also in the retail business, and these non-traditional gasoline retailers have obtained a significant share of the transportation fuels market.

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Aron will own all of the crude oil in our tanks and substantially all of our refined product inventories prior to our sale of the inventories.

Upon termination of the Supply and Offtake Agreements, which may be terminated by J.

Aron as early as May 31, 2021 , we are obligated to repurchase all crude oil and refined product inventories then owned by J.

Upon termination of the Supply and Offtake Agreements, which terminates on May 31, 2021 unless extended by mutual agreement for an additional one year term, we are obligated to repurchase all crude oil and refined product inventories then owned by J.

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

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We also have the Washington Refinery Intermediation Agreement with MLC whereby our Washington refinery purchases certain crude oil supplies from third-party suppliers and MLC provides credit support for such purchases in exchange for our pledge of all crude oil and refined products inventories from such refinery.

An adverse change in the business, results of operations, liquidity, or financial condition of our intermediation counterparties could adversely affect the ability of such counterparties to perform their obligations, which could consequently have a material adverse effect on our business, results of operations, or liquidity and, as a result, our business and operating results.

An adverse change in

the business, results of operations, liquidity, or financial condition of our intermediation counterparties could adversely affect the ability of such counterparties to perform their obligations, which could consequently have a material adverse effect on our business, results of operations, or liquidity and, as a result, our business and operating results.

Inadequate liquidity could materially and adversely affect our business operations in the future.

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We are not able to control many of these factors.

If industry and economic conditions deteriorate, our cash flow may not be sufficient to allow them to pay principal and interest on our debt and meet our other obligations.

If industry and economic conditions deteriorate, our cash flow may not be sufficient to allow us to pay principal and interest on our debt and meet our other obligations.

This increase in our indebtedness may reduce our flexibility to respond to changing business and economic conditions or to fund capital expenditure or working capital needs because we will require additional funds to service our outstanding indebtedness and may not be able to obtain additional financing.

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The availability of NOLs to offset taxable income would be substantially reduced or eliminated if we were to undergo an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).

We will be treated as having had an “ownership change” if there is more than a 50% increase in stock ownership during any three year “testing period” by “5% shareholders.” In order to help us preserve our NOLs, our certificate of incorporation contains stock transfer restrictions designed to reduce the risk of an ownership change for purposes of Section 382 of the Code.

stock transfer restrictions designed to reduce the risk of an ownership change for purposes of Section 382 of the Code.

We expect that the restrictions will remain in place for the foreseeable future.

We cannot assure you, however, that these restrictions will prevent an ownership change.

Our ability to utilize our NOLs to offset future taxable income is subject to various limitations, including that the NOLs will expire in various amounts, if not used, between 2027 through 2036 .

Our ability to utilize a significant portion of our NOLs to offset future taxable income is subject to various limitations, including that certain NOLs will expire in various amounts, if not used, between 2028 through 2036.

During 2018, the Internal Revenue Service (“IRS”) completed an audit of our tax returns for the tax years ending 2014 through 2016, which included those returns for the years in which the losses giving rise to the NOLs were reported.

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However, such reviews will not reveal all existing or potential problems.

In addition, our reviews may not permit us to become sufficiently

familiar with potential environmental problems or other contingent and unknown liabilities that may exist or arise.

In addition, our reviews may not permit us to become sufficiently familiar with potential environmental problems or other contingent and unknown liabilities that may exist or arise.

As a result, there may be unknown and contingent liabilities related to acquired businesses and assets of which we are unaware.

We could be liable for unknown obligations relating to acquisitions for which indemnification is not available, which could materially adversely affect our business, results of operations, and cash flows.

All of our refineries are scheduled for maintenance turnarounds in the next few years that will involve significant expenditures.

Our Wyoming refinery and the Par East refinery in Hawaii are scheduled to undergo significant maintenance turnarounds in 2020.

Additionally, our newly-acquired Washington refinery anticipates conducting a turnaround during 2021.

During a turnaround, all or a portion of each refinery’s production may be halted or disrupted.

We must acquire refined products to satisfy our supply obligations, often at a significant premium to our contractual prices, resulting in the possibility of financial loss.

Any turnaround, if unsuccessful or delayed, could have a material adverse effect on our business, financial condition, or results of operations.

In addition, all of our refineries may require additional unscheduled down time for unanticipated maintenance or repairs that are more frequent than our scheduled turnarounds.

Refinery operations may also be disrupted by external factors such as a suspension of feedstock deliveries or an interruption of electricity, natural gas, water treatment, or other utilities.

Other potentially disruptive factors include natural disasters, severe weather conditions, workplace or environmental accidents, interruptions of supply, work stoppages, losses of permits or authorizations, or acts of terrorism.

Disruptions to our refining operations could reduce our revenues and profitability during the period of time that our processing units are not operating.

A substantial portion of our refining workforce is unionized and we may face labor disruptions that would interfere with our operations.

As of December 31, 2020, we employed approximately 1,403 people, 243 of whom are covered by collective bargaining agreements.

At our Par East and Washington refineries, 224 employees are represented by the United Steelworkers Union (“USW”) with collective bargaining agreements expiring on January 31, 2022 .

At our Par West refinery, 36 employees are represented by the International Brotherhood of Electrical Workers (“IBEW”) with a collective bargaining agreement expiring on December 31, 2020 ;

we plan to engage in negotiations for a new extension of the collective bargaining agreement.

At our Hawaii and Washington refineries, 243 employees are represented by the USW with collective bargaining agreements expiring on January 31, 2022.

However, we may not be able to prevent a strike or work stoppage in the future and any such work stoppage could cause disruptions in our business and have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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This volatility may affect the price at which you could sell your common stock.

The market price for our common stock has varied between a high of $25.39 on November 14, 2019 , and a low of $14.14 on January 2, 2019 , during the year ended December 31, 2019 .

The market price for our common stock has varied between a high of $23.12 on January 2, 2020, and a low of $6.00 on March 18, 2020, during the year ended December 31, 2020.

This volatility may affect the price at which you could sell your common stock.

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An impairment of an equity investment, a long-lived asset, or goodwill could reduce our earnings or negatively impact the value of our common stock.

Consistent with GAAP, we evaluate our goodwill for impairment at least annually and our equity investments and long-lived assets, including intangible assets with finite useful lives, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Consistent with U.S.

generally accepted accounting principles (“GAAP”), we evaluate our goodwill for impairment at least annually and our equity investments and long-lived assets, including intangible assets with finite useful lives, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

For the investments we account for under the equity method, such as Laramie Energy, the impairment test requires us to consider whether the fair value of the equity investment as a whole, not the underlying net assets, has declined and whether that decline is other than temporary.

If we determine that an other-than-temporary impairment is indicated, we would be required to recognize a non-cash charge to earnings with a correlative effect on equity and balance sheet leverage as measured by debt to total capitalization.

As a result of our impairment evaluation of our investment in Laramie Energy, we have recorded an impairment charge of $81.5 million on our statement of operations for the year ended December 31, 2019.

This impairment charge or any additional impairment charges could have a negative impact on the price of our common stock.

As a result of the global economic impact of the COVID-19 pandemic and a steep decline in current and forecasted prices and demand for crude oil and refined products, the goodwill at our refining reporting units in Hawaii and Washington was 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 consolidated statement of operations for the year ended December 31, 2020.

Additionally, as a result of our impairment evaluations of our investment in Laramie Energy, we recorded impairment charges of $45.3 million and $81.5 million on our consolidated statement of operations for the years ended December 31, 2020 and 2019, respectively.

These impairment charges or any additional impairment charges could have a negative impact on the price of our common stock.

Additionally, there can be no assurance that no future impairment charge will be made with respect to our equity investments, goodwill, and long-lived assets.

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There is no guarantee that an active trading market for our common stock will develop or be maintained on the NYSE, or that the volume of trading will be sufficient to allow for timely trades.

Investors may not be able to sell their shares quickly or at the latest market price if trading in our stock is not active or if trading volume is limited.

Investors may not be able to sell their shares quickly or at the latest market price if trading in our stock is not active or if trading

volume is limited.

In addition, if trading volume in our common stock is limited, trades of relatively small numbers of shares may have a disproportionate effect on the market price of our common stock.

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However, one or more large issuances of our common stock, or securities convertible into our common stock, may adversely affect the prevailing market price of our common stock.

Investor sentiment towards climate change, fossil fuels, and sustainability could adversely affect our business and our stock price.

Investor sentiment towards climate change, fossil fuels, sustainability, and other Environmental, Social, and Governance (“ESG”) matters could adversely affect our business and our stock price.

There have been efforts in recent years aimed at the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities, and other groups, to promote the divestment of shares of energy companies, as well as to pressure lenders and other financial services companies to limit or curtail activities with energy companies.

If these efforts are successful, our stock price and our ability to access capital markets may be negatively impacted.

Members of the investment community are also increasing their focus on sustainability practices, including practices related to GHGs and climate change, in the energy industry.

As a result, we may face increasing pressure regarding our sustainability disclosures and practices.

Additionally, members of the investment community may screen companies such as ours for sustainability performance before investing in our stock.

If we are unable to meet the sustainability standards set by these investors, we may lose investors, our stock price may be negatively impacted, and our reputation may be negatively affected.

As a result, some financial intermediaries, investors, and other capital markets participants have reduced or ceased lending to, or investing in, companies that operate in industries with higher perceived environmental exposure, such as the energy industry.

For example, in December 2020, the State of New York announced that it will be divesting the state’s Common Retirement Fund from fossil fuels.

If this or similar divestment efforts are continued, the price of our common stock or debt securities, and our ability to access capital markets or to otherwise obtain new investment or financing, may be negatively impacted.

Members of the investment community are also increasing their focus on ESG practices and disclosures, including practices and disclosures related to GHGs and climate change in the energy industry in particular, and diversity and inclusion initiatives and governance standards among companies more generally.

As a result, we may face increasing pressure regarding our ESG practices and disclosures.

Additionally, members of the investment community may screen companies such as ours for ESG performance before investing in our common stock or debt securities or lending to us.

Over the past few years there has also been an acceleration in investor demand for ESG investing opportunities, and many large institutional investors have committed to increasing the percentage of their portfolios that are allocated towards ESG-focused investments.

As a result, there has been a proliferation of ESG-focused investment funds seeking ESG-oriented investment products.

If we are unable to meet the ESG standards or investment or lending criteria set by these investors and funds, we may lose investors, investors may allocate a portion of their capital away from us, our cost of capital may increase, the price of our common stock and debt securities may be negatively impacted, and our reputation may also be negatively affected.

UNRESOLVED STAFF COMMENTS

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-K

Item 1A. Risk Factors