What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-05 · 218 added, 223 removed, 601 unchanged (42% of the section changed)

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2) Retail - Our retail outlets in Hawaii, Washington, and Idaho sell gasoline, diesel, and retail merchandise through Hele and “76” branded sites, “nomnom” branded company-operated convenience stores, 7-Eleven operated convenience stores, other sites operated by third parties, and unattended cardlock stations.

We completed the rebranding of all company-operated convenience stores in Washington and Idaho to “nomnom,” our proprietary brand.

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

As of June 30, 2021, we owned a 46.0% equity investment in Laramie Energy.

This year, we completed the rebranding of all company-operated convenience stores in Washington and Idaho to “nomnom,” our proprietary brand.

3) Logistics - We operate an extensive multi-modal logistics network spanning the Pacific, the Northwest, and the Rocky Mountain regions to transport and store crude oil and refined products for our refineries and transport refined products to our retail sites or third-party purchasers.

As of September 30, 2021, we owned a 46.0% equity investment in Laramie Energy.

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

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Recent Events Affecting Comparability of Periods

On June 10, 2021, the Centers for Disease Control and Prevention (“CDC”) announced that individuals who have been fully vaccinated against COVID-19 can travel domestically at low risk to themselves from COVID-19, though they should still wear masks and adhere to social distancing guidelines.

Beginning July 8, 2021, travelers entering the state of Hawaii who have been fully vaccinated in the U.S.

may bypass quarantine without a pre-travel test.

Tourism in Hawaii increased during the second quarter of 2021, with 419 thousand visitors from the U.S.

West coast in May 2021, an 8% increase compared to the same period in 2019 prior to the pandemic.

With easing COVID-19 restrictions and increasing demand, our profitability in the retail and logistics segments has reached over 90% of pre-pandemic levels.

In the second quarter of 2021, the U.S.

saw continued economic recovery due to increased availability of the COVID-19 vaccine to the public.

As of June 30, 2021, 46% of the United States population has been fully vaccinated.

In Hawaii, Washington, and Wyoming, 52%, 55%, and 34% of the population have been fully vaccinated, respectively.

Though vaccination rates continue to rise, the more contagious Delta variant, now the dominant coronavirus strain in the U.S., could cause a resurgence of COVID-19.

During the third quarter of 2021, demand for refined products in the regions in which we operate continued to recover as vaccination rates increased and travel restrictions related to the COVID-19 pandemic eased in the U.S.

On June 10, 2021, the Centers for Disease Control and Prevention (“CDC”) announced that individuals who have been fully vaccinated against COVID-19 can resume domestic travel at low risk to themselves of contracting COVID-19, though the CDC continued to recommend wearing masks and adhering to social distancing guidelines.

Beginning July 8, 2021, the state of Hawaii lifted its requirement for travelers entering the state without a pre-travel test to quarantine for those who had been fully vaccinated in the U.S.

Tourism in Hawaii continued to rise during the third quarter of 2021, with 714 thousand visitors traveling domestically from the U.S.

in August 2021, an 8% increase compared to the same period in 2019 prior to the pandemic.

Wyoming has experienced similar economic growth due to a tourism boom, with Mount Rushmore and Devils Tower welcoming 2.2 million and 509 thousand visitors, respectively, during the nine months ending September 30, 2021, both approximately 20% increases from the same period in 2019.

Our refining margins saw improvements during the third quarter of 2021 compared to the second quarter, and profitability in our retail and logistics segments during the nine months ended September 30, 2021, reached over 90% of pre-pandemic levels.

As of September 30, 2021, 56% of the United States population was fully vaccinated, and in Hawaii, Washington, and Wyoming, 58%, 61%, and 42% of the population was fully vaccinated, respectively.

Despite the increases in vaccination rates and domestic travel, economic recovery from the pandemic remains uncertain as the Delta variant, now the dominant coronavirus strain in the U.S., caused a resurgence of COVID-19 in the U.S.

during the third quarter of 2021.

On August 23, 2021, the governor of Hawaii asked travelers to delay all non-essential travel through the end of October due to the recent surge in COVID-19 cases experienced in the state, although there have been no new travel restrictions imposed by the state.

As the COVID-19 pandemic remains a dynamic driver in the global economy, we continue to monitor the spread of COVID-19 and its potential impacts on our business.

In addition to measures we took in 2020 in response to the COVID-19 pandemic, as described in our Annual Report on Form 10-K as of and for the year ended December 31, 2020, we have also undertaken additional liquidity-enhancing measures, including deferring or delaying certain capital expenditures related to turnaround activities at our Washington refinery.

We closed sale-leaseback transactions in the first quarter of 2021, in which we sold twenty-two (22) retail convenience store/fuel station properties located in Hawaii (the “Sale-Leaseback Properties”) for $112.8 million, net of fees.

We also entered into a lease on the properties for fifteen (15) years, unless earlier terminated, with up to four five-year renewal options.

We closed sale-leaseback transactions (the “Sale-Leaseback Transactions”) in the first quarter of 2021, in which we sold twenty-two (22) retail convenience store/fuel station properties located in Hawaii (the “Sale-Leaseback Properties”) for $112.8 million, net of fees.

We also entered into a lease on the properties for fifteen (15) years, unless earlier terminated, with up to four five-

year renewal options.

On March 19, 2021, we sold 5.75 million shares of common stock in an underwritten public offering at a public offering price of $16.00 per share resulting in net proceeds to us of approximately $87.2 million, after deducting underwriting discounts and commissions and offering expenses.

We believe the steps we have taken throughout 2020 and in the first half of 2021 have strengthened our ability to conduct our operations through current conditions.

We believe the steps we have taken in response to the pandemic and its effects on the economy have strengthened our ability to conduct our operations through current conditions.

We are also utilizing some of the non-income tax payment deferral opportunities at various state levels and utilized federal refund acceleration opportunities provided by the Internal Revenue Service (“IRS”), Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

We continue to maintain existing processes and procedures, including but not limited to processes and procedures around protection of our technology systems and proprietary data, even though a significant number of our employees are working from home.

The health and well-being of

our employees and customers continue to be our top priorities as we continue navigating the challenges presented by the COVID-19 pandemic.

The financial results contained in this Quarterly Report on Form 10-Q reflect the continuing pandemic-related demand suppression experienced in the first half of 2021 in the regions in which we operate.

We continue to maintain existing processes and procedures, including but not limited to processes and procedures around protection of our technology systems and proprietary data.

The health and well-being of our employees and customers continue to be our top priorities as we continue navigating the challenges presented by the COVID-19 pandemic.

The financial results contained in this Quarterly Report on Form 10-Q reflect the continuing pandemic-related demand suppression experienced in the first nine months of 2021 in the regions in which we operate.

Though vaccine availability and vaccination rates are increasing, the COVID-19 pandemic is ongoing and the impacts of the virus on people and businesses continue to evolve as of the date of this report.

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Results of Operations

Three months ended June 30, 2021 compared to the three months ended June 30, 2020

Our financial results for the second quarter of 2021 declined from a net loss of $40.6 million for the three months ended June 30, 2020 to a net loss of $109.0 million for the three months ended June 30, 2021.

The decrease was primarily driven by a $158.4 million unfavorable change in lower of cost or net realizable value inventory adjustments and increased RINs expenses driven by higher RINs prices, partially offset by a favorable change in inventory valuation adjustments at our Hawaii refinery and improved crack spreads driven by increased refined product demand due to the continuing economic recovery from the COVID-19 pandemic.

Adjusted EBITDA and Adjusted Net Loss.

For the three months ended June 30, 2021, Adjusted EBITDA was a loss of $6.7 million compared to a loss of $50.3 million for the three months ended June 30, 2020.

The increase was primarily related to improved crack spreads driven by increased refined product demand, favorable realized derivatives, and a 23% increase in sales volumes in our Refining segment, partially offset by a higher RINs mark-to-market expense driven by higher RINs prices, unfavorable feedstock costs at our Washington refinery, a 31% decrease in fuel margins at our Retail segment related to rising crude oil prices, and an unfavorable increase in internal fuel consumption at our Refining segment due to higher throughput volumes and rising crude oil prices.

For the three months ended June 30, 2021, Adjusted Net Loss was a loss of $48.0 million compared to a loss of $90.8 million for the three months ended June 30, 2020.

Three months ended September 30, 2021 compared to the three months ended September 30, 2020

Net Income (Loss).

Our financial results for the third quarter of 2021 improved from a net loss of $14.3 million for the three months ended September 30, 2020 to net income of $81.8 million for the three months ended September 30, 2021.

The increase was primarily driven by higher product crack spreads related to increased refined product demand, favorable RINs expenses driven by lower RINs prices, and a 16% increase in sales volumes in our Refining segment, partially offset by higher feedstock, purchased product, and derivative costs and higher inventory financing costs.

Adjusted EBITDA and Adjusted Net Income (Loss).

For the three months ended September 30, 2021, Adjusted EBITDA was $84.7 million compared to a loss of $16.1 million for the three months ended September 30, 2020.

The increase was primarily related to improved crack spreads driven by increased refined product demand and favorable RINs mark-to-market adjustments driven by lower RINs prices, partially offset by unfavorable feedstock and purchased product costs at our Hawaii and Washington refineries.

For the three months ended September 30, 2021, Adjusted Net Income (Loss) was income of $45.1 million compared to a loss of $56.5 million for the three months ended September 30, 2020.

The improvement was primarily related to the factors described above for the increase in Adjusted EBITDA.

Six months ended June 30, 2021 compared to the six months ended June 30, 2020

Our financial results for the second quarter of 2021 improved from a net loss of $262.9 million for the six months ended June 30, 2020 to a net loss of $171.2 million for the six months ended June 30, 2021.

The increase was primarily driven by favorable feedstock, purchased product, and derivative costs at our Hawaii refinery, favorable inventory valuation adjustments in our Refining segment, the goodwill impairment of $67.9 million in our Refining and Retail segments and the other-than-temporary impairment of $45.3 million related to our equity investment in Laramie Energy in the six months ended June 30, 2020 with no such impairments in 2021, and a gain of $63.9 million in the six months ended June 30, 2021 related to the Sale-Leaseback Transactions with no such gain in 2020.

These benefits were partially offset by increased RINs expenses driven by higher RINs prices, the price lag impact associated with certain product sales contracts at our Hawaii refinery, higher costs associated with our inventory intermediation step-out obligations, and a $21.0 million tax benefit recorded in 2020 with no such benefit recorded in 2021.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

Our financial results for the nine months ended September 30, 2021 improved from a net loss of $277.2 million for the nine months ended September 30, 2020 to a net loss of $89.4 million for the nine months ended September 30, 2021.

The increase was primarily driven by favorable feedstock, purchased product, and derivative costs at our Hawaii refinery, improved crack spreads driven by increased refined product demand, the goodwill impairment of $67.9 million in our Refining and Retail segments and the other-than-temporary impairment of $45.3 million related to our equity investment in Laramie Energy in the nine months ended September 30, 2020 with no such impairments in 2021, and a gain of $63.9 million in the nine months ended September 30, 2021 related to the Sale-Leaseback Transactions with no such gain in 2020.

These benefits were partially offset by increased RINs expenses driven by higher RINs prices in the first half of 2021, the price lag impact associated with certain product sales contracts at our Hawaii refinery, higher inventory financing costs, and a $20.9 million tax benefit recorded in 2020 with no such benefit recorded in 2021.

Adjusted EBITDA and Adjusted Net Loss.

For the six months ended June 30, 2021, Adjusted EBITDA was a loss of $50.0 million compared to a loss of $36.7 million for the six months ended June 30, 2020.

The decline was primarily related to the price lag impact associated with certain product sales contracts at our Hawaii refinery, increased fees related to our intermediation agreements, and higher RINs mark-to-market expenses related to prior year net obligations due to increasing RINs prices, partially offset by favorable feedstock, purchased product, and realized derivative costs at our Hawaii refinery and favorable inventory valuation adjustments at our Wyoming and Washington refineries.

For the nine months ended September 30, 2021, Adjusted EBITDA was $34.7 million compared to a loss of $52.7 million for the nine months ended September 30, 2020.

The improvement was primarily related to higher average product crack spreads driven by increased refined product demand, favorable feedstock costs at our Hawaii refinery, lower product delivery costs at our Washington refinery, and lower realized derivative costs at our Hawaii refinery, partially offset by higher RINs mark-to-market expenses related to prior year net obligations due to higher RINs prices and the price lag impact associated with certain product sales contracts at our Hawaii refinery.

Other factors impacting our results period over period include a 17% decrease in fuel margins at our Retail segment related to rising crude oil prices.

For the six months ended June 30, 2021, Adjusted Net Loss was $132.4 million compared to a loss of approximately $118.0 million for the six months ended June 30, 2020.

The decline was primarily related to the same factors described above for the decrease in Adjusted EBITDA.

The following tables summarize our consolidated results of operations for the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020 (in thousands).

For the nine months ended September 30, 2021, Adjusted Net Loss was $87.3 million compared to a loss of approximately $174.5 million for the nine months ended September 30, 2020.

The improvement was primarily related to the same factors described above for the increase in Adjusted EBITDA.

The following tables summarize our consolidated results of operations for the three and nine months ended September 30, 2021 compared to the three and nine months ended September 30, 2020 (in thousands).

The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Three Months Ended June 30,

Three Months Ended September 30,

2021 2020 $ Change % Change (1)

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Depreciation, depletion, and amortization 23,618 22,821 797 3 %

Loss (gain) on sale of assets, net 510 — 510 NM

Loss on sale of assets, net 2 — 2 NM

General and administrative expense (excluding depreciation) 12,473 9,818 2,655 27 %

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Total operating expenses 1,212,575 687,231

Operating loss (84,501) (25,443)

Operating income 97,793 2,750

Other income (expense)

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Other income (expense), net (22) 610 (632) (104) %

Equity losses from Laramie Energy, LLC — (1,874) 1,874 100 %

Total other income (expense), net (15,405) (16,913)

Loss before income taxes (108,351) (43,276)

Income tax benefit (expense) (607) 2,716 (3,323) (122) %

Net loss $ (108,958) $ (40,560)

Income (loss) before income taxes 82,388 (14,163)

Income tax expense (586) (108) (478) 443 %

Net income (loss) $ 81,802 $ (14,271)

________________________________________________________

(1) NM - Not meaningful

Six Months Ended June 30,

Nine Months Ended September 30,

2021 2020 $ Change % Change (1)

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Impairment expense — 67,922 (67,922) (100) %

Loss (gain) on sale of assets, net (64,402) — (64,402) NM

Gain on sale of assets, net (64,400) — (64,400) NM

General and administrative expense (excluding depreciation) 36,559 31,823 4,736 15 %

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(1) NM - Not meaningful

The following tables summarize our operating income (loss) by segment for the three and six months ended June 30, 2021 and 2020 (in thousands).

The following tables summarize our operating income (loss) by segment for the three and nine months ended September 30, 2021 and 2020 (in thousands).

The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Three months ended June 30, 2021 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Three months ended September 30, 2021 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 1,242,848 $ 46,735 $ 125,910 $ (105,125) $ 1,310,368

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Depreciation, depletion, and amortization 14,748 5,545 2,630 695 23,618

Loss (gain) on sale of assets, net 1,664 (21) (1,133) — 510

Loss on sale of assets, net — 2 — — 2

General and administrative expense (excluding depreciation) — — — 12,473 12,473

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Operating income (loss) $ 86,413 $ 13,357 $ 11,201 $ (13,178) $ 97,793

Three months ended June 30, 2020 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Three months ended September 30, 2020 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 626,426 $ 41,722 $ 91,736 $ (69,903) $ 689,981

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________________________________________________________

(1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $105.5 million and $61.8 million for the three months ended June 30, 2021 and 2020, respectively.

Six months ended June 30, 2021 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

(1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $105.1 million and $69.9 million for the three months ended September 30, 2021 and 2020, respectively.

Nine months ended September 30, 2021 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 3,237,450 $ 136,750 $ 335,544 $ (293,171) $ 3,416,573

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Operating income (loss) $ (103,571) $ 37,976 $ 73,207 $ (38,982) $ (31,370)

Six months ended June 30, 2020 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Nine months ended September 30, 2020 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 2,229,853 $ 143,004 $ 274,170 $ (237,662) $ 2,409,365

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________________________________________________________

(1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $188.0 million and $167.8 million for the six months ended June 30, 2021 and 2020, respectively.

Below is a summary of key operating statistics for the refining segment for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, Six Months Ended June 30,

(1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $293.2 million and $237.7 million for the nine months ended September 30, 2021 and 2020, respectively.

Below is a summary of key operating statistics for the refining segment for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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DD&A per bbl ($/throughput bbl) 1.48 1.29 1.56 1.40

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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(4) We believe the Pacific Northwest 5-2-2-1 Index is the most representative market indicator for our operations in Tacoma, Washington.

The Pacific Northwest 5-2-2-1 Index is computed by taking two parts gasoline (sub-octane), two parts middle distillates (ULSD and jet fuel), and one part fuel oil as created from five barrels of Alaskan North Slope (“ANS”) crude oil.

The Pacific Northwest 5-2-2-1 Index is computed by taking two parts gasoline (sub-octane), two parts middle distillates (ultra-low sulfur diesel (“ULSD”) and jet fuel), and one part fuel oil as created from five barrels of Alaskan North Slope (“ANS”) crude oil.

(5) The profitability of our Wyoming refinery is heavily influenced by crack spreads in nearby markets.

We believe the Wyoming 3-2-1 Index is the most representative market indicator for our operations in Wyoming.

The Wyoming 3-2-1

Index is computed by taking two parts gasoline and one part distillates (ULSD) as created from three barrels of West Texas Intermediate Crude Oil (“WTI”).

The Wyoming 3-2-1 Index is computed by taking two parts gasoline and one part distillates (ULSD) as created from three barrels of West Texas Intermediate Crude Oil (“WTI”).

Pricing is based 50% on applicable product pricing in Rapid City, South Dakota, and 50% on applicable product pricing in Denver, Colorado.

Below is a summary of key operating statistics for the retail segment for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, Six Months Ended June 30,

Below is a summary of key operating statistics for the retail segment for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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Adjusted Gross Margin

Adjusted Gross Margin is defined as (i) operating income (loss) plus operating expense (excluding depreciation), impairment expense, inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments), depreciation, depletion, and amortization (“DD&A”);

Renewable Identification Numbers (“RINs”) loss (gain) in excess of net obligation (which represents the income statement effect of reflecting our RINs liability on a net basis), loss (gain) on sale of assets, and unrealized loss (gain) on derivatives or (ii) revenues less cost of revenues (excluding depreciation) plus inventory valuation adjustment, unrealized loss (gain) on derivatives, and RINs loss (gain) in excess of net obligation.

Adjusted Gross Margin is defined as (i) operating income (loss) adjusted for operating expense (excluding depreciation);

depreciation, depletion, and amortization (“DD&A”);

impairment expense;

loss (gain) on sale of assets;

inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments);

LIFO layer liquidation impacts associated with our Washington inventory;

Renewable Identification Numbers (“RINs”) loss (gain) in excess of net obligation (which represents the income statement effect of reflecting our RINs liability on a net basis);

and unrealized loss (gain) on derivatives or (ii) revenues less cost of revenues (excluding depreciation) plus inventory valuation adjustment, unrealized loss (gain) on derivatives, LIFO layer liquidation impacts associated with our Washington inventory, and RINs loss (gain) in excess of net obligation.

We define cost of revenues (excluding depreciation) as the hydrocarbon-related costs of inventory sold, transportation costs of delivering product to customers, crude oil consumed in the refining process, costs to satisfy our RINs and environmental credit obligations, and certain hydrocarbon fees and taxes.

Cost of revenues (excluding depreciation) also includes the unrealized gain (loss) on derivatives and the inventory valuation adjustment that we exclude from Adjusted Gross Margin.

Beginning in the third quarter of 2020, Adjusted Gross Margin excludes the LIFO layer liquidation impacts associated with our Washington inventory.

There was no LIFO liquidation adjustment for the three and six months ended June 30, 2020.

Management believes Adjusted Gross Margin is an important measure of operating performance and uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks.

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The following tables present a reconciliation of Adjusted Gross Margin to the most directly comparable GAAP financial measure, operating income (loss), on a historical basis, for selected segments, for the periods indicated (in thousands):

Three months ended June 30, 2021 Refining Logistics Retail

Operating income (loss) $ (99,119) $ 14,542 $ 12,651

Three months ended September 30, 2021 Refining Logistics Retail

Operating income $ 86,413 $ 13,357 $ 11,201

Operating expense (excluding depreciation)

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Depreciation, depletion, and amortization 14,748 5,545 2,630

Loss (gain) on sale of assets, net 1,664 (21) (1,133)

Loss on sale of assets, net — 2 —

Inventory valuation adjustment (727) — —

LIFO liquidation adjustment (4,151) — —

RINs loss in excess of net obligation 25,207 — —

RINs gain in excess of net obligation (42,103) — —

Unrealized loss on derivatives 10,228 — —

Adjusted Gross Margin (1) $ 120,021 $ 22,658 $ 32,523

Three months ended June 30, 2020 Refining Logistics Retail

Three months ended September 30, 2020 Refining Logistics Retail

Operating income (loss) $ (5,106) $ 6,434 $ 12,060

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Inventory valuation adjustment (43,980) — —

LIFO liquidation adjustment 6,211 — —

RINs loss in excess of net obligation 645 — —

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Adjusted Gross Margin (1) (2) $ 16,299 $ 15,311 $ 31,011

Six months ended June 30, 2021 Refining Logistics Retail

Nine months ended September 30, 2021 Refining Logistics Retail

Operating income (loss) $ (103,571) $ 37,976 $ 73,207

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Depreciation, depletion, and amortization 43,373 16,176 8,164

Loss (gain) on sale of assets, net (19,595) (21) (44,786)

Gain on sale of assets, net (19,595) (19) (44,786)

Inventory valuation adjustment 38,732 — —

LIFO liquidation adjustment 4,151 — —

RINs loss in excess of net obligation 11,874 — —

Unrealized gain on derivatives (2,608) — —

Unrealized loss on derivatives 7,620 — —

Adjusted Gross Margin (1) (3) $ 135,328 $ 65,277 $ 89,614

Six months ended June 30, 2020 Refining Logistics Retail

Nine months ended September 30, 2020 Refining Logistics Retail

Operating income (loss) $ (210,433) $ 31,513 $ 10,131

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Inventory valuation adjustment (4,635) — —

LIFO liquidation adjustment 6,211 — —

RINs loss in excess of net obligation 17,985 — —

Unrealized loss on derivatives 445 — —

Unrealized gain on derivatives (4,507) — —

Adjusted Gross Margin (2) $ 33,536 $ 57,477 $ 96,633

____________________________________________________________________________

(1) For the three and six months ended June 30, 2021, and the three months ended June 30, 2020, there was no impairment expense recorded in Operating income (loss).

(2) For the three and six months ended June 30, 2020, there was no loss (gain) on sale of assets or LIFO liquidation adjustment recorded in Operating income (loss).

(1) For the three and nine months ended September 30, 2021, and the three months ended September 30, 2020, there was no impairment expense recorded in Operating income (loss).

(2) For the three and nine months ended September 30, 2020, there was no loss (gain) on sale of assets recorded in Operating income (loss).

(3) For the nine months ended September 30, 2021, there was no LIFO liquidation adjustment recorded in Operating income (loss).

Adjusted Net Income (Loss) and Adjusted EBITDA

Adjusted Net Income (Loss) is defined as Net income (loss) excluding changes in the value of contingent consideration and common stock warrants, acquisition and integration costs, unrealized (gain) loss on derivatives, debt extinguishment and commitment costs, increase in (release of) tax valuation allowance and other deferred tax items, inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments), severance costs, impairment expense, (gain) loss on sale of assets, Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives, RINs loss (gain) in excess of net obligation, and impairment expense associated with our investment in Laramie Energy and our share of Laramie Energy’s asset impairment losses in excess of our basis difference.

Beginning in the third quarter of 2020, Adjusted Net Income (Loss) excludes the LIFO layer liquidation impacts associated with our Washington inventory.

There was no LIFO liquidation adjustment for the three and six months ended June 30, 2020.

Adjusted EBITDA is Adjusted Net Income (Loss) excluding interest expense and financing costs, income taxes, DD&A, and equity losses (earnings) from Laramie Energy, excluding Par’s share of unrealized loss (gain) on derivatives, impairment of Par’s investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference.

Adjusted Net Income (Loss) is defined as Net income (loss) excluding inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments), the LIFO layer liquidation impacts associated with our Washington inventory, RINs loss (gain) in excess of net obligation, unrealized (gain) loss on derivatives, acquisition and integration costs, debt extinguishment and commitment costs, increase in (release of) tax valuation allowance and other deferred tax items, changes in the value of contingent consideration and common stock warrants, severance costs, (gain) loss on sale of assets, impairment expense, impairment expense associated with our investment in Laramie Energy and our share of Laramie Energy’s asset impairment losses in excess of our basis difference, and Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives.

Adjusted EBITDA is Adjusted Net Income (Loss) excluding DD&A, interest expense and financing costs, equity losses (earnings) from Laramie Energy excluding Par’s share of unrealized loss (gain) on derivatives, impairment of Par’s investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference, and income tax expense (benefit).

We believe Adjusted Net Income (Loss) and Adjusted EBITDA are useful supplemental financial measures that allow investors to assess:

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Adjusted Net Income (Loss) and Adjusted EBITDA presented by other companies may not be comparable to our presentation as other companies may define these terms differently.

The following table presents a reconciliation of Adjusted Net Loss and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net Loss, on a historical basis for the periods indicated (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table presents a reconciliation of Adjusted Net Income (Loss) and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss), on a historical basis for the periods indicated (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

2 unchanged sentences

LIFO liquidation adjustment (4,151) 6,211 — 6,211

RINs loss in excess of net obligation 25,207 10,738 53,977 17,340

RINs loss (gain) in excess of net obligation (42,103) 645 11,874 17,985

Unrealized loss (gain) on derivatives 10,228 (4,952) 7,620 (4,507)

7 unchanged sentences

Impairment of Investment in Laramie Energy, LLC (2) — — — 45,294

Par's share of Laramie Energy's unrealized loss (gain) on derivatives (2) — — — (1,110)

Adjusted Net Loss (3) (48,014) (90,760) (132,371) (118,018)

Par's share of Laramie Energy's unrealized gain on derivatives (2) — — — (1,110)

Adjusted Net Income (Loss) (3) 45,120 (56,502) (87,251) (174,520)

Depreciation, depletion, and amortization 23,618 22,821 70,046 66,232

Interest expense and financing costs, net 15,374 17,523 50,711 52,611

Equity losses (earnings) from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives and impairment losses — 1,874 — 2,721

Income tax expense (benefit) 607 (2) 607 124

Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized gain on derivatives and impairment losses — — — 2,721

Income tax expense 586 108 1,193 232

Adjusted EBITDA $ 84,698 $ (16,050) $ 34,699 $ (52,724)

3 unchanged sentences

(2) Included in Equity losses from Laramie Energy, LLC on our condensed consolidated statements of operations.

(3) For the three and six months ended June 30, 2021 and 2020, there was no change in value of contingent consideration.

(3) For the three and nine months ended September 30, 2021 and 2020, there was no change in value of contingent consideration.

Factors Impacting Segment Results

Three months ended June 30, 2021 compared to the three months ended June 30, 2020

Operating loss for our refining segment was $99.1 million for the three months ended June 30, 2021, a decline of $62.3 million compared to operating loss of $36.8 million for the three months ended June 30, 2020.

The decrease in profitability was primarily driven by a $50.3 million increase in RINs expenses driven by higher RINs prices, a $158.4 million unfavorable change in lower of cost or net realizable value inventory adjustments, and an unfavorable change in feedstock costs at our Washington refinery, partially offset by a 23% increase in sales volume and favorable crack spreads as demand increases due to the continued economic recovery from the COVID-19 pandemic.

Other factors impacting our results period over period include higher internal fuel consumption, higher derivative costs, higher inventory financing costs, and higher depreciation expenses due to recently-completed capital projects.

Operating income for our logistics segment was $14.5 million for the three months ended June 30, 2021, an increase of $8.2 million compared to operating income of $6.3 million for the three months ended June 30, 2020.

The increase is due to net 34% higher throughput across our Wyoming logistics assets and 55% higher throughput across our Hawaii assets related to increased sales volumes, especially across the neighbor islands in Hawaii, primarily due to increased demand as COVID-19 restrictions ease.

Operating income for our retail segment was $12.7 million for the three months ended June 30, 2021, a decrease of $3.5 million compared to operating income of $16.2 million for the three months ended June 30, 2020.

The decrease was primarily due to a 31% decrease in fuel margins related to rising crude oil prices and $1.4 million of rent expense in the second quarter of 2021 related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021, partially offset by a 28% increase in fuel sales volumes.

Six months ended June 30, 2021 compared to the six months ended June 30, 2020

Operating loss for our refining segment was $190.0 million for the six months ended June 30, 2021, an improvement of $15.3 million compared to an operating loss of $205.3 million for the six months ended June 30, 2020.

The decrease in the reported loss was primarily driven by favorable feedstock and derivative costs and a favorable change in lower of cost or net realizable value inventory adjustments, partially offset by a $128.3 million increase in RINs expenses driven by higher RINs prices, higher costs associated with our inventory intermediation step-out obligations, and the price lag impact associated with certain sales contracts at our Hawaii refinery.

Other factors impacting our results period over period include a favorable FIFO impact in 2021 at our Wyoming refinery, no impairment in 2021 as compared to our 2020 goodwill impairment of $38.1 million, and a 2021 gain of $19.6 million primarily related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021.

Operating income for our logistics segment was $24.6 million for the six months ended June 30, 2021, which was relatively consistent with $25.1 million for the six months ended June 30, 2020.

Operating income for our retail segment was $62.0 million for the six months ended June 30, 2021, an increase of $63.9 million compared to an operating loss of $1.9 million for the six months ended June 30, 2020.

The increase in profitability is primarily due to a gain of $44.8 million primarily related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021, no impairment in 2021 as compared to our 2020 goodwill impairment of $29.8 million, and an increase in sales volumes of 5%, partially offset by a decrease in fuel margins of 23% related to rising crude oil prices.

Three months ended September 30, 2021 compared to the three months ended September 30, 2020

Operating income for our refining segment was $86.4 million for the three months ended September 30, 2021, an increase of $91.5 million compared to operating loss of $5.1 million for the three months ended September 30, 2020.

The increase in profitability was primarily driven by an increase in product crack spreads driven by increased refined product demand, a $74.0 million favorable reduction in RINs expenses driven by lower RINs prices, and a 16% increase in sales volume resulting from increasing demand due to the continued economic recovery, partially offset by unfavorable changes in feedstock costs at our Hawaii and Washington refineries.

Other factors impacting our results period over period include higher purchased product costs at our Hawaii refinery, and higher derivatives and inventory financing costs.

Operating income for our logistics segment was $13.4 million for the three months ended September 30, 2021, an increase of $7.0 million compared to operating income of $6.4 million for the three months ended September 30, 2020.

The increase is due to a net 38% higher throughput across our Hawaii assets and 35% higher throughput across our Wyoming logistics assets related to increased sales volumes primarily due to increased demand as COVID-19 restrictions ease.

Operating income for our retail segment was $11.2 million for the three months ended September 30, 2021, a decrease of $0.9 million compared to operating income of $12.1 million for the three months ended September 30, 2020.

The decrease was primarily due to a 4% decrease in fuel margins related to rising crude oil prices and additional rent expense in the third quarter of 2021 related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021, partially offset by an 11% increase in fuel sales volumes.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

Operating loss for our refining segment was $103.6 million for the nine months ended September 30, 2021, an improvement of $106.8 million compared to an operating loss of $210.4 million for the nine months ended September 30, 2020.

The improvement was primarily driven by lower purchased product and feedstock costs, higher average product crack spreads, and lower derivative costs, partially offset by a $54.4 million increase in RINs expenses driven by higher RINs prices in the first half of 2021 and higher costs associated with our inventory financing.

Other factors impacting our results period over period include no impairment in 2021 as compared to our 2020 goodwill impairment of $38.1 million, and a 2021 gain on sale of assets of $19.6 million primarily related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021.

Operating income for our logistics segment was $38.0 million for the nine months ended September 30, 2021, an increase of $6.5 million compared to operating income of $31.5 million for the nine months ended September 30, 2020.

The increase was primarily related to a net 12% higher throughput across our Hawaii assets and 15% higher throughput across our Wyoming logistics assets related to increased sales volumes, primarily due to increased demand as COVID-19 restrictions ease.

Operating income for our retail segment was $73.2 million for the nine months ended September 30, 2021, an increase of $63.1 million compared to an operating income of $10.1 million for the nine months ended September 30, 2020.

The increase in profitability is primarily due to a gain on sale of assets of $44.8 million primarily related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021, no impairment in 2021 as compared to our 2020 goodwill impairment of $29.8 million, and an increase in sales volumes of 7%, partially offset by a decrease in fuel margins of 17% related to rising crude oil prices.

Adjusted Gross Margin

Three months ended June 30, 2021 compared to the three months ended June 30, 2020

For the three months ended June 30, 2021, our refining Adjusted Gross Margin was $19.2 million, an increase of $41.5 million compared to a loss of $22.3 million for the three months ended June 30, 2020.

The increase was primarily driven by improved crack spreads and a 23% increase in refining sales volumes, partially offset by higher RINs mark-to-market expenses driven by increasing RINs prices and rising feedstock costs at the Washington refinery.

Adjusted Gross Margin for the Hawaii refineries increased from a loss of $6.96 per barrel during the three months ended June 30, 2020 to income of $0.34 per barrel during the three months ended June 30, 2021 primarily due to improved contract terms and crack spreads, a 26% increase in sales volume, and favorable feedstock and purchased product costs, partially offset by increased RINs costs driven by a $12.7 million higher RINs mark-to-market expense and an unfavorable increase in logistics costs.

Adjusted Gross Margin for the Wyoming refinery increased $4.03 per barrel primarily due to improved crack spreads, a FIFO benefit related to increasing crude oil prices, and a 38% increase in sales volumes, partially offset by increased RINs costs driven by a $4.8 million higher RINs mark-to-market expense.

Adjusted Gross Margin for the Washington refinery decreased $3.82 per barrel primarily due to a $4.1 million higher RINs mark-to-market expense, compressed heavy product spreads, and unfavorable feedstock costs, partially offset by improved crack spreads and an 11% increase in sales volume.

For the three months ended June 30, 2021, our logistics Adjusted Gross Margin was $23.4 million, an increase of $8.9 million compared to $14.5 million for the three months ended June 30, 2020.

The increase is primarily due to net 34% higher throughput across our Wyoming logistics assets and 55% higher throughput across our Hawaii logistics assets due to increased sales volumes in Hawaii, especially across the neighboring islands, driven by easing travel restrictions related to the continued recovery from the COVID-19 pandemic.

For the three months ended June 30, 2021, our retail Adjusted Gross Margin was $31.8 million, a decrease of $2.4 million when compared to $34.2 million for the three months ended June 30, 2020.

The decrease was primarily due to a 31% decrease in fuel margins related to rising crude oil prices, partially offset by a 28% increase in sales volumes from the ongoing recovery.

Six months ended June 30, 2021 compared to the six months ended June 30, 2020

For the six months ended June 30, 2021, our refining Adjusted Gross Margin was $15.3 million, a decrease of $1.9 million compared to $17.2 million for the six months ended June 30, 2020.

The decrease was primarily due to higher

RINs expense driven by increasing RINs prices and higher inventory financing costs, partially offset by lower feedstock costs in Hawaii.

Adjusted Gross Margin for the Hawaii refineries improved from a loss of $2.73 per barrel during the six months ended June 30, 2020 to a loss of $0.05 per barrel during the six months ended June 30, 2021 primarily due to favorable feedstock and purchased product costs and realized derivative favorability, partially offset by a 12% decrease in sales volumes, the price lag impact associated with certain sales contracts, and increased RINs costs driven by a $39.8 million higher RINs mark-to-market expense.

Adjusted Gross Margin for the Wyoming refinery increased $4.35 per barrel primarily due to an $11.9 million favorable FIFO impact in 2021 compared to a $10.5 million unfavorable FIFO impact in the same period in 2020 and favorable crack spreads, partially offset by increased RINs costs driven by a $14.0 million higher RINs mark-to-market expense and higher feedstock costs.

Adjusted Gross Margin for the Washington refinery decreased $7.68 per barrel primarily due to higher feedstock costs, compressed heavy product spreads, and a $12.1 million increase in RINs mark-to-market expense, partially offset by lower logistics costs.

For the six months ended June 30, 2021, our logistics Adjusted Gross Margin was $42.6 million, which was relatively consistent with our logistics Adjusted Gross Margin of $42.2 million for the six months ended June 30, 2020.

For the six months ended June 30, 2021, our retail Adjusted Gross Margin was $57.1 million, a decrease of $8.5 million compared to $65.6 million for the six months ended June 30, 2020.

Three months ended September 30, 2021 compared to the three months ended September 30, 2020

For the three months ended September 30, 2021, our refining Adjusted Gross Margin was $120.0 million, an increase of $103.7 million compared to $16.3 million for the three months ended September 30, 2020.

The increase was primarily driven by improved crack spreads, a decrease in RINs expenses driven by lower RINs prices, and a 16% increase in refining sales volumes, partially offset by higher feedstock costs, additional purchased product costs at our Hawaii refinery and unfavorable realized derivative expenses.

Adjusted Gross Margin for the Hawaii refineries increased from a loss of $0.47 per barrel during the three months ended September 30, 2020 to income of $7.66 per barrel during the three months ended September 30, 2021 primarily due to improved contract terms and crack spreads, a 24% increase in sales volume, and decreased RINs costs driven by a $19.2 million favorable change in RINs mark-to-market adjustments, partially offset by unfavorable feedstock costs, higher purchased product expenses and unfavorable increases in logistics costs.

Adjusted Gross Margin for the Wyoming refinery increased $18.87 per barrel primarily due to improved crack spreads, decreased RINs costs driven by a $10.1 million favorable change in RINs mark-to-market adjustments, and a 36% increase in sales volumes.

Adjusted Gross Margin for the Washington refinery increased $2.81 per barrel primarily due to improved crack spreads and a $6.3 million favorable change in RINs mark-to-market adjustments, partially offset by unfavorable feedstock costs and a 3% decrease in sales volume.

For the three months ended September 30, 2021, our logistics Adjusted Gross Margin was $22.7 million, an increase of $7.4 million compared to $15.3 million for the three months ended September 30, 2020.

The increase is primarily due to net 38% higher throughput across our Hawaii logistics assets and 35% higher throughput across our Wyoming logistics assets due to increased sales volumes in both regions driven by easing travel restrictions related to the continued recovery from the COVID-19 pandemic.

For the three months ended September 30, 2021, our retail Adjusted Gross Margin was $32.5 million, which was relatively consistent with our Adjusted Gross Margin of $31.0 million for the three months ended September 30, 2020.

The increase was primarily due to a 11% increase in sales volumes from the ongoing recovery partially offset by a 4% decrease in fuel margins related to rising crude oil prices.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

For the nine months ended September 30, 2021, our refining Adjusted Gross Margin was $135.3 million, an increase of $101.8 million compared to $33.5 million for the nine months ended September 30, 2020.

The increase was primarily due to favorable purchased product costs, improved crack spreads, lower feedstock costs, and realized derivatives favorability, partially offset by higher RINs expense driven by increasing RINs prices.

Adjusted Gross Margin for the Hawaii refineries improved from a loss of $2.17 per barrel during the nine months ended September 30, 2020 to income of $2.52 per barrel during the nine months ended September 30, 2021 primarily due to favorable purchased product and feedstock costs and realized derivative favorability, partially offset by unfavorable crack spreads, increased RINs costs driven by a $20.6 million higher RINs mark-to-market expense, a 3% decrease in sales volumes, and the price lag impact associated with certain sales contracts.

Adjusted Gross Margin for the Wyoming refinery increased $9.82 per barrel primarily due to improved crack spreads, a favorable FIFO change of $22.2 million in 2021 compared to 2020, and a 15% increase in sales volumes, partially offset by increased RINs costs driven by a $3.9 million higher RINs mark-to-market expense.

Adjusted Gross Margin for the Washington refinery decreased $3.99 per barrel primarily due to higher feedstock costs and a $5.8 million increase in RINs mark-to-market expense, partially offset by improving crack spreads and lower logistics costs.

For the nine months ended September 30, 2021, our logistics Adjusted Gross Margin was $65.3 million, an increase of $7.8 million compared to $57.5 million for the nine months ended September 30, 2020.

The increase is primarily due to net 12% higher throughput across our Hawaii logistics assets and 15% higher throughput across our Wyoming logistics assets due to increased sales volumes driven by easing travel restrictions related to the continued recovery from the COVID-19 pandemic.

For the nine months ended September 30, 2021, our retail Adjusted Gross Margin was $89.6 million, a decrease of $7.0 million compared to $96.6 million for the nine months ended September 30, 2020.

The decrease was primarily due to a 17% decrease in fuel margins related to rising crude oil prices, partially offset by a 7% increase in sales volumes from the ongoing recovery.

Discussion of Consolidated Results

Three months ended June 30, 2021 compared to the three months ended June 30, 2020

For the three months ended June 30, 2021, revenues were $1.2 billion, a $0.7 billion increase compared to $0.5 billion for the three months ended June 30, 2020.

Three months ended September 30, 2021 compared to the three months ended September 30, 2020

For the three months ended September 30, 2021, revenues were $1.3 billion, a $0.6 billion increase compared to $0.7 billion for the three months ended September 30, 2020.

The increase was primarily due to an increase of $0.6 billion in third-party refining segment revenue as a result of increases in Brent and WTI crude oil prices, a 16% increase in refining sales volumes, and an increase in average product cracks.

Brent crude oil prices recovered to $69.08 per barrel during the second quarter of 2021 compared to $33.39 per barrel during the second quarter of 2020, and WTI crude oil prices recovered to $66.17 per barrel during the second quarter of 2021 compared to $28.00 per barrel during the second quarter of 2020.

Brent crude oil prices recovered to $73.23 per barrel during the third quarter of 2021 compared to $43.34 per barrel during the third quarter of 2020, and WTI crude oil prices recovered to $70.52 per barrel during the third quarter of 2021 compared to $40.92 per barrel during the third quarter of 2020.

Cost of Revenues (Excluding Depreciation).

For the three months ended June 30, 2021, cost of revenues (excluding depreciation) was $1.2 billion, a $0.8 billion increase compared to $0.4 billion for the three months ended June 30, 2020.

The increase was primarily driven by higher Brent and WTI crude oil prices and higher refining volumes as discussed above, a $158.4 million unfavorable change in lower of cost or net realizable value adjustments, higher feedstock costs at our Washington refinery, and a $50.3 million increase in the RINs expense driven by higher RINs prices.

For the three months ended September 30, 2021, cost of revenues (excluding depreciation) was $1.1 billion, a $0.5 billion increase compared to $0.6 billion for the three months ended September 30, 2020.

The increase was primarily driven by higher Brent and WTI crude oil prices, higher refining volumes as discussed above, and unfavorable feedstock differentials at our Hawaii and Washington refineries, partially offset by a $74.0 million favorable change in the RINs expense driven by lower RINs prices.

Operating Expense (Excluding Depreciation).

For the three months ended June 30, 2021, operating expense (excluding depreciation) was $68.8 million, which was relatively consistent with $67.0 million for the three months ended June 30, 2020.

For the three months ended September 30, 2021, operating expense (excluding depreciation) was $78.1 million, an $8.6 million increase when compared to $69.5 million for the three months ended September 30, 2020.

The increase in operating expenses was primarily driven by higher maintenance and utility costs at our Hawaii refinery and increased rent expenses driven by new leases from the Sale-Leaseback Transactions we completed in the first quarter of 2021.

Depreciation, Depletion, and Amortization .

For the three months ended June 30, 2021, DD&A was $23.5 million, which was relatively consistent with $22.1 million for the three months ended June 30, 2020.

Loss on Sale of Assets, Net.

During the three months ended June 30, 2021, we recorded a loss of $0.5 million primarily related to the sale and disposal of certain retail locations.

No such gain or loss was recorded during the three months ended June 30, 2020.

For the three months ended September 30, 2021, DD&A was $23.6 million, which was relatively consistent with $22.8 million for the three months ended September 30, 2020.

General and Administrative Expense (Excluding Depreciation).

For the three months ended June 30, 2021, general and administrative expense (excluding depreciation) was $12.2 million, an increase of $2.0 million compared to $10.2 million for the three months ended June 30, 2020.

For the three months ended September 30, 2021, general and administrative expense (excluding depreciation) was $12.5 million, an increase of $2.7 million compared to $9.8 million for the three months ended September 30, 2020.

The increase was primarily due to an increase in employee costs and the use of outside services.

Acquisition and Integration Costs.

For the three months ended June 30, 2021, we recorded an acquisition and integration gain of $0.4 million, which was relatively consistent with $0.1 million of costs incurred during the three months ended June 30, 2020.

Interest Expense and Financing Costs, Net .

For the three months ended June 30, 2021, our interest expense and financing costs were $17.2 million, an increase of $0.8 million compared to $16.4 million for the three months ended June 30, 2020.

The change was driven by a $2.3 million increase in interest expense and financing costs related to the 12.875% Senior

Secured Notes issued in June 2020.

This increase was partially offset by a decrease of $0.8 million due to the reduced principal and lower variable interest rates on our Term Loan B Facility, a $0.4 million decrease related to debt fully repaid during the six months ended June 30, 2021, and a net $0.2 million decrease in interest expense related to our inventory financing agreements.

Debt Extinguishment and Commitment Costs.

For the three months ended June 30, 2021, our debt extinguishment and commitment costs were $6.6 million and primarily represent extinguishment costs associated with the repayment of a portion of our 12.875% Senior Secured Notes on June 14, 2021.

Please read Note 9—Debt to our condensed consolidated financial statements for further discussion.

No such costs were incurred for the three months ended June 30, 2020.

Equity Earnings (Losses) from Laramie Energy, LLC .

For the three months ended June 30, 2021, there were no equity earnings (losses) from Laramie Energy, compared to equity losses of $1.9 million for the three months ended June 30, 2020.

As of June 30, 2020, we discontinued the application of the equity method of accounting for our investment in Laramie Energy because the book value of such investment has been reduced to zero.

Please read Note 3—Investment in Laramie Energy, LLC for further information.

For the three months ended September 30, 2021, our interest expense and financing costs were $15.4 million, a decrease of $2.1 million compared to $17.5 million for the three months ended September

The decrease was primarily due to lower outstanding debt balances driven by the early repayment of a portion of the outstanding 12.875% Senior Secured Notes on June 14, 2021, and the final maturity of the 5.00% Convertible Senior Notes on June 15, 2021.

Please read Note 9—Debt to our condensed consolidated financial statements for further discussion on our indebtedness.

Income Taxes.

For the three months ended June 30, 2021, we recorded income tax expense of $0.6 million primarily related to foreign taxes.

For the three months ended June 30, 2020, we recorded an income tax benefit of $2.7 million primarily related to an increase in our net operating loss carryforwards.

Six months ended June 30, 2021 compared to the six months ended June 30, 2020

For the six months ended June 30, 2021, revenues were $2.1 billion, a $0.4 billion increase compared to $1.7 billion for the six months ended June 30, 2020.

The increase was primarily due to an increase of $0.4 billion in third-party revenues at our refining segment primarily as a result of higher crude oil prices, partially offset by a 7% decrease in refining sales volumes.

Average Brent crude oil prices recovered to $65.22 in the six months ended June 30, 2021 compared to $42.10 per barrel in the six months ended June 30, 2020, and WTI crude oil prices recovered to $62.18 per barrel during the six months ended June 30, 2021 compared to $36.99 in the six months ended June 30, 2020.

Revenues at our retail segment increased $27.2 million primarily due to a 5% increase in sales volumes and a 9% increase in fuel prices.

For the three months ended September 30, 2021, we recorded income tax expense of $0.6 million primarily related to foreign taxes.

For the three months ended September 30, 2020, we recorded an income tax expense of $0.1 million primarily related to current state income taxes.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

For the nine months ended September 30, 2021, revenues were $3.4 billion, a $1.0 billion increase compared to $2.4 billion for the nine months ended September 30, 2020.

The increase was primarily due to an increase of $0.9 billion in third-party revenues at our refining segment primarily as a result of higher crude oil prices across all our refining locations and a 15% increase in refining sales volume at our Wyoming refinery combined with improved realized product differentials in that region.

Other factors impacting revenues were a 3% decrease in sales volumes and unfavorable product pricing in Hawaii, partially offset by more favorable product pricing at our Washington refinery.

Average Brent crude oil prices recovered to $67.92 in the nine months ended September 30, 2021 compared to $42.52 per barrel in the nine months ended September 30, 2020, and WTI crude oil prices recovered to $64.99 per barrel during the nine months ended September 30, 2021 compared to $38.31 in the nine months ended September 30, 2020.

Revenues at our retail segment increased $61.3 million primarily due to a 18% increase in fuel prices and a 7% increase in sales volumes.

Cost of Revenues (Excluding Depreciation).

For the six months ended June 30, 2021, cost of revenues (excluding depreciation) was $2.1 billion, a $0.4 billion increase compared to $1.7 billion for the six months ended June 30, 2020.

The increase was primarily due to increases in Brent and WTI crude oil prices as discussed above, a $128.3 million increase in the RINs expense driven by higher RINs prices, and higher inventory financing costs, partially offset by lower refining sales volumes and favorable purchased product and feedstock costs at our Hawaii refinery.

Other factors impacting our results period over period are a $34.6 million favorable change in lower of cost or net realizable value adjustments and lower crude oil sales.

For the nine months ended September 30, 2021, cost of revenues (excluding depreciation) was $3.2 billion, a $1.0 billion increase compared to $2.2 billion for the nine months ended September 30, 2020.

The increase was primarily due to increases in Brent and WTI crude oil prices as discussed above, higher inventory financing costs, and a $54.4 million increase in the RINs expense driven by higher RINs prices during 2021, partially offset by favorable purchased product and feedstock costs at our Hawaii refinery.

Other factors impacting our results period over period include 37% higher fuel costs and 7% higher sales volumes at our Retail segment.

Operating Expense (Excluding Depreciation).

For the six months ended June 30, 2021, operating expense (excluding depreciation) was $143.0 million, which was relatively consistent with $140.4 million for the six months ended June 30, 2020.

For the nine months ended September 30, 2021, operating expense (excluding depreciation) was $221.1 million, an increase of $11.2 million when compared to $209.9 million for the nine months ended September 30, 2020.

The increase was primarily driven by higher utility and maintenance expenses at our Hawaii refinery, increased rent expenses driven by new leases from the Sale-Leaseback Transactions we completed in the first quarter of 2021, and increased utility and maintenance expenses at our Wyoming refinery related to Winter Storm Uri in February 2021.

Depreciation, Depletion, and Amortization .

For the six months ended June 30, 2021, DD&A was $46.4 million, an increase of $3.0 million compared to $43.4 million for the six months ended June 30, 2020.

For the nine months ended September 30, 2021, DD&A was $70.0 million, an increase of $3.8 million compared to $66.2 million for the nine months ended September 30, 2020.

The increase was primarily due to Hawaii refinery turnaround amortization.

Impairment Expense.

For the six months ended June 30, 2020, we recorded goodwill impairment charges of $67.9 million related to our Refining and Retail segments 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.

No such expense was recorded during the six months ended June 30, 2021.

For the nine months ended September 30, 2020, we recorded goodwill impairment charges of $67.9 million related to our Refining and Retail segments 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.

No such expense was recorded during the nine months ended September 30, 2021.

Gain on Sale of Assets, Net.

For the six months ended June 30, 2021, the gain on sale of assets, net was approximately $64.4 million and primarily related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021.

No such gain was recorded during the six months ended June 30, 2020.

For the nine months ended September 30, 2021, the gain on sale of assets, net was approximately $64.4 million and primarily related to the Sale-Leaseback Transactions we closed on February 23 and March 12, 2021.

No such gain was recorded during the nine months ended September 30, 2020.

General and Administrative Expense (Excluding Depreciation).

For the six months ended June 30, 2021, general and administrative expense (excluding depreciation) was $24.1 million, an increase of $2.1 million compared to $22.0 million for the six months ended June 30, 2020.

For the nine months ended September 30, 2021, general and administrative expense (excluding depreciation) was $36.6 million, an increase of $4.8 million compared to $31.8 million for the nine months ended September 30, 2020.

The increase was primarily due to increased employee costs and an increase in the use of outside services.

Acquisition and Integration Costs.

For the six months ended June 30, 2021, acquisition and integration costs were not significant.

For the six months ended June 30, 2020, we incurred $0.8 million of integration costs primarily related to the Washington Acquisition.

For the nine months ended September 30, 2021, acquisition and integration costs were not significant.

For the nine months ended September 30, 2020, we incurred $0.6 million of integration costs primarily related to the Washington Acquisition.

Interest Expense and Financing Costs, Net .

For the six months ended June 30, 2021, our interest expense and financing costs were $35.3 million, an increase of $0.2 million when compared to $35.1 million for the six months ended June 30, 2020.

The increase was primarily due to a $5.9 million increase in interest expense and financing costs related to the 12.875% Senior Secured Notes issued in June 2020 and increased interest expense of $0.1 million related to the ABL Credit Facility.

These increases were partially offset by a decrease of $2.4 million due to the interest rate derivatives terminated as of March 31, 2021 primarily related to the Retail Property Term Loan and $2.1 million due to the reduced principal and lower variable interest rates on our Term Loan B Facility.

Other factors contributing to the decrease included a $0.8 million decrease in interest expense related to our inventory financing agreements and a $0.5 million decrease related to debt fully repaid during the six months ended June 30, 2021.

Please read Note 7—Inventory Financing Agreements and Note 9—Debt to our condensed consolidated financial statements for further discussion on our inventory financing and indebtedness, respectively.

For the nine months ended September 30, 2021, our interest expense and financing costs were $50.7 million, a decrease of $1.9 million when compared to $52.6 million for the nine months ended

September 30, 2020.

Please read Note 9—Debt to our condensed consolidated financial statements for further discussion on our indebtedness.

Debt Extinguishment and Commitment Costs.

For the six months ended June 30, 2021, our debt extinguishment and commitment costs were $8.1 million and primarily represent $6.6 million in extinguishment costs associated with the redemption of $36.8 million of 12.875% Senior Secured Notes on June 14, 2021 and $1.4 million in extinguishment costs associated with the repayment of the Retail Property Term Loan on February 23, 2021.

For the nine months ended September 30, 2021, our debt extinguishment and commitment costs were $8.1 million and primarily represent $6.6 million in extinguishment costs associated with the early repayment of a portion of the outstanding 12.875% Senior Secured Notes on June 14, 2021 and $1.4 million in extinguishment costs associated with the repayment of the Retail Property Term Loan on February 23, 2021.

Please read Note 9—Debt to our condensed consolidated financial statements for further discussion.

No such costs were incurred for the six months ended June 30, 2020.

No such costs were incurred for the nine months ended September 30, 2020.

Gain on Curtailment of Pension Obligation.

For the six months ended June 30, 2021, we recorded a $2.0 million gain on curtailment of pension obligation related to the March 2021 Wyoming Refining plan amendment.

For the nine months ended September 30, 2021, we recorded a $2.0 million gain on curtailment of pension obligation related to the March 2021 Wyoming Refining plan amendment.

Please read Note 2—Summary of Significant Accounting Policies to our condensed consolidated financial statements for further discussion.

No such gain was recorded during the six months ended June 30, 2020.

No such gain was recorded during the nine months ended September 30, 2020.

Change in Value of Common Stock Warrants .

For the six months ended June 30, 2020, the change in value of common stock warrants resulted in a gain of $4.3 million.

For the nine months ended September 30, 2020, the change in value of common stock warrants resulted in a gain of $4.3 million.

During January and March 2020, one of our stockholders and its affiliates exercised the remaining 354,350 common stock warrants in exchange for 350,542 shares of common stock.

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For the three months ended March 31, 2020, our stock price decreased from $23.24 per share as of December 31, 2019 to $7.10 per share as of March 31, 2020.

During the six months ended June 30, 2021, there were no common stock warrants outstanding.

Equity Earnings (Losses) from Laramie Energy, LLC .

For the six months ended June 30, 2021, there were no equity earnings (losses) from Laramie Energy compared to equity losses of $46.9 million for the six months ended June 30, 2020.

During the nine months ended September 30, 2021, there were no common stock warrants outstanding.

Equity Losses from Laramie Energy, LLC .

For the nine months ended September 30, 2021, there were no equity earnings (losses) from Laramie Energy compared to equity losses of $46.9 million for the nine months ended September 30, 2020.

The losses recorded in 2020 were primarily a result of an impairment of our investment in Laramie.

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Income Taxes.

For the six months ended June 30, 2021, we recorded an income tax expense of $0.6 million primarily driven by foreign taxes.

For the six months ended June 30, 2020, we recorded an income tax benefit of $21.0 million primarily driven by an increase in our net operating loss carryforwards and the change in our indefinitely-lived goodwill due to the impairments.

For the nine months ended September 30, 2021, we recorded an income tax expense of $1.2 million primarily driven by foreign taxes.

For the nine months ended September 30, 2020, we recorded an income tax benefit of $20.9 million primarily driven by an increase in our net operating loss carryforwards and the change in our indefinitely-lived goodwill due to the impairments.

Consolidating Condensed Financial Information

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For purposes of the following condensed consolidating information, the Parent’s investment in its subsidiaries is accounted for under the equity method of accounting (dollar amounts in thousands).

As of June 30, 2021

As of September 30, 2021

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Total liabilities and stockholders’ equity $ 346,344 $ 2,080,147 $ (292,630) $ 2,133,861

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Adjusted EBITDA $ (3,112) $ 87,799 $ 11 $ 84,698

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Total operating expenses 3,314 684,973 (1,056) 687,231

Operating loss (3,397) (23,099) 1,053 (25,443)

Operating income (loss) (3,314) 5,008 1,056 2,750

Other income (expense)

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Adjusted EBITDA $ (2,569) $ (14,664) $ 1,183 $ (16,050)

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Adjusted EBITDA $ (9,334) $ 43,281 $ 752 $ 34,699

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Total operating expenses 10,448 2,605,945 (3,162) 2,613,231

Operating loss (7,134) (201,590) 2,108 (206,616)

Operating income (loss) (10,448) (196,582) 3,164 (203,866)

Other income (expense)

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See “Results of Operations — Non-GAAP Performance Measures — Adjusted Net Income (Loss) and Adjusted EBITDA” above.

The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net Loss, on a historical basis for the periods indicated (in thousands):

Three Months Ended June 30, 2021

The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss), on a historical basis for the periods indicated (in thousands):

Three Months Ended September 30, 2021

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Debt extinguishment and commitment costs — 9 — 9

Severance costs — 59 — 59

Loss (gain) on sale of assets, net — 2 — 2

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Adjusted EBITDA (3) $ (3,112) $ 87,799 $ 11 $ 84,698

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Inventory valuation adjustment — (43,980) — (43,980)

LIFO liquidation adjustment — 6,211 — 6,211

RINs loss (gain) in excess of net obligation — 645 — 645

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Acquisition and integration costs — (155) — (155)

Changes in valuation allowance and other deferred tax items (1) — — (2,714) (2,714)

Severance costs 96 — — 96

Depreciation, depletion, and amortization 753 21,941 127 22,821

Interest expense and financing costs, net 1,236 16,059 228 17,523

Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — 1,874 1,874

Equity losses (income) from subsidiaries 9,713 — (9,713) —

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Adjusted EBITDA (3) $ (2,569) $ (14,664) $ 1,183 $ (16,050)

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Inventory valuation adjustment — 38,732 — 38,732

LIFO liquidation adjustment — 4,151 — 4,151

RINs loss (gain) in excess of net obligation — 11,874 — 11,874

Unrealized loss (gain) on derivatives — (2,608) — (2,608)

Unrealized loss on derivatives — 7,620 — 7,620

Acquisition and integration costs 87 — — 87

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Adjusted EBITDA (3) $ (9,334) $ 43,281 $ 752 $ 34,699

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Inventory valuation adjustment — (4,635) — (4,635)

LIFO liquidation adjustment — 6,211 — 6,211

RINs loss (gain) in excess of net obligation — 17,985 — 17,985

Unrealized loss on derivatives — 445 — 445

Unrealized loss (gain) on derivatives — (4,507) — (4,507)

Acquisition and integration costs — 600 — 600

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on derivatives are included in Equity earnings (losses) from Laramie Energy, LLC on our condensed consolidated statements of operations.

(3) For the three and six months ended June 30, 2021, there was no change in valuation allowance and other deferred tax items, change in value of common stock warrants, impairment expense, impairment of investment in Laramie Energy, unrealized gain on derivatives included in equity earnings from Laramie Energy, or equity losses from Laramie Energy.

For the three and six months ended June 30, 2020, there were no debt extinguishment costs, LIFO liquidation adjustment, or loss (gain) on sale of assets.

(3) For the three and nine months ended September 30, 2021, and the three months ended September 30, 2020, there was no change in valuation allowance and other deferred tax items, change in value of common stock warrants, impairment expense, impairment of investment in Laramie Energy, unrealized gain on derivatives included in equity earnings from Laramie Energy, or equity losses from Laramie Energy.

For the nine months ended September 30, 2021, there was no LIFO liquidation adjustment.

For the three and nine months ended September 30, 2020, there were no debt extinguishment and commitment costs or losses (gains) on sale of assets.

For the three months ended September 30, 2020, there were no severance costs.

Liquidity and Capital Resources

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Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets.

Our liquidity position as of June 30, 2021 was $243.5 million and consisted of $240.6 million at Par Petroleum, LLC and subsidiaries, $2.8 million at Par Pacific Holdings, and $0.1 million at all our other subsidiaries.

As of June 30, 2021, we had access to the ABL Credit Facility, the MLC receivable advances, and cash on hand of $174.3 million.

Beginning on July 1, 2021, we also had access to the J.

Aron Discretionary Draw Facility.

Our liquidity position as of September 30, 2021 was $276.8 million and consisted of $272.2 million at Par Petroleum, LLC and subsidiaries, $4.6 million at Par Pacific Holdings, and an immaterial amount at all our other subsidiaries.

As of September 30, 2021, we had access to the ABL Credit Facility, the J.

Aron Discretionary Draw Facility, the MLC receivable advances, and cash on hand of $201.3 million.

In addition, we have the Supply and Offtake Agreement with J.

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Generally, the primary uses of our capital resources have been in the operations of our refining and retail segments, payments related to acquisitions, and to repay or refinance indebtedness.

In the first quarter of 2021, we closed on the sale and leaseback of twenty-two (22) of our retail properties in Hawaii for an aggregate cash purchase price of approximately $112.8 million net of transaction fees (the “Sale-Leaseback Transactions”).

In the first quarter of 2021, we closed the Sale-Leaseback Transactions for an aggregate cash purchase price of approximately $112.8 million net of transaction fees.

We used approximately $53.1 million of the net cash proceeds to repay the certain financing arrangements which were related to certain of the retail properties and the remainder for general corporate purposes.

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The amounts involved may be material.

The following table summarizes cash activities for the six months ended June 30, 2021 and 2020 (in thousands):

Six Months Ended June 30,

The Term Loan B Facility may also require annual prepayments of principal with a variable percentage of our excess cash flow, 50% or 25% depending on our consolidated year end secured leverage ratio (as defined in the Term Loan B Facility agreement).

The following table summarizes cash activities for the nine months ended September 30, 2021 and 2020 (in thousands):

Nine Months Ended September 30,

Net cash provided by operating activities $ 54,594 $ 25,953

Net cash provided by (used in) investing activities 82,356 (42,428)

Net cash provided by financing activities 15,358 13,247

Net cash provided by operating activities was approximately $1.8 million for the six months ended June 30, 2021, which resulted from a net loss of $171.2 million, offset by net cash provided by changes in operating assets and liabilities of approximately $191.2 million and non-cash earnings from operations of approximately $18.2 million.

The change in our operating assets and liabilities for the six months ended June 30, 2021 was primarily due to an increase in our gross environmental credit obligations of $204.0 million and a net increase in our Supply and Offtake Agreement and Washington Refinery Intermediation Agreement obligations of $199.6 million, partially offset by increases in inventories of $184.1 million and accounts receivable of $99.5 million.

Net cash provided by (used in) financing activities (1,954) 17,380

Net cash provided by operating activities was approximately $54.6 million for the nine months ended September 30, 2021, which resulted from a net loss of $89.4 million, offset by net cash provided by changes in operating assets and liabilities of approximately $125.3 million and non-cash charges to operations of approximately $18.7 million.

The change in our operating assets and liabilities for the nine months ended September 30, 2021 was primarily due to an increase in our gross environmental credit obligations of $147.0 million and a net increase in our Supply and Offtake Agreement and Washington Refinery Intermediation Agreement obligations of $178.6 million, partially offset by increases in inventories of $195.1 million and accounts receivable of $83.5 million.

Net cash provided by changes in operating assets and liabilities also includes an increase of $6.3 million in deferred turnaround costs.

Net cash provided by operating activities was approximately $33.8 million for the six months ended June 30, 2020, which resulted from a net loss of approximately $262.9 million, partially offset by net cash provided by changes in operating assets and liabilities of approximately $130.9 million and non-cash charges to operations of approximately $165.7 million.

For the six months ended June 30, 2021, net cash provided by investing activities was approximately $88.8 million and primarily related to proceeds received from the Sale-Leaseback Transactions partially offset by $14.0 million of additions to property, plant, and equipment.

Net cash used in investing activities was approximately $30.2 million for the six months ended June 30, 2020 and primarily related to additions to property, plant, and equipment totaling approximately $30.2 million.

Net cash provided by financing activities for the six months ended June 30, 2021 was approximately $15.4 million, which consisted primarily of proceeds of $87.2 million from our March 2021 equity offering of common stock and net borrowings associated with the J.

Net cash provided by operating activities was approximately $26.0 million for the nine months ended September 30, 2020, which resulted from a net loss of approximately $277.2 million, partially offset by net cash provided by changes in operating assets and liabilities of approximately $117.5 million and non-cash charges to operations of approximately $185.6 million.

For the nine months ended September 30, 2021, net cash provided by investing activities was approximately $82.4 million and primarily related to proceeds received from the Sale-Leaseback Transactions partially offset by $21.0 million of additions to property, plant, and equipment.

Net cash used in investing activities was approximately $42.4 million for the nine months ended September 30, 2020 and primarily related to additions to property, plant, and equipment totaling approximately $42.5 million.

Net cash used in financing activities for the nine months ended September 30, 2021 was approximately $2.0 million, which consisted primarily of proceeds of $87.2 million from our March 2021 equity offering of common stock and net borrowings associated with the J.

Aron deferred payment and MLC receivable advances of approximately $66.2 million, partially offset by net debt and insurance premium repayments of approximately $148.7 million and $5.6 million in extinguishment costs related to the repayment of the Retail Property Term Loan and a portion of the 12.875% Senior Secured Notes.

Net cash provided by financing activities for the six months ended June 30, 2020 was approximately $13.2 million, which consisted primarily of net debt and insurance premium borrowings of approximately $92.7 million, partially offset by net repayments associated with the J.

Net cash provided by financing activities for the nine months ended September 30, 2020 was approximately $17.4 million, which consisted primarily of net debt and insurance premium borrowings of approximately $85.5 million, partially offset by net repayments associated with the J.

Aron deferred payment and MLC receivable advances of approximately $60.8 million and payments of $6.3 million in deferred loan costs primarily related to the issuance of the 12.875% Senior Secured Notes.

Capital Expenditures and Turnaround Costs

Our deferred turnaround costs and capital expenditures, excluding acquisitions, for the six months ended June 30, 2021 totaled approximately $19.7 million and were primarily related to the 2021 turnaround and related scheduled maintenance work at our Washington refinery, capital projects at our Hawaii refinery, and underground tank replacements, rebranding, and point of sale and other equipment upgrades at our Retail segment.

Our deferred turnaround costs and capital expenditures, excluding acquisitions, for the nine months ended September 30, 2021 totaled approximately $27.3 million and were primarily related to the 2021 turnaround and related scheduled maintenance work at our Washington refinery, capital projects at our Hawaii refinery, and underground tank replacements, rebranding, and point of sale and other equipment upgrades at our Retail segment.

Our capital expenditure and deferred turnaround cost budget for 2021 ranges from $35 to $45 million and primarily relates to a partial turnaround at our Washington refinery and scheduled sustaining maintenance, regulatory, and safety compliance projects across all businesses.

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Commitments and Contingencies

Supply and Offtake Agreements.

Supply and Offtake Agreement.

On June 1, 2021, we and J.

Aron entered into a Second Amended and Restated Supply and Offtake Agreement to support our Hawaii refining operations which expires on May 31, 2024 with a one-year extension option.

Aron entered into a Second Amended and Restated Supply and Offtake Agreement to support our Hawaii refining operations.

This agreement expires on May 31, 2024 with a one-year extension option.

Please read Note 7—Inventory Financing Agreements for more information.

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However, the adverse impact of COVID-19 on the Company has been and will likely continue to be material.

There can be no guarantee that the operational and financial measures the Company has taken, and may take in the future, will be fully effective.

There can be no guarantee that the operational and financial measures the Company has taken, and may take in the future, will be fully

We do not intend to update or revise any forward-looking statements as a result of new information, future events, or otherwise.

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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 2. Management’s Discussion and Analysis