PAR PACIFIC HOLDINGS, INC. 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a growth-oriented company based in Houston, Texas, that owns and operates market-leading energy and infrastructure businesses. Our business is organized into three primary segments: 1) Refining - We own and operate three refineries with total operating throughput capacity of 154 Mbpd in Hawaii, Wyoming, and Washington. 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. 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 March 31, 2022, 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. Given the improved outlook for natural gas, we are considering strategic alternatives with respect to our investment in Laramie Energy given the improved outlook for natural gas, including, among other things, a change in the size of our investment. We have four reportable segments: (i) Refining, (ii) Retail, (iii) Logistics, and (iv) Corporate and Other. Our Corporate and Other reportable segment primarily includes general and administrative costs. Please read Note 17—Segment Information to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for detailed information on our operating results by segment. Recent Events Affecting Comparability of Periods During the first quarter of 2022, the global market for energy commodities experienced significant volatility. In January and February, the price of crude oil maintained the steady increase experienced in the last quarter of 2021 as the global economy continued to recover from lows related to the COVID-19 pandemic and the Organization of the Petroleum Exporting Countries, or OPEC, and its oil-producing allies implemented modest production increases while global demand surged. The rise in demand was driven by a recovery of U.S. domestic travel to pre-pandemic levels as COVID-19 cases declined and an improved outlook on international tourism from the Asian market for the remainder of 2022 as international travel restrictions in Japan eased in March. In March, the U.S. Centers for Disease Control and Prevention (“CDC”) lifted its Travel Health Notice for cruise ships in response to the decline in COVID-19 cases, and in April, the requirement for passengers to wear masks on airplanes mandated by the CDC was struck down in a U.S. District Court. Airline companies, which represent a significant portion of our Hawaii market through jet fuel sales, have forecasted significant increases in air travel volumes for the remainder of 2022, further signifying an expected return to pre-pandemic levels of demand in the Pacific region. In response to the Russian invasion of Ukraine in February, the international community imposed economic sanctions and other limitations on Russian exports, which further decreased the global supply of crude oil and drove up the price of crude oil. By early March, crude oil reached its highest price since 2008. On March 3, 2022, we suspended purchases of Russian crude oil for our Hawaii refinery in response to the Russia-Ukraine conflict. We have turned to other grades of crude oil to meet fuel production requirements. As of the date of this Quarterly Report on Form 10-Q, the Russia-Ukraine conflict is ongoing and continues to impact the global economy. We will continue to monitor the effects the conflict has on the global financial markets and our operations. Please read Item 1A. — Risk Factors for more information on the Russia-Ukraine conflict and its potential impacts on our business. Additionally, the financial results contained in this Quarterly Report on Form 10-Q reflect the continuing COVID-19 pandemic-related demand suppression experienced in the regions in which we operate. Though vaccine availability and vaccination rates are increasing, the pandemic is ongoing and the impacts of the virus on people and businesses continue to evolve as of the date of this report. The full magnitude of the impact of these and other events on our financial condition, future results of operations, and future cash flows and liquidity is uncertain and has been and may continue to be material. 26 Results of Operations Three months ended March 31, 2022 compared to the three months ended March 31, 2021 Net Loss. Our financial results declined from a net loss of $62.2 million for the three months ended March 31, 2021 to a net loss of $137.1 million for the three months ended March 31, 2022. The increase in our net loss was primarily driven by a gain of $63.9 million related to the Sale-Leaseback Transactions and a $2.0 million gain on curtailment of pension obligation in the three months ended March 31, 2021 with no such gains in the 2022 comparable period . Other factors impacting our results period over period include higher utilities and repair and maintenance costs and higher employee expenses. Adjusted EBITDA and Adjusted Net Loss. For the three months ended March 31, 2022, Adjusted EBITDA was $8.3 million compared to a loss of $34.4 million for the three months ended March 31, 2021. The improvement was primarily related to favorable crack spreads across all our refineries and lower RINs costs, partially offset by unfavorable feedstock and purchased product costs and higher costs related to our inventory financing agreements. Other factors impacting our results period over period include realized derivative unfavorability and increased fuel burn costs for the three months ended March 31, 2022. For the three months ended March 31, 2022, Adjusted Net Loss was $31.4 million compared to $75.4 million for the three months ended March 31, 2021. 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 months ended March 31, 2022 compared to the three months ended March 31, 2021 (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 March 31, 2022 2021 $ Change % Change (1) Revenues $ 1,350,293 $ 888,680 $ 461,613 52% Cost of revenues (excluding depreciation) 1,350,249 888,863 461,386 52% Operating expense (excluding depreciation) 81,404 74,188 7,216 10% Depreciation, depletion, and amortization 23,780 22,880 900 4% Gain on sale of assets, net — (64,912) 64,912 100% General and administrative expense (excluding depreciation) 15,893 11,885 4,008 34% Acquisition and integration costs 63 438 (375) (86)% Total operating expenses 1,471,389 933,342 Operating loss (121,096) (44,662) Other income (expense) Interest expense and financing costs, net (16,394) (18,151) 1,757 (10)% Debt extinguishment and commitment costs — (1,507) 1,507 100% Gain on curtailment of pension obligation — 2,032 (2,032) (100)% Other income, net 2 61 (59) (97)% Total other income (expense), net (16,392) (17,565) Loss before income taxes (137,488) (62,227) Income tax benefit (expense) 437 — 437 NM Net loss $ (137,051) $ (62,227) ________________________________________________________ (1) NM - Not meaningful 27 The following tables summarize our operating income (loss) by segment for the three months ended March 31, 2022 and 2021 (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 March 31, 2022 Refining Logistics Retail Corporate, Eliminations and Other (1) Total Revenues $ 1,299,223 $ 42,461 $ 119,909 $ (111,300) $ 1,350,293 Cost of revenues (excluding depreciation) 1,343,915 23,749 93,842 (111,257) 1,350,249 Operating expense (excluding depreciation) 58,300 3,773 19,331 — 81,404 Depreciation, depletion, and amortization 15,333 5,087 2,691 669 23,780 General and administrative expense (excluding depreciation) — — — 15,893 15,893 Acquisition and integration costs — — — 63 63 Operating income (loss) $ (118,325) $ 9,852 $ 4,045 $ (16,668) $ (121,096) Three months ended March 31, 2021 Refining Logistics Retail Corporate, Eliminations and Other (1) Total Revenues $ 838,755 $ 41,309 $ 91,188 $ (82,572) $ 888,680 Cost of revenues (excluding depreciation) 883,477 22,082 65,872 (82,568) 888,863 Operating expense (excluding depreciation) 53,338 3,896 16,954 — 74,188 Depreciation, depletion, and amortization 14,064 5,254 2,660 902 22,880 Loss (gain) on sale of assets, net (21,259) — (43,653) — (64,912) General and administrative expense (excluding depreciation) — — — 11,885 11,885 Acquisition and integration costs — — — 438 438 Operating income (loss) $ (90,865) $ 10,077 $ 49,355 $ (13,229) $ (44,662) ________________________________________________________ (1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $111.3 million and $82.6 million for the three months ended March 31, 2022 and 2021, respectively. 28 Below is a summary of key operating statistics for the refining segment for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Total Refining Segment Feedstocks Throughput (Mbpd) 118.2 127.4 Refined product sales volume (Mbpd) 122.3 130.0 Hawaii Refinery Feedstocks Throughput (Mbpd) 82.7 81.2 Yield (% of total throughput) Gasoline and gasoline blendstocks 25.2 % 24.7 % Distillates 41.1 % 42.9 % Fuel oils 29.3 % 27.6 % Other products 0.4 % 1.5 % Total yield 96.0 % 96.7 % Refined product sales volume (Mbpd) On-island sales volume 78.0 77.7 Exports sales volume — — Total refined product sales volume 78.0 77.7 Adjusted Gross Margin per bbl ($/throughput bbl) (1) $ 3.27 $ 0.76 Production costs per bbl ($/throughput bbl) (2) 4.38 3.97 DD&A per bbl ($/throughput bbl) 0.66 0.68 Washington Refinery Feedstocks Throughput (Mbpd) 20.2 31.6 Yield (% of total throughput) Gasoline and gasoline blendstocks 24.9 % 24.5 % Distillates 33.5 % 36.2 % Asphalt 17.4 % 18.0 % Other products 20.9 % 18.7 % Total yield 96.7 % 97.4 % Refined product sales volume (Mbpd) 29.5 39.2 Adjusted Gross Margin per bbl ($/throughput bbl) (1) $ 0.74 $ (1.33) Production costs per bbl ($/throughput bbl) (2) 7.35 4.36 DD&A per bbl ($/throughput bbl) 3.29 1.77 29 Three Months Ended March 31, 2022 2021 Wyoming Refinery Feedstocks Throughput (Mbpd) 15.3 14.6 Yield (% of total throughput) Gasoline and gasoline blendstocks 50.3 % 49.0 % Distillates 43.1 % 45.0 % Fuel oils 2.4 % 1.4 % Other products 1.4 % 1.2 % Total yield 97.2 % 96.6 % Refined product sales volume (Mbpd) 14.8 13.1 Adjusted Gross Margin per bbl ($/throughput bbl) (1) $ 24.91 $ 2.35 Production costs per bbl ($/throughput bbl) (2) 8.00 8.10 DD&A per bbl ($/throughput bbl) 3.24 3.11 Market Indices (average $ per barrel) 3-1-2 Singapore Crack Spread (3) $ 16.21 $ 3.80 Pacific Northwest 5-2-2-1 Index (4) 21.88 11.46 Wyoming 3-2-1 Index (5) 26.53 20.97 Crude Oil Prices (average $ per barrel) Brent $ 97.90 $ 61.32 WTI 95.01 58.14 ANS 99.56 61.65 Bakken Clearbrook 98.39 57.60 WCS Hardisty 82.53 46.16 Brent M1-M3 4.13 0.81 ________________________________________________________ (1) We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput. Adjusted Gross Margin for our Washington refinery is determined under the last-in, first-out (“LIFO”) inventory costing method. Adjusted Gross Margin for our other refineries is determined under the first-in, first-out (“FIFO”) inventory costing method. Please see discussion of Adjusted Gross Margin below. (2) Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are a variety of ways to calculate production costs per barrel; different companies within the industry calculate it in different ways. We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refineries including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput. Our production costs are included in Operating expense (excluding depreciation) on our condensed consolidated statement of operations, which also includes costs related to our bulk marketing operations. (3) We believe the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) is the most representative market indicator for our operations in Hawaii. (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 (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 30 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 months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Retail Segment Retail sales volumes (thousands of gallons) 24,908 24,801 Non-GAAP Performance Measures Management uses certain financial measures to evaluate our operating performance that are considered non-GAAP financial measures. These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies since each company may define these terms differently. We believe Adjusted Gross Margin (as defined below) provides useful information to investors because it eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost and net realizable value adjustments to demonstrate the earnings potential of the business before other fixed and variable costs, which are reported separately in Operating expense (excluding depreciation) and Depreciation, depletion, and amortization. Management uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure. Beginning with financial results reported for periods in fiscal year 2022, the inventory valuation adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with the our titled manufactured inventory in Hawaii. This modification was made to better align Adjusted Net Income (Loss) and Adjusted EBITDA with the cash flow of the Hawaii refining business. Prior to 2022, the impacts of FIFO inventory gains (losses) associated with Hawaii titled manufactured inventory were eliminated through the inventory valuation adjustment. We have recast Adjusted Gross Margin, Adjusted Net Income, and Adjusted EBITDA for prior periods when reported to conform to the modified presentation. Adjusted Gross Margin Adjusted Gross Margin is defined as operating income (loss) excluding: • operating expense (excluding depreciation); • depreciation, depletion, and amortization (“DD&A”); • impairment expense; • loss (gain) on sale of assets, net; • 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; beginning in 2022, this also includes the FIFO inventory (gains) losses associated with our titled manufactured inventory in Hawaii); • 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. 31 Adjusted Gross Margin can also be defined as revenues less cost of revenues (excluding depreciation) excluding: • 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, • certain hydrocarbon fees and taxes, and • the unrealized gain (loss) on derivatives and the inventory valuation adjustment that we exclude from Adjusted Gross Margin. 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 March 31, 2022 Refining Logistics Retail Operating income (loss) $ (118,325) $ 9,852 $ 4,045 Operating expense (excluding depreciation) 58,300 3,773 19,331 Depreciation, depletion, and amortization 15,333 5,087 2,691 Inventory valuation adjustment 80,653 — — RINs loss in excess of net obligation 7,256 — — Unrealized loss on derivatives 15,452 — — Adjusted Gross Margin (1) $ 58,669 $ 18,712 $ 26,067 Three months ended March 31, 2021 Refining Logistics Retail Operating income (loss) $ (90,865) $ 10,077 $ 49,355 Operating expense (excluding depreciation) 53,338 3,896 16,954 Depreciation, depletion, and amortization 14,064 5,254 2,660 Loss on sale of assets, net (21,259) — (43,653) Inventory valuation adjustment 23,086 — — LIFO liquidation adjustment 1,888 — — RINs loss in excess of net obligation 28,770 — — Unrealized gain on derivatives (4,012) — — Adjusted Gross Margin (2) $ 5,010 $ 19,227 $ 25,316 ____________________________________________________________________________ (1) For the three months ended March 31, 2022, there was no loss (gain) on sale of assets, impairment expense, or LIFO liquidation adjustment recorded in Operating income (loss). (2) For the three months ended March 31, 2021, there was no impairment expense recorded in Operating income (loss). Adjusted Net Income (Loss) and Adjusted EBITDA 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; beginning in 2022, this also includes the FIFO inventory (gains) losses associated with our titled manufactured inventory in Hawaii); • the LIFO layer liquidation impacts associated with our Washington inventory; 32 • 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 defined as 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). 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 March 31, 2022 2021 Net Loss $ (137,051) $ (62,227) Inventory valuation adjustment 80,653 23,086 LIFO liquidation adjustment — 1,888 RINs loss in excess of net obligation 7,256 28,770 Unrealized loss (gain) on derivatives 15,452 (4,012) Acquisition and integration costs 63 438 Debt extinguishment and commitment costs — 1,507 Severance costs 2,228 16 Loss (gain) on sale of assets, net — (64,912) Adjusted Net Loss (1) (31,399) (75,446) Depreciation, depletion, and amortization 23,780 22,880 Interest expense and financing costs, net 16,394 18,151 Income tax expense (benefit) (437) — Adjusted EBITDA $ 8,338 $ (34,415) ________________________________________ (1) For the three months ended March 31, 2022 and 2021, there was no change in value of contingent consideration, change in value of common stock warrants, change in valuation allowance or other deferred tax items, impairment expense, or equity losses (earnings) from Laramie Energy, LLC, including impairments associated with our investment in Laramie Energy, our share of Laramie Energy’s asset impairment losses in excess of our basis difference, and our share of Laramie Energy’s unrealized loss (gain) on derivatives. 33 Factors Impacting Segment Results Three months ended March 31, 2022 compared to the three months ended March 31, 2021 Refining. Operating loss for our refining segment was $118.3 million for the three months ended March 31, 2022, an increased loss of $27.4 million compared to an operating loss of $90.9 million for the three months ended March 31, 2021. The increased loss was primarily driven by higher costs associated with our inventory financing agreements, higher feedstock costs across our refineries, and unfavorable purchased product and derivative costs at our Hawaii refinery, partially offset by favorable crack spreads across our refineries and a $67.9 million decrease in RINs expenses. Other factors impacting our results period over period include a gain on sale of assets of $21.3 million in the three months ended March 31, 2021 primarily related to the Sale-Leaseback Transactions we closed in the first quarter of 2021 with no such gain in 2022 and increased fuel burn costs for the three months ended March 31, 2022. Logistics. Operating income for our logistics segment was $9.9 million for the three months ended March 31, 2022, which was relatively consistent with operating income of $10.1 million for the three months ended March 31, 2021. Retail. Operating income for our retail segment was $4.0 million for the three months ended March 31, 2022, a decrease of $45.4 million compared to an operating income of $49.4 million for the three months ended March 31, 2021. The decrease in profitability is primarily due to a gain on sale of assets of $43.7 million in the three months ended March 31, 2021 primarily related to the Sale-Leaseback Transactions we closed in the first quarter of 2021 with no such gain in 2022. Adjusted Gross Margin Three months ended March 31, 2022 compared to the three months ended March 31, 2021 Refining. For the three months ended March 31, 2022, our refining Adjusted Gross Margin was $58.7 million, an increase of $53.7 million compared to $5.0 million for the three months ended March 31, 2021. The increase was primarily due to favorable crack spreads across all our refineries and lower RINs costs, partially offset by unfavorable feedstock and purchased product costs, higher costs associated with our inventory financing agreements, and higher fuel burn costs. Adjusted Gross Margin for the Hawaii refinery improved from $0.76 per barrel during the three months ended March 31, 2021 to $3.27 per barrel during the three months ended March 31, 2022 primarily due to favorable crack spreads and decreased RINs costs, partially offset by unfavorable feedstock, purchased product, and realized derivative costs, increased fuel burn costs, and higher costs associated with our inventory financing agreement. Adjusted Gross Margin for the Wyoming refinery increased by $22.56 per barrel primarily due to decreased RINs costs, a favorable FIFO change of $9.8 million, improved crack spreads, and higher sales volumes. Adjusted Gross Margin for the Washington refinery increased by $2.07 per barrel primarily due to favorable crack spreads and decreased RINs costs, partially offset by unfavorable feedstock costs, reduced sales volumes related to the 2022 turnaround, and higher costs associated with our inventory financing agreement. Logistics. For the three months ended March 31, 2022, our logistics Adjusted Gross Margin was $18.7 million, which was relatively consistent with $19.2 million for the three months ended March 31, 2021. Retail. For the three months ended March 31, 2022, our retail Adjusted Gross Margin was $26.1 million, which was relatively consistent with $25.3 million for the three months ended March 31, 2021. Discussion of Consolidated Results Three months ended March 31, 2022 compared to the three months ended March 31, 2021 Revenues. For the three months ended March 31, 2022, revenues were $1.4 billion, a $0.5 billion increase compared to $0.9 billion for the three months ended March 31, 2021. The increase was primarily due to an increase of $0.4 billion in third-party revenues at our refining segment, primarily related to higher crude oil prices and crack spreads across our refining locations, partially offset by a 25% decrease in refining sales volume at our Washington refinery, mainly due to the 2022 turnaround. Average Brent crude oil prices rose to $97.90 in the three months ended March 31, 2022 compared to $61.32 per barrel in the three months ended March 31, 2021, and WTI crude oil prices rose to $95.01 per barrel during the three months ended March 31, 2022 compared to $58.14 in the three months ended March 31, 2021. Revenues at our retail segment increased $28.7 million primarily due to a 42% increase in fuel prices. Cost of Revenues (Excluding Depreciation). For the three months ended March 31, 2022, cost of revenues (excluding depreciation) was $1.4 billion, a $0.5 billion increase compared to $0.9 billion for the three months ended March 31, 2021. The increase was primarily due to increases in Brent and WTI crude oil prices as discussed above, higher feedstock, purchased product, and derivative costs, and higher costs associated with our inventory financing agreements, partially offset by a $67.9 34 million decrease in RINs expense across our refineries. Other factors impacting our results period over period include 56% higher fuel costs at our retail segment. Operating Expense (Excluding Depreciation). For the three months ended March 31, 2022, operating expense (excluding depreciation) was $81.4 million, an increase of $7.2 million when compared to $74.2 million for the three months ended March 31, 2021. The increase was primarily driven by higher utility and maintenance expenses at our Hawaii and Washington refineries and higher maintenance and rental expenses at our Hawaii retail locations. Depreciation, Depletion, and Amortization . For the three months ended March 31, 2022, DD&A was $23.8 million, which was relatively consistent with $22.9 million for the three months ended March 31, 2021. Gain on Sale of Assets, Net. For the three months ended March 31, 2022, there was no gain on sale of assets, net. For the three months ended March 31, 2021, the gain on sale of assets, net was approximately $64.9 million and primarily related to the Sale-Leaseback Transactions we closed in the first quarter of 2021. General and Administrative Expense (Excluding Depreciation). For the three months ended March 31, 2022, general and administrative expense (excluding depreciation) was $15.9 million, an increase of $4.0 million compared to $11.9 million for the three months ended March 31, 2021. The increase was primarily due to higher employee costs. Interest Expense and Financing Costs, Net . For the three months ended March 31, 2022, our interest expense and financing costs were $16.4 million, a decrease of $1.8 million when compared to $18.2 million for the three months ended March 31, 2021. The decrease was primarily due to lower outstanding debt balances in 2022 driven by the early partial repayment of the outstanding 12.875% Senior Secured Notes and the full repayment at maturity of the 5.00% Convertible Senior Notes in June 2021, partially offset by higher fees related to our inventory financing. Debt Extinguishment and Commitment Costs. For the three months ended March 31, 2021, our debt extinguishment and commitment costs were $1.5 million and primarily represent $1.4 million in extinguishment costs associated with the repayment of the Retail Property Term Loan on February 23, 2021. No such costs were incurred for the three months ended March 31, 2022. Gain on Curtailment of Pension Obligation. For the three months ended March 31, 2021, we recorded a $2.0 million gain on curtailment of pension obligation related to the March 2021 Wyoming Refining plan amendment. No such gain was recorded during the three months ended March 31, 2022. Income Taxes. For the three months ended March 31, 2022, we recorded an income tax benefit of $0.4 million primarily related to an increase in our net operating loss carryforwards. For the three months ended March 31, 2021, we did not record any income taxes. Consolidating Condensed Financial Information On December 21, 2017, Par Petroleum, LLC (the “Issuer”) issued its 7.75% Senior Secured Notes due 2025 in a private offering under Rule 144A and Regulation S of the Securities Act. On January 11, 2019, the Issuers (defined below) entered into a term loan and guaranty agreement with Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto with respect to a $250.0 million term loan (the “Term Loan B”). On June 5, 2020, the Issuers issued their 12.875% Senior Secured Notes due 2026 in a private offering under Rule 144A and Regulation S of the Securities Act. The 7.75% Senior Secured Notes, the Term Loan B, and the 12.875% Senior Secured Notes were co-issued by Par Petroleum Finance Corp. (together with the Issuer, the “Issuers”), which has no independent assets or operations. The 7.75% Senior Secured Notes, Term Loan B, and 12.875% Senior Secured Notes are guaranteed on a senior unsecured basis only as to payment of principal and interest by Par Pacific Holdings, Inc. (the “Parent”) and are guaranteed on a senior secured basis by all of the subsidiaries of Par Petroleum, LLC. The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Petroleum, LLC and its consolidated subsidiaries’ accounts (which are all guarantors of the 7.75% Senior Secured Notes, Term Loan B, and 12.875% Senior Secured Notes), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the 7.75% Senior Secured Notes, Term Loan B, or 12.875% Senior Secured Notes and consolidating adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated. 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). 35 As of March 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 4,652 $ 136,192 $ 30 $ 140,874 Restricted cash 330 3,670 — 4,000 Trade accounts receivable — 235,283 3 235,286 Inventories — 1,027,133 — 1,027,133 Prepaid and other current assets 11,926 44,543 (3) 56,466 Due from related parties 97,606 — (97,606) — Total current assets 114,514 1,446,821 (97,576) 1,463,759 Property, plant, and equipment Property, plant, and equipment 19,597 1,168,488 3,955 1,192,040 Less accumulated depreciation, depletion, and amortization (14,497) (321,498) (2,980) (338,975) Property, plant, and equipment, net 5,100 846,990 975 853,065 Long-term assets Operating lease right-of-use assets 3,126 374,619 — 377,745 Investment in subsidiaries 75,313 — (75,313) — Intangible assets, net — 15,570 — 15,570 Goodwill — 124,664 2,598 127,262 Other long-term assets 723 92,742 (10,429) 83,036 Total assets $ 198,776 $ 2,901,406 $ (179,745) $ 2,920,437 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 10,846 $ — $ 10,846 Obligations under inventory financing agreements — 981,412 — 981,412 Accounts payable 1,270 315,274 1,480 318,024 Accrued taxes 60 29,197 — 29,257 Operating lease liabilities 535 54,905 — 55,440 Other accrued liabilities 6,729 426,542 372 433,643 Due to related parties 60,262 3,137 (63,399) — Total current liabilities 68,856 1,821,313 (61,547) 1,828,622 Long-term liabilities Long-term debt, net of current maturities — 576,482 — 576,482 Finance lease liabilities 10 12,134 (4,491) 7,653 Operating lease liabilities 3,993 326,038 — 330,031 Other liabilities — 39,312 12,420 51,732 Total liabilities 72,859 2,775,279 (53,618) 2,794,520 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 601 — — 601 Additional paid-in capital 823,937 409,686 (409,686) 823,937 Accumulated earnings (deficit) (701,123) (285,364) 285,364 (701,123) Accumulated other comprehensive income (loss) 2,502 1,805 (1,805) 2,502 Total stockholders’ equity 125,917 126,127 (126,127) 125,917 Total liabilities and stockholders’ equity $ 198,776 $ 2,901,406 $ (179,745) $ 2,920,437 36 As of December 31, 2021 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 4,086 $ 108,105 $ 30 $ 112,221 Restricted cash 330 3,670 — 4,000 Trade accounts receivable — 195,104 4 195,108 Inventories — 790,317 — 790,317 Prepaid and other current assets 15,664 12,864 (3) 28,525 Due from related parties 94,676 — (94,676) — Total current assets 114,756 1,110,060 (94,645) 1,130,171 Property, plant, and equipment Property, plant, and equipment 19,535 1,156,906 3,956 1,180,397 Less accumulated depreciation, depletion, and amortization (13,869) (307,091) (2,932) (323,892) Property, plant, and equipment, net 5,666 849,815 1,024 856,505 Long-term assets Operating lease right-of-use assets 3,280 380,544 — 383,824 Investment in subsidiaries 207,483 — (207,483) — Intangible assets, net — 16,234 — 16,234 Goodwill — 124,664 2,598 127,262 Other long-term assets 724 57,382 (1,851) 56,255 Total assets $ 331,909 $ 2,538,699 $ (300,357) $ 2,570,251 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 10,841 $ — $ 10,841 Obligations under inventory financing agreements — 737,704 — 737,704 Accounts payable 1,386 151,676 1,481 154,543 Accrued taxes 48 28,593 — 28,641 Operating lease liabilities 608 53,032 — 53,640 Other accrued liabilities 9,805 360,246 373 370,424 Due to related parties 50,195 10,261 (60,456) — Total current liabilities 62,042 1,352,353 (58,602) 1,355,793 Long-term liabilities Long-term debt, net of current maturities — 553,717 — 553,717 Finance lease liabilities 17 12,192 (4,518) 7,691 Operating lease liabilities 4,150 330,944 — 335,094 Other liabilities — 63,098 (10,842) 52,256 Total liabilities 66,209 2,312,304 (73,962) 2,304,551 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 602 — — 602 Additional paid-in capital 821,713 409,686 (409,686) 821,713 Accumulated earnings (deficit) (559,117) (185,096) 185,096 (559,117) Accumulated other comprehensive income (loss) 2,502 1,805 (1,805) 2,502 Total stockholders’ equity 265,700 226,395 (226,395) 265,700 Total liabilities and stockholders’ equity $ 331,909 $ 2,538,699 $ (300,357) $ 2,570,251 37 Three Months Ended March 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 1,350,280 $ 13 $ 1,350,293 Operating expenses Cost of revenues (excluding depreciation) — 1,350,249 — 1,350,249 Operating expense (excluding depreciation) — 81,404 — 81,404 Depreciation, depletion, and amortization 628 23,103 49 23,780 Loss (gain) on sale of assets, net — — — — General and administrative expense (excluding depreciation) 4,178 11,715 — 15,893 Acquisition and integration costs 63 — — 63 Total operating expenses 4,869 1,466,471 49 1,471,389 Operating income (loss) (4,869) (116,191) (36) (121,096) Other income (expense) Interest expense and financing costs, net (5) (16,483) 94 (16,394) Other income (expense), net (7) 9 — 2 Equity earnings (losses) from subsidiaries (132,170) — 132,170 — Total other income (expense), net (132,182) (16,474) 132,264 (16,392) Income (loss) before income taxes (137,051) (132,665) 132,228 (137,488) Income tax benefit (expense) (1) — 32,397 (31,960) 437 Net income (loss) $ (137,051) $ (100,268) $ 100,268 $ (137,051) Adjusted EBITDA $ (3,834) $ 12,159 $ 13 $ 8,338 38 Three Months Ended March 31, 2021 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 888,680 $ — $ 888,680 Operating expenses Cost of revenues (excluding depreciation) — 888,863 — 888,863 Operating expense (excluding depreciation) — 74,905 (717) 74,188 Depreciation, depletion, and amortization 666 22,119 95 22,880 Loss (gain) on sale of assets, net — (11,208) (53,704) (64,912) General and administrative expense (excluding depreciation) 3,105 8,780 — 11,885 Acquisition and integration costs 438 — — 438 Total operating expenses 4,209 983,459 (54,326) 933,342 Operating loss (4,209) (94,779) 54,326 (44,662) Other income (expense) Interest expense and financing costs, net (1,290) (16,897) 36 (18,151) Debt extinguishment and commitment costs — (91) (1,416) (1,507) Gain on curtailment of pension obligation — 2,032 — 2,032 Other income (expense), net (7) 69 (1) 61 Equity earnings (losses) from subsidiaries (56,721) — 56,721 — Total other income (expense), net (58,018) (14,887) 55,340 (17,565) Income (loss) before income taxes (62,227) (109,666) 109,666 (62,227) Income tax benefit (expense) (1) — 22,873 (22,873) — Net income (loss) $ (62,227) $ (86,793) $ 86,793 $ (62,227) Adjusted EBITDA $ (3,112) $ (32,019) $ 716 $ (34,415) ________________________________________ (1) The income tax benefit (expense) of the Parent Guarantor and Issuer and Subsidiaries is determined using the separate return method. The Non-Guarantor Subsidiaries and Eliminations column includes tax benefits recognized at the Par consolidated level that are primarily associated with changes to the consolidated valuation allowance and other deferred tax balances. 39 Three Months Ended March 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ (137,051) $ (100,268) $ 100,268 $ (137,051) Inventory valuation adjustment — 80,653 — 80,653 RINs loss (gain) in excess of net obligation — 7,256 — 7,256 Unrealized loss on derivatives — 15,452 — 15,452 Acquisition and integration costs 63 — — 63 Severance costs 351 1,877 — 2,228 Depreciation, depletion, and amortization 628 23,103 49 23,780 Interest expense and financing costs, net 5 16,483 (94) 16,394 Equity losses (income) from subsidiaries 132,170 — (132,170) — Income tax expense (benefit) — (32,397) 31,960 (437) Adjusted EBITDA (1) $ (3,834) $ 12,159 $ 13 $ 8,338 Three Months Ended March 31, 2021 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ (62,227) $ (86,793) $ 86,793 $ (62,227) Inventory valuation adjustment — 23,086 — 23,086 LIFO liquidation adjustment — 1,888 — 1,888 RINs loss (gain) in excess of net obligation — 28,770 — 28,770 Unrealized loss (gain) on derivatives — (4,012) — (4,012) Acquisition and integration costs 438 — — 438 Debt extinguishment and commitment costs — 91 1,416 1,507 Severance costs — 16 — 16 Loss (gain) on sale of assets, net — (11,208) (53,704) (64,912) Depreciation, depletion, and amortization 666 22,119 95 22,880 Interest expense and financing costs, net 1,290 16,897 (36) 18,151 Equity losses (income) from subsidiaries 56,721 — (56,721) — Income tax expense (benefit) — (22,873) 22,873 — Adjusted EBITDA (1) $ (3,112) $ (32,019) $ 716 $ (34,415) ________________________________________ (1) For the three months ended March 31, 2022, and the three months ended March 31, 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 months ended March 31, 2022, there was no LIFO liquidation adjustment, debt extinguishment and commitment costs, or losses (gains) on sale of assets. Liquidity and Capital Resources Our liquidity and capital requirements are primarily a function of our debt maturities and debt service requirements and contractual obligations, capital expenditures, turnaround outlays, and working capital needs. Examples of working capital needs include purchases and sales of commodities and associated margin and collateral requirements, facility maintenance costs, and other costs such as payroll. Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets. 40 Our liquidity position as of March 31, 2022 was $212.0 million and consisted of $207.4 million at Par Petroleum, LLC and subsidiaries, $4.7 million at Par Pacific Holdings, and an immaterial amount at all our other subsidiaries. As of March 31, 2022, we had access to the ABL Credit Facility, the J. Aron Discretionary Draw Facility, the MLC receivable advances, and cash on hand of $140.9 million. In addition, we have the Supply and Offtake Agreement with J. Aron and the Washington Refinery Intermediation Agreement, which are used to finance the majority of the inventory at our Hawaii and Washington refineries, respectively. 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. We believe our cash flows from operations and available capital resources will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for the next 12 months. We may seek to raise additional debt or equity capital to fund any other significant changes to our business or to refinance existing debt. We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost. We may from time to time seek to retire or repurchase our 7.75% Senior Secured Notes, our 12.875% Senior Secured Notes, or our common stock through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. 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). Cash Flows The following table summarizes cash activities for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Net cash used in operating activities $ (7,685) $ (30,737) Net cash provided by (used in) investing activities (16,273) 94,678 Net cash provided by financing activities 52,611 82,483 Cash flows for the three months ended March 31, 2022 Net cash used in operating activities for the three months ended March 31, 2022 was driven primarily by a net loss of $137.1 million, offset by net cash provided by changes in operating assets and liabilities of approximately $85.9 million and non-cash charges to operations of approximately $43.4 million. Non-cash charges to operations consisted primarily of the following adjustments: • depreciation, depletion, and amortization expenses of $23.8 million; • unrealized loss on derivatives contracts of $15.5 million; and • stock based compensation costs of $3.7 million. Net cash provided by changes in operating assets and liabilities resulted primarily from: • net increases in our Supply and Offtake Agreement and Washington Refinery Intermediation Agreement obligations and accounts payable; and • an increase in gross environmental credit obligations primarily related to current period production volumes and increases in RINs prices; partially offset by • net increases in our inventories and accounts receivable resulting from higher crude oil and refined product prices and higher inventory volumes at our Hawaii refinery; and • $28.9 million in deferred turnaround costs primarily related to the 2022 turnaround at our Washington refinery. Net cash used in investing activities for the three months ended March 31, 2022 consisted primarily of $16.3 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude recovery and debottlenecking projects at our Tacoma refinery, maintenance projects at our Wyoming refinery, and co-generation engine and combustion projects at our Hawaii refinery. 41 Net cash provided by financing activities was approximately $52.6 million for the three months ended March 31, 2022 and consisted primarily of the following activities: • net borrowings under the J. Aron Discretionary Draw Facility and MLC receivable advances of $41.7 million; and • net borrowings of debt of $18.1 million primarily driven by increased borrowings on the ABL Revolver; partially offset by • repurchases of common stock of $6.4 million. Cash flows for the three months ended March 31, 2021 Net cash used in operating activities was approximately $30.7 million for the three months ended March 31, 2021, which resulted from a net loss of approximately $62.2 million and non-cash earnings from operations of approximately $54.3 million, partially offset by net cash provided by changes in operating assets and liabilities of approximately $85.8 million. Net cash provided by investing activities was approximately $94.7 million for the three months ended March 31, 2021 and primarily related to proceeds received from the Sale-Leaseback Transactions. Net cash provided by financing activities for the three months ended March 31, 2021 was approximately $82.5 million, which consisted primarily of proceeds of $87.4 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 $44.5 million, partially offset by net debt and insurance premium repayments of approximately $47.3 million. Cash Requirements There have been no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, outside the ordinary course of business except as follows: Washington Refinery Intermediation Agreement . On March 9, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to advance the term expiry date from December 21, 2022 to March 31, 2023. Please read Note 7—Inventory Financing Agreements for more information. Supply and Offtake Agreement. On April 25, 2022, we entered into an amendment to the Supply and Offtake Agreement pursuant to which, among other things, the capacity under the Discretionary Draw Facility was increased from $165 million to $215 million. Please read Note 19—Subsequent Events for further information about the amendment. Critical Accounting Estimates There have been no material changes to critical accounting estimates disclosed in our Annual Report on Form 10-K. Forward-Looking Statements Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (“PSLRA”), or in releases made by the SEC, all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties, and other important factors including, without limitation, our expectations regarding the impact of COVID-19 along with a number of recent global events including the conflict between Russia and Ukraine and certain developments in the global crude oil markets on our business, our customers, and the markets where we operate; our beliefs regarding available capital resources; our beliefs regarding the likely results or impact of certain disputes or contingencies and any potential fines or penalties; our beliefs regarding the fair value of certain assets, and our expectations with respect to laws and regulations, including environmental regulations and related compliance costs and any fines or penalties related thereto; our expectations regarding the sufficiency of our cash flows and liquidity; our expectations regarding anticipated capital expenditures, including the timing and cost of compliance with consent decrees and other enforcement actions; our expectations regarding the impact of the adoption of certain accounting standards; our estimates regarding the fair value of certain indebtedness; estimated costs to settle claims from the Delta bankruptcy; the estimated value of, and our ability to settle, legal claims remaining to be settled against third parties; our expectations regarding the synergies or other benefits of our acquisitions; our expectations regarding certain tax liabilities and debt obligations; management’s assumptions about future events; our ability to raise additional debt or equity capital; our ability to make strategic investments in business opportunities; and the estimates, assumptions, and projections regarding future financial condition, results of operations, liquidity, and cash flows. These and other forward-looking statements could cause the actual results, performance, or achievements of Par and its subsidiaries to differ materially 42 from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “may,” “will,” “would,” “could,” “should,” “seeks,” or “scheduled to,” or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act, and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. The forward-looking statements contained in this Quarterly Report on Form 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control, including those set out in our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q under “Risk Factors.” In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this Quarterly Report on Form 10-Q are not guarantees of future performance; and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described above and under Critical Accounting Estimates and Risk Factors included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q. All forward-looking statements speak only as of the date they are made. Additionally, significant uncertainties remain with respect to COVID-19 and its economic effects. Due to the unpredictable and unprecedented nature of the COVID-19 pandemic, we cannot identify all potential risks to, and impacts on, our business, including the ultimate adverse economic impact to the Company’s business, results of operations, financial condition, and liquidity. 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. We do not intend to update or revise any forward-looking statements as a result of new information, future events, or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.