What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-06 · 294 added, 186 removed, 687 unchanged (41% of the section changed)

4 unchanged sentences

(in thousands, except share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current assets

2 unchanged sentences

Total cash, cash equivalents, and restricted cash 190,178 116,221

Trade accounts receivable, net of allowances of $ 0.3 million and $ 0.4 million at March 31, 2022 and December 31, 2021, respectively

Trade accounts receivable, net of allowances of $ 0.3 million and $ 0.4 million at June 30, 2022 and December 31, 2021, respectively

370,773 195,108

4 unchanged sentences

Property, plant, and equipment 1,196,747 1,180,397

Less accumulated depreciation, depletion, and amortization ( 338,975 ) ( 323,892 )

Less accumulated depreciation and amortization ( 356,885 ) ( 323,892 )

Property, plant, and equipment, net 839,862 856,505

25 unchanged sentences

Common stock, $ 0.01 par value;

500,000,000 shares authorized at March 31, 2022 and December 31, 2021, 60,111,642 shares and 60,161,955 shares issued at March 31, 2022 and December 31, 2021, respectively

500,000,000 shares authorized at June 30, 2022 and December 31, 2021, 60,219,925 shares and 60,161,955 shares issued at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 827,623 821,713

8 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Revenues $ 2,106,332 $ 1,217,525 $ 3,456,625 $ 2,106,205

2 unchanged sentences

Operating expense (excluding depreciation) 82,342 68,821 163,746 143,009

Depreciation, depletion, and amortization 23,780 22,880

Depreciation and amortization 25,583 23,548 49,363 46,428

Loss (gain) on sale of assets, net 15 510 15 ( 64,402 )

2 unchanged sentences

Total operating expenses 1,932,303 1,302,026 3,403,692 2,235,368

Operating loss ( 121,096 ) ( 44,662 )

Operating income (loss) 174,029 ( 84,501 ) 52,933 ( 129,163 )

Other income (expense)

2 unchanged sentences

Gain on curtailment of pension obligation — — — 2,032

Other income, net 2 61

Total other income (expense), net ( 16,392 ) ( 17,565 )

Loss before income taxes ( 137,488 ) ( 62,227 )

Income tax benefit 437 —

Net loss $ ( 137,051 ) $ ( 62,227 )

Loss per share

Other income (loss), net 47 ( 36 ) 49 25

Total other expense, net ( 23,779 ) ( 23,850 ) ( 40,171 ) ( 41,415 )

Income (loss) before income taxes 150,250 ( 108,351 ) 12,762 ( 170,578 )

Income tax expense ( 1,125 ) ( 607 ) ( 688 ) ( 607 )

Net income (loss) $ 149,125 $ ( 108,958 ) $ 12,074 $ ( 171,185 )

Income (loss) per share

Basic $ 2.51 $ ( 1.84 ) $ 0.20 $ ( 3.01 )

6 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Three Months Ended

Net loss $ ( 137,051 ) $ ( 62,227 )

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Net income (loss) $ 149,125 $ ( 108,958 ) $ 12,074 $ ( 171,185 )

Other comprehensive income (loss):

1 unchanged sentence

Total other comprehensive income, net of tax — — — 3,996

Comprehensive loss $ ( 137,051 ) $ ( 58,231 )

Comprehensive income (loss) $ 149,125 $ ( 108,958 ) $ 12,074 $ ( 167,189 )

See accompanying notes to the condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net Loss $ ( 137,051 ) $ ( 62,227 )

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation, depletion, and amortization 23,780 22,880

Net Income (Loss) $ 12,074 $ ( 171,185 )

Adjustments to reconcile net income (loss) to cash provided by operating activities:

Depreciation and amortization 49,363 46,428

Debt extinguishment and commitment costs 5,672 8,135

1 unchanged sentence

Non-cash lower of cost and net realizable value adjustment ( 463 ) ( 10,595 )

Gain on sale of assets, net — ( 64,912 )

Deferred taxes 615 —

Loss (gain) on sale of assets, net 15 ( 64,402 )

Stock-based compensation 5,769 4,072

Unrealized (gain) loss on derivative contracts 15,452 ( 6,922 )

Unrealized gain on derivative contracts ( 13,155 ) ( 5,517 )

Net changes in operating assets and liabilities:

5 unchanged sentences

Accounts payable, other accrued liabilities, and operating lease ROU assets and liabilities 299,197 275,415

Net cash used in operating activities ( 7,685 ) ( 30,737 )

Net cash provided by operating activities 27,657 1,815

Cash flows from investing activities:

17 unchanged sentences

Interest $ ( 30,735 ) $ ( 37,601 )

Taxes ( 13 ) 54

Non-cash investing and financing activities:

19 unchanged sentences

Balance, March 31, 2021 60,142 601 814,467 ( 539,255 ) 254 276,067

Common stock offering, net of issuance costs — — ( 208 ) — — ( 208 )

Issuance of common stock for employee stock purchase plan 42 1 713 — — 714

Stock-based compensation 1 — 2,079 — — 2,079

Purchase of common stock for retirement — — ( 2 ) — — ( 2 )

Net loss — — — ( 108,958 ) — ( 108,958 )

Balance, June 30, 2021 60,185 $ 602 $ 817,049 $ ( 648,213 ) $ 254 $ 169,692

Additional Other

6 unchanged sentences

Balance, March 31, 2022 60,112 601 823,937 ( 701,123 ) 2,502 125,917

Issuance of common stock for employee stock purchase plan 41 — 632 — — 632

Purchase of common stock for retirement ( 1 ) — ( 94 ) — — ( 94 )

Stock-based compensation 3 — 2,017 — — 2,017

Exercise of stock options 65 1 1,131 — — 1,132

Net income — — — 149,125 — 149,125

Balance, June 30, 2022 60,220 $ 602 $ 827,623 $ ( 551,998 ) $ 2,502 $ 278,729

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

Note 1 — Overview

3 unchanged sentences

Currently, we operate in three primary business segments:

1) Refining - We own and operate three refineries with total operating throughput capacity of 154 Mbpd in Hawaii, Wyoming, and Washington.

1) Refining - We own and operate three refineries 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 our 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, LLC (“Laramie Energy”).

As of June 30, 2022, we owned a 46.0 % equity investment in Laramie Energy, LLC (“Laramie Energy”).

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

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

Credit allowances are reviewed at least quarterly based on

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

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

changes in the customer’s creditworthiness due to economic conditions, liquidity, and business strategy as publicly reported and through discussions between the customer and the Company.

For the Interim Periods Ended June 30, 2022 and 2021

through discussions between the customer and the Company.

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

We did not have a material change in our allowances on trade receivables during the three months ended March 31, 2022 or 2021.

We did not have a material change in our allowances on trade receivables during the three and six months ended June 30, 2022 or 2021.

Cost Classifications

4 unchanged sentences

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Cost of revenues $ 5,175 $ 5,341 $ 10,227 $ 10,560

4 unchanged sentences

Note 3— Investment in Laramie Energy, LLC

As of March 31, 2022, we had a 46.0 % ownership interest in Laramie Energy.

As of June 30, 2022, we had a 46.0 % ownership interest in Laramie Energy.

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

The balance of our investment in Laramie Energy was zero as of March 31, 2022 and December 31, 2021.

The balance of our investment in Laramie Energy was zero as of June 30, 2022 and December 31, 2021.

Laramie Energy has a term loan agreement which provides a term loan secured by a lien on its natural gas and crude oil properties and related assets.

As of March 31, 2022, the term loan had an outstanding balance of $ 126.4 million.

As of June 30, 2022, the term loan had an outstanding balance of $ 91.8 million.

Under the terms of the term loan, Laramie Energy is generally prohibited from making future cash distributions to its owners, including us, except for certain permitted tax distributions.

1 unchanged sentence

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current assets $ 52,908 $ 68,779

2 unchanged sentences

Non-current liabilities 238,635 177,503

Three Months Ended March 31,

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

2022 2021 2022 2021

Natural gas and oil revenues $ 57,885 $ 37,616 $ 108,734 $ 119,964

4 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

Laramie Energy’s net income (loss) includes (in thousands):

Three Months Ended March 31,

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

2022 2021 2022 2021

Depreciation, depletion, and amortization $ 5,555 $ 8,772 $ 11,264 $ 15,756

Unrealized (gain) loss on derivative instruments 42,655 ( 549 )

Unrealized loss on derivative instruments 10,734 731 53,389 182

Note 4— Revenue Recognition

As of March 31, 2022 and December 31, 2021, receivables from contracts with customers were $ 222.4 million and $ 189.9 million, respectively.

As of June 30, 2022 and December 31, 2021, receivables from contracts with customers were $ 356.1 million and $ 189.9 million, respectively.

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

Deferred revenue was $ 18.2 million and $ 10.1 million as of March 31, 2022 and December 31, 2021, respectively.

Deferred revenue was $ 30.3 million and $ 10.1 million as of June 30, 2022 and December 31, 2021, respectively.

We have elected to apply a practical expedient not to disclose the value of unsatisfied performance obligations for (i) contracts with an original expected duration of less than one year and (ii) contracts where the variable consideration has been allocated entirely to our unsatisfied performance obligation.

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

Three Months Ended March 31, 2022 Refining Logistics Retail

Three Months Ended June 30, 2022 Refining Logistics Retail

Product or service:

6 unchanged sentences

Total segment revenues (3) $ 2,044,455 $ 50,633 $ 147,211

Three Months Ended March 31, 2021 Refining Logistics Retail

Three Months Ended June 30, 2021 Refining Logistics Retail

Product or service:

6 unchanged sentences

Total segment revenues (3) $ 1,155,847 $ 48,706 $ 118,446

Six Months Ended June 30, 2022 Refining Logistics Retail

Product or service:

Gasoline $ 1,016,051 $ — $ 202,006

Distillates (1) 1,484,684 — 19,734

Other refined products (2) 830,461 — —

Merchandise — — 43,722

Transportation and terminalling services — 93,094 —

Other revenue 12,482 — 1,658

Total segment revenues (3) $ 3,343,678 $ 93,094 $ 267,120

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

Six Months Ended June 30, 2021 Refining Logistics Retail

Product or service:

Gasoline $ 670,862 $ — $ 150,004

Distillates (1) 842,425 — 12,010

Other refined products (2) 480,537 — —

Merchandise — — 45,432

Transportation and terminalling services — 90,015 —

Other revenue 778 — 2,188

Total segment revenues (3) $ 1,994,602 $ 90,015 $ 209,634

_______________________________________________________

2 unchanged sentences

(3) Refer to Note 17—Segment Information for the reconciliation of segment revenues to total consolidated revenues.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

Note 5— Inventories

Inventories at March 31, 2022 and December 31, 2021 consisted of the following (in thousands):

Inventories at June 30, 2022 and December 31, 2021 consisted of the following (in thousands):

Titled Inventory Supply and Offtake Agreement (1) Total

March 31, 2022

June 30, 2022

Crude oil and feedstocks $ 237,399 $ 236,813 $ 474,212

9 unchanged sentences

(1) Please read Note 7—Inventory Financing Agreements for further information.

(2) Includes $ 134.8 million and $ 120.1 million of RINs and environmental credits, reported at the lower of cost or net realizable value, as of March 31, 2022 and December 31, 2021, respectively.

RINs and environmental obligations of $ 346.0 million and $ 311.0 million, reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, we had no reserve for the lower of cost or net realizable value of inventory.

(2) Includes $ 160.4 million and $ 120.1 million of RINs and environmental credits, reported at the lower of cost or net realizable value, as of June 30, 2022 and December 31, 2021, respectively.

RINs and environmental credit obligations of $ 460.9 million and $ 311.0 million, reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022, we had no reserve for the lower of cost or net realizable value of inventory.

As of December 31, 2021, there was a $ 0.5 million reserve for the lower of cost or net realizable value of inventory.

As of March 31, 2022 and December 31, 2021, the excess of current replacement cost over the last-in, first-out (“LIFO”) inventory carrying value at the Washington refinery was approximately $ 77.9 million and $ 46.0 million, respectively.

As of June 30, 2022 and December 31, 2021, the excess of current replacement cost over the last-in, first-out (“LIFO”) inventory carrying value at the Washington refinery was approximately $ 111.6 million and $ 46.0 million, respectively.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

Note 6— Prepaid and Other Current Assets

Prepaid and other current assets at March 31, 2022 and December 31, 2021 consisted of the following (in thousands):

March 31, 2022 December 31, 2021

Prepaid and other current assets at June 30, 2022 and December 31, 2021 consisted of the following (in thousands):

June 30, 2022 December 31, 2021

Advances to suppliers for crude purchases $ 12,513 $ —

Collateral posted with broker for derivative instruments (1) 72,162 6,053

Prepaid insurance 4,911 14,110

Prepaid taxes 1,562 —

Derivative assets 33,864 1,260

7 unchanged sentences

The following table summarizes our outstanding obligations under our inventory financing agreements (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Supply and Offtake Agreement

2 unchanged sentences

Obligations under inventory financing agreements $ 1,189,448 $ 737,704

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

Supply and Offtake Agreement

5 unchanged sentences

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

As of March 31, 2022, we had no obligations due to J.

As of June 30, 2022, we had no obligations due to J.

Aron under this contractual undertakings agreement.

1 unchanged sentence

The Supply and Offtake Agreement also makes available a discretionary draw facility (the “Discretionary Draw Facility”) to Par Hawaii Refining, LLC (“PHR”).

As of March 31, 2022, and December 31, 2021, our outstanding balance under the Discretionary Draw Facility was equal to our borrowing base of $ 165.0 million and $ 126.2 million, respectively.

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.

As of June 30, 2022, the capacity of the Discretionary Draw Facility was $ 210.0 million and we had $ 208.1 million outstanding.

As of December 31, 2021, our outstanding balance under the Discretionary Draw Facility was equal to our borrowing base of $ 126.2 million.

On April 25, 2022, we entered into an Amendment (the “S&O Amendment”) to the Supply and Offtake Agreement which, among other things, amended the maximum commitment amount under the Discretionary Draw Facility from $ 165 million to $ 215 million.

The S&O Amendment further increased the limit in the borrowing base for eligible hydrocarbon inventory from $ 82.5 million to $ 107.5 million.

The S&O Amendment further requires a $ 5.0 million reserve against the borrowing base at any time more than $ 165 million is outstanding in discretionary draw advances made to PHR;

the reserve may be reduced by the posting of cash collateral by PHR in accordance with the terms of the S&O Amendment.

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

4 unchanged sentences

Aron is recorded as an adjustment to our Obligations under inventory financing agreements as allowed under the Supply and Offtake Agreement.

As of March 31, 2022, and December 31, 2021, we had payables of $ 7.0 million and $ 6.2 million, respectively.

We had no fixed market fees due to or from J.

Aron as of June 30, 2022.

As of December 31, 2021, we had a payable of $ 6.2 million.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

Washington Refinery Intermediation Agreement

The Washington Refinery Intermediation Agreement with MLC provides a structured financing arrangement based on U.S.

Oil’s crude oil and refined products inventories and associated accounts receivable.

The Washington Refinery Intermediation Agreement with Merrill Lynch Commodities, Inc.

(“MLC”) provides a structured financing arrangement based on U.S.

Oil & Refining Co.

and certain affiliated entities’ crude oil and refined products inventories and associated accounts receivable.

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.

As of March 31, 2022, and December 31, 2021, our outstanding balance under the MLC receivable advances was equal to our borrowing base of $ 57.5 million and $ 54.5 million, respectively.

Additionally, as of March 31, 2022, and December 31, 2021, we had approximately $ 211.2 million and $ 167.0 million in letters of credit outstanding through MLC’s credit support, respectively.

On May 9, 2022, we and MLC further amended the Washington Refinery Intermediation Agreement to increase the MLC receivable advances from $ 90 million to $ 115 million.

As of June 30, 2022, and December 31, 2021, our outstanding balance under the MLC receivable advances was equal to our borrowing base of $ 115.0 million and $ 54.5 million, respectively.

Additionally, as of June 30, 2022, and December 31, 2021, we had approximately $ 280.5 million and $ 167.0 million in letters of credit outstanding through MLC’s credit support, respectively.

The following table summarizes the inventory intermediation fees, which are included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations, and Interest expense and financing costs, net related to the intermediation agreements (in thousands):

Three Months Ended March 31,

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

2022 2021 2022 2021

Net fees and expenses:

7 unchanged sentences

Please read Note 10—Derivatives for further information.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

Note 8— Other Accrued Liabilities

Other accrued liabilities at March 31, 2022 and December 31, 2021 consisted of the following (in thousands):

March 31, 2022 December 31, 2021

Other accrued liabilities at June 30, 2022 and December 31, 2021 consisted of the following (in thousands):

June 30, 2022 December 31, 2021

Accrued payroll and other employee benefits $ 20,484 $ 19,710

4 unchanged sentences

___________________________________________________

(1) Gross environmental credit obligations are stated at market as of March 31, 2022 and December 31, 2021.

(1) Gross environmental credit obligations are stated at market as of June 30, 2022 and December 31, 2021.

Please read Note 11—Fair Value Measurements for further information.

A portion of these obligations are expected to be settled with our RINs assets and other environmental credits, which are presented as Inventories on our condensed consolidated balance sheet and are stated at the lower of cost and net realizable value.

The carrying costs of these assets were $ 134.8 million and $ 120.1 million as of March 31, 2022 and December 31, 2021, respectively.

The carrying costs of these assets were $ 160.4 million and $ 120.1 million as of June 30, 2022 and December 31, 2021, respectively.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

ABL Credit Facility due 2025 $ — $ —

9 unchanged sentences

Long-term debt, net of current maturities $ 508,997 $ 553,717

As of March 31, 2022 and December 31, 2021, we had $ 31.6 million and $ 18.5 million, respectively, in letters of credit outstanding under the loan and security agreements with certain lenders and Bank of America, N.A., as administrative agent and collateral agent (the “ABL Credit Facility”).

We had $ 5.9 million in cash-collateralized letters of credit and surety bonds outstanding as of March 31, 2022 and December 31, 2021 under agreements with MLC and under certain other facilities.

As of June 30, 2022 and December 31, 2021, we had $ 44.8 million and $ 18.5 million, respectively, in letters of credit outstanding under the loan and security agreements with certain lenders and Bank of America, N.A., as administrative agent and collateral agent (the “ABL Credit Facility”).

We had $ 5.9 million in cash-collateralized letters of credit and surety bonds outstanding as of June 30, 2022 and December 31, 2021 under agreements with MLC and under certain other facilities.

Under the ABL Credit Facility, the indentures governing the 7.75 % Senior Secured Notes and 12.875 % Senior Secured Notes, and the term loan facility with Goldman Sachs Bank USA (the “Term Loan B Facility”), our subsidiaries are restricted from paying dividends or making other equity distributions, subject to certain exceptions.

4 unchanged sentences

The ABL Loan Agreement increased the maximum principal amount of the ABL Revolver at any time outstanding from $ 85 million to $ 105 million, subject to a borrowing base, including a sublimit of $ 15 million for swingline loans and a sublimit of $ 65 million for the issuance of standby or commercial letters of credit, extended the maturity date of the ABL Revolver to February 2, 2025, and modified the ABL Revolver interest rate definitions to be based on the secured overnight financing rate (“SOFR”) as administered by the Federal Reserve Bank of New York, among other modifications.

The ABL Loan Agreement also included

The ABL Loan Agreement also included an accordion feature that would allow the ABL Borrowers to increase the size of the facility by up to $ 50 million in the aggregate, subject to certain limitations and conditions.

On March 30, 2022, the parties to the ABL Loan Agreement and the incremental lender party thereto amended the ABL Loan Agreement to exercise the accordion feature of the ABL Loan Agreement.

Under the amendment, the aggregate revolving commitments under the ABL Loan Agreement increased from $ 105 million to $ 142.5 million and the available increase under the accordion feature decreased to $ 12.5 million, subject to certain limitations and conditions.

As of June 30, 2022, the ABL Revolver had no outstanding revolving loans, $ 44.8 million in letters of credit outstanding, and a borrowing base of approximately $ 142.5 million.

7.75% Senior Secured Notes Due 2025

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

On May 24, 2022, we repurchased and cancelled $ 5.0 million in aggregate principal amount of the 7.75% Senior Secured Notes at a repurchase price of 97.500 % of the aggregate principal amount of notes repurchased .

We recognized a discount of $ 0.1 million and incurred debt extinguishment costs of $ 0.1 million, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the six months ended June 30, 2022.

As of June 30, 2022, the 7.75% Senior Secured Notes had an outstanding principal balance of $ 291.0 million.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

an accordion feature that would allow the ABL Borrowers to increase the size of the facility by up to $ 50 million in the aggregate, subject to certain limitations and conditions.

On March 30, 2022, the parties to the ABL Loan Agreement and the incremental lender party thereto amended the ABL Loan Agreement to exercise the accordion feature of the ABL Loan Agreement.

As of March 31, 2022, the ABL Revolver had $ 25.0 million in outstanding revolving loans, $ 31.6 million in letters of credit outstanding, and a borrowing base of approximately $ 127.8 million.

For the Interim Periods Ended June 30, 2022 and 2021

12.875% Senior Secured Notes due 2026

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

We repurchased and cancelled $ 13.9 million and $ 21.7 million in aggregate principal amount of 12.875% Senior Secured Notes on May 16, 2022 and May 27, 2022, respectively, at a repurchase price of 111.125 % of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest as of the repurchase date.

On June 13, 2022, we repurchased an additional $ 1.3 million in aggregate principal amount of the notes at a repurchase price of 111.000 % of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest as of the repurchase date.

We paid premiums of approximately $ 4.1 million upon repurchases of the 12.875% Senior Secured Notes during the six months ended June 30, 2022.

We incurred aggregate debt extinguishment costs of $ 1.6 million for these repurchases, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the six months ended June 30, 2022.

As of June 30, 2022, $ 31.3 million in aggregate principal amount of the 12.875% Senior Secured Notes remained outstanding.

Cross Default Provisions

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

As of March 31, 2022, we were in compliance with all of our debt instruments.

As of June 30, 2022, we were in compliance with all of our debt instruments.

In connection with our shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission (“SEC”) and became automatically effective on February 14, 2022 (“Registration Statement”), we may sell non-convertible debt securities and other securities in one or more offerings with an aggregate initial offering price of up to $ 750.0 million.

6 unchanged sentences

Our cash margin that is required as collateral deposits cannot be offset against the fair value of open contracts except in the event of default.

Our open futures and over-the-counter (“OTC”) swaps at March 31, 2022, will settle by March 2023.

At March 31, 2022, our open commodity derivative contracts represented (in thousands of barrels):

Our open futures and over-the-counter (“OTC”) swaps at June 30, 2022, will settle by March 2023.

At June 30, 2022, our open commodity derivative contracts represented (in thousands of barrels):

Contract type Purchases Sales Net

2 unchanged sentences

Total 13,007 ( 15,722 ) ( 2,715 )

At March 31, 2022, we also had option collars that economically hedge a portion of our internally consumed fuel at our refineries.

The following table provides information on these option collars at our refineries as of March 31, 2022:

March 31, 2022

At June 30, 2022, we also had option collars that economically hedge a portion of our internally consumed fuel at our refineries.

The following table provides information on these option collars at our refineries as of June 30, 2022:

June 30, 2022

Average barrels per month 75,000

1 unchanged sentence

Weighted-average strike price - ceiling (in dollars) $ 75.36

Earliest commencement date April 2022

Earliest commencement date January 2022

Furthest expiry date December 2022

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

Interest Rate Derivatives

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On February 23, 2021, we terminated and repaid all amounts outstanding under the Retail Property Term Loan and the related interest rate swap.

At March 31, 2022, and December 31, 2021, we did not hold any interest rate derivative instruments.

The following table provides information on the fair value amounts (in thousands) of these derivatives as of March 31, 2022, and December 31, 2021, and their placement within our condensed consolidated balance sheets.

Balance Sheet Location March 31, 2022 December 31, 2021

At June 30, 2022, and December 31, 2021, we did not hold any interest rate derivative instruments.

The following table provides information on the fair value amounts (in thousands) of these derivatives as of June 30, 2022, and December 31, 2021, and their placement within our condensed consolidated balance sheets.

Balance Sheet Location June 30, 2022 December 31, 2021

Asset (Liability)

4 unchanged sentences

_________________________________________________________

(1) Does not include cash collateral of $ 32.4 million and $ 6.1 million recorded in Prepaid and other current assets as of March 31, 2022, and December 31, 2021, respectively, and $ 9.5 million in Other long-term assets as of both March 31, 2022, and December 31, 2021.

(1) Does not include cash collateral of $ 72.2 million and $ 6.1 million recorded in Prepaid and other current assets as of June 30, 2022, and December 31, 2021, respectively, and $ 9.5 million in Other long-term assets as of both June 30, 2022, and December 31, 2021.

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

Three Months Ended March 31,

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

Statement of Operations Location 2022 2021 2022 2021

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Our Level 2 instruments include OTC swaps and options.

These derivatives are valued using market quotations from independent price reporting agencies and commodity exchange price curves that are corroborated with market data.

These derivatives are valued using market quotations from independent price reporting agencies and

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

commodity exchange price curves that are corroborated with market data.

Level 3 instruments are valued using significant unobservable inputs that are not supported by sufficient market activity.

2 unchanged sentences

Estimates of the J.

Aron and MLC settlement prices are based on observable inputs, such as

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

Brent and West Texas Intermediate Crude Oil (“WTI”) indices, and unobservable inputs, such as contractual price differentials as defined in the Supply and Offtake Agreement and Washington Refinery Intermediation Agreement.

Such contractual differentials vary by location and by the type of product and range from a discount of $ 16.40 per barrel to a premium of $ 57.86 per barrel as of March 31, 2022.

Aron and MLC settlement prices are based on observable inputs, such as Brent and West Texas Intermediate Crude Oil (“WTI”) indices, and unobservable inputs, such as contractual price differentials as defined in the Supply and Offtake Agreement and Washington Refinery Intermediation Agreement.

Such contractual differentials vary by location and by the type of product and range from a discount of $ 8.61 per barrel to a premium of $ 71.58 per barrel as of June 30, 2022.

Contractual price differentials are considered unobservable inputs;

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

We did not have other commodity derivatives classified as Level 3 at March 31, 2022, or December 31, 2021.

We did not have other commodity derivatives classified as Level 3 at June 30, 2022, or December 31, 2021.

Please read Note 10—Derivatives for further information on derivatives.

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Financial Statement Impact

Fair value amounts by hierarchy level as of March 31, 2022, and December 31, 2021, are presented gross in the tables below (in thousands):

March 31, 2022

Fair value amounts by hierarchy level as of June 30, 2022, and December 31, 2021, are presented gross in the tables below (in thousands):

June 30, 2022

Level 1 Level 2 Level 3 Gross Fair Value Effect of Counter-Party Netting Net Carrying Value on Balance Sheet (1)

8 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

December 31, 2021

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_________________________________________________________

(1) Does not include cash collateral of $ 41.9 million and $ 15.6 million as of March 31, 2022, and December 31, 2021, respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

(2) Does not include RINs assets and other environmental credits of $ 134.8 million and $ 120.1 million presented as Inventories on our condensed consolidated balance sheet and stated at the lower of cost and net realizable value as of March 31, 2022, and December 31, 2021, respectively.

(1) Does not include cash collateral of $ 81.7 million and $ 15.6 million as of June 30, 2022, and December 31, 2021, respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

(2) Does not include RINs assets and other environmental credits of $ 160.4 million and $ 120.1 million presented as Inventories on our condensed consolidated balance sheet and stated at the lower of cost and net realizable value as of June 30, 2022, and December 31, 2021, respectively.

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Balance, at beginning of period $ ( 52,678 ) $ ( 21,162 ) $ ( 37,321 ) $ ( 30,958 )

Settlements 56,753 20,569 149,061 55,512

Acquired — — — —

Total gains (losses) included in earnings ( 12,567 ) ( 35,771 ) ( 120,232 ) ( 60,918 )

Balance, at end of period $ ( 8,492 ) $ ( 36,364 ) $ ( 8,492 ) $ ( 36,364 )

The carrying value and fair value of long-term debt and other financial instruments as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

March 31, 2022

The carrying value and fair value of long-term debt and other financial instruments as of June 30, 2022 and December 31, 2021 are as follows (in thousands):

June 30, 2022

Carrying Value Fair Value

8 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

December 31, 2021

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The inputs used to measure the fair value are classified as Level 2 inputs within the fair value hierarchy because the 7.75 % Senior Secured Notes, Term Loan B Facility, and 12.875 % Senior Secured Notes may not be actively traded.

The carrying value of our ABL Credit Facility was determined to approximate fair value as of March 31, 2022.

The carrying value of our ABL Credit Facility was determined to approximate fair value as of June 30, 2022.

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

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Most of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 30 years or more.

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

The following table provides information on the amounts (in thousands) of our right-of-use assets (“ROU assets”) and liabilities as of March 31, 2022 and December 31, 2021 and their placement within our condensed consolidated balance sheets:

Lease type Balance Sheet Location March 31, 2022 December 31, 2021

There are no material residual value guarantees associated with any of our leases.

The following table provides information on the amounts (in thousands) of our right-of-use assets (“ROU assets”) and liabilities as of June 30, 2022 and December 31, 2021 and their placement within our condensed consolidated balance sheets:

Lease type Balance Sheet Location June 30, 2022 December 31, 2021

Finance Property, plant, and equipment $ 21,150 $ 20,556

11 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

The following table summarizes the weighted-average lease terms and discount rates of our leases as of March 31, 2022 and December 31, 2021:

March 31, 2022 December 31, 2021

For the Interim Periods Ended June 30, 2022 and 2021

The following table summarizes the weighted-average lease terms and discount rates of our leases as of June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

Weighted-average remaining lease term (in years)

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Operating 6.89 % 6.70 %

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

Three Months Ended March 31,

Lease cost type 2022 2021

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

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

Lease cost (income) type 2022 2021 2022 2021

Finance lease cost

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Net lease cost $ 25,489 $ 25,783 $ 50,620 $ 50,625

Operating lease income (1) $ ( 3,219 ) $ ( 727 ) $ ( 4,065 ) $ ( 1,489 )

_________________________________________________________

(1) From time to time, we enter into lease arrangements where we are the lessor in order to utilize a portion of our fixed assets not currently used in our primary operations.

All of these lessor leases are classified as operating leases, whereby we do not derecognize the underlying asset, and the income from our customers is recognized as revenue on a straight-line basis over the lease term.

The majority of our lessor income comes from leases with lease terms of one year or less and the estimated future undiscounted cash flows from lessor income are not expected to be material.

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

Three Months Ended March 31,

Six Months Ended June 30,

Lease type 2022 2021

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

The table below includes the estimated future undiscounted cash flows for finance and operating leases as of March 31, 2022 (in thousands):

For the Interim Periods Ended June 30, 2022 and 2021

The table below includes the estimated future undiscounted cash flows for finance and operating leases as of June 30, 2022 (in thousands):

For the year ending December 31, Finance leases Operating leases Total

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_________________________________________________________

(1) Represents the period from April 1, 2022 to December 31, 2022.

(1) Represents the period from July 1, 2022 to December 31, 2022.

Additionally, we have $ 3.8 million and $ 6.1 million in future undiscounted cash flows for finance and operating leases that have not yet commenced, respectively.

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

Sale-Leaseback Transaction

Sale-Leaseback Transactions

In February and March 2021, PHL and Par Hawaii Property Company, LLC (collectively, the “Sellers”), both our wholly owned subsidiaries, and MDC Coast HI 1, LLC, a subsidiary of Realty Income Corporation (the “Buyer”), entered into sale-leaseback transactions with respect to twenty-two ( 22 ) retail convenience store/fuel station properties located in Hawaii.

We recognized a gain of $ 63.9 million as a result of these transactions, which is included in Loss (gain) on sale of assets, net on our condensed consolidated statements of operations for the three months ended March 31, 2021.

Note 13— Commitments and Contingencies

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By opinion dated September 22, 2021, the Hawaii Attorney General reversed a prior 1964 opinion exempting various business transactions conducted in Hawaii free trade zones from certain state taxes.

We understand that we and other similarly situated state taxpayers who had previously claimed such exemptions may anticipate an audit of their state tax returns filed for such prior tax periods.

We and other similarly situated state taxpayers who had previously claimed such exemptions are currently being audited for such prior tax periods.

Similarly, on September 30, 2021, we received notice of a complaint filed on May 17, 2021, on camera and under seal in the first circuit court of the state of Hawaii alleging that Par Hawaii Refining, LLC, Par Pacific Holdings, Inc.

7 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

management activities.

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Investigative work by Wyoming Refining and negotiations with the relevant agencies as to remedial approaches remain ongoing on a number of aspects of the contamination, meaning that investigation, monitoring, and remediation costs are not reasonably estimable for some elements of these efforts.

As of March 31, 2022, we have accrued $ 15.4 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years.

As of June 30, 2022, we have accrued $ 15.3 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years.

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

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

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

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To the extent that we exceed the minimum volumetric requirements for blending of renewable fuels, we have the option of retaining these RINs for current or future RFS compliance or selling those RINs on the open market.

As of March 31, 2022, our estimate of the renewable volume obligation (“RVO”) liability for the 2021 and 2022 compliance years is based on the RFS proposed volumetric requirements released by the EPA on December 7, 2021.

As of June 30, 2022, our estimate of the renewable volume obligation (“RVO”) liability for the 2021 and 2022 compliance years is based on the RFS volumetric requirements which the EPA finalized on June 3, 2022.

Additionally, the RFS enables the EPA to exempt certain small refineries from the renewable fuels blending requirements in the event such requirements would cause disproportionate economic hardship to that refinery.

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Renewable Fuels Association, the United States Supreme Court recently held that the CAA authorizes the EPA to exempt a small refinery from compliance with the renewable fuel standards program even if the small refinery had not received an exemption in each year since the program began in 2011.

It is uncertain whether the EPA will begin granting hardship exemptions again in light of the Court’s decision or withhold approval of pending hardship exemption requests on other grounds.

On June 3, 2022, the EPA denied our pending small refinery exemption applications for 2019-2020.

The RFS may present production and logistics challenges for both the renewable fuels and petroleum refining and marketing industries in that we may have to enter into arrangements with other parties or purchase D3 waivers from the EPA to meet our obligations to use advanced biofuels, including biomass-based diesel and cellulosic biofuel, with potentially uncertain supplies of these new fuels.

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In 2019, the EPA approved year-round sales of E15.

However, on July 2, 2021, a three-judge panel of the U.S.

On July 2, 2021, a three-judge panel of the U.S.

Court of Appeals for the District of Columbia Circuit vacated the EPA’s approval of year-round E15 sales.

However, on April 29, 2022, in response to supply challenges caused in part by Russia’s invasion of Ukraine, the EPA issued an emergency waiver to permit E15 sales during the summer of 2022.

There are numerous issues, including state and federal regulatory issues, that need to be addressed before E15 can be marketed on a large scale for use in traditional gasoline engines;

10 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

Tier 3 gasoline standard.

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Government and Noble Energy, Inc.

As of March 31, 2022, two related claims totaling approximately $ 22.4 million remained to be resolved and we have accrued approximately $ 0.5 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end.

As of June 30, 2022, two related claims totaling approximately $ 22.4 million remained to be resolved and we have accrued approximately $ 0.5 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end.

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

4 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

We believe the probability of issuing stock to satisfy the full claim amount is remote, as the obligations upon which such proof of claim is asserted are joint and several among all working interest owners and Delta, our predecessor, only owned an approximate 3.4 % aggregate working interest in the unit.

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On November 10, 2021, the Board authorized and approved a share repurchase program for up to $ 50 million of the outstanding shares of the Company’s common stock, with no specified end date.

During the three months ended March 31, 2022, we repurchased 362,130 shares under this share repurchase program for a total of $ 5.0 million.

During the six months ended June 30, 2022, we repurchased 362 thousand shares under this share repurchase program for a total of $ 5.0 million.

No shares were repurchased during the three months ended June 30, 2022.

Incentive Plans

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Restricted Stock Awards $ 1,153 $ 1,252 $ 2,902 $ 2,364

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Stock Option Awards 525 499 1,761 945

During the three months ended March 31, 2022, we granted 361 thousand shares of restricted stock and restricted stock units with a fair value of approximately $ 5.4 million.

As of March 31, 2022, there were approximately $ 12.2 million of total unrecognized compensation costs related to restricted stock awards and restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 2.0 years.

During the three months ended March 31, 2022, we granted 449 thousand stock option awards with a weighted-average exercise price of $ 14.91 per share.

As of March 31, 2022, there were approximately $ 5.9 million of total unrecognized compensation costs related to stock option awards, which are expected to be recognized on a straight-line basis over a weighted-average period of 2.1 years.

During the three months ended March 31, 2022, we granted 50 thousand performance restricted stock units to executive officers.

During the three and six months ended June 30, 2022, we granted 36 thousand and 397 thousand shares of restricted stock and restricted stock units with a fair value of approximately $ 0.5 million and $ 5.9 million, respectively.

As of June 30, 2022, there were approximately $ 11.0 million of total unrecognized compensation costs related to restricted stock awards and restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.8 years.

During the six months ended June 30, 2022, we granted 449 thousand stock option awards with a weighted-average exercise price of $ 14.91 per share, but no grants were made for the three months ended June 30, 2022.

As of June 30, 2022, there were approximately $ 5.4 million of total unrecognized compensation costs related to stock option awards, which are expected to be recognized on a straight-line basis over a weighted-average period of 2.0 years.

During the six months ended June 30, 2022, we granted 50 thousand performance restricted stock units to executive officers, but no grants were made for the three months ended June 30, 2022.

These performance restricted stock units had a fair value of approximately $ 0.7 million and are subject to certain annual performance targets based on three-year -performance periods as defined by our Board of Directors.

As of March 31, 2022, there were approximately $ 1.5 million of total unrecognized compensation costs related to the performance restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 2.2 years.

As of June 30, 2022, there were approximately $ 1.3 million of total unrecognized compensation costs related to the performance restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 2.0 years.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

Note 15— Income (Loss) per Share

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

Three Months Ended March 31,

Net loss $ ( 137,051 ) $ ( 62,227 )

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

2022 2021 2022 2021

Net income (loss) $ 149,125 $ ( 108,958 ) $ 12,074 $ ( 171,185 )

Undistributed income allocated to participating securities — — — —

Net loss attributable to common stockholders ( 137,051 ) ( 62,227 )

Net income (loss) attributable to common stockholders 149,125 ( 108,958 ) 12,074 ( 171,185 )

Net income effect of convertible securities — — — —

Numerator for diluted loss per common share $ ( 137,051 ) $ ( 62,227 )

Numerator for diluted income (loss) per common share $ 149,125 $ ( 108,958 ) $ 12,074 $ ( 171,185 )

Basic weighted-average common stock shares outstanding 59,479 59,367 59,449 56,837

1 unchanged sentence

Diluted weighted-average common stock shares outstanding 59,642 59,367 59,644 56,837

Basic loss per common share $ ( 2.31 ) $ ( 1.15 )

Diluted loss per common share $ ( 2.31 ) $ ( 1.15 )

Basic income (loss) per common share $ 2.51 $ ( 1.84 ) $ 0.20 $ ( 3.01 )

Diluted income (loss) per common share $ 2.50 $ ( 1.84 ) $ 0.20 $ ( 3.01 )

Diluted income (loss) per common share excludes the following equity instruments because their effect would be anti-dilutive:

3 unchanged sentences

— 2,258 — 2,480

_________________________________________________________

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

We have utilized the basic shares outstanding to calculate both basic and diluted Net Loss per common share for the three months ended March 31, 2022 and 2021.

(2) We had no 5.00 % Convertible Senior Notes outstanding for the three months ended March 31, 2022.

We have utilized the basic shares outstanding to calculate both basic and diluted Net Loss per common share for the three and six months ended June 30, 2021.

(2) We had no 5.00 % Convertible Senior Notes outstanding for the three and six months ended June 30, 2022.

Note 16— Income Taxes

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

Management continues to conclude that we did not meet the “more likely than not” requirement in order to recognize deferred tax assets on the remaining amounts and a valuation allowance has been recorded for substantially all of our net deferred tax assets at March 31, 2022 and December 31, 2021.

We believe that any adjustment to our uncertain tax positions would no t have a material impact on our financial statements given the Company’s deferred tax and corresponding valuation allowance position as of March 31, 2022 and December 31, 2021.

As of December 31, 2021, we had approximately $ 1.6 billion in net operating loss carryforwards (“NOL carryforwards”);

7 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

Note 17— Segment Information

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

Three Months Ended March 31, 2022 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Three Months Ended June 30, 2022 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues 2,044,455 50,633 147,211 ( 135,967 ) $ 2,106,332

3 unchanged sentences

59,101 3,797 19,444 — 82,342

Depreciation, depletion, and amortization 15,333 5,087 2,691 669 23,780

Depreciation and amortization 16,979 5,211 2,600 793 25,583

Loss (gain) on sale of assets, net — ( 12 ) — 27 15

General and administrative expense (excluding depreciation) — — — 15,438 15,438

2 unchanged sentences

Interest expense and financing costs, net ( 18,154 )

Debt extinguishment and commitment costs ( 5,672 )

Other income, net 47

Income before income taxes 150,250

Income tax expense ( 1,125 )

Net income $ 149,125

Capital expenditures $ 8,666 $ 2,177 $ 1,508 $ 336 $ 12,687

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

Revenues $ 1,155,847 $ 48,706 $ 118,446 $ ( 105,474 ) $ 1,217,525

Cost of revenues (excluding depreciation)

1,190,797 25,314 86,671 ( 105,484 ) 1,197,298

Operating expense (excluding depreciation)

47,944 3,494 17,383 — 68,821

Depreciation and amortization 14,561 5,377 2,874 736 23,548

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

General and administrative expense (excluding depreciation) — — — 12,201 12,201

Acquisition and integration costs — — — ( 352 ) ( 352 )

Operating income (loss) $ ( 99,119 ) $ 14,542 $ 12,651 $ ( 12,575 ) $ ( 84,501 )

Interest expense and financing costs, net ( 17,186 )

Debt extinguishment and commitment costs ( 6,628 )

Other expense, net ( 36 )

Loss before income taxes ( 108,351 )

Income tax benefit 437

Income tax expense ( 607 )

Net loss $ ( 108,958 )

Capital expenditures $ 2,432 $ 1,112 $ 1,983 $ 302 $ 5,829

Three Months Ended March 31, 2021 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

________________________________________________________

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 136.0 million and $ 105.5 million for the three months ended June 30, 2022 and 2021, respectively.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

Six Months Ended June 30, 2022 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 3,343,678 $ 93,094 $ 267,120 $ ( 247,267 ) $ 3,456,625

3 unchanged sentences

117,401 7,570 38,775 — 163,746

Depreciation, depletion, and amortization 14,064 5,254 2,660 902 22,880

Depreciation and amortization 32,312 10,298 5,291 1,462 49,363

Loss (gain) on sale of assets, net — ( 12 ) — 27 15

4 unchanged sentences

Debt extinguishment and commitment costs ( 5,672 )

Other income, net 49

Income before income taxes 12,762

Income tax expense ( 688 )

Net income $ 12,074

Capital expenditures $ 21,495 $ 3,910 $ 3,089 $ 526 $ 29,020

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

Revenues $ 1,994,602 $ 90,015 $ 209,634 $ ( 188,046 ) $ 2,106,205

Cost of revenues (excluding depreciation)

2,074,274 47,396 152,543 ( 188,052 ) 2,086,161

Operating expense (excluding depreciation)

101,282 7,390 34,337 — 143,009

Depreciation and amortization 28,625 10,631 5,534 1,638 46,428

Loss (gain) from sale of assets, net ( 19,595 ) ( 21 ) ( 44,786 ) — ( 64,402 )

General and administrative expense (excluding depreciation) — — — 24,086 24,086

Acquisition and integration costs — — — 86 86

Operating income (loss) $ ( 189,984 ) $ 24,619 $ 62,006 $ ( 25,804 ) $ ( 129,163 )

Interest expense and financing costs, net ( 35,337 )

Debt extinguishment and commitment costs ( 8,135 )

Gain on curtailment of pension obligation 2,032

5 unchanged sentences

________________________________________________________

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 111.3 million and $ 82.6 million for the three months ended March 31, 2022 and 2021, respectively.

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 247.3 million and $ 188.0 million for the six months ended June 30, 2022 and 2021, respectively.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2022 and 2021

For the Interim Periods Ended June 30, 2022 and 2021

Note 18— Related Party Transactions

Equity Group Investments (“EGI”) - Service Agreement

On September 17, 2013, we entered into a letter agreement (“Services Agreement”) with Equity Group Investments (“EGI”), an affiliate of Zell Credit Opportunities Fund, LP (“ZCOF”), which owns 10 % or more of our common stock directly or through affiliates.

On September 17, 2013, we entered into a letter agreement (“Services Agreement”) with Equity Group Investments (“EGI”), an affiliate of Zell Credit Opportunities Fund, LP (“ZCOF”), which owned 10 % or more of our common stock directly or through affiliates during the second quarter of 2022.

Pursuant to the Services Agreement, EGI agreed to provide us with ongoing strategic, advisory, and consulting services that may include (i) advice on financing structures and our relationship with lenders and bankers, (ii) advice regarding public and private offerings of debt and equity securities, (iii) advice regarding asset dispositions, acquisitions, or other asset management strategies, (iv) advice regarding potential business acquisitions, dispositions, or combinations involving us or our affiliates, or (v) such other advice directly related or ancillary to the above strategic, advisory, and consulting services as may be reasonably requested by us.

2 unchanged sentences

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

There were no costs incurred related to this agreement during the three months ended March 31, 2022 or 2021.

Note 19— Subsequent Events

On April 25, 2022, PHR and Par Petroleum, LLC, entered into an Amendment (the “Amendment”) to the Second Amended and Restated Supply and Offtake Agreement with J.

Aron & Company, LLC (“J.

The Amendment, among other things, amended the maximum commitment amount under the discretionary draw facility available to PHR (the “Discretionary Draw Facility”), from $ 165 million to $ 215 million.

The Amendment further increased the limit in the borrowing base for eligible hydrocarbon inventory from $ 82.5 million to $ 107.5 million.

Under the Discretionary Draw Facility as amended by the Amendment, J.

Aron agrees to make advances to PHR from time to time at the request of PHR, subject to the satisfaction of certain conditions precedent, in an aggregate principal amount at any one time outstanding not to exceed the lesser of (i) $ 215 million;

and (ii) the borrowing base, which is calculated as (x) 85 % of eligible receivables, plus (y) the lesser of $ 107.5 million and 85 % of the value of eligible hydrocarbon inventory, minus (z) such reserves as established by J.

Aron in respect of eligible receivables and eligible hydrocarbon inventory.

The Amendment further requires a $ 5.0 million reserve against the borrowing base at any time more than $ 165 million is outstanding in discretionary draw advances made to PHR, which reserve may be reduced by the posting of cash collateral by PHR in accordance with the terms of the Amendment.

In addition, the Amendment modified the calculation “DD Make-Whole” by increasing the assumed aggregate principal amount outstanding used in such calculation from $ 41.3 million to $ 53.8 million.

There were no costs incurred related to this agreement during the three and six months ended June 30, 2022 or 2021.

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

What changed 10-Q

Item 1. Financial Statements