What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-09 · 244 added, 220 removed, 761 unchanged (38% of the section changed)

4 unchanged sentences

(in thousands, except share data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets

2 unchanged sentences

Total cash, cash equivalents, and restricted cash 413,091 116,221

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

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

287,722 195,108

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Common stock, $ 0.01 par value;

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

500,000,000 shares authorized at September 30, 2022 and December 31, 2021, 60,157,574 shares and 60,161,955 shares issued at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 829,195 821,713

8 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

29 unchanged sentences

(in thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

9 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

6 unchanged sentences

Deferred taxes 682 9

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

Gain on sale of assets, net ( 170 ) ( 64,400 )

Stock-based compensation 7,382 6,095

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

Unrealized (gain) loss on derivative contracts ( 10,151 ) 4,710

Net changes in operating assets and liabilities:

18 unchanged sentences

Other financing activities, net 351 333

Net cash provided by financing activities 75,252 15,358

Net cash used in financing activities ( 34,522 ) ( 1,954 )

Net increase in cash, cash equivalents, and restricted cash 296,870 134,996

2 unchanged sentences

Supplemental cash flow information:

Net cash received (paid) for:

Net cash paid for:

Interest $ ( 43,161 ) $ ( 47,653 )

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

Stock-based compensation ( 5 ) — 2,023 — — 2,023

Purchase of common stock for retirement 13 — ( 15 ) — — ( 15 )

Net income — — — 81,802 — 81,802

Balance, September 30, 2021 60,193 $ 602 $ 819,057 $ ( 566,411 ) $ 254 $ 253,502

Additional Other

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

Stock-based compensation ( 2 ) — 1,613 — — 1,613

Purchase of common stock for retirement ( 60 ) ( 1 ) ( 41 ) ( 804 ) — ( 846 )

Net income — — — 267,396 — 267,396

Balance, September 30, 2022 60,158 $ 601 $ 829,195 $ ( 285,406 ) $ 2,502 $ 546,892

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

For the Interim Periods Ended September 30, 2022 and 2021

Note 1 — Overview

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

As of September 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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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

For the Interim Periods Ended September 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 and six months ended June 30, 2022 or 2021.

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

Cost Classifications

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

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

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

2022 2021 2022 2021

3 unchanged sentences

Recent Accounting Pronouncements

There have been no developments to recent accounting pronouncements, including the expected dates of adoption and estimated effects on our financial condition, results of operations, and cash flows, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

On September 30, 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.

This ASU defines supplier finance programs and establishes new disclosure requirements for such programs.

For programs meeting that definition, this ASU requires annual disclosures of key terms, obligations, and certain information related to these programs.

Interim disclosure of the amount of outstanding obligations is also required.

ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

This ASU will expand our disclosures for qualified supplier finance programs.

Note 3— Investment in Laramie Energy, LLC

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

As of September 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 June 30, 2022 and December 31, 2021.

The balance of our investment in Laramie Energy was zero as of September 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 June 30, 2022, the term loan had an outstanding balance of $ 91.8 million.

As of September 30, 2022, the term loan had an outstanding balance of $ 85.1 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.

Laramie Energy’s term loan matures on July 1, 2025.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets $ 61,845 $ 68,779

2 unchanged sentences

Non-current liabilities 248,088 177,503

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

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

2022 2021 2022 2021

1 unchanged sentence

Income from operations 32,056 20,807 86,124 73,957

Net income (loss) 383 133 ( 32,517 ) 40,584

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

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

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

Net loss ( 5,187 ) ( 41,892 ) ( 37,704 ) ( 1,308 )

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

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

2022 2021 2022 2021

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Note 4— Revenue Recognition

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

As of September 30, 2022 and December 31, 2021, receivables from contracts with customers were $ 267.1 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 $ 30.3 million and $ 10.1 million as of June 30, 2022 and December 31, 2021, respectively.

Deferred revenue was $ 26.4 million and $ 10.1 million as of September 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 June 30, 2022 Refining Logistics Retail

Three Months Ended September 30, 2022 Refining Logistics Retail

Product or service:

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Total segment revenues (3) $ 1,974,701 $ 54,635 $ 157,385

Three Months Ended June 30, 2021 Refining Logistics Retail

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

Three Months Ended September 30, 2021 Refining Logistics Retail

Product or service:

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Total segment revenues (3) $ 1,242,848 $ 46,735 $ 125,910

Six Months Ended June 30, 2022 Refining Logistics Retail

Nine Months Ended September 30, 2022 Refining Logistics Retail

Product or service:

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Total segment revenues (3) $ 5,318,379 $ 147,729 $ 424,505

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

Nine Months Ended September 30, 2021 Refining Logistics Retail

Product or service:

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(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 September 30, 2022 and 2021

Note 5— Inventories

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

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

Titled Inventory Supply and Offtake Agreement (1) Total

June 30, 2022

September 30, 2022

Crude oil and feedstocks $ 98,449 $ 224,419 $ 322,868

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

(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.

(2) Includes $ 194.0 million and $ 120.1 million of RINs and environmental credits, reported at the lower of cost or net realizable value, as of September 30, 2022 and December 31, 2021, respectively.

RINs and environmental credit obligations of $ 489.6 million and $ 311.0 million, reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively.

As of September 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 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

As of September 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 $ 71.5 million and $ 46.0 million, respectively.

Note 6— Prepaid and Other Current Assets

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

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

September 30, 2022 December 31, 2021

Advances to suppliers for crude purchases $ 71,227 $ —

8 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 September 30, 2022 and 2021

Note 7— Inventory Financing Agreements

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Supply and Offtake Agreement

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

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

As of September 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 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.

As of September 30, 2022 and December 31, 2021, our outstanding balance under the Discretionary Draw Facility was equal to our borrowing base of $ 147.1 million and $ 126.2 million, respectively.

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.

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

Aron as of June 30, 2022.

Aron as of September 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

We did no t recognize any fixed market fees for the three months ended September 30, 2022.

We recognized fixed market fees of $ 8.8 million for the nine months ended September 30, 2022, and $ 6.0 million and $ 7.7 million for the three and nine months ended September 30, 2021, respectively, which were included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

Washington Refinery Intermediation Agreement

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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.

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.

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

On August 11, 2022, we and MLC entered into an amendment to the Washington Refinery Intermediation Agreement to establish the adjusted three-month term Secured Overnight Financing Rate ("SOFR") as the benchmark rate in replacement of the London Interbank Offered Rate ("LIBOR") and revise certain other terms and conditions.

As of September 30, 2022 and December 31, 2021, our outstanding balance under the MLC receivable advances was equal to our borrowing base of $ 81.9 million and $ 54.5 million, respectively.

Additionally, as of September 30, 2022, and December 31, 2021, we had approximately $ 194.2 million and $ 167.0 million in letters of credit outstanding through MLC’s credit support, respectively.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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 June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

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Interest expense and financing costs, net 2,636 1,276 7,533 3,387

___________________________________________________

(1) Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $ 30.2 million and $ 0.8 million for the three months ended September 30, 2022 and 2021, and $ 54.1 million and $ 1.9 million for the nine months ended September 30, 2022 and 2021, respectively.

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

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Note 8— Other Accrued Liabilities

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

June 30, 2022 December 31, 2021

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

September 30, 2022 December 31, 2021

Accrued payroll and other employee benefits $ 24,058 $ 19,710

Derivative liabilities 41,347 1,431

Gross environmental credit obligations (1) 489,613 311,014

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___________________________________________________

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

(1) Gross environmental credit obligations are stated at market as of September 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 $ 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 carrying costs of these assets were $ 194.0 million and $ 120.1 million as of September 30, 2022 and December 31, 2021, respectively.

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

ABL Credit Facility due 2025 $ — $ —

9 unchanged sentences

Long-term debt, net of current maturities $ 496,870 $ 553,717

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.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

As of September 30, 2022 and December 31, 2021, we had $ 30.9 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 September 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.

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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.

As of September 30, 2022, the ABL Revolver had no outstanding revolving loans, $ 30.9 million in letters of credit outstanding, and a borrowing base of approximately $ 116.4 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.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

On May 24, 2022, and July 14, 2022, we repurchased and cancelled $ 5.0 million and $ 10.0 million in aggregate principal amounts of the 7.75% Senior Secured Notes at repurchase prices of 97.500 % and 95.000 %, respectively, of the aggregate principal amount of notes repurchased .

We recognized aggregate discounts of $ 0.6 million and incurred aggregate debt extinguishment costs of $ 0.2 million for these repurchases, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the nine months ended September 30, 2022.

As of September 30, 2022, the 7.75% Senior Secured Notes had an outstanding principal balance of $ 281.0 million.

12.875% Senior Secured Notes due 2026

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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.

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

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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

As of September 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.

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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 June 30, 2022, will settle by March 2023.

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

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

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

Contract type Purchases Sales Net

2 unchanged sentences

Total 37,111 ( 36,151 ) 960

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

At September 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 September 30, 2022:

Average barrels per month 85,000 40,000

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Weighted-average strike price - ceiling (in dollars) $ 86.55 $ 102.96

Earliest commencement date January 2022

Furthest expiry date December 2022

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

Earliest commencement date October 2022 January 2023

Furthest expiry date December 2022 June 2023

Interest Rate Derivatives

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

In May 2019, we entered into an interest rate swap at an average fixed rate of 3.91 % in exchange for the floating interest rate on the notional amounts due under the Retail Property Term Loan.

In May 2019, we entered into an interest rate swap at an average fixed rate of 3.91 % in exchange for the floating interest rate on the notional amounts due under the term loan agreement entered into by Par Pacific Hawaii Property Company, LLC, our wholly owned subsidiary, and Bank of Hawaii on March 29, 2019 (the “Retail Property Term Loan”).

This swap was set to expire on April 1, 2024, the maturity date of the Retail Property Term Loan.

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

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

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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

Balance Sheet Location September 30, 2022 December 31, 2021

Asset (Liability)

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_________________________________________________________

(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.

(1) Does not include cash collateral of $ 23.3 million and $ 6.1 million recorded in Prepaid and other current assets as of September 30, 2022, and December 31, 2021, respectively, and $ 9.5 million in Other long-term assets as of both September 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 June 30, Six Months Ended June 30,

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

Statement of Operations Location 2022 2021 2022 2021

13 unchanged sentences

Our Level 2 instruments include OTC swaps and options.

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.

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

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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.

Such contractual differentials vary by location and by the type of product, have a weighted average premium of $ 14.75 , and range from a discount of $ 17.55 per barrel to a premium of $ 55.31 per barrel as of September 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 June 30, 2022, or December 31, 2021.

We did not have

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

other commodity derivatives classified as Level 3 at September 30, 2022, or December 31, 2021.

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

5 unchanged sentences

Financial Statement Impact

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

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

September 30, 2022

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

5 unchanged sentences

Total liabilities $ ( 326,635 ) $ ( 494,778 ) $ 13,334 $ ( 808,079 ) $ 331,444 $ ( 476,635 )

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

December 31, 2021

7 unchanged sentences

_________________________________________________________

(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.

(1) Does not include cash collateral of $ 23.3 million and $ 6.1 million as of September 30, 2022, and December 31, 2021, respectively, included within Prepaid and other current assets and $ 9.5 million included within Other long-term assets as of September 30, 2022, and December 31, 2021, on our condensed consolidated balance sheets.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

(2) Does not include RINs assets and other environmental credits of $ 194.0 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 September 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 June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

1 unchanged sentence

Settlements ( 55,448 ) 5,682 93,613 61,194

Acquired — — — —

Total gains (losses) included in earnings (1) 77,274 ( 14,641 ) ( 42,958 ) ( 75,559 )

Balance, at end of period $ 13,334 $ ( 45,323 ) $ 13,334 $ ( 45,323 )

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

_________________________________________________________

(1) Included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

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

September 30, 2022

Carrying Value Fair Value

5 unchanged sentences

30,051 33,647

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

December 31, 2021

11 unchanged sentences

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 June 30, 2022.

The carrying value of our ABL Credit Facility was determined to approximate fair value as of September 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.

3 unchanged sentences

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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

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

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

8 unchanged sentences

Total lease liabilities $ 338,067 $ 397,965

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 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

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

September 30, 2022 December 31, 2021

Weighted-average remaining lease term (in years)

5 unchanged sentences

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,

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

Lease cost (income) type 2022 2021 2022 2021

8 unchanged sentences

_________________________________________________________

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

(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.

2 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended September 30,

Lease type 2022 2021

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ROU assets terminated in exchange for release from operating lease liabilities 32,902 800

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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):

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

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

10 unchanged sentences

_________________________________________________________

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

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

Additionally, we have $ 3.8 million and $ 48.2 million in future undiscounted cash flows for finance and operating leases that have not yet commenced, respectively.

2 unchanged sentences

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 six months ended June 30, 2021.

Note 13— Commitments and Contingencies

2 unchanged sentences

It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on our financial condition, results of operations, or cash flows.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

Tax and Related Matters

9 unchanged sentences

Environmental Matters

Like other petroleum refiners, our operations are subject to extensive and periodically-changing federal, state, and local environmental laws and regulations governing air emissions, wastewater discharges, and solid and hazardous waste

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

management activities.

Many of these regulations are becoming increasingly stringent and the cost of compliance can be expected to increase over time.

6 unchanged sentences

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 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.

As of September 30, 2022, we have accrued $ 15.0 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years.

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.

5 unchanged sentences

New construction or material expansions that meet certain GHG emissions thresholds will likely require that, among other things, a GHG permit be issued in accordance with the federal CAA regulations and we will be required, in connection with such permitting, to undertake a technology review to determine appropriate controls to be implemented with the project in order to reduce GHG emissions.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

Furthermore, the EPA is currently developing refinery-specific GHG regulations and performance standards that are expected to impose GHG emission limits and/or technology requirements.

9 unchanged sentences

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

Accordingly, our Hawaii

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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.

Accordingly, our Hawaii 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.

Compliance with federal and state GHG regulations could result in material increased compliance costs and an increase in the cost of our products.

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Higher fuel economy standards have the potential to reduce demand for our refined transportation fuel products.

Under EISA, the RFS requires an increasing amount of renewable fuel to be blended into the nation’s transportation fuel supply, up to 36 billion gallons by 2022.

Under EISA, the RFS requires an increasing amount of renewable fuel to be blended into the nation’s transportation fuel supply.

Over time, higher annual RFS requirements have the potential to reduce demand for our refined transportation fuel products.

3 unchanged sentences

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 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.

As of September 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.

3 unchanged sentences

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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.

9 unchanged sentences

The effective date for the new standard was January 1, 2017, however, approved small volume refineries had until January 1, 2020 to meet the standard.

The Par East Hawaii refinery was required to comply with Tier 3 gasoline standards within 30 months of June 21, 2016, the date it was disqualified from small volume refinery status.

The Par East Hawaii refinery was required to comply with Tier 3 gasoline standards within 30 months of June 21, 2016.

On March 19, 2015, the EPA confirmed the small refinery status of our Wyoming refinery.

The Par East Hawaii refinery, our Wyoming refinery, and our Washington refinery, acquired in January 2019, were all granted small refinery status by the EPA for 2018.

All of our refineries are compliant with the final

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

Tier 3 gasoline standard.

All of our refineries are compliant with the final Tier 3 gasoline standard.

Beginning on June 30, 2014, new sulfur standards for fuel oil used by marine vessels operating within 200 miles of the U.S.

15 unchanged sentences

These limitations include a deductible of $ 1 million and a cap of $ 15 million for certain of Tesoro’s indemnification obligations related to certain pre-existing conditions, as well as certain restrictions regarding the time limits for submitting notice and supporting documentation for remediation actions.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

Recovery Trusts

6 unchanged sentences

Government and Noble Energy, Inc.

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.

As of September 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.

Government for approximately $ 22.4 million relating to ongoing litigation concerning a plugging and abandonment obligation in Pacific Outer Continental Shelf Lease OCS-P 0320, comprising part of the Sword Unit in the Santa Barbara Channel, California.

The second unliquidated claim, which is related to the same plugging and abandonment obligation, was filed by Noble Energy Inc., the operator and majority interest owner of the

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

The second unliquidated claim, which is related to the same plugging and abandonment obligation, was filed by Noble Energy Inc., the operator and majority interest owner of the Sword Unit.

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.

4 unchanged sentences

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 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.

During the three and nine months ended September 30, 2022, 58 thousand and 420 thousand shares were repurchased under this share repurchase program for $ 0.8 million and $ 5.8 million, respectively.

Incentive Plans

1 unchanged sentence

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

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

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

2022 2021 2022 2021

2 unchanged sentences

Stock Option Awards 333 493 2,093 1,438

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 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.

During the three and nine months ended September 30, 2022, we granted 40 thousand and 437 thousand shares of restricted stock and restricted stock units with a fair value of approximately $ 0.6 million and $ 6.5 million, respectively.

As of September 30, 2022, there were approximately $ 9.8 million of total unrecognized compensation costs related to restricted stock awards and restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.8 years.

During the nine months ended September 30, 2022, we granted 449 thousand stock option awards with a weighted-average exercise price of $ 14.91 per share.

No grants were made for the three months ended September 30, 2022.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

For the Interim Periods Ended September 30, 2022 and 2021

September 30, 2022, there were approximately $ 4.2 million of total unrecognized compensation costs related to stock option awards, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.9 years.

During the nine months ended September 30, 2022, we granted 50 thousand performance restricted stock units to executive officers.

No grants were made for the three months ended September 30, 2022.

As of September 30, 2022, there were approximately $ 0.9 million of total unrecognized compensation costs related to the performance restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.9 years.

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 June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

14 unchanged sentences

_________________________________________________________

(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 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.

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

(2) We had no 5.00 % Convertible Senior Notes outstanding for the three and nine months ended September 30, 2022, and the three months ended September 30, 2021.

Note 16— Income Taxes

1 unchanged sentence

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

Management continues to conclude that we did not meet the “more likely than not” requirement in order to recognize deferred tax assets on the remaining amounts and a valuation allowance has been recorded for substantially all of our net deferred tax assets at June 30, 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 June 30, 2022 and December 31, 2021.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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

4 unchanged sentences

therefore, we expect to incur state tax liabilities in connection with our refining, retail, and logistics operations.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

Note 17— Segment Information

2 unchanged sentences

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

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

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

Revenues 1,974,701 54,635 157,385 ( 130,436 ) $ 2,056,285

6 unchanged sentences

General and administrative expense (excluding depreciation) — — — 16,219 16,219

Acquisition and integration costs — — — — —

Operating income (loss) $ 266,091 $ 17,625 $ 17,320 $ ( 16,865 ) $ 284,171

1 unchanged sentence

Debt extinguishment and commitment costs 343

Other income, net 47

Other expense, net ( 198 )

Income before income taxes 267,464

2 unchanged sentences

Capital expenditures $ 3,754 $ 2,967 $ 2,135 $ 182 $ 9,038

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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

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

4 unchanged sentences

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

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

Loss on sale of assets, net — 2 — — 2

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

4 unchanged sentences

Other expense, net ( 22 )

Loss before income taxes ( 108,351 )

Income before income taxes 82,388

Income tax expense ( 586 )

Net loss $ ( 108,958 )

Net income $ 81,802

Capital expenditures $ 3,164 $ 1,353 $ 2,255 $ 236 $ 7,008

________________________________________________________

(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

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 130.4 million and $ 105.1 million for the three months ended September 30, 2022 and 2021, respectively.

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

Revenues $ 5,318,379 $ 147,729 $ 424,505 $ ( 377,703 ) $ 5,512,910

10 unchanged sentences

Debt extinguishment and commitment costs ( 5,329 )

Other income, net 49

Other expense, net ( 149 )

Income before income taxes 280,226

2 unchanged sentences

Capital expenditures $ 25,249 $ 6,877 $ 5,224 $ 708 $ 38,058

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

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

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

4 unchanged sentences

Depreciation and amortization 43,373 16,176 8,164 2,333 70,046

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

Gain on sale of assets, net ( 19,595 ) ( 19 ) ( 44,786 ) — ( 64,400 )

General and administrative expense (excluding depreciation) — — — 36,559 36,559

10 unchanged sentences

________________________________________________________

(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.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2022 and 2021

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 377.7 million and $ 293.2 million for the nine months ended September 30, 2022 and 2021, respectively.

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 owned 10 % or more of our common stock directly or through affiliates during the second quarter of 2022.

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 5 % or more of our common stock directly or through affiliates during the third 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 and six months ended June 30, 2022 or 2021.

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2022 and 2021

Note 19— Subsequent Events

Billings Acquisition

On October 20, 2022, we and our subsidiaries Par Montana, LLC (“Par Montana”) and Par Montana Holdings, LLC (“Par Montana Holdings” and, together with Par Montana, the “Purchasers”) entered into an Equity and Asset Purchase Agreement (the “Purchase Agreement”) with Exxon Mobil Corporation, ExxonMobil Oil Corporation, and ExxonMobil Pipeline Company LLC (collectively, the “Sellers”) to purchase (i) the high-conversion, complex refinery located in Billings, Montana and certain associated distribution and logistics assets, and (ii) 100 % of the issued and outstanding equity interests in Exxon Billings Cogeneration, Inc.

and in Yellowstone Logistics Holding Company for a base purchase price of $ 310 million plus the value of hydrocarbon inventory and adjusted working capital at closing (collectively, the “Billings Acquisition”).

The closing of the Billings Acquisition is subject to certain customary closing conditions and is expected to close in the second quarter of 2023.

The Company will guarantee the payment and performance of the Purchasers’ obligations under the Purchase Agreement.

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