PAR PACIFIC HOLDINGS, INC. 10-K

Item 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are designed with the objective of ensuring that all information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (“Exchange Act”), such as this report, is recorded, processed, summarized, and reported within the time periods specified by the SEC. In connection with the preparation of this Annual Report on Form 10-K, as of December 31, 2022, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the 64 design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of December 31, 2022. Changes in Internal Control over Financial Reporting There were no changes during the quarter ended December 31, 2022, in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 65 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on such assessment, the Company's management concluded that, as of December 31, 2022, the Company’s internal control over financial reporting was effective based on those criteria. Deloitte & Touche LLP, the Company’s independent registered public accounting firm that audited the Company’s financial statements included in this Annual Report on Form 10-K, has issued an audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, which is included herein. 66 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Par Pacific Holdings, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Par Pacific Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated February 27, 2023, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Houston, Texas February 27, 2023 67 Item 9B. OTHER INFORMATION None. Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The information required by this item is incorporated in this Annual Report on Form 10-K by reference to our definitive proxy statement or an amendment to this Annual Report on Form 10-K to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year ended December 31, 2022. Item 11. EXECUTIVE COMPENSATION The information required by this item is incorporated in this Annual Report on Form 10-K by reference to our definitive proxy statement or an amendment to this Annual Report on Form 10-K to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year ended December 31, 2022. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated in this Annual Report on Form 10-K by reference to our definitive proxy statement or an amendment to this Annual Report on Form 10-K to be filed with the Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2022. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this item is incorporated in this Annual Report on Form 10-K by reference to our definitive proxy statement or an amendment to this Annual Report on Form 10-K to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year ended December 31, 2022. Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated in this Annual Report on Form 10-K by reference to our definitive proxy statement or an amendment to this Annual Report on Form 10-K to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year ended December 31, 2022. 68 PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this report: (1) Consolidated Financial Statements (Included under Item 8). The Index to the Consolidated Financial Statements is included on page F- 1 of this Annual Report on Form 10-K and is incorporated herein by reference. (2) Financial Statement Schedules Schedule I – Condensed Financial Information of Registrant 2.1 Third Amended Joint Chapter 11 Plan of Reorganization of Delta Petroleum Corporation and Its Debtor Affiliates dated August 16, 2012. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 7, 2012. 2.2 Membership Interest Purchase Agreement dated as of June 17, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC, and Hawaii Pacific Energy, LLC. Incorporated by reference to Exhibit 2.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed on August 14, 2013. 2.3 Agreement and Plan of Merger dated as of June 2, 2014, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholders’ Representative. Incorporated by reference to Exhibit 2.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed on August 11, 2014. 2.4 Amendment of Agreement and Plan of Merger dated as of September 9, 2014, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholders’ Representative. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 10, 2014. 2.5 Second Amendment of Agreement and Plan of Merger dated as of December 31, 2014, by and among Par Petroleum Corporation, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholder’s Representative. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 7, 2015. 2.6 Third Amendment to Agreement and Plan of Merger dated as of March 31, 2015, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholders’ Representative. Incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K filed on April 2, 2015. 2.7 Unit Purchase Agreement, dated as of June 13, 2016, between Par Wyoming, LLC and Black Elk Refining, LLC. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 15, 2016. 2.8 First Amendment to Unit Purchase Agreement dated as of July 14, 2016, between Par Wyoming, LLC and Black Elk Refining, LLC. Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on July 15, 2016. 2.9 Purchase and Sale Agreement dated as of November 26, 2018, among Par Petroleum, LLC, TrailStone NA Oil & Refining Holdings, LLC, and solely for certain purposes specified therein, the Company. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed on November 30, 2018.# 2.10 Amendment No. 1 to Purchase and Sale Agreement dated as of January 11, 2019, among Par Petroleum, LLC, TrailStone NA Oil & Refining Holdings, LLC, and Par Pacific Holdings, Inc. Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on January 14, 2019. 2.11 Equity and Asset Purchase Agreement dated as of October 20, 2022, by and among Exxon Mobil Corporation, ExxonMobil Oil Corporation and ExxonMobil Pipeline Company, LLC, as sellers, and Par Montana, LLC and Par Montana Holdings, LLC, as purchaser entities, and solely for the limited purposes set forth therein, Par Pacific Holdings, Inc. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on October 21, 2022. 3.1 Restated Certificate of Incorporation of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 20, 2015. 3.2 Second Amended and Restated Bylaws of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on October 20, 2015. 69 4.1 Form of the Company’s Common Stock Certificate. Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed on March 31, 2014. 4.2 Registration Rights Agreement effective as of August 31, 2012, by and among the Company, Zell Credit Opportunities Master Fund, L.P., Waterstone Capital Management, L.P., Pandora Select Partners, LP, Iam Mini-Fund 14 Limited, Whitebox Multi-Strategy Partners, LP, Whitebox Credit Arbitrage Partners, LP, HFR RVA Combined Master Trust, Whitebox Concentrated Convertible Arbitrage Partners, LP, and Whitebox Asymmetric Partners, LP. Incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on September 7, 2012. 4.3 First Amendment to Registration Rights Agreement dated as of December 19, 2018, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.3 to the Company’s registration statement on Form S-3 filed on December 21, 2018. 4.4 Stockholders Agreement dated April 10, 2015. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 13, 2015. 4.5 Indenture, dated June 21, 2016, between Par Pacific Holdings, Inc. and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 22, 2016. 4.6 Indenture, dated December 21, 2017, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein), and Wilmington Trust, National Association, as Trustee and Collateral Trustee. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 22, 2017. 4.7 First Supplemental Indenture, dated November 20, 2018, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein), and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.21 to the Company’s registration statement on Form S-3 filed on December 21, 2018. 4.8 Second Supplemental Indenture, dated January 11, 2019, among Par Tacoma, LLC (f/k/a TrailStone NA Asset Finance I, LLC), U.S. Oil & Refining Co., McChord Pipeline Co., Par Petroleum, LLC, Par Petroleum Finance Corp., Par Pacific Holdings, Inc., the other guarantors party thereto, and Wilmington Trust, National Association. Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on January 14, 2019. 4.9 Third Supplemental Indenture, dated August 15, 2019, among Par Hawaii, LLC (successor by conversion to Par Hawaii, Inc.), Par Petroleum, LLC, Par Petroleum Finance Corp., Par Pacific Holdings, Inc., the other guarantors party thereto, and Wilmington Trust, National Association. Incorporated by reference to Exhibit 4.23 to the Company’s Quarterly Report on Form 10-Q filed on August 10, 2020. 4.10 Fourth Supplemental Indenture, dated as of November 16, 2022, among Par Montana, LLC, Par Petroleum, LLC, Par Petroleum Finance Corp., Par Pacific Holdings, Inc., the other guarantors party thereto, and Wilmington Trust, National Association.* 4.11 Indenture, dated as of June 5, 2020, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein) and Wilmington Trust, National Association, as Trustee and Collateral Trustee. Incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed on June 8, 2020. 4.12 First Supplemental Indenture, dated as of November 16, 2022, among Par Montana, LLC, Par Petroleum, LLC, Par Petroleum Finance Corp., Par Pacific Holdings, Inc., the other guarantors party thereto, and Wilmington Trust, National Association.* 4.13 Description of Registrant’s Securities.* 10.1 Fourth Amended and Restated Limited Liability Company Agreement of Laramie Energy, LLC, dated as of October 18, 2018, by and among Par Piceance Energy Equity LLC and the other members party thereto. Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2018. 10.2 Delta Petroleum General Recovery Trust Agreement dated August 27, 2012, by and among the Company, DPCA LLC, Delta Exploration Company, Inc., Delta Pipeline, LLC, DLC, Inc., CEC, Inc., Castle Texas Production Limited Partnership, Amber Resources Company of Colorado, Castle Exploration Company, Inc., and John T. Young. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on September 7, 2012. 10.3 Par Pacific Holdings, Inc. Amended and Restated 2012 Long Term Incentive Plan. Incorporated by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed on April 21, 2016.**** 10.4 Par Pacific Holdings, Inc. Second Amended and Restated 2012 Long Term Incentive Plan. Incorporated by reference to Exhibit 4.1 to the Company’s registration statement on Form S-8 filed on May 18, 2018.**** 70 10.5 Par Pacific Holdings, Inc. 2018 Employee Stock Purchase Plan. Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed on May 18, 2018.**** 10.6 Form of Indemnification Agreement between the Company and its Directors and Executive Officers. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2012.**** 10.7 Letter Agreement dated as of September 17, 2013 but effective as of January 1, 2013, by and between Equity Group Investments and the Company. Incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2013. 10.8 Environmental Agreement dated as of September 25, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC, and Hawaii Pacific Energy, LLC. Incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2013. 10.9 Employment Offer Letter with William Monteleone dated September 25, 2013. Incorporated by reference to Exhibit 10.43 to the Company’s Amendment No. 3 to Annual Report on Form 10-K/A filed on July 2, 2014.**** 10.10 Employment Offer Letter with Jim Yates dated March 10, 2015. Incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2016.**** 10.11 Initial Award with Jim Yates dated May 8, 2015. Incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2016.**** 10.12 Form of Award of Restricted Stock (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed on March 2, 2020.**** 10.13 Form of Award of Restricted Stock Units (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 2, 2015.**** 10.14 Form of Nonstatutory Stock Option Agreement (Discretionary Long Term Incentive Plan). * 10.15 Par Petroleum (and subsidiaries) Incentive Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 12, 2015.**** 10.16 Second Amended and Restated Supply and Offtake Agreement dated as of June 1, 2021, between Par Hawaii Refining, LLC and J. Aron & Company, LLC. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 5, 2021. 10.17 Amended and Restated Guaranty dated June 1, 2021 in favor of J. Aron & Company LLC by Par Petroleum, LLC. Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 5, 2021. 10.18 Environmental Indemnity Agreement dated as of June 1, 2015, by Hawaii Independent Energy, LLC in favor of J. Aron & Company. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed June 2, 2015. 10.19 Employment Offer Letter with William C. Pate dated October 12, 2015. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 14, 2015.**** 10.20 Employment Assignment Letter with Jim Yates dated August 5, 2022. Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on November 3, 2022. 10.21 Employment Offer Letter with Richard Creamer dated March 29, 2022. Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2022. 10.22 Employment Offer Letter with Eric Wright dated January 17, 2017. Incorporated by reference to Exhibit 10. 5 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2022. 10.23 Employment Offer Letter with Shawn Flores dated December 13, 2022.* 10.24 Par Pacific Holdings, Inc. Non-Qualified Deferred Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 6, 2017.**** 10.25 Par Pacific Holdings, Inc. Severance Plan for Senior Officers. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 6, 2017. **** 10.26 Par Pacific Holdings, Inc. Severance Plan for Senior Officers, dated as of March 7, 2017. **** 10.27 Amendment #2 to the Par Pacific Holdings, Inc. Severance Plan for Senior Officers, dated as of May 23, 2022. Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on May 25, 2022. 71 10.28 Asset Purchase Agreement dated as of January 9, 2018 by and among CHS Inc., Par Hawaii, Inc., and Par Pacific Holdings, Inc. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2018. # 10.29 First Amendment to Asset Purchase Agreement dated as of March 23, 2018 by and among CHS Inc., Par Hawaii, Inc., and Par Pacific Holdings, Inc. Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2018. # 10.30 Term Loan and Guaranty Agreement, dated as of January 11, 2019, among Par Petroleum, LLC, Par Petroleum Finance Corp., the guarantors party thereto, Par Pacific Holdings, Inc. solely for the limited purposes set forth therein, the lenders party thereto, and Goldman Sachs Bank USA, as administrative agent. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 14, 2019. 10.31 Collateral Trust and Intercreditor Agreement, dated as of December 21, 2017, among Par Petroleum, LLC, Par Petroleum Finance Corp., the guarantors from time to time party thereto, Wilmington Trust, National Association, as indenture trustee and as collateral trustee, J. Aron & Company LLC, and Goldman Sachs Bank USA. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 14, 2019. 10.32 Conformed Copy of First Lien ISDA Master Agreement dated as of January 11, 2019, between Merrill Lynch Commodities, Inc. and U.S. Oil & Refining Co. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on January 14, 2019. 10.33 Ninth Amendment to First Lien ISDA 2002 Master Agreement entered into as of November 1, 2019 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 4, 2019. 10.34 Eighteenth Amendment to First Lien ISDA 2002 Master Agreement entered into as of December 17, 2021 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 20, 2021 10.35 Nineteenth Amendment to First Lien ISDA 2002 Master Agreement entered into as of February 24, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed on February 25, 2022. 10.36 Topping Unit Purchase Agreement by and among IES Downstream, LLC, Eagle Island, LLC, Par Hawaii Refining, LLC, and Par Pacific Holdings, Inc., dated as of August 29, 2018. Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2018. # 10.37 Pledge and Security Agreement dated as of December 21, 2017 among Par Petroleum, LLC, the other grantors party thereto, and Wilmington Trust, National Association, as collateral trustee. Incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K filed on March 8, 2021. 10.38 Amendment No. 1 and Assumption Agreement to Pledge and Security Agreement dated as of August 1 5 , 2019, among Par Petroleum, LLC, and the other grantors party thereto and Wilmington Trust, National Association, as collateral trustee. Incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K filed on February 25, 2022. 10.39 Amendment No. 2 and Assumption Agreement to Pledge and Security Agreement dated as of May 12, 2020, among Par Petroleum, LLC, and the other grantors party thereto and Wilmington Trust, National Association, as collateral trustee. Incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K filed on February 25, 2022. 10.40 Amendment No. 3 and Assumption Agreement to Pledge and Security Agreement dated as of June 4, 2020, among Par Petroleum, LLC, and the other grantors party thereto and Wilmington Trust, National Association, as collateral trustee. Incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K filed on February 25, 2022. 10.41 Amendment No. 4 and Assumption Agreement to Pledge and Security Agreement dated as of March 23, 2022, among Par Petroleum, LLC, and the other grantors party thereto and Wilmington Trust, National Association, as collateral trustee.* 10.42 Assumption Agreement to Pledge and Security Agreement, dated as of November 16, 2022, made by and among Par Petroleum, LLC, Par Petroleum Finance Corp. and Par Montana, LLC, in favor of Wilmington Trust, National Association, as collateral trustee.* 10.43 Purchase Agreement and Escrow Instructions, dated as of February 11, 2021, by and among Par Hawaii, LLC, Par Pacific Hawaii Property Company, LLC, MDC Coast HI 1, LLC, and Fidelity National Title Insurance Company. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 16, 2021. 72 10.44 Amended and Restated Master Land and Building Lease Agreement, dated as of March 12, 2021, by and among Par Hawaii, LLC, Par Petroleum, LLC and MDC Coast HI 1, LLC. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on Form 8-K filed on May 7, 2021. 10.45 Amended and Restated Loan and Security Agreement dated as of February 2, 2022, among Par Petroleum, LLC, Par Hawaii, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company LLC, the guarantors party thereto, the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 4, 2022. 10.46 First Amendment to Amended and Restated Loan and Security Agreement dated as of February 14, 2023, among Par Petroleum, LLC, Par Hawaii, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company LLC, the guarantors party thereto, the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent.* 10.47 Increase Agreement and Amendment dated as of March 30, 2022, among Par Petroleum, LLC, Par Hawaii, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company LLC, Par Pacific Holdings, Inc., the guarantors party thereto, the incremental lender party thereto, the other lenders party thereto, and Bank of America, N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 1, 2022. 10.48 Thirteenth Amendment to First Lien ISDA 2002 Master Agreement entered into as of February 11, 2021, by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on Form 8-K filed on February 16, 2021. 10.49 Second Amended and Restated Pledge and Security Agreement dated June 1, 2021 in favor of J. Aron & Company LLC by Par Hawaii Refining, LLC. Incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K filed on February 25, 2022. 10.50 Amendment to Second Amended and Restated Supply and Offtake Agreement dated as of March 24, 2022, between Par Hawaii Refining, LLC and J. Aron & Company, LLC. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2022. 10.51 Amendment to Second Amended and Restated Supply and Offtake Agreement, dated as of April 25, 2022, by and among Par Hawaii Refining LLC, Par Petroleum, LLC, as guarantor, and J. Aron & Company LLC. Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on April 28, 2022 10.52 Amendment to Second Amended and Restated Supply and Offtake Agreement, dated as of May 17, 2022, by and among Par Hawaii Refining LLC, Par Petroleum, LLC, as guarantor, and J. Aron & Company LLC. Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on May 19, 2022. 10.53 Amendment to Second Amended and Restated Supply and Offtake Agreement, dated as of September 13, 2022, by and among Par Hawaii Refining LLC, Par Petroleum, LLC, as guarantor, and J. Aron & Company LLC. Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 3, 2022. 10.54 Amendment to Second Amended and Restated Supply and Offtake Agreement, dated as of February 13, 2023, by and among Par Hawaii Refining LLC, Par Petroleum, LLC, as guarantor, and J. Aron & Company LLC.* 10.55 Twentieth Amendment to First Lien ISDA 2002 Master Agreement entered into as of March 9 , 202 2 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 11, 2022 . 10.56 Twenty first Amendment to First Lien ISDA 2002 Master Agreement entered into as of March 25, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2022. 10.57 Twenty second Amendment to First Lien ISDA 2002 Master Agreement entered into as of April 21, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10. 4 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2022. 10.58 Twenty third Amendment to First Lien ISDA 2002 Master Agreement entered into as of May 9, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10. 5 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2022. 10.59 Twenty fourth Amendment to First Lien ISDA 2002 Master Agreement entered into as of May 17, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2022. 10.60 Twenty fifth Amendment to First Lien ISDA 2002 Master Agreement entered into as of June 28, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10. 7 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2022. 73 10.61 Twenty sixth Amendment to First Lien ISDA 2002 Master Agreement entered into as of August 11, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 16, 2022. 10.62 Twenty seventh Amendment to First Lien ISDA 2002 Master Agreement entered into as of November 2, 2022 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 7, 2022. 10.63 Twenty eighth Amendment to First Lien ISDA 2002 Master Agreement entered into as of January 3, 2023 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc.* 10.64 Twenty ninth Amendment to First Lien ISDA 2002 Master Agreement entered into as of January 25, 2023 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc.* 14.1 Par Pacific Holdings, Inc. Code of Business Conduct and Ethics for Employees, Executive Officers and Directors, effective December 3, 2015. Incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed March 3, 2016. 21.1 Subsidiaries of the Registrant.* 23.1 Consent of Deloitte & Touche LLP* 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.*** 32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*** 101.INS Inline XBRL Instance Document the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.* 101.SCH Inline XBRL Taxonomy Extension Schema Documents.* 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.* 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.* 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.* 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.* 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).* * Filed herewith. *** Furnished herewith. **** Management contract or compensatory plan or arrangement. # Portions of this exhibit have been redacted in accordance with Item 601(b)(10) of Regulation S-K. 74 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2022, 2021, and 2020 Page No. Report of Independent Registered Public Accounting Firm Auditor Name: Deloitte & Touch LLP ; Auditor Firm ID: 34 ; Auditor Location: Houston, Texas F- 2 Consolidated Balance Sheets F- 4 Consolidated Statements of Operations F- 5 Consolidated Statements of Comprehensive Income (Loss) F- 6 Consolidated Statements of Cash Flows F- 7 Consolidated Statements of Changes in Stockholders’ Equity F- 8 Notes to Consolidated Financial Statements F- 9 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Par Pacific Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Par Pacific Holdings, Inc. and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, cash flows and changes in stakeholder's equity for each of the three years in the period ended December 31, 2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2023 expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill – Certain Reporting Units — Refer to Notes 2 and 10 to the financial statements Critical Audit Matter Description The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company determines the fair value of its reporting units using the discounted cash flow model and the market approach. The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to discount rates and forecasts of future gross margin and operating expenses. The determination of the fair value using the market approach requires management to make significant assumptions related to valuation multiples. Changes in these assumptions could have a significant impact on either the fair value, or the amount of any goodwill impairment charge, or both. The F-2 goodwill balance was $129.3 million as of December 31, 2022. No impairment loss was recorded during the year ended December 31, 2022. We identified goodwill associated with certain reporting units as a critical audit matter because of the significant judgments made by management to estimate the fair value of the reporting units and, consequently, the difference between their fair value and carrying value. The audit procedures performed to evaluate the reasonableness of management’s estimates and assumptions related to the selection of discount rate, valuation multiples, and forecasts of future gross margin and operating expenses required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the discount rate, valuation multiples, and forecasts of future gross margin and operating expenses used by management to estimate the fair value of certain reporting units included the following, among others: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the underlying assumptions, such as management’s selection of the discount rate, selection of valuation multiples, and forecasts of future gross margin and operating expenses. • We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts. • We evaluated the reasonableness of management’s forecasts by comparing the forecasts to: • Historical financial results. • Internal communications to management and the Board of Directors. • Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies. • We evaluated the impact of changes in management’s forecasts from the measurement date to December 31, 2022. • With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rates, long-term growth rates, and valuation multiples by: • Testing the source information underlying the determination of the discount rate, long-term growth rates, and valuation multiples and the mathematical accuracy of the calculations. • Developing a range of independent estimates and comparing those to the discount rates, long-term growth rates, and valuation multiples selected by management. /s/ DELOITTE & TOUCHE LLP Houston, Texas February 27, 2023 We have served as the Company’s auditor since 2013. F-3 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, 2022 December 31, 2021 ASSETS Current assets Cash and cash equivalents $ 490,925 $ 112,221 Restricted cash 4,001 4,000 Total cash, cash equivalents, and restricted cash 494,926 116,221 Trade accounts receivable, net of allowances of $ 0.3 million and $ 0.4 million at December 31, 2022 and December 31, 2021, respectively 252,885 195,108 Inventories 1,041,983 790,317 Prepaid and other current assets 92,043 28,525 Total current assets 1,881,837 1,130,171 Property, plant, and equipment Property, plant, and equipment 1,224,567 1,180,397 Less accumulated depreciation and amortization ( 388,733 ) ( 323,892 ) Property, plant, and equipment, net 835,834 856,505 Long-term assets Operating lease right-of-use (“ROU”) assets 350,761 383,824 Intangible assets, net 13,577 16,234 Goodwill 129,325 127,262 Other long-term assets 69,313 56,255 Total assets $ 3,280,647 $ 2,570,251 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ 10,956 $ 10,841 Obligations under inventory financing agreements 893,065 737,704 Accounts payable 151,395 154,543 Accrued taxes 32,099 28,641 Operating lease liabilities 66,081 53,640 Other accrued liabilities 640,494 370,424 Total current liabilities 1,794,090 1,355,793 Long-term liabilities Long-term debt, net of current maturities 494,576 553,717 Finance lease liabilities 6,311 7,691 Operating lease liabilities 292,701 335,094 Other liabilities 48,432 52,256 Total liabilities 2,636,110 2,304,551 Commitments and Contingencies (Note 17) Stockholders’ equity Preferred stock, $ 0.01 par value: 3,000,000 shares authorized, none issued — — Common stock, $ 0.01 par value; 500,000,000 shares authorized at December 31, 2022 and December 31, 2021, 60,470,837 shares and 60,161,955 shares issued at December 31, 2022 and December 31, 2021, respectively 604 602 Additional paid-in capital 836,491 821,713 Accumulated deficit ( 200,687 ) ( 559,117 ) Accumulated other comprehensive income (loss) 8,129 2,502 Total stockholders’ equity 644,537 265,700 Total liabilities and stockholders’ equity $ 3,280,647 $ 2,570,251 See accompanying notes to consolidated financial statements. F-4 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended December 31, 2022 2021 2020 Revenues $ 7,321,785 $ 4,710,089 $ 3,124,870 Operating expenses Cost of revenues (excluding depreciation) 6,376,014 4,338,474 2,947,697 Operating expense (excluding depreciation) 342,209 299,669 277,427 Depreciation and amortization 99,769 94,241 90,036 Impairment expense — 1,838 85,806 Gain on sale of assets, net ( 169 ) ( 64,697 ) — General and administrative expense (excluding depreciation) 62,396 48,096 41,288 Acquisition and integration costs 3,663 87 614 Total operating expenses 6,883,882 4,717,708 3,442,868 Operating income (loss) 437,903 ( 7,619 ) ( 317,998 ) Other income (expense) Interest expense and financing costs, net ( 68,288 ) ( 66,493 ) ( 70,222 ) Debt extinguishment and commitment costs ( 5,329 ) ( 8,144 ) — Gain on curtailment of pension obligation — 2,032 — Other income (expense), net 613 ( 52 ) 1,049 Change in value of common stock warrants — — 4,270 Equity losses from Laramie Energy, LLC — — ( 46,905 ) Total other expense, net ( 73,004 ) ( 72,657 ) ( 111,808 ) Income (loss) before income taxes 364,899 ( 80,276 ) ( 429,806 ) Income tax benefit (expense) ( 710 ) ( 1,021 ) 20,720 Net income (loss) $ 364,189 $ ( 81,297 ) $ ( 409,086 ) Income (loss) per share Basic $ 6.12 $ ( 1.40 ) $ ( 7.68 ) Diluted $ 6.08 $ ( 1.40 ) $ ( 7.68 ) Weighted-average number of shares outstanding Basic 59,544 58,268 53,295 Diluted 59,883 58,268 53,295 See accompanying notes to consolidated financial statements. F-5 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Year Ended December 31, 2022 2021 2020 Net income (loss) $ 364,189 $ ( 81,297 ) $ ( 409,086 ) Other comprehensive income (loss): Other post-retirement benefits income (loss), net of tax 5,627 6,244 ( 4,324 ) Total other comprehensive income (loss), net of tax 5,627 6,244 ( 4,324 ) Comprehensive income (loss) $ 369,816 $ ( 75,053 ) $ ( 413,410 ) See accompanying notes to consolidated financial statements. F-6 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income (loss) $ 364,189 $ ( 81,297 ) $ ( 409,086 ) Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: Depreciation and amortization 99,769 94,241 90,036 Impairment expense — 1,838 85,806 Debt extinguishment and commitment costs 5,329 8,144 — Non-cash interest expense 4,218 5,663 6,902 Non-cash lower of cost and net realizable value adjustment ( 463 ) ( 10,132 ) 10,595 Change in value of common stock warrants — — ( 4,270 ) Deferred taxes 274 ( 260 ) ( 20,895 ) Gain on sale of assets, net ( 169 ) ( 64,697 ) — Stock-based compensation 9,353 8,165 7,342 Unrealized (gain) loss on derivative contracts 9,336 ( 1,393 ) ( 3,322 ) Equity losses from Laramie Energy, LLC — — 46,905 Net changes in operating assets and liabilities: Trade accounts receivable ( 57,391 ) ( 83,955 ) 117,801 Prepaid and other assets ( 35,356 ) ( 6,321 ) 36,500 Inventories ( 254,437 ) ( 350,652 ) 171,880 Deferred turnaround expenditures ( 29,608 ) ( 9,451 ) ( 49,770 ) Obligations under inventory financing agreements 74,680 252,920 ( 190,831 ) Accounts payable, other accrued liabilities, and operating lease ROU assets and liabilities 262,882 209,565 67,193 Net cash provided by (used in) operating activities 452,606 ( 27,622 ) ( 37,214 ) Cash flows from investing activities: Acquisitions of businesses, net of cash acquired ( 35,546 ) — — Capital expenditures ( 53,025 ) ( 29,533 ) ( 63,522 ) Proceeds from sale of assets 1,263 104,161 58 Net cash provided by (used in) investing activities ( 87,308 ) 74,628 ( 63,464 ) Cash flows from financing activities: Proceeds from sale of common stock, net of offering costs — 87,193 — Proceeds from borrowings 384,874 186,773 250,387 Repayments of borrowings ( 446,863 ) ( 329,315 ) ( 159,489 ) Net borrowings (repayments) on deferred payment arrangements and receivable advances 80,681 61,098 ( 41,645 ) Purchase of common stock for retirement ( 7,834 ) ( 2,145 ) ( 1,156 ) Payments for debt extinguishment and commitment costs ( 3,483 ) ( 5,618 ) — Other financing activities, net 6,032 920 ( 5,538 ) Net cash provided by (used in) financing activities 13,407 ( 1,094 ) 42,559 Net increase (decrease) in cash, cash equivalents, and restricted cash 378,705 45,912 ( 58,119 ) Cash, cash equivalents, and restricted cash at beginning of period 116,221 70,309 128,428 Cash, cash equivalents, and restricted cash at end of period $ 494,926 $ 116,221 $ 70,309 Supplemental cash flow information: Net cash received (paid) for: Interest $ ( 63,323 ) $ ( 65,221 ) $ ( 54,256 ) Taxes ( 51 ) ( 795 ) 190 Non-cash investing and financing activities: Accrued capital expenditures $ 5,418 $ 8,177 $ 4,686 Value of warrants reclassified to equity — — 3,936 ROU assets obtained in exchange for new finance lease liabilities 594 1,936 3,476 ROU assets obtained in exchange for new operating lease liabilities 64,567 97,011 22,529 ROU assets terminated in exchange for release from finance lease liabilities — — — ROU assets terminated in exchange for release from operating lease liabilities 32,902 6,847 7,738 See accompanying notes to consolidated financial statements. F-7 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (in thousands) Accumulated Additional Other Common Stock Paid-In Accumulated Comprehensive Total Shares Amount Capital Deficit Income Equity Balance, January 1, 2020 53,254 $ 533 $ 715,069 $ ( 67,942 ) $ 582 $ 648,242 Issuance of common stock for employee stock purchase plan 145 2 1,551 — — 1,553 Exercise of common stock warrants 351 3 3,933 3,936 Stock-based compensation 322 3 7,106 — — 7,109 Purchase of common stock for retirement ( 69 ) ( 1 ) ( 1,155 ) — — ( 1,156 ) Other comprehensive loss — — — — ( 4,324 ) ( 4,324 ) Net loss — — — ( 409,086 ) — ( 409,086 ) Balance, December 31, 2020 54,003 540 726,504 ( 477,028 ) ( 3,742 ) 246,274 Common stock offering, net of issuance costs 5,750 58 87,135 — — 87,193 Issuance of common stock for employee stock purchase plan 85 1 1,420 — — 1,421 Stock-based compensation 443 4 7,948 — — 7,952 Purchase of common stock for retirement ( 123 ) ( 1 ) ( 1,352 ) ( 792 ) — ( 2,145 ) Exercise of stock options 4 — 58 — — 58 Other comprehensive income — — — — 6,244 6,244 Net loss — — — ( 81,297 ) — ( 81,297 ) Balance, December 31, 2021 60,162 602 821,713 ( 559,117 ) 2,502 265,700 Issuance of common stock for employee stock purchase plan 67 — 1,244 — — 1,244 Stock-based compensation 417 3 9,163 — — 9,166 Purchase of common stock for retirement ( 524 ) ( 5 ) ( 2,069 ) ( 5,759 ) — ( 7,833 ) Exercise of stock options 349 4 6,440 — — 6,444 Other comprehensive income — — — — 5,627 5,627 Net income — — — 364,189 — 364,189 Balance, December 31, 2022 60,471 $ 604 $ 836,491 $ ( 200,687 ) $ 8,129 $ 644,537 See accompanying notes to consolidated financial statements. F-8 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Note 1— Overview Par Pacific Holdings, Inc. and its wholly owned subsidiaries (“Par” or the “Company”) own and operate market-leading energy and infrastructure businesses. Our strategy is to acquire and develop businesses in logistically complex, niche markets. Currently, we operate in three primary business segments: 1) Refining - We own and operate three refineries. Our refinery in Kapolei, Hawaii, produces gasoline, jet fuel, ultra-low sulfur diesel (“ULSD”), marine fuel, low sulfur fuel oil (“LSFO”), and other associated refined products primarily for consumption in Hawaii. Our refinery in Newcastle, Wyoming, produces gasoline, jet fuel, ULSD, and other associated refined products that are primarily marketed in Wyoming and South Dakota. Our refinery in Tacoma, Washington, produces gasoline, jet fuel, ULSD, asphalt, and other associated refined products primarily marketed in the Pacific Northwest. 2) Retail - We operate retail outlets in Hawaii, Washington, and Idaho. Our fuel retail outlets in Hawaii sell gasoline and diesel throughout the islands of Oahu, Maui, Hawaii, and Kauai. We operate convenience stores under our proprietary “nomnom” brand that sell merchandise such as soft drinks, prepared foods, and other sundries. Our Hawaii retail network includes our proprietary Hele (the Hawaiian word for movement or “let’s go”) fuel brand and “76” branded retail sites, “nomnom” branded company-operated convenience stores, 7-Eleven operated convenience stores, other sites operated by third parties, and unattended cardlock stations. In 2023, we plan to unite all our company operated convenience stores under our Hele brand. Our cardlock locations on Kauai are branded Kauai Automated Fuels (“KAF”). We operate convenience stores at our retail fuel outlets in Washington and Idaho. As part of our 2018 acquisition of these retail outlets, we entered into a multi-year branded petroleum marketing agreement for the continued supply of Cenex®-branded refined products to the acquired Cenex® Zip Trip convenience stores. As of December 31, 2022, we had completed the rebranding of all of our retail outlets in Washington and Idaho from the “Cenex®” and “Zip Trip®” brand names to our proprietary “nomnom” brand. As these stores were rebranded, we began self-supplying the fuel with equity barrels and/or unbranded fuels procured in the open market. 3) Logistics - We operate an extensive multi-modal logistics network spanning the Pacific, the Northwest, and the Rocky Mountain regions. We own and operate terminals, pipelines, a single point mooring (“SPM”), and trucking operations to distribute refined products throughout the islands of Oahu, Maui, Hawaii, Molokai, and Kauai. We lease marine vessels for the movement of petroleum, refined products, and ethanol between the U.S. West Coast and Hawaii. We own and operate a crude oil pipeline gathering system, a refined products pipeline, storage facilities, and loading racks in Wyoming and a jet fuel storage facility and pipeline that serve Ellsworth Air Force Base in South Dakota. We own and operate logistics assets in Washington, including a marine terminal, a unit train-capable rail loading terminal, storage facilities, a truck rack, and a proprietary pipeline that serves Joint Base Lewis McChord. As of December 31, 2022, we owned a 46.0 % equity investment in Laramie Energy, LLC (“Laramie Energy”). Laramie Energy is focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado. Our Corporate and Other reportable segment primarily includes general and administrative costs. Note 2— Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Par Pacific Holdings, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts previously reported in our consolidated financial statements for prior periods have been reclassified to conform to the current presentation. F-9 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosures. Actual amounts could differ from these estimates. Cash and Cash Equivalents Cash and cash equivalents consist of all highly liquid investments with original maturities of three months or less. The carrying value of cash equivalents approximates fair value because of the short-term nature of these investments. Restricted Cash Restricted cash consists of cash not readily available for general purpose cash needs. Restricted cash relates to cash held at commercial banks to support letter of credit facilities and certain ongoing bankruptcy recovery trust claims. Allowance for Credit Losses We are exposed to credit losses primarily through our sales of refined products. 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 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. 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 years ended December 31, 2022, 2021, or 2020. Inventories Commodity inventories, excluding commodity inventories at the Washington refinery, are stated at the lower of cost and net realizable value (“NRV”) using the first-in, first-out (“FIFO”) inventory accounting method. Commodity inventories at the Washington refinery are stated at the lower of cost and NRV using the last-in, first-out (“LIFO”) inventory accounting method. We value merchandise along with spare parts, materials, and supplies at average cost. All of the crude oil utilized at the Hawaii refinery is financed by J. Aron & Company LLC (“J. Aron”) under the Supply and Offtake Agreement as described in Note 11—Inventory Financing Agreements. The crude oil remains in the legal title of J. Aron and is stored in our storage tanks governed by a storage agreement. Legal title to the crude oil passes to us at the tank outlet. After processing, J. Aron takes title to the refined products stored in our storage tanks until they are sold to our retail locations or to third parties. We record the inventory owned by J. Aron on our behalf as inventory with a corresponding obligation on our balance sheet because we maintain the risk of loss until the refined products are sold to third parties and we are obligated to repurchase the inventory. We are party to an intermediation arrangement (the “Washington Refinery Intermediation Agreement”) with Merrill Lynch Commodities, Inc. (“MLC”) as described in Note 11—Inventory Financing Agreements. Under this arrangement, U.S. Oil & Refining Co. and certain affiliated entities (collectively, “U.S. Oil”) purchases crude oil supplied from third-party suppliers and MLC provides credit support for certain crude oil purchases. MLC’s credit support can consist of either providing a payment guaranty, causing the issuance of a letter of credit from a third-party issuing bank, or purchasing crude oil directly from third parties on our behalf. U.S. Oil holds title to all crude oil and refined products inventories at all times and pledges such inventories, together with all receivables arising from the sales of these inventories, exclusively to MLC. We enter into refined product and crude oil exchange agreements with other oil companies. Exchange receivables or payables are stated at cost and are presented within Trade accounts receivable and Accounts payable on our consolidated balance sheets. Environmental Credits and Obligations Inventories also include Renewable Identification Numbers (“RINs”), sulfur credits, and other environmental credits. Our RINs assets, which include RINs purchased in the open market and RINs obtained by purchasing biofuels which are later blended into our refined products, are presented as Inventories on our consolidated balance sheets and stated at the lower of cost and NRV as of the end of the reporting period. Our sulfur credits and other environmental credits generated as part of our refining process are presented as Inventories on our consolidated balance sheets and stated at the lower of cost and NRV as of the end of the reporting period. Our renewable volume obligation and other environmental credit obligations to comply with the F-10 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 U.S. Environmental Protection Agency (“EPA”) regulations (as discussed in Note 17—Commitments and Contingencies) are presented in Other accrued liabilities on our consolidated balance sheets and measured at fair value as of the end of the reporting period. The net cost of environmental credits is recognized within Cost of revenues (excluding depreciation) on our consolidated statements of operations. Investment in Laramie Energy, LLC Prior to June 30, 2020, we accounted for our Investment in Laramie Energy, LLC using the equity method as we have the ability to exert significant influence, but do not control its operating and financial policies. Our proportionate share of the net income (loss) of this entity was included in Equity losses from Laramie Energy, LLC in the consolidated statements of operations. As of June 30, 2020, we discontinued the application of the equity method of accounting for our investment in Laramie Energy because the book value of such investment had been reduced to zero. The investment is reviewed for impairment when events or changes in circumstances indicate that there may have been an other-than-temporary decline in the value of the investment. During the year ended December 31, 2020, we recorded an impairment charge of $ 45.3 million in our consolidated statement of operations due to the significant decline in natural gas prices during the first quarter of 2020. Please read Note 3—Investment in Laramie Energy, LLC for further information. Property, Plant, and Equipment We capitalize the cost of additions, major improvements, and modifications to property, plant, and equipment. The cost of repairs and normal maintenance of property, plant, and equipment is expensed as incurred. Major improvements and modifications of property, plant, and equipment are those expenditures that either extend the useful life, increase the capacity, or improve the operating efficiency of the asset or the safety of our operations. We compute depreciation of property, plant, and equipment using the straight-line method, based on the estimated useful life of each asset as follows: Assets Lives in Years Refining 2 to 47 Logistics 3 to 30 Retail 3 to 40 Corporate 3 to 7 Software 3 to 5 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. Please read Note 16—Leases for further disclosures and information on leases. Impairment of Long-Lived Assets We review property, plant, and equipment, operating leases, deferred turnaround costs, and other long-lived assets for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment is indicated when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying value. If this occurs, an impairment loss is recognized for the difference between the fair value and carrying value. Factors that indicate potential impairment include a significant decrease in the market value of the asset, operating or cash flow losses associated with the use of the asset, and a significant change in the asset’s physical condition or use. Simultaneously with our review of our property, plant, and equipment, operating leases, deferred turnaround costs, and other long-lived assets for impairment, we evaluate whether an abandonment has occurred. Abandonment occurs either when a business terminates its operations or an asset is no longer profitable to operate. When the act of abandonment occurs, we determine if the assets have a shortened useful life or should be considered abandoned and accelerate depreciation or write off the asset balance and any associated accumulated depreciation and record an impairment loss. Lease Liabilities and Right-of-Use Assets We determine whether a contract is or contains a lease when we have the right to control the use of the identified asset in exchange for consideration. Lease liabilities and right-of-use assets (“ROU assets”) are recognized at the commencement date based on the present value of lease payments over the lease term. We use our incremental borrowing rate in the calculation of present value unless the implicit rate can be readily determined, however, the lease liability associated with leases calculated through the use of implicit rates is not significant. Certain leases include provisions for variable payments based upon F-11 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 percentage of sales and/or other operating metrics; escalation provisions to adjust rental payments to reflect changes in price indices and fair market rents; and provisions for the renewal, termination, and/or purchase of the leased asset. We only consider fixed payments and those options that are reasonably certain to be exercised in the determination of the lease term and the initial measurement of lease liabilities and ROU assets. Expense for finance leases is recognized as amortization expense on a straight-line basis and interest expense on an effective rate basis over the lease term. Expense for operating lease payments is recognized as lease expense on a straight-line basis over the lease term. We do not separate lease and nonlease components of a contract. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Finance lease ROU assets are presented within Property, plant, and equipment and operating lease ROU assets within Operating lease right-of-use assets on our consolidated balance sheets. Please read Note 16—Leases for further disclosures and information on leases. Asset Retirement Obligations We record asset retirement obligations (“AROs”) at fair value in the period in which we have a legal obligation, whether by government action or contractual arrangement, to incur these costs and can make a reasonable estimate of the fair value of the liability. Our AROs arise from our refining, logistics, and retail operations. AROs are calculated based on the present value of the estimated removal and other closure costs using our credit-adjusted risk-free rate. When the liability is initially recorded, we capitalize the cost by increasing the book value of the related long-lived tangible asset. The liability is accreted to its estimated settlement value with accretion expense recognized in Depreciation and amortization (“D&A”) on our consolidated statements of operations and the related capitalized cost is depreciated over the asset’s useful life. The difference between the settlement amount and the recorded liability is recorded as a gain or loss on asset disposals in our consolidated statements of operations. We estimate settlement dates by considering our past practice, industry practice, contractual terms, management’s intent, and estimated economic lives. We cannot currently estimate the fair value for certain AROs primarily because we cannot estimate settlement dates (or ranges of dates) associated with these assets. These AROs include hazardous materials disposal (such as petroleum manufacturing by-products, chemical catalysts, and sealed insulation material containing asbestos) and removal or dismantlement requirements associated with the closure of our refining facilities, terminal facilities, or pipelines, including the demolition or removal of certain major processing units, buildings, tanks, pipelines, or other equipment. Deferred Turnaround Costs Refinery turnaround costs, which are incurred in connection with planned major maintenance activities at our refineries, are deferred and amortized on a straight-line basis over the period of time estimated until the next planned turnaround (generally three to five years ). During 2022, 2021, and 2020, we recognized deferred turnaround costs of approximately $ 29.6 million, $ 9.5 million, and $ 49.8 million, respectively. Deferred turnaround costs are presented within Other long-term assets on our consolidated balance sheets. Goodwill and Other Intangible Assets Goodwill represents the amount the purchase price exceeds the fair value of net assets acquired in a business combination. Goodwill is not amortized, but is tested for impairment annually on October 1. We assess the recoverability of the carrying value of goodwill during the fourth quarter of each year or whenever events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required. Under the quantitative test, we compare the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. If the carrying value exceeds the estimated fair value of the reporting unit, an impairment loss is recorded. During the year ended December 31, 2020, we recorded goodwill impairment charges of $ 67.9 million related to our Refining and Retail segments. Please read Note 10—Goodwill and Intangible Assets for further discussion on the goodwill impairment. Our intangible assets include relationships with customers, trade names, and trademarks. These intangible assets are amortized over their estimated useful lives on a straight-line basis. We evaluate the carrying value of our intangible assets when impairment indicators are present. When we believe impairment indicators may exist, projections of the undiscounted future cash flows associated with the use of and eventual disposition of the intangible assets are prepared. If the projections indicate that their carrying values are not recoverable, we reduce the carrying values to their estimated fair values. F-12 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Environmental Matters We capitalize environmental expenditures that extend the life or increase the capacity of facilities as well as expenditures that prevent environmental contamination. We expense costs that relate to an existing condition caused by past operations and that do not contribute to current or future revenue generation. We record liabilities when environmental assessments and/or remedial efforts are probable and can be reasonably estimated. Cost estimates are based on the expected timing and extent of remedial actions required by governing agencies, experience gained from similar sites for which environmental assessments or remediation have been completed, and the amount of our anticipated liability considering the proportional liability and financial abilities of other responsible parties. Usually, the timing of these accruals coincides with the completion of a feasibility study or our commitment to a formal plan of action. Estimated liabilities are not discounted to present value and are presented within Other liabilities on our consolidated balance sheets. Environmental expenses are recorded in Operating expense (excluding depreciation) on our consolidated statements of operations. Derivatives and Other Financial instruments We are exposed to commodity price risk related to crude oil and refined products. We manage this exposure through the use of various derivative commodity instruments. These instruments include exchange traded futures and over-the-counter (“OTC”) swaps, forwards, and options. For our forward contracts that are derivatives, we have elected the normal purchase normal sale exclusion, as it is our policy to fulfill or accept the physical delivery of the product and we will not net settle. Therefore, we did not recognize the unrealized gains or losses related to these contracts in our consolidated financial statements. All derivative instruments not designated as normal purchases or sales are recorded in the balance sheet as either assets or liabilities measured at their fair values. Changes in the fair value of these derivative instruments are recognized currently in earnings. We have not designated any derivative instruments as cash flow or fair value hedges and, therefore, do not apply hedge accounting treatment. In addition, we may have other financial instruments, such as warrants or embedded debt features, that may be classified as liabilities when either (a) the holders possess rights to net cash settlement, (b) physical or net equity settlement is not in our control, or (c) the instruments contain other provisions that cause us to conclude that they are not indexed to our equity. Our embedded derivatives include our obligations to repurchase crude oil and refined products from J. Aron at the termination of the Supply and Offtake Agreement and to repay MLC for monthly crude oil and refined product financing under the Washington Refinery Intermediation Agreement. These liabilities were initially recorded at fair value and subsequently adjusted to fair value at the end of each reporting period through earnings. Please read Note 14—Derivatives and Note 15—Fair Value Measurements for information regarding our derivatives and other financial instruments. Income Taxes We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss (“NOL”) and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period that includes the enactment date. The realizability of deferred tax assets is evaluated quarterly based on a “more likely than not” standard and, to the extent this threshold is not met, a valuation allowance is recorded. We have determined that any uncertain tax positions outstanding at December 31, 2022 and 2021 would not have a material impact on our financial condition, results of operations, or cash flows as any uncertain tax positions taken would have been fully covered by the Company’s deferred tax assets related to its historical net operating losses and corresponding valuation allowance. As a general rule, our open years for Internal Revenue Service (“IRS”) examination purposes are 2019, 2020, and 2021. However, since we have NOL carryforwards, the IRS has the ability to make adjustments to items that originate in a year otherwise barred by the statute of limitations in order to re-determine tax for an open year to which those items are carried. Therefore, in a year in which a NOL deduction is claimed, the IRS may examine the year in which the NOL was generated and F-13 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 adjust it accordingly for purposes of assessing additional tax in the year the NOL deduction was claimed. Any penalties or interest as a result of an examination will be recorded in the period assessed. Stock-Based Compensation We recognize the cost of share-based payments on a straight-line basis over the period the employee provides service, generally the vesting period, and include such costs in General and administrative expense (excluding depreciation) and Operating expense (excluding depreciation) in the consolidated statements of operations. We account for forfeitures as they occur. The grant date fair value of restricted stock awards is equal to the market price of our common stock on the date of grant. The fair value of stock options is estimated using the Black-Scholes option-pricing model as of the date of grant. The fair value of the discount offered on the employee stock purchase plan is equal to 15 % of the market price of our common stock on the purchase date. Revenue Recognition Refining and Retail Our refining and retail segment revenues are primarily associated with the sale of refined products. We recognize revenues upon physical delivery of refined products to a customer, which is the point in time at which control of the refined products is transferred to the customer. The pricing of our refined products is variable and primarily driven by commodity prices. The refining segment’s contracts with its customers state the terms of the sale, including the description, quantity, delivery terms, and price of each product sold. Payments from refining and bulk retail customers are generally due in full within 2 to 30 days of product delivery or invoice date. Payments from our other retail customers occur at the point of sale and are typically collected in cash or occur by credit or debit card. As such, we have no significant financing element to our revenues and have immaterial product returns and refunds. We account for certain transactions on a net basis under Financial Accounting Standards Board (“FASB”) ASC Topic 845, “Nonmonetary Transactions.” These transactions include nonmonetary crude oil and refined product exchange transactions, certain crude oil buy/sell arrangements, and sale and purchase transactions entered into with the same counterparty that are deemed to be in contemplation with one another. We made an accounting policy election to apply the sales tax practical expedient, whereby all taxes assessed by a governmental authority that are both imposed on and concurrent with a revenue-producing transaction and collected from our customers will be recognized on a net basis within Cost of revenues (excluding depreciation). Logistics We recognize transportation and storage fees as services are provided to a customer. Substantially all of our logistics revenues represent intercompany transactions that are eliminated in consolidation. Cost Classifications Cost of revenues (excluding depreciation) includes the hydrocarbon-related costs of inventory sold, transportation costs of delivering product to customers, crude oil consumed in the refining process, costs to satisfy our environmental credit obligations, and certain hydrocarbon fees and taxes. Cost of revenues (excluding depreciation) also includes the unrealized gains and losses on derivatives and inventory valuation adjustments. Certain direct operating expenses related to our logistics segment are also included in Cost of revenues (excluding depreciation). Operating expense (excluding depreciation) includes direct costs of labor, maintenance and services, energy and utility costs, property taxes, and environmental compliance costs, as well as chemicals and catalysts and other direct operating expenses. The following table summarizes depreciation and finance lease amortization expense excluded from each line item in our consolidated statements of operations (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenues $ 20,437 $ 21,903 $ 21,755 Operating expense 51,901 52,338 56,637 General and administrative expense 2,661 2,972 3,429 F-14 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Benefit Plans We recognize an asset for the overfunded status or a liability for the underfunded status of our defined benefit pension plans. The funded status is recorded within Other liabilities on our consolidated balance sheets. Certain changes in the plans’ funded status are recognized in Other comprehensive income (loss) in the period the change occurs. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value measurements are categorized with the highest priority given to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority given to unobservable inputs. The three levels of the fair value hierarchy are as follows: Level 1 – Assets or liabilities for which the item is valued based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Assets or liabilities valued based on observable market data for similar instruments. Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed and considers risk premiums that a market participant would require. The level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Our policy is to recognize transfers in and/or out of fair value hierarchy levels as of the end of the reporting period for which the event or change in circumstances caused the transfer. We have consistently applied these valuation techniques for the periods presented. The fair value of the J. Aron repurchase obligation and Washington Refinery Intermediation Agreement derivatives are measured using estimates of the prices and differentials assuming settlement at the end of the reporting period. Income (Loss) Per Share Basic income (loss) per share (“EPS”) is computed by dividing net income (loss) attributable to common stockholders by the sum of the weighted-average number of common shares outstanding and the weighted-average number of shares issuable under the warrants. The common stock warrants were included in the calculation of basic EPS because they were issuable for minimal consideration. Basic and diluted EPS are computed taking into account the effect of participating securities. Participating securities include restricted stock that has been issued but has not yet vested. Please read Note 20—Income (Loss) Per Share for further information. Foreign Currency Transactions We may, on occasion, enter into transactions denominated in currencies other than the U.S. dollar, which is our functional currency. Gains and losses resulting from changes in currency exchange rates between the functional currency and the currency in which a transaction is denominated are included in Other income (expense), net, in the accompanying consolidated statement of operations in the period in which the currency exchange rates change. Accounting Principles Not Yet Adopted In October 2021, the FASB issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 updates the current guidance to require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers” as if the acquiring entity had originated the contracts. This ASU improves comparability by providing consistent guidance between revenue contracts with customers acquired in a business combination and those not acquired in a business combination. The guidance in ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. This ASU will change the policy under which we account for future business combinations. On September 30, 2022, the FASB issued 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 F-15 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 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. Accounting Principles Adopted On January 1, 2022, we adopted ASU No. 2021-04, Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”) . This ASU clarifies treatment of modifications or exchanges of call options or warrants classified in equity. As we do not have any such items classified in equity as of December 31, 2022, our adoption of ASU 2021-04 did not have a material impact on our financial condition, results of operations, and cash flows. On January 1, 2022, we adopted ASU No. 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance (“ASU 2021-10”). This ASU requires certain annual disclosures when receiving government assistance that is accounted for under a grant or contribution model. As of December 31, 2022, we did not receive any government assistance requiring these new disclosures, therefore our adoption of ASU 2021-10 did not have a material impact on our financial condition, results of operations, and cash flows. Note 3— Investment in Laramie Energy, LLC As of December 31, 2022, we owned a 46.0 % ownership interest in Laramie Energy, an entity focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado. As of December 31, 2020, Laramie Energy had a $ 400.0 million revolving credit facility secured by a lien on its natural gas and crude oil properties and related assets with a borrowing base set at $ 139.7 million. On November 20, 2020, Laramie Energy amended its revolving credit facility, reducing the borrowing base to $ 140.0 million, resulting in a borrowing base deficiency of $ 60.0 million. In conjunction with the borrowing base deficiency, Laramie entered into a forbearance agreement through June 15, 2021 with its lenders. On July 1, 2021, Laramie Energy entered into a term loan agreement which provided a term loan in the principal amount of $ 160 million. Laramie Energy used the proceeds from the term loan to repay the outstanding balance on its revolving credit facility. The term loan is secured by a lien on its natural gas and crude oil properties and related assets. 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. As of December 31, 2022 and 2021, the term loan had an outstanding balance of $ 77.4 million and $ 140.1 million, respectively. On February 21, 2023, Laramie Energy entered into a term loan agreement which provided a $ 205 million first lien term loan facility with $ 160.0 million funded at closing and an optional $ 45 million delayed draw commitment, subject to certain terms and conditions. Laramie Energy used the proceeds from the term loan to repay the then-outstanding balance of $ 76.3 million on its existing term loan, including accrued interest and prepayment penalties, and fully redeem preferred equity of $ 73.5 million. After deducting transaction costs, net proceeds were $ 4.8 million. Laramie Energy’s term loan matures on February 21, 2027. Under the terms of the new term loan, Laramie is permitted to make future cash distributions to its owners, including us, subject to certain restrictions. At March 31, 2020, we conducted an impairment evaluation of our investment in Laramie Energy because of (i) the global economic impact of the COVID-19 pandemic, (ii) an increase in the weighted-average cost of capital for energy companies, and (iii) continuing declines in natural gas prices through the first quarter of 2020. Based on our evaluation, we determined that the estimated fair value of our investment in Laramie Energy was $ 1.9 million, compared to a carrying value of $ 47.2 million at March 31, 2020. The fair value estimate was determined using a discounted cash flow analysis based on natural gas forward strip prices as of March 31, 2020 for the years 2020 and 2021 of the forecast, and a blend of forward strip pricing and third-party analyst pricing for the years 2022 through 2028. Other significant inputs used in the discounted cash flow analysis included proved and unproved reserves information, forecasts of operating expenditures, and the applicable discount rate. As a result, we recorded an other-than temporary impairment charge of $ 45.3 million in Equity losses from Laramie Energy, LLC on our consolidated statement of operations for the year ended December 31, 2020. Please read Note 15—Fair Value Measurements for further information. During the quarter ended June 30, 2020, Laramie Energy incurred additional losses that reduced the book value of our investment to zero and, as such, as of June 30, 2020, we discontinued the application of the equity method of accounting for our investment in Laramie Energy. F-16 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The change in our equity investment in Laramie Energy is as follows (in thousands): Year Ended December 31, 2020 Beginning balance $ 46,905 Equity earnings (losses) from Laramie Energy (1) ( 1,611 ) Impairment of our investment in Laramie Energy ( 45,294 ) Ending balance (1) $ — ________________________________________________________ (1) As of June 30, 2020, we discontinued the application of the equity method of accounting for our investment in Laramie Energy because the book value of such investment has been reduced to zero . Note 4— Acquisitions 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 $ 310.0 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. Upon execution of the Purchase Agreement, we made a cash deposit of $ 30.0 million, recorded in Prepaid and other current assets, which will be credited to the sale upon a successful closing. We guaranteed the payment and performance of the Purchasers’ obligations under the Purchase Agreement. We incurred $ 3.4 million of acquisition costs related to the Billings Acquisition for the year ended December 31, 2022. These costs are included in Acquisition and integration costs on our consolidated statement of operations. Northwest Retail Expansion On December 2, 2022, we purchased three retail stores in Washington, for total consideration of $ 5.5 million (the “Northwest Retail Expansion”). We accounted for the Northwest Retail Expansion as a business combination whereby the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. Of the total purchase price of $ 5.5 million, $ 2.0 million was allocated to property, plant, and equipment, $ 0.8 million was allocated to lease valuation, and $ 0.5 million was allocated to inventory. We recognized $ 2.1 million in goodwill attributable to opportunities expected to arise from expanding our operations. We incurred $ 0.3 million of acquisition costs related to the Northwest Retail Expansion for the year ended December 31, 2022. These costs are included in Acquisition and integration costs on our consolidated statement of operations. Note 5— Revenue Recognition As of December 31, 2022 and 2021, receivables from contracts with customers were $ 242.5 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 $ 11.5 million and $ 10.1 million as of December 31, 2022 and 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. F-17 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 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): Year Ended December 31, 2022 Refining Logistics Retail Product or service: Gasoline $ 1,999,065 $ — $ 428,959 Distillates (1) 3,139,807 — 46,392 Other refined products (2) 1,890,813 — — Merchandise — — 91,289 Transportation and terminalling services — 198,821 — Other revenue 16,375 — 3,566 Total segment revenues (3) $ 7,046,060 $ 198,821 $ 570,206 Year Ended December 31, 2021 Refining Logistics Retail Product or service: Gasoline $ 1,472,335 $ — $ 333,396 Distillates (1) 1,927,851 — 27,057 Other refined products (2) 1,065,555 — — Merchandise — — 92,004 Transportation and terminalling services — 184,734 — Other revenue 5,370 — 3,959 Total segment revenues (3) $ 4,471,111 $ 184,734 $ 456,416 Year Ended December 31, 2020 Refining Logistics Retail Product or service: Gasoline $ 846,294 $ — $ 241,003 Distillates (1) 1,256,618 — 30,739 Other refined products (2) 753,591 — — Merchandise — — 90,173 Transportation and terminalling services — 180,909 — Other revenue 30,198 — 1,798 Total segment revenues (3) $ 2,886,701 $ 180,909 $ 363,713 _______________________________________________________ (1) Distillates primarily include diesel and jet fuel. (2) Other refined products include fuel oil, gas oil, and asphalt. (3) Refer to Note 22—Segment Information for the reconciliation of segment revenues to total consolidated revenues. F-18 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Note 6— Inventories Inventories at December 31, 2022 and 2021 consisted of the following (in thousands): Titled Inventory Supply and Offtake Agreement (1) Total December 31, 2022 Crude oil and feedstocks $ 112,082 $ 265,536 $ 377,618 Refined products and blendstock 188,040 168,624 356,664 Warehouse stock and other (2) 307,701 — 307,701 Total $ 607,823 $ 434,160 $ 1,041,983 December 31, 2021 Crude oil and feedstocks $ 102,085 $ 199,282 $ 301,367 Refined products and blendstock 179,737 142,872 322,609 Warehouse stock and other (2) 166,341 — 166,341 Total $ 448,163 $ 342,154 $ 790,317 _________________________________________________________ (1) Please read Note 11—Inventory Financing Agreements for further information. (2) Includes $ 258.2 million and $ 120.1 million of RINs and environmental credits, reported at the lower of cost or NRV, as of December 31, 2022 and 2021, respectively. Our renewable volume obligation and other gross environmental credit obligations of $ 549.8 million and $ 311.0 million, reported at market value, are included in Other accrued liabilities on our consolidated balance sheets as of December 31, 2022 and 2021, respectively. Inventories valued on the LIFO method were approximately 20 % of total inventories at both December 31, 2022 and 2021. As of December 31, 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 December 31, 2022 and December 31, 2021, the current replacement cost exceeded the LIFO inventory carrying value by approximately $ 46.4 million and $ 46.0 million, respectively. Note 7— Prepaid and Other Current Assets Prepaid and other current assets at December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Collateral posted with broker for derivative instruments (1) $ 40,788 $ 6,053 Billings acquisition deposit (2) 30,000 — Prepaid insurance 15,639 14,110 Deferred inventory financing charges — 4,073 Other 5,616 4,289 Total $ 92,043 $ 28,525 _________________________________________________________ (1) Our cash margin that is required as collateral deposits on our commodity derivatives cannot be offset against the fair value of open contracts except in the event of default. Please read Note 14—Derivatives for further information. (2) Please read Note 4—Acquisitions for further discussion. F-19 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Note 8— Property, Plant, and Equipment and Impairment of Long-Lived Assets Major classes of property, plant, and equipment, including assets acquired under finance leases, consisted of the following (in thousands): December 31, 2022 2021 Land $ 153,804 $ 153,254 Buildings and equipment (1) 1,050,898 1,007,608 Other (1) 19,865 19,535 Total property, plant, and equipment 1,224,567 1,180,397 Less accumulated depreciation and amortization ( 388,733 ) ( 323,892 ) Property, plant, and equipment, net $ 835,834 $ 856,505 ______________________________________________________ (1) Please read Note 16—Leases for further disclosures and information on finance leases. Depreciation and finance lease amortization expense was approximately $ 75.0 million, $ 77.2 million, and $ 81.8 million for the years ended December 31, 2022, 2021, and 2020, respectively. The Par West refinery was idled in the first quarter of 2020 due to the reduction in demand resulting from the COVID-19 global pandemic’s effect on the economy. Pursuant to GAAP accounting guidelines, this refinery was deemed abandoned in the fourth quarter of 2020 due to the following factors: the idling of the assets for more than an insignificant amount of time, the significant cost to restart the refinery, and a lack of a current plan or timeline to restart the refinery. As a result, in the year ended December 31, 2020, we recorded impairment charges of $ 10.7 million, $ 5.0 million, and $ 2.2 million in Impairment expense on our consolidated statement of operations related to the write-offs of Par West property, plant, and equipment, deferred turnaround costs, and inventory, respectively. For the year ended December 31, 2021, we recorded additional impairment charges of $ 0.2 million in Impairment expense on our consolidated statement of operations related to this idling. Please read Note 15—Fair Value Measurements for additional information. For the year ended December 31, 2021, we recorded $ 1.7 million of Impairment expense on our consolidated statement of operations related to the impairment of a separate capital project. For the year ended December 31, 2022, no such impairment was recorded. Note 9— Asset Retirement Obligations Our asset retirement obligations (“AROs”) are primarily related to the removal of underground storage tanks and the removal of brand signage at owned and leased retail sites which are legally required, whether by government action or contractual arrangement. The table below summarizes the changes in our recorded AROs (in thousands): Year Ended December 31, 2022 2021 2020 Beginning balance $ 14,414 $ 10,636 $ 10,180 Accretion expense 934 873 490 Revision in estimate 116 3,602 — Liabilities settled during period ( 89 ) ( 697 ) ( 34 ) Ending balance $ 15,375 $ 14,414 $ 10,636 F-20 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Note 10— Goodwill and Intangible Assets During the years ended December 31, 2022, 2021, and 2020, the change in the net carrying amount of goodwill was as follows (in thousands): Balance at January 1, 2020 $ 195,919 Impairment expense ( 67,922 ) Balance at December 31, 2020 127,997 Divestitures ( 735 ) Balance at December 31, 2021 127,262 Acquisitions (1) 2,120 Divestitures ( 57 ) Balance at December 31, 2022 $ 129,325 ________________________________________________________ (1) Please read Note 4—Acquisitions for further discussion. The gross carrying value of goodwill was $ 202.9 million as of January 1, 2020 and December 31, 2020 and 2021, and $ 205.0 million as of December 31, 2022. As of January 1, 2020, we had accumulated impairment charges of $ 7.0 million, and as of December 31, 2020, 2021, and 2022, we had accumulated impairment charges, including charges related to divestitures, of $ 74.9 million, $ 75.6 million, and $ 75.7 million, respectively. At March 31, 2020, we performed a quantitative goodwill impairment test of all of our reporting units due to (i) the global economic impact of the COVID-19 pandemic and (ii) a steep decline in current and forecasted prices and demand for crude oil and refined products. As part of our quantitative impairment test, we compared the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. In assessing the fair value of the reporting units, we primarily utilized a market approach based on observable multiples for comparable companies within our industry. Our refining reporting units in Hawaii and Washington were fully impaired and the goodwill associated with our retail reporting unit in Washington and Idaho was partially impaired, resulting in a charge of $ 67.9 million in our consolidated statement of operations for the year ended December 31, 2020. The goodwill impairment expense was allocated to the Refining segment ($ 38.1 million) and to the Retail segment ($ 29.8 million). Intangible assets consisted of the following (in thousands): December 31, 2022 2021 Intangible assets: Trade names and trademarks $ 6,267 $ 6,267 Customer relationships 32,064 32,064 Other 261 261 Total intangible assets 38,592 38,592 Accumulated amortization: Trade name and trademarks ( 5,383 ) ( 5,297 ) Customer relationships ( 19,632 ) ( 17,061 ) Other — — Total accumulated amortization ( 25,015 ) ( 22,358 ) Net: Trade name and trademarks 884 970 Customer relationships 12,432 15,003 Other 261 261 Total intangible assets, net $ 13,577 $ 16,234 F-21 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Amortization expense was approximately $ 2.7 million for each of the years ended December 31, 2022, 2021, and 2020. Our intangible assets related to customer relationships and trade names have an average useful life of 13.5 years. Expected amortization expense for each of the next five years and thereafter is as follows (in thousands): Year Ended Amount 2023 $ 2,658 2024 1,400 2025 979 2026 979 2027 979 Thereafter 6,582 $ 13,577 Note 11— Inventory Financing Agreements The following table summarizes our outstanding obligations under our inventory financing agreements (in thousands): December 31, 2022 2021 Supply and Offtake Agreement $ 732,511 $ 569,158 Washington Refinery Intermediation Agreement 160,554 168,546 Obligations under inventory financing agreements $ 893,065 $ 737,704 Supply and Offtake Agreement We have a supply and offtake agreement with J. Aron to support our Hawaii refining operations (the “Supply and Offtake Agreement"). On June 1, 2021, we entered into the second amended and restated supply and offtake agreement, which amended and restated the first amended and restated supply and offtake agreement in its entirety. During the term of the Supply and Offtake Agreement, J. Aron and we will identify mutually acceptable contracts for the purchase of crude oil from third parties. Per the agreement, J. Aron will provide up to 150 Mbpd of crude oil to our Hawaii refinery. Additionally, we will sell, and J. Aron will buy, at market prices, refined products produced at our Hawaii refinery. We will then repurchase the refined products from J. Aron prior to selling the refined products to our retail operations or to third parties. Under the agreement, J. Aron may enter into agreements with third parties whereby J. Aron remits payments to these third parties for refinery procurement contracts for which we will become immediately obligated to reimburse J. Aron. The agreement also provides for the lease of crude oil and certain refined product storage facilities to J. Aron. The Supply and Offtake Agreement expires May 31, 2024 (as extended, the “Expiration Date”), subject to a one-year extension at the mutual agreement of the parties at least 120 days prior to the Expiration Date. Under the Supply and Offtake Agreement, we are subject to an early termination fee if we terminate the Supply and Offtake Agreement on or prior to May 31, 2023. Following the expiration or termination of the agreement, we are obligated to purchase the crude oil and refined product inventories then owned by J. Aron and located at the leased storage facilities at then-current market prices. Under the Supply and Offtake Agreement, Par Hawaii Refining, LLC (“PHR”) is required to maintain minimum liquidity of not less than $ 15 million for any three consecutive business days, with at least $ 7.5 million of such liquidity consisting of cash and cash equivalents. Though title to the crude oil and certain refined product inventories resides with J. Aron, the Supply and Offtake Agreement is accounted for similar to a product financing arrangement; therefore, the crude oil and refined products inventories will continue to be included in our consolidated balance sheets until processed and sold to a third party. Each reporting period, we record a liability in an amount equal to the amount we expect to pay to repurchase the inventory held by J. Aron based on current market prices. Prior to July 1, 2021, the Supply and Offtake Agreement also included a deferred payment arrangement whereby we could defer payments owed under the agreements up to the lesser of $ 165 million or 85 % of the eligible accounts receivable and inventory. The deferred amounts under the deferred payment arrangement bore interest at a rate equal to three-month LIBOR plus 3.50 % per annum. We also paid a deferred payment availability fee equal to 0.75 % of the unused capacity under the deferred payment arrangement. F-22 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Effective July 1, 2021, a discretionary draw facility (the “Discretionary Draw Facility”) became available to PHR up to but excluding the Expiration Date. Under the Discretionary Draw Facility, J. Aron agreed 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 $ 165 million or the sum of the borrowing base, which is calculated as (x) 85 % of the eligible accounts receivables, plus (y) the lesser of $ 82.5 million and 85 % of eligible hydrocarbon inventory, minus (z) such reserves as established by J. Aron in respect of eligible receivables and eligible hydrocarbon inventory. Prior to June 1, 2022, the advances under the Discretionary Draw Facility bore interest at a rate equal to three-month LIBOR plus 4.00 % per annum. Beginning on June 1, 2022, the advances bear interest at a rate equal to LIBOR (or LIBOR equivalent) plus an applicable spread between 3.50 % and 4.00 % to be determined annually based on certain financial ratios. We also pay a discretionary draw availability fee equal to 0.75 % of the unused capacity under the Discretionary Draw Facility. On April 25, 2022, we entered into an 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 and increased the limit in the borrowing base for eligible hydrocarbon inventory from $ 82.5 million to $ 107.5 million. 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; the reserve may be reduced by the posting of cash collateral by PHR in accordance with the terms of the amendment. Under the Supply and Offtake Agreement, we pay or receive certain fees from J. Aron based on changes in market prices over time. In 2017, we fixed the market fee for the period from June 1, 2018 through May 2021 for an additional $ 2.2 million. In 2020, we fixed the market fee for the period from February 1, 2020 through April 1, 2021 for an additional $ 0.8 million to be settled in fifteen payments. In 2021, we entered into multiple contracts to fix certain market fees for the period from May 2021 through May 2022 for $ 18.2 million. In 2022, we entered into additional contracts with J. Aron to fix certain fees for the month of March 2022 for $ 4.5 million. The amount due to or from J. Aron is recorded as an adjustment to our Obligations under inventory financing agreements as allowed under the Supply and Offtake Agreement. We had no fixed market fees due to or from J. Aron as of December 31, 2022. As of December 31, 2021, we had a payable of $ 6.2 million. We recognized fixed market fees of $ 8.8 million, $ 13.5 million, and $ 1.3 million for the years ended December 31, 2022, 2021, and 2020, respectively, which were included in Cost of revenues (excluding depreciation) on our consolidated statements of operations. Washington Refinery Intermediation Agreement We are party to the Washington Refinery Intermediation Agreement with MLC, which provides a structured financing arrangement based on U.S. Oil’s crude oil and refined products inventories and associated accounts receivable. Under this arrangement, U.S. Oil purchases crude oil supplied from third-party suppliers and MLC provides credit support for such crude oil purchases. MLC’s credit support can consist of either providing a payment guaranty, causing the issuance of a letter of credit from a third-party issuing bank, or purchasing crude oil directly from third parties on our behalf. U.S. Oil holds title to all crude oil and refined products inventories at all times and pledges such inventories, together with all receivables arising from the sales of the same, exclusively to MLC. On February 11, 2021, we and MLC amended the Washington Refinery Intermediation Agreement and extended the term from June 30, 2021 to March 31, 2022. On December 17, 2021, we and MLC amended the Washington Refinery Intermediation Agreement to further extend the term through December 21, 2022 and to revise certain other terms and conditions in the Washington Refinery Intermediation Agreement. On March 9, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to advance the term expiry date to March 31, 2023. On November 2, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to further extend the term through March 31, 2024. During the remaining term of the Washington Refinery Intermediation Agreement, MLC will make receivable advances to U.S. Oil based on an advance rate of 95 % of eligible receivables (the “MLC receivable advances”) and additional advances based on crude oil and products inventories. Prior to May 9, 2022, the maximum borrowing capacity under the MLC receivable advances was $ 90.0 million. On May 9, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to increase the maximum borrowing capacity under the MLC receivable advances to $ 115 million. The maximum borrowing capacity was reduced to $ 110 million under the amendment to the Washington Refinery Intermediation Agreement dated November 2, 2022. The MLC receivable advances bore interest at a rate equal to three-month LIBOR plus 3.25 % per annum prior to August 11, 2022. On August 11, 2022, we and MLC entered into an amendment to the Washington Refinery Intermediation Agreement to establish adjusted three-month term Secured Overnight Financing Rate ("SOFR") as the benchmark rate in replacement of LIBOR and revise certain other terms and conditions. We also pay an availability fee equal to 0.75 % of the unused capacity under the MLC receivable advances. F-23 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The following table summarizes our outstanding borrowings, letters of credit, and contractual undertaking obligations under the intermediation agreements (in thousands): December 31, 2022 2021 Discretionary Draw Facility Outstanding borrowings (1) $ 204,843 $ 126,225 Borrowing capacity 204,843 126,225 MLC receivable advances Outstanding borrowings (1) 56,601 54,538 Borrowing capacity 56,601 54,538 J. Aron payment undertaking obligations — — MLC issued letters of credit 115,001 166,950 ______________________________________________________ (1) Amounts outstanding under the Discretionary Draw Facility and MLC receivable advances are included in Obligations under inventory financing agreements on our consolidated balance sheets. Changes in the amount outstanding under these arrangements are included within Cash flows from financing activities on the consolidated statements of cash flows. The following table summarizes the inventory intermediation fees, which are included in Cost of revenues (excluding depreciation) on our consolidated statements of operations, and Interest expense and financing costs, net related to the intermediation agreements (in thousands): Year Ended December 31, 2022 2021 2020 Net fees and expenses: Supply and Offtake Agreement Inventory intermediation fees (1) $ 100,610 $ 21,612 $ 12,034 Interest expense and financing costs, net 6,150 3,015 3,044 Washington Refinery Intermediation Agreement Inventory intermediation fees $ 3,000 $ 3,236 $ 4,112 Interest expense and financing costs, net 10,111 4,900 2,791 ___________________________________________________ (1) Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $ 63.3 million and $ 4.0 million for the years ended December 31, 2022, and 2021, respectively, and a market structure benefit of $ 3.0 million for the year ended December 31, 2020. 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. Please read Note 14—Derivatives for further information. Note 12— Other Accrued Liabilities Other accrued liabilities at December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 2021 Accrued payroll and other employee benefits $ 27,815 $ 19,710 Gross environmental credit obligations (1) 549,791 311,014 Other 62,888 39,700 Total $ 640,494 $ 370,424 F-24 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 ______________________________________________________ (1) Gross environmental credit obligations are stated at market as of December 31, 2022 and 2021. Please read Note 15—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 consolidated balance sheet and are stated at the lower of cost or net realizable value. The carrying costs of these assets were $ 258.2 million and $ 120.1 million as of December 31, 2022 and 2021, respectively. Note 13— Debt The following table summarizes our outstanding debt (in thousands): December 31, 2022 2021 ABL Credit Facility due 2025 $ — $ — 7.75 % Senior Secured Notes due 2025 281,000 296,000 Term Loan B due 2026 203,125 215,625 12.875 % Senior Secured Notes due 2026 31,314 68,250 Principal amount of long-term debt 515,439 579,875 Less: unamortized discount and deferred financing costs ( 9,907 ) ( 15,317 ) Total debt, net of unamortized discount and deferred financing costs 505,532 564,558 Less: current maturities, net of unamortized discount and deferred financing costs ( 10,956 ) ( 10,841 ) Long-term debt, net of current maturities $ 494,576 $ 553,717 Annual maturities of our long-term debt for the next five years and thereafter are as follows (in thousands): Year Ended Amount Due 2023 $ 12,500 2024 12,500 2025 293,500 2026 196,939 2027 — Thereafter — Total $ 515,439 Additionally, as of December 31, 2022 and 2021, we had approximately $ 19.5 million and $ 18.5 million in letters of credit outstanding, respectively, under the Loan and Security Agreement dated as of December 21, 2017 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 both December 31, 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 B Facility, our subsidiaries are restricted from paying dividends or making other equity distributions, subject to certain exceptions. 5.00% Convertible Senior Notes Due 2021 In June 2016, we completed the issuance and sale of $ 115 million in aggregate principal amount of the 5.00% Convertible Senior Notes in a private placement under Rule 144A (the “Notes Offering”). Affiliates of funds managed by or on behalf of Highbridge Capital Management, LLC (“Highbridge”) and Whitebox Advisors, LLC (“Whitebox”), our related parties, purchased an aggregate of $ 47.5 million and $ 40.4 million, respectively, principal amount of the 5.00% Convertible Senior Notes in the Notes Offering. The 5.00% Convertible Senior Notes bore interest at a rate of 5.00 % per year (payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2016) and matured on June 15, 2021. During May, June, and December 2019, we entered into privately negotiated exchange agreements with a limited number of holders (the F-25 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 “Noteholders”) to repurchase $ 66.3 million in aggregate principal amount of the 5.00% Convertible Senior Notes held by the Noteholders for an aggregate of $ 18.6 million in cash and approximately 3.2 million shares of Par’s common stock with a fair value of $ 74.3 million. We recognized a loss of approximately $ 6.1 million related to the extinguishment of the repurchased 5.00% Convertible Senior Notes in the year ended December 31, 2019. On June 15, 2021, the remaining $ 48.7 million aggregate principal amount of the 5.00% Convertible Senior Notes was paid in full at maturity. Retail Property Term Loan On March 29, 2019, Par Pacific Hawaii Property Company, LLC (“Par Property LLC”), our wholly owned subsidiary, entered into a term loan agreement (the “Retail Property Term Loan”) with Bank of Hawaii, which provided a term loan in the principal amount of $ 45.0 million. The Retail Property Term Loan bore interest based on a floating rate equal to the applicable LIBOR for a one-month interest period plus 1.5 %. Principal and interest payments were payable monthly based on a 20 -year amortization schedule, principal prepayments were allowed subject to applicable prepayment penalties, and the remaining unpaid principal, plus any unpaid interest or other charges, was due 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. We recognized approximately $ 1.4 million of debt extinguishment costs in the year ended December 31 2021 related to our prepayment of the loan principal. ABL Credit Facility Under the ABL Credit Facility, we have a revolving credit facility that provides for revolving loans and for the issuance of letters of credit (the “ABL Revolver”) with a maximum principal amount at any time outstanding of $ 142.5 million subject to a borrowing base. As of December 31, 2022, the ABL Revolver had no outstanding balance and a borrowing base of approximately $ 85.1 million. The maturity date of the ABL Revolver is February 2, 2025, on which date all revolving loans will be due and payable in full. On February 2, 2022, Par Petroleum, LLC, PHL, Hermes Consolidated, LLC, and Wyoming Pipeline Company, LLC (collectively, the “ABL Borrowers”), entered into the Amended and Restated Loan and Security Agreement (as amended from time to time, the “ABL Loan Agreement”) dated as of February 2, 2022, with certain lenders and Bank of America, N.A., as administrative agent and collateral agent. 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, and extended the maturity date of the ABL Revolver from December 21, 2022 to February 2, 2025. 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 to increase the aggregate revolving commitments under the ABL Loan Agreement from $ 105 million to $ 142.5 million and decrease the available increase under the accordion feature from $ 50 million to $ 12.5 million, subject to certain limitations and conditions. Prior to February 2, 2022, the revolving loans under the ABL Revolver bore interest at a fluctuating rate per annum equal to (i) during the periods such revolving loan was a base rate loan, the base rate plus the applicable margin in effect from time to time, and (ii) during the periods such revolving loan was a LIBOR Loan, at LIBOR for the applicable interest period plus the applicable margin in effect from time to time. The base rate was equal to (i) daily LIBOR (“LIBOR Daily Floating Rate”) or (ii) if the LIBOR Daily Floating Rate was unavailable for any reason, a rate as calculated per the agreement for such day. Under the ABL Loan Agreement entered into on February 2, 2022, the outstanding principal amount of each revolving loan bears interest at a fluctuating rate per annum equal to (i) during the periods such revolving loan is a base rate loan, the base rate plus the applicable margin in effect from time to time, and (ii) during the periods such revolving loan is a Term SOFR Loan, at Term SOFR (as defined in the ABL Loan Agreement) for the applicable interest period plus the applicable margin in effect from time to time. The base rate for any day is a per annum rate equal to the greater of (a) a rate as calculated per the agreement (the “Prime Rate”) for such day; (b) a rate as calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depository institutions (“Federal Funds Rate”) for such day, plus 0.50 %; or (c) Term SOFR for a one month interest period as of such day plus 1.0 %, subject to the interest rate floor set forth therein; provided, that in no event shall the base rate be less than zero. We also pay a de minimis fee for any undrawn amounts available under the ABL Revolver. The average effective interest rate for 2022 and 2021 on the ABL Revolver loan was 2.7 % and 2.6 %, respectively. F-26 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Under the ABL Loan Agreement, the applicable margins for the ABL Credit Facility and advances under the ABL Revolver are as specified below: Level Arithmetic Mean of Daily Availability (as a percentage of the borrowing base) Term SOFR Loans Base Rate Loans 1 >50% 1.25 % 0.25 % 2 >30% but ≤ 50% 1.50 % 0.50 % 3 ≤ 30% 1.75 % 0.75 % The ABL Loan Agreement requires the ABL Borrowers to comply with certain customary affirmative, as well as certain negative covenants that, among other things, will restrict, subject to certain exceptions, the ability of the ABL Borrowers and their guarantors to incur indebtedness, grant liens, make investments, engage in acquisitions, mergers or consolidations and pay dividends and other restricted payments. Upon the occurrence of a triggering event whereby availability is less than the greater of (i) $ 7.5 million and (ii) 12.5 % of the borrowing base, the ABL Borrowers are required to comply for at least 30 days with a minimum fixed charge coverage ratio of 1.00 to 1.00 measured monthly, with respect to (a) Par Petroleum, LLC and its consolidated subsidiaries, and (b) Par Petroleum, LLC and its consolidated subsidiaries, other than PHR, U.S. Oil, and any other Future Intermediation Subsidiary (as defined in the ABL Loan Agreement). The obligations of the ABL Borrowers are guaranteed by Par and Par Petroleum, LLC’s existing and future direct or indirect domestic subsidiaries that are not borrowers under the ABL Credit Facility. The loans and letters of credit issued under the ABL Credit Facility are secured by a first-priority security interest in and lien on certain assets of the borrowers and the guarantors, including, among other items, cash and cash equivalents, accounts receivables, and inventory, and excluding the assets of PHR and U.S. Oil. 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. During the year ended December 31, 2021, we repurchased and cancelled $ 4 million in aggregate principal amount of the 7.75% Senior Secured Notes through two repurchases . 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 consolidated statement of operations for the year ended December 31, 2022. As of December 31, 2022, the 7.75% Senior Secured Notes had an outstanding principal balance of $ 281.0 million. The indenture governing the 7.75% Senior Secured Notes contains restrictive covenants limiting the ability of Par Petroleum, LLC and its Restricted Subsidiaries (as defined in the indenture) to, among other things, incur additional indebtedness, issue certain preferred shares, create liens on certain assets to secure debt, sell or otherwise dispose of all or substantially all assets, or pay dividends. The 7.75% Senior Secured Notes are secured on a pari passu basis by first priority liens (subject to the relative priority of permitted liens) on substantially all of the property and assets of the Issuers and the subsidiary guarantors, including but not limited to, material real property now owned or hereafter acquired by the Issuers or subsidiary guarantors and their equipment, intellectual property, and equity interests, but excluding certain property which is collateral under the ABL Credit Facility, the Supply and Offtake Agreement, and the Washington Refinery Intermediation Agreement. The 7.75% Senior Secured Notes are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by each of Par Petroleum, LLC’s existing wholly owned subsidiaries (other than Par Petroleum Finance Corp.), and are guaranteed on a senior unsecured basis only as to the payment of principal and interest by Par Pacific Holdings, Inc. In the future, the 7.75% Senior Secured Notes will be guaranteed on a senior secured basis by additional subsidiaries of Par Petroleum, LLC that guarantee material indebtedness of the Issuers or otherwise become obligated with respect to material indebtedness under a credit facility, subject to certain exceptions. Term Loan B Facility due 2026 On January 11, 2019, Par Petroleum, LLC and Par Petroleum Finance Corp. (collectively, the “Issuers”) entered into a new term loan facility with Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto from time to time F-27 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 (the “Term Loan B Facility”). Pursuant to the Term Loan B Facility, the lenders made a term loan to the borrowers in the amount of $ 250.0 million (“Term Loan B”) on the closing date. The net proceeds from Term Loan B totaled $ 232.0 million after deducting the original issue discount, deferred financing costs, and commitment and other fees. Loans under the Term Loan B bear interest at a rate per annum equal to Adjusted LIBOR (as defined in the Term Loan B Facility) plus an applicable margin of 6.75 % or at a rate per annum equal to Alternate Base Rate (as defined in the Term Loan B Facility) plus an applicable margin of 5.75 %. The average effective interest rate for 2022 on the Term Loan B was 8.6 %. In addition to the quarterly interest payments, the Term Loan B requires quarterly principal payments of $ 3.1 million. The Term Loan B matures on January 11, 2026. The obligations of the borrowers under the Term Loan B Facility are guaranteed by Par Petroleum, LLC’s and Par Petroleum Finance Corp.’s existing and future direct or indirect domestic subsidiaries and, by Par Pacific Holdings, Inc., with respect to principal and interest only. The Term Loan B Facility is secured on a pari passu basis by first priority liens (subject to the relative priority of permitted liens) on substantially all of the property and assets of Par Petroleum, LLC, Par Petroleum Finance Corp., and their subsidiary guarantors, but excluding certain property which is collateral under the ABL Credit Facility, the Supply and Offtake Agreement, and the Washington Refinery Intermediation Agreement. 12.875% Senior Secured Notes due 2026 On June 5, 2020, the Issuers completed the issuance and sale of $ 105.0 million in aggregate principal amount of 12.875% Senior Secured Notes in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended. The net proceeds of $ 98.8 million from the sale were used for general corporate purposes. 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. The indenture for the 12.875% Senior Secured Notes also allows for optional early redemptions, some of which require the Issuers to pay a premium and some of which have certain other restrictions related to timing and the maximum redeemable principal amount. On June 14, 2021, we redeemed $ 36.8 million aggregate principal amount of 12.875% Senior Secured Notes at a redemption price of 112.875 % of the aggregate principal amount of the notes redeemed, plus the accrued and unpaid interest as of the redemption date. On the redemption date, we paid a premium of approximately $ 4.7 million and incurred additional debt extinguishment costs of $ 1.9 million, which were recorded in Debt extinguishment and commitment costs on our consolidated statement of operations for the year ended December 31, 2021. 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 year ended December 31, 2022 and incurred aggregate debt extinguishment costs of $ 1.6 million for these repurchases, which were recorded in Debt extinguishment and commitment costs on our consolidated statement of operations for the year ended December 31, 2022. As of December 31, 2022, $ 31.3 million in aggregate principal amount of the 12.875% Senior Secured Notes remained outstanding. The obligations of the borrowers under the 12.875% Senior Secured Notes are guaranteed by the Issuers’ existing and future direct or indirect domestic subsidiaries (other than Par Petroleum Finance Corp.) and by Par Pacific Holdings, Inc., with respect to principal and interest only. The 12.875% Senior Secured Notes are secured on a pari passu basis by first priority liens (subject to the relative priority of permitted liens) on substantially all of the property and assets of the Issuers and the subsidiary guarantors, but excluding certain assets which are collateral under the ABL Credit Facility, the Supply and Offtake Agreement, and the Washington Refinery Intermediation Agreement. Mid Pac Term Loan Our Mid Pac Term Loan with American Savings Bank, F.S.B. was payable monthly, bore interest at an annual rate of 4.375 %, was secured by a first-priority lien on the real property purchased with the funds, including leases and rents on the property and the property’s fixed assets and fixtures, and was guaranteed by Par Petroleum, LLC. The Mid Pac Term Loan was scheduled to mature on October 18, 2028. On March 12, 2021, we terminated and repaid all amounts outstanding under the Mid Pac Term Loan. F-28 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 PHL Term Loan On April 13, 2020, PHL, our wholly owned subsidiary, entered into a Term Loan Agreement (“PHL Term Loan”) with American Savings Bank F.S.B., which provided a term loan in the principal amount of approximately $ 6.0 million. The proceeds from the PHL Term Loan were used to finance PHL’s equity in certain real property. The PHL Term Loan bore interest at a fixed rate of 2.750 % per annum. Principal and interest payments were payable monthly based on a 25-year amortization schedule, principal prepayments were allowed with no prepayment charge, and the remaining principal, plus any unpaid interest or other charges, was due on April 15, 2030, the maturity date of the PHL Term Loan. The PHL Term Loan was guaranteed by Par Petroleum, LLC. On February 23, 2021, we terminated and repaid all amounts outstanding under the PHL Term Loan. 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 December 31, 2022, we were in compliance with all of our debt instruments. Guarantors In connection with our shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission (“SEC”) and declared 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. Any non-convertible debt securities issued under the Registration Statement may be fully and unconditionally guaranteed (except for customary release provisions), on a joint and several basis, by some or all of our subsidiaries, other than subsidiaries that are “minor” within the meaning of Rule 3-10 of Regulation S-X (the “Guarantor Subsidiaries”). We have no “independent assets or operations” within the meaning of Rule 3-10 of Regulation S-X and certain of the Guarantor Subsidiaries may be subject to restrictions on their ability to distribute funds to us, whether by cash dividends, loans, or advances. Note 14— Derivatives Commodity Derivatives We utilize commodity derivative contracts to manage our price exposure in our inventory positions, future purchases of crude oil, future purchases and sales of refined products, and crude oil consumption in our refining process. The derivative contracts that we execute to manage our price risk include exchange traded futures, options, and OTC swaps. Our futures, options, and OTC swaps are marked-to-market and changes in the fair value of these contracts are recognized within Cost of revenues (excluding depreciation) on our consolidated statements of operations. We are obligated to repurchase the crude oil and refined products from J. Aron at the termination of the Supply and Offtake Agreement. Our Washington Refinery Intermediation Agreement contains forward purchase obligations for certain volumes of crude oil and refined products that are required to be settled at market prices on a monthly basis. We have determined that these obligations under the Supply and Offtake Agreement and Washington Refinery Intermediation Agreement contain embedded derivatives. As such, we have accounted for these embedded derivatives at fair value with changes in the fair value recorded in Cost of revenues (excluding depreciation) on our consolidated statements of operations. We have entered into forward purchase contracts for crude oil and forward purchases and sales contracts of refined products. We elect the normal purchases normal sales (“NPNS”) exception for all forward contracts that meet the definition of a derivative and are not expected to net settle. Any gains and losses with respect to these forward contracts designated as NPNS are not reflected in earnings until the delivery occurs. We elect to offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting agreement. Our consolidated balance sheets present derivative assets and liabilities on a net basis. Please read Note 15—Fair Value Measurements for the gross fair value and net carrying value of our derivative instruments. 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. F-29 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Our open futures and OTC swaps expire in April 2024. At December 31, 2022, our open commodity derivative contracts represented (in thousands of barrels): Contract type Purchases Sales Net Futures 50,892 ( 51,147 ) ( 255 ) Swaps 1,524 ( 2,014 ) ( 490 ) Total 52,416 ( 53,161 ) ( 745 ) At December 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 December 31, 2022: 2022 Average barrels per month 67,500 Weighted-average strike price - floor (in dollars) $ 69.01 Weighted-average strike price - ceiling (in dollars) $ 92.36 Commencement date January 2023 Expiry date December 2023 Interest Rate Derivatives We are exposed to interest rate volatility in our ABL Revolver, Term Loan B Facility, Supply and Offtake Agreement, and Washington Refinery Intermediation Agreement. We may utilize interest rate swaps to manage our interest rate risk. As of December 31, 2020, we had 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. 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. Upon redemption of our 5.00% Convertible Senior Notes on or after June 20, 2019 at our election, we were obligated to pay a make-whole premium equal to the present value of the remaining scheduled payments of interest on the 5.00% Convertible Senior Notes to be redeemed from the relevant redemption date to the maturity date of June 15, 2021. We determined that the redemption option and the related make-whole premium represented an embedded derivative that was not clearly and closely related to the 5.00% Convertible Senior Notes. As such, prior to the maturity date of June 15, 2021, we accounted for this embedded derivative at fair value with changes in the fair value recorded in Interest expense and financing costs, net on our consolidated statements of operations. On June 15, 2021, the 5.00% Convertible Senior Notes were repaid in full and the related embedded derivative was settled. The following table provides information on the fair value amounts (in thousands) of these derivatives as of December 31, 2022 and 2021 and their placement within our consolidated balance sheets. December 31, Balance Sheet Location 2022 2021 Asset (Liability) Commodity derivatives (1) Prepaid and other current assets $ 495 $ 1,260 Commodity derivatives Other accrued liabilities ( 10,989 ) ( 1,431 ) J. Aron repurchase obligation derivative Obligations under inventory financing agreements ( 12,156 ) ( 15,151 ) MLC terminal obligation derivative Obligations under inventory financing agreements 14,435 ( 22,170 ) _________________________________________________________ (1) Does not include cash collateral of $ 40.8 million and $ 6.1 million recorded in Prepaid and other current assets as of December 31, 2022, and December 31, 2021, respectively, and $ 9.5 million in Other long-term assets as of both December 31, 2022 and December 31, 2021. F-30 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The following table summarizes the pre-tax gains (losses) recognized in Net income (loss) on our consolidated statements of operations resulting from changes in fair value of derivative instruments not designated as hedges charged directly to earnings (in thousands): Year Ended December 31, Statement of Operations Classification 2022 2021 2020 Commodity derivatives Cost of revenues (excluding depreciation) $ ( 65,814 ) $ ( 22,417 ) $ ( 51,902 ) J. Aron repurchase obligation derivative Cost of revenues (excluding depreciation) 2,995 5,646 ( 20,970 ) MLC terminal obligation derivative Cost of revenues (excluding depreciation) ( 49,636 ) ( 73,256 ) 39,820 Interest rate derivatives Interest expense and financing costs, net — 104 ( 2,265 ) Note 15— Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Goodwill At March 31, 2020, we performed a quantitative goodwill impairment test of all of our reporting units due to (i) the global economic impact of the COVID-19 pandemic and (ii) a steep decline in current and forecasted prices and demand for crude oil and refined products. As part of our quantitative impairment test, we compared the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. In assessing the fair value of the reporting units, we primarily utilized a market approach based on observable multiples for comparable companies within our industry. Our refining reporting units in Hawaii and Washington were fully impaired and the goodwill associated with our retail reporting unit in Washington and Idaho was partially impaired, resulting in a charge of $ 67.9 million in our consolidated statement of operations for the year ended December 31, 2020. The goodwill impairment expense was allocated to the Refining segment ($ 38.1 million) and to the Retail segment ($ 29.8 million). We consider the impairment of our goodwill to be a Level 3 fair value measurement. Investment in Laramie Energy We evaluate equity method investments for impairment when factors indicate that a decrease in the value of our investment has occurred and the carrying amount of our investment may not be recoverable. An impairment loss, based on the difference between the carrying value and the estimated fair value of the investment, is recognized in earnings when an impairment is deemed to be other than temporary. At March 31, 2020, we conducted an impairment evaluation of our investment in Laramie Energy because of (i) the global economic impact of the COVID-19 pandemic, (ii) an increase in the weighted-average cost of capital for energy companies, and (iii) continuing declines in natural gas prices through the first quarter of 2020. Based on our evaluation, we determined that the estimated fair value of our investment in Laramie Energy was $ 1.9 million, compared to a carrying value of $ 47.2 million at March 31, 2020. The fair value estimate was determined using a discounted cash flow analysis based on natural gas forward strip prices as of March 31, 2020 for the years 2020 and 2021 of the forecast, and a blend of forward strip pricing and third-party analyst pricing for the years 2022 through 2028. Other significant inputs used in the discounted cash flow analysis included proved and unproved reserves information, forecasts of operating expenditures, and the applicable discount rate. As part of our evaluation, we considered the likelihood that New York Mercantile Exchange (“NYMEX”) Henry Hub prices, which declined from an average spot price of $ 2.29 ($/MMBtu) at December 31, 2019 to $ 2.03 ($/MMBtu) in the first quarter of 2020, will recover in the near term. A discount rate of 10 % was used to reflect the higher cost of capital under the economic conditions as of March 31, 2020. As a result, we recorded an other-than temporary impairment charge of $ 45.3 million in Equity losses from Laramie Energy, LLC on our consolidated statement of operations for the year ended December 31, 2020. Par West Refinery Pursuant to GAAP accounting guidelines, the Par West refinery was deemed abandoned in the fourth quarter of 2020 due to the following factors: the idling of the assets for more than an insignificant amount of time, the significant cost to restart the refinery, and a lack of a current plan or timeline to restart the refinery. Given the lack of alternative uses of the Par West F-31 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 refinery assets, we impaired all assets that are not expected to be used as part of our ongoing refining operations in Hawaii down to their salvage value, which is immaterial. As a result of this evaluation, we recorded an impairment charge of $ 17.9 million on our statement of operations for the year ended December 31, 2020. For the year ended December 31, 2021, we recorded $ 0.2 million of Impairment expense on our consolidated statement of operations related to this idling. Assets and Liabilities Measured at Fair Value on a Recurring Basis Derivative instruments We classify financial assets and liabilities according to the fair value hierarchy. Financial assets and liabilities classified as Level 1 instruments are valued using quoted prices in active markets for identical assets and liabilities. These include our exchange traded futures. Level 2 instruments are valued using quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. 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. Level 3 instruments are valued using significant unobservable inputs that are not supported by sufficient market activity. The valuation of the embedded derivatives related to our J. Aron repurchase and MLC terminal obligations is based on estimates of the prices and differentials assuming settlement at the end of the reporting period. Estimates of the J. Aron and MLC settlement prices are based on observable inputs, such as Brent and 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, have a weighted average of $ 14.07 per barrel, and range from a discount of $ 17.90 per barrel to a premium of $ 85.04 per barrel as of December 31, 2022. Contractual price differentials are considered unobservable inputs; therefore, these embedded derivatives are classified as Level 3 instruments. We do not have other commodity derivatives classified as Level 3 at December 31, 2022 or 2021. Please read Note 14—Derivatives for further information on derivatives. Gross Environmental credit obligations Estimates of our gross environmental credit obligations are based on the amount of RINs or other environmental credits required to comply with EPA regulations and the market prices of those RINs or other environmental credits as of the end of the reporting period. The gross environmental credit obligations are classified as a Level 2 instruments as we obtain the pricing inputs for our RINs and other environmental credits from brokers based on market quotes on similar instruments. Please read Note 17—Commitments and Contingencies for further information on the EPA regulations related to greenhouse gases. Financial Statement Impact Fair value amounts by hierarchy level as of December 31, 2022 and 2021 are presented gross in the tables below (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Gross Fair Value Effect of Counter-party Netting Net Carrying Value on Balance Sheet (1) Assets Commodity derivatives $ 161,541 $ 8,369 $ — $ 169,910 $ ( 169,415 ) $ 495 Liabilities Commodity derivatives $ ( 172,529 ) $ ( 7,875 ) $ — $ ( 180,404 ) $ 169,415 $ ( 10,989 ) J. Aron repurchase obligation derivative — — ( 12,156 ) ( 12,156 ) — ( 12,156 ) MLC terminal obligation derivative — — 14,435 14,435 — 14,435 Gross environmental credit obligations (2) — ( 549,791 ) — ( 549,791 ) — ( 549,791 ) Total (3) $ ( 172,529 ) $ ( 557,666 ) $ 2,279 $ ( 727,916 ) $ 169,415 $ ( 558,501 ) F-32 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 December 31, 2021 Level 1 Level 2 Level 3 Gross Fair Value Effect of Counter-party Netting Net Carrying Value on Balance Sheet (1) Assets Commodity derivatives $ 4,283 $ 4,513 $ — $ 8,796 $ ( 7,536 ) $ 1,260 Liabilities Commodity derivatives $ ( 3,964 ) $ ( 5,003 ) $ — $ ( 8,967 ) $ 7,536 $ ( 1,431 ) J. Aron repurchase obligation derivative — — ( 15,151 ) ( 15,151 ) — ( 15,151 ) MLC terminal obligation derivative — — ( 22,170 ) ( 22,170 ) — ( 22,170 ) Gross environmental credit obligations (2) — ( 311,014 ) — ( 311,014 ) — ( 311,014 ) Total (3) $ ( 3,964 ) $ ( 316,017 ) $ ( 37,321 ) $ ( 357,302 ) $ 7,536 $ ( 349,766 ) _________________________________________________________ (1) Does not include cash collateral of $ 50.3 million and $ 15.6 million as of December 31, 2022 and 2021, respectively, included within Prepaid and other current assets and Other long-term assets on our consolidated balance sheets. (2) Does not include RINs assets and other environmental credits of $ 258.2 million and $ 120.1 million presented as Inventories on our consolidated balance sheet and stated at the lower of cost and net realizable value as of December 31, 2022 and 2021, respectively. (3) The interest rate derivative was settled in February 2021, therefore, there is no asset or liability related to the interest rate derivative on December 31, 2022 or 2021. Please read Note 14—Derivatives for further information. A roll forward of Level 3 derivative instruments measured at fair value on a recurring basis is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of period $ ( 37,321 ) $ ( 30,958 ) $ ( 22,750 ) Settlements 86,242 61,247 ( 31,328 ) Total gains (losses) included in earnings ( 46,642 ) ( 67,610 ) 23,120 Balance, end of period $ 2,279 $ ( 37,321 ) $ ( 30,958 ) The carrying value and fair value of long-term debt and other financial instruments as of December 31, 2022 and 2021 are as follows (in thousands): December 31, 2022 Carrying Value Fair Value ABL Credit Facility due 2025 (2) $ — $ — 7.75 % Senior Secured Notes due 2025 (1) 277,137 276,785 Term Loan B Facility due 2026 (1) 198,268 201,094 12.875 % Senior Secured Notes due 2026 (1) 30,127 34,029 F-33 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 December 31, 2021 Carrying Value Fair Value ABL Credit Facility due 2025 (2) $ — $ — 7.75 % Senior Secured Notes due 2025 (1) 290,621 299,700 Term Loan B Facility due 2026 (1) 208,903 214,827 Senior Secured Notes due 2026 (1) 65,034 75,758 _________________________________________________________ (1) The fair value measurements of the 7.75% Senior Secured Notes, Term Loan B Facility, and 12.875% Senior Secured Notes are considered Level 2 measurements in the fair value hierarchy as discussed below. (2) The fair value measurements of the ABL Credit Facility is considered Level 3 measurements in the fair value hierarchy. 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, approximated their carrying value due to their short-term nature. Note 16— Leases We have cancellable and non-cancellable finance and operating lease liabilities for the lease of land, vehicles, office space, retail facilities, and other facilities used in the storage and transportation of crude oil and refined products. 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 residual value guarantees associated with any of our leases. The following table provides information on the amounts (in thousands, except lease term and discount rates) of our ROU assets and liabilities as of December 31, 2022 and 2021 and their placement within our consolidated balance sheets: Lease type Balance Sheet Location December 31, 2022 December 31, 2021 Assets Finance Property, plant, and equipment $ 21,150 $ 20,556 Finance Accumulated amortization ( 10,308 ) ( 8,397 ) Finance Property, plant, and equipment, net $ 10,842 $ 12,159 Operating Operating lease right-of-use assets 350,761 383,824 Total right-of-use assets $ 361,603 $ 395,983 Liabilities Current Finance Other accrued liabilities $ 1,782 $ 1,540 Operating Operating lease liabilities 66,081 53,640 Long-term Finance Finance lease liabilities 6,311 7,691 Operating Operating lease liabilities 292,701 335,094 Total lease liabilities $ 366,875 $ 397,965 Weighted-average remaining lease term (in years) Finance 5.60 6.29 Operating 9.00 11.28 Weighted-average discount rate Finance 7.38 % 7.46 % Operating 7.10 % 6.70 % F-34 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The following table summarizes the lease costs recognized in our consolidated statements of operations (in thousands): Year Ended December 31, Lease cost type 2022 2021 2020 Finance lease cost Amortization of finance lease ROU assets $ 1,917 $ 1,913 $ 2,007 Interest on lease liabilities 619 655 654 Operating lease cost 89,591 91,882 106,256 Variable lease cost 5,478 6,716 9,802 Short-term lease cost 8,575 1,013 1,926 Net lease cost $ 106,180 $ 102,179 $ 120,645 Operating lease income (1) $ ( 11,030 ) $ ( 3,149 ) $ ( 3,201 ) _________________________________________________________ (1) At December 31, 2022 and 2021, Property, plant, and equipment, net associated with leased assets was approximately $ 9.2 million and $ 10.8 million, respectively. 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): Year Ended December 31, Lease type 2022 2021 2020 Cash paid for amounts included in the measurement of liabilities Financing cash flows from finance leases $ 1,620 $ 1,914 $ 1,932 Operating cash flows from finance leases 614 658 656 Operating cash flows from operating leases 85,681 89,677 103,270 Non-cash supplemental amounts ROU assets obtained in exchange for new finance lease liabilities 594 1,936 3,476 ROU assets obtained in exchange for new operating lease liabilities 64,567 97,011 22,529 ROU assets terminated in exchange for release from finance lease liabilities — — — ROU assets terminated in exchange for release from operating lease liabilities 32,902 6,847 7,738 The table below includes the estimated future undiscounted cash flows for finance and operating leases as of December 31, 2022 (in thousands): For the year ending December 31, Finance leases Operating leases Total 2023 $ 2,286 $ 88,546 $ 90,832 2024 1,955 75,129 77,084 2025 1,794 50,823 52,617 2026 1,327 45,777 47,104 2027 1,098 43,575 44,673 Thereafter 1,582 160,849 162,431 Total lease payments 10,042 464,699 474,741 Less amount representing interest ( 1,949 ) ( 105,917 ) ( 107,866 ) Present value of lease liabilities $ 8,093 $ 358,782 $ 366,875 Additionally, we have $ 11.6 million and $ 3.8 million in future undiscounted cash flows for operating leases and finance 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. F-35 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Sale-Leaseback Transaction On February 11, 2021, PHL and Par Hawaii Property Company, LLC (collectively, the “Sellers”), both our wholly owned subsidiaries, entered into a Purchase Agreement and Escrow Instructions with MDC Coast HI 1, LLC, a subsidiary of Realty Income Corporation (the “Buyer”), and Fidelity National Title Insurance Company, pursuant to which the Sellers and Buyer agreed to consummate a sale-leaseback transaction (the “Sale-Leaseback Transactions”). Under the terms of the Purchase Agreement, the Sellers agreed to sell to the Buyer a total of twenty-two ( 22 ) retail convenience store/fuel station properties located in Hawaii (the “Sale-Leaseback Properties”) for an aggregate cash purchase price of $ 112.8 million, net of transaction fees. On February 23, 2021, the Sellers and Buyer closed the Sale-Leaseback Transactions with respect to twenty-one ( 21 ) Sale-Leaseback Properties for an aggregate cash purchase price of approximately $ 107.0 million, net of transaction fees. On March 12, 2021, the Sellers and Buyer closed the sale of one additional property for an aggregate cash purchase price of approximately $ 5.8 million, net of transaction fees. 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 consolidated statements of operations for the year ended December 31, 2021. Upon the closings of the sales of the Sale-Leaseback Properties, PHL entered into a Master Land and Building Lease Agreement (the “Lease Agreement”) with the Buyer, pursuant to which, among other things, PHL leased the Sale-Leaseback Properties from the Buyer, on a commercial triple-net basis, for 15 years unless earlier terminated. The initial lease term may be extended for up to four five-year renewal terms in accordance with the terms of the Lease Agreement. Under the terms of the Lease Agreement, PHL is responsible for monthly rent and all expenses related to the leased facilities, including, but not limited to, insurance premiums, taxes, and other expenses, such as utilities. As a result of the Sale-Leaseback Transactions, we recorded operating ROU assets and lease liabilities of $ 81.3 million. Certain of the Sale-Leaseback Properties were treated as failed sale-leaseback transactions based on the terms of the lease. As such, we retained the book value of the assets and recognized a finance liability of $ 12.4 million included in Other accrued liabilities and Other liabilities on our consolidated balance sheet. In connection with PHL’s entry into the Lease Agreement, Par Petroleum, LLC, our wholly owned subsidiary, entered into a guaranty agreement in favor of the Buyer, pursuant to which, among other things, Par Petroleum, LLC guaranteed the payment when due of the monthly rent, and all other additional rent, interest, and charges payable by PHL to the Buyer under the Lease Agreement, and the performance by PHL of all the material terms, conditions, covenants, and agreements of the Lease Agreement. Note 17— Commitments and Contingencies In the ordinary course of business, we are a party to various lawsuits and other contingent matters. We establish accruals for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. 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. Tax and Related Matters We are also party to various other legal proceedings, claims, and regulatory, tax or government audits, inquiries and investigations that arise in the ordinary course of business. From time to time, Par Hawaii Refining, LLC has appealed various tax assessments related to its land, buildings, and fuel storage tanks, and is currently appealing the City of Honolulu’s property tax assessment for tax year 2023. During the first quarter of 2022, we received a tax assessment in the amount of $ 1.4 million from the Washington Department of Revenue related to its audit of certain taxes allegedly payable on certain sales of raw vacuum gas oil between 2014 and 2016. We believe the Department of Revenue’s interpretation is in conflict with its prior guidance and we appealed in November 2022. By opinion dated September 22, 2021, the Hawaii Attorney General reversed a prior 1964 opinion exempting various business transactions conducted in Hawaii foreign trade zone from certain state taxes. We and other similarly situated state taxpayers who had previously claimed such exemptions, certain of which we are contractually obligated to indemnify, 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. and certain unnamed defendants made false claims and statements in connection with various state tax returns related to our business conducted within the Hawaii foreign trade zone, and seeking unspecified damages, penalties, interest and injunctive relief. We dispute the allegations in the complaint and intend to vigorously defend ourselves in such proceeding. We believe the likelihood of an unfavorable outcome in these matters to be neither probable nor reasonably estimable. F-36 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 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 management activities. Many of these regulations are becoming increasingly stringent and the cost of compliance can be expected to increase over time. Periodically, we receive communications from various federal, state, and local governmental authorities asserting violations of environmental laws and/or regulations. These governmental entities may also propose or assess fines or require corrective actions for these asserted violations. Except as disclosed below, we do not anticipate that any such matters currently asserted will have a material impact on our financial condition, results of operations, or cash flows. Wyoming Refinery Our Wyoming refinery is subject to a number of consent decrees, orders, and settlement agreements involving the EPA and/or the Wyoming Department of Environmental Quality, some of which date back to the late 1970s and several of which remain in effect, requiring further actions at the Wyoming refinery. The largest cost component arising from these various decrees relates to the investigation, monitoring, and remediation of soil, groundwater, surface water and sediment contamination associated with the facility’s historic operations. Investigative work by Hermes Consolidated LLC, and its wholly owned subsidiary, Wyoming Pipeline Company (collectively, “WRC” or “Wyoming Refining”) and negotiations with the relevant agencies as to remedial approaches remain ongoing on a number of aspects of the contamination, meaning that investigation, monitoring, and remediation costs are not reasonably estimable for some elements of these efforts. As of December 31, 2022, we have accrued $ 14.8 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. Based on current information, reasonable estimates we have received suggest costs of approximately $ 11.6 million to design and construct a new wastewater treatment system. Finally, among the various historic consent decrees, orders, and settlement agreements into which Wyoming Refining has entered, there are several penalty orders associated with exceedances of permitted limits by the Wyoming refinery’s wastewater discharges. Although the frequency of these exceedances has declined over time, Wyoming Refining may become subject to new penalty enforcement action in the next several years, which could involve penalties in excess of $ 300,000 . Regulation of Greenhouse Gases Under the Energy Independence and Security Act (the “EISA”), the Renewable Fuel Standard (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. In the near term, the RFS will be satisfied primarily with fuel ethanol blended into gasoline or by purchasing renewable credits, referred to as RINs, to maintain compliance. For additional information, please read Item 1. — Business — Environmental Regulations. As of December 31, 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. 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. There will be compliance costs and uncertainties regarding how we will comply with the various requirements contained in the EISA, RFS, and other fuel-related regulations. We may experience a decrease in demand for refined petroleum products due to an increase in combined fleet mileage or due to refined petroleum products being replaced by renewable fuels. Environmental Agreement On September 25, 2013, Par Petroleum, LLC (formerly Hawaii Pacific Energy, a wholly owned subsidiary of Par created for purposes of the acquisition of PHR), Tesoro Corporation (“Tesoro”), and PHR entered into an Environmental F-37 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Agreement (“Environmental Agreement”) that allocated responsibility for known and contingent environmental liabilities related to the acquisition of PHR, including a consent decree. Indemnification In addition to its obligation to reimburse us for capital expenditures incurred pursuant to a consent decree, Tesoro agreed to indemnify us for claims and losses arising out of related breaches of Tesoro’s representations, warranties, and covenants in the Environmental Agreement, certain defined “corrective actions” relating to pre-existing environmental conditions, third-party claims arising under environmental laws for personal injury or property damage arising out of or relating to releases of hazardous materials that occurred prior to the date of the closing of the PHR acquisition, any fine, penalty, or other cost assessed by a governmental authority in connection with violations of environmental laws by PHR prior to the date of the closing of the PHR acquisition, certain groundwater remediation work, fines, or penalties imposed on PHR by a consent decree related to acts or omissions of Tesoro prior to the date of the closing of the PHR acquisition, and claims and losses related to the Pearl City Superfund Site. Tesoro’s indemnification obligations are subject to certain limitations as set forth in the Environmental Agreement. 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. Recovery Trusts We emerged from the reorganization of Delta Petroleum Corporation (“Delta”) on August 31, 2012 (“Emergence Date”), when the plan of reorganization (“Plan”) was consummated. On the Emergence Date, we formed the Delta Petroleum General Recovery Trust (“General Trust”). The General Trust was formed to pursue certain litigation against third parties, including preference actions, fraudulent transfer and conveyance actions, rights of setoff and other claims, or causes of action under the U.S. Bankruptcy Code and other claims and potential claims that Delta and its subsidiaries (collectively, “Debtors”) hold against third parties. On February 27, 2018, the Bankruptcy Court entered its final decree closing the Chapter 11 bankruptcy cases of Delta and the other Debtors, discharging the trustee for the General Trust, and finding that all assets of the General Trust were resolved, abandoned, or liquidated and have been distributed in accordance with the requirements of the Plan. In addition, the final decree required the Company or the General Trust, as applicable, to maintain the current accruals owed on account of the remaining claims of the U.S. Government and Noble Energy, Inc. As of December 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. 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 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. The settlement of claims is subject to ongoing litigation and we are unable to predict with certainty how many shares will be required to satisfy all claims. Pursuant to the Plan, allowed claims are settled at a ratio of 54.4 shares per $1,000 of claim. Major Customers We sell a variety of refined products to a diverse customer base. For each of the years ended December 31, 2022, 2021, and 2020, we had one customer in our refining segment that accounted for 17 %, 13 %, and, 13 %, respectively, of our consolidated revenue. No other customer accounted for more than 10% of our consolidated revenues during the years ended December 31, 2022, 2021, and 2020. F-38 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Note 18— Stockholders’ Equity Common Stock Our certificate of incorporation contains restrictions on the transfer of certain of our securities in order to preserve the net operating loss carryovers, capital loss carryovers, general business credit carryovers, and foreign tax credit carryovers, as well as any “net unrealized built-in loss” within the meaning of Section 382 of the Internal Revenue Service Code, of us or any direct or indirect subsidiary thereof. These restrictions include provisions regarding approval by our Board of Directors of transfers of common stock by holders of five percent or more of the outstanding common stock. Our debt agreements restrict the payment of dividends. Registration Rights Agreement In connection with our emergence from bankruptcy on August 31, 2012, we entered into a registration rights agreement (“Registration Rights Agreement”) providing the stockholders party thereto (“Stockholders”) with certain registration rights. The Registration Rights Agreement states that at any time after the consummation of a qualified public offering, any Stockholder or group of Stockholders that, together with its or their affiliates, holds more than fifteen percent of the Registrable Shares (as defined in the Registration Rights Agreement), will have the right to require us to file with the SEC a registration statement for a public offering of all or part of its Registrable Shares (each a “Demand Registration”), by delivery of written notice to the company (each, a “Demand Request”). Within 90 days after receiving the Demand Request, we must file with the SEC the registration statement with respect to the Demand Registration, subject to certain limitations as set forth in the Registration Rights Agreement. We are required to use commercially reasonable efforts to cause the registration statement to be declared effective as soon as practicable after such filing. In addition, subject to certain exceptions, if we propose to register any class of common stock for sale to the public, we are required, subject to certain conditions, to include all Registrable Shares with respect to which we have received written requests for inclusion. In connection with the closing of a private placement, we entered into an additional registration rights agreement with the purchasers of the shares. Under this registration rights agreement, we agreed to file a registration statement relating to the shares of common stock with the SEC within 60 days after the closing date of the sale which would be declared effective within 180 days of the closing date of the sale. We also agreed to use commercially reasonable efforts to keep the registration statement effective until the earliest to occur of (i) the disposition of all registrable securities, (ii) the availability under Rule 144 of the Securities Act of 1933, as amended, for each holder of registrable securities to immediately freely resell such registrable securities without volume restrictions, or (iii) the third anniversary of the effective date of the registration statement. This registration rights agreement also provides the right for a holder or group of holders of more than $ 50 million of registrable securities to demand that we conduct an underwritten public offering of the registrable securities. However, the demanding holders are limited to a total of three such underwritten offerings, with no more than one demand request for an underwritten offering made in any 365 day period. Additionally, this registration rights agreement contains customary indemnification rights and obligations for both us and the holders of registrable securities. If this registration statement does not remain effective for the applicable effectiveness period described above then from that date until cured, we must pay, as liquidated damages and not as a penalty, an amount in cash equal to 0.25 % of the purchaser’s allocated purchase price per calendar month, not to exceed 0.75 % of the allocated purchase price. The registration rights granted in each rights agreement are subject to customary indemnification and contribution provisions, as well as customary restrictions such as suspension periods and, if a registration is for an underwritten offering, limitations on the number of shares to be included in the underwritten offering imposed by the managing underwriter. Issuance of Common Stock On March 16, 2021, we entered into an underwriting agreement with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters named therein, in connection with an underwritten public offering (the “Equity Offering”) of 5.75 million shares of common stock, par value $ 0.01 per share, at a public offering price of $ 16.00 per share. We completed the issuance of these shares on March 19, 2021. The net proceeds from the Equity Offering were F-39 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 approximately $ 87.2 million, after deducting underwriting discounts and commissions and offering expenses. We used the net proceeds from the Equity Offering to repay the remaining $ 48.7 million in aggregate 5.00% Convertible Senior Notes due at maturity in June 2021 and $ 36.8 million in aggregate principal amount of 12.875% Senior Secured Notes, and the remainder for general corporate purposes, including capital expenditures and funding working capital. Share Repurchase Program On November 10, 2021, the Board authorized and approved a share repurchase program for up to $ 50 million of the currently outstanding shares of the Company’s common stock. Under the share repurchase program, the Company intends to repurchase shares through open market purchases, privately negotiated transactions, block purchases, or otherwise in accordance with applicable federal and state laws. The share repurchase program does not have a specified end date and may be limited or terminated at any time without prior notice. During the years ended December 31, 2022 and 2021, 420 thousand and 59 thousand shares were repurchased under this share repurchase program for a total of $ 5.8 million and $ 0.8 million, respectively. Incentive Plans Our incentive compensation plans are described below. Long Term Incentive Plan Under the Par Petroleum Corporation 2012 Long Term Incentive Plan (“Incentive Plan” or “LTIP”), as amended and restated, the Board, or a committee of the Board, may grant incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, and performance restricted stock units to directors and other employees or those of our subsidiaries. The maximum number of shares that may be granted under the LTIP is 9.0 million shares of common stock. At December 31, 2022, 3.4 million shares were available for future grants and awards under the LTIP. Restricted stock and restricted stock units awarded under the Incentive Plan are subject to restrictions, terms, and conditions, including forfeitures, as may be determined by the Board. During the period in which such restrictions apply, unless specifically provided otherwise in accordance with the terms of the Incentive Plan, the recipient of the restricted stock would be the record owner of the shares and have all of the rights of a stockholder with respect to the shares, including the right to vote and the right to receive dividends or other distributions made or paid with respect to the shares. The recipient of restricted stock units shall not have any of the rights of a stockholder of the Company until such units vest and convert into shares of common stock. The fair value of the restricted stock and stock units is generally determined based upon the quoted market price of our common stock on the date of grant. Restricted stock awards generally vest ratably over a four-year period. Restricted stock units do not vest ratably, rather they generally vest in full at the end of three years , while some restricted stock units vest over the same period of time with a one-year cliff. Stock options are issued with an exercise price equal to the fair market value of our common stock on the date of grant and are subject to such other terms and conditions as may be determined by the Board. The options generally expire eight years from the grant date, unless granted by the Board for a shorter term. Option grants generally vest ratably over a four-year period. Stock Purchase Plan The Stock Purchase Plan (as amended, the “SPP”) is limited to the Company’s qualifying executive officers and directors who qualify as accredited investors under Rule 501(a) of the Securities Act of 1933, as amended. The SPP provides that each participant may, subject to compliance with securities laws and other regulations and only during “window periods” as described in our insider trading policy as in effect from time to time, until the later to occur of (a) December 31, 2015 or (b) the eighteen month anniversary of the date that the participant commenced his or her employment or service with us, purchase, in a single transaction, up to $ 1 million of shares of our common stock (“the SPP Shares”) at a per share purchase price equal to the closing price of the common stock on the date of purchase. The sale or transfer of the SPP Shares by such participant would be limited for the earlier of (i) two years from the date of purchase or (ii) the termination of the participant’s service with us or any affiliates for any reason. Additionally, the SPP provides that each purchasing participant will be granted a number of shares of restricted common stock under the Incentive Plan equal to 20 % of the SPP Shares purchased with 50 % of the restricted common stock vesting on each of the two annual anniversaries of the date of grant. Each purchasing participant will also be granted nonstatutory stock options with a 5-year term to purchase a number of shares of common stock under the Incentive Plan (with an exercise price equal to the Fair Market Value as defined in the Incentive Plan on the date of grant) equal to certain specified percentages of the SPP Shares purchased based on a Black-Scholes model with 50 % of the options vesting on each of the two annual anniversaries of the date of grant. Such percentages are as follows: 50 % for a non-employee chairman of the Board, 35 % for non-employee members of the Board, and 50 % - 70 % for executive officers. F-40 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The following table summarizes our compensation costs recognized in General and administrative expense (excluding depreciation) and Operating expense (excluding depreciation) under the Incentive Plan and Stock Purchase Plan (in thousands): Years Ended December 31, 2022 2021 2020 Restricted Stock Awards $ 5,172 $ 4,657 $ 3,939 Restricted Stock Units $ 1,451 $ 1,356 $ 1,510 Stock Option Awards $ 2,540 $ 1,939 $ 1,660 Employee Stock Purchase Plan Under the Par Pacific Holdings, Inc. 2018 Employee Stock Purchase Plan (“ESPP”), eligible employees may elect to purchase the Company’s common stock at 85 % of the market price on the purchase date. Eligible employees may invest from 0 % to 10 % of their annual income subject to a $ 15 thousand annual maximum. The Board, or a committee of the Board, is authorized to set the market price discount percentages, any holding periods, and other purchasing terms and timing. The Company’s shareholders ratified the ESPP on May 8, 2018. The maximum number of shares that may be issued under the ESPP is 500 thousand shares of common stock. At December 31, 2022, 135 thousand shares remained available under the ESPP. During each of the years ended December 31, 2022, 2021, and 2020, we recognized $ 0.2 million of compensation costs in General and administrative expense (excluding depreciation) and Operating expense (excluding depreciation) related to the 15 % discount offered to employees under the ESPP. During the years ended December 31, 2022, 2021, and 2020, employees purchased 67 thousand, 85 thousand, and 145 thousand shares under the ESPP, respectively. Management Stock Purchase Plan On February 26, 2019, our Board approved the Par Pacific Holdings, Inc. 2019 Management Stock Purchase Plan (the “MSPP”). The MSPP provides executive management with an opportunity to receive restricted stock units (“RSUs”) by converting a portion of their cash bonus compensation into RSUs (“Deferred RSUs”) and receiving awards of matching RSUs, the amount of which are determined by the amount of compensation converted (“Matching RSUs”). A Deferred RSU and a Matching RSU each represents a right to receive one share of the Company’s common stock in the future, subject to the terms and conditions of the MSPP, including, but not limited to, vesting requirements. Shares of common stock issued pursuant to awards of Deferred RSUs and Matching RSUs will be issued from the shares reserved for issuance under the LTIP. As of December 31, 2022, no Deferred RSUs or Matching RSUs had been issued under the MSPP. Restricted Stock Awards and Restricted Stock Units The following tables summarize our restricted stock activity (in thousands, except per share amounts): Shares Weighted- Average Grant Date Fair Value Unvested balance at December 31, 2021 760 $ 17.19 Granted 464 15.27 Vested ( 336 ) 17.01 Forfeited ( 94 ) 16.49 Unvested balance at December 31, 2022 794 $ 16.24 Years Ended December 31, 2022 2021 2020 Weighted-average grant-date fair value per share of restricted stock awards and restricted stock units granted (in dollars) $ 15.27 $ 16.38 $ 16.97 Fair value of restricted stock awards and restricted stock units vested $ 5,718 $ 4,370 $ 3,787 As of December 31, 2022 and 2021, there were approximately $ 8.8 million and $ 9.0 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 1.69 years and 1.74 years, respectively. F-41 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Performance Restricted Stock Units The following tables summarize our performance restricted stock activity (in thousands, except per unit amounts): Units Weighted- Average Grant Date Fair Value Unvested balance at December 31, 2021 158 $ 17.61 Granted 50 14.91 Vested ( 70 ) 17.31 Forfeited ( 25 ) 16.81 Unvested balance at December 31, 2022 113 $ 16.78 Years Ended December 31, 2022 2021 2020 Weighted-average grant-date fair value per share of performance restricted stock units granted (in dollars) $ 14.91 $ 16.52 $ 19.73 Fair value of performance restricted stock units vested $ 1,343 $ 940 $ 783 Performance restricted stock units a re subject to certain annual performance targets based on three-year performance periods as defined by our Board. As of December 31, 2022 and 2021, there were approximately $ 0.7 million and $ 1.1 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 1.69 years and 1.76 years, respectively. Stock Option Grants The fair value of each option is estimated on the grant date using the Black-Scholes option pricing model. The expected term represents the period of time that options are expected to be outstanding and is based upon the term of the option. The expected volatility represents the extent to which our stock price is expected to fluctuate between the grant date and the expected term of the award. We do not use an expected dividend yield in our fair value measurement as we are restricted from the payment of dividends. The risk-free rate is the implied yield available on U.S. Treasury securities with a remaining term equal to the expected term of the option at the date of grant. The weighted-average assumptions used to measure stock options granted during 2022, 2021, and 2020 are presented below. 2022 2021 2020 Expected life from date of grant (in years) 5.3 5.3 5.3 Expected volatility 55.4 % 53.2 % 33.2 % Risk-free interest rate 1.83 % 0.64 % 1.31 % The following table summarizes our stock option activity (in thousands, except per share amounts and term years): Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding balance at December 31, 2021 2,195 $ 18.50 4.2 $ 446 Issued 449 14.91 Exercised ( 349 ) 16.79 Forfeited / canceled / expired ( 275 ) 19.13 Outstanding balance at December 31, 2022 2,020 $ 17.92 4.3 $ 10,779 Exercisable, end of year 1,300 $ 18.94 3.2 $ 5,608 F-42 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The estimated weighted-average grant-date fair value per share of options granted during the year ended December 31, 2022, 2021, and 2020 was $ 7.44 , $ 7.72 , and $ 6.30 , respectively. As of December 31, 2022 and 2021, there were approximately $ 3.7 million and $ 3.8 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 1.79 years and 1.76 years, respectively. Note 19— Benefit Plans Defined Contribution Plans We maintain defined contribution plans for our employees. All eligible employees, including our U.S. Oil & Refining Co. employees beginning January 1, 2020, may participate in our Par plan after thirty days of service. For all employees participating in the Par plan, excluding participating U.S. Oil union employees, we match employee contributions up to a maximum of 6 % of the employee’s eligible compensation, with the employer contributions vesting at 100 %. Beginning in January 2021 and as part of cost reductions in response to the impact of the COVID-19 pandemic on our businesses, we temporarily suspended matching employee contributions for salaried employees with 2020 annual earnings in excess of the IRS highly compensated limit of $ 130,000 . In January 2022, we resumed matching of all previously-suspended employee contributions. For the years ended December 31, 2022, 2021, and 2020, we made contributions to the plans totaling approximately $ 5.2 million, $ 3.1 million, and $ 5.6 million, respectively. Defined Benefit Plans We maintain defined benefit pension plans (the “Benefit Plans”) covering eligible Wyoming Refining employees and the employees of U.S. Oil covered by a collective bargaining agreement. Benefits under our Wyoming Refining plan are based on years of service and the employee’s highest average compensation received during five consecutive years of the last ten years of employment. Benefits under our U.S. Oil plan are based on the employee’s hourly rate of compensation at the beginning of each year of employment. Our funding policy is to contribute annually an amount equal to the pension expense, subject to the minimum funding requirements of the Employee Retirement Income Security Act of 1974 and the tax deductibility of such contributions. In December 2016, the Wyoming Refining plan was amended to freeze all future benefit accruals for salaried employees. In March 2021, the Wyoming Refining plan was amended (the “Plan Amendment”) to freeze all future benefit accruals for hourly plan participants. The Plan Amendment reduced the projected benefit obligation by $ 6.0 million. We recorded a $ 2.0 million Gain on curtailment of pension obligation in our consolidated statements of operations for the year ended December 31, 2021, and an unrealized actuarial gain of $ 4.0 million as Other post-retirement benefits income (loss), net of tax, in our consolidated statements of other comprehensive income for the year ended December 31, 2021. Similar to the evaluation done for the estimate as of December 31, 2020, the projected benefit obligation estimate was determined based on the present value of projected future benefit payments. In determining the discount rate, we used pricing and yield information for high-quality corporate bonds that result in payments similar to the estimated distributions of benefits from our plans. The weighted average discount rate used to determine benefit obligations increased from 2.65 % to 3.25 %, or 23 %, from December 31, 2020 to March 31, 2021. The estimated rate of compensation increase remained 3 % at the time of curtailment. F-43 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The changes in the projected benefit obligation and the fair value of plan assets of our Benefit Plans for the years ended December 31, 2022 and 2021 were as follows (in thousands): 2022 2021 Changes in projected benefit obligation: Projected benefit obligation as of the beginning of the period $ 56,411 $ 60,479 Service cost 821 1,140 Interest cost 1,538 1,538 Plan amendment — ( 446 ) Actuarial gain (1) ( 15,178 ) ( 2,508 ) Benefits paid ( 2,225 ) ( 1,760 ) Curtailment — ( 2,032 ) Projected benefit obligation as of the end of the period $ 41,367 $ 56,411 Changes in fair value of plan assets: Fair value of plan assets as of the beginning of the period $ 49,821 $ 46,161 Actual return (loss) on plan assets ( 6,957 ) 5,420 Employer contributions — — Benefits paid ( 2,225 ) ( 1,760 ) Fair value of plan assets as of the end of the period $ 40,639 $ 49,821 ____________________________________________________ (1) For the year ended December 31, 2022, the change in the actuarial gain was due to an increase in the discount rate. For the year ended December 31, 2021, the change in the actuarial gain was due to an increase in the discount rate and strong asset performance. The underfunded status of our Benefit Plans is recorded within Other liabilities on our consolidated balance sheets and the funded status of our Benefit Plans is recorded within Other long-term assets on our consolidated balance sheets. The reconciliation of the underfunded status of our Benefit Plans of December 31, 2022 and 2021 was as follows: 2022 2021 WY Refining U.S. Oil WY Refining U.S. Oil Projected benefit obligation 24,730 16,637 34,333 22,078 Fair value of plan assets 21,940 18,699 28,076 21,745 Underfunded/(overfunded) status $ 2,790 $ ( 2,062 ) $ 6,257 $ 333 Amounts recognized in consolidated balance sheet: Non-current assets — 2,062 — — Non-current liabilities ( 2,790 ) — ( 6,257 ) ( 333 ) Net amount recorded $ ( 2,790 ) $ 2,062 $ ( 6,257 ) $ ( 333 ) Gross amounts recognized in accumulated other comprehensive income (loss): (1) Net actuarial gain (loss) 5,243 ( 318 ) 2,188 ( 2,892 ) Total accumulated other comprehensive income (loss) $ 5,243 $ ( 318 ) $ 2,188 $ ( 2,892 ) ____________________________________________________ (1) For the year ended December 31, 2022, we recognized an immaterial amount of service costs in accumulated other comprehensive income. F-44 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Weighted-average assumptions used to measure our projected benefit obligation as of December 31, 2022, 2021, and 2020 and net periodic benefit costs for the years ended December 31, 2022, 2021 and 2020 are as follows: 2022 2021 2020 Projected benefit obligation: Wyoming Refining plan Discount rate (1) 5.15 % 2.85 % 2.65 % Rate of compensation increase — % — % 3.00 % U.S. Oil plan Discount rate (1) 5.00 % 2.70 % 2.35 % Rate of compensation increase 3.00 % 3.00 % 3.00 % Net periodic benefit costs: Wyoming Refining plan Discount rate (1) 2.85 % 3.25 % 3.30 % Expected long-term rate of return (2) 5.75 % 5.75 % 6.25 % Rate of compensation increase — % 3.00 % 3.00 % U.S. Oil plan Discount rate (1) 2.70 % 2.35 % 3.10 % Expected long-term rate of return (2) 6.00 % 6.00 % 6.00 % Rate of compensation increase 3.00 % 3.00 % 3.00 % _________________________________________________________ (1) In determining the discount rate, we use pricing and yield information for high-quality corporate bonds that result in payments similar to the estimated distributions of benefits from our plans. (2) The expected long-term rate of return is based on the target asset allocation of each plan and capital market assumptions developed using forward-looking models and historical market data and trends. The net periodic benefit credit for the years ended December 31, 2022, 2021, and 2020 includes the following components: 2022 2021 2020 Components of net periodic benefit (credit): Service cost $ 821 $ 1,140 $ 1,347 Interest cost 1,538 1,538 1,642 Expected return on plan assets ( 2,596 ) ( 2,375 ) ( 2,323 ) Amortization of net loss 3 245 176 Amortization of prior service cost — — 1 Effect of curtailment — ( 2,032 ) — Net periodic benefit credit $ ( 234 ) $ ( 1,484 ) $ 843 The Service cost component of net periodic benefit cost is included in Operating expense (excluding depreciation) on our consolidated statement of operations for the years ended December 31, 2022, 2021, and 2020. The other components of net periodic benefit cost are included in Other income (expense), net on our consolidated statement of operations for the years ended December 31, 2022, 2021, and 2020. F-45 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The weighted-average asset allocation for our Wyoming Refining plan at December 31, 2022 is as follows: Target Actual Asset category: Equity securities 40 % 33 % Debt securities 50 % 49 % Real estate 10 % 18 % Total 100 % 100 % The weighted-average asset allocation for our U.S. Oil plan at December 31, 2022 is as follows: Target Actual Asset category: Equity securities 56 % 50 % Debt securities 43 % 50 % Cash and Cash Equivalents 1 % — % Total 100 % 100 % We have a long-term, risk-controlled investment approach using diversified investment options with minimal exposure to volatile investment options like derivatives. Our Benefit Plans’ assets are invested in pooled separate accounts administered by the Benefit Plans’ custodians. The underlying assets in the pooled separate accounts are invested in equity securities, debt securities, real estate, or cash and cash equivalents. The pooled separate accounts are valued based upon the fair market value of the underlying investments and are deemed to be Level 2. We do no t intend to make any contributions to the Wyoming Refining plan or U.S. Oil plan during 2023. Based on current data and assumptions, the following benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next 10 years: Year Ended 2023 $ 2,281 2024 2,322 2025 2,404 2026 2,632 2027 2,628 Thereafter 13,441 $ 25,708 Note 20— Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the sum of the weighted-average number of common shares outstanding and the weighted-average number of shares issuable under the common stock warrants, representing 61 thousand shares during the year ended December 31, 2020. The common stock warrants are included in the calculation of basic income (loss) per share for the year ended December 31, 2020, because they were issuable for minimal consideration. As of March 31, 2020, the previously outstanding common stock warrants had been exercised for common stock and no warrants were outstanding. F-46 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2022 2021 2020 Net income (loss) $ 364,189 $ ( 81,297 ) $ ( 409,086 ) Plus: Net income effect of convertible securities — — — Numerator for diluted income (loss) per common share $ 364,189 $ ( 81,297 ) $ ( 409,086 ) Basic weighted-average common stock shares outstanding 59,544 58,268 53,295 Plus: dilutive effects of common stock equivalents (1) 339 — — Diluted weighted-average common stock shares outstanding 59,883 58,268 53,295 Basic income (loss) per common share $ 6.12 $ ( 1.40 ) $ ( 7.68 ) Diluted income (loss) per common share $ 6.08 $ ( 1.40 ) $ ( 7.68 ) Diluted income (loss) per common share excludes the following equity instruments because their effect would be anti-dilutive: Shares of unvested restricted stock 234 925 475 Shares of stock options 1,868 2,386 2,229 Common stock equivalents using the if-converted method of settling the 5.00% Convertible Senior Notes (2) — 1,230 2,704 ________________________________________________________ (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 loss per common share for the years ended December 31, 2021 and 2020. (2) We had no 5.00 % Convertible Senior Notes outstanding for the year ended December 31, 2022 . Note 21— Income Taxes As of December 31, 2022, we had approximately $ 1.2 billion in net operating loss carryforwards (“NOL carryforwards”); however, we currently have a valuation allowance against this and substantially all of our other deferred tax assets. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. 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. For the year ended December 31, 2022, we recorded an income tax expense of $ 0.7 million primarily driven by an increase in state taxable income. For the year ended December 31, 2021, we recorded an income tax expense of $ 1.0 million primarily driven by foreign withholding taxes. For the year ended December 31, 2020, we recorded an income tax benefit of $ 20.7 million primarily driven by an increase in our net operating loss carryforwards and the change in our indefinitely-lived goodwill due to the impairments. 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 December 31, 2022 and 2021. In connection with our emergence from bankruptcy on August 31, 2012, we experienced an ownership change as defined under Section 382 of the Code. Section 382 generally places a limit on the amount of NOL carryforwards and other tax attributes arising before an ownership change that may be used to offset taxable income after an ownership change. We believe that we have qualified for an exception to the general limitation rules under Code Section 382(l)(5) which provides for substantially less restrictive limitations on our NOL carryforwards. Our amended and restated certificate of incorporation places restrictions upon the ability of certain equity interest holders to transfer their ownership interest in us. These restrictions are designed to provide us with the maximum assurance that another ownership change does not occur that could adversely impact our NOL carryforwards. 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 December 31, 2022. F-47 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Our net taxable income must be apportioned to various states based upon the income tax laws of the states in which we derive our revenue. Our NOL carryforwards will not always be available to offset taxable income apportioned to the various states. The states from which our refining, logistics, and retail revenues are derived are not the same states in which our NOLs were incurred; therefore, we expect to incur state tax liabilities in connection with our refining, logistics, and retail operations. We will continue to assess the realizability of our deferred tax assets based on consideration of actual operating results. If sufficient positive evidence of improving actual operating results becomes available, the amount of the deferred tax asset considered more likely than not to be recognized would be increased with a corresponding reduction in income tax expense in the period recorded. Income tax expense (benefit) consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current: U.S.—Federal $ — $ — $ — U.S.—State 362 26 51 Foreign 73 1,255 125 Deferred: U.S.—Federal 236 ( 223 ) ( 20,509 ) U.S.—State 39 ( 37 ) ( 387 ) Total $ 710 $ 1,021 $ ( 20,720 ) Income tax expense was different from the amounts computed by applying U.S. Federal income tax rate to pretax income as a result of the following: Year Ended December 31, 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 0.1 % — % 0.1 % Foreign taxes — % ( 1.6 ) % — % Change in valuation allowance related to current activity ( 21.3 ) % ( 20.1 ) % ( 14.0 ) % Permanent items 0.4 % ( 0.6 ) % ( 2.3 ) % Actual income tax rate 0.2 % ( 1.3 ) % 4.8 % F-48 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Deferred tax assets (liabilities) are comprised of the following (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating loss $ 308,457 $ 424,112 Intangible assets 830 1,912 Environmental credit obligations 71,424 40,097 Other 4,099 16,137 Total deferred tax assets 384,810 482,258 Valuation allowance ( 330,456 ) ( 421,387 ) Net deferred tax assets 54,354 60,871 Deferred tax liabilities: Inventory 5,891 9,820 Property and equipment 54,124 56,436 Total deferred tax liabilities 60,015 66,256 Total deferred tax liability, net $ ( 5,661 ) $ ( 5,385 ) We have NOL carryforwards as of December 31, 2022 of $ 1.2 billion for federal income tax purposes. If not utilized, approximately $ 1.0 billion of our NOL carryforwards will expire during 2029 through 2037. Approximately $ 0.2 billion of our NOL carryforwards do not expire. F-49 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 Note 22— Segment Information We report the results for the following four reportable segments: (i) Refining, (ii) Logistics, (iii) Retail, and (iv) Corporate and Other. Summarized financial information concerning reportable segments consists of the following (in thousands): For the year ended December 31, 2022 Refining Logistics Retail Corporate, Eliminations, and Other (1) Total Revenues $ 7,046,060 $ 198,821 $ 570,206 $ ( 493,302 ) $ 7,321,785 Cost of revenues (excluding depreciation) 6,332,694 109,458 428,712 ( 494,850 ) 6,376,014 Operating expense (excluding depreciation) 245,992 14,988 81,229 — 342,209 Depreciation and amortization 65,472 20,579 10,971 2,747 99,769 Loss (gain) on sale of assets, net 1 ( 253 ) 56 27 ( 169 ) General and administrative expense (excluding depreciation) — — — 62,396 62,396 Acquisition and integration costs — — — 3,663 3,663 Operating income (loss) $ 401,901 $ 54,049 $ 49,238 $ ( 67,285 ) $ 437,903 Interest expense and financing costs, net ( 68,288 ) Debt extinguishment and commitment costs ( 5,329 ) Gain on curtailment of pension obligation — Other income, net 613 Income before income taxes 364,899 Income tax expense ( 710 ) Net income $ 364,189 Total assets $ 2,580,298 $ 412,336 $ 244,233 $ 43,780 $ 3,280,647 Goodwill 39,821 55,232 34,272 — 129,325 Capital expenditures 31,967 12,094 7,652 1,312 53,025 ________________________________________________________ (1) Includes eliminations of intersegment revenues and cost of revenues of $ 493.3 million for the year ended December 31, 2022. F-50 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 For the year ended December 31, 2021 Refining Logistics Retail Corporate, Eliminations, and Other (1) Total Revenues $ 4,471,111 $ 184,734 $ 456,416 $ ( 402,172 ) $ 4,710,089 Cost of revenues (excluding depreciation) 4,306,371 96,828 337,476 ( 402,201 ) 4,338,474 Operating expense (excluding depreciation) 213,102 14,722 71,845 — 299,669 Depreciation and amortization 58,258 22,044 10,880 3,059 94,241 Impairment expense 1,838 — — — 1,838 Loss on sale of assets, net ( 19,659 ) ( 19 ) ( 45,034 ) 15 ( 64,697 ) General and administrative expense (excluding depreciation) — — — 48,096 48,096 Acquisition and integration costs — — — 87 87 Operating income (loss) $ ( 88,799 ) $ 51,159 $ 81,249 $ ( 51,228 ) $ ( 7,619 ) Interest expense and financing costs, net ( 66,493 ) Debt extinguishment and commitment costs ( 8,144 ) Gain on curtailment of pension obligation 2,032 Other expense, net ( 52 ) Loss before income taxes ( 80,276 ) Income tax expense ( 1,021 ) Net loss $ ( 81,297 ) Total assets $ 1,928,987 $ 398,182 $ 228,245 $ 14,837 $ 2,570,251 Goodwill 39,821 55,232 32,209 — 127,262 Capital expenditures 15,689 6,801 5,917 1,126 29,533 ________________________________________________________ (1) Includes eliminations of intersegment revenues and cost of revenues of $ 402.2 million for the year ended December 31, 2021. F-51 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 For the year ended December 31, 2020 Refining Logistics Retail Corporate, Eliminations, and Other (1) Total Revenues $ 2,886,701 $ 180,909 $ 363,713 $ ( 306,453 ) $ 3,124,870 Cost of revenues (excluding depreciation) 2,908,870 110,385 234,885 ( 306,443 ) 2,947,697 Operating expense (excluding depreciation) 199,738 13,581 64,108 — 277,427 Depreciation and amortization 53,930 21,899 10,692 3,515 90,036 Impairment expense 55,989 — 29,817 — 85,806 General and administrative expense (excluding depreciation) — — — 41,288 41,288 Acquisition and integration costs — — — 614 614 Operating income (loss) $ ( 331,826 ) $ 35,044 $ 24,211 $ ( 45,427 ) $ ( 317,998 ) Interest expense and financing costs, net ( 70,222 ) Other income, net 1,049 Change in value of common stock warrants 4,270 Equity losses from Laramie Energy, LLC ( 46,905 ) Loss before income taxes ( 429,806 ) Income tax benefit 20,720 Net loss $ ( 409,086 ) Total assets $ 1,478,603 $ 444,800 $ 193,365 $ 17,093 $ 2,133,861 Goodwill 39,821 55,232 32,944 — 127,997 Capital expenditures 38,781 20,898 2,547 1,296 63,522 ________________________________________________________ (1) Includes eliminations of intersegment revenues and cost of revenues of $ 306.5 million for the year ended December 31, 2020. Note 23— Related Party Transactions Convertible Notes Offering In June 2016, we issued $ 115 million in aggregate principal amount of our 5.00% Convertible Senior Notes in a private placement under Rule 144A in the Notes Offering. Affiliates of Whitebox and Highbridge purchased an aggregate of $ 47.5 million and $ 40.4 million, respectively, principal amount of the 5.00% Convertible Senior Notes in the Notes Offering. In June 2021, the remaining aggregate principal amount of the 5.00% Convertible Senior Notes were paid in full at maturity. Please read Note 13—Debt for further discussion. 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 5 % or more of our common stock directly or through affiliates. 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. EGI does not receive a fee for the provision of the strategic, advisory, or consulting services set forth in the Services Agreement, but may be periodically reimbursed by us, upon request, for (i) travel and out-of-pocket expenses, provided that, in the event that such expenses exceed $ 50 thousand in the aggregate with respect to any single proposed matter, EGI will obtain our consent prior to incurring additional costs, and (ii) provided that we provide prior consent to their engagement with respect to any particular proposed matter, all reasonable fees and disbursements of counsel, accountants, and other professionals incurred in connection with EGI’s services under the Services Agreement. In consideration of the services provided by EGI under the Services Agreement, we agreed to indemnify EGI for certain losses relating to or arising out of the Services Agreement or the services provided thereunder. F-52 PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2022, 2021, and 2020 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 years ended December 31, 2022, 2021, or 2020. Note 24— Subsequent Events Refinancing of Term Loan B On February 14, 2023, we priced the proposed private $ 550 million aggregate principal amount senior secured term loan B due 2030. We intend to use the proceeds from the proposed term loan to refinance the Company’s existing Term Loan B Facility and its outstanding Notes (as described below) and for general corporate purposes. Tender Offers On February 15, 2023, we announced the commencement of cash tender offers (the “Tender Offers”) for the purchase by PPL of any and all of the (i) 7.75% Senior Secured Notes and (ii) 12.875% Senior Secured Notes (together, the “Notes”). The Tender Offers were for cash consideration of $ 1,021.20 per $1,000 principal amount of 7.75% Senior Secured Notes and $ 1,090.44 per $1,000 principal amount of 12.875% Senior Secured Notes, plus an amount equal to any accrued and unpaid interest. The Tender Offers expired on February 23, 2023, and $ 260.6 million, or approximately 92.74 %, of the 7.75% Senior Secured Notes and $ 29.0 million, or approximately 92.73 %, of the 12.875% Senior Secured Notes were validly tendered and not validly withdrawn, In addition, $ 270 thousand aggregate principal amount of the 7.75% Senior Secured Notes were tendered subject to guaranteed delivery procedures. Subject to raising at least $ 550 million in gross proceeds under the proposed term loan, we expect to accept for payment all notes validly tendered during the offering period and all notes properly delivered under guaranteed delivery procedures and expects to make payment on all such notes on February 28, 2023. As described below, we have exercised optional redemption rights with respect to any outstanding Notes and intend to satisfy and discharge each indenture governing the Notes, as applicable, on the settlement date. Redemption of Notes On February 15, 2023, we issued notices of conditional redemption (collectively, the “Redemption”) for each series of the Notes pursuant to the applicable agreements, in each case subject to the successful refinancing of Term Loan B. Amendments In connection with the above, (i) the ABL Borrowers and the lenders, and Bank of America, N.A., as administrative agent, entered into the First Amendment, dated as of February 14, 2023, to Amended and Restated Loan and Security Agreement, dated as of February 2, 2022, (ii) Par Hawaii Refining, LLC, PPL and J. Aron & Company, LLC entered into the Amendment, dated as of February 13, 2023, to Second Amended and Restated Supply and Offtake Agreement, dated as of June 1, 2021, and (iii) U.S. Oil & Refining Co., PPL and Merrill Lynch Commodities, Inc. entered into a letter agreement dated February 15, 2023, in each case, to facilitate the refinancing and tender offers noted. F-53 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT PAR PACIFIC HOLDINGS, INC. (PARENT ONLY) BALANCE SHEETS (in thousands, except share data) December 31, 2022 December 31, 2021 ASSETS Current assets Cash and cash equivalents $ 2,547 $ 4,086 Restricted cash 331 330 Total cash, cash equivalents, and restricted cash 2,878 4,416 Prepaid and other current assets 2,229 15,664 Due from subsidiaries 229,431 94,676 Total current assets 234,538 114,756 Property, plant, and equipment Property, plant, and equipment 19,865 19,535 Less accumulated depreciation and amortization ( 14,967 ) ( 13,869 ) Property, plant, and equipment, net 4,898 5,666 Long-term assets Operating lease right-of-use (“ROU”) assets 2,649 3,280 Investment in subsidiaries 487,943 207,483 Other long-term assets 723 724 Total assets $ 730,751 $ 331,909 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 4,176 $ 1,386 Accrued taxes 47 48 Operating lease liabilities 787 608 Other accrued liabilities 511 9,805 Due to subsidiaries 77,420 50,195 Total current liabilities 82,941 62,042 Long-term liabilities Finance lease liabilities — 17 Operating lease liabilities 3,273 4,150 Total liabilities 86,214 66,209 Stockholders’ equity Preferred stock, $ 0.01 par value: 3,000,000 shares authorized, none issued — — Common stock, $ 0.01 par value; 500,000,000 shares authorized at December 31, 2022 and December 31, 2021, 60,470,837 shares and 60,161,955 shares issued at December 31, 2022 and December 31, 2021, respectively 604 602 Additional paid-in capital 836,491 821,713 Accumulated deficit ( 200,687 ) ( 559,117 ) Accumulated other comprehensive income (loss) 8,129 2,502 Total stockholders’ equity 644,537 265,700 Total liabilities and stockholders’ equity $ 730,751 $ 331,909 This statement should be read in conjunction with the notes to consolidated financial statements. F-54 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT PAR PACIFIC HOLDINGS, INC. (PARENT ONLY) STATEMENTS OF OPERATIONS (in thousands) Year Ended December 31, 2022 2021 2020 Operating expenses Depreciation and amortization $ 2,131 $ 2,452 $ 2,900 Loss (gain) on sale of assets, net 27 15 — General and administrative expense (excluding depreciation) 17,882 12,435 11,097 Acquisition and integration costs 3,396 87 — Total operating expenses 23,436 14,989 13,997 Operating loss ( 23,436 ) ( 14,989 ) ( 13,997 ) Other income (expense) Interest expense and financing costs, net ( 1 ) ( 2,600 ) ( 4,982 ) Other expense, net ( 20 ) ( 33 ) ( 3 ) Change in value of common stock warrants — — 4,270 Equity in earnings (losses) from subsidiaries 388,008 ( 63,649 ) ( 394,197 ) Total other income (expense), net 387,987 ( 66,282 ) ( 394,912 ) Income (loss) before income taxes 364,551 ( 81,271 ) ( 408,909 ) Income tax expense ( 362 ) ( 26 ) ( 177 ) Net income (loss) $ 364,189 $ ( 81,297 ) $ ( 409,086 ) This statement should be read in conjunction with the notes to consolidated financial statements. F-55 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT PAR PACIFIC HOLDINGS, INC. (PARENT ONLY) STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Year Ended December 31, 2022 2021 2020 Net income (loss) $ 364,189 $ ( 81,297 ) $ ( 409,086 ) Other comprehensive income (loss): (1) Other post-retirement benefits income (loss), net of tax 5,627 6,244 ( 4,324 ) Total other comprehensive income (loss), net of tax 5,627 6,244 ( 4,324 ) Comprehensive income (loss) $ 369,816 $ ( 75,053 ) $ ( 413,410 ) ____________________________________________________ (1) Other comprehensive income (loss) relates to benefit plans at our subsidiaries. This statement should be read in conjunction with the notes to consolidated financial statements. F-56 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT PAR PACIFIC HOLDINGS, INC. (PARENT ONLY) STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income (loss) $ 364,189 $ ( 81,297 ) $ ( 409,086 ) Adjustments to reconcile net income (loss) to cash used in operating activities: Depreciation and amortization 2,131 2,452 2,900 Non-cash interest expense — 1,364 2,518 Change in value of common stock warrants — — ( 4,270 ) Loss (gain) on sale of assets, net 27 15 — Stock-based compensation 9,353 8,165 7,342 Equity in losses (income) of subsidiaries ( 388,008 ) 63,649 394,197 Net changes in operating assets and liabilities: Prepaid and other assets 13,436 1,318 ( 4,253 ) Accounts payable, other accrued liabilities, and operating lease ROU assets and liabilities 2,651 ( 1,380 ) ( 187 ) Net cash provided by (used in) operating activities 3,779 ( 5,714 ) ( 10,839 ) Cash flows from investing activities: Investments in subsidiaries — ( 146,056 ) — Distributions from subsidiaries — 90,183 4,113 Capital expenditures ( 1,311 ) ( 1,126 ) ( 1,296 ) Due to (from) subsidiaries 5,645 29,752 5,768 Proceeds from sale of assets — — 14 Net cash provided by (used in) investing activities 4,334 ( 27,247 ) 8,599 Cash flows from financing activities: Proceeds from sale of common stock, net of offering costs — 87,193 — Proceeds from borrowings — 12,364 14,437 Repayments of borrowings ( 9,319 ) ( 62,111 ) ( 18,603 ) Other financing activities, net ( 332 ) ( 879 ) 164 Net cash provided by (used in) financing activities ( 9,651 ) 36,567 ( 4,002 ) Net increase (decrease) in cash, cash equivalents, and restricted cash ( 1,538 ) 3,606 ( 6,242 ) Cash, cash equivalents, and restricted cash at beginning of period 4,416 810 7,052 Cash, cash equivalents, and restricted cash at end of period $ 2,878 $ 4,416 $ 810 Supplemental cash flow information: Net cash received (paid) for: Interest $ ( 3 ) $ ( 1,230 ) $ ( 2,475 ) Taxes ( 15 ) 27 ( 28 ) Non-cash investing and financing activities: Accrued capital expenditures $ 372 $ 131 $ 233 ROU assets obtained in exchange for new finance lease liabilities — — 173 ROU assets obtained in exchange for new operating lease liabilities — 165 — This statement should be read in conjunction with the notes to consolidated financial statements. F-57 Item 16. FORM 10-K SUMMARY None. F-58 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange of Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 27, 2023. PAR PACIFIC HOLDINGS, INC. By: /s/ William Pate William Pate Chief Executive Officer By: /s/ Shawn Flores Shawn Flores Senior Vice President and Chief Financial Officer F-59 Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on our behalf and in the capacities indicated and on February 27, 2023. Signature Title /s/ WILLIAM PATE Chief Executive Officer and Director (Principal Executive Officer) William Pate /s/ WILLIAM MONTELEONE President and Director William Monteleone /s/ SHAWN FLORES Senior Vice President and Chief Financial Officer (Principal Financial Officer) Shawn Flores /s/ IVAN GUERRA Chief Accounting Officer (Principal Accounting Officer) Ivan Guerra /s/ MELVYN N. KLEIN Chairman Emeritus Melvyn N. Klein /s/ ROBERT S. SILBERMAN Chairman of the Board of Directors Robert S. Silberman /s/ TIMOTHY CLOSSEY Director Timothy Clossey /s/ L. MELVIN COOPER Director L. Melvin Cooper /s/ CURTIS ANASTASIO Director Curtis Anastasio /s/ WALTER A. DODS, JR. Director Walter A. Dods, Jr. /s/ KATHERINE HATCHER Director Katherine Hatcher /s/ ANTHONY CHASE Director Anthony Chase /s/ PHILIP DAVIDSON Director Philip Davidson F-60