What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-05 compared with 2022-11-03 · 191 added, 412 removed, 419 unchanged (59% of the section changed)

5 unchanged sentences

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

As of September 30, 2022, we owned a 46.0% equity investment in Laramie Energy.

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

Given the improved outlook for natural gas, we are considering strategic alternatives with respect to our investment in Laramie Energy, including, among other things, a change in the size of our investment.

As of March 31, 2023, we owned a 46.0% equity investment in Laramie Energy.

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

We have four reportable segments:

3 unchanged sentences

Recent Events Affecting Comparability of Periods

Over the last twelve months, increased demand for and reduced supply of refined product has led to increased crude oil prices.

The rise in demand from 2021 to 2022 is driven by a recovery of global travel to pre-pandemic levels as well as a return to in-office work.

In March, the U.S.

Centers for Disease Control and Prevention (“CDC”) lifted its Travel Health Notice for cruise ships in response to the decline in COVID-19 cases, and, as of April, the U.S.

Transportation Security Administration (“TSA”) no longer requires masking on U.S.

domestic flights.

Airline companies, which represent a significant portion of our Hawaii market through jet fuel sales, have forecasted significant increases in air travel volumes for the remainder of 2022 and Hawaii visitor counts for the first half of 2022 are in excess of 90% of pre-pandemic levels.

In 2022, higher national gasoline prices and U.S.

inflation have affected most Americans.

Following high gasoline prices in the summer, prices at the pump fell from June through September.

Even with these third quarter declines, the overall energy index is up 19.8% year over year as of September 2022.

Rising gasoline prices, and rising energy prices overall, are indicators of inflation and the U.S.

Federal Reserve (the “Fed”) has taken significant steps to curb inflation.

In summer 2022, the Fed increased its benchmark interest rate by 75 basis points twice, to 1.75% in June and to 2.5% in July.

The rate increased again by 75 basis points in September 2022, as expected, because the summer rate changes did not measurably slow inflation.

Following the September meeting, the Fed indicated its intent to raise rates by an additional 1.25% this year.

These actions by the Fed are intended to cool rising U.S.

inflation rates, which have increased 8.2% year over year as of September 2022, by slowing economic growth and nonessential consumer spending (including travel).

If consumer spending decreases as a result of these actions, it is expected that demand and prices for our products will decrease in kind.

In response to the Russian invasion of Ukraine in February, the international community imposed economic sanctions and other limitations on Russian exports, which further decreased the global supply of crude oil and drove up the price of crude oil.

On March 3, 2022, we suspended purchases of Russian crude oil for our Hawaii refinery in response to the Russia-Ukraine conflict.

We have turned to other grades of crude oil to meet fuel production requirements.

In the third quarter, the global market for energy commodities experienced moderately declining prices driven by increased supply expectations after twelve months of rising prices.

In response, the Organization of the Petroleum Exporting Companies (“OPEC”) announced on October 5 that it would cut production by two million barrels a day (representing approximately 2% of global oil production) with the intention of raising global oil prices.

As of the date of this Quarterly Report on Form 10-Q, the Russia-Ukraine conflict is ongoing and continues to impact the global economy.

We will continue to monitor the effects the conflict has on the global financial markets and our operations.

The crude oil market stabilized in the first quarter of 2023 as compared to the volatility noted in the first quarter of 2022.

The price of crude oil held relatively steady in the first quarter of this year.

Energy Administration (“EIA”) in its April 2023 short term energy outlook is forecasting average Brent crude oil pricing of $85 per barrel in 2023, reflecting the Organization of the Petroleum Exporting Countries (“OPEC”) crude oil production cut of 1.2 MMbpd through the end of 2023, as announced on April 3, 2023.

Global crude oil demand is forecasted to rise by 1.4 billion bpd in 2023.

The financial results reported in this Quarterly Report on Form 10-Q continue to reflect the rebounding demand driven by decreasing COVID-19 pandemic related demand suppression in the regions in which we operate.

Please read Item 1A.

— Risk Factors for more information on the Russia-Ukraine conflict and its potential impacts on our business.

Additionally, the financial results contained in this Quarterly Report on Form 10-Q reflect rebounding demand driven by decreasing COVID-19 pandemic-related demand suppression experienced in the regions in which we operate.

However, the pandemic is ongoing and the impacts of the virus on people and businesses continue to evolve as of the date of this report.

The full magnitude of the impact of these and other events on our financial condition, future results of operations, and future cash flows and liquidity is uncertain and has been and may continue to be material.

— Risk Factors on our Annual Report on Form 10-K for the year ended December 31, 2022 for further information.

Results of Operations

Three months ended September 30, 2022 compared to the three months ended September 30, 2021

Our financial results for the third quarter of 2022 improved from net income of $81.8 million for the three months ended September 30, 2021 to net income of $267.4 million for the three months ended September 30, 2022.

The increase was primarily driven by higher product crack spreads across all of our refineries and a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices.

These factors were partially offset by higher crude oil differentials and a $70.8 million increase in RINs expenses.

Adjusted EBITDA and Adjusted Net Income.

For the three months ended September 30, 2022, Adjusted EBITDA was $214.1 million compared to $58.2 million for the three months ended September 30, 2021.

The increase was primarily related to improved product crack spreads across all of our refineries, favorable realized commodity derivatives, and an 11% increase in refining sales volumes at our Washington refinery, partially offset by unfavorable crude oil and purchased product differentials, a $35.1 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement, and higher fuel burn costs.

For the three months ended September 30, 2022, Adjusted Net Income was $172.0 million compared to $18.6 million for the three months ended September 30, 2021.

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

Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

Three months ended March 31, 2023 compared to the three months ended March 31, 2022

Net Income (Loss).

Our financial results improved from a net loss of $89.4 million for the nine months ended September 30, 2021 to net income of $279.5 million for the nine months ended September 30, 2022.

The increase in profitability was primarily driven by higher product crack spreads across all of our refineries and a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices.

These factors were partially offset by unfavorable crude oil and purchased product differentials, higher fuel burn costs and intermediation fees, unfavorable commodity derivatives, and a $22.9 million increase in RINs expenses.

Other factors impacting our results period over period include a gain of $63.9 million related to the 2021 Hawaii sale-leaseback transactions in the nine months ended September 30, 2021 with no such gain in the 2022 comparable period and a 14% increase in operating expenses compared to the comparable period in 2021.

Our financial results for the first quarter of 2023 improved from a net loss of $137.1 million for the three months ended March 31, 2022 to net income of $237.9 million for the three months ended March 31, 2023.

The increase was primarily driven by higher operating income of $385.2 million including a $94.7 million gain on settlement of RIN obligations and a $10.7 million distribution from Laramie Energy, partially offset by $17.7 million of costs related to our 2023 debt repayments.

Please read the discussions of segment results and consolidated results below for additional information.

Adjusted EBITDA and Adjusted Net Income (Loss).

For the nine months ended September 30, 2022, Adjusted EBITDA was $468.5 million compared to $98.6 million for the nine months ended September 30, 2021.

The improvement was primarily related to favorable product crack spreads across all of our refineries partially offset by unfavorable crude oil and purchased product differentials, a $65.3 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement, unfavorable realized commodity derivatives, and higher fuel burn costs.

Other factors impacting our results period over period include a 14% increase in operating expenses in 2022 compared to the comparable period in 2021.

For the nine months ended September 30, 2022, Adjusted Net Income was $341.9 million compared to a loss of $23.4 million for the nine months ended September 30, 2021.

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

The following tables summarize our consolidated results of operations for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021 (in thousands).

For the three months ended March 31, 2023, Adjusted EBITDA was $167.6 million compared to $12.4 million for the three months ended March 31, 2022.

The increase was primarily related to an increase of $148.2 million in our refining segment and an increase of $9.9 million in our retail segment.

Please read the discussion of segment results below for additional information.

For the three months ended March 31, 2023, Adjusted Net Income was $137.5 million compared to an Adjusted Net Loss of $27.4 million for the three months ended March 31, 2022.

The improvement was primarily related to the factors described above for the increase in Adjusted EBITDA as well as our receipt of a $10.7 million distribution from Laramie Energy.

The following tables summarize our consolidated results of operations for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 (in thousands).

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

Three Months Ended September 30,

2022 2021 $ Change % Change

Revenues $ 2,056,285 $ 1,310,368 $ 745,917 57%

Cost of revenues (excluding depreciation) 1,642,626 1,098,422 544,204 50%

Operating expense (excluding depreciation) 88,329 78,059 10,270 13%

Depreciation and amortization 25,125 23,618 1,507 6%

Loss (gain) on sale of assets, net (185) 2 (187) (9,350)%

General and administrative expense (excluding depreciation) 16,219 12,473 3,746 30%

Acquisition and integration costs — 1 (1) (100)%

Total operating expenses 1,772,114 1,212,575

Operating income 284,171 97,793

Other income (expense)

Interest expense and financing costs, net (16,852) (15,374) (1,478) 10%

Debt extinguishment and commitment costs 343 (9) 352 3,911%

Other expense, net (198) (22) (176) 800%

Total other expense, net (16,707) (15,405)

Income before income taxes 267,464 82,388

Income tax expense (68) (586) 518 (88)%

Net income $ 267,396 $ 81,802

Nine Months Ended September 30,

Three Months Ended March 31,

2023 2022 $ Change % Change

3 unchanged sentences

Depreciation and amortization 24,360 23,780 580 2%

Gain on sale of assets, net (170) (64,400) 64,230 (100)%

General and administrative expense (excluding depreciation) 19,286 15,893 3,393 21%

Acquisition and integration costs 5,271 63 5,208 8,267%

Par West redevelopment and other costs 2,750 — 2,750 NM (1)

Total operating expenses 1,423,807 1,471,389

2 unchanged sentences

Interest expense and financing costs, net (16,250) (16,394) 144 (1)%

Debt extinguishment and commitment costs (5,329) (8,144) 2,815 (35)%

Gain on curtailment of pension obligation — 2,032 (2,032) (100)%

Debt extinguishment and commitment costs (17,720) — (17,720) NM (1)

Other income (expense), net (35) 2 (37) (1,850)%

Equity earnings (losses) from Laramie Energy, LLC 10,706 — 10,706 NM (1)

Total other expense, net (23,299) (16,392)

Income (loss) before income taxes 238,103 (137,488)

Income tax expense (756) (1,193) 437 (37)%

Income tax benefit (expense) (213) 437 (650) (149)%

Net income (loss) $ 237,890 $ (137,051)

The following tables summarize our operating income (loss) by segment for the three and nine months ended September 30, 2022 and 2021 (in thousands).

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

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

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

Cost of revenues (excluding depreciation) 1,629,019 28,482 115,574 (130,449) 1,642,626

Operating expense (excluding depreciation) 63,049 3,710 21,570 — 88,329

Depreciation and amortization 16,542 5,059 2,865 659 25,125

Loss (gain) on sale of assets, net — (241) 56 — (185)

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

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

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

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

Cost of revenues (excluding depreciation) 1,086,074 24,077 93,387 (105,116) 1,098,422

Operating expense (excluding depreciation) 55,613 3,754 18,692 — 78,059

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

Loss on sale of assets, net — 2 — — 2

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

Acquisition and integration costs — — — 1 1

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

________________________________________________________

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

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

(1) NM - Not meaningful

The following tables summarize our operating income (loss) by segment for the three months ended March 31, 2023 and 2022 (in thousands).

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

Three months ended March 31, 2023 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 1,615,412 $ 52,388 $ 135,572 $ (118,163) $ 1,685,209

2 unchanged sentences

Depreciation and amortization 15,723 5,034 3,079 524 24,360

Loss (gain) on sale of assets, net — (253) 56 27 (170)

General and administrative expense (excluding depreciation) — — — 19,286 19,286

Acquisition and integration costs — — — 5,271 5,271

Par West redevelopment and other costs — — — 2,750 2,750

Operating income (loss) $ 263,137 $ 12,608 $ 13,474 $ (27,817) $ 261,402

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

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

Revenues $ 1,299,223 $ 42,461 $ 119,909 $ (111,300) $ 1,350,293

2 unchanged sentences

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

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

General and administrative expense (excluding depreciation) — — — 15,893 15,893

2 unchanged sentences

________________________________________________________

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

Below is a summary of key operating statistics for the refining segment for the three and nine months ended September 30, 2022 and 2021:

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

2022 2021 2022 2021

(1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $118.2 million and $111.3 million for the three months ended March 31, 2023 and 2022, respectively.

Below is a summary of key operating statistics for the refining segment for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

Total Refining Segment

28 unchanged sentences

D&A per bbl ($/throughput bbl) 1.81 3.29

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

2022 2021 2022 2021

Three Months Ended March 31,

Wyoming Refinery

12 unchanged sentences

3-1-2 Singapore Crack Spread (3) $ 21.22 $ 16.21

Pacific Northwest 5-2-2-1 Index (4) 33.21 18.59 33.79 15.39

Wyoming 3-2-1 Index (5) 45.78 41.78 42.36 31.01

RVO Adjusted Pacific Northwest 3-1-1-1 (4) 25.30 22.66

RVO Adjusted USGC 3-2-1 (5) 26.55 18.24

Crude Oil Prices (average $ per barrel)

9 unchanged sentences

Adjusted Gross Margin for our other refineries is determined under the first-in, first-out (“FIFO”) inventory costing method.

The definition of Adjusted Gross Margin was modified beginning with the financial results reported for periods in fiscal year 2022.

The definition of Adjusted Gross Margin was modified beginning with the financial results reported for the second quarter in fiscal year 2022.

We have recast Adjusted Gross Margin for prior periods when reported to conform to the modified presentation.

4 unchanged sentences

We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refineries including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput.

Our production costs are included in Operating expense (excluding depreciation) on our condensed consolidated statement of operations, which also includes costs related to our bulk marketing operations.

Our production costs are included in Operating expense (excluding depreciation) on our consolidated statement of operations, which also includes costs related to our bulk marketing operations.

(3) We believe the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) is the most representative market indicator for our operations in Hawaii.

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

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

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

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

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

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

Below is a summary of key operating statistics for the retail segment for the three and nine months ended September 30, 2022 and 2021:

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

2022 2021 2022 2021

(4) We believe the RVO Adjusted Pacific Northwest 3-1-1-1 (or three barrels of WTI crude oil converted into one barrel of Pacific Northwest gasoline, one barrel of Pacific Northwest ULSD and one barrel of USGC VGO, less 100% of the RVO cost for gasoline and ULSD) is the most representative market indicator for our operations in Washington with improved historical correlations to our reported adjusted gross margin compared to prior reported indices.

(5) We believe the RVO Adjusted USGC 3-2-1 (or three barrels of WTI crude oil converted into two barrels of USGC gasoline and one barrel of USGC ULSD, less 100% of the RVO cost) is the most representative market indicator for our operations in Wyoming with improved historical correlations to our reported adjusted gross margin compared to prior reported indices.

(6) Crude pricing has been updated to reflect simple averages of outright prices during the relevant period.

Below is a summary of key operating statistics for the retail segment for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

Retail Segment

7 unchanged sentences

We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure.

Beginning with financial results reported for periods in fiscal year 2022, the inventory valuation adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in Hawaii.

This modification was made to better align Adjusted Net Income (Loss) and Adjusted EBITDA with the cash flow of the Hawaii refining business.

Prior to 2022, the impacts of FIFO inventory gains (losses) associated with Hawaii titled manufactured inventory were eliminated through the inventory valuation adjustment.

Beginning with financial results reported for the second quarter of 2022, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude the mark-to-market losses (gains) associated with our net RINs liability.

This modification was made to better reflect our operating performance and to improve comparability between periods.

Beginning with financial results reported for periods in fiscal year 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude the mark-to-market losses (gains) associated with our net obligation related to the Washington Climate Commitment Act and Clean Fuel Standard effective beginning in 2023.

These modifications were made to better reflect our operating performance and to improve comparability between periods.

Beginning with financial results reported for periods in fiscal year 2023, Adjusted Net Income (loss) and Adjusted EBITDA also exclude the redevelopment and other costs for our Par West facility, which was shut down in 2020.

This modification improves comparability between periods by excluding expenses incurred in connection with the strategic redevelopment of this non-operating facility.

We have recast Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA for prior periods when reported to conform to the modified presentation.

7 unchanged sentences

• LIFO layer liquidation impacts associated with our Washington inventory;

• Renewable Identification Numbers (“RINs”) mark-to-market adjustments (which represents the income statement effect of reflecting our RINs liability on a net basis;

this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability);

• unrealized loss (gain) on derivatives.

Adjusted Gross Margin can also be defined as revenues less cost of revenues (excluding depreciation) excluding:

• inventory valuation adjustment;

• Environmental obligation mark-to-market adjustment (which represents the income statement effect of reflecting our Renewable Identification Numbers (“RINs”) liability on a net basis;

this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability and our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard);

• unrealized loss (gain) on derivatives.

• LIFO layer liquidation impacts associated with our Washington inventory;

• RINs mark-to-market adjustments.

We define cost of revenues (excluding depreciation) as:

• the hydrocarbon-related costs of inventory sold,

• transportation costs of delivering product to customers,

• crude oil consumed in the refining process,

• costs to satisfy our RINs and environmental credit obligations,

• certain hydrocarbon fees and taxes, and

• the unrealized gain (loss) on derivatives and the inventory valuation adjustment that we exclude from Adjusted Gross Margin.

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

Three months ended September 30, 2022 Refining Logistics Retail

Operating income $ 266,091 $ 17,625 $ 17,320

Operating expense (excluding depreciation)

63,049 3,710 21,570

Depreciation and amortization 16,542 5,059 2,865

Loss (gain) on sale of assets, net — (241) 56

Inventory valuation adjustment (91,135) — —

RINs mark-to-market adjustments (6,731) — —

Unrealized loss on derivatives 3,004 — —

Adjusted Gross Margin (1) $ 250,820 $ 26,153 $ 41,811

Three months ended September 30, 2021 Refining Logistics Retail

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

Operating expense (excluding depreciation)

55,613 3,754 18,692

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

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

Inventory valuation adjustment 2,784 — —

LIFO liquidation adjustment (4,151) — —

RINs mark-to-market adjustments (72,087) — —

Unrealized loss on derivatives 10,228 — —

Adjusted Gross Margin (1) $ 93,548 $ 22,658 $ 32,523

Nine months ended September 30, 2022 Refining Logistics Retail

Three months ended March 31, 2023 Refining Logistics Retail

Operating income $ 263,137 $ 12,608 $ 13,474

2 unchanged sentences

Depreciation and amortization 15,723 5,034 3,079

Loss (gain) on sale of assets, net — (253) 56

Inventory valuation adjustment 20,858 — —

RINs mark-to-market adjustments 83,119 — —

Environmental obligation mark-to-market adjustments (133,301) — —

Unrealized gain on derivatives (13,670) — —

Adjusted Gross Margin (1) $ 211,629 $ 21,089 $ 37,344

Nine months ended September 30, 2021 Refining Logistics Retail

Three months ended March 31, 2022 Refining Logistics Retail

Operating income (loss) $ (118,325) $ 9,852 $ 4,045

2 unchanged sentences

Depreciation and amortization 15,333 5,087 2,691

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

Inventory valuation adjustment 80,653 — —

RINs mark-to-market adjustments 58,973 — —

Environmental obligation mark-to-market adjustments 11,302 — —

Unrealized loss on derivatives 15,452 — —

1 unchanged sentence

____________________________________________________________________________

(1) For the three and nine months ended September 30, 2022 and 2021, there was no impairment expense recorded in Operating income (loss).

For the three and nine months ended September 30, 2022 and the nine months ended September 30, 2021, there was no LIFO liquidation adjustment recorded in Operating income (loss).

(1) For the three months ended March 31, 2023 and 2022, there was no impairment expense, loss (gain) on sale of assets, or LIFO liquidation adjustment recorded in Operating income (loss).

Adjusted Net Income (Loss) and Adjusted EBITDA

2 unchanged sentences

• the LIFO layer liquidation impacts associated with our Washington inventory;

• RINs mark-to-market adjustments (which represents the income statement effect of reflecting our RINs liability on a net basis;

this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability);

• Environmental obligation mark-to-market adjustments (which represents the income statement effect of reflecting our Renewable Identification Numbers (“RINs”) liability on a net basis;

• unrealized (gain) loss on derivatives;

• acquisition and integration costs;

• redevelopment and other costs related to Par West;

• debt extinguishment and commitment costs;

9 unchanged sentences

• equity losses (earnings) from Laramie Energy excluding Par’s share of unrealized loss (gain) on derivatives, impairment of Par’s investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference;

• income tax expense (benefit).

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

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

2022 2021 2022 2021

• income tax expense (benefit) excluding the increase in (release of) tax valuation allowance.

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

Three Months Ended March 31,

Net Income (Loss) $ 237,890 $ (137,051)

Inventory valuation adjustment 20,858 80,653

LIFO liquidation adjustment — (4,151) — —

RINs mark-to-market adjustments (6,731) (72,087) 83,119 58,973

Environmental obligation mark-to-market adjustments (133,301) 11,302

Unrealized loss (gain) on derivatives (13,670) 15,452

Acquisition and integration costs 5,271 63

Par West redevelopment and other costs 2,750 —

Debt extinguishment and commitment costs 17,720 —

Severance costs — 2,228

Loss (gain) on sale of assets, net (185) 2 (170) (64,400)

Adjusted Net Income (Loss) (1) 137,518 (27,353)

1 unchanged sentence

Interest expense and financing costs, net 16,250 16,394

Income tax expense 68 586 756 1,193

Equity earnings from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives (10,706) —

Income tax expense (benefit) 213 (437)

Adjusted EBITDA (1) $ 167,635 $ 12,384

________________________________________

(1) For the three and nine months ended September 30, 2022 and 2021, there was no change in value of contingent consideration, change in value of common stock warrants, change in valuation allowance or other deferred tax items, impairment expense, or equity losses (earnings) from Laramie Energy, LLC, including impairments associated with our investment in Laramie Energy, our share of Laramie Energy’s asset impairment losses in excess of our basis difference, and our share of Laramie Energy’s unrealized loss (gain) on derivatives.

(1) For the three months ended March 31, 2023 and 2022, there was no LIFO liquidation adjustment, change in value of contingent consideration, change in value of common stock warrants, (gain) loss on sale of assets, change in valuation allowance or other deferred tax items, impairment expense, impairments associated with our investment in Laramie Energy, our share of Laramie Energy’s asset impairment losses in excess of our basis difference, or our share of Laramie Energy’s unrealized loss (gain) on derivatives.

Factors Impacting Segment Results

Three months ended September 30, 2022 compared to the three months ended September 30, 2021

Operating income for our refining segment was $266.1 million for the three months ended September 30, 2022, an increase of $179.7 million compared to $86.4 million for the three months ended September 30, 2021.

The increase was primarily driven by improved product crack spreads across all of our refineries and a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices, partially offset by unfavorable crude oil differentials, a $70.8 million increase in RINs expenses, and a $35.1 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement.

Operating income for our logistics segment was $17.6 million for the three months ended September 30, 2022, an increase of $4.2 million compared to $13.4 million for the three months ended September 30, 2021.

Operating Income

Three months ended March 31, 2023 compared to the three months ended March 31, 2022

Operating income for our refining segment was $263.1 million for the three months ended March 31, 2023, an increase of $381.4 million compared to a loss of $118.3 million for the three months ended March 31, 2022.

The increase was primarily driven by:

• an increase of $267.7 million related to improved crack spreads across all our refineries,

• a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices that resulted in a decrease in expense of $170.4 million,

• a decrease in consolidated environmental costs across all our refineries of $114.2 million, primarily associated with a gain of $94.7 million related to the settlements of a portion of our 2020 and all of our 2021 RVO liabilities, and

• an increase of $38.5 million driven by a 38% increase in refined product sales at all our refineries,

partially offset by:

• an increase in purchased product costs of $137.0 million at our Hawaii refinery and

• a decrease of $65.0 million related to an increase in crude oil differentials at our Hawaii refinery.

Operating income for our logistics segment was $12.6 million for the three months ended March 31, 2023, an increase of $2.7 million compared to $9.9 million for the three months ended March 31, 2022.

The increase is primarily due to higher third party revenues.

Operating income for our retail segment was $17.3 million for the three months ended September 30, 2022, an increase of $6.1 million compared to $11.2 million for the three months ended September 30, 2021.

The increase was primarily due to a 42% increase in fuel margins related to declining crude oil prices in the three months ended September 30, 2022 compared to rising prices in the comparative period of 2021, partially offset by a 16% increase in operating expenses in the three months ended September 30, 2022 related to increased employee costs and higher credit card processing fees due to increased gasoline prices.

Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

Operating income for our refining segment was $316.6 million for the nine months ended September 30, 2022, an improvement of $420.2 million compared to an operating loss of $103.6 million for the nine months ended September 30, 2021.

The increase in profitability was primarily driven by improved product crack spreads across all of our refineries and a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices, partially offset by unfavorable crude oil and purchased product differentials, a $65.3 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement, higher fuel burn costs, unfavorable commodity derivatives, and a $22.9 million increase in RINs expenses.

Other factors impacting our results period over period include a gain on sale of assets of $19.6 million in the nine months ended September 30, 2021 primarily related to the 2021 Hawaii sale-leaseback transactions we closed in the first quarter of 2021 with no such gain in 2022 and a 15% increase in operating expenses in the nine months ended September 30, 2021 primarily related to increased utility costs, planned repairs and maintenance, and higher employee costs.

Operating income for our logistics segment was $43.4 million for the nine months ended September 30, 2022, an increase of $5.4 million compared to $38.0 million for the nine months ended September 30, 2021.

The increase was primarily due to increased third party revenues and a 5% increase in throughput across our Washington assets, partially offset by a 9% increase in cost of sales driven primarily by higher marine vessel fees and fuel costs.

Operating income for our retail segment was $26.9 million for the nine months ended September 30, 2022, a decrease of $46.3 million compared to $73.2 million for the nine months ended September 30, 2021.

The decrease in profitability is primarily due to a gain on sale of assets of $44.8 million in the nine months ended September 30, 2021 related to the 2021 Hawaii sale-leaseback transactions we closed in the first quarter of 2021 with no such gain in 2022 and a 14% increase in operating expenses in the nine months ended September 30, 2022 primarily related to higher repair and maintenance expenses, increased employee costs, higher credit card processing fees due to increased gasoline prices, and higher rent expense related to the additional leases from our 2021 Hawaii sale-leaseback transactions, partially offset by a 15% increase in fuel margin.

Operating income for our retail segment was $13.5 million for the three months ended March 31, 2023, an increase of $9.5 million compared to $4.0 million for the three months ended March 31, 2022.

The increase was primarily due to a 43% increase in fuel margins related to higher gasoline prices in the three months ended March 31, 2023 compared to declining prices in the comparative period of 2022.

Adjusted Gross Margin

Three months ended September 30, 2022 compared to the three months ended September 30, 2021

For the three months ended September 30, 2022, our refining Adjusted Gross Margin was $250.8 million, an increase of $157.3 million compared to $93.5 million for the three months ended September 30, 2021.

The increase was primarily driven by improved product crack spreads and favorable realized commodity derivatives, partially offset by higher crude oil and purchased product differentials and higher intermediation fees in Hawaii.

Adjusted Gross Margin for the Hawaii refinery increased from $6.02 per barrel during the three months ended September 30, 2021 to $19.49 per barrel during the three months ended September 30, 2022.

The improvement was primarily due to improved product crack spreads and favorable realized commodity derivatives, partially offset by unfavorable crude oil and purchased product differentials, a $35.1 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement, and higher fuel burn costs.

Adjusted Gross Margin for the Washington refinery increased by $16.45 per barrel primarily due to improved product crack spreads and an 11% increase in sales volumes, partially offset by unfavorable crude oil differentials.

Adjusted Gross Margin for the Wyoming refinery decreased by $2.45 per barrel primarily due to an unfavorable FIFO change of $15.4 million, unfavorable crude differentials, and higher RINs expenses related to current period production, partially offset by improved product crack spreads.

For the three months ended September 30, 2022, our logistics Adjusted Gross Margin was $26.2 million, an increase of $3.5 million compared to $22.7 million for the three months ended September 30, 2021.

Three months ended March 31, 2023 compared to the three months ended March 31, 2022

For the three months ended March 31, 2023, our refining Adjusted Gross Margin was $211.6 million, an increase of $148.9 million compared to $62.7 million for the three months ended March 31, 2022.

The increase was primarily driven by higher crack spreads partially offset by unfavorable purchased product costs as described in the refining operating income discussion above.

Adjusted Gross Margin for the Hawaii refinery increased from $3.52 per barrel during the three months ended March 31, 2022 to $19.11 per barrel during the three months ended March 31, 2023.

The improvement was primarily due to improved crack spreads and feedstock differentials, partially offset by unfavorable purchased product differentials.

Adjusted Gross Margin for the Washington refinery increased by $9.73 per barrel primarily due to improved product crack spreads and a 38% increase in sales volumes due to prior year turnaround activity, partially offset by unfavorable environmental costs, driven by Washington CCA costs.

Adjusted Gross Margin for the Wyoming refinery increased by $1.81 per barrel primarily due to favorable crack spreads partially offset by an unfavorable FIFO change of $20.0 million.

For the three months ended March 31, 2023, our logistics Adjusted Gross Margin was $21.1 million, an increase of $2.4 million compared to $18.7 million for the three months ended March 31, 2022.

The increase is primarily due to higher revenues from third party services.

For the three months ended September 30, 2022, our retail Adjusted Gross Margin was $41.8 million, an increase of $9.3 million compared to $32.5 million for the three months ended September 30, 2021.

The increase was primarily due to a 42% increase in fuel margins related to declining crude oil prices in the three months ended September 30, 2022 compared to rising crude oil prices in the comparable period in 2021.

Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

For the nine months ended September 30, 2022, our refining Adjusted Gross Margin was $600.8 million, an increase of $401.6 million compared to $199.2 million for the nine months ended September 30, 2021.

The increase was primarily due to favorable product crack spreads across all our refineries partially offset by unfavorable crude oil and purchased

product differentials, higher intermediation fees in Hawaii, unfavorable realized commodity derivatives, and higher fuel burn costs.

Adjusted Gross Margin for the Hawaii refinery improved from $4.35 per barrel during the nine months ended September 30, 2021 to $13.92 per barrel during the nine months ended September 30, 2022.

The improvement was primarily due to improved product crack spreads, partially offset by unfavorable crude oil and purchased product differentials, a $65.3 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement, unfavorable realized commodity derivatives, and higher fuel burn costs.

Adjusted Gross Margin for the Washington refinery increased by $13.88 per barrel primarily due to favorable product crack spreads partially offset by unfavorable crude oil differentials.

Adjusted Gross Margin for the Wyoming refinery increased by $12.75 per barrel primarily due to improved product crack spreads partially offset by unfavorable crude oil differentials.

For the nine months ended September 30, 2022, our logistics Adjusted Gross Margin was $69.8 million, an increase of $4.5 million compared to $65.3 million for the nine months ended September 30, 2021.

The increase was primarily due to increased revenues from third party services and a 5% increase in throughput across our Washington assets, partially offset by a 9% increase in cost of sales driven primarily by higher marine vessel fees and fuel costs.

For the nine months ended September 30, 2022, our retail Adjusted Gross Margin was $95.4 million, an increase of $5.8 million compared to $89.6 million for the nine months ended September 30, 2021.

The increase was primarily due to a 15% increase in fuel margins related to declining crude oil prices in the three months ended September 30, 2022 partially offset by a 5% decline in fuel sales volumes.

For the three months ended March 31, 2023, our retail Adjusted Gross Margin was $37.3 million, an increase of $11.2 million compared to $26.1 million for the three months ended March 31, 2022.

The increase was primarily due to a 43% increase in fuel margins related to higher gasoline prices in the three months ended March 31, 2023 compared to the comparable period in 2022.

Discussion of Consolidated Results

Three months ended September 30, 2022 compared to the three months ended September 30, 2021

For the three months ended September 30, 2022, revenues were $2.1 billion, a $0.8 billion increase compared to $1.3 billion for the three months ended September 30, 2021.

The increase was primarily due to an increase of $0.7 billion in third-party refining segment revenue as a result of increases in Brent and WTI crude oil prices, an increase in average product crack spreads, and an 11% increase in refining sales volumes at our Washington refinery.

Average Brent crude oil prices increased to $97.70 per barrel during the third quarter of 2022 compared to $73.23 per barrel during the third quarter of 2021, and average WTI crude oil prices increased to $91.43 per barrel during the third quarter of 2022 compared to $70.52 per barrel during the third quarter of 2021.

Three months ended March 31, 2023 compared to the three months ended March 31, 2022

For the three months ended March 31, 2023, revenues were $1.7 billion, a $0.3 billion increase compared to $1.4 billion for the three months ended March 31, 2022.

The increase was primarily due to an increase of $0.3 billion in third-party refining segment revenue as a result of an increase in average product crack spreads, and a 22% increase in refining sales volumes at all our refineries, partially offset by decreasing crude prices in the quarter.

Average Brent crude oil prices decreased to $82.10 per barrel during the first quarter of 2023 compared to $97.90 per barrel during the first quarter of 2022, and average WTI crude oil prices decreased to $75.99 per barrel during the first quarter of 2023 compared to $95.01 per barrel during the first quarter of 2022.

Please read our key operating statistics for further information.

Revenues at our retail segment increased $15.7 million primarily due to a 4% increase in fuel prices.

Cost of Revenues (Excluding Depreciation).

For the three months ended September 30, 2022, cost of revenues (excluding depreciation) was $1.6 billion, a $0.5 billion increase compared to $1.1 billion for the three months ended September 30, 2021.

The increase was primarily driven by higher Brent and WTI crude oil prices as discussed above and unfavorable crude oil and purchased product differentials, a $70.8 million increase in RINs expenses, a $35.1 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement, an 11% increase in refining sales volumes at our Washington refinery, and higher fuel burn costs, partially offset by a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices, and favorable commodity derivatives.

Other factors impacting our results period over period include 33% higher fuel costs at our retail segment.

For the three months ended March 31, 2023, cost of revenues (excluding depreciation) was $1.3 billion, a decrease of $0.1 billion when compared to $1.4 billion for the three months ended March 31, 2022.

The decrease was primarily driven by decreased crude oil prices as described above.

Operating Expense (Excluding Depreciation).

For the three months ended September 30, 2022, operating expense (excluding depreciation) was $88.3 million, a $10.2 million increase when compared to $78.1 million for the three months ended September 30, 2021.

For the three months ended March 31, 2023, operating expense (excluding depreciation) was $83.1 million, a $1.7 million increase when compared to $81.4 million for the three months ended March 31, 2022.

The increase in operating expenses was primarily driven by higher utility and maintenance costs and increased employee costs.

Depreciation and Amortization .

For the three months ended September 30, 2022, D&A was $25.1 million, an increase of $1.5 million compared to $23.6 million for the three months ended September 30, 2021.

The increase was primarily due to the amortization of our Washington refinery turnaround projects completed in the first quarter of 2022.

For the three months ended March 31, 2023, D&A was $24.4 million, relatively consistent with $23.8 million for the three months ended March 31, 2022.

General and Administrative Expense (Excluding Depreciation).

For the three months ended September 30, 2022, general and administrative expense (excluding depreciation) was $16.2 million, an increase of $3.7 million compared to $12.5 million for the three months ended September 30, 2021.

For the three months ended March 31, 2023, general and administrative expense (excluding depreciation) was $19.3 million, an increase of $3.4 million compared to $15.9 million for the three months ended March 31, 2022.

The increase was primarily due to an increase in employee costs and outside services related to profit improvement projects.

Interest Expense and Financing Costs, Net .

For the three months ended September 30, 2022, our interest expense and financing costs were $16.9 million, an increase of $1.5 million compared to $15.4 million for the three months ended September 30, 2021.

The increase was primarily due to higher balances on our inventory financing agreements, partially offset

by lower outstanding debt balances driven by early repayments of the outstanding 12.875% Senior Secured Notes in the second quarters of 2021 and 2022 and the final maturity of the 5.00% Convertible Senior Notes on June 15, 2021.

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

Income Taxes.

For the three months ended September 30, 2022, we recorded income tax expense of $0.1 million primarily related to increased taxable income.

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

Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

For the nine months ended September 30, 2022, revenues were $5.5 billion, a $2.1 billion increase compared to $3.4 billion for the nine months ended September 30, 2021.

The increase was primarily due to an increase of $2.0 billion in third-party revenues at our refining segment, primarily related to higher crude oil prices and product crack spreads across all our refining locations.

Average Brent crude oil prices rose to $102.53 in the nine months ended September 30, 2022 compared to $67.92 per barrel in the nine months ended September 30, 2021, and average WTI crude oil prices rose to $98.31 per barrel during the nine months ended September 30, 2022 compared to $64.99 in the nine months ended September 30, 2021.

Revenues at our retail segment increased $89.0 million primarily due to a 41% increase in fuel prices.

Cost of Revenues (Excluding Depreciation).

For the nine months ended September 30, 2022, cost of revenues (excluding depreciation) was $4.8 billion, a $1.6 billion increase compared to $3.2 billion for the nine months ended September 30, 2021.

The increase was primarily due to increases in Brent and WTI crude oil prices as discussed above, higher crude oil and purchased product differentials, a $65.3 million increase in intermediation fees driven primarily by higher market structure fees under the Supply and Offtake Agreement, higher fuel burn costs, and unfavorable commodity derivatives, partially offset by a favorable change in valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices.

Other factors impacting our results period over period include 50% higher fuel costs at our retail segment.

Operating Expense (Excluding Depreciation).

For the nine months ended September 30, 2022, operating expense (excluding depreciation) was $252.1 million, an increase of $31.0 million compared to $221.1 million for the nine months ended September 30, 2021.

The increase was primarily driven by higher utility and maintenance expenses, increased employee costs, and higher retail credit card processing fees related to increased gasoline prices.

Depreciation and Amortization .

For the nine months ended September 30, 2022, D&A was $74.5 million, an increase of $4.5 million compared to $70.0 million for the nine months ended September 30, 2021.

The increase was primarily due to the amortization of our Washington refinery turnaround projects completed in the first quarter of 2022.

Gain on Sale of Assets, Net.

For the nine months ended September 30, 2022, there was a $0.2 million gain on sale of assets, net, which resulted primarily from the sale of equipment.

For the nine months ended September 30, 2021, the gain on sale of assets, net was approximately $64.4 million and primarily related to the Hawaii sale-leaseback transactions we closed in the first quarter of 2021.

General and Administrative Expense (Excluding Depreciation).

For the nine months ended September 30, 2022, general and administrative expense (excluding depreciation) was $47.6 million, an increase of $11.0 million compared to $36.6 million for the nine months ended September 30, 2021.

The increase was primarily due to higher employee costs.

Acquisition and Integration Expense.

During the three months ended March 31, 2023, we incurred $5.3 million of acquisition and integration costs related to the Billings Acquisition.

For the three months ended March 31, 2022, we recognized immaterial costs related to the Billings Acquisition.

Please read Note 4—Acquisitions for further discussion.

Interest Expense and Financing Costs, Net .

For the nine months ended September 30, 2022, our interest expense and financing costs were $51.4 million, an increase of $0.7 million when compared to $50.7 million for the nine months ended September 30, 2021.

The increase was primarily due to increased balances on our inventory financing agreements, partially offset by lower outstanding debt balances in 2022 driven by early partial repayments of the outstanding 12.875% Senior Secured Notes in the second quarters of 2021 and 2022 and the full repayment at maturity of the 5.00% Convertible Senior Notes in June 2021.

For the three months ended March 31, 2023, our interest expense and financing costs were $16.3 million, relatively consistent with $16.4 million for the three months ended March 31, 2022.

Please read Note 8—Inventory Financing Agreements and Note 10—Debt for further information.

Debt Extinguishment and Commitment Costs.

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

For the nine months ended September 30, 2022, our debt extinguishment and commitment costs were $5.3 million and primarily represented extinguishment costs associated with the repurchase and cancellation of an additional $36.9 million of 12.875% Senior Secured

Notes in the second quarter of 2022.

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

Gain on Curtailment of Pension Obligation.

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

No such gain was recorded during the nine months ended September 30, 2022.

For the three months ended March 31, 2023 we incurred $17.7 million of debt extinguishment and commitment costs in connection with the refinancing of our long-term debt.

Please read Note 10—Debt for further information.

Equity Earnings from Laramie Energy, LLC.

On March 1, 2023, following a refinancing of certain debt, Laramie Energy, LLC, was permitted to make a one-time cash distribution to its owners based on ownership percentage.

Our share of this distribution was $10.7 million.

There were no equity earnings from our investment in Laramie Energy, LLC, for the three months ended March 31, 2022.

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

Income Taxes.

For the nine months ended September 30, 2022, we recorded an income tax expense of $0.8 million primarily related to increased taxable income.

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

For the three months ended March 31, 2023, we recorded income tax expense of $0.2 million primarily related to increased taxable income.

For the three months ended March 31, 2022, we recorded an income tax benefit of $0.4 million primarily related to foreign taxes.

Consolidating Condensed Financial Information

On December 21, 2017, Par Petroleum, LLC (the “Issuer”) issued its 7.75% Senior Secured Notes due 2025 in a private offering under Rule 144A and Regulation S of the Securities Act.

On January 11, 2019, the Issuers (defined below) entered into a term loan and guaranty agreement with Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto with respect to a $250.0 million term loan (the “Term Loan B”).

On June 5, 2020, the Issuers issued their 12.875% Senior Secured Notes due 2026 in a private offering under Rule 144A and Regulation S of the Securities Act.

The 7.75% Senior Secured Notes, the Term Loan B, and the 12.875% Senior Secured Notes were co-issued by Par Petroleum Finance Corp.

On February 28, 2023, Par Petroleum, LLC (the “Issuer”) entered into the Term Loan Credit Agreement due 2030 with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto.

The Term Loan Credit Agreement was co-issued by Par Petroleum Finance Corp.

(together with the Issuer, the “Issuers”), which has no independent assets or operations.

The 7.75% Senior Secured Notes, Term Loan B, and 12.875% Senior Secured Notes are guaranteed on a senior unsecured basis only as to payment of principal and interest by Par Pacific Holdings, Inc.

(the “Parent”) and are guaranteed on a senior secured basis by all of the subsidiaries of Par Petroleum, LLC.

The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Petroleum, LLC and its consolidated subsidiaries’ accounts (which are all guarantors of the 7.75% Senior Secured Notes, Term Loan B, and 12.875% Senior Secured Notes), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the 7.75% Senior Secured Notes, Term Loan B, or 12.875% Senior Secured Notes and consolidating adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated.

The Term Loan Credit Agreement is guaranteed on a senior unsecured basis only as to payment of principal and interest by Par Pacific Holdings, Inc.

(the “Parent”) and is guaranteed on a senior secured basis by all of the subsidiaries of Par Petroleum, LLC.

The Term Loan Credit Agreement proceeds were used to refinance our existing Term Loan B Facility and repurchase our outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, all three of which had similar guarantees that were replaced by those on the Term Loan Credit Agreement.

The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Petroleum, LLC and its consolidated subsidiaries’ accounts (which are all guarantors of the Term Loan Credit Agreement), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the Term Loan Credit Agreement and consolidating adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated.

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

As of September 30, 2022

As of March 31, 2023

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

31 unchanged sentences

Long-term debt, net of current maturities — 530,574 — 530,574

Due to related parties — — — —

Finance lease liabilities — 11,036 (4,366) 6,670

58 unchanged sentences

Total liabilities and stockholders’ equity $ 730,751 $ 3,267,943 $ (718,047) $ 3,280,647

Three Months Ended September 30, 2022

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

and Subsidiaries

Revenues $ — $ 2,056,252 $ 33 $ 2,056,285

Operating expenses

Cost of revenues (excluding depreciation) — 1,642,626 — 1,642,626

Operating expense (excluding depreciation) — 88,329 — 88,329

Depreciation and amortization 517 24,561 47 25,125

Loss (gain) on sale of assets, net — (185) — (185)

General and administrative expense (excluding depreciation) 5,213 11,006 — 16,219

Acquisition and integration costs — — — —

Total operating expenses 5,730 1,766,337 47 1,772,114

Operating income (loss) (5,730) 289,915 (14) 284,171

Other income (expense)

Interest expense and financing costs, net 15 (16,958) 91 (16,852)

Debt extinguishment and commitment costs — 343 — 343

Other income (expense), net (8) (191) 1 (198)

Equity earnings (losses) from subsidiaries 273,119 — (273,119) —

Total other income (expense), net 273,126 (16,806) (273,027) (16,707)

Income (loss) before income taxes 267,396 273,109 (273,041) 267,464

Income tax benefit (expense) (1) — (66,917) 66,849 (68)

Net income (loss) $ 267,396 $ 206,192 $ (206,192) $ 267,396

Adjusted EBITDA $ (5,221) $ 219,247 $ 34 $ 214,060

Three Months Ended September 30, 2021

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

and Subsidiaries

Revenues $ — $ 1,310,357 $ 11 $ 1,310,368

Operating expenses

Cost of revenues (excluding depreciation) — 1,098,422 — 1,098,422

Operating expense (excluding depreciation) — 78,059 — 78,059

Depreciation and amortization 571 22,999 48 23,618

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

General and administrative expense (excluding depreciation) 3,098 9,375 — 12,473

Acquisition and integration costs 1 — — 1

Total operating expenses 3,670 1,208,857 48 1,212,575

Operating income (loss) (3,670) 101,500 (37) 97,793

Other income (expense)

Interest expense and financing costs, net (7) (15,462) 95 (15,374)

Debt extinguishment and commitment costs — (9) — (9)

Other income (expense), net (14) (8) — (22)

Equity earnings (losses) from subsidiaries 85,502 — (85,502) —

Total other income (expense), net 85,481 (15,479) (85,407) (15,405)

Income (loss) before income taxes 81,811 86,021 (85,444) 82,388

Income tax benefit (expense) (1) (9) (21,385) 20,808 (586)

Net income (loss) $ 81,802 $ 64,636 $ (64,636) $ 81,802

Adjusted EBITDA $ (3,112) $ 61,326 $ 11 $ 58,225

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

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

8 unchanged sentences

Acquisition and integration costs 5,271 — — 5,271

Par West redevelopment and other costs — 2,750 — 2,750

Total operating expenses 11,494 1,412,265 48 1,423,807

5 unchanged sentences

Equity earnings (losses) from subsidiaries 249,544 — (249,544) —

Equity earnings from Laramie Energy, LLC — — 10,706 10,706

Total other income (expense), net 249,529 (34,080) (238,748) (23,299)

3 unchanged sentences

Adjusted EBITDA $ (5,857) $ 173,481 $ 11 $ 167,635

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

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

12 unchanged sentences

Interest expense and financing costs, net (5) (16,483) 94 (16,394)

Debt extinguishment and commitment costs — (6,728) (1,416) (8,144)

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

Other income (expense), net (7) 9 — 2

5 unchanged sentences

Adjusted EBITDA $ (3,834) $ 16,205 $ 13 $ 12,384

________________________________________

(1) The income tax benefit (expense) of the Parent Guarantor and Issuer and Subsidiaries is determined using the separate return method.

The Non-Guarantor Subsidiaries and Eliminations column includes tax benefits recognized at the Par consolidated level that are primarily associated with changes to the consolidated valuation allowance and other deferred tax balances.

Non-GAAP Financial Measures

3 unchanged sentences

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

Three Months Ended September 30, 2022

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

and Subsidiaries

Net income (loss) $ 267,396 $ 206,192 $ (206,192) $ 267,396

Inventory valuation adjustment — (91,135) — (91,135)

RINs mark-to-market adjustments — (6,731) — (6,731)

Unrealized loss on derivatives — 3,004 — 3,004

Acquisition and integration costs — — — —

Debt extinguishment and commitment costs — (343) — (343)

Severance costs — 9 — 9

Loss (gain) on sale of assets, net — (185) — (185)

Depreciation and amortization 517 24,561 47 25,125

Interest expense and financing costs, net (15) 16,958 (91) 16,852

Equity losses (income) from subsidiaries (273,119) — 273,119 —

Income tax expense (benefit) — 66,917 (66,849) 68

Adjusted EBITDA (1) $ (5,221) $ 219,247 $ 34 $ 214,060

Three Months Ended September 30, 2021

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

and Subsidiaries

Net income (loss) $ 81,802 $ 64,636 $ (64,636) $ 81,802

Inventory valuation adjustment — 2,784 — 2,784

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

RINs mark-to-market adjustments — (72,087) — (72,087)

Unrealized loss on derivatives — 10,228 — 10,228

Acquisition and integration costs 1 — — 1

Debt extinguishment and commitment costs — 9 — 9

Severance costs — 59 — 59

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

Depreciation and amortization 571 22,999 48 23,618

Interest expense and financing costs, net 7 15,462 (95) 15,374

Equity losses (income) from subsidiaries (85,502) — 85,502 —

Income tax expense (benefit) 9 21,385 (20,808) 586

Adjusted EBITDA (1) $ (3,112) $ 61,326 $ 11 $ 58,225

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

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

2 unchanged sentences

Inventory valuation adjustment — 20,858 — 20,858

RINs mark-to-market adjustments — 83,119 — 83,119

Environmental obligation mark-to-market adjustments — (133,301) — (133,301)

Unrealized loss (gain) on derivatives — (13,670) — (13,670)

Acquisition and integration costs 5,271 — — 5,271

Par West redevelopment and other costs — 2,750 — 2,750

Debt extinguishment and commitment costs — 17,720 — 17,720

Severance costs — — — —

Loss (gain) on sale of assets, net 27 (197) — (170)

Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives (2) — — — —

Depreciation and amortization 373 23,939 48 24,360

Interest expense and financing costs, net 8 16,333 (91) 16,250

Equity earnings from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — (10,706) (10,706)

Equity losses (income) from subsidiaries (249,544) — 249,544 —

1 unchanged sentence

Adjusted EBITDA (1) $ (5,857) $ 173,481 $ 11 $ 167,635

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

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

2 unchanged sentences

Inventory valuation adjustment — 80,653 — 80,653

RINs mark-to-market adjustments — 58,973 — 58,973

Environmental obligation mark-to-market adjustments — 11,302 — 11,302

Unrealized loss on derivatives — 15,452 — 15,452

Acquisition and integration costs 63 — — 63

Par West redevelopment and other costs — — — —

Debt extinguishment and commitment costs — — — —

Severance costs 351 1,877 — 2,228

Loss (gain) on sale of assets, net — (10,637) (53,763) (64,400)

Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives — — — —

Depreciation and amortization 628 23,103 49 23,780

Interest expense and financing costs, net 5 16,483 (94) 16,394

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

Equity losses (income) from subsidiaries 132,170 — (132,170) —

2 unchanged sentences

________________________________________

(1) For the three and nine months ended September 30, 2022 and 2021, there was no change in valuation allowance and other deferred tax items, change in value of common stock warrants, impairment expense, impairment of investment in Laramie Energy, unrealized gain on derivatives included in equity earnings from Laramie Energy, or equity losses from Laramie Energy.

For the three and nine months ended September 30, 2022 and the nine months ended September 30, 2021, there was no LIFO liquidation adjustment.

(1) For the three months ended March 31, 2023 and 2022, there was no LIFO liquidation adjustment, change in value of contingent consideration, change in value of common stock warrants, (gain) loss on sale of assets, change in valuation allowance or other deferred tax items, impairment expense, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference.

Liquidity and Capital Resources

2 unchanged sentences

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

Our liquidity position as of September 30, 2022 was $494.7 million and consisted of $488.3 million at Par Petroleum, LLC and subsidiaries, $6.3 million at Par Pacific Holdings, and $0.1 million at all our other subsidiaries.

As of September 30, 2022, we had access to the ABL Credit Facility, the J.

Our liquidity position as of March 31, 2023 was $750.5 million and consisted of $744.3 million at Par Petroleum, LLC and subsidiaries, $6.1 million at Par Pacific Holdings, Inc., and $0.1 million at all our other subsidiaries.

As of March 31, 2023, we had access to the ABL Credit Facility, the J.

Aron Discretionary Draw Facility, the MLC receivable advances, and cash on hand of $661.3 million.

2 unchanged sentences

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

We expect to close the Billings Acquisition in the second quarter of 2023;

please read Note 4—Acquisitions for further information.

On April 26, 2023, we terminated the ABL Revolver and entered into a new ABL Credit Agreement.

Please read Note 19—Subsequent Events for further information about the ABL Credit Agreement.

We believe our cash flows from operations and available capital resources will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for the next 12 months.

1 unchanged sentence

We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost.

We may from time to time seek to retire or repurchase our 7.75% Senior Secured Notes, our 12.875% Senior Secured Notes, or our common stock through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, or otherwise.

Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.

We may from time to time seek to retire or repurchase our common stock through cash purchases, in open market purchases, privately negotiated transactions, or otherwise.

Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.

The amounts involved may be material.

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

The following table summarizes cash activities for the nine months ended September 30, 2022 and 2021 (in thousands):

Nine Months Ended September 30,

Net cash provided by operating activities $ 369,053 $ 54,594

Net cash provided by (used in) investing activities (37,661) 82,356

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

Cash flows for the nine months ended September 30, 2022

Net cash provided by operating activities for the nine months ended September 30, 2022 was driven primarily by net income of $279.5 million, non-cash charges to operations of approximately $80.3 million, and net cash provided by changes in operating assets and liabilities of approximately $9.3 million.

Non-cash charges to operations consisted primarily of the following adjustments:

The Term Loan Credit Agreement may also require annual prepayments of principal with a variable percentage of our excess cash

flow, 50% or 25% depending on our consolidated year end secured net leverage ratio (as defined in the Term Loan Credit Agreement).

The following table summarizes cash activities for the three months ended March 31, 2023 and 2022 (in thousands):

Three Months Ended March 31,

Net cash provided by (used in) operating activities $ 139,095 $ (7,685)

Net cash used in investing activities (2,457) (16,273)

Net cash provided by financing activities 33,754 52,611

Cash flows for the three months ended March 31, 2023

Net cash provided by operating activities for the three months ended March 31, 2023 was driven primarily by net income of $237.9 million, non-cash charges to operations and non-operating items of approximately $21.0 million, and net cash used for changes in operating assets and liabilities of approximately $119.8 million.

Non-cash charges to operations and non-operating items consisted primarily of the following adjustments:

• depreciation and amortization expenses of $24.4 million;

• stock based compensation costs of $7.4 million;

• debt commitment and extinguishment costs of $17.7 million;

1 unchanged sentence

• unrealized gain on derivatives contracts of $13.7 million;

• gain of $10.7 million from our equity investment in Laramie Energy, LLC.

Net cash used for changes in operating assets and liabilities resulted primarily from:

• a decrease in gross environmental credit obligations primarily related to retirements of a portion of our 2020 and all our 2021 RVO liabilities across all our refineries, partially offset by increased obligations related to the Washington CCA and increased gross RVO primarily related to current period production volumes;

• net decreases in our inventories and accounts receivable resulting from retirements of RINs across all our refineries, lower crude oil and refined product prices and lower inventory volumes at our Hawaii refinery;

partially offset by

• net increases in our inventory financing agreement obligations and accounts payable;

• decreases in prepaid and other expenses primarily driven by decreases in our derivative collateral.

Net cash used in investing activities for the three months ended March 31, 2023 consisted primarily of $13.2 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects, including construction of a flagship retail store in Washington, improved crude processing equipment at our Hawaii refinery, co-processing unit at our Tacoma refinery, and various IT infrastructure improvements.

This was partially offset by a $10.7 million cash distribution received from Laramie Energy, LLC.

Net cash provided by financing activities was approximately $33.8 million for the three months ended March 31, 2023 and consisted primarily of the following activities:

• net borrowings of debt of $20.5 million primarily driven by the refinancing and consolidation of our debt,

• net borrowings under the J.

Aron Discretionary Draw Facility and MLC receivable advances of $22.4 million;

partially offset by

• aggregate payments of $13.0 million of deferred loan costs and debt extinguishment costs, related to our debt refinancing.

Cash flows for the three months ended March 31, 2022

Net cash used in operating activities for the three months ended March 31, 2022, was driven primarily by a net loss of $137.1 million, offset by net cash provided by changes in operating assets and liabilities of approximately $85.9 million and non-cash charges to operations of approximately $43.4 million.

Non-cash charges to operations consisted primarily of the following adjustments:

• depreciation and amortization expenses of $23.8 million;

• unrealized loss on derivatives contracts of $15.5 million;

• stock based compensation costs of $3.7 million.

Net cash provided by changes in operating assets and liabilities resulted primarily from:

3 unchanged sentences

• net increases in our inventories and accounts receivable resulting from higher crude oil and refined product prices and higher inventory volumes at our Hawaii refinery;

• increase in prepaid and other primarily driven by a $71.2 million increase in Advances to suppliers for crude purchases.

Net cash used in investing activities for the nine months ended September 30, 2022 consisted primarily of $38.1 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude

recovery and debottlenecking projects at our Tacoma refinery, maintenance and tank replacement projects at our Wyoming refinery, and co-generation engine and tank conversion projects at our Hawaii refinery.

Net cash used in financing activities was approximately $34.5 million for the nine months ended September 30, 2022 and consisted primarily of the following activities:

• net repayments of debt of $72.3 million primarily driven by the partial repurchase and cancellation of our 7.75% Senior Secured Notes and 12.875% Senior Secured Notes and

• repurchases of common stock of $7.3 million

partially offset by

• $28.9 million in deferred turnaround costs primarily related to the 2022 turnaround at our Washington refinery.

Net cash used in investing activities for the three months ended March 31, 2022 consisted primarily of:

• $16.3 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude recovery and debottlenecking projects at our Tacoma refinery, maintenance projects at our Wyoming refinery, and co-generation engine and combustion projects at our Hawaii refinery.

Net cash provided by financing activities was approximately $52.6 million for the three months ended March 31, 2022 and consisted primarily of the following activities:

• net borrowings under the J.

Aron Discretionary Draw Facility and MLC receivable advances of $41.7 million;

Cash flows for the nine months ended September 30, 2021

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

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

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

Net cash provided by investing activities was approximately $82.4 million for the nine months ended September 30, 2021 and primarily related to proceeds received from the 2021 Hawaii sale-leaseback transactions partially offset by $21.0 million of additions to property, plant, and equipment.

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

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

• net borrowings of debt of $18.1 million primarily driven by increased borrowings on the ABL Revolver;

partially offset by:

• repurchases of common stock of $6.4 million.

Cash Requirements

There have been no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, outside the ordinary course of business except as follows:

Washington Refinery Intermediation Agreement .

We and MLC entered into amendments to the Washington Refinery Intermediation Agreement on March 9, 2022, May 9, 2022, and August 11, 2022, which, among other things, increased the maximum borrowing capacity under the MLC receivable advances.

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

Supply and Offtake Agreement.

Aron entered into amendments to the Supply and Offtake Agreement on April 25, 2022, and May 17, 2022, which, among other things, increased the capacity under the Discretionary Draw Facility.

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

ABL Credit Facility.

On February 2, 2022, the ABL Borrowers entered into the ABL Loan Agreement with certain lenders and Bank of America, N.A., which amended and restated the first Loan and Security Agreement in its entirety.

The ABL Loan Agreement was further amended on March 30, 2022.

Please read Note 9—Debt for more information.

Debt Repayments.

During the nine months ended September 30, 2022, we repurchased and cancelled $15.0 million and $36.9 million in aggregate principal amounts of the 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, respectively.

Debt Refinancing.

On February 28, 2023, we entered into the Term Loan Credit Agreement.

The proceeds were used to repurchase and cancel the then-outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes and terminate and repay all amounts outstanding under the Term Loan B Facility .

As a result of this refinancing, our debt maturity was

extended from 2026 to 2030 and, using interest rates that were in effect at March 31, 2023, our estimated undiscounted future interest payments increased to $295 million.

Please read Note 10—Debt for more information.

Critical Accounting Estimates

There have been no material changes to critical accounting estimates disclosed in our Annual Report on Form 10-K.

There have been no material changes to critical accounting estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (“PSLRA”), or in releases made by the SEC, all as may be amended from time to time.

Such forward-looking statements involve known and unknown risks, uncertainties, and other important factors including, without limitation, our expectations regarding the impact of COVID-19 along with a number of recent global events including the conflict between Russia and Ukraine and certain developments in the global crude oil markets on our business, our customers, and the markets where we operate;

Such forward-looking statements involve known and unknown risks, uncertainties, and other important factors including, without limitation, the conflict between Russia and Ukraine and certain developments in the global crude oil markets on our business, our customers, and the markets where we operate;

our beliefs regarding available capital resources;

10 unchanged sentences

management’s assumptions about future events;

t he effects and timing of the closing of the acquisition of the ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”), the anticipated cash on hand and other financing for the Acquisition and the acquisition of the hydrocarbon inventory, the anticipated synergies and other benefits of the Acquisition, including renewable growth opportunities, the anticipated financial and operating results of the Acquisition, and the effect on the Company’s cash flows and profitability (including Adjusted EBITDA and Adjusted Net Income);

t he effects and timing of the closing of the acquisition of the ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”), the anticipated cash on hand and other financing sources for the Acquisition and the acquisition of the hydrocarbon inventory, the anticipated synergies and other benefits of the Acquisition, including renewable growth opportunities, the anticipated financial and operating results of the Acquisition, and the effect on the Company’s cash flows and profitability (including Adjusted EBITDA and Adjusted Net Income);

our ability to raise additional debt or equity capital;

16 unchanged sentences

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

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

We do not intend to update or revise any forward-looking statements as a result of new

information, future events, or otherwise.

These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis