PAR PACIFIC HOLDINGS, INC. 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a growth-oriented company based in Houston, Texas, that owns and operates market-leading energy and infrastructure businesses. Our business is organized into three primary segments: 1) Refining - We own and operate three refineries with total operating throughput capacity of 155 Mbpd in Hawaii, Wyoming, and Washington. 2) Retail - Our retail outlets in Hawaii, Washington, and Idaho sell gasoline, diesel, and retail merchandise through Hele and “76” branded sites, “nomnom” branded company-operated convenience stores, 7-Eleven operated convenience stores, other sites operated by third parties, and unattended cardlock stations. 3) Logistics - We operate an extensive multi-modal logistics network spanning the Pacific, the Northwest, and the Rocky Mountain regions to transport and store crude oil and refined products for our refineries and transport refined products to our retail sites or third-party purchasers. As of March 31, 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: (i) Refining, (ii) Retail, (iii) Logistics, and (iv) Corporate and Other. Our Corporate and Other reportable segment primarily includes general and administrative costs. Please read Note 18—Segment Information to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for detailed information on our operating results by segment. Recent Events Affecting Comparability of Periods 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. The U.S. 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 on our Annual Report on Form 10-K for the year ended December 31, 2022 for further information. Results of Operations Three months ended March 31, 2023 compared to the three months ended March 31, 2022 Net Income (Loss). 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 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. 25 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 March 31, 2023 2022 $ Change % Change Revenues $ 1,685,209 $ 1,350,293 $ 334,916 25% Cost of revenues (excluding depreciation) 1,289,020 1,350,249 (61,229) (5)% Operating expense (excluding depreciation) 83,120 81,404 1,716 2% Depreciation and amortization 24,360 23,780 580 2% 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 Operating income (loss) 261,402 (121,096) Other income (expense) Interest expense and financing costs, net (16,250) (16,394) 144 (1)% 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 benefit (expense) (213) 437 (650) (149)% Net income (loss) $ 237,890 $ (137,051) ________________________________________________________ (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 Cost of revenues (excluding depreciation) 1,277,670 31,299 98,228 (118,177) 1,289,020 Operating expense (excluding depreciation) 58,882 3,447 20,791 — 83,120 Depreciation and amortization 15,723 5,034 3,079 524 24,360 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 26 Three months ended March 31, 2022 Refining Logistics Retail Corporate, Eliminations and Other (1) Total Revenues $ 1,299,223 $ 42,461 $ 119,909 $ (111,300) $ 1,350,293 Cost of revenues (excluding depreciation) 1,343,915 23,749 93,842 (111,257) 1,350,249 Operating expense (excluding depreciation) 58,300 3,773 19,331 — 81,404 Depreciation and amortization 15,333 5,087 2,691 669 23,780 General and administrative expense (excluding depreciation) — — — 15,893 15,893 Acquisition and integration costs — — — 63 63 Operating income (loss) $ (118,325) $ 9,852 $ 4,045 $ (16,668) $ (121,096) ________________________________________________________ (1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $118.2 million and $111.3 million for the three months ended March 31, 2023 and 2022, respectively. 27 Below is a summary of key operating statistics for the refining segment for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Total Refining Segment Feedstocks Throughput (Mbpd) 132.8 118.2 Refined product sales volume (Mbpd) 149.1 122.3 Hawaii Refinery Feedstocks Throughput (Mbpd) 76.3 82.7 Yield (% of total throughput) Gasoline and gasoline blendstocks 26.8 % 25.2 % Distillates 39.1 % 41.1 % Fuel oils 29.3 % 29.3 % Other products 1.7 % 0.4 % Total yield 96.9 % 96.0 % Refined product sales volume (Mbpd) On-island sales volume 90.4 78.0 Exports sales volume — — Total refined product sales volume 90.4 78.0 Adjusted Gross Margin per bbl ($/throughput bbl) (1) $ 19.11 $ 3.52 Production costs per bbl ($/throughput bbl) (2) 4.54 4.38 D&A per bbl ($/throughput bbl) 0.73 0.66 Washington Refinery Feedstocks Throughput (Mbpd) 39.6 20.2 Yield (% of total throughput) Gasoline and gasoline blendstocks 23.6 % 24.9 % Distillates 34.5 % 33.5 % Asphalt 18.5 % 17.4 % Other products 19.2 % 20.9 % Total yield 95.8 % 96.7 % Refined product sales volume (Mbpd) 40.7 29.5 Adjusted Gross Margin per bbl ($/throughput bbl) (1) $ 11.07 $ 1.34 Production costs per bbl ($/throughput bbl) (2) 4.25 7.35 D&A per bbl ($/throughput bbl) 1.81 3.29 28 Three Months Ended March 31, 2023 2022 Wyoming Refinery Feedstocks Throughput (Mbpd) 16.9 15.3 Yield (% of total throughput) Gasoline and gasoline blendstocks 47.5 % 50.3 % Distillates 46.0 % 43.1 % Fuel oils 2.4 % 2.4 % Other products 0.8 % 1.4 % Total yield 96.7 % 97.2 % Refined product sales volume (Mbpd) 18.0 14.8 Adjusted Gross Margin per bbl ($/throughput bbl) (1) $ 27.54 $ 25.73 Production costs per bbl ($/throughput bbl) (2) 7.41 8.00 D&A per bbl ($/throughput bbl) 2.78 3.24 Market Indices (average $ per barrel) 3-1-2 Singapore Crack Spread (3) $ 21.22 $ 16.21 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) Brent $ 82.10 $ 97.90 WTI 75.99 95.01 ANS (6) 79.01 96.13 Bakken Clearbrook (6) 79.14 95.84 WCS Hardisty (6) 56.67 79.90 Brent M1-M3 0.52 4.13 ________________________________________________________ (1) We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput. Adjusted Gross Margin for our Washington refinery is determined under the last-in, first-out (“LIFO”) inventory costing method. Adjusted Gross Margin for our other refineries is determined under the first-in, first-out (“FIFO”) inventory costing method. 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. Please see discussion of Adjusted Gross Margin below. (2) Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are a variety of ways to calculate production costs per barrel; different companies within the industry calculate it in different ways. We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refineries including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput. Our production costs are included in Operating expense (excluding depreciation) on our 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 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. 29 (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, 2023 2022 Retail Segment Retail sales volumes (thousands of gallons) 27,123 24,908 Non-GAAP Performance Measures Management uses certain financial measures to evaluate our operating performance that are considered non-GAAP financial measures. These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies since each company may define these terms differently. We believe Adjusted Gross Margin (as defined below) provides useful information to investors because it eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost and net realizable value adjustments to demonstrate the earnings potential of the business before other fixed and variable costs, which are reported separately in Operating expense (excluding depreciation) and Depreciation and amortization. Management uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure. Beginning with financial results reported for 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. 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. Adjusted Gross Margin Adjusted Gross Margin is defined as operating income (loss) excluding: • operating expense (excluding depreciation); • depreciation and amortization (“D&A”); • impairment expense; • loss (gain) on sale of assets, net; • inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments); 30 • LIFO layer liquidation impacts associated with our Washington inventory; • 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); and • unrealized loss (gain) on derivatives. The following tables present a reconciliation of Adjusted Gross Margin to the most directly comparable GAAP financial measure, operating income (loss), on a historical basis, for selected segments, for the periods indicated (in thousands): Three months ended March 31, 2023 Refining Logistics Retail Operating income $ 263,137 $ 12,608 $ 13,474 Operating expense (excluding depreciation) 58,882 3,447 20,791 Depreciation and amortization 15,723 5,034 3,079 Inventory valuation adjustment 20,858 — — Environmental obligation mark-to-market adjustments (133,301) — — Unrealized gain on derivatives (13,670) — — Adjusted Gross Margin (1) $ 211,629 $ 21,089 $ 37,344 Three months ended March 31, 2022 Refining Logistics Retail Operating income (loss) $ (118,325) $ 9,852 $ 4,045 Operating expense (excluding depreciation) 58,300 3,773 19,331 Depreciation and amortization 15,333 5,087 2,691 Inventory valuation adjustment 80,653 — — Environmental obligation mark-to-market adjustments 11,302 — — Unrealized loss on derivatives 15,452 — — Adjusted Gross Margin (1) $ 62,715 $ 18,712 $ 26,067 ____________________________________________________________________________ (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 Adjusted Net Income (Loss) is defined as Net income (loss) excluding: • inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments); • the LIFO layer liquidation impacts associated with our Washington inventory; • Environmental obligation mark-to-market adjustments (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 (gain) loss on derivatives; • acquisition and integration costs; • redevelopment and other costs related to Par West; • debt extinguishment and commitment costs; • increase in (release of) tax valuation allowance and other deferred tax items; • changes in the value of contingent consideration and common stock warrants; • severance costs; 31 • (gain) loss on sale of assets; • impairment expense; • impairment expense associated with our investment in Laramie Energy and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; and • Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives. Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding: • D&A; • interest expense and financing costs; • equity losses (earnings) from Laramie Energy excluding Par’s share of unrealized loss (gain) on derivatives, impairment of Par’s investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; and • income tax expense (benefit) 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, 2023 2022 Net Income (Loss) $ 237,890 $ (137,051) Inventory valuation adjustment 20,858 80,653 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 Adjusted Net Income (Loss) (1) 137,518 (27,353) Depreciation and amortization 24,360 23,780 Interest expense and financing costs, net 16,250 16,394 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 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 Operating Income Three months ended March 31, 2023 compared to the three months ended March 31, 2022 Refining. 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, 32 • 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. Logistics. 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. Retail. 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 March 31, 2023 compared to the three months ended March 31, 2022 Refining. 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. Logistics. 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. Retail. 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 March 31, 2023 compared to the three months ended March 31, 2022 Revenues. 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 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. 33 Operating Expense (Excluding Depreciation). 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 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 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. 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 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 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 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 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 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). 34 As of March 31, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 6,149 $ 655,139 $ 28 $ 661,316 Restricted cash 332 3,670 — 4,002 Trade accounts receivable — 277,369 331 277,700 Inventories — 929,574 — 929,574 Prepaid and other current assets 3,218 73,240 (331) 76,127 Due from related parties 255,167 — (255,167) — Total current assets 264,866 1,938,992 (255,139) 1,948,719 Property, plant, and equipment Property, plant, and equipment 21,067 1,212,618 3,955 1,237,640 Less accumulated depreciation and amortization (15,340) (387,611) (3,170) (406,121) Property, plant, and equipment, net 5,727 825,007 785 831,519 Long-term assets Operating lease right-of-use assets 2,487 338,805 — 341,292 Investment in subsidiaries 719,947 — (719,947) — Intangible assets, net — 12,912 — 12,912 Goodwill — 126,677 2,598 129,275 Other long-term assets 726 62,989 — 63,715 Total assets $ 993,753 $ 3,305,382 $ (971,703) $ 3,327,432 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 3,747 $ — $ 3,747 Obligations under inventory financing agreements — 871,562 — 871,562 Accounts payable 7,424 180,662 — 188,086 Accrued taxes 60 32,221 — 32,281 Operating lease liabilities 777 65,752 — 66,529 Other accrued liabilities 504 409,077 569 410,150 Due to related parties 93,964 138,030 (231,994) — Total current liabilities 102,729 1,701,051 (231,425) 1,572,355 Long-term liabilities Long-term debt, net of current maturities — 530,574 — 530,574 Finance lease liabilities — 11,036 (4,366) 6,670 Operating lease liabilities 3,031 278,440 — 281,471 Other liabilities — 83,794 (35,425) 48,369 Total liabilities 105,760 2,604,895 (271,216) 2,439,439 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 610 — — 610 Additional paid-in capital 842,062 409,686 (409,686) 842,062 Accumulated earnings (deficit) 37,203 284,791 (284,791) 37,203 Accumulated other comprehensive income (loss) 8,118 6,010 (6,010) 8,118 Total stockholders’ equity 887,993 700,487 (700,487) 887,993 Total liabilities and stockholders’ equity $ 993,753 $ 3,305,382 $ (971,703) $ 3,327,432 35 As of December 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 2,547 $ 488,350 $ 28 $ 490,925 Restricted cash 331 3,670 — 4,001 Trade accounts receivable — 252,816 69 252,885 Inventories — 1,041,983 — 1,041,983 Prepaid and other current assets 2,229 89,883 (69) 92,043 Due from related parties 229,431 — (229,431) — Total current assets 234,538 1,876,702 (229,403) 1,881,837 Property, plant, and equipment Property, plant, and equipment 19,865 1,200,747 3,955 1,224,567 Less accumulated depreciation and amortization (14,967) (370,643) (3,123) (388,733) Property, plant, and equipment, net 4,898 830,104 832 835,834 Long-term assets Operating lease right-of-use assets 2,649 348,112 — 350,761 Investment in subsidiaries 487,943 — (487,943) — Intangible assets, net — 13,577 — 13,577 Goodwill — 126,727 2,598 129,325 Other long-term assets 723 72,721 (4,131) 69,313 Total assets $ 730,751 $ 3,267,943 $ (718,047) $ 3,280,647 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 10,956 $ — $ 10,956 Obligations under inventory financing agreements — 893,065 — 893,065 Accounts payable 4,176 147,219 — 151,395 Accrued taxes 47 32,052 — 32,099 Operating lease liabilities 787 65,294 — 66,081 Other accrued liabilities 511 639,396 587 640,494 Due to related parties 77,420 118,139 (195,559) — Total current liabilities 82,941 1,906,121 (194,972) 1,794,090 Long-term liabilities Long-term debt, net of current maturities — 494,576 — 494,576 Finance lease liabilities — 10,710 (4,399) 6,311 Operating lease liabilities 3,273 289,428 — 292,701 Other liabilities — 46,922 1,510 48,432 Total liabilities 86,214 2,747,757 (197,861) 2,636,110 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 604 — — 604 Additional paid-in capital 836,491 409,686 (409,686) 836,491 Accumulated earnings (deficit) (200,687) 104,479 (104,479) (200,687) Accumulated other comprehensive income (loss) 8,129 6,021 (6,021) 8,129 Total stockholders’ equity 644,537 520,186 (520,186) 644,537 Total liabilities and stockholders’ equity $ 730,751 $ 3,267,943 $ (718,047) $ 3,280,647 36 Three Months Ended March 31, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 1,685,197 $ 12 $ 1,685,209 Operating expenses Cost of revenues (excluding depreciation) — 1,289,020 — 1,289,020 Operating expense (excluding depreciation) — 83,120 — 83,120 Depreciation and amortization 373 23,939 48 24,360 Loss (gain) on sale of assets, net — — — — General and administrative expense (excluding depreciation) 5,850 13,436 — 19,286 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 Operating income (loss) (11,494) 272,932 (36) 261,402 Other income (expense) Interest expense and financing costs, net (8) (16,333) 91 (16,250) Debt extinguishment and commitment costs — (17,720) — (17,720) Other income (expense), net (7) (27) (1) (35) 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) Income (loss) before income taxes 238,035 238,852 (238,784) 238,103 Income tax benefit (expense) (1) (145) (58,540) 58,472 (213) Net income (loss) $ 237,890 $ 180,312 $ (180,312) $ 237,890 Adjusted EBITDA $ (5,857) $ 173,481 $ 11 $ 167,635 37 Three Months Ended March 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 1,350,280 $ 13 $ 1,350,293 Operating expenses Cost of revenues (excluding depreciation) — 1,350,249 — 1,350,249 Operating expense (excluding depreciation) — 81,404 — 81,404 Depreciation and amortization 628 23,103 49 23,780 Loss (gain) on sale of assets, net — — — — General and administrative expense (excluding depreciation) 4,178 11,715 — 15,893 Acquisition and integration costs 63 — — 63 Total operating expenses 4,869 1,466,471 49 1,471,389 Operating income (loss) (4,869) (116,191) (36) (121,096) Other income (expense) Interest expense and financing costs, net (5) (16,483) 94 (16,394) Other income (expense), net (7) 9 — 2 Equity earnings (losses) from subsidiaries (132,170) — 132,170 — Total other income (expense), net (132,182) (16,474) 132,264 (16,392) Income (loss) before income taxes (137,051) (132,665) 132,228 (137,488) Income tax benefit (expense) (1) — 32,397 (31,960) 437 Net income (loss) $ (137,051) $ (100,268) $ 100,268 $ (137,051) Adjusted EBITDA $ (3,834) $ 16,205 $ 13 $ 12,384 38 Non-GAAP Financial Measures Adjusted EBITDA for the supplemental consolidating condensed financial information, which is segregated at the “Parent Guarantor,” “Issuer and Subsidiaries,” and “Non-Guarantor Subsidiaries and Eliminations” levels, is calculated in the same manner as for the Par Pacific Holdings, Inc. Adjusted EBITDA calculations. See “Results of Operations — Non-GAAP Performance Measures — Adjusted Net Income (Loss) and Adjusted EBITDA” above. 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 March 31, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 237,890 $ 180,312 $ (180,312) $ 237,890 Inventory valuation adjustment — 20,858 — 20,858 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 — — — — 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 — Income tax expense (benefit) 145 58,540 (58,472) 213 Adjusted EBITDA (1) $ (5,857) $ 173,481 $ 11 $ 167,635 39 Three Months Ended March 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ (137,051) $ (100,268) $ 100,268 $ (137,051) Inventory valuation adjustment — 80,653 — 80,653 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 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) — Income tax expense (benefit) — (32,397) 31,960 (437) Adjusted EBITDA (1) $ (3,834) $ 16,205 $ 13 $ 12,384 ________________________________________ (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 Our liquidity and capital requirements are primarily a function of our debt maturities and debt service requirements and contractual obligations, capital expenditures, turnaround outlays, and working capital needs. Examples of working capital needs include purchases and sales of commodities and associated margin and collateral requirements, facility maintenance costs, and other costs such as payroll. Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets. 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. In addition, we have the Supply and Offtake Agreement with J. Aron and the Washington Refinery Intermediation Agreement, which are used to finance the majority of the inventory at our Hawaii and Washington refineries, respectively. Generally, the primary uses of our capital resources have been in the operations of our refining and retail segments, payments related to acquisitions, and to repay or refinance indebtedness. We 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. We may seek to raise additional debt or equity capital to fund acquisitions and any other significant changes to our business or to refinance existing debt. We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost. We may from time to time seek to retire or repurchase our 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 Credit Agreement may also require annual prepayments of principal with a variable percentage of our excess cash 40 flow, 50% or 25% depending on our consolidated year end secured net leverage ratio (as defined in the Term Loan Credit Agreement). Cash Flows The following table summarizes cash activities for the three months ended March 31, 2023 and 2022 (in thousands): Three Months Ended March 31, 2023 2022 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; and • debt commitment and extinguishment costs of $17.7 million; partially offset by • unrealized gain on derivatives contracts of $13.7 million; and • 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; and • 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; and • 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, 41 • 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; and • stock based compensation costs of $3.7 million. Net cash provided by changes in operating assets and liabilities resulted primarily from: • net increases in our Supply and Offtake Agreement and Washington Refinery Intermediation Agreement obligations and accounts payable; and • an increase in gross environmental credit obligations primarily related to current period production volumes and increases in RINs prices; partially offset by: • net increases in our inventories and accounts receivable resulting from higher crude oil and refined product prices and higher inventory volumes at our Hawaii refinery; and • $28.9 million in deferred turnaround costs primarily related to the 2022 turnaround at our Washington refinery. Net cash used in investing activities for the three months ended March 31, 2022 consisted primarily of: • $16.3 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude recovery and debottlenecking projects at our Tacoma refinery, maintenance projects at our Wyoming refinery, and co-generation engine and combustion projects at our Hawaii refinery. 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; • 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: 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 42 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 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, the conflict between Russia and Ukraine and certain developments in the global crude oil markets on our business, our customers, and the markets where we operate; our beliefs regarding available capital resources; our beliefs regarding the likely results or impact of certain disputes or contingencies and any potential fines or penalties; our beliefs regarding the fair value of certain assets, and our expectations with respect to laws and regulations, including environmental regulations and related compliance costs and any fines or penalties related thereto; our expectations regarding the sufficiency of our cash flows and liquidity; our expectations regarding anticipated capital expenditures, including the timing and cost of compliance with consent decrees and other enforcement actions; our expectations regarding the impact of the adoption of certain accounting standards; our estimates regarding the fair value of certain indebtedness; estimated costs to settle claims from the Delta bankruptcy; the estimated value of, and our ability to settle, legal claims remaining to be settled against third parties; our expectations regarding the synergies or other benefits of our acquisitions; our expectations regarding certain tax liabilities and debt obligations; management’s assumptions about future events; 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; our ability to make strategic investments in business opportunities; and the estimates, assumptions, and projections regarding future financial condition, results of operations, liquidity, and cash flows. These and other forward-looking statements could cause the actual results, performance, or achievements of Par and its subsidiaries to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “may,” “will,” “would,” “could,” “should,” “seeks,” or “scheduled to,” or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act, and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. The forward-looking statements contained in this Quarterly Report on Form 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control, including those set out in our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q under “Risk Factors.” In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this Quarterly Report on Form 10-Q are not guarantees of future performance; and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described above and under Critical Accounting Estimates and Risk Factors included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q. All forward-looking statements speak only as of the date they are made. Additionally, significant uncertainties remain with respect to COVID-19 and its economic effects. Due to the unpredictable and unprecedented nature of the COVID-19 pandemic, we cannot identify all potential risks to, and impacts on, our business, including the ultimate adverse economic impact to the Company’s business, results of operations, financial condition, and liquidity. There can be no guarantee that the operational and financial measures the Company has taken, and may take in the future, will be fully effective. We do not intend to update or revise any forward-looking statements as a result of new 43 information, future events, or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.