What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-09 compared with 2023-05-05 · 440 added, 228 removed, 644 unchanged (51% of the section changed)

4 unchanged sentences

(in thousands, except share data)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current assets

2 unchanged sentences

Total cash, cash equivalents, and restricted cash 194,957 494,926

Trade accounts receivable, net of allowances of $ 0.3 million and $ 0.3 million at March 31, 2023 and December 31, 2022, respectively

Trade accounts receivable, net of allowances of $ 0.2 million and $ 0.3 million at June 30, 2023 and December 31, 2022, respectively

402,086 252,885

8 unchanged sentences

Operating lease right-of-use assets 330,864 350,761

Refining and logistics equity investments 84,425 —

Intangible assets, net 12,247 13,577

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Common stock, $ 0.01 par value;

500,000,000 shares authorized at March 31, 2023 and December 31, 2022, 61,029,446 shares and 60,470,837 shares issued at March 31, 2023 and December 31, 2022, respectively

500,000,000 shares authorized at June 30, 2023 and December 31, 2022, 61,043,466 shares and 60,470,837 shares issued at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 845,979 836,491

8 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Revenues $ 1,783,927 $ 2,106,332 $ 3,469,136 $ 3,456,625

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Depreciation and amortization 28,216 25,583 52,576 49,363

Loss on sale of assets, net — 15 — 15

General and administrative expense (excluding depreciation) 23,168 15,438 42,454 31,331

Equity (earnings) from refining and logistics investments ( 425 ) — ( 425 ) —

Acquisition and integration costs 7,273 — 12,544 63

1 unchanged sentence

Total operating expenses 1,737,494 1,932,303 3,161,301 3,403,692

Operating income (loss) 261,402 ( 121,096 )

Operating income 46,433 174,029 307,835 52,933

Other income (expense)

1 unchanged sentence

Debt extinguishment and commitment costs 38 ( 5,672 ) ( 17,682 ) ( 5,672 )

Other income (loss), net ( 35 ) 2

Other income, net 379 47 344 49

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

Total other expense, net ( 14,492 ) ( 23,779 ) ( 37,791 ) ( 40,171 )

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

Income tax benefit (expense) ( 213 ) 437

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

Income (loss) per share

Income before income taxes 31,941 150,250 270,044 12,762

Income tax expense ( 1,928 ) ( 1,125 ) ( 2,141 ) ( 688 )

Net income $ 30,013 $ 149,125 $ 267,903 $ 12,074

Income per share

Basic $ 0.50 $ 2.51 $ 4.45 $ 0.20

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(in thousands)

Three Months Ended

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

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Net income $ 30,013 $ 149,125 $ 267,903 $ 12,074

Other comprehensive income (loss):

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(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

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

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

Net Income $ 267,903 $ 12,074

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization 52,576 49,363

3 unchanged sentences

Deferred taxes 1,226 615

Loss on sale of assets, net — 15

Stock-based compensation 6,082 5,769

1 unchanged sentence

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

Equity earnings from refining and logistics investments ( 425 ) —

Dividends received from refining and logistics investments 425 —

Net changes in operating assets and liabilities:

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Accounts payable, other accrued liabilities, and operating lease ROU assets and liabilities 76,507 299,197

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

Net cash provided by operating activities 312,240 27,657

Cash flows from investing activities:

Acquisition of business ( 608,223 ) —

Capital expenditures ( 30,729 ) ( 29,020 )

1 unchanged sentence

Return of capital from Laramie Energy, LLC 10,706 —

Return of capital from refining and logistics investments 2,175 —

Net cash used in investing activities ( 626,021 ) ( 28,952 )

2 unchanged sentences

Repayments of borrowings ( 702,499 ) ( 313,143 )

Net borrowings on deferred payment arrangements and receivable advances 22,407 41,712

Net borrowings (repayments) on deferred payment arrangements and receivable advances ( 31,405 ) 142,348

Payment of deferred loan costs ( 9,127 ) —

2 unchanged sentences

Payments for debt extinguishment and commitment costs ( 8,742 ) ( 3,983 )

Other financing activities, net 617 350

Net cash provided by financing activities 13,812 75,252

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ROU assets obtained in exchange for new operating lease liabilities 16,684 13,692

ROU assets terminated in exchange for release from finance lease liabilities — —

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

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

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

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

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

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

Net income — — — 149,125 — 149,125

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

Additional Accumulated Other

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Balance, March 31, 2023 61,030 610 842,062 37,203 8,118 887,993

Issuance of common stock for employee stock purchase plan 27 — 726 — — 726

Stock-based compensation 115 1 3,655 — — 3,656

Purchase of common stock for retirement ( 128 ) ( 1 ) ( 464 ) ( 2,601 ) — ( 3,066 )

Other comprehensive loss — — — — ( 11 ) ( 11 )

Net income — — — 30,013 — 30,013

Balance, June 30, 2023 61,044 $ 610 $ 845,979 $ 64,615 $ 8,107 $ 919,311

See accompanying notes to the condensed consolidated financial statements.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

For the Interim Periods Ended June 30, 2023 and 2022

Note 1 — Overview

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Currently, we operate in three primary business segments:

1) Refining - We own and operate three refineries in Hawaii, Wyoming, and Washington.

1) Refining - We own and operate four refineries in Hawaii, Wyoming, Washington, and Montana.

Beginning June 1, 2023, we own and operate a refinery that processes Western Canadian and regional Rocky Mountain crude oil and a 65 % interest in an adjacent cogeneration facility in Billings, Montana.

2) Retail - Our retail outlets in Hawaii, Washington, and Idaho sell gasoline, diesel, and retail merchandise through Hele and “76” branded sites, “nomnom” branded company-operated convenience stores, 7-Eleven operated convenience stores, other sites operated by third parties, and unattended cardlock stations.

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

As of March 31, 2023, we owned a 46.0 % equity investment in Laramie Energy, LLC (“Laramie Energy”).

Beginning June 1, 2023, we maintain ownership in distribution and logistics assets in the upper Rockies region, including the wholly owned Silvertip Pipeline, a 40 % interest in the Yellowstone refined products pipeline, and four wholly owned and three joint venture refined product terminals.

As of June 30, 2023, we owned a 46.0 % equity investment in Laramie Energy, LLC (“Laramie Energy”).

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

Our Corporate and Other reportable segment primarily includes general and administrative costs.

As noted in the Refining and Logistics discussions above, as of June 30, 2023 through the Billings Acquisition (as defined in Note 5—Acquisitions), we own a 65 % and a 40 % equity investment in Yellowstone Energy Limited Partnership, (“YELP”) and Yellowstone Pipeline Company (“YPLC”), respectively.

Our Corporate and Other reportable segment primarily includes general and administrative costs and certain development expenses associated with our renewable fuel initiatives.

Note 2— Summary of Significant Accounting Policies

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Actual amounts could differ from these estimates.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Allowance for Credit Losses

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

We did not have a material change in our allowances on trade receivables during the three months ended March 31, 2023 or 2022.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

We did not have a material change in our allowances on trade receivables during the three and six months ended June 30, 2023 or 2022.

Cost Classifications

Cost of revenues (excluding depreciation) includes the hydrocarbon-related costs of inventory sold, transportation costs of delivering product to customers, crude oil consumed in the refining process, costs to satisfy our Renewable Identification Numbers (“RINs”) obligations, and certain hydrocarbon fees and taxes.

Cost of revenues (excluding depreciation) includes the hydrocarbon-related costs of inventory sold, transportation costs of delivering product to customers, crude oil consumed in the refining process, costs to satisfy our Renewable Identification Numbers (“RINs”) and other environmental credit obligations, and certain hydrocarbon fees and taxes.

Cost of revenues (excluding depreciation) also includes the unrealized gains and losses on derivatives and inventory valuation adjustments.

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Cost of revenues $ 5,022 $ 5,175 $ 10,021 $ 10,227

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There have been no developments to recent accounting pronouncements, including the expected dates of adoption and estimated effects on our financial condition, results of operations, and cash flows, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Note 3— Investment in Laramie Energy, LLC

As of March 31, 2023, we had a 46.0 % ownership interest in Laramie Energy.

Note 3— Refining and Logistics Equity Investments

Yellowstone Energy Limited Partnership

On June 1, 2023, we completed the Billings Acquisition (as defined in Note 5—Acquisitions) and acquired a 65 % limited partnership ownership interest in YELP.

YELP owns a cogeneration facility in Billings, Montana, that converts petroleum coke, supplied from our Montana refinery and other nearby third-party refineries, into power production for the local utility grid.

As of June 30, 2023, our investment in YELP was $ 58.0 million.

We account for our investment in YELP using the equity method as we have the ability to exert significant influence over, but do not control its operating and financial policies.

Our proportionate share of YELP’s net income (loss) will be recorded on a one-month lag basis and included in Equity (earnings) from refining and logistics investments on our condensed consolidated statements of operations.

Yellowstone Pipeline Company

On June 1, 2023, we completed the Billings Acquisition (as defined in Note 5—Acquisitions) and acquired a 40 % ownership interest in YPLC.

YPLC owns a refined products pipeline that begins at our Montana refinery and transports refined product to Montana and the Pacific Northwest.

As of June 30, 2023, our investment in YPLC was $ 26.4 million.

We account for our ownership interest in YPLC using the equity method as we have the ability to exert significant influence over, but do not control its operating and financial policies.

Our proportionate share of YPLC’s net income of $ 0.4 million for the three and six months ended June 30, 2023 is included in Equity (earnings) from refining and logistics investments on our condensed

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

consolidated statements of operations.

Additionally, on June 28, 2023, YPLC made a cash dividend to its shareholders, of which our proportionate share was $ 2.6 million.

Note 4— Investment in Laramie Energy

Laramie Energy

As of June 30, 2023, we had a 46.0 % ownership interest in Laramie Energy.

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

The balance of our investment in Laramie Energy was zero as of March 31, 2023 and December 31, 2022.

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

The balance of our investment in Laramie Energy was zero as of June 30, 2023 and December 31, 2022.

Prior to February 21, 2023, Laramie Energy had a term loan agreement which provided a term loan secured by a lien on its natural gas and crude oil properties and related assets.

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

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Laramie Energy’s term loan matures on February 21, 2027.

As of March 31, 2023, the term loan had an outstanding balance of $ 160.0 million.

As of June 30, 2023, the term loan had an outstanding balance of $ 155.0 million.

On March 1, 2023, pursuant to its new term loan agreement, Laramie Energy made a one-time cash distribution to its owners, including us, based on ownership percentage.

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Effective February 21, 2023, and concurrent with the new term loan agreement noted above, we resumed the application of equity method accounting with respect to our investment in Laramie Energy.

At March 31, 2023, our equity in the underlying net assets of Laramie Energy exceeded the carrying value of our investment by approximately $ 76.4 million.

At June 30, 2023, our equity in the underlying net assets of Laramie Energy exceeded the carrying value of our investment by approximately $ 76.4 million.

This difference arose primarily due to other-than-temporary impairments of our equity investment in Laramie Energy.

Note 5— Acquisitions

Billings Acquisition

On October 20, 2022, we and our subsidiaries Par Montana, LLC (“Par Montana”), Par Montana Holdings, LLC (“Par Montana Holdings”), and Par Rocky Mountain Midstream, LLC (“Par Rocky Mountain”, and together with Par Montana and Par Montana Holdings, the “Purchasers”), entered into an equity and asset purchase agreement (the “Purchase Agreement”) with Exxon Mobil Corporation, ExxonMobil Oil Corporation, and ExxonMobil Pipeline Company LLC (collectively, the “Sellers”) to purchase (i) the high-conversion, complex refinery located in Billings, Montana and certain associated distribution and logistics assets, (ii) the Sellers’ 65 % limited partnership equity interest in YELP, and (iii) the Sellers’ 40 % equity interest in YPLC for a base purchase price of $ 310.0 million plus the value of hydrocarbon inventory and adjusted working capital at closing (collectively, the “Billings Acquisition”).

The Billings Acquisition enhances our fully integrated downstream network in the upper Rockies and Pacific Northwest.

The Billings Acquisition increases scale and geographic diversification on the U.S.

mainland and allows for efficient access to alternative markets.

On June 1, 2023, we completed the Billings Acquisition for a total purchase price of approximately $ 638.2 million (before consideration of the preliminary working capital adjustment), consisting of a cash deposit of $ 30.0 million paid on October 20, 2022 upon execution of the Purchase Agreement and $ 608.2 million paid at closing on June 1, 2023.

The preliminary working capital adjustment is $ 12.7 million, which will reduce the total purchase price.

The Company funded the Billings Acquisition with cash on hand and borrowings from the ABL Credit Facility (as defined in Note 11—Debt) under the ABL Credit Facility (as defined in Note 11—Debt).

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

Note 4— Acquisitions

Billings Acquisition

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

and in Yellowstone Logistics Holding Company for a base purchase price of $ 310.0 million plus the value of hydrocarbon inventory and adjusted working capital at closing (collectively, the “Billings Acquisition”).

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

Upon execution of the Purchase Agreement, we made a cash deposit of $ 30.0 million, recorded in Prepaid and other current assets, which will be credited to the purchase price upon a successful closing.

We guaranteed the payment and performance of the Purchasers’ obligations under the Purchase Agreement.

We incurred $ 5.3 million of acquisition costs related to the Billings Acquisition for the three months ended March 31, 2023.

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

For the Interim Periods Ended June 30, 2023 and 2022

We accounted for the Billings Acquisition as a business combination whereby the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition.

A summary of the preliminary fair value of the assets acquired and liabilities assumed is as follows (in thousands):

Trade accounts receivable $ 2,395

Inventories 299,228

Property, plant, and equipment 259,088

Operating lease right-of-use assets 3,562

Investment in refining and logistics subsidiaries 86,600

Other long-term assets 4,094

Total assets (1) 654,967

Current operating lease liabilities 2,081

Other current liabilities 7,056

Environmental liabilities 18,869

Long-term operating lease liabilities 1,481

Total liabilities 29,487

Total $ 625,480

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(1) We allocated $ 531.7 million and $ 123.3 million of total assets to our refining and logistics segments, respectively.

We have recorded a preliminary estimate of the fair value of the assets acquired and liabilities assumed and expect to finalize the purchase price allocation during the first part of 2024.

The primary areas of the purchase price allocation that are not finalized as of June 30, 2023 relate to inventory, property, plant, and equipment, and the environmental liabilities.

Any final valuation adjustments could change the fair values assigned to the assets acquired and liabilities assumed, resulting in a change to our condensed consolidated financial statements, which could be material.

We incurred $ 5.1 million and $ 10.4 million of acquisition costs related to the Billings Acquisition for the three and six months ended June 30, 2023, respectively.

These costs are included in Acquisition and integration costs on our condensed consolidated statements of operations.

We assumed certain environmental liabilities associated with the Billings Acquisition, including costs related to hazardous waste corrective measures, ground and surface water sampling and monitoring.

We expect to incur these costs over a 20 to 30 year period.

The results of operations of the Montana refinery, newly acquired logistics assets in the Rockies region, and YELP and YPLC equity investments were included in our results beginning on June 1, 2023.

For both of the three and six months ended June 30, 2023, our results of operations included revenues of $ 217.2 million and a net loss of $ 15.6 million related to these assets.

The following unaudited pro forma financial information presents our consolidated revenues and net income (loss) as if the Billings Acquisition had been completed on January 1, 2022 (in thousands):

Six Months Ended June 30,

Revenues $ 4,410,002 $ 4,733,450

Net income (loss) 419,113 ( 80,237 )

These pro forma results were based on estimates and assumptions that we believe are reasonable.

The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the Billings Acquisition been effective as of the dates presented, nor is it indicative of future operating results of the combined company.

Pro forma adjustments include (i) incremental depreciation resulting from the estimated fair value of property, plant, and equipment acquired, (ii) transaction costs which were shifted from the six months ended June 30, 2023 to the six months ended June 30, 2022 and (iii) elimination of historical transactions between Par and the Montana assets.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Note 6— Revenue Recognition

As of March 31, 2023 and December 31, 2022, receivables from contracts with customers were $ 271.9 million and $ 242.5 million, respectively.

As of June 30, 2023 and December 31, 2022, receivables from contracts with customers were $ 367.7 million and $ 242.5 million, respectively.

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

Deferred revenue was $ 22.8 million and $ 11.5 million as of March 31, 2023 and December 31, 2022, respectively.

Deferred revenue was $ 14.2 million and $ 11.5 million as of June 30, 2023 and December 31, 2022, respectively.

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

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

Three Months Ended March 31, 2023 Refining Logistics Retail

Three Months Ended June 30, 2023 Refining Logistics Retail

Product or service:

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Total segment revenues (3) $ 1,708,541 $ 64,709 $ 148,396

Three Months Ended March 31, 2022 Refining Logistics Retail

Three Months Ended June 30, 2022 Refining Logistics Retail

Product or service:

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

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(1) Distillates primarily include diesel and jet fuel.

(2) Other refined products include fuel oil, gas oil, and asphalt.

(3) Refer to Note 18—Segment Information for the reconciliation of segment revenues to total consolidated revenues.

Six Months Ended June 30, 2023 Refining Logistics Retail

Product or service:

Gasoline $ 1,053,922 $ — $ 209,453

Distillates (1) 1,479,101 — 23,967

Other refined products (2) 790,228 — —

Merchandise — — 48,720

Transportation and terminalling services — 117,097 —

Other revenue 702 — 1,828

Total segment revenues (3) $ 3,323,953 $ 117,097 $ 283,968

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

For the Interim Periods Ended June 30, 2023 and 2022

Six Months Ended June 30, 2022 Refining Logistics Retail

Product or service:

Gasoline $ 1,016,051 $ — $ 202,006

Distillates (1) 1,484,684 — 19,734

Other refined products (2) 830,461 — —

Merchandise — — 43,722

Transportation and terminalling services — 93,094 —

Other revenue 12,482 — 1,658

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

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(1) Distillates primarily include diesel and jet fuel.

(2) Other refined products include fuel oil, vacuum gas oil, and asphalt.

(3) Refer to Note 19—Segment Information for the reconciliation of segment revenues to total consolidated revenues.

Note 7— Inventories

Inventories at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

Inventories at June 30, 2023 and December 31, 2022 consisted of the following (in thousands):

Titled Inventory Supply and Offtake Agreement (1) Total

March 31, 2023

June 30, 2023

Crude oil and feedstocks $ 152,175 $ 216,782 $ 368,957

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(1) Please read Note 9—Inventory Financing Agreements for further information.

(2) Includes $ 193.2 million and $ 258.2 million of RINs and environmental credits, reported at the lower of cost or net realizable value, as of March 31, 2023 and December 31, 2022, respectively.

RINs and environmental credit obligations of $ 346.7 million and $ 549.8 million, reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023 and December 31, 2022, there was no reserve for the lower of cost or net realizable value of inventory.

As of March 31, 2023 and December 31, 2022, the excess of current replacement cost over the last-in, first-out (“LIFO”) inventory carrying value at the Washington refinery was approximately $ 37.0 million and $ 46.4 million, respectively.

(2) Includes $ 293.3 million and $ 258.2 million of RINs and environmental credits, reported at the lower of cost or net realizable value, as of June 30, 2023 and December 31, 2022, respectively.

RINs and environmental credit obligations of $ 433.0 million and $ 549.8 million, reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, respectively.

If we marked our RINs and environmental credits to fair market value, our net environmental credit obligations would have been $ 100.9 million and $ 152.6 million as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023 and December 31, 2022, there was no reserve for the lower of cost or net realizable value of inventory.

As of June 30, 2023 and December 31, 2022, the excess of current replacement cost over the last-in, first-out (“LIFO”) inventory carrying value at the Washington refinery was approximately $ 41.1 million and $ 46.4 million, respectively.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Note 8— Prepaid and Other Current Assets

Prepaid and other current assets at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

March 31, 2023 December 31, 2022

Prepaid and other current assets at June 30, 2023 and December 31, 2022 consisted of the following (in thousands):

June 30, 2023 December 31, 2022

Collateral posted with broker for derivative instruments (1) $ 29,973 $ 40,788

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Supply and Offtake Agreement

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Supply and Offtake Agreement

Under the Second Amended and Restated Supply and Offtake Agreement (as amended, the “Supply and Offtake

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

Agreement”), J.

Under the Second Amended and Restated Supply and Offtake Agreement (as amended, the “Supply and Offtake Agreement”), J.

Aron & Company LLC (“J.

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

On February 13, 2023, we entered into an amendment to the Supply and Offtake Agreement to, among other things, facilitate entry into the Term Loan Credit Agreement.

On June 21, 2023, we entered into an amendment (the June “2023 S&O Amendment”) to establish the Secured Overnight Financing Rate ("SOFR"), as defined in the Supply and Offtake Agreement, as the benchmark rate in replacement of the London Interbank Offered Rate ("LIBOR") and revise certain other terms and conditions, effective July 1, 2023.

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

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In 2021 and 2022, we entered into multiple contracts to fix certain market fees for the period from January 2022 through May 2022 for $ 8.7 million.

In 2023, we did not enter into any contracts to fix market fees related to our Supply and Offtake Agreement.

For the three and six months ended June 30, 2023, we did not enter into any contracts to fix market fees related to our Supply and Offtake Agreement.

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

Aron as of March 31, 2023 and December 31, 2022.

Aron as of June 30, 2023 and December 31, 2022.

The amount due to or from J.

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

We did not recognize any fixed market fees for the three months ended March 31, 2023.

We recognized fixed market fees of $ 7.3 million for the three months ended March 31, 2022, which were included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

We did not recognize any fixed market fees for the three and six months ended June 30, 2023.

We recognized fixed market fees of $ 1.6 million and $ 8.8 million for the three and six months ended June 30, 2022, respectively, which were included in Cost of revenues (excluding

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

depreciation) on our condensed consolidated statements of operations.

Washington Refinery Intermediation Agreement

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

On March 9, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to advance the term expiry date from December 21, 2022 to March 31, 2023.

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

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

On August 11, 2022, we and MLC entered into an amendment to the Washington Refinery Intermediation Agreement to establish the adjusted three-month term SOFR rate as the benchmark rate in replacement of the LIBOR rate and revise certain other terms and conditions.

On November 2, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to further extend the term through March 31, 2024 and reduce the maximum borrowing capacity to $ 110 million.

On February 28, 2023, we and MLC amended the Washington Refinery Intermediation Agreement to facilitate entry into the Term Loan Credit Agreement.

On February 28, 2023, we and MLC amended the Washington Refinery Intermediation Agreement to facilitate entry into the Term Loan Credit Agreement, and on April 26, 2023, we and MLC amended the Washington Refinery Intermediation Agreement to facilitate entry into the ABL Credit Facility.

The following table summarizes our outstanding borrowings, letters of credit, and contractual undertaking obligations under the intermediation agreements (in thousands):

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Discretionary Draw Facility

8 unchanged sentences

83,882 56,601

Aron payment undertaking obligations — —

MLC issued letters of credit 75,830 115,001

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

______________________________________________________

2 unchanged sentences

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Net fees and expenses:

6 unchanged sentences

___________________________________________________

(1) Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $ 2.4 million and $ 4.4 million for the three months ended March 31, 2023 and 2022, respectively.

(1) Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $ 1.8 million and $ 19.4 million for the three months ended June 30, 2023 and 2022 and $ 4.2 million and $ 23.8 million for the six months ended June 30, 2023 and 2022, respectively.

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

Please read Note 12—Derivatives for further information.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Note 10— Other Accrued Liabilities

Other accrued liabilities at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

March 31, 2023 December 31, 2022

Other accrued liabilities at June 30, 2023 and December 31, 2022 consisted of the following (in thousands):

June 30, 2023 December 31, 2022

Accrued payroll and other employee benefits $ 22,617 $ 27,815

3 unchanged sentences

___________________________________________________

(1) Gross environmental credit obligations are stated at market as of March 31, 2023 and December 31, 2022.

(1) Gross environmental credit obligations are stated at market as of June 30, 2023 and December 31, 2022.

Please read Note 13—Fair Value Measurements for further information.

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

The carrying costs of these assets were $ 193.2 million and $ 258.2 million as of March 31, 2023 and December 31, 2022, respectively.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

The carrying costs of these assets were $ 293.3 million and $ 258.2 million as of June 30, 2023 and December 31, 2022, respectively.

If we marked our RINs and environmental credits to fair market value, our net environmental credit obligations at market value would have been $ 100.9 million and $ 152.6 million as of June 30, 2023 and December 31, 2022, respectively.

Note 11— Debt

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

ABL Credit Facility due 2028

1 unchanged sentence

7.75 % Senior Secured Notes due 2025

Term Loan B due 2026 — 203,125

Term Loan B Facility due 2026 — 203,125

12.875 % Senior Secured Notes due 2026

Other long-term debt 5,058 —

Principal amount of long-term debt 594,683 515,439

3 unchanged sentences

Long-term debt, net of current maturities $ 574,762 $ 494,576

As of March 31, 2023 and December 31, 2022, we had $ 13.9 million and $ 19.5 million, respectively, in letters of credit outstanding under the loan and security agreements with certain lenders and Bank of America, N.A., as administrative agent and collateral agent (the “ABL Credit Facility”).

We had $ 6.0 million in cash-collateralized letters of credit and surety bonds outstanding as of March 31, 2023 and December 31, 2022 under agreements with MLC and under certain other facilities.

Under the ABL Credit Facility and the Term Loan Credit Agreement due 2030, our subsidiaries are restricted from paying dividends or making other equity distributions, subject to certain exceptions.

ABL Credit Facility

Under the ABL Credit Facility, we have a revolving credit facility that provides for revolving loans and for the issuance of letters of credit (the “ABL Revolver”).

On February 2, 2022, Par Petroleum, LLC, Par Hawaii, LLC (“PHL”), Hermes Consolidated, LLC, and Wyoming Pipeline Company, LLC (collectively, the “ABL Borrowers”), entered into the Amended and Restated Loan and Security Agreement (as amended from time to time, the “ABL Loan Agreement”) dated as of February 2, 2022, with certain lenders and Bank of America, N.A., which amended and restated the Loan and Security Agreement dated as of December 21, 2017, in its entirety.

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

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

On March 30, 2022, the ABL Loan Agreement was amended to exercise the accordion feature of the ABL Loan Agreement.

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

As of March 31, 2023, the ABL Revolver had no outstanding revolving loans, $ 13.9 million in letters of credit outstanding, and a borrowing base of approximately $ 103.0 million.

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.

As of June 30, 2023, we had $ 215.0 million in letters of credit outstanding under the ABL Credit Facility, as defined below.

As of December 31, 2022, we had $ 19.5 million in letters of credit outstanding under the Prior ABL Credit Facility, as defined below.

We had $ 70.0 million and $ 5.9 million in cash-collateralized letters of credit and surety bonds outstanding as of June 30, 2023 and December 31, 2022, respectively, under agreements with MLC and under certain other facilities.

Under the ABL Credit Facility and the Term Loan Credit Agreement, defined below, our subsidiaries are restricted from paying dividends or making other equity distributions, subject to certain exceptions.

ABL Credit Facility due 2028

On April 26, 2023, in connection with the Billings Acquisition, we repaid in full and terminated the loan and security agreements with certain lenders and Bank of America, N.A., as administrative agent and collateral agent (as amended from time to time, “Prior ABL Credit Facility”) and entered into an Asset-Based Revolving Credit Agreement with certain lenders, and Wells Fargo Bank, National Association, as administrative agent and collateral agent (as amended from time to time, the “ABL Credit Facility”), providing for a senior secured asset-based revolving credit facility in an initial aggregate principal amount of up to $ 150 million and secured by a first priority lien over certain of our assets and other personal property, subject to certain customary exceptions.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

For the Interim Periods Ended June 30, 2023 and 2022

In accordance with ASC Topic 470, "Debt", we accounted for the ABL Credit Facility as a debt m odification and unamortized deferred financing costs/modification costs o f $ 0.7 million were rolled into the ABL Credit Facility which will be amortized over the remaining term of the ABL Credit Facility .

On May 30, 2023, the ABL Credit Facility was amended (“ABL Credit Facility Billings Amendment”) in order to, among other things, increase the principal amount to $ 450 million, adjust the borrowing base to account for the Billings Acquisition assets, and fund an escrow account to purchase a portion of the hydrocarbon inventory associated with the Billings Acquisition.

Initially the ABL Credit Facility permitted the issuance of letters of credit of up to $ 65 million, with the ABL Credit Facility Billings Amendment this amount increased to $ 250 million.

The ABL Credit Facility will mature, and the commitments thereunder will terminate on April 26, 2028.

As of June 30, 2023, the ABL Credit Facility had $ 41.0 million outstanding revolving loans , $ 215.0 million in letters of credit outstanding, and a borrowing base of approxi mately $ 531.0 million.

The interest rates applicable to borrowings under the ABL Credit Facility is based on a fluctuating rate of interest measured by reference to either, at our option, (i) a base rate, plus an applicable margin, or (ii) an Adjusted Term SOFR rate, plus an applicable margin.

The initial applicable margin for borrowings under the Facilities is 0.50 % per annum with respect to base rate borrowings and 1.50 % per annum with respect to SOFR borrowings, and the applicable margin for such borrowings after June 30, 2023 will be based on the our quarterly average excess availability as determined by reference to a borrowing base, ranging from 0.25 % per annum to 0.75 % per annum with respect to base rate borrowings and from 1.25 % per annum to 1.75 % per annum with respect to SOFR borrowings.

We will also pay a de minimis fee for any undrawn amounts available under the ABL Credit Facility.

The ABL Credit Facility includes certain customary affirmative and negative covenants, including a minimum financial fixed charge coverage ratio and a minimum Borrower Group Fixed Charge Coverage Ratio.

In addition, the covenants limit our ability and the ability of our restricted subsidiaries to incur indebtedness, grant liens, make investments, engage in acquisitions, mergers, or consolidations, engage in certain hedging transactions, and pay dividends and other restricted payments.

Term Loan Credit Agreement due 2030

3 unchanged sentences

The net 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 and any remaining net proceeds are expected to be used for general corporate purposes.

We recognized an aggregate of $ 2.8 million in debt modification costs in connection with the refinancing, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the three months ended March 31, 2023.

The Term Loan Credit Agreement bears interest at a fluctuating rate per annum equal to either a SOFR rate or base rate “Base Rate”, provided that the Base Rate shall not be below 1.5 %, as defined in the Term Loan Credit Agreement.

6 unchanged sentences

• a rate as announced by Wells Fargo (the “Prime Rate”).

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

The Term Loan Credit Agreement requires quarterly payments of $ 1.4 million on the last business day of each March, June, September and December, commencing on June 30, 2023, with the balance due upon maturity.

3 unchanged sentences

On March 17, 2023, we repurchased and cancelled all remaining outstanding 7.75% Senior Secured Notes at a repurchase price of 101.938 % of the aggregate principal amount repurchased.

In connection with the termination of the 7.75% Senior Secured Notes, we recognized debt extinguishment costs of $ 5.9 million associated with debt repurchase premiums and $ 3.4 million associated with unamortized deferred financing costs, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the three months ended March 31, 2023.

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

1 unchanged sentence

On February 28, 2023, we terminated and repaid all amounts outstanding under the Term Loan B Facility.

We recognized debt extinguishment costs of $ 1.7 million associated with unamortized deferred financing costs, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the three months ended March 31, 2023.

The Term Loan B Facility bore interest at a rate per annum equal to Adjusted LIBOR (as defined in the Term Loan B Facility) plus an applicable margin of 6.75 % or at a rate per annum equal to Alternate Base Rate (as defined in the Term Loan B Facility) plus an applicable margin of 5.75 %.

4 unchanged sentences

On March 17, 2023, we repurchased and cancelled all remaining outstanding 12.875% Senior Secured Notes at a repurchase price of 108.616 % of the aggregate principal amount repurchased.

In connection with the termination of the 12.875% Senior Secured Notes, we recognized debt extinguishment costs of $ 2.8 million associated with debt repurchase premiums and $ 1.1 million associated

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

with unamortized deferred financing costs, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the three months ended March 31, 2023.

In connection with the termination of the 12.875% Senior Secured Notes, we recognized debt extinguishment costs of $ 2.8 million associated with debt repurchase premiums and $ 1.1 million associated with unamortized deferred financing costs, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the six months ended June 30, 2023.

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

Other long-term debt

On June 7, 2023, we entered into two promissory notes with a third-party lender to acquire land in Kahului, Hawaii, and Hilo, Hawaii totaling $ 5.1 million.

The notes bear interest at a fixed rate of 4.625 % per annum and are payable on the first day of each month, commencing on July 1, 2023, until maturity.

The promissory notes are unsecured and mature on June 7, 2030.

Cross Default Provisions

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

As of March 31, 2023, we were in compliance with all of our debt instruments.

As of June 30, 2023, we were in compliance with all of our debt instruments.

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

Any non-convertible debt securities issued under the Registration Statement may be fully and unconditionally guaranteed (except for customary release provisions), on a joint and several basis, by some or all of our subsidiaries, other than subsidiaries that are “minor” within the meaning of Rule 3-10 of Regulation S-X (the “Guarantor Subsidiaries”).

We have excluded the summarized financial information for the Guarantor Subsidiaries as the assets and results of operations of the Company and the Guarantor Subsidiaries are not materially different than the corresponding amounts presented on our consolidated financial statements.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

excluded the summarized financial information for the Guarantor Subsidiaries as the assets and results of operations of the Company and the Guarantor Subsidiaries are not materially different than the corresponding amounts presented on our consolidated financial statements.

Note 12— Derivatives

2 unchanged sentences

Please read Note 13—Fair Value Measurements for the gross fair value and net carrying value of our derivative instruments.

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

Our open futures and over-the-counter (“OTC”) swaps at March 31, 2023, will settle by June 2024.

At March 31, 2023, our open commodity derivative contracts represented (in thousands of barrels):

Our open futures and over-the-counter (“OTC”) swaps at June 30, 2023, will settle by December 2024.

At June 30, 2023, our open commodity derivative contracts represented (in thousands of barrels):

Contract Type Purchases Sales Net

2 unchanged sentences

Total 52,041 ( 56,206 ) ( 4,165 )

At March 31, 2023, we also had option collars that economically hedge a portion of our internally consumed fuel at our refineries.

The following table provides information on these option collars at our refineries as of March 31, 2023:

At June 30, 2023, we also had option collars that economically hedge a portion of our internally consumed fuel at our refineries.

The following table provides information on these option collars at our refineries as of June 30, 2023:

Average barrels per month 166,667 148,168

1 unchanged sentence

Weighted-average strike price - ceiling (in dollars) $ 88.19 $ 83.20

Earliest commencement date April 2023

Furthest expiry date December 2023

Earliest commencement date July 2023 January 2024

Furthest expiry date December 2023 June 2024

Interest Rate Derivatives

We are exposed to interest rate volatility in our ABL Revolver, Term Loan Credit Agreement, Supply and Offtake Agreement, and Washington Refinery Intermediation Agreement.

We are exposed to interest rate volatility in our ABL Credit Facility, Term Loan Credit Agreement, Supply and Offtake Agreement, and Washington Refinery Intermediation Agreement.

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

As of March 31, 2023 and December 31, 2022, we did not hold any interest rate derivative instruments.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

The following table provides information on the fair value amounts (in thousands) of these derivatives as of March 31, 2023 and December 31, 2022, and their placement within our condensed consolidated balance sheets.

Balance Sheet Location March 31, 2023 December 31, 2022

On April 12, 2023, we entered into an interest rate collar transaction to manage our interest rate risk on the Term Loan Credit Agreement.

The interest rate collar agreement reduces variable interest rate risk from May 31, 2023, through May 31, 2026, with a notional amount of $ 300.0 million as of June 30, 2023.

The terms of the agreement provide for an interest rate cap of 5.50 % and floor of 2.295 %, based on the three month SOFR as of the fixing date.

We pay variable interest quarterly until the three month SOFR reaches the floor.

If the three month SOFR is between the floor and the cap, no payment is due to either party.

If the three month SOFR is greater than the cap, the counterparty pays us.

The interest rate collar transaction expires on May 31, 2026.

As of December 31, 2022, we did not hold any interest rate derivative instruments.

The following table provides information on the fair value amounts (in thousands) of these derivatives as of June 30, 2023 and December 31, 2022, and their placement within our condensed consolidated balance sheets.

Balance Sheet Location June 30, 2023 December 31, 2022

Asset (Liability)

1 unchanged sentence

Commodity derivatives Other accrued liabilities ( 18,659 ) ( 10,989 )

Commodity derivatives Other liabilities ( 199 ) —

Aron repurchase obligation derivative Obligations under inventory financing agreements ( 6,628 ) ( 12,156 )

MLC terminal obligation derivative Obligations under inventory financing agreements 1,044 14,435

Interest rate derivatives Other long-term assets 543 —

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

_________________________________________________________

(1) Does not include cash collateral of $ 18.9 million and $ 40.8 million recorded in Prepaid and other current assets as of March 31, 2023 and December 31, 2022, respectively, and $ 9.5 million in Other long-term assets as of both March 31, 2023 and December 31, 2022.

(1) Does not include cash collateral of $ 30.0 million and $ 40.8 million recorded in Prepaid and other current assets as of June 30, 2023 and December 31, 2022, respectively, and $ 9.5 million in Other long-term assets as of both June 30, 2023 and December 31, 2022.

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

Three Months Ended March 31,

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

Statement of Operations Location 2023 2022 2023 2022

2 unchanged sentences

MLC terminal obligation derivative Cost of revenues (excluding depreciation) 20,490 ( 25,796 ) 3,467 ( 90,192 )

Interest rate derivatives Interest expense and financing costs, net 543 — 543 —

Note 13— Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Purchase Price Allocation of Billings Acquisition

The preliminary fair values of the assets acquired and liabilities assumed as a result of the Billings Acquisition were estimated as of June 1, 2023, the date of the acquisition, using valuation techniques described in notes (1) through (5) below.

Fair Value Technique

(in thousands)

Net working capital excluding operating leases $ 294,567 (1)

Property, plant, and equipment 259,088 (2)

Operating lease right-of-use assets 3,562 (3)

Refining and logistics equity investments 86,600 (4)

Other long-term assets 4,094 (1)

Current operating lease liabilities ( 2,081 ) (3)

Long-term operating lease liabilities ( 1,481 ) (3)

Environmental liabilities ( 18,869 ) (5)

Total $ 625,480

(1) Current assets acquired and liabilities assumed were recorded at their net realizable value.

Other long-term assets includes preliminary costs for future turnarounds that were recently incurred and were recorded at their net realizable value.

(2) The fair value of personal property was estimated using the cost approach.

Key assumptions in the cost approach include determining the replacement cost by evaluating recent purchases of comparable assets or published data, and adjusting replacement cost for economic and functional obsolescence, location, normal useful lives, and capacity (if applicable).

The fair value of real property was estimated using the market approach.

Key assumptions in the market approach include determining the asset value by evaluating recent purchases of comparable assets under similar circumstances.

We consider this to be a Level 3 fair value measurement.

(3) Operating lease right-of-use assets and liabilities were recognized based on the present value of lease payments over the lease term using the incremental borrowing rate at acquisition of 9.6 %.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

(4) The fair value of our investments in YELP and YPLC were determined using a combination of the income approach and the market approach.

Under the income approach, we estimated the present value of expected future cash flows using a market participant discount rate.

Under the market approach, we estimated fair value using observable multiples for comparable companies in the investments’ industries.

These valuation methods require us to make significant estimates and assumptions regarding future cash flows, capital projects, commodity prices, long-term growth rates, and discount rates.

We consider this to be a Level 3 fair value measurement.

(5) Environmental liabilities are based on management’s best estimates of probable future costs using currently available information.

We consider this to be a Level 3 fair value measurement.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

13 unchanged sentences

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

Such contractual differentials vary by location and by the type of product, have a weighted average premium of $ 11.67 , and range from a discount of $ 8.99 per barrel to a premium of $ 53.79 per barrel as of March 31, 2023.

Such contractual differentials vary by location and by the type of product, have a weighted average premium of $ 11.09 , and range from a discount of $ 5.64 per barrel to a premium of $ 48.39 per barrel as of June 30, 2023.

Contractual price differentials are considered unobservable inputs;

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

We did not have other commodity derivatives classified as Level 3 at March 31, 2023, or December 31, 2022.

We did not have other commodity derivatives classified as Level 3 at June 30, 2023, or December 31, 2022.

Please read Note 12—Derivatives for further information on derivatives.

1 unchanged sentence

Estimates of our gross environmental credit obligations are based on the amount of RINs or other environmental credits required to comply with U.S.

Environmental Protection Agency (“EPA”) and the State of Washington’s regulations and

Environmental Protection Agency (“EPA”) and the State of Washington’s regulations and the market prices of those RINs or other environmental credits as of the end of the reporting period.

The gross environmental credit obligations are classified as Level 2 instruments as we obtain the pricing inputs for our RINs and other environmental credits from brokers based on market quotes on similar instruments.

Please read Note 15—Commitments and Contingencies for further information on the EPA and the State of Washington’s regulations related to greenhouse gases.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

the market prices of those RINs or other environmental credits as of the end of the reporting period.

Please read Note 14—Commitments and Contingencies for further information on the EPA and the State of Washington’s regulations related to greenhouse gases.

For the Interim Periods Ended June 30, 2023 and 2022

Financial Statement Impact

Fair value amounts by hierarchy level as of March 31, 2023 and December 31, 2022, are presented gross in the tables below (in thousands):

March 31, 2023

Fair value amounts by hierarchy level as of June 30, 2023 and December 31, 2022, are presented gross in the tables below (in thousands):

June 30, 2023

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

Commodity derivatives $ 167,336 $ 11,944 $ — $ 179,280 $ ( 179,280 ) $ —

Interest rate derivatives — 543 — 543 — 543

Total $ 167,336 $ 12,487 $ — $ 179,823 $ ( 179,280 ) $ 543

Commodity derivatives $ ( 178,093 ) $ ( 20,045 ) $ — $ ( 198,138 ) $ 179,280 $ ( 18,858 )

12 unchanged sentences

_________________________________________________________

(1) Does not include cash collateral of $ 28.4 million and $ 50.3 million as of March 31, 2023 and December 31, 2022, respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

(2) Does not include RINs assets and other environmental credits of $ 193.2 million and $ 258.2 million presented as Inventories on our condensed consolidated balance sheet and stated at the lower of cost and net realizable value as of March 31, 2023 and December 31, 2022, respectively.

(1) Does not include cash collateral of $ 39.5 million and $ 50.3 million as of June 30, 2023 and December 31, 2022, respectively, included within Prepaid and other current assets and Other long-term assets on our condensed consolidated balance sheets.

(2) Does not include RINs assets and other environmental credits of $ 293.3 million and $ 258.2 million presented as Inventories on our condensed consolidated balance sheet and stated at the lower of cost and net realizable value as of June 30, 2023 and December 31, 2022, respectively.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

For the Interim Periods Ended June 30, 2023 and 2022

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Balance, at beginning of period $ ( 5,979 ) $ ( 52,678 ) $ 2,279 $ ( 37,321 )

Settlements ( 12,243 ) 56,753 ( 16,858 ) 149,061

Total losses included in earnings (1) ( 3,643 ) ( 107,665 )

Total gains (losses) included in earnings (1) 12,638 ( 12,567 ) 8,995 ( 120,232 )

Balance, at end of period $ ( 5,584 ) $ ( 8,492 ) $ ( 5,584 ) $ ( 8,492 )

1 unchanged sentence

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

The carrying value and fair value of long-term debt and other financial instruments as of March 31, 2023 and December 31, 2022 are as follows (in thousands):

March 31, 2023

The carrying value and fair value of long-term debt and other financial instruments as of June 30, 2023 and December 31, 2022 are as follows (in thousands):

June 30, 2023

Carrying Value Fair Value

ABL Credit Facility due 2028 (2)

41,000 41,000

Term Loan Credit Agreement due 2030 (1)

533,057 536,994

Other long-term debt (1) 5,058 4,829

7.75 % Senior Secured Notes due 2025 (1) (3)

Term Loan B Facility due 2026 (1) (3) — —

12.875 % Senior Secured Notes due 2026 (1) (3)

December 31, 2022

Carrying Value Fair Value

ABL Credit Facility due 2025 (2) $ — $ —

Prior ABL Credit Facility due 2025 (2) $ — $ —

7.75 % Senior Secured Notes due 2025 (1)

4 unchanged sentences

_________________________________________________________

(1) The fair value measurements of the Term Loan Credit Agreement, 7.75 % Senior Secured Notes, Term Loan B Facility, and 12.875 % Senior Secured Notes are considered Level 2 measurements in the fair value hierarchy as discussed below.

(2) The fair value measurement of the ABL Credit Facility is considered a Level 3 measurement in the fair value hierarchy.

The fair value of the Term Loan Credit Agreement, 7.75 % Senior Secured Notes, Term Loan B Facility, and 12.875 % Senior Secured Notes were determined using a market approach based on quoted prices.

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

The carrying value of our ABL Credit Facility was determined to approximate fair value as of March 31, 2023.

(1) The fair value measurements of the Term Loan Credit Agreement, Other long-term debt, 7.75 % Senior Secured Notes, Term Loan B Facility, and 12.875 % Senior Secured Notes are considered Level 2 measurements in the fair value hierarchy as discussed below.

(2) The fair value measurement of the ABL Credit Facility and the Prior ABL Credit Facility is considered a Level 3 measurement in the fair value hierarchy.

(3) The 7.75 % Senior Secured Notes, Term Loan B Facility, and 12.875 % Senior Secured Notes were fully repaid in 2023, please read Note 11—Debt for more information.

The fair value of the Term Loan Credit Agreement, Other long-term debt, 7.75 % Senior Secured Notes, Term Loan B Facility, and 12.875 % Senior Secured Notes were determined using a market approach based on quoted prices.

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

The carrying value of our ABL Credit Facility was determined to approximate fair value as of June 30, 2023.

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

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We have cancellable and non-cancellable finance and operating lease liabilities for the lease of land, vehicles, office space, retail facilities, and other facilities used in the storage and transportation of crude oil and refined products.

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

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

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

The following table provides information on the amounts (in thousands) of our right-of-use assets (“ROU assets”) and liabilities as of March 31, 2023 and December 31, 2022 and their placement within our condensed consolidated balance sheets:

Lease type Balance Sheet Location March 31, 2023 December 31, 2022

For the Interim Periods Ended June 30, 2023 and 2022

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

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

The following table provides information on the amounts (in thousands) of our right-of-use assets (“ROU assets”) and liabilities as of June 30, 2023 and December 31, 2022 and their placement within our condensed consolidated balance sheets:

Lease type Balance Sheet Location June 30, 2023 December 31, 2022

Finance Property, plant, and equipment $ 22,095 $ 21,150

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Total lease liabilities $ 348,185 $ 366,875

The following table summarizes the weighted-average lease terms and discount rates of our leases as of March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

The following table summarizes the weighted-average lease terms and discount rates of our leases as of June 30, 2023 and December 31, 2022:

June 30, 2023 December 31, 2022

Weighted-average remaining lease term (in years)

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

Three Months Ended March 31,

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

Lease cost (income) type 2023 2022 2023 2022

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

For the Interim Periods Ended June 30, 2023 and 2022

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

Three Months Ended March 31,

Six Months Ended June 30,

Lease type 2023 2022

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

The table below includes the estimated future undiscounted cash flows for finance and operating leases as of March 31, 2023 (in thousands):

The table below includes the estimated future undiscounted cash flows for finance and operating leases as of June 30, 2023 (in thousands):

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

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_________________________________________________________

(1) Represents the period from April 1, 2023 to December 31, 2023.

(1) Represents the period from July 1, 2023 to December 31, 2023.

Additionally, we have $ 3.8 million and $ 18.5 million in future undiscounted cash flows for finance and operating leases that have not yet commenced, respectively.

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In the ordinary course of business, we are a party to various lawsuits and other contingent matters.

Additionally, we assumed certain liabilities associated with the Billings Acquisition.

Please read Note 5—Acquisitions for further information.

We establish accruals for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable.

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

and certain unnamed defendants made false claims and statements in connection with various state tax returns related to our business conducted within the Hawaii foreign trade zone, and seeking unspecified damages, penalties, interest and injunctive relief.

We dispute the allegations in the complaint and intend to

and certain unnamed defendants made false claims and statements in connection with various state tax returns related to our business conducted within the Hawaii foreign trade zone, and seeking

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

vigorously defend ourselves in such proceeding.

For the Interim Periods Ended June 30, 2023 and 2022

unspecified damages, penalties, interest and injunctive relief.

We dispute the allegations in the complaint and intend to vigorously defend ourselves in such proceeding.

We believe the likelihood of an unfavorable outcome in these matters to be neither probable nor reasonably estimable.

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Investigative work by Hermes Consolidated LLC, and its wholly owned subsidiary, Wyoming Pipeline Company (collectively, “WRC” or “Wyoming Refining”) and negotiations with the relevant agencies as to remedial approaches remain ongoing on a number of aspects of the contamination, meaning that investigation, monitoring, and remediation costs are not reasonably estimable for some elements of these efforts.

As of March 31, 2023, we have accrued $ 14.8 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years.

As of June 30, 2023, we have accrued $ 14.5 million for the well-understood components of these efforts based on current information, approximately one-third of which we expect to incur in the next five years and the remainder to be incurred over approximately 30 years.

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

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For additional information, please read Item 1.

— Business — Environmental Regulations on our Annual Report on Form 10-K for the year ended December 31, 2022.

As of March 31, 2023, our estimate of the renewable volume obligation

— Business — Environmental Regulations on our Annual Report

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

(“RVO”) liability for the 2020 and 2022 compliance years is based on the RFS volumetric requirements which the EPA finalized on June 3, 2022.

For the Interim Periods Ended June 30, 2023 and 2022

on Form 10-K for the year ended December 31, 2022.

As of June 30, 2023, our estimate of the renewable volume obligation (“RVO”) liability for the 2020 and 2022 compliance years is based on the RFS volumetric requirements which the EPA finalized on June 3, 2022.

Our RVO liability for the 2023 compliance year is based on the RFS volumetric requirements that were proposed on December 1, 2022.

During the three months ended March 31, 2023, we settled a portion of our 2020 and all of our 2021 RVO liabilities, which resulted in a gain of $ 94.7 million associated with the difference between the carrying value of the RINs retired and the market value of the RVO settled.

During the six months ended June 30, 2023, we settled a portion of our 2020 and all of our 2021 RVO liabilities, which resulted in a gain of $ 94.7 million associated with the difference between the carrying value of the RINs retired and the market value of the RVO settled.

This gain is included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

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Government and Noble Energy, Inc.

As of March 31, 2023, two related claims totaling approximately $ 22.4 million remained to be resolved and we have accrued approximately $ 0.5 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end.

As of June 30, 2023, two related claims totaling approximately $ 22.4 million remained to be resolved and we have accrued approximately $ 0.5 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end.

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

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

During the three months ended March 31, 2022, 362 thousand shares were repurchased under this share repurchase program for $ 5 million.

During the three months ended March 31, 2023, no shares were repurchased under this share repurchase program.

As of March 31, 2023, there was $ 43.5 million of authorization remaining under this share repurchase program.

During the three and six months ended June 30, 2023, 110 thousand shares in total were repurchased under this share repurchase program for $ 2.6 million.

During the six months ended June 30, 2022, 362 thousand shares were repurchased under this share repurchase program for $ 5 million.

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

The repurchased shares were retired by the Company upon receipt.

As of June 30, 2023, there was $ 43.3 million of authorization remaining under this share repurchase program.

On August 2, 2023, the Board approved expanding the Company’s share repurchase authorization from $ 50 million to $ 250 million.

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

For the Interim Periods Ended June 30, 2023 and 2022

Incentive Plans

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

Three Months Ended March 31,

Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

Restricted Stock Awards $ 2,656 $ 1,153 $ 4,052 $ 2,902

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Stock Option Awards 523 525 937 1,761

The following table summarizes our grant activity related to our stock based incentive plan during the period, including the number of granted shares, options, awards, or units;

the fair value as of the grant date;

total unrecognized compensation costs as of the period end;

and the weighted-average period in years over which the compensation costs are expected to be recognized (in thousands except weighted average period):

Three Months Ended March 31, 2023

Awards granted Fair value Unrecognized compensation costs Weighted average period

Restricted Stock Awards and Restricted Stock Units 303 $ 8,269 $ 15,432 1.8 years

Stock Option Awards (1) — — 3,297 1.7 years

Performance Restricted Stock Units (2) 90 2,476 2,968 2.6 years

_________________________________________________________

(1) There were no stock option awards granted for the period.

(2) Performance restricted stock units are subject to certain annual performance targets based on three-year-performance periods as defined by our Board of Directors.

During the three and six months ended June 30, 2023, we granted 102 thousand and 405 thousand shares of restricted stock and restricted stock units with a fair value of approximately $ 2.3 million.

As of June 30, 2023, there were approximately $ 15.0 million of total unrecognized compensation costs related to restricted stock awards and restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.7 years.

During the six months ended June 30, 2023, we granted no stock option awards.

As of June 30, 2023, there were approximately $ 2.8 million of total unrecognized compensation costs related to stock option awards, which are expected to be recognized on a straight-line basis over a weighted-average period of 1.6 years.

During the six months ended June 30, 2023, we granted 90 thousand performance restricted stock units to executive officers, but no grants were made for the three months ended June 30, 2023.

These performance restricted stock units had a fair value of approximately $ 2.5 million and are subject to certain annual performance targets based on three-year -performance periods as defined by our Board of Directors.

As of June 30, 2023, there were approximately $ 2.6 million of total unrecognized compensation costs related to the performance restricted stock units, which are expected to be recognized on a straight-line basis over a weighted-average period of 2.4 years.

Note 17— Income (Loss) per Share

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

Three Months Ended March 31,

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

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

2023 2022 2023 2022

Net income $ 30,013 $ 149,125 $ 267,903 $ 12,074

Net income effect of convertible securities — — — —

Numerator for diluted income (loss) per common share $ 237,890 $ ( 137,051 )

Numerator for diluted income per common share $ 30,013 $ 149,125 $ 267,903 $ 12,074

Basic weighted-average common stock shares outstanding 60,399 59,479 60,255 59,449

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Diluted weighted-average common stock shares outstanding 60,993 59,642 61,020 59,644

Basic income (loss) per common share $ 3.96 $ ( 2.31 )

Diluted income (loss) per common share $ 3.90 $ ( 2.31 )

Basic income per common share $ 0.50 $ 2.51 $ 4.45 $ 0.20

Diluted income per common share $ 0.49 $ 2.50 $ 4.39 $ 0.20

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

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

_________________________________________________________

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

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

For the Interim Periods Ended June 30, 2023 and 2022

Note 18— Income Taxes

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

Management continues to conclude that we did not meet the “more likely than not” requirement in order to recognize deferred tax assets on the remaining amounts and a valuation allowance has been recorded for substantially all of our net deferred tax assets at March 31, 2023 and December 31, 2022.

We believe that any adjustment to our uncertain tax positions would no t have a material impact on our financial statements given the Company’s deferred tax and corresponding valuation allowance position as of March 31, 2023 and December 31, 2022.

As of December 31, 2022, we had approximately $ 1.2 billion in net operating loss carryforwards (“NOL carryforwards”);

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(i) Refining, (ii) Retail, (iii) Logistics, and (iv) Corporate and Other.

Commencing June 1, 2023, the results of operations of the Billings Acquisition are included in our refining and logistics segments.

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

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

Three Months Ended June 30, 2023 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 1,708,541 $ 64,709 $ 148,396 $ ( 137,719 ) $ 1,783,927

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General and administrative expense (excluding depreciation) — — — 23,168 23,168

Equity earnings from refining and logistics investments — ( 425 ) — — ( 425 )

Acquisition and integration costs — — — 7,273 7,273

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Debt extinguishment and commitment costs 38

Other expense, net ( 35 )

Other income, net 379

Income before income taxes 31,941

Income tax expense ( 1,928 )

Net income $ 30,013

Capital expenditures $ 6,301 $ 7,124 $ 3,104 $ 987 $ 17,516

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

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

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

Cost of revenues (excluding depreciation)

1,799,577 25,739 119,642 ( 136,033 ) 1,808,925

Operating expense (excluding depreciation)

57,624 3,797 19,444 — 80,865

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

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

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

Par West redevelopment and other costs 1,477 — — — 1,477

Operating income (loss) 168,798 15,898 5,525 ( 16,192 ) 174,029

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

Debt extinguishment and commitment costs ( 5,672 )

Other income, net 47

Income before income taxes 150,250

Income tax expense ( 1,125 )

Net income $ 149,125

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

________________________________________________________

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 137.7 million and $ 136.0 million for the three months ended June 30, 2023 and 2022, respectively.

Six Months Ended June 30, 2023 Refining Logistics Retail Corporate, Eliminations and Other (1) Total

Revenues $ 3,323,953 $ 117,097 $ 283,968 $ ( 255,882 ) $ 3,469,136

Cost of revenues (excluding depreciation)

2,845,275 67,087 207,396 ( 255,932 ) 2,863,826

Operating expense (excluding depreciation)

135,853 7,043 42,067 — 184,963

Depreciation and amortization 35,549 10,093 5,811 1,123 52,576

General and administrative expense (excluding depreciation) — — — 42,454 42,454

Equity earnings from refining and logistics investments — ( 425 ) — — ( 425 )

Acquisition and integration costs — — — 12,544 12,544

Par West redevelopment and other costs — — — 5,363 5,363

Operating income (loss) $ 307,276 $ 33,299 $ 28,694 $ ( 61,434 ) $ 307,835

Interest expense and financing costs, net ( 31,159 )

Debt extinguishment and commitment costs ( 17,682 )

Other income, net 344

Equity earnings from Laramie Energy, LLC 10,706

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended March 31, 2023 and 2022

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

For the Interim Periods Ended June 30, 2023 and 2022

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

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

4 unchanged sentences

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

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

General and administrative expense (excluding depreciation) — — — 31,331 31,331

Acquisition and integration costs — — — 63 63

Par West redevelopment and other costs 2,865 — — — 2,865

Operating income (loss) $ 50,473 $ 25,750 $ 9,570 $ ( 32,860 ) $ 52,933

Interest expense and financing costs, net ( 34,548 )

Debt extinguishment and commitment costs ( 5,672 )

Other income, net 49

Loss before income taxes ( 137,488 )

Income tax benefit 437

Net loss $ ( 137,051 )

Income before income taxes 12,762

Income tax expense ( 688 )

Net income $ 12,074

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

________________________________________________________

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

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 255.9 million and $ 247.3 million for the six months ended June 30, 2023 and 2022, respectively.

Note 20— Subsequent Events

Asset-Based Revolving Credit Agreement

On April 26, 2023, we entered into an Asset-Based Revolving Credit Agreement (as amended from time to time, the “ABL Credit Agreement”) with certain lenders, and Wells Fargo Bank, National Association, as administrative agent and collateral agent, providing for a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $ 150 million.

and allows for an increase up to $ 450 million in conjunction with the planned Billings Acquisition (together, the “Facilities”).

Initially the ABL Credit Agreement permits the issuance of letters of credit of up to $ 65 million, with an increase to $ 250 million in conjunction with the Billings Acquisition.

The ABL Credit Agreement allows us to request an increase in the commitment under the Facilities of up to $ 250 million.

The Facilities will mature and the commitments thereunder will terminate five years after the Closing Date and are secured by a first priority lien over certain of our assets and other personal property, subject to certain customary exceptions.

The interest rates applicable to borrowings under the Facilities are based on a fluctuating rate of interest measured by reference to either, at the our option, (i) a base rate, plus an applicable margin, or (ii) a Adjusted Term Secured Overnight Financing Rate (“SOFR”), plus an applicable margin.

We will also pay a de minimis fee for any undrawn amounts available under the ABL Credit Agreement.

The ABL Credit Agreement includes certain customary affirmative and negative covenants, including a minimum financial coverage fixed charge coverage ratio and a minimum Borrower Group Fixed Charge Coverage Ratio.

In addition, the covenants limit the our ability and the ability of our restricted subsidiaries to incur indebtedness, grant liens, make investments, engage in acquisitions, mergers, or consolidations, engage in certain hedging transactions, and pay dividends and other restricted payments.

On July 26, 2023, PHR, as borrower, entered into an Uncommitted Credit Agreement (the “LC Facility Agreement”) whereby the lenders agree to consider making revolving credit loans and issuing and participating in letters of credit for the account of PHR in the maximum available amount of $ 120 million in the aggregate (the “LC Facility”) with the right to request an increase up to $ 350 million in the aggregate, subject to conditions.

Letters of credit issued under the Uncommitted Facility are intended finance and provide credit support for certain of PHR’s purchases of crude oil from crude oil suppliers and proceeds of revolving credit loans may be used to pay suppliers when due.

PHR has agreed to pay customary fees and commissions under this agreement.

The LC Facility Agreement requires PHR to comply with various covenants including compliance with the minimum liquidity covenant as discussed below.

Amendment to Second Amended and Restated Supply and Offtake Agreement

On July 26, 2023, and in connection with entering into the LC Facility Agreement, PHR, Par Petroleum, as guarantor, and J.

Aron entered into an Amendment to Second Amended and Restated Supply and Offtake Agreement.

This amendment allows PHR to enter into a crude oil procurement contract supported by a letter of credit and have its purchases funded by J.

Aron, subject to certain conditions.

Under this amendment, PHR agrees that it shall not permit the liquidity of PHR for any three consecutive business days to be less than $ 15 million at any time, with at least $ 15 million of such liquidity consisting of cash and cash equivalents.

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

What changed 10-Q

Item 1. Financial Statements