PAR PACIFIC HOLDINGS, INC. 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a growing energy company based in Houston, Texas, that provides both renewable and conventional fuels to the western United States. Our business is organized into three primary segments: 1) Refining - We own and operate four refineries with total operating throughput capacity of 218 thousand barrels per day (“Mbpd”) in Hawaii, Wyoming, Washington, and Montana. On June 1, 2023, we purchased a refinery in Billings, Montana that processes Western Canadian and regional Rocky Mountain crude oil and a 65% interest in an adjacent cogeneration facility. 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 energy infrastructure network spanning the Pacific, the Northwest, and the Rocky Mountain regions to transport and store crude oil and refined products for our refineries and transport refined products to our retail sites or third-party purchasers. On June 1, 2023, we purchased distribution and logistics assets in the upper Rockies region, including the wholly owned 70-mile, 55 Mbpd Silvertip Pipeline, a 40% interest in the 750-mile, 65 Mbpd 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. Laramie Energy is focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado. As noted in the Refining and Logistics discussions above, as of June 30, 2023 through the Billings Acquisition, we own a 65% and a 40% equity investment in YELP and YPLC, respectively. We have four reportable segments: (i) Refining, (ii) Retail, (iii) Logistics, and (iv) Corporate and Other. Our Corporate and Other reportable segment primarily includes general and administrative costs, business development expenses associated with renewable fuel projects, and Par West redevelopment and other costs. Please read Note 19—Segment Information to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for detailed information on our operating results by segment. Recent Events Affecting Comparability of Periods Crude oil pricing decreased in the first half of 2023, compared to the volatility noted in the second half of 2022. In the first half of 2023, Brent crude oil pricing decreased to $80 per barrel compared to $107 per barrel in the second half of 2022. In addition, in the first half of 2023 U.S. retail gasoline prices decreased to $3.59 per gallon compared to $4.17 per gallon in the second half of 2022. The U.S. Energy Information Administration (“EIA”) in its May 2023 short term energy outlook is forecasting average Brent crude oil pricing of $73 per barrel in 2023 due to ongoing considerations about weakening global economic conditions, perceived risk around the global banking sector, and persistent inflation. Refined product crack spreads in the second quarter of 2023 decreased as compared to the second quarter of 2022, largely driven by the conflict between Russia and Ukraine that escalated in February 2022. In addition, U.S retail gasoline prices are expected to decrease by 20% to $3.40 per gallon during the summer 2023 driving season (April-September) compared to summer 2022. On April 3, 2023, the Organization of the Petroleum Exporting Countries (“OPEC”) announced a cut to crude oil production of 1.2 MMbpd through the end of 2023. The EIA expects the drop in OPEC crude oil production and the seasonal rise in oil consumption to put upward pressure on crude oil prices. On June 4, 2023, Saudi Arabia, the largest producer in the OPEC cartel, announced an additional 1 MMbpd cut to its production beginning with its July export program. The Kingdom announced during early August that those cuts would be extended through the end of the year. As a result, crude oil prices have returned to levels closer to 2022 than crude oil prices during the first half of 2023. Please read Item 1A. — Risk Factors on our Annual Report on Form 10-K for the year ended December 31, 2022 for further information. Results of Operations 30 Three months ended June 30, 2023 compared to the three months ended June 30, 2022 Net Income. Our financial results for the second quarter of 2023 declined from net income of $149.1 million for the three months ended June 30, 2022 to net income of $30.0 million for the three months ended June 30, 2023. The decrease was primarily driven by a $124.7 million decrease in refining segment operating income, $7.8 million higher general and administrative expenses, and $7.3 million higher acquisition and integration expenses also related to our Billings Acquisition, partially offset by a $9.7 million improvement in our retail segment operating income. Please read the discussions of segment and consolidated results below for additional information. Adjusted EBITDA and Adjusted Net Income. For the three months ended June 30, 2023, Adjusted EBITDA was $150.8 million compared to $242.1 million for the three months ended June 30, 2022. The $91.3 million decrease was primarily related to a decrease of $99.6 million in our refining segment, partially offset by an increase of $9.9 million in our retail segment. Please read the discussion of segment results below for additional information. For the three months ended June 30, 2023, Adjusted Net Income was $105.6 million compared to an Adjusted Net Income of $197.2 million for the three months ended June 30, 2022. The decline was primarily related to the factors described above for the decrease in Adjusted EBITDA. Six months ended June 30, 2023 compared to the six months ended June 30, 2022 Net Income. Our financial results improved from a net income of $12.1 million for the six months ended June 30, 2022 to net income of $267.9 million for the six months ended June 30, 2023. The increase was driven by a $256.8 million increase in refining segment operating income and a $19.1 million increase in retail segment operating income, partially offset by a $12.4 million increase in acquisitions and integration expenses related to our Billings Acquisition, and a $11.2 million increase in general and administrative expenses. Please read the discussions of segment and consolidated results below for additional information. Adjusted EBITDA and Adjusted Net Income. For the six months ended June 30, 2023, Adjusted EBITDA was $318.5 million compared to $254.5 million for the six months ended June 30, 2022. The improvement was primarily related to an increase of $48.8 million in our refining segment, combined with an increase of $19.6 million in our retail segment, an increase of $7.6 million in our logistics segment, offset by a decrease of $11.9 million in our corporate segment. Please read the discussion of segment results below for additional information. For the six months ended June 30, 2023, Adjusted Net Income was $243.1 million compared to $169.9 million for the six months ended June 30, 2022. The improvement was primarily related to the same factors described above for the increase in Adjusted EBITDA as well as our receipt of a $10.7 million distribution from Laramie Energy. 31 The following tables summarize our consolidated results of operations for the three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022 (in thousands). The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Three Months Ended June 30, 2023 2022 $ Change % Change Revenues $ 1,783,927 $ 2,106,332 $ (322,405) (15)% Cost of revenues (excluding depreciation) 1,574,806 1,808,925 (234,119) (13)% Operating expense (excluding depreciation) 101,843 80,865 20,978 26% Depreciation and amortization 28,216 25,583 2,633 10% Loss on sale of assets, net — 15 (15) (100)% General and administrative expense (excluding depreciation) 23,168 15,438 7,730 50% Equity earnings from refining and logistics investments (425) — (425) NM (1) Acquisition and integration costs 7,273 — 7,273 NM (1) Par West redevelopment and other costs 2,613 1,477 1,136 77% Total operating expenses 1,737,494 1,932,303 Operating income 46,433 174,029 Other income (expense) Interest expense and financing costs, net (14,909) (18,154) 3,245 (18)% Debt extinguishment and commitment costs 38 (5,672) 5,710 101% Other income, net 379 47 332 706% Total other expense, net (14,492) (23,779) Income before income taxes 31,941 150,250 Income tax expense (1,928) (1,125) (803) 71% Net income $ 30,013 $ 149,125 Six Months Ended June 30, 2023 2022 $ Change % Change Revenues $ 3,469,136 $ 3,456,625 $ 12,511 —% Cost of revenues (excluding depreciation) 2,863,826 3,159,174 (295,348) (9)% Operating expense (excluding depreciation) 184,963 160,881 24,082 15% Depreciation and amortization 52,576 49,363 3,213 7% Loss on sale of assets, net — 15 (15) (100)% General and administrative expense (excluding depreciation) 42,454 31,331 11,123 36% Equity earnings from refining and logistics investments (425) — (425) NM (1) Acquisition and integration costs 12,544 63 12,481 19,811% Par West redevelopment and other costs 5,363 2,865 2,498 87% Total operating expenses 3,161,301 3,403,692 Operating income 307,835 52,933 Other income (expense) Interest expense and financing costs, net (31,159) (34,548) 3,389 (10)% Debt extinguishment and commitment costs (17,682) (5,672) (12,010) 212% Other income, net 344 49 295 602% Equity earnings (losses) from Laramie Energy, LLC 10,706 — 10,706 NM (1) Total other expense, net (37,791) (40,171) Income before income taxes 270,044 12,762 Income tax expense (2,141) (688) (1,453) 211% Net income $ 267,903 $ 12,074 ________________________________________________________ 32 (1) NM - Not meaningful The following tables summarize our operating income (loss) by segment for the three and six months ended June 30, 2023 and 2022 (in thousands). The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Three months ended 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 Cost of revenues (excluding depreciation) 1,567,605 35,788 109,168 (137,755) 1,574,806 Operating expense (excluding depreciation) 76,971 3,596 21,276 — 101,843 Depreciation and amortization 19,826 5,059 2,732 599 28,216 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 Par West redevelopment and other costs — — — 2,613 2,613 Operating income (loss) $ 44,139 $ 20,691 $ 15,220 $ (33,617) $ 46,433 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 Acquisition and integration costs — — — — — Par West redevelopment and other costs 1,477 — — — 1,477 Operating income (loss) $ 168,798 $ 15,898 $ 5,525 $ (16,192) $ 174,029 ________________________________________________________ (1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) 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 33 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 Cost of revenues (excluding depreciation) 3,143,492 49,488 213,484 (247,290) 3,159,174 Operating expense (excluding depreciation) 114,536 7,570 38,775 — 160,881 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 ________________________________________________________ (1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $255.9 million and $247.3 million for the six months ended June 30, 2023 and 2022, respectively. Below is a summary of key operating statistics for the refining segment for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Total Refining Segment Feedstocks Throughput (Mbpd) (1) 162.3 141.3 147.7 129.8 Refined product sales volume (Mbpd) (1) 168.8 143.4 159.1 133.0 Hawaii Refinery Feedstocks Throughput (Mbpd) 84.1 84.1 80.2 83.4 Yield (% of total throughput) Gasoline and gasoline blendstocks 26.8 % 22.9 % 26.8 % 24.0 % Distillates 41.0 % 38.0 % 40.1 % 39.6 % Fuel oils 28.2 % 33.6 % 28.8 % 31.5 % Other products 0.8 % 2.4 % 1.2 % 1.4 % Total yield 96.8 % 96.9 % 96.9 % 96.5 % Refined product sales volume (Mbpd) 87.2 80.2 88.8 79.2 Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 12.08 $ 18.71 $ 15.41 $ 11.22 Production costs per bbl ($/throughput bbl) (3) 4.33 4.50 4.43 4.45 D&A per bbl ($/throughput bbl) 0.67 0.66 0.70 0.66 Montana Refinery Feedstocks Throughput (Mbpd) (1) 62.6 — 62.6 — Yield (% of total throughput) Gasoline and gasoline blendstocks 46.3 % — % 46.3 % — % Distillates 29.3 % — % 29.3 % — % Asphalt 13.3 % — % 13.3 % — % Other products 6.1 % — % 6.1 % — % Total yield 95.0 % — % 95.0 % — % 34 Refined product sales volume (Mbpd) (1) 59.3 — 59.3 — Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 30.98 $ — $ 30.98 $ — Production costs per bbl ($/throughput bbl) (3) 8.07 — 8.07 — D&A per bbl ($/throughput bbl) 1.85 — 1.85 — Washington Refinery Feedstocks Throughput (Mbpd) 40.9 40.5 40.3 30.4 Yield (% of total throughput) Gasoline and gasoline blendstocks 24.0 % 24.2 % 23.8 % 24.4 % Distillates 34.8 % 34.4 % 34.6 % 34.1 % Asphalt 19.5 % 20.8 % 19.0 % 19.7 % Other products 18.3 % 17.4 % 18.7 % 18.6 % Total yield 96.6 % 96.8 % 96.1 % 96.8 % Refined product sales volume (Mbpd) 44.8 44.6 42.8 37.1 Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 6.37 $ 20.50 $ 8.66 $ 14.17 Production costs per bbl ($/throughput bbl) (3) 3.98 3.40 4.11 4.71 D&A per bbl ($/throughput bbl) 1.82 2.03 1.81 2.45 35 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Wyoming Refinery Feedstocks Throughput (Mbpd) 16.7 16.7 16.8 16.0 Yield (% of total throughput) Gasoline and gasoline blendstocks 43.7 % 48.1 % 45.6 % 49.1 % Distillates 48.7 % 43.6 % 47.3 % 43.4 % Fuel oils 2.6 % 2.2 % 2.5 % 2.3 % Other products 2.5 % 3.4 % 1.7 % 2.5 % Total yield 97.5 % 97.3 % 97.1 % 97.3 % Refined product sales volume (Mbpd) 17.3 18.6 17.7 16.7 Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 20.56 $ 43.34 $ 24.05 $ 34.97 Production costs per bbl ($/throughput bbl) (3) 8.30 6.97 7.85 7.46 D&A per bbl ($/throughput bbl) 2.93 2.92 2.85 3.07 Market Indices (average $ per barrel) 3-1-2 Singapore Crack Spread (4) $ 13.72 $ 36.80 $ 17.45 $ 26.56 RVO Adjusted Pacific Northwest 3-1-1-1 (5) 25.13 47.23 25.21 35.01 RVO Adjusted USGC 3-2-1 (6) 21.65 42.24 24.09 30.31 Crude Oil Prices (average $ per barrel) Brent $ 77.73 $ 111.98 $ 79.90 $ 104.98 WTI 73.56 108.52 74.77 101.80 ANS (7) 78.26 112.17 78.63 104.19 Bakken Clearbrook (7) 75.37 109.80 77.25 102.86 WCS Hardisty (7) 60.07 90.25 58.38 85.10 Brent M1-M3 0.44 4.23 0.48 4.18 ________________________________________________________ (1) Feedstocks throughput and sales volumes per day for the Montana refinery for the three and six months ended June 30, 2023 are calculated based on the 30-day period for which we owned the Montana refinery in 2023. As such, the amounts for the total refining segment represent the sum of the Hawaii, Washington and Wyoming refineries’ throughput or sales volumes averaged over the three and six months ended June 30, 2023 plus the Montana refinery’s throughput or sales volumes averaged over the period from June 1, 2023 to June 30, 2023. The 2022 amounts for the total refining segment represent the sum of the Hawaii, Washington and Wyoming refineries’ throughput or sales volumes averaged over the three and six months ended June 30, 2022. (2) We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput. Adjusted Gross Margin for our Washington refinery is determined under the last-in, first-out (“LIFO”) inventory costing method. Adjusted Gross Margin for our other refineries is determined under the first-in, first-out (“FIFO”) inventory costing method. The definition of Adjusted Gross Margin was modified beginning with the financial results reported for the second quarter in fiscal year 2022. We have recast Adjusted Gross Margin for prior periods when reported to conform to the modified presentation. Please see discussion of Adjusted Gross Margin below. (3) Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are a variety of ways to calculate production costs per barrel; different companies within the industry calculate it in different ways. We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refineries including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput. Our production costs are included in Operating expense (excluding depreciation) on our consolidated statement of operations, which also includes costs related to our bulk marketing operations. 36 (4) We believe the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) is the most representative market indicator for our operations in Hawaii. (5) We believe the RVO Adjusted Pacific Northwest 3-1-1-1 (or three barrels of WTI crude oil converted into one barrel of Pacific Northwest gasoline, one barrel of Pacific Northwest ULSD and one barrel of USGC VGO, less 100% of the RVO cost for gasoline and ULSD) is the most representative market indicator for our operations in Washington with improved historical correlations to our reported adjusted gross margin compared to prior reported indices. (6) We believe the RVO Adjusted USGC 3-2-1 (or three barrels of WTI crude oil converted into two barrels of USGC gasoline and one barrel of USGC ULSD, less 100% of the RVO cost) is the most representative market indicator for our operations in Montana and Wyoming with improved historical correlations to our reported adjusted gross margin compared to prior reported indices. (7) Crude pricing has been updated to reflect simple averages of outright prices during the relevant period. Below is a summary of key operating statistics for the retail segment for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Retail Segment Retail sales volumes (thousands of gallons) 29,373 25,862 56,572 50,770 Non-GAAP Performance Measures Management uses certain financial measures to evaluate our operating performance that are considered non-GAAP financial measures. These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies since each company may define these terms differently. We believe Adjusted Gross Margin (as defined below) provides useful information to investors because it eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost and net realizable value adjustments to demonstrate the earnings potential of the business before other fixed and variable costs, which are reported separately in Operating expense (excluding depreciation) and Depreciation and amortization. Management uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure. Beginning with financial results reported for periods in fiscal year 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude the mark-to-market losses (gains) associated with our net obligation related to the Washington Climate Commitment Act and Clean Fuel Standard effective beginning in 2023. These modifications were made to better reflect our operating performance and to improve comparability between periods. Beginning with financial results reported for periods in fiscal year 2023, Adjusted Net Income (loss) and Adjusted EBITDA also exclude the redevelopment and other costs for our Par West facility, which was shut down in 2020. This modification improves comparability between periods by excluding expenses incurred in connection with the strategic redevelopment of this non-operating facility. We have recast Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA for prior periods when reported to conform to the modified presentation. Beginning with financial results report for the second quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude our portion of interest, taxes, and depreciation expense from our refining and logistics investments. Adjusted Gross Margin Adjusted Gross Margin is defined as operating income (loss) excluding: 37 • operating expense (excluding depreciation); • depreciation and amortization (“D&A”); • Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments; • impairment expense; • loss (gain) on sale of assets, net; • inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments); • LIFO layer liquidation impacts associated with our Washington inventory; • Environmental obligation mark-to-market adjustment (which represents the income statement effect of reflecting our RINs liability on a net basis; this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability and our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); and • unrealized loss (gain) on derivatives. The following tables present a reconciliation of Adjusted Gross Margin to the most directly comparable GAAP financial measure, operating income (loss), on a historical basis, for selected segments, for the periods indicated (in thousands): Three months ended June 30, 2023 Refining Logistics Retail Operating income $ 44,139 $ 20,691 $ 15,220 Operating expense (excluding depreciation) 76,971 3,596 21,276 Depreciation and amortization 19,826 5,059 2,732 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments — 207 — Inventory valuation adjustment 33,118 — — Environmental obligation mark-to-market adjustments 9,343 — — Unrealized loss on derivatives 22,178 — — Adjusted Gross Margin (1) $ 205,575 $ 29,553 $ 39,228 Three months ended June 30, 2022 Refining Logistics Retail Operating income $ 168,798 $ 15,898 $ 5,525 Operating expense (excluding depreciation) 57,624 3,797 19,444 Depreciation and amortization 16,979 5,211 2,600 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments — — — Gain on sale of assets, net — (12) — Inventory valuation adjustment (7,557) — — Environmental obligation mark-to-market adjustments 78,548 — — Unrealized gain on derivatives (28,607) — — Par West redevelopment and other costs 1,477 — — Adjusted Gross Margin (1) $ 287,262 $ 24,894 $ 27,569 38 Six months ended June 30, 2023 Refining Logistics Retail Operating income $ 307,276 $ 33,299 $ 28,694 Operating expense (excluding depreciation) 135,853 7,043 42,067 Depreciation and amortization 35,549 10,093 5,811 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments — 207 — Inventory valuation adjustment 53,976 — — Environmental obligation mark-to-market adjustments (123,958) — — Unrealized loss on derivatives 8,508 — — Adjusted Gross Margin (1) $ 417,204 $ 50,642 $ 76,572 Six months ended June 30, 2022 Refining Logistics Retail Operating income $ 50,473 $ 25,750 $ 9,570 Operating expense (excluding depreciation) 114,536 7,570 38,775 Depreciation and amortization 32,312 10,298 5,291 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments — — — Gain on sale of assets, net — (12) — Inventory valuation adjustment 73,096 — — Environmental obligation mark-to-market adjustments 89,850 — — Unrealized gain on derivatives (13,155) — — Par West redevelopment and other costs 2,865 — — Adjusted Gross Margin (1) $ 349,977 $ 43,606 $ 53,636 ____________________________________________________________________________ (1) For the three and six months ended June 30, 2023 and 2022, there was no impairment expense and LIFO liquidation adjustment recorded in Operating income (loss). For the three and six months ended June 30, 2023, there was no (gain) loss on sale of assets recorded in Operating income (loss). Adjusted Net Income (Loss) and Adjusted EBITDA Adjusted Net Income (Loss) is defined as Net income (loss) excluding: • inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments); • the LIFO layer liquidation impacts associated with our Washington inventory; • Environmental obligation mark-to-market adjustments (which represents the income statement effect of reflecting our RINs liability on a net basis; this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability and our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); • unrealized (gain) loss on derivatives; • acquisition and integration costs; • redevelopment and other costs related to Par West; • debt extinguishment and commitment costs; • increase in (release of) tax valuation allowance and other deferred tax items; • changes in the value of contingent consideration and common stock warrants; • severance costs; • (gain) loss on sale of assets; • impairment expense; • impairment expense associated with our investment in Laramie Energy and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; and • Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives. 39 Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding: • D&A; • interest expense and financing costs; • equity losses (earnings) from Laramie Energy excluding Par’s share of unrealized loss (gain) on derivatives, impairment of Par’s investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; • Par's portion of interest, taxes, and depreciation expense from refining and logistics investments; and • income tax expense (benefit) excluding the increase in (release of) tax valuation allowance. The following table presents a reconciliation of Adjusted Net Income and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income, on a historical basis for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net Income $ 30,013 $ 149,125 $ 267,903 $ 12,074 Inventory valuation adjustment 33,118 (7,557) 53,976 73,096 Environmental obligation mark-to-market adjustments 9,343 78,548 (123,958) 89,850 Unrealized loss (gain) on derivatives 22,178 (28,607) 8,508 (13,155) Acquisition and integration costs 7,273 — 12,544 63 Par West redevelopment and other costs 2,613 — 5,363 — Debt extinguishment and commitment costs (38) 5,672 17,682 5,672 Severance costs 1,070 35 1,070 2,263 Loss on sale of assets, net — 15 — 15 Adjusted Net Income (1) 105,570 197,231 243,088 169,878 Depreciation and amortization 28,216 25,583 52,576 49,363 Interest expense and financing costs, net 14,909 18,154 31,159 34,548 Equity earnings from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — (10,706) — Par's portion of interest, taxes, and depreciation expense from refining and logistics investments 207 — 207 — Income tax expense 1,928 1,125 2,141 688 Adjusted EBITDA (1) $ 150,830 $ 242,093 $ 318,465 $ 254,477 ________________________________________ (1) For the three and six months ended June 30, 2023 and 2022, there was no LIFO liquidation adjustment, change in value of contingent consideration, change in value of common stock warrants, change in valuation allowance or other deferred tax items, impairment expense, impairments associated with our investment in Laramie Energy, our share of Laramie Energy’s asset impairment losses in excess of our basis difference, or our share of Laramie Energy’s unrealized loss (gain) on derivatives. Factors Impacting Segment Results Operating Income Three months ended June 30, 2023 compared to the three months ended June 30, 2022 Refining. Operating income for our refining segment was $44.1 million for the three months ended June 30, 2023, a decrease of $124.7 million compared to an income of $168.8 million for the three months ended June 30, 2022. The decrease was primarily driven by: • a decrease of $145.9 million related to decreased crack spreads at all our refineries, • a decrease of $60.0 million related to an unfavorable change in crude oil differentials at our Hawaii refinery, and • a $12.0 million unfavorable FIFO change at our Wyoming refinery, partially offset by: 40 • an increase of $88.3 million related to a favorable change in the step-out obligation related to our inventory financing agreements driven by changes in commodity prices, and • an increase of $21.6 million driven by a 17.7% increase in refined product sales across our refineries. Logistics. Operating income for our logistics segment was $20.7 million for the three months ended June 30, 2023, an increase of $4.8 million compared to $15.9 million for the three months ended June 30, 2022. The increase is primarily due to contribution from Billings logistics assets during June 2023. Retail. Operating income for our retail segment was $15.2 million for the three months ended June 30, 2023, an increase of $9.7 million compared to $5.5 million for the three months ended June 30, 2022. The increase was primarily due to an increase in fuel margins, higher fuel sales volumes, and increased merchandise sales in the three months ended June 30, 2023 compared to the three months ended June 30, 2022. Six months ended June 30, 2023 compared to the six months ended June 30, 2022 Refining. Operating income for our refining segment was $307.3 million for the six months ended June 30, 2023, an improvement of $256.8 million compared to an operating income of $50.5 million for the six months ended June 30, 2022. The increase in profitability was primarily driven by a decrease in consolidated environmental costs across all our refineries of $216.7 million, including a $94.7 million gain on retirement of 2020 and 2021 RINs. Other factors impacting segment results include higher refined product sales volumes and declining crack spreads. Logistics. Operating income for our logistics segment was $33.3 million for the six months ended June 30, 2023, an increase of $7.5 million compared to $25.8 million for the six months ended June 30, 2022. The increase was primarily due to increased third party revenues and a $3.0 million contribution from the Billings Acquisition logistics assets during June 2023. Retail. Operating income for our retail segment was $28.7 million for the six months ended June 30, 2023, an increase of $19.1 million compared to $9.6 million for the six months ended June 30, 2022. The increase was primarily due to an increase in fuel margins, higher fuel sales volumes, and increased merchandise sales in the six months ended June 30, 2023 compared to the six months ended June 30, 2022. Adjusted Gross Margin Three months ended June 30, 2023 compared to the three months ended June 30, 2022 Refining. For the three months ended June 30, 2023, our refining Adjusted Gross Margin was $205.6 million, a decrease of $81.7 million compared to $287.3 million for the three months ended June 30, 2022. The decrease was primarily driven by decreased crack spreads and higher environmental costs across all our refineries, partially offset by margin contributed by the Montana refinery of $58.2 million. Overall, refined product crack spreads in the second quarter of 2023 decreased as compared to the second quarter of 2022 due to the conflict between Russia and Ukraine that escalated in February 2022. • Adjusted Gross Margin for the Hawaii refinery decreased by $6.63 per barrel from $18.71 per barrel during the three months ended June 30, 2022 to $12.08 per barrel during the three months ended June 30, 2023, primarily due to declining crack spreads and higher feedstock differentials. The Singapore 3-1-2 index declined from $36.80 in the second quarter of 2022 to $13.72 in the second quarter of 2023. • Adjusted Gross Margin for the Washington refinery decreased by $14.13 per barrel from $20.50 per barrel during the three months ended June 30, 2022 to $6.37 per barrel during the three months ended June 30, 2023, primarily due to declining product crack spreads, and unfavorable environmental costs of $23.3 million. The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $47.23 in the second quarter of 2022 to $25.13 in the second quarter of 2023. • Adjusted Gross Margin for the Wyoming refinery decreased by $22.78 per barrel from $43.34 per barrel during the three months ended June 30, 2022 to $20.56 per barrel during the three months ended June 30, 2023, primarily due to declining crack spreads and an unfavorable FIFO change of $12.0 million. The RVO Adjusted USGC 3-2-1 index declined from $42.24 in the second quarter of 2022 to $21.65 in the second quarter of 2023. Logistics. For the three months ended June 30, 2023, our logistics Adjusted Gross Margin was $29.6 million, an increase of $4.7 million compared to $24.9 million for the three months ended June 30, 2022. The increase is primarily due to a 4% increase in throughput across our logistics assets. Retail. For the three months ended June 30, 2023, our retail Adjusted Gross Margin was $39.2 million, an increase of $11.6 million compared to $27.6 million for the three months ended June 30, 2022. The increase was primarily due to an 41 increase in fuel margins, higher fuel sales volumes, and increased merchandise sales in the three months ended June 30, 2023 compared to the comparable period in 2022. Six months ended June 30, 2023 compared to the six months ended June 30, 2022 Refining. For the six months ended June 30, 2023, our refining Adjusted Gross Margin was $417.2 million, an increase of $67.2 million compared to $350.0 million for the six months ended June 30, 2022. The increase was primarily due to Adjusted Gross Margin contributed by the Montana refinery of $58.2 million. Other factors impacting refining results are described below. • Adjusted Gross Margin for the Hawaii refinery improved by $4.19 per barrel from $11.22 per barrel during the six months ended June 30, 2022 to $15.41 per barrel during the six months ended June 30, 2023, primarily due to higher refined products sold partially offset by lower crack spreads. The Singapore 3-2-1 index declined from $26.56 in the six months ended June 30, 2022 to $17.45 in the six months ended June 30, 2023. • Adjusted Gross Margin for the Washington refinery decreased by $5.51 per barrel from $14.17 per barrel during the six months ended June 30, 2022 to $8.66 per barrel during the six months ended June 30, 2023, primarily due to declining product crack spreads. The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $35.01 in the six months ended June 30, 2022 to $25.21 in the six months ended June 30, 2023. • Adjusted Gross Margin for the Wyoming refinery decreased by $10.92 per barrel from $34.97 per barrel during the six months ended June 30, 2022 to $24.05 per barrel during the six months ended June 30, 2023, primarily due to declining crack spreads and unfavorable FIFO changes of $32 million. The RVO Adjusted USGS 3-2-1 index declined from $30.31 in the six months ended June 30, 2022 to $24.09 in the six months ended June 30, 2023. Logistics. For the six months ended June 30, 2023, our logistics Adjusted Gross Margin was $50.6 million, an increase of $7.0 million compared to $43.6 million for the six months ended June 30, 2022. The increase was primarily due to increased revenues from third party services and a 10% increase in throughput across our Washington assets, partially offset by a 36% increase in cost of sales driven primarily by higher marine vessel fees and fuel costs. Retail. For the six months ended June 30, 2023, our retail Adjusted Gross Margin was $76.6 million, an increase of $23.0 million compared to $53.6 million for the six months ended June 30, 2022. The increase was primarily due to an increase in fuel margins, higher fuel sales volumes, and increased merchandise sales. Discussion of Consolidated Results Three months ended June 30, 2023 compared to the three months ended June 30, 2022 Revenues. For the three months ended June 30, 2023, revenues were $1.8 billion, a $0.3 billion decrease compared to $2.1 billion for the three months ended June 30, 2022. The decrease was primarily due to the decrease in crude prices and average product crack spreads discussed below, partially offset by a $0.2 billion contribution from the Billings Acquisition and a 4% increase in refining sales volumes across our legacy refinery portfolio during the quarter. Average Brent crude oil prices declined 31% and average WTI crude oil prices declined 32% during the second quarter of 2023 compared to the second quarter of 2022. The 3-1-2 Singapore Crack Spread, RVO Adjusted Pacific Northwest 3-1-1-1, and RVO Adjusted USGC 3-2-1 declined 63%, 47%, and 49%, respectively, compared to the second quarter of 2022. Please read our key operating statistics for further information. Revenues at our retail segment increased $1.2 million primarily due to a 14% increase in volumes and a 13% increase in merchandise sales, partially offset by a 13% decline in fuel prices. Cost of Revenues (Excluding Depreciation). For the three months ended June 30, 2023, cost of revenues (excluding depreciation) was $1.6 billion, a decrease of $0.2 billion when compared to $1.8 billion for the three months ended June 30, 2022. The decrease was primarily driven by decreased crude oil prices as described above and lower purchased product costs, partially offset by a $0.2 billion contribution from the Billings Acquisition. Cost of sales at our retail segment decreased $10 million primarily driven by a decrease in fuel costs. Operating Expense (Excluding Depreciation). For the three months ended June 30, 2023, operating expense (excluding depreciation) was $101.8 million, a $20.9 million increase when compared to $80.9 million for the three months ended June 30, 2022. $15.3 million of the increase was driven by the Billings Acquisition. Additional drivers of the increase were higher utility and maintenance costs and increased employee costs. 42 Depreciation and Amortization . For the three months ended June 30, 2023, D&A was $28.2 million, an increase of $2.6 million compared to $25.6 million for the three months ended June 30, 2022. The increase was primarily driven by the $3.5 million of D&A attributable to the Billings Acquisition. General and Administrative Expense (Excluding Depreciation). For the three months ended June 30, 2023, general and administrative expense (excluding depreciation) was $23.2 million, an increase of $7.8 million compared to $15.4 million for the three months ended June 30, 2022. The increase was primarily due to an increase in employee costs, costs related to the Billings Acquisition, and renewable development activities. Equity earnings from refining and logistics investments. During the three months ended June 30, 2023, Equity (earnings) from refining and logistics investments were $0.4 million related to YPLC. Please read Note 3—Refining and Logistics Equity Investments for further information. Acquisition and Integration Expense. During the three months ended June 30, 2023, we incurred $7.3 million of acquisition and integration costs related to the Billings Acquisition, compared to immaterial acquisition and integration costs for the three months ended June 30, 2022. Please read Note 5—Acquisitions for further information. Par West redevelopment and other costs. For the three months ended June 30, 2023, Par West redevelopment and other costs were $2.6 million, an increase of $1.1 million compared to $1.5 million for the three months ended June 30, 2022, primarily due to higher redevelopment costs. Interest Expense and Financing Costs, Net . For the three months ended June 30, 2023, our interest expense and financing costs were $14.9 million, a decrease of $3.3 million compared to $18.2 million for the three months ended June 30, 2022. The decrease was primarily due to a $4.7 million increase in interest income, partially offset by an increase in interest expense due to higher outstanding debt balances. Please read Note 9—Inventory Financing Agreements and Note 11—Debt for further information. Debt Extinguishment and Commitment Costs. For the three months ended June 30, 2022, our debt extinguishment and commitment costs were $5.7 million and primarily represented extinguishment costs associated with the redemption of $36.9 million of 12.875% Senior Secured Notes in second quarter of 2022. For the three months ended June 30, 2023, debt extinguishment and commitment costs were immaterial. Please read Note 11—Debt to our condensed consolidated financial statements for further information. Income Taxes. For the three months ended June 30, 2023, we recorded income tax expense of $1.9 million primarily related to increased taxable income and higher apportionment factors in the states in which we pay taxes. For the three months ended June 30, 2022, we recorded an income tax expense of $1.1 million primarily related to increased taxable income. Six months ended June 30, 2023 compared to the six months ended June 30, 2022 Revenues. For the six months ended June 30, 2023, revenues were $3.5 billion, relatively consistent with $3.5 billion for the six months ended June 30, 2022. The Billings Acquisition contributed revenues of $0.2 billion in the first month under our ownership. When comparing our legacy refining operations, there was a decrease of $0.2 billion in third-party revenues at our refining segment, $0.6 billion related to lower crude oil prices, partially offset by a 12% increase in refining sales volumes across our legacy refining locations. Average Brent crude oil prices declined 24% and average WTI crude oil prices declined 27% as compared to the prior period. Revenues at our retail segment increased $16.9 million primarily due to an 11% increase in volumes, partially offset by a 6% decrease in fuel prices. Revenues at our at Logistics segment increased $3.2 million primarily due to a 2% increase in Hawaii throughput. Cost of Revenues (Excluding Depreciation). For the six months ended June 30, 2023, cost of revenues (excluding depreciation) was $2.9 billion, a $0.3 billion decrease compared to $3.2 billion for the six months ended June 30, 2022, inclusive of a $0.2 billion contribution from the Billings Refinery. A $0.6 billion decrease within our legacy refining portfolio was primarily due to decreases in Brent and WTI crude oil prices as discussed above, coupled with $0.3 billion lower intermediation costs and $0.2 billion lower environmental costs, partially offset by $0.2 billion related to higher refining sales volumes, $0.2 billion related to higher purchased products. Operating Expense (Excluding Depreciation). For the six months ended June 30, 2023, operating expense (excluding depreciation) was $185.0 million, an increase of $24.1 million compared to $160.9 million for the six months ended June 30, 2022. The increase was primarily driven by $15.3 million attributable to the Billings Acquisition, coupled with $2.5 million higher employee costs and $2.0 million higher utility and maintenance expenses. 43 Depreciation and Amortization . For the six months ended June 30, 2023, D&A was $52.6 million, an increase of $3.2 million compared to $49.4 million for the six months ended June 30, 2022. The increase was primarily driven by the $3.5 million contribution from the Billings Acquisition. General and Administrative Expense (Excluding Depreciation). For the six months ended June 30, 2023, general and administrative expense (excluding depreciation) was $42.5 million, an increase of $11.2 million compared to $31.3 million for the six months ended June 30, 2022. The increase was primarily due to an increase in employee costs, costs related to the Billings Acquisition, and renewable development activities. Equity earnings from refining and logistics investments. For the six months ended June 30, 2023, equity earnings from refining and logistics investments were $0.4 million. As part of the Billings Acquisition, we acquired a 65% limited partnership ownership interest in YELP and a 40% ownership interest in YPLC. Our proportionate share of YPLC’s net income was $0.4 million. There was no equity earnings from YELP for the three and six months ended June 30, 2023. Please read Note 3—Refining and Logistics Equity Investments for additional information. Acquisition and Integration Expense. For the six months ended June 30, 2023, we incurred $12.5 million of acquisition and integration costs and primarily related to the Billings Acquisition. Please read Note 5—Acquisitions for further information. Par West redevelopment and other costs. For the six months ended June 30, 2023, Par West redevelopment and other costs were $5.4 million, an increase of $2.5 million compared to $2.9 million for the six months ended June 30, 2022, associated with the operation and decommissioning of our Par West facility. The increase was primarily due to additional redevelopment costs of $2.3 million. Interest Expense and Financing Costs, Net . For the six months ended June 30, 2023, our interest expense and financing costs were $31.2 million, a decrease of $3.3 million when compared to $34.5 million for the six months ended June 30, 2022. The decrease was primarily due to an increase in interest income of $6.9 million, partially offset by an increase in interest expense due to higher outstanding debt balances. Debt Extinguishment and Commitment Costs. For the six months ended June 30, 2023, we incurred debt extinguishment and commitment costs of $17.7 million in connection with the refinancing of our long-term debt in the first quarter of 2023. Please read Note 11—Debt for further information. For the six months ended June 30, 2022, our debt extinguishment and commitment costs were $5.7 million and primarily represented extinguishment costs associated with the redemption of $36.9 million of 12.875% Senior Secured Notes in second quarter of 2022. Equity Earnings from Laramie Energy, LLC. For the six months ended June 30, 2023, equity earnings from Laramie Energy, LLC were $10.7 million. On March 1, 2023, following a refinancing of certain debt, Laramie Energy was permitted to make a one-time cash distribution to its owners based on ownership percentage. Our share of this distribution was $10.7 million. There were no equity earnings from our investment in Laramie Energy, LLC, for the three months ended June 30, 2023 and six months ended June 30, 2022. Please read Note 4 — Investment in Laramie Energy for further discussion. Income Taxes. For the six months ended June 30, 2023, we recorded an income tax expense of $2.1 million primarily related to increased taxable income and higher apportionment factors in the states in which we pay taxes. For the six months ended June 30, 2022, we recorded an income tax expense of $0.7 million primarily related to increased taxable income. 44 Consolidating Condensed Financial Information On February 28, 2023, Par Petroleum, LLC (the “Issuer”) entered into the Term Loan Credit Agreement due 2030 with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. The Term Loan Credit Agreement was co-issued by Par Petroleum Finance Corp. (together with the Issuer, the “Issuers”), which has no independent assets or operations. The Term Loan Credit Agreement is guaranteed on a senior unsecured basis only as to payment of principal and interest by Par Pacific Holdings, Inc. (the “Parent”) and is guaranteed on a senior secured basis by all of the subsidiaries of Par Petroleum, LLC. The Term Loan Credit Agreement proceeds were used to refinance our existing Term Loan B Facility and repurchase our outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, all three of which had similar guarantees that were replaced by those on the Term Loan Credit Agreement. The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Petroleum, LLC and its consolidated subsidiaries’ accounts (which are all guarantors of the Term Loan Credit Agreement), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the Term Loan Credit Agreement and consolidating adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated. For purposes of the following condensed consolidating information, the Parent’s investment in its subsidiaries is accounted for under the equity method of accounting (dollar amounts in thousands). 45 As of June 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 7,191 $ 183,732 $ 28 $ 190,951 Restricted cash 336 3,670 — 4,006 Trade accounts receivable — 401,711 375 402,086 Inventories — 1,241,494 — 1,241,494 Prepaid and other current assets 3,049 52,140 (375) 54,814 Due from related parties 355,102 — (355,102) — Total current assets 365,678 1,882,747 (355,074) 1,893,351 Property, plant, and equipment Property, plant, and equipment 21,043 1,492,021 3,955 1,517,019 Less accumulated depreciation and amortization (15,784) (407,760) (3,216) (426,760) Property, plant, and equipment, net 5,259 1,084,261 739 1,090,259 Long-term assets Operating lease right-of-use assets 2,324 328,540 — 330,864 Refining and logistics equity investments — — 84,425 84,425 Investment in subsidiaries 657,524 — (657,524) — Intangible assets, net — 12,247 — 12,247 Goodwill — 126,678 2,597 129,275 Other long-term assets 726 68,823 — 69,549 Total assets $ 1,031,511 $ 3,503,296 $ (924,837) $ 3,609,970 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 4,353 $ — $ 4,353 Obligations under inventory financing agreements — 783,622 — 783,622 Accounts payable 7,125 344,195 — 351,320 Accrued taxes 22 48,452 — 48,474 Operating lease liabilities 783 68,270 — 69,053 Other accrued liabilities 496 514,321 (1,686) 513,131 Due to related parties 100,986 153,514 (254,500) — Total current liabilities 109,412 1,916,727 (256,186) 1,769,953 Long-term liabilities Long-term debt, net of current maturities — 574,762 — 574,762 Finance lease liabilities — 10,839 (4,330) 6,509 Operating lease liabilities 2,788 268,176 — 270,964 Other liabilities — 101,111 (32,640) 68,471 Total liabilities 112,200 2,871,615 (293,156) 2,690,659 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 610 — — 610 Additional paid-in capital 845,979 314,686 (314,686) 845,979 Accumulated earnings (deficit) 64,615 310,996 (310,996) 64,615 Accumulated other comprehensive income (loss) 8,107 5,999 (5,999) 8,107 Total stockholders’ equity 919,311 631,681 (631,681) 919,311 Total liabilities and stockholders’ equity $ 1,031,511 $ 3,503,296 $ (924,837) $ 3,609,970 46 As of December 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 2,547 $ 488,350 $ 28 $ 490,925 Restricted cash 331 3,670 — 4,001 Trade accounts receivable — 252,816 69 252,885 Inventories — 1,041,983 — 1,041,983 Prepaid and other current assets 2,229 89,883 (69) 92,043 Due from related parties 229,431 — (229,431) — Total current assets 234,538 1,876,702 (229,403) 1,881,837 Property, plant, and equipment Property, plant, and equipment 19,865 1,200,747 3,955 1,224,567 Less accumulated depreciation and amortization (14,967) (370,643) (3,123) (388,733) Property, plant, and equipment, net 4,898 830,104 832 835,834 Long-term assets Operating lease right-of-use assets 2,649 348,112 — 350,761 Investment in subsidiaries 487,943 — (487,943) — Intangible assets, net — 13,577 — 13,577 Goodwill — 126,727 2,598 129,325 Other long-term assets 723 72,721 (4,131) 69,313 Total assets $ 730,751 $ 3,267,943 $ (718,047) $ 3,280,647 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 10,956 $ — $ 10,956 Obligations under inventory financing agreements — 893,065 — 893,065 Accounts payable 4,176 147,219 — 151,395 Accrued taxes 47 32,052 — 32,099 Operating lease liabilities 787 65,294 — 66,081 Other accrued liabilities 511 639,396 587 640,494 Due to related parties 77,420 118,139 (195,559) — Total current liabilities 82,941 1,906,121 (194,972) 1,794,090 Long-term liabilities Long-term debt, net of current maturities — 494,576 — 494,576 Finance lease liabilities — 10,710 (4,399) 6,311 Operating lease liabilities 3,273 289,428 — 292,701 Other liabilities — 46,922 1,510 48,432 Total liabilities 86,214 2,747,757 (197,861) 2,636,110 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 604 — — 604 Additional paid-in capital 836,491 409,686 (409,686) 836,491 Accumulated earnings (deficit) (200,687) 104,479 (104,479) (200,687) Accumulated other comprehensive income (loss) 8,129 6,021 (6,021) 8,129 Total stockholders’ equity 644,537 520,186 (520,186) 644,537 Total liabilities and stockholders’ equity $ 730,751 $ 3,267,943 $ (718,047) $ 3,280,647 47 Three Months Ended June 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 1,783,875 $ 52 $ 1,783,927 Operating expenses Cost of revenues (excluding depreciation) — 1,574,806 — 1,574,806 Operating expense (excluding depreciation) — 101,843 — 101,843 Depreciation and amortization 443 27,727 46 28,216 Loss on sale of assets, net — — — — General and administrative expense (excluding depreciation) 8,459 14,710 (1) 23,168 Equity (earnings) from refining and logistics investments — — (425) (425) Acquisition and integration costs (2) (5,271) 12,544 — 7,273 Par West redevelopment and other costs — 2,613 — 2,613 Total operating expenses 3,631 1,734,243 (380) 1,737,494 Operating income (loss) (3,631) 49,632 432 46,433 Other income (expense) Interest expense and financing costs, net (18) (14,982) 91 (14,909) Debt extinguishment and commitment costs — 38 — 38 Other income (expense), net 41 337 1 379 Equity earnings (losses) from subsidiaries 34,389 — (34,389) — Equity earnings from Laramie Energy, LLC — — — — Total other income (expense), net 34,412 (14,607) (34,297) (14,492) Income (loss) before income taxes 30,781 35,025 (33,865) 31,941 Income tax benefit (expense) (1) (768) (8,820) 7,660 (1,928) Net income (loss) $ 30,013 $ 26,205 $ (26,205) $ 30,013 Adjusted EBITDA $ (7,942) $ 158,086 $ 686 $ 150,830 48 Three Months Ended June 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 2,106,284 $ 48 $ 2,106,332 Operating expenses Cost of revenues (excluding depreciation) — 1,808,925 — 1,808,925 Operating expense (excluding depreciation) — 80,865 — 80,865 Depreciation and amortization 576 24,960 47 25,583 Loss on sale of assets, net 27 (12) — 15 General and administrative expense (excluding depreciation) 4,756 10,682 — 15,438 Acquisition and integration costs — — — — Par West redevelopment and other costs — 1,477 — 1,477 Total operating expenses 5,359 1,926,897 47 1,932,303 Operating income (5,359) 179,387 1 174,029 Other income (expense) Interest expense and financing costs, net (4) (18,242) 92 (18,154) Debt extinguishment and commitment costs — (5,672) — (5,672) Other income (expense), net 3 44 — 47 Equity earnings (losses) from subsidiaries 154,484 — (154,484) — Total other income (expense), net 154,483 (23,870) (154,392) (23,779) Income (loss) before income taxes 149,124 155,517 (154,391) 150,250 Income tax benefit (expense) (1) — (38,096) 36,971 (1,125) Net income (loss) $ 149,124 $ 117,421 $ (117,420) $ 149,125 Adjusted EBITDA $ (4,753) $ 246,798 $ 48 $ 242,093 49 Six Months Ended June 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 3,469,072 $ 64 $ 3,469,136 Operating expenses Cost of revenues (excluding depreciation) — 2,863,826 — 2,863,826 Operating expense (excluding depreciation) — 184,963 — 184,963 Depreciation and amortization 816 51,666 94 52,576 Loss on sale of assets, net — — — — General and administrative expense (excluding depreciation) 14,309 28,146 (1) 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 Total operating expenses 15,125 3,146,508 (332) 3,161,301 Operating income (loss) (15,125) 322,564 396 307,835 Other income (expense) Interest expense and financing costs, net (26) (31,315) 182 (31,159) Debt extinguishment and commitment costs — (17,682) — (17,682) Other income (expense), net 34 310 — 344 Equity earnings (losses) from subsidiaries 283,933 — (283,933) — Equity earnings from Laramie Energy, LLC — — 10,706 10,706 Total other income (expense), net 283,941 (48,687) (273,045) (37,791) Income (loss) before income taxes 268,816 273,877 (272,649) 270,044 Income tax benefit (expense) (1) (913) (67,360) 66,132 (2,141) Net income (loss) $ 267,903 $ 206,517 $ (206,517) $ 267,903 Adjusted EBITDA $ (13,799) $ 331,567 $ 697 $ 318,465 50 Six Months Ended June 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 3,456,564 $ 61 $ 3,456,625 Operating expenses Cost of revenues (excluding depreciation) — 3,159,174 — 3,159,174 Operating expense (excluding depreciation) — 160,881 — 160,881 Depreciation and amortization 1,204 48,063 96 49,363 Loss on sale of assets, net 27 (12) — 15 General and administrative expense (excluding depreciation) 8,934 22,397 — 31,331 Acquisition and integration costs 63 — — 63 Par West redevelopment and other costs — 2,865 — 2,865 Total operating expenses 10,228 3,393,368 96 3,403,692 Operating income (10,228) 63,196 (35) 52,933 Other income (expense) Interest expense and financing costs, net (9) (34,725) 186 (34,548) Debt extinguishment and commitment costs — (5,672) — (5,672) Other income (expense), net (4) 53 — 49 Equity earnings (losses) from subsidiaries 22,315 — (22,315) — Total other income (expense), net 22,302 (40,344) (22,129) (40,171) Income (loss) before income taxes 12,074 22,852 (22,164) 12,762 Income tax benefit (expense) (1) — (5,699) 5,011 (688) Net income (loss) $ 12,074 $ 17,153 $ (17,153) $ 12,074 Adjusted EBITDA $ (8,587) $ 263,003 $ 61 $ 254,477 ________________________________________ (1) The income tax benefit (expense) of the Parent Guarantor and Issuer and Subsidiaries is determined using the separate return method. The Non-Guarantor Subsidiaries and Eliminations column includes tax benefits recognized at the Par consolidated level that are primarily associated with changes to the consolidated valuation allowance and other deferred tax balances. (2) The acquisition and integration expense related to the Billings Acquisition was pushed down from the Parent Guarantor to the Issuer and Subsidiaries upon consummation of the transaction. 51 Non-GAAP Financial Measures Adjusted EBITDA for the supplemental consolidating condensed financial information, which is segregated at the “Parent Guarantor,” “Issuer and Subsidiaries,” and “Non-Guarantor Subsidiaries and Eliminations” levels, is calculated in the same manner as for the Par Pacific Holdings, Inc. Adjusted EBITDA calculations. See “Results of Operations — Non-GAAP Performance Measures — Adjusted Net Income (Loss) and Adjusted EBITDA” above. The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income, on a historical basis for the periods indicated (in thousands): Three Months Ended June 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 30,013 $ 26,205 $ (26,205) $ 30,013 Inventory valuation adjustment — 33,118 — 33,118 Environmental obligation mark-to-market adjustments — 9,343 — 9,343 Unrealized loss on derivatives — 22,178 — 22,178 Acquisition and integration costs (5,271) 12,544 — 7,273 Par West redevelopment and other costs — 2,613 — 2,613 Debt extinguishment and commitment costs — (38) — (38) Severance costs 476 594 — 1,070 Depreciation and amortization 443 27,727 46 28,216 Interest expense and financing costs, net 18 14,982 (91) 14,909 Equity losses (earnings) from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — — — Equity losses (income) from subsidiaries (34,389) — 34,389 — Par's portion of interest, taxes, and depreciation expense from refining and logistics investments — — 207 207 Income tax expense (benefit) 768 8,820 (7,660) 1,928 Adjusted EBITDA (1) $ (7,942) $ 158,086 $ 686 $ 150,830 Three Months Ended June 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 149,124 $ 117,421 $ (117,420) $ 149,125 Inventory valuation adjustment — (7,557) — (7,557) Environmental obligation mark-to-market adjustments — 78,548 — 78,548 Unrealized loss (gain) on derivatives — (28,607) — (28,607) Acquisition and integration costs — — — — Debt extinguishment and commitment costs — 5,672 — 5,672 Severance costs — 35 — 35 Loss on sale of assets, net 27 (12) — 15 Depreciation and amortization 576 24,960 47 25,583 Interest expense and financing costs, net 4 18,242 (92) 18,154 Equity losses (income) from subsidiaries (154,484) — 154,484 — Income tax expense (benefit) — 38,096 (36,971) 1,125 Adjusted EBITDA (1) $ (4,753) $ 246,798 $ 48 $ 242,093 52 Six Months Ended June 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 267,903 $ 206,517 $ (206,517) $ 267,903 Inventory valuation adjustment — 53,976 — 53,976 Environmental obligation mark-to-market adjustments — (123,958) — (123,958) Unrealized loss on derivatives — 8,508 — 8,508 Acquisition and integration costs — 12,544 — 12,544 Par West redevelopment and other costs — 5,363 — 5,363 Debt extinguishment and commitment costs — 17,682 — 17,682 Severance costs 476 594 — 1,070 Depreciation and amortization 816 51,666 94 52,576 Interest expense and financing costs, net 26 31,315 (182) 31,159 Equity earnings from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — (10,706) (10,706) Equity losses (income) from subsidiaries (283,933) — 283,933 — Par's portion of interest, taxes, and depreciation expense from refining and logistics investments — — 207 207 Income tax expense 913 67,360 (66,132) 2,141 Adjusted EBITDA (1) $ (13,799) $ 331,567 $ 697 $ 318,465 Six Months Ended June 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 12,074 $ 17,153 $ (17,153) $ 12,074 Inventory valuation adjustment — 73,096 — 73,096 Environmental obligation mark-to-market adjustments — 89,850 — 89,850 Unrealized loss (gain) on derivatives — (13,155) — (13,155) Acquisition and integration costs 63 — — 63 Debt extinguishment and commitment costs — 5,672 — 5,672 Severance costs 351 1,912 — 2,263 Loss on sale of assets, net 27 (12) — 15 Depreciation and amortization 1,204 48,063 96 49,363 Interest expense and financing costs, net 9 34,725 (186) 34,548 Equity losses (income) from subsidiaries (22,315) — 22,315 — Income tax expense (benefit) — 5,699 (5,011) 688 Adjusted EBITDA (1) $ (8,587) $ 263,003 $ 61 $ 254,477 ________________________________________ (1) For the three and six months ended June 30, 2023 and 2022, there was no LIFO liquidation adjustment, change in value of contingent consideration, change in value of common stock warrants, change in valuation allowance or other deferred tax items, impairment expense, impairments associated with our investment in Laramie Energy, our share of Laramie Energy’s asset impairment losses in excess of our basis difference, or our share of Laramie Energy’s unrealized loss (gain) on derivatives. For the three and six months ended June 30, 2022, there was no Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments. 53 Liquidity and Capital Resources Our liquidity and capital requirements are primarily a function of our debt maturities and debt service requirements and contractual obligations, capital expenditures, turnaround outlays, and working capital needs. Examples of working capital needs include purchases and sales of commodities and associated margin and collateral requirements, facility maintenance costs, and other costs such as payroll. Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets. Our liquidity position as of June 30, 2023 was $464.4 million and consisted of $457.1 million at Par Petroleum, LLC and subsidiaries, $7.2 million at Par Pacific Holdings, Inc., and $0.1 million at all our other subsidiaries. As of June 30, 2023, we had access to the ABL Credit Facility, the J. Aron Discretionary Draw Facility, the MLC receivable advances, and cash on hand of $191.0 million. In addition, we have the Supply and Offtake Agreement with J. Aron and the Washington Refinery Intermediation Agreement, which are used to finance the majority of the inventory at our Hawaii and Washington refineries, respectively. Generally, the primary uses of our capital resources have been in the operations of our refining and retail segments, payments related to acquisitions, and to repay or refinance indebtedness. On June 1, 2023 we closed the Billings Acquisition; please read Note 5—Acquisitions for further information. On April 26, 2023, we terminated the Prior ABL Credit Facility with certain lenders and Bank of America and entered into a new ABL Credit Facility. Please read Note 11—Debt for further information about the ABL Credit Facility. On July 26, 2023, we entered into a new LC Facility. Please read Note 20—Subsequent Events for further information about the LC Facility. We believe our cash flows from operations and available capital resources will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for the next 12 months. We may seek to raise additional debt or equity capital to fund acquisitions and any other significant changes to our business or to refinance existing debt. We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost. We may from time to time seek to retire or repurchase our common stock through cash purchases, in open market purchases, privately negotiated transactions, or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. The Term Loan Credit Agreement may also require annual prepayments of principal with a variable percentage of our excess cash flow, 50% or 25% depending on our consolidated year end secured net leverage ratio (as defined in the Term Loan Credit Agreement). Cash Flows The following table summarizes cash activities for the six months ended June 30, 2023 and 2022 (in thousands): Six Months Ended June 30, 2023 2022 Net cash provided by operating activities $ 312,240 $ 27,657 Net cash used in investing activities (626,021) (28,952) Net cash provided by financing activities 13,812 75,252 Cash flows for the six months ended June 30, 2023 Net cash provided by operating activities for the six months ended June 30, 2023 was driven primarily by net income of $267.9 million, non-cash charges to operations and non-operating items of approximately $76.1 million, and net cash used for changes in operating assets and liabilities of approximately $31.8 million. Non-cash charges to operations and non-operating items consisted primarily of the following adjustments: • depreciation and amortization expenses of $52.6 million, • debt commitment and extinguishment costs of $17.7 million, • unrealized loss on derivatives contracts of $7.6 million, and • stock based compensation costs of $6.1 million, partially offset by: • gain of $10.7 million from our equity investment in Laramie Energy. 54 Net cash used for changes in operating assets and liabilities resulted primarily from: • an increase in our accounts receivable due to the Billings Acquisition, • a decrease in gross environmental credit obligations primarily related to retirements of a portion of our prior year obligations, partially offset by increased current period obligations • a decrease in our inventory financing agreement obligations. partially offset by: • an increase in our and accounts payable, and • an increase in inventory driven by Washington CCA assets, partially offset by lower crude oil and refined product prices and lower inventory volumes at our Hawaii refinery. Net cash used in investing activities for the six months ended June 30, 2023 consisted primarily of: • $608.2 million for the Billings Acquisition, and • $30.7 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects, including construction of a flagship retail store in Washington, improved crude processing equipment at our Hawaii refinery, a co-processing unit at our Tacoma refinery, and various IT infrastructure improvements, partially offset by: • a $10.7 million cash distribution received from Laramie Energy in the first quarter of 2023. Net cash provided by financing activities was approximately $13.8 million for the six months ended June 30, 2023 and consisted primarily of the following activities: • net borrowings of debt of $61.3 million primarily driven by the refinancing and consolidation of our debt, partially offset by: • net repayment under the J. Aron Discretionary Draw Facility and MLC receivable advances of $31.4 million, and • aggregate payments of $17.9 million of deferred loan costs and debt extinguishment costs, related to our debt refinancing. Cash flows for the six months ended June 30, 2022 Net cash provided by operating activities for the six months ended June 30, 2022, was driven primarily by non-cash charges to operations of approximately $49.9 million and net income of $12.1 million, partially offset by net cash used for changes in operating assets and liabilities of approximately $34.3 million. Non-cash charges to operations consisted primarily of the following adjustments: • depreciation and amortization expenses of $49.4 million, • stock based compensation costs of $5.8 million, and • debt commitment and extinguishment costs of $5.7 million, partially offset by: • unrealized loss on derivatives contracts of $13.2 million. 55 Net cash used for changes in operating assets and liabilities resulted primarily from: • net increases in our inventories and accounts receivable resulting from higher crude oil and refined product prices and higher inventory volumes at our Hawaii refinery, and • increase in prepaid and other primarily driven by $66.1 million increase in collateral posted with broker to support commodity derivative positions, partially offset by: • net increases in our Supply and Offtake Agreement and Washington Refinery Intermediation Agreement obligations and accounts payable, and • an increase in gross environmental credit obligations primarily related to current period production volumes and increases in RINs prices. Net cash used in investing activities for the six months ended June 30, 2022 consisted primarily of: • $29.0 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude recovery and debottlenecking projects at our Tacoma refinery, maintenance projects at our Wyoming refinery, and co-generation engine and combustion projects at our Hawaii refinery. Net cash provided by financing activities was approximately $75.3 million for the six months ended June 30, 2022 and consisted primarily of the following activities: • net borrowings under the J. Aron Discretionary Draw Facility and MLC receivable advances of $142.3 million, partially offset by: • net repayments of debt of $57.0 million primarily driven by the partial repurchase and cancellation of our 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, and • repurchases of common stock of $6.5 million. Cash Requirements. There have been no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, outside the ordinary course of business except as follows: Debt Refinancing. On February 28, 2023, we entered into the Term Loan Credit Agreement. The proceeds were used to repurchase and cancel the then-outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes and terminate and repay all amounts outstanding under the Term Loan B Facility . As a result of this refinancing, our debt maturity was extended from 2026 to 2030 and, using interest rates that were in effect at March 31, 2023, our estimated undiscounted future interest payments increased to $295 million. Please read Note 11—Debt for more information. Critical Accounting Estimates There have been no material changes to critical accounting estimates disclosed in our Annual Report on Form 10-K for the six months ended June 30, 2023. Forward-Looking Statements Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (“PSLRA”), or in releases made by the SEC, all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties, and other important factors including, without limitation, the conflict between Russia and Ukraine and certain developments in the global crude oil markets on our business, our customers, and the markets where we operate; our beliefs regarding available capital resources; our beliefs regarding the likely results or impact of certain disputes or contingencies and any potential fines or penalties; our beliefs regarding the fair value of certain assets, and our expectations with respect to laws and regulations, including environmental regulations and related compliance costs and any fines or penalties related thereto; our expectations regarding the sufficiency of our cash flows and liquidity; our expectations regarding anticipated capital expenditures, including the timing and cost of compliance with consent decrees and other enforcement actions; our expectations 56 regarding the impact of the adoption of certain accounting standards; our estimates regarding the fair value of certain indebtedness; estimated costs to settle claims from the Delta bankruptcy; the estimated value of, and our ability to settle, legal claims remaining to be settled against third parties; our expectations regarding the synergies or other benefits of our acquisitions; our expectations regarding certain tax liabilities and debt obligations; management’s assumptions about future events; our ability to integrate the recently acquired ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”) into our existing business, the anticipated synergies and other benefits of the Acquisition, including renewable growth opportunities; anticipated liabilities and costs associated with the Acquisition; the anticipated financial and operating results of the Acquisition, and the effect on the Company’s cash flows and profitability (including Adjusted EBITDA and Adjusted Net Income); our ability to raise additional debt or equity capital; our ability to make strategic investments in business opportunities; and the estimates, assumptions, and projections regarding future financial condition, results of operations, liquidity, and cash flows. These and other forward-looking statements could cause the actual results, performance, or achievements of Par and its subsidiaries to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “may,” “will,” “would,” “could,” “should,” “seeks,” or “scheduled to,” or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act, and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. The forward-looking statements contained in this Quarterly Report on Form 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control, including those set out in our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q under “Risk Factors.” In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this Quarterly Report on Form 10-Q are not guarantees of future performance; and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described above and under Critical Accounting Estimates and Risk Factors included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q. All forward-looking statements speak only as of the date they are made. There can be no guarantee that the operational and financial measures the Company has taken, and may take in the future, will be fully effective. We do not intend to update or revise any forward-looking statements as a result of new information, future events, or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.