What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-08 compared with 2023-08-09 · 332 added, 238 removed, 846 unchanged (40% of the section changed)

4 unchanged sentences

(in thousands, except share data)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets

2 unchanged sentences

Total cash, cash equivalents, and restricted cash 365,580 494,926

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

Trade accounts receivable, net of allowances of $ 0.1 million and $ 0.3 million at September 30, 2023 and December 31, 2022, respectively

527,442 252,885

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Common stock, $ 0.01 par value;

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

500,000,000 shares authorized at September 30, 2023 and December 31, 2022, 60,518,417 shares and 60,470,837 shares issued at September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 853,835 836,491

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(in thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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Depreciation and amortization 35,311 25,125 87,887 74,488

Loss on sale of assets, net — 15 — 15

General and administrative expense (excluding depreciation) 23,694 16,219 66,148 47,550

Equity earnings from refining and logistics investments

( 3,934 ) — ( 4,359 ) —

Acquisition and integration costs 4,669 — 17,213 63

Par West redevelopment and other costs 3,127 2,816 8,490 5,681

Gain on sale of assets, net — ( 185 ) — ( 170 )

Total operating expenses 2,382,435 1,772,114 5,543,736 5,175,806

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Debt extinguishment and commitment costs — 343 ( 17,682 ) ( 5,329 )

Other income, net 379 47 344 49

Other income (loss), net ( 43 ) ( 198 ) 301 ( 149 )

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

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(in thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

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Deferred taxes 3,676 682

Loss on sale of assets, net — 15

Gain on sale of assets, net — ( 170 )

Stock-based compensation 8,956 7,382

Unrealized (gain) loss on derivative contracts 7,621 ( 13,155 )

Unrealized gain on derivative contracts ( 1,152 ) ( 10,151 )

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

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Other financing activities, net 617 351

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

Net cash used in financing activities ( 79,039 ) ( 34,522 )

Net increase in cash, cash equivalents, and restricted cash ( 129,346 ) 296,870

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

Stock-based compensation ( 2 ) — 1,613 — — 1,613

Purchase of common stock for retirement ( 60 ) ( 1 ) ( 41 ) ( 804 ) — ( 846 )

Net income — — — 267,396 — 267,396

Balance, September 30, 2022 60,158 $ 601 $ 829,195 $ ( 285,406 ) $ 2,502 $ 546,892

Additional Accumulated Other

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

Common stock offering, net of issuance costs — — — — — —

Stock-based compensation 7 3 2,871 — — 2,874

Purchase of common stock for retirement ( 784 ) ( 8 ) ( 1,655 ) ( 27,306 ) — ( 28,969 )

Exercise of stock options 251 — 6,640 — — 6,640

Other comprehensive loss — — — — ( 12 ) ( 12 )

Net income — — — 171,415 — 171,415

Balance, September 30, 2023 60,518 $ 605 $ 853,835 $ 208,724 $ 8,095 $ 1,071,259

See accompanying notes to the condensed consolidated financial statements.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

For the Interim Periods Ended September 30, 2023 and 2022

Note 1 — Overview

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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”).

As of September 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.

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.

As noted in the Refining and Logistics discussions above, as of September 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.

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Actual amounts could differ from these estimates.

Allowance for Credit Losses

We are exposed to credit losses primarily through our sales of refined products.

Credit limits and/or prepayment requirements are set based on such factors as the customer’s financial results, credit rating, payment history, and industry and

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Allowance for Credit Losses

We are exposed to credit losses primarily through our sales of refined products.

Credit limits and/or prepayment requirements are set based on such factors as the customer’s financial results, credit rating, payment history, and industry and are reviewed annually for customers with material credit limits.

For the Interim Periods Ended September 30, 2023 and 2022

are reviewed annually for customers with material credit limits.

Credit allowances are reviewed at least quarterly based on changes in the customer’s creditworthiness due to economic conditions, liquidity, and business strategy as publicly reported and through discussions between the customer and the Company.

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

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

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

Cost Classifications

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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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

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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

Our proportionate share of YELP’s net income and the depreciation of our basis difference are included in Equity earnings from refining and logistics investments on our condensed consolidated statements of operations.

Our proportionate share of YELP’s net income (loss) is recorded on a one-month lag.

PAR PACIFIC HOLDINGS, INC.

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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.

For the Interim Periods Ended September 30, 2023 and 2022

The change in our equity investment in YELP is as follows (in thousands):

Three Months Ended September 30, For the period from June 1 through September 30,

Beginning balance $ 58,019 $ —

Acquisition of investment

Equity earnings from YELP

Depreciation of basis difference

( 348 ) ( 348 )

Dividends received ( 5,558 ) ( 5,558 )

Ending balance $ 54,853 $ 54,853

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 throughout Montana and the Pacific Northwest.

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 and the accretion of our basis difference is included in Equity earnings from refining and logistics investments on our condensed consolidated statements of operations.

The change in our equity investment in YPLC is as follows (in thousands):

Three Months Ended September 30, For the period from June 1 through September 30,

Beginning balance $ 26,406 $ —

Acquisition of investment

Equity earnings from YPLC

Accretion of basis difference 51 51

Dividends received — ( 2,600 )

Ending balance $ 27,947 $ 27,947

Note 4— Investment in Laramie Energy

Laramie Energy

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

As of September 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 June 30, 2023 and December 31, 2022.

The balance of our investment in Laramie Energy was zero as of September 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.

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

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

As of September 30, 2023, the term loan had an outstanding balance of $ 160.0 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.

Our share of this distribution was $ 10.7 million, which was reflected as Return of capital from Laramie Energy, LLC on our condensed consolidated statements of cash flows.

Our share of this distribution was $ 10.7 million, which was reflected as

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Return of capital from Laramie Energy, LLC on our condensed consolidated statements of cash flows.

We recorded the cash received as Equity earnings from Laramie Energy, LLC on our condensed consolidated statements of operations because the carrying value of our investment in Laramie Energy was zero at the time of such distribution.

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 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.

At September 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.

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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”).

On October 20, 2022, we and our subsidiaries Par Montana, LLC (“Par Montana”) and Par Montana Holdings, LLC (“Par Montana Holdings”), entered into an equity and asset purchase agreement (as amended to include Par Rocky Mountain Midstream, LLC, 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.

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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.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

On June 1, 2023, we completed the Billings Acquisition for a total purchase price of approximately $ 625.4 million, including acquired working capital, consisting of a cash deposit of $ 30.0 million paid on October 20, 2022 upon execution of the Purchase Agreement and $ 595.4 million paid at closing on June 1, 2023.

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

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.

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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.

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

During the three months ended September 30, 2023, immaterial purchase price allocation adjustments were recorded related to

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

working capital.

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.

We incurred $ 0.2 million and $ 10.6 million of acquisition costs related to the Billings Acquisition for the three and nine months ended September 30, 2023, respectively.

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

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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,

For the three and nine months ended September 30, 2023, our results of operations included revenues of $ 839.9 million and $ 1,057.0 million, respectively, and net income of $ 68.2 million and $ 52.6 million, respectively, related to these assets.

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

Nine Months Ended September 30,

Revenues $ 6,989,310 $ 7,599,525

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

Net income 592,970 261,796

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

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 nine months ended September 30, 2023 to the nine months ended September 30, 2022 and (iii) elimination of historical transactions between Par and the Montana assets.

Note 6— Revenue Recognition

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

As of September 30, 2023 and December 31, 2022, receivables from contracts with customers were $ 471.6 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 $ 14.2 million and $ 11.5 million as of June 30, 2023 and December 31, 2022, respectively.

Deferred revenue was $ 35.1 million and $ 11.5 million as of September 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 June 30, 2023 Refining Logistics Retail

Three Months Ended September 30, 2023 Refining Logistics Retail

Product or service:

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Total segment revenues (3) $ 2,524,155 $ 72,839 $ 158,512

Three Months Ended June 30, 2022 Refining Logistics Retail

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Three Months Ended September 30, 2022 Refining Logistics Retail

Product or service:

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Total segment revenues (3) $ 1,974,701 $ 54,635 $ 157,385

Six Months Ended June 30, 2023 Refining Logistics Retail

Nine Months Ended September 30, 2023 Refining Logistics Retail

Product or service:

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Total segment revenues (3) $ 5,848,108 $ 189,936 $ 442,480

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Six Months Ended June 30, 2022 Refining Logistics Retail

Nine Months Ended September 30, 2022 Refining Logistics Retail

Product or service:

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

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Note 7— Inventories

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

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

Titled Inventory Supply and Offtake Agreement (1) Total

June 30, 2023

September 30, 2023

Crude oil and feedstocks $ 268,498 $ 126,747 $ 395,245

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

(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

(2) Includes $ 223.4 million and $ 258.2 million of RINs and environmental credits, reported at the lower of cost or net realizable value, as of September 30, 2023 and December 31, 2022, respectively.

RINs and environmental credit obligations of $ 326.6 million and $ 549.8 million, reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of September 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 $ 91.1 million and $ 152.6 million as of September 30, 2023 and December 31, 2022, respectively.

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

As of September 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 $ 63.4 million and $ 46.4 million, respectively.

Note 8— Prepaid and Other Current Assets

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

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

September 30, 2023 December 31, 2022

Collateral posted with broker for derivative instruments (1) $ 22,834 $ 40,788

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Prepaid insurance 585 15,639

Derivative assets 18,138 —

Other 15,846 5,616

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(2) Please read Note 5—Acquisitions for further information.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Note 9— Inventory Financing Agreements

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Supply and Offtake Agreement

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Washington Refinery Intermediation Agreement 161,690 160,554

LC Facility due 2024

Obligations under inventory financing agreements $ 841,838 $ 893,065

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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.

On June 21, 2023, we entered into an amendment (the “June 2023 S&O Amendment”) to the Supply and Offtake Agreement 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.

On July 26, 2023, we entered into an amendment (the “July 2023 S&O Amendment”) to the Supply and Offtake Agreement which, among other things, allowed PHR to enter into a crude oil procurement contract supported by a letter of credit under the LC Facility (as defined below) and have its purchases funded by J.

Aron, subject to certain conditions.

Please read below for further information on the LC Facility.

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.

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.

For the three and nine months ended September 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 June 30, 2023 and December 31, 2022.

Aron as of September 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 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

We did not recognize any fixed market fees for the three and nine months ended September 30, 2023 or for the three months ended September 30, 2022.

We recognized fixed market fees of $ 8.8 million for the nine months ended September 30, 2022, which were included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations.

LC Facility due 2024

On July 26, 2023, PHR, as borrower, the lenders and letter of credit issuing banks party thereto (collectively, the “LC Facility Lenders”), MUFG Bank, Ltd., as administrative agent (the “LC Facility Agent”), sub-collateral agent, joint lead arranger and sole bookrunner, Macquarie Bank Limited, as joint lead arranger, and U.S.

Bank Trust Company, National Association, as collateral agent (the “Collateral Agent”), entered into an Uncommitted Credit Agreement (the “LC Facility Agreement”) whereby the LC Facility Lenders agree, on an uncommitted and absolutely discretionary basis, to consider making revolving credit loans and issuing and participating in letters of credit in the maximum available amount of $ 120.0 million in the aggregate (the “LC Facility”) with the right to request an increase up to $ 350.0 million in the aggregate, subject to certain conditions.

Letters of credit issued under the LC Facility are intended to finance and provide credit support for certain of PHR’s

PAR PACIFIC HOLDINGS, INC.

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

depreciation) on our condensed consolidated statements of operations.

For the Interim Periods Ended September 30, 2023 and 2022

purchases of crude oil.

In addition, revolving credit loans may be used to pay suppliers.

The LC Facility will mature on July 25, 2024, unless the obligations are accelerated and the maximum credit limits of the LC Facility Lenders are terminated prior to such date.

The revolving credit loans under the LC Facility bear interest at a 1) SOFR rate plus the applicable margin of 2.5 %, 2) cost of funds rate plus applicable margin of 2.5 % or) alternate base rate plus 1.5 %, as more particularly described in the LC Facility Agreement.

PHR has agreed to pay certain fees and commissions with respect to letters of credit under the LC Facility, including, but not limited to, a letter of credit commission, in an amount equal to the greater of $ 750 (in dollars) and (1) 2.00 % per annum of the face amount of any trade letter of credit, or (2) 2.25 % per annum of the face amount of any performance letter of credit, each payable monthly in arrears.

In addition, PHR shall pay a fronting fee equal to 0.25 % of the face amount of each letter of credit issued by a letter of credit issuing bank, payable monthly in arrears.

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

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.

PHR has granted a lien and security interest in certain of its assets to the Collateral Agent.

PHR is also required to provide cash collateral to the LC Facility Agent as a condition to issuance of certain letters of credit.

Washington Refinery Intermediation Agreement

2 unchanged sentences

Oil & Refining Co.

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

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

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.

2 unchanged sentences

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.

On October 4, 2023, USOR entered into a Wind-Down and Termination Agreement;

please read Note 20—Subsequent Events for further information

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Discretionary Draw Facility

8 unchanged sentences

72,090 56,601

LC Facility due 2024

Outstanding borrowings

Borrowing capacity

MLC issued letters of credit 68,900 115,001

LC Facility issued letters of credit

______________________________________________________

1 unchanged sentence

Changes in the borrowings outstanding under these arrangements are included within Cash flows from financing activities on the condensed consolidated statements of cash flows.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

6 unchanged sentences

Interest expense and financing costs, net 3,278 2,636 9,250 7,533

LC Facility due 2024

Interest expense and financing costs, net $ 54 — $ 54 —

___________________________________________________

(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.

(1) Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $ 5.1 million and $ 30.2 million for the three months ended September 30, 2023 and 2022 and $ 9.3 million and $ 54.1 million for the nine months ended September 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 June 30, 2023 and December 31, 2022 consisted of the following (in thousands):

June 30, 2023 December 31, 2022

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

September 30, 2023 December 31, 2022

Accrued payroll and other employee benefits $ 30,905 $ 27,815

3 unchanged sentences

___________________________________________________

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

(1) Gross environmental credit obligations are stated at market as of September 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 $ 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.

The carrying costs of these assets were $ 223.4 million and $ 258.2 million as of September 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 $ 91.1 million and $ 152.6 million as of September 30, 2023 and December 31, 2022, respectively.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Note 11— Debt

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

ABL Credit Facility due 2028

9 unchanged sentences

Long-term debt, net of current maturities $ 532,653 $ 494,576

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 September 30, 2023, we had $ 49.4 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.

We had $ 70.0 million and $ 5.9 million in cash-collateralized letters of credit and surety bonds outstanding as of September 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.

1 unchanged sentence

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.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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.

On May 30, 2023, the ABL Credit Facility was amended (“ABL Credit Facility Billings Amendment”) in order to, among other things, increase the commitment amount by $ 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.

On October 4, 2023, we entered into the Second Amendment to the ABL Credit Facility;

please read Note 20—Subsequent Events for further information.

As of September 30, 2023, the ABL Credit Facility had no outstanding revolving loans , $ 49.4 million in letters of credit outstanding, and a borrowing base of approxi mately $ 424.0 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.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

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.

6 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 and six months June 30, 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 six months ended June 30, 2023.

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 nine months ended September 30, 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 six months ended June 30, 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 %.

In addition to the quarterly interest payments, the Term Loan B Facility required quarterly principal payments of $ 3.1 million.

In addition to the quarterly interest payments, the

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Term Loan B Facility required quarterly principal payments of $ 3.1 million.

The Term Loan B Facility was due to mature on January 11, 2026.

2 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 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.

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 nine months ended September 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.

5 unchanged sentences

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

As of September 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”).

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.

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.

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 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):

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

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

Contract Type Purchases Sales Net

2 unchanged sentences

Total 34,455 ( 38,302 ) ( 3,847 )

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:

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

At September 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 September 30, 2023:

Average barrels per month 168,333 146,500

1 unchanged sentence

Weighted-average strike price - ceiling (in dollars) $ 88.10 $ 83.19

Earliest commencement date July 2023 January 2024

Earliest commencement date September 2023 January 2024

Furthest expiry date December 2023 June 2024

At September 30, 2023, we also had open exchange traded future contracts for certain environmental credits that economically hedge a portion of our environmental credit obligations.

Our open environmental credit derivative contracts represented 750 thousand credits and will deliver by December 2023.

Interest Rate Derivatives

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 are exposed to interest rate volatility in our ABL Credit Facility, LC 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.

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 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 September 30, 2023.

The terms of the agreement provide for an interest rate cap of 5.50 % and floor of 2.300 %, based on the three month SOFR as of the fixing date.

4 unchanged sentences

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

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

Balance Sheet Location September 30, 2023 December 31, 2022

Asset (Liability)

1 unchanged sentence

Commodity derivatives Other accrued liabilities ( 33,980 ) ( 10,989 )

Commodity derivatives Other liabilities ( 199 ) —

Environmental credit derivatives

Other accrued liabilities ( 1,931 ) —

Aron repurchase obligation derivative Obligations under inventory financing agreements ( 57,972 ) ( 12,156 )

1 unchanged sentence

Interest rate derivatives Other long-term assets 664 —

_________________________________________________________

(1) Does not include cash collateral of $ 22.8 million and $ 40.8 million recorded in Prepaid and other current assets as of September 30, 2023 and December 31, 2022, respectively, and $ 9.5 million in Other long-term assets as of both September 30, 2023 and December 31, 2022.

PAR PACIFIC HOLDINGS, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 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.

For the Interim Periods Ended September 30, 2023 and 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 June 30, Six Months Ended June 30,

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

Statement of Operations Location 2023 2022 2023 2022

26 unchanged sentences

(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.

1 unchanged sentence

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.

These valuation methods require us

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

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.

4 unchanged sentences

We utilize commodity derivative contracts to manage our price exposure to our inventory positions, future purchases of crude oil, future purchases and sales of refined products, and cost of crude oil consumed in the refining process.

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

We utilize exchange traded futures contracts to manage a portion of our cost for credits required by certain environmental agencies to offset our carbon emissions.

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

We classify financial assets and liabilities according to the fair value hierarchy.

9 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 $ 11.09 , and range from a discount of $ 5.64 per barrel to a premium of $ 48.39 per barrel as of June 30, 2023.

Such contractual differentials vary by location and by the type of product, have a weighted average premium of $ 17.98 , and range from a discount of $ 6.18 per barrel to a premium of $ 67.61 per barrel as of September 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 June 30, 2023, or December 31, 2022.

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

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

The embedded derivative related to our MLC terminal obligation and certain commodity derivative contracts were terminated along with the wind-down of the Washington Refinery Intermediation Agreement on October 4, 2023.

Please read Note 20—Subsequent Events for further information.

Gross Environmental credit obligations

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

For the Interim Periods Ended September 30, 2023 and 2022

Financial Statement Impact

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

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

September 30, 2023

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

16 unchanged sentences

_________________________________________________________

(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.

(1) Does not include cash collateral of $ 32.4 million and $ 50.3 million as of September 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 $ 223.4 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 September 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 June 30, 2023 and 2022

For the Interim Periods Ended September 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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

5 unchanged sentences

(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 June 30, 2023 and December 31, 2022 are as follows (in thousands):

June 30, 2023

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

September 30, 2023

Carrying Value Fair Value

ABL Credit Facility due 2028 (2)

41,000 41,000

LC Facility due 2024 (2)

Term Loan Credit Agreement due 2030 (1)

1 unchanged sentence

Other long-term debt (1) 4,901 4,680

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

4 unchanged sentences

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

198,268 201,094

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

2 unchanged sentences

(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.

(2) The fair value measurement of the ABL Credit Facility, LC 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.

1 unchanged sentence

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 carrying value of our ABL Credit Facility was determined to approximate fair value as of September 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.

1 unchanged sentence

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.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

For the Interim Periods Ended September 30, 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 September 30, 2023 and December 31, 2022 and their placement within our condensed consolidated balance sheets:

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

Finance Property, plant, and equipment $ 24,172 $ 21,150

8 unchanged sentences

Total lease liabilities $ 348,438 $ 366,875

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

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

September 30, 2023 December 31, 2022

Weighted-average remaining lease term (in years)

5 unchanged sentences

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

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

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

Lease cost (income) type 2023 2022 2023 2022

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

For the Interim Periods Ended September 30, 2023 and 2022

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

Six Months Ended June 30,

Nine Months Ended September 30,

Lease type 2023 2022

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ROU assets terminated in exchange for release from operating lease liabilities 1,439 32,902

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

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

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

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_________________________________________________________

(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.

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

Additionally, we have $ 43.8 million in future undiscounted cash flows for operating leases that have not yet commenced.

At September 30, 2023 we have no finance leases that have not yet commenced.

These leases are expected to commence when the lessor has made the equipment or location available to us to operate or begin construction, respectively.

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It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on our financial condition, results of operations, or cash flows.

Tax and Related Matters

Legal Proceedings and Related Matters

We are also party to various other legal proceedings, claims, and regulatory, tax or government audits, inquiries, and investigations that arise in the ordinary course of business.

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By opinion dated September 22, 2021, the Hawaii Attorney General reversed a prior 1964 opinion exempting various business transactions conducted in the Hawaii foreign trade zone from certain state taxes.

We and other similarly situated state taxpayers who had previously claimed such exemptions are currently being audited for such prior tax periods.

We and other similarly situated state taxpayers who had previously claimed such exemptions are currently being audited for certain prior tax periods.

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

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Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

For the Interim Periods Ended September 30, 2023 and 2022

unspecified damages, penalties, interest and injunctive relief.

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Except as disclosed below, we do not anticipate that any such matters currently asserted will have a material impact on our financial condition, results of operations, or cash flows.

Hawaii Consent Decree

On July 18, 2016, PHR and subsidiaries of Tesoro entered into a consent decree with the EPA, the U.S.

Department of Justice and other state governmental authorities concerning alleged violations of the federal Clean Air Act related to the ownership and operation of multiple facilities owned or formerly owned by Tesoro Corporation and its affiliates ("Consent Decree"), including our refinery in Kapolei, Hawaii, that we acquired from Tesoro in 2013.

On September 29, 2023, we received a letter from EPA related to the alleged violation of certain nitrogen oxides (“NOx”) and sulfur dioxide (“SO 2 ”) emission controls and monitoring requirements pursuant to the Consent Decree.

We are unable to predict the cost to resolve these alleged violations, but resolution will likely involve financial penalties or impose capital expenditure requirements that could be material.

Wyoming Refinery

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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 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.

As of September 30, 2023, we have accrued $ 14.4 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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Finally, among the various historic consent decrees, orders, and settlement agreements into which Wyoming Refining has entered, there are several penalty orders associated with exceedances of permitted limits by the Wyoming refinery’s wastewater discharges.

Although the frequency of these exceedances has declined over time, Wyoming Refining may become subject to new penalty enforcement action in the next several years, which could involve penalties in excess of $ 300,000 .

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Washington Climate Commitment Act and Clean Fuel Standard

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We will be required to purchase compliance credits or allowances if we are unable to reduce emissions at our Tacoma refinery or reduce the amount of carbon in the transportation fuels we sell in Washington, which could have a material impact on our financial condition, results of operations, or cash flows.

During the third quarter of 2023, we received and responded to a civil investigative demand for information related to our compliance with the Washington CCA.

Regulation of Greenhouse Gases

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For additional information, please read Item 1.

— Business — Environmental Regulations on our Annual Report

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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 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.

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

As of September 30, 2023, our estimate of the renewable volume obligation (“RVO”) liability for the 2022 compliance year 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 finalized by the EPA on June 21, 2023.

During the nine months ended September 30, 2023, we settled all of our 2020 and 2021 RVO liabilities, which resulted in a gain of $ 99.7 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 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.

As of September 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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The second unliquidated claim, which is related to the same plugging and abandonment obligation, was filed by Noble Energy Inc., the operator and majority interest owner of the Sword Unit.

We believe the probability of issuing stock to satisfy the full claim amount is remote, as the obligations upon which such proof of claim is asserted are joint and several among all working interest owners and Delta, our predecessor, only owned an approximate 3.4 % aggregate working interest in the unit.

We believe the probability of issuing stock to satisfy the full claim amount is remote, as the obligations upon

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

which such proof of claim is asserted are joint and several among all working interest owners and Delta, our predecessor, only owned an approximate 3.4 % aggregate working interest in the unit.

The settlement of claims is subject to ongoing litigation and we are unable to predict with certainty how many shares will be required to satisfy all claims.

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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 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.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

During the three and nine months ended September 30, 2023, 778 thousand and 889 thousand shares in total were repurchased under this share repurchase program for $ 27.3 million and $ 29.9 million, respectively.

During the three and nine months ended September 30, 2022, 58 thousand and 420 thousand shares were repurchased under this share repurchase program for $ 0.8 million and $ 5.8 million, respectively.

The repurchased shares were retired by the Company upon receipt.

As of September 30, 2023, there was $ 213.6 million of authorization remaining under this share repurchase program.

Incentive Plans

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

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

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

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Stock Option Awards 350 333 1,287 2,093

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.

During the three and nine months ended September 30, 2023, we granted 14 thousand and 420 thousand shares of restricted stock and restricted stock units with a fair value of approximately $ 0.4 million and $ 11.0 million, respectively.

As of September 30, 2023, there were approximately $ 13.1 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 1.5 years.

During the nine months ended September 30, 2023, we granted no stock option awards.

As of September 30, 2023, there were approximately $ 2.4 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 1.5 years.

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

As of September 30, 2023, there were approximately $ 2.3 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 2.2 years.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

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Shares of stock options — 2,135 36 2,314

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

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 June 30, 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 June 30, 2023 and December 31, 2022.

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

however, we currently have a valuation allowance against this and substantially all of our other deferred taxed assets.

At each reporting date, we will consider evidence, both positive and negative, to determine realization of our deferred income tax assets, including NOL carryforwards.

Valuation allowances for deferred income tax assets are recognized when it is more likely than not that some or all of the benefit from the deferred income tax assets will not be realized.

We have begun to sustain a level of increased profitability.

Should this continue, we will evaluate whether this new evidence will be sufficient to provide for realization of our deferred income tax assets, and if so, this new evidence may result in a reversal of our valuation allowance in the next twelve months.

Our net taxable income must be apportioned to various states based upon the income tax laws of the states in which we derive our revenue.

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therefore, we expect to incur state tax liabilities in connection with our refining, retail, and logistics operations.

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

Note 19— Segment Information

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

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

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

Revenues $ 2,524,155 $ 72,839 $ 158,512 $ ( 176,198 ) $ 2,579,308

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Depreciation and amortization 24,278 7,708 2,766 559 35,311

Impairment expense — — — — —

General and administrative expense (excluding depreciation) — — — 23,694 23,694

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Par West redevelopment and other costs — — — 3,127 3,127

Loss on sale of assets, net — — — — —

Operating income (loss) $ 194,847 $ 20,736 $ 13,315 $ ( 32,025 ) $ 196,873

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Debt extinguishment and commitment costs —

Other income, net 379

Other expense, net ( 43 )

Income before income taxes 176,015

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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

For the Interim Periods Ended September 30, 2023 and 2022

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

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

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

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

Impairment expense — — — — —

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

Par West redevelopment and other costs 2,816 — — — 2,816

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

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

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Debt extinguishment and commitment costs 343

Other income, net 47

Other expense, net ( 198 )

Income before income taxes 267,464

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(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

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 176.2 million and $ 130.4 million for the three months ended September 30, 2023 and 2022, respectively.

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

Revenues $ 5,848,108 $ 189,936 $ 442,480 $ ( 432,080 ) $ 6,048,444

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Notes to Condensed Consolidated Financial Statements

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

For the Interim Periods Ended September 30, 2023 and 2022

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

Revenues $ 5,318,379 $ 147,729 $ 424,505 $ ( 377,703 ) $ 5,512,910

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Depreciation and amortization 48,854 15,357 8,156 2,121 74,488

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

Impairment expense — — — — —

General and administrative expense (excluding depreciation) — — — 47,550 47,550

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Par West redevelopment and other costs 5,681 — — — 5,681

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

Operating income (loss) $ 316,564 $ 43,375 $ 26,890 $ ( 49,725 ) $ 337,104

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Debt extinguishment and commitment costs ( 5,329 )

Other income, net 49

Other expense, net ( 149 )

Income before income taxes 280,226

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(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.

(1) Includes eliminations of intersegment revenues and cost of revenues of $ 432.1 million and $ 377.7 million for the nine months ended September 30, 2023 and 2022, respectively.

Note 20— Subsequent Events

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.

Wind-Down and Termination Agreement of Washington Refinery Intermediation Agreement

On October 4, 2023, USOR and certain affiliates and subsidiaries (collectively, the “USOR Parties”) entered into a wind-down and termination agreement (the “Wind-Down Agreement”) with MLC, which provided for the wind down of the respective obligations of MLC and USOR.

Under the Wind-Down Agreement, in exchange for cash collateral provided by USOR to MLC, the payment of certain fees by USOR to MLC, and the satisfaction of other conditions precedent specified in the Wind-Down Agreement, MLC released all of its liens and security interests in all collateral, and MLC and the USOR Parties terminated the First Lien ISDA Agreement, Collateral Agreement, and all other guarantee and collateral documents, other than certain surviving obligations and certain other obligations which specifically continue under the terms of the Wind-Down Agreement.

Second Amendment to ABL Credit Facility

On October 4, 2023, the ABL Credit Facility was amended by the Second Amendment to Asset-Based Revolving Credit Agreement and Joinder Agreement (the “Second Amendment to ABL Credit Facility”).

The Second Amendment to ABL Credit Facility provided for, among other things, (i) incremental commitments that increase the total revolver commitment under the ABL Credit Facility to $ 900.0 million, (ii) future incremental increases up to $ 400.0 million, (iii) the designation of USOR as a borrower under the ABL Credit Facility, (iv) the grant of a security interest in all or substantially all of the assets of each of USOR and certain affiliated entities’ to secure the obligations under the ABL Credit Facility, and (v) amendments to certain defined terms and provisions in the ABL Credit Facility agreement.

Limited Consent to LC Facility

On October 4, 2023, PHR, and Par Petroleum, LLC, obtained the written consent from the lenders party to the LC Facility to permit the Second Amendment to ABL Credit Facility and to amend certain defined terms or provisions in the ABL Credit Facility, pursuant to that certain Limited Consent to Uncommitted Credit Agreement dated as of October 3, 2023, among

PAR PACIFIC HOLDINGS, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended September 30, 2023 and 2022

PHR, Par Petroleum, LLC, each of the lenders party thereto, LC Facility Agent, and U.S.

Bank Trust Company, National Association, solely in its capacity as the collateral agent (the “Limited Consent”).

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