PAR PACIFIC HOLDINGS, INC. 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a growing energy company based in Houston, Texas, that provides both renewable and conventional fuels to the western United States. Our business is organized into three primary segments: 1) Refining - We own and operate four refineries with total operating throughput capacity of 218 thousand barrels per day (“Mbpd”) in Hawaii, Wyoming, Washington, and Montana. On June 1, 2023, we purchased a refinery in Billings, Montana that processes Western Canadian and regional Rocky Mountain crude oil and a 65% interest in an adjacent cogeneration facility. 2) Retail - Our retail outlets in Hawaii, Washington, and Idaho sell gasoline, diesel, and retail merchandise through Hele and “76” branded sites, “nomnom” branded company-operated convenience stores, 7-Eleven operated convenience stores, other sites operated by third parties, and unattended cardlock stations. 3) Logistics - We operate an extensive energy infrastructure network spanning the Pacific, the Northwest, and the Rocky Mountain regions to transport and store crude oil and refined products for our refineries and transport refined products to our retail sites or third-party purchasers. On June 1, 2023, we purchased distribution and logistics assets in the upper Rockies region, including the wholly owned 70-mile, 55 Mbpd Silvertip Pipeline, a 40% interest in the 750-mile, 65 Mbpd Yellowstone refined products pipeline, and four wholly owned and three joint venture refined product terminals. As of September 30, 2023, we owned a 46.0% equity investment in Laramie Energy. Laramie Energy is focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado. As noted in the Refining and Logistics discussions above, as of September 30, 2023 through the Billings Acquisition, we own a 65% and a 40% equity investment in YELP and YPLC, respectively. We have four reportable segments: (i) Refining, (ii) Retail, (iii) Logistics, and (iv) Corporate and Other. Our Corporate and Other reportable segment primarily includes general and administrative costs, business development expenses associated with renewable fuel projects, and Par West redevelopment and other costs. Please read Note 19—Segment Information to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for detailed information on our operating results by segment. Recent Events Affecting Comparability of Periods Crude oil pricing decreased in 2023 compared to 2022. In 2023, Brent crude oil pricing decreased to $84 per barrel compared to $101 per barrel in 2022. In addition, U.S. retail gasoline prices decreased to $3.62 per gallon in 2023 compared to $3.97 in 2022. Refined product crack spreads in the third quarter of 2023 decreased as compared to the third quarter of 2022, largely driven by the conflict between Russia and Ukraine that escalated in February 2022. The U.S. Energy Information Administration (“EIA”) in its October 2023 short term energy outlook forecasts average Brent crude oil pricing of $95 per barrel in 2024 due to lower crude oil inventories driven by Saudi Arabia’s continued voluntary crude oil production cuts. Brent crude oil spot prices increased in the third quarter of 2023 as U.S commercial crude oil inventories fell to the lowest level since early 2022 at the end of September 2023. In addition, the EIA forecasts that jet fuel consumption will increase by 6% in 2024 and would equal pre-pandemic 2019 consumption driven by strong return of passengers. On April 3, 2023, the Organization of the Petroleum Exporting Countries (“OPEC”) announced a cut to crude oil production of 1.2 MMbpd through the end of 2023. The EIA expects the drop in OPEC crude oil production and the seasonal rise in oil consumption to put upward pressure on crude oil prices. On June 4, 2023, Saudi Arabia, the largest producer in the OPEC cartel, announced an additional 1 MMbpd cut to its production beginning with its July export program. Saudi Arabia announced during early August that those cuts would be extended through the end of the year. As a result, crude oil prices have returned to levels closer to 2022 crude oil prices during the third quarter of 2023. Please read Item 1A. — Risk Factors on our Annual Report on Form 10-K for the year ended December 31, 2022 for further information. 35 Results of Operations Three months ended September 30, 2023 compared to the three months ended September 30, 2022 Net Income. Our financial results for the third quarter of 2023 declined from net income of $267.4 million for the three months ended September 30, 2022 to $171.4 million for the three months ended September 30, 2023. The decrease was primarily driven by a $71.3 million decrease in refining segment operating income, $7.5 million increase in general and administrative expenses, $4.7 million increase in acquisition and integration expenses related to our Billings Acquisition, $4.5 million increase in tax expense and a $4.0 million decrease in retail segment operating income, partially offset by a $3.1 million improvement in our logistics segment operating income. Please read the discussions of segment and consolidated results below for additional information. Adjusted EBITDA and Adjusted Net Income. For the three months ended September 30, 2023, Adjusted EBITDA was $255.7 million compared to $214.1 million for the three months ended September 30, 2022. The $41.6 million increase was primarily related to an increase of $45.8 million in our refining segment, partially offset by a decrease of $3.5 million in our retail segment. Please read the discussion of segment results below for additional information. For the three months ended September 30, 2023, Adjusted Net Income was $193.5 million compared to $172.0 million for the three months ended September 30, 2022. The improvement was primarily related to the factors described above for the increase in Adjusted EBITDA. Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 Net Income. Our financial results improved from net income of $279.5 million for the nine months ended September 30, 2022 to $439.3 million for the nine months ended September 30, 2023. The increase was driven by a $185.5 million increase in refining segment operating income and a $15.1 million increase in retail segment operating income, partially offset by an $18.5 million increase in general and administrative expenses and a $17.1 million increase in acquisitions and integration expenses related to our Billings Acquisition. Please read the discussions of segment and consolidated results below for additional information. Adjusted EBITDA and Adjusted Net Income. For the nine months ended September 30, 2023, Adjusted EBITDA was $574.2 million compared to $468.5 million for the nine months ended September 30, 2022. The improvement was primarily related to an increase of $94.6 million in our refining segment, an increase of $16.1 million in our retail segment and an increase of $14.2 million in our logistics segment, offset by a decrease due to an increase of $19.2 million in our corporate segment. Please read the discussion of segment results below for additional information. For the nine months ended September 30, 2023, Adjusted Net Income was $436.6 million compared to $341.9 million for the nine months ended September 30, 2022. The improvement was primarily related to the same factors described above for the increase in Adjusted EBITDA as well as our receipt of a $10.7 million distribution from Laramie Energy, partially offset by a $5.9 million higher income tax expense. 36 The following tables summarize our consolidated results of operations for the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022 (in thousands). The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Three Months Ended September 30, 2023 2022 $ Change % Change Revenues $ 2,579,308 $ 2,056,285 $ 523,023 25% Cost of revenues (excluding depreciation) 2,174,385 1,642,626 531,759 32% Operating expense (excluding depreciation) 145,183 85,513 59,670 70% Depreciation and amortization 35,311 25,125 10,186 41% General and administrative expense (excluding depreciation) 23,694 16,219 7,475 46% Equity earnings from refining and logistics investments (3,934) — (3,934) NM (1) Acquisition and integration costs 4,669 — 4,669 NM (1) Par West redevelopment and other costs 3,127 2,816 311 11% Gain on sale of assets, net — (185) 185 100% Total operating expenses 2,382,435 1,772,114 Operating income 196,873 284,171 Other income (expense) Interest expense and financing costs, net (20,815) (16,852) (3,963) 24% Debt extinguishment and commitment costs — 343 (343) (100)% Other expense, net (43) (198) 155 (78)% Total other expense, net (20,858) (16,707) Income before income taxes 176,015 267,464 Income tax expense (4,600) (68) (4,532) 6,665% Net income $ 171,415 $ 267,396 37 Nine Months Ended September 30, 2023 2022 $ Change % Change Revenues $ 6,048,444 $ 5,512,910 $ 535,534 10% Cost of revenues (excluding depreciation) 5,038,211 4,801,800 236,411 5% Operating expense (excluding depreciation) 330,146 246,394 83,752 34% Depreciation and amortization 87,887 74,488 13,399 18% General and administrative expense (excluding depreciation) 66,148 47,550 18,598 39% Equity earnings from refining and logistics investments (4,359) — (4,359) NM (1) Acquisition and integration costs 17,213 63 17,150 27,222% Par West redevelopment and other costs 8,490 5,681 2,809 49% Gain on sale of assets, net — (170) 170 (100)% Total operating expenses 5,543,736 5,175,806 Operating income 504,708 337,104 Other income (expense) Interest expense and financing costs, net (51,974) (51,400) (574) 1% Debt extinguishment and commitment costs (17,682) (5,329) (12,353) 232% Other income (expense), net 301 (149) 450 302% Equity earnings (losses) from Laramie Energy, LLC 10,706 — 10,706 NM (1) Total other expense, net (58,649) (56,878) Income before income taxes 446,059 280,226 Income tax expense (6,741) (756) (5,985) 792% Net income $ 439,318 $ 279,470 ________________________________________________________ (1) NM - Not meaningful The following tables summarize our operating income (loss) by segment for the three and nine months ended September 30, 2023 and 2022 (in thousands). The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Three months ended 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 Cost of revenues (excluding depreciation) 2,190,474 39,801 120,332 (176,222) 2,174,385 Operating expense (excluding depreciation) 116,949 6,135 22,099 — 145,183 Depreciation and amortization 24,278 7,708 2,766 559 35,311 General and administrative expense (excluding depreciation) — — — 23,694 23,694 Equity earnings from refining and logistics investments (2,393) (1,541) — — (3,934) Acquisition and integration costs — — — 4,669 4,669 Par West redevelopment and other costs — — — 3,127 3,127 Operating income (loss) $ 194,847 $ 20,736 $ 13,315 $ (32,025) $ 196,873 38 Three months ended September 30, 2022 Refining Logistics Retail Corporate, Eliminations and Other (1) Total Revenues $ 1,974,701 $ 54,635 $ 157,385 $ (130,436) $ 2,056,285 Cost of revenues (excluding depreciation) 1,629,019 28,482 115,574 (130,449) 1,642,626 Operating expense (excluding depreciation) 60,233 3,710 21,570 — 85,513 Depreciation and amortization 16,542 5,059 2,865 659 25,125 General and administrative expense (excluding depreciation) — — — 16,219 16,219 Acquisition and integration costs — — — — — 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 ________________________________________________________ (1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) 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 Cost of revenues (excluding depreciation) 5,035,749 106,888 327,728 (432,154) 5,038,211 Operating expense (excluding depreciation) 252,802 13,178 64,166 — 330,146 Depreciation and amortization 59,827 17,801 8,577 1,682 87,887 General and administrative expense (excluding depreciation) — — — 66,148 66,148 Equity earnings from refining and logistics investments (2,393) (1,966) — — (4,359) Acquisition and integration costs — — — 17,213 17,213 Par West redevelopment and other costs — — — 8,490 8,490 Operating income (loss) $ 502,123 $ 54,035 $ 42,009 $ (93,459) $ 504,708 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 Cost of revenues (excluding depreciation) 4,772,511 77,970 329,058 (377,739) 4,801,800 Operating expense (excluding depreciation) 174,769 11,280 60,345 — 246,394 Depreciation and amortization 48,854 15,357 8,156 2,121 74,488 General and administrative expense (excluding depreciation) — — — 47,550 47,550 Acquisition and integration costs — — — 63 63 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 ________________________________________________________ (1) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $432.1 million and $377.7 million for the nine months ended September 30, 2023 and 2022, respectively. 39 Below is a summary of key operating statistics for the refining segment for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total Refining Segment Feedstocks Throughput (Mbpd) (1) 198.2 138.5 164.6 132.8 Refined product sales volume (Mbpd) (1) 217.3 149.3 178.7 138.5 Hawaii Refinery Feedstocks Throughput (Mbpd) 82.3 79.7 80.9 82.2 Yield (% of total throughput) Gasoline and gasoline blendstocks 26.5 % 28.1 % 26.7 % 25.4 % Distillates 42.1 % 39.3 % 40.8 % 39.5 % Fuel oils 26.5 % 30.1 % 28.0 % 31.1 % Other products 2.1 % (0.9) % 1.5 % 0.6 % Total yield 97.2 % 96.6 % 97.0 % 96.6 % Refined product sales volume (Mbpd) 90.0 86.6 89.2 81.6 Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 13.47 $ 19.49 $ 14.74 $ 13.92 Production costs per bbl ($/throughput bbl) (3) 4.50 5.14 4.46 4.67 D&A per bbl ($/throughput bbl) 0.65 0.68 0.68 0.66 Montana Refinery Feedstocks Throughput (Mbpd) (1) 55.4 — 57.1 — Yield (% of total throughput) Gasoline and gasoline blendstocks 50.5 % — % 49.6 % — % Distillates 27.7 % — % 28.2 % — % Asphalt 14.7 % — % 14.4 % — % Other products 3.4 % — % 3.5 % — % Total yield 96.3 % — % 95.7 % — % Refined product sales volume (Mbpd) (1) 63.5 — 62.5 — Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 26.49 $ — $ 27.74 $ — Production costs per bbl ($/throughput bbl) (3) 10.83 — 10.10 — D&A per bbl ($/throughput bbl) 1.63 — 1.69 — 40 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Washington Refinery Feedstocks Throughput (Mbpd) 41.0 40.5 40.5 33.8 Yield (% of total throughput) Gasoline and gasoline blendstocks 22.8 % 24.2 % 23.4 % 24.4 % Distillates 34.6 % 34.1 % 34.6 % 34.1 % Asphalt 20.1 % 20.2 % 19.4 % 19.9 % Other products 18.8 % 18.4 % 18.8 % 18.5 % Total yield 96.3 % 96.9 % 96.2 % 96.9 % Refined product sales volume (Mbpd) 44.2 45.3 43.3 39.9 Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 12.30 $ 19.97 $ 9.91 $ 16.51 Production costs per bbl ($/throughput bbl) (3) 3.77 3.43 4.00 4.19 D&A per bbl ($/throughput bbl) 1.79 2.02 1.81 2.28 Wyoming Refinery Feedstocks Throughput (Mbpd) 19.5 18.3 17.7 16.8 Yield (% of total throughput) Gasoline and gasoline blendstocks 46.7 % 48.3 % 46.0 % 48.8 % Distillates 47.1 % 43.9 % 47.3 % 43.6 % Fuel oils 2.5 % 3.0 % 2.5 % 2.5 % Other products 1.7 % 2.5 % 1.7 % 2.5 % Total yield 98.0 % 97.7 % 97.5 % 97.4 % Refined product sales volume (Mbpd) 19.6 17.4 18.3 17.0 Adjusted Gross Margin per bbl ($/throughput bbl) (2) $ 37.01 $ 19.39 $ 28.88 $ 29.20 Production costs per bbl ($/throughput bbl) (3) 6.46 6.63 7.34 7.14 D&A per bbl ($/throughput bbl) 2.41 2.40 2.69 2.82 Market Indices (average $ per barrel) 3-1-2 Singapore Crack Spread (4) $ 23.39 $ 26.43 $ 19.45 $ 26.52 RVO Adjusted Pacific Northwest 3-1-1-1 (5) 35.00 40.58 28.51 36.89 RVO Adjusted USGC 3-2-1 (6) 29.65 29.01 25.96 29.87 Crude Oil Prices (average $ per barrel) Brent $ 85.92 $ 97.70 $ 81.93 $ 102.53 WTI 82.22 91.43 77.28 98.31 ANS (7) 87.95 98.84 81.77 102.39 Bakken Clearbrook (7) 83.58 94.37 79.38 100.00 WCS Hardisty (7) 65.42 69.02 60.75 79.68 Brent M1-M3 1.27 3.94 0.74 4.10 ________________________________________________________ (1) Feedstocks throughput and sales volumes per day for the Montana refinery for the three and nine months ended September 30, 2023 are calculated based on the 92-day and 122-day periods for which we owned the Montana refinery in 41 2023, respectively. As such, the amounts for the total refining segment represent the sum of the Hawaii, Washington and Wyoming refineries’ throughput or sales volumes averaged over the three and nine months ended September 30, 2023 plus the Montana refinery’s throughput or sales volumes averaged over the periods from July 1, 2023 to September 30, 2023 and June 1, 2023 to September 30, 2023, respectively. The 2022 amounts for the total refining segment represent the sum of the Hawaii, Washington and Wyoming refineries’ throughput or sales volumes averaged over the three and nine months ended September 30, 2022. (2) We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput. Adjusted Gross Margin for our Washington refinery is determined under the last-in, first-out (“LIFO”) inventory costing method. Adjusted Gross Margin for our other refineries is determined under the first-in, first-out (“FIFO”) inventory costing method. The definition of Adjusted Gross Margin was modified beginning with the financial results reported for the second quarter in fiscal year 2022. We have recast Adjusted Gross Margin for prior periods when reported to conform to the modified presentation. Please see discussion of Adjusted Gross Margin below. (3) Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are a variety of ways to calculate production costs per barrel; different companies within the industry calculate it in different ways. We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refineries including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput. Our production costs are included in Operating expense (excluding depreciation) on our consolidated statement of operations, which also includes costs related to our bulk marketing operations. (4) We believe the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) is the most representative market indicator for our operations in Hawaii. (5) We believe the RVO Adjusted Pacific Northwest 3-1-1-1 (or three barrels of WTI crude oil converted into one barrel of Pacific Northwest gasoline, one barrel of Pacific Northwest ULSD and one barrel of USGC VGO, less 100% of the RVO cost for gasoline and ULSD) is the most representative market indicator for our operations in Washington with improved historical correlations to our reported adjusted gross margin compared to prior reported indices. (6) We believe the RVO Adjusted USGC 3-2-1 (or three barrels of WTI crude oil converted into two barrels of USGC gasoline and one barrel of USGC ULSD, less 100% of the RVO cost) is the most representative market indicator for our operations in Montana and Wyoming with improved historical correlations to our reported adjusted gross margin compared to prior reported indices. (7) Crude pricing has been updated to reflect simple averages of outright prices during the relevant period. Below is a summary of key operating statistics for the retail segment for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Retail Segment Retail sales volumes (thousands of gallons) 31,137 27,829 87,710 78,599 Non-GAAP Performance Measures Management uses certain financial measures to evaluate our operating performance that are considered non-GAAP financial measures. These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies since each company may define these terms differently. 42 We believe Adjusted Gross Margin (as defined below) provides useful information to investors because it eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost and net realizable value adjustments to demonstrate the earnings potential of the business before other fixed and variable costs, which are reported separately in Operating expense (excluding depreciation) and Depreciation and amortization. Management uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure. Beginning with financial results reported for periods in fiscal year 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude the mark-to-market losses (gains) associated with our net obligation related to the Washington Climate Commitment Act and Clean Fuel Standard effective beginning in 2023. These modifications were made to better reflect our operating performance and to improve comparability between periods. Beginning with financial results reported for periods in fiscal year 2023, Adjusted Net Income (loss) and Adjusted EBITDA also exclude the redevelopment and other costs for our Par West facility, which was shut down in 2020. This modification improves comparability between periods by excluding expenses incurred in connection with the strategic redevelopment of this non-operating facility. We have recast Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA for prior periods when reported to conform to the modified presentation. Beginning with financial results report for the second quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude our portion of interest, taxes, and depreciation expense from our refining and logistics investments. Adjusted Gross Margin Adjusted Gross Margin is defined as operating income (loss) excluding: • operating expense (excluding depreciation); • depreciation and amortization (“D&A”); • Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments; • impairment expense; • loss (gain) on sale of assets, net; • inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments); • LIFO layer liquidation impacts associated with our Washington inventory; • Environmental obligation mark-to-market adjustment (which represents the income statement effect of reflecting our RINs liability on a net basis; this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability and our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); and • unrealized loss (gain) on derivatives. 43 The following tables present a reconciliation of Adjusted Gross Margin to the most directly comparable GAAP financial measure, operating income (loss), on a historical basis, for selected segments, for the periods indicated (in thousands): Three months ended September 30, 2023 Refining Logistics Retail Operating income $ 194,847 $ 20,736 $ 13,315 Operating expense (excluding depreciation) 116,949 6,135 22,099 Depreciation and amortization 24,278 7,708 2,766 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments 821 698 — Inventory valuation adjustment 72,823 — — Environmental obligation mark-to-market adjustments (50,153) — — Unrealized gain on derivatives (8,995) — — Adjusted Gross Margin (1) $ 350,570 $ 35,277 $ 38,180 Three months ended September 30, 2022 Refining Logistics Retail Operating income $ 266,091 $ 17,625 $ 17,320 Operating expense (excluding depreciation) 60,233 3,710 21,570 Depreciation and amortization 16,542 5,059 2,865 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments — — — Inventory valuation adjustment (91,135) — — Environmental obligation mark-to-market adjustments (6,731) — — Unrealized loss on derivatives 3,004 — — Par West redevelopment and other costs 2,816 — — Loss (gain) on sale of assets, net — (241) 56 Adjusted Gross Margin (1) $ 250,820 $ 26,153 $ 41,811 Nine months ended September 30, 2023 Refining Logistics Retail Operating income $ 502,123 $ 54,035 $ 42,009 Operating expense (excluding depreciation) 252,802 13,178 64,166 Depreciation and amortization 59,827 17,801 8,577 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments 821 905 — Inventory valuation adjustment 126,799 — — Environmental obligation mark-to-market adjustments (174,111) — — Unrealized gain on derivatives (487) — — Adjusted Gross Margin (1) $ 767,774 $ 85,919 $ 114,752 44 Nine months ended September 30, 2022 Refining Logistics Retail Operating income $ 316,564 $ 43,375 $ 26,890 Operating expense (excluding depreciation) 174,769 11,280 60,345 Depreciation and amortization 48,854 15,357 8,156 Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments — — — Inventory valuation adjustment (18,039) — — Environmental obligation mark-to-market adjustments 83,119 — — Unrealized gain on derivatives (10,151) — — Par West redevelopment and other costs 5,681 — — Loss (gain) on sale of assets, net — (253) 56 Adjusted Gross Margin (1) $ 600,797 $ 69,759 $ 95,447 ____________________________________________________________________________ (1) For the three and nine months ended September 30, 2023 and 2022, there was no impairment expense and LIFO liquidation adjustment recorded in Operating income (loss). For the three and nine months ended September 30, 2023, there was no (gain) loss on sale of assets recorded in Operating income (loss). Adjusted Net Income (Loss) and Adjusted EBITDA Adjusted Net Income (Loss) is defined as Net income (loss) excluding: • inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments); • the LIFO layer liquidation impacts associated with our Washington inventory; • Environmental obligation mark-to-market adjustments (which represents the income statement effect of reflecting our RINs liability on a net basis; this adjustment also includes the mark-to-market losses (gains) associated with our net RINs liability and our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); • unrealized (gain) loss on derivatives; • acquisition and integration costs; • redevelopment and other costs related to Par West; • debt extinguishment and commitment costs; • increase in (release of) tax valuation allowance and other deferred tax items; • changes in the value of contingent consideration and common stock warrants; • severance costs; • (gain) loss on sale of assets; • impairment expense; • impairment expense associated with our investment in Laramie Energy and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; and • Par’s share of Laramie Energy’s unrealized loss (gain) on derivatives. Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding: • D&A; • interest expense and financing costs; • equity losses (earnings) from Laramie Energy excluding Par’s share of unrealized loss (gain) on derivatives, impairment of Par’s investment, and our share of Laramie Energy’s asset impairment losses in excess of our basis difference; • Par's portion of interest, taxes, and depreciation expense from refining and logistics investments; and • income tax expense (benefit) excluding the increase in (release of) tax valuation allowance. 45 The following table presents a reconciliation of Adjusted Net Income and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income, on a historical basis for the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net Income $ 171,415 $ 267,396 $ 439,318 $ 279,470 Inventory valuation adjustment 72,823 (91,135) 126,799 (18,039) Environmental obligation mark-to-market adjustments (50,153) (6,731) (174,111) 83,119 Unrealized loss (gain) on derivatives (8,995) 3,004 (487) (10,151) Acquisition and integration costs 4,669 — 17,213 63 Par West redevelopment and other costs 3,127 — 8,490 — Debt extinguishment and commitment costs — (343) 17,682 5,329 Severance costs 615 9 1,685 2,272 Gain on sale of assets, net — (185) — (170) Adjusted Net Income (1) 193,501 172,015 436,589 341,893 Depreciation and amortization 35,311 25,125 87,887 74,488 Interest expense and financing costs, net 20,815 16,852 51,974 51,400 Equity earnings from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — (10,706) — Par's portion of interest, taxes, and depreciation expense from refining and logistics investments 1,519 — 1,726 — Income tax expense 4,600 68 6,741 756 Adjusted EBITDA (1) $ 255,746 $ 214,060 $ 574,211 $ 468,537 ________________________________________ (1) For the three and nine months ended September 30, 2023 and 2022, there was no LIFO liquidation adjustment, change in value of contingent consideration, change in value of common stock warrants, change in valuation allowance or other deferred tax items, impairment expense, impairments associated with our investment in Laramie Energy, our share of Laramie Energy’s asset impairment losses in excess of our basis difference, or our share of Laramie Energy’s unrealized loss (gain) on derivatives. Factors Impacting Segment Results Operating Income Three months ended September 30, 2023 compared to the three months ended September 30, 2022 Refining. Operating income for our refining segment was $194.8 million for the three months ended September 30, 2023, a decrease of $71.3 million compared to operating income of $266.1 million for the three months ended September 30, 2022. The decrease was primarily driven by: • $204.0 million related to higher inventory financing costs driven by changes in commodity prices, • $131.0 million related to decreased crack spreads at our refineries in our legacy portfolio, and • a decrease of $52.6 million related to our derivative costs associated with our refineries in our legacy portfolio, partially offset by: • an increase of $230.0 million related to a favorable change in crude oil differentials at our refineries in our legacy portfolio, • a $69.6 million contribution from the Billings Acquisition, and • a $24.0 million favorable FIFO change at our Wyoming refinery. Logistics. Operating income for our logistics segment was $20.7 million for the three months ended September 30, 2023, an increase of $3.1 million compared to $17.6 million for the three months ended September 30, 2022. The increase is primarily due to a $3.1 million contribution from the Billings Acquisition logistics assets acquired in June 2023. 46 Retail. Operating income for our retail segment was $13.3 million for the three months ended September 30, 2023, a decrease of $4.0 million compared to $17.3 million for the three months ended September 30, 2022. The decrease was primarily due to a $7.1 million decrease in operating income related to a decrease in fuel margins and a $0.5 million increase in operating expenses, partially offset by a $2.7 million increase related to higher fuel sales volumes, and increased merchandise sales of $1.0 million in the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 Refining. Operating income for our refining segment was $502.1 million for the nine months ended September 30, 2023, an improvement of $185.5 million compared to operating income of $316.6 million for the nine months ended September 30, 2022. The increase in operating income was primarily driven by: • a decrease in consolidated environmental costs across all our refineries in our legacy portfolio of $136.9 million, driven by favorable mark to market adjustments and a gain on retirement of prior year RINs, • an increase of $113.3 million driven by a 29.0% increase in refined product sales volumes at our refineries in our legacy portfolio, • an increase of $98.9 million related to a favorable change in crude oil differentials at our refineries in our legacy portfolio, • a $53.1 million contribution from the Billings Acquisition, and • a favorable change in step-out obligation related to our intermediation agreements of $52.6 million driven by changes in commodity prices, partially offset by: • an increase in purchased product costs of $201.0 million at all our refineries in our legacy portfolio, • a decrease of $46.0 million related to declining crack spreads at our refineries in our legacy portfolio, and • an increase in logistics and other product delivery costs of $34.9 million at our refineries in our legacy portfolio. Logistics. Operating income for our logistics segment was $54.0 million for the nine months ended September 30, 2023, an increase of $10.6 million compared to $43.4 million for the nine months ended September 30, 2022. The increase was primarily due to a $6.2 million contribution from the Billings Acquisition logistics assets acquired in June 2023 and a $17.4 million increase in operating income driven by an increase in throughput volumes throughout our legacy logistics portfolio, an increase in third-party contracts of $3.9 million, partially offset by an increase in variable expenses of $10.3 million, an increase in vessel and fuel costs of $4.5 million and an increase in depreciation and amortization expenses of $2.4 million. Retail. Operating income for our retail segment was $42.0 million for the nine months ended September 30, 2023, an increase of $15.1 million compared to $26.9 million for the nine months ended September 30, 2022. The increase in operating income was primarily due to a $9.1 million increase in fuel margins, $8.2 million related to higher fuel sales volumes, and increased merchandise sales of $2.2 million, partly offset by higher operating expenses of $3.8 million driven by an increase in employee costs and credit card fees in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Adjusted Gross Margin Three months ended September 30, 2023 compared to the three months ended September 30, 2022 Refining. For the three months ended September 30, 2023, our refining Adjusted Gross Margin was $350.6 million, an increase of $99.8 million compared to $250.8 million for the three months ended September 30, 2022. The increase was primarily driven by an increase of $197.6 million primarily related to lower feedstock costs across our legacy refining portfolio, Adjusted Gross Margin of $135.0 million contributed by the Montana refinery, partially offset by decreased crack spreads across our legacy refining portfolio, and higher intermediation fees. Other factors impacting refining results are described below. • Adjusted Gross Margin for the Hawaii refinery decreased by $6.02 per barrel from $19.49 per barrel during the three months ended September 30, 2022 to $13.47 per barrel during the three months ended September 30, 2023, primarily due to lower feedstock costs and declining crack spreads. The Singapore 3-1-2 index declined from $26.43 in the third quarter of 2022 to $23.39 in the third quarter of 2023. • Adjusted Gross Margin for the Washington refinery decreased by $7.67 per barrel from $19.97 per barrel during the three months ended September 30, 2022 to $12.30 per barrel during the three months ended September 30, 2023, 47 primarily due to unfavorable environmental costs and declining crack spreads. The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $40.58 in the third quarter of 2022 to $35.00 in the third quarter of 2023. • Adjusted Gross Margin for the Wyoming refinery increased by $17.62 per barrel from $19.39 per barrel during the three months ended September 30, 2022 to $37.01 per barrel during the three months ended September 30, 2023, primarily due to a favorable FIFO change of $24.0 million and 13% higher sales volumes. The RVO Adjusted USGC 3-2-1 index improved from $29.01 in the third quarter of 2022 to $29.65 in the third quarter of 2023. Logistics. For the three months ended September 30, 2023, our logistics Adjusted Gross Margin was $35.3 million, an increase of $9.1 million compared to $26.2 million for the three months ended September 30, 2022. The increase is primarily due to Adjusted Gross Margin of $9.0 million contributed by the Billings Acquisition logistics assets acquired in June 2023. Retail. For the three months ended September 30, 2023, our retail Adjusted Gross Margin was $38.2 million, a decrease of $3.6 million compared to $41.8 million for the three months ended September 30, 2022. The decrease was primarily due to a 22% decrease in fuel margins, partially offset by 12% higher fuel sales volumes and 13% higher merchandise sales margins in the three months ended September 30, 2023 compared to the comparable period in 2022. Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 Refining. For the nine months ended September 30, 2023, our refining Adjusted Gross Margin was $767.8 million, an increase of $167.0 million compared to $600.8 million for the nine months ended September 30, 2022. The increase was primarily due to Adjusted Gross Margin contributed by the Montana refinery of $193.2 million and 9% higher refined product sales margins across our legacy refining portfolio, partially offset by $201.0 million higher purchased product expenses, and $112.8 million higher environmental expenses. Other factors impacting refining results are described below. • Adjusted Gross Margin for the Hawaii refinery improved by $0.82 per barrel from $13.92 per barrel during the nine months ended September 30, 2022 to $14.74 per barrel during the nine months ended September 30, 2023, primarily due to lower feedstock costs and a 9% increase in refined product sales volumes, partially offset by $198.0 million higher purchased product costs and lower crack spreads. The Singapore 3-2-1 index declined from $26.52 in the nine months ended September 30, 2022 to $19.45 in the nine months ended September 30, 2023. • Adjusted Gross Margin for the Washington refinery decreased by $6.60 per barrel from $16.51 per barrel during the nine months ended September 30, 2022 to $9.91 per barrel during the nine months ended September 30, 2023, primarily due to $115.5 million higher environmental expenses and declining crack spreads. The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $36.89 in the nine months ended September 30, 2022 to $28.51 in the nine months ended September 30, 2023. • Adjusted Gross Margin for the Wyoming refinery remained relatively consistent, from $29.20 per barrel during the nine months ended September 30, 2022 to $28.88 per barrel during the nine months ended September 30, 2023. The RVO Adjusted USGS 3-2-1 index declined from $29.87 in the nine months ended September 30, 2022 to $25.96 in the nine months ended September 30, 2023. Logistics. For the nine months ended September 30, 2023, our logistics Adjusted Gross Margin was $85.9 million, an increase of $16.1 million compared to $69.8 million for the nine months ended September 30, 2022. The increase was primarily due to Adjusted Gross Margin of $12.4 million contributed from the Billings Acquisition logistics assets acquired in June 2023 and a 2% increase in throughput across our legacy assets, partially offset by an increase in cost of sales driven by $14.8 million higher fees and variable expenses. Retail. For the nine months ended September 30, 2023, our retail Adjusted Gross Margin was $114.8 million, an increase of $19.4 million compared to $95.4 million for the nine months ended September 30, 2022. The increase was primarily related to an 11% increase in fuel margins, 12% higher fuel sales volumes, and an 11% increase in merchandise sales. Discussion of Consolidated Results Three months ended September 30, 2023 compared to the three months ended September 30, 2022 Revenues. For the three months ended September 30, 2023, revenues were $2.6 billion, a $0.5 billion increase compared to $2.1 billion for the three months ended September 30, 2022. The increase was primarily due to a $0.8 billion contribution from the Billings Acquisition and a 3% increase in refining sales volumes across our legacy refinery portfolio during the quarter, partially offset by the decrease in crude prices and average product crack spreads discussed below. Average Brent crude oil prices declined 12% and average WTI crude oil prices declined 10% during the third quarter of 2023 compared to the third quarter of 2022. The 3-1-2 Singapore Crack Spread, RVO Adjusted Pacific Northwest 3-1-1-1, and RVO Adjusted 48 USGC 3-2-1 declined 12%, 14%, and 2%, respectively, compared to the third quarter of 2022. Please read our key operating statistics for further information. Revenues at our retail segment increased $1.1 million primarily due to a 12% increase in volumes and a 10% increase in merchandise sales, partially offset by an 11% decline in fuel prices. Cost of Revenues (Excluding Depreciation). For the three months ended September 30, 2023, cost of revenues (excluding depreciation) was $2.2 billion, an increase of $0.6 billion when compared to $1.6 billion for the three months ended September 30, 2022. The increase was primarily driven by a $0.7 billion contribution from the Billings Acquisition and higher inventory financing expenses, partially offset by decreased crude oil prices as described above and a favorable FIFO change of $0.2 billion. Cost of sales at our retail segment increased $4.7 million primarily driven by an increase in fuel sales volumes. Operating Expense (Excluding Depreciation). For the three months ended September 30, 2023, operating expense (excluding depreciation) was $145.2 million, a $59.7 million increase when compared to $85.5 million for the three months ended September 30, 2022. The increase was primarily driven by the $57.7 million contribution from the Billings Acquisition. Depreciation and Amortization . For the three months ended September 30, 2023, D&A was $35.3 million, an increase of $10.2 million compared to $25.1 million for the three months ended September 30, 2022. The increase was primarily driven by the $11.0 million of D&A attributable to the Billings Acquisition. General and Administrative Expense (Excluding Depreciation). For the three months ended September 30, 2023, general and administrative expense (excluding depreciation) was $23.7 million, an increase of $7.5 million compared to $16.2 million for the three months ended September 30, 2022. The increase was primarily due to a $4.7 million increase in employee costs, a $1.3 million increase in consulting services, and $1.0 million related to the Billings Acquisition. Equity earnings from refining and logistics investments. During the three months ended September 30, 2023, Equity earnings from refining and logistics investments were $3.9 million related to YELP and YPLC. For the three months ended ended September 30, 2023, our proportionate share of YELP’s net income and YPLC’s net income was $2.7 million and $1.5 million, respectively. Please read Note 3—Refining and Logistics Equity Investments for further information. Acquisition and Integration Expense. During the three months ended September 30, 2023, we incurred $4.7 million of acquisition and integration costs related to the Billings Acquisition, compared to immaterial acquisition and integration costs for the three months ended September 30, 2022. Please read Note 5—Acquisitions for further information. Par West redevelopment and other costs. For the three months ended September 30, 2023, Par West redevelopment and other costs were $3.1 million, an increase of $0.3 million compared to $2.8 million for the three months ended September 30, 2022, primarily due to higher redevelopment costs. Interest Expense and Financing Costs, Net . For the three months ended September 30, 2023, our interest expense and financing costs were $20.8 million, an increase of $3.9 million compared to $16.9 million for the three months ended September 30, 2022. The increase was primarily due to an increase in interest expense due to higher outstanding debt balances and higher inventory financing fees. Please read Note 11—Debt and Note 9—Inventory Financing Agreements for further information. Income Taxes. For the three months ended September 30, 2023, we recorded income tax expense of $4.6 million primarily related to increased taxable income and higher apportionment factors in the states in which we pay taxes. For the three months ended September 30, 2022, we recorded income tax expense of $0.1 million primarily related to increased taxable income. Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 Revenues. For the nine months ended September 30, 2023, revenues were $6.0 billion, a $0.5 billion increase compared to $5.5 billion for the nine months ended September 30, 2022. The Billings Acquisition contributed revenues of $1.0 billion in the first four months under our ownership. When comparing our legacy refining operations, there was a decrease of $0.5 billion in third-party revenues at our refining segment, $0.7 billion of which was related to lower crude oil prices, partially offset by a 9% increase in refining sales volumes. Average Brent crude oil prices declined 20% and average WTI crude oil prices declined 21% as compared to the prior period. Revenues at our retail segment increased $18.0 million primarily due to a 12% increase in volumes, partially offset by a 8% decrease in fuel prices. Cost of Revenues (Excluding Depreciation). For the nine months ended September 30, 2023, cost of revenues (excluding depreciation) was $5.0 billion, a $0.2 billion increase compared to $4.8 billion for the nine months ended September 30, 2022, inclusive of a $0.9 billion contribution from the Billings Acquisition. When comparing our legacy refining 49 operations, there was a decrease of $0.7 billion in cost of revenues (excluding depreciation), $0.8 billion of which was primarily due to decreases in crude oil prices as discussed above, $0.1 billion lower environmental costs, and $0.1 billion lower feedstock costs, partially offset by $0.3 billion related to higher refining sales volumes, and $0.2 billion related to higher purchased product costs. Operating Expense (Excluding Depreciation). For the nine months ended September 30, 2023, operating expense (excluding depreciation) was $330.1 million, an increase of $83.7 million compared to $246.4 million for the nine months ended September 30, 2022. The increase was primarily driven by $73.0 million attributable to the Billings Acquisition, coupled with $3.6 million higher employee costs and $2.8 million higher utility and maintenance expenses. Depreciation and Amortization . For the nine months ended September 30, 2023, D&A was $87.9 million, an increase of $13.4 million compared to $74.5 million for the nine months ended September 30, 2022. The increase was primarily driven by the $14.5 million contribution from the Billings Acquisition. General and Administrative Expense (Excluding Depreciation). For the nine months ended September 30, 2023, general and administrative expense (excluding depreciation) was $66.1 million, an increase of $18.5 million compared to $47.6 million for the nine months ended September 30, 2022. The increase was primarily due to an $8.9 million increase in employee costs, $4.5 million increase in outside services, and $3.1 million of expenses related to development of our renewable projects. Equity earnings from refining and logistics investments. For the nine months ended September 30, 2023, equity earnings from refining and logistics investments were $4.4 million. As part of the Billings Acquisition, we acquired a 65% limited partnership ownership interest in YELP and a 40% ownership interest in YPLC. For the nine months ended September 30, 2023, our proportionate share of YELP’s net income and YPLC’s net income was $2.7 million and $1.9 million, respectively. Please read Note 3—Refining and Logistics Equity Investments for additional information. Acquisition and Integration Expense. During the nine months ended September 30, 2023, we incurred $17.2 million of acquisition and integration costs related to the Billings Acquisition, compared to $0.1 million of acquisition and integration costs for the nine months ended September 30, 2022. Please read Note 5—Acquisitions for further information. Par West redevelopment and other costs. For the nine months ended September 30, 2023, Par West redevelopment and other costs were $8.5 million, an increase of $2.8 million compared to $5.7 million for the nine months ended September 30, 2022, associated with the operation and decommissioning of our Par West facility. The increase was primarily due to additional redevelopment costs of $3.0 million. Interest Expense and Financing Costs, Net . For the nine months ended September 30, 2023, our interest expense and financing costs were $52.0 million, relatively consistent with $51.4 million for the nine months ended September 30, 2022. Debt Extinguishment and Commitment Costs. For the nine months ended September 30, 2023, we incurred debt extinguishment and commitment costs of $17.7 million in connection with the refinancing of our long-term debt in the first quarter of 2023. Please read Note 11—Debt for further information. For the nine months ended September 30, 2022, our debt extinguishment and commitment costs were $5.3 million and primarily represented extinguishment costs associated with the redemption of $36.9 million of 12.875% Senior Secured Notes in the second quarter of 2022. Equity Earnings from Laramie Energy, LLC. For the nine months ended September 30, 2023, equity earnings from Laramie Energy, LLC were $10.7 million. On March 1, 2023, following a refinancing of certain debt, Laramie Energy was permitted to make a one-time cash distribution to its owners based on ownership percentage. Our share of this distribution was $10.7 million. There were no equity earnings from our investment in Laramie Energy, LLC, for the nine months ended September 30, 2022. Please read Note 4 — Investment in Laramie Energy for further discussion. Income Taxes. For the nine months ended September 30, 2023, we recorded an income tax expense of $6.7 million primarily related to increased taxable income and higher apportionment factors in the states in which we pay taxes. For the nine months ended September 30, 2022, we recorded an income tax expense of $0.8 million primarily related to increased taxable income. 50 Consolidating Condensed Financial Information On February 28, 2023, Par Petroleum, LLC (the “Issuer”) entered into the Term Loan Credit Agreement due 2030 with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. The Term Loan Credit Agreement was co-issued by Par Petroleum Finance Corp. (together with the Issuer, the “Issuers”), which has no independent assets or operations. The Term Loan Credit Agreement is guaranteed on a senior unsecured basis only as to payment of principal and interest by Par Pacific Holdings, Inc. (the “Parent”) and is guaranteed on a senior secured basis by all of the subsidiaries of Par Petroleum, LLC. The Term Loan Credit Agreement proceeds were used to refinance our existing Term Loan B Facility and repurchase our outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, all three of which had similar guarantees that were replaced by those on the Term Loan Credit Agreement. The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Petroleum, LLC and its consolidated subsidiaries’ accounts (which are all guarantors of the Term Loan Credit Agreement), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the Term Loan Credit Agreement and consolidating adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated. For purposes of the following condensed consolidating information, the Parent’s investment in its subsidiaries is accounted for under the equity method of accounting (dollar amounts in thousands). 51 As of September 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 8,194 $ 338,884 $ 27 $ 347,105 Restricted cash 337 18,138 — 18,475 Trade accounts receivable — 527,348 94 527,442 Inventories — 1,227,329 — 1,227,329 Prepaid and other current assets 7,592 49,905 (94) 57,403 Due from related parties 329,553 — (329,553) — Total current assets 345,676 2,161,604 (329,526) 2,177,754 Property, plant, and equipment Property, plant, and equipment 21,307 1,519,113 3,955 1,544,375 Less accumulated depreciation and amortization (16,187) (436,075) (3,263) (455,525) Property, plant, and equipment, net 5,120 1,083,038 692 1,088,850 Long-term assets Operating lease right-of-use assets 2,172 327,256 — 329,428 Refining and logistics equity investments — — 82,800 82,800 Investment in subsidiaries 842,757 — (842,757) — Intangible assets, net — 11,583 — 11,583 Goodwill — 126,678 2,597 129,275 Other long-term assets 726 68,337 — 69,063 Total assets $ 1,196,451 $ 3,778,496 $ (1,086,194) $ 3,888,753 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 4,287 $ — $ 4,287 Obligations under inventory financing agreements — 841,838 — 841,838 Accounts payable 4,883 515,050 — 519,933 Accrued taxes 35 50,248 — 50,283 Operating lease liabilities 788 70,838 — 71,626 Other accrued liabilities 497 450,764 360 451,621 Due to related parties 116,448 197,861 (314,309) — Total current liabilities 122,651 2,130,886 (313,949) 1,939,588 Long-term liabilities Long-term debt, net of current maturities — 532,653 — 532,653 Finance lease liabilities — 12,471 (4,293) 8,178 Operating lease liabilities 2,541 264,441 — 266,982 Other liabilities — 107,495 (37,402) 70,093 Total liabilities 125,192 3,047,946 (355,644) 2,817,494 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 605 — — 605 Additional paid-in capital 853,835 277,686 (277,686) 853,835 Accumulated earnings (deficit) 208,724 446,876 (446,876) 208,724 Accumulated other comprehensive income (loss) 8,095 5,988 (5,988) 8,095 Total stockholders’ equity 1,071,259 730,550 (730,550) 1,071,259 Total liabilities and stockholders’ equity $ 1,196,451 $ 3,778,496 $ (1,086,194) $ 3,888,753 52 As of December 31, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries ASSETS Current assets Cash and cash equivalents $ 2,547 $ 488,350 $ 28 $ 490,925 Restricted cash 331 3,670 — 4,001 Trade accounts receivable — 252,816 69 252,885 Inventories — 1,041,983 — 1,041,983 Prepaid and other current assets 2,229 89,883 (69) 92,043 Due from related parties 229,431 — (229,431) — Total current assets 234,538 1,876,702 (229,403) 1,881,837 Property, plant, and equipment Property, plant, and equipment 19,865 1,200,747 3,955 1,224,567 Less accumulated depreciation and amortization (14,967) (370,643) (3,123) (388,733) Property, plant, and equipment, net 4,898 830,104 832 835,834 Long-term assets Operating lease right-of-use assets 2,649 348,112 — 350,761 Investment in subsidiaries 487,943 — (487,943) — Intangible assets, net — 13,577 — 13,577 Goodwill — 126,727 2,598 129,325 Other long-term assets 723 72,721 (4,131) 69,313 Total assets $ 730,751 $ 3,267,943 $ (718,047) $ 3,280,647 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Current maturities of long-term debt $ — $ 10,956 $ — $ 10,956 Obligations under inventory financing agreements — 893,065 — 893,065 Accounts payable 4,176 147,219 — 151,395 Accrued taxes 47 32,052 — 32,099 Operating lease liabilities 787 65,294 — 66,081 Other accrued liabilities 511 639,396 587 640,494 Due to related parties 77,420 118,139 (195,559) — Total current liabilities 82,941 1,906,121 (194,972) 1,794,090 Long-term liabilities Long-term debt, net of current maturities — 494,576 — 494,576 Finance lease liabilities — 10,710 (4,399) 6,311 Operating lease liabilities 3,273 289,428 — 292,701 Other liabilities — 46,922 1,510 48,432 Total liabilities 86,214 2,747,757 (197,861) 2,636,110 Commitments and contingencies Stockholders’ equity Preferred stock — — — — Common stock 604 — — 604 Additional paid-in capital 836,491 409,686 (409,686) 836,491 Accumulated earnings (deficit) (200,687) 104,479 (104,479) (200,687) Accumulated other comprehensive income (loss) 8,129 6,021 (6,021) 8,129 Total stockholders’ equity 644,537 520,186 (520,186) 644,537 Total liabilities and stockholders’ equity $ 730,751 $ 3,267,943 $ (718,047) $ 3,280,647 53 Three Months Ended September 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 2,579,306 $ 2 $ 2,579,308 Operating expenses Cost of revenues (excluding depreciation) — 2,174,385 — 2,174,385 Operating expense (excluding depreciation) — 145,183 — 145,183 Depreciation and amortization 404 34,861 46 35,311 General and administrative expense (excluding depreciation) 7,158 16,536 — 23,694 Equity earnings from refining and logistics investments — — (3,934) (3,934) Acquisition and integration costs (2) — 4,669 — 4,669 Par West redevelopment and other costs — 3,127 — 3,127 Gain on sale of assets, net — — — — Total operating expenses 7,562 2,378,761 (3,888) 2,382,435 Operating income (loss) (7,562) 200,545 3,890 196,873 Other income (expense) Interest expense and financing costs, net (11) (20,895) 91 (20,815) Debt extinguishment and commitment costs — — — — Other income (expense), net 19 (62) — (43) Equity earnings (losses) from subsidiaries 181,120 — (181,120) — Equity earnings from Laramie Energy, LLC — — — — Total other income (expense), net 181,128 (20,957) (181,029) (20,858) Income (loss) before income taxes 173,566 179,588 (177,139) 176,015 Income tax benefit (expense) (1) (2,151) (43,708) 41,259 (4,600) Net income (loss) $ 171,415 $ 135,880 $ (135,880) $ 171,415 Adjusted EBITDA $ (7,123) $ 257,413 $ 5,456 $ 255,746 54 Three Months Ended September 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 2,056,252 $ 33 $ 2,056,285 Operating expenses Cost of revenues (excluding depreciation) — 1,642,626 — 1,642,626 Operating expense (excluding depreciation) — 85,513 — 85,513 Depreciation and amortization 517 24,561 47 25,125 General and administrative expense (excluding depreciation) 5,213 11,006 — 16,219 Acquisition and integration costs — — — — Par West redevelopment and other costs — 2,816 — 2,816 Gain on sale of assets, net — (185) — (185) Total operating expenses 5,730 1,766,337 47 1,772,114 Operating income (5,730) 289,915 (14) 284,171 Other income (expense) Interest expense and financing costs, net 15 (16,958) 91 (16,852) Debt extinguishment and commitment costs — 343 — 343 Other income (expense), net (8) (191) 1 (198) Equity earnings (losses) from subsidiaries 273,119 — (273,119) — Total other income (expense), net 273,126 (16,806) (273,027) (16,707) Income (loss) before income taxes 267,396 273,109 (273,041) 267,464 Income tax benefit (expense) (1) — (66,917) 66,849 (68) Net income (loss) $ 267,396 $ 206,192 $ (206,192) $ 267,396 Adjusted EBITDA $ (5,221) $ 219,247 $ 34 $ 214,060 55 Nine Months Ended September 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 6,048,378 $ 66 $ 6,048,444 Operating expenses Cost of revenues (excluding depreciation) — 5,038,211 — 5,038,211 Operating expense (excluding depreciation) — 330,146 — 330,146 Depreciation and amortization 1,220 86,527 140 87,887 General and administrative expense (excluding depreciation) 21,467 44,682 (1) 66,148 Equity earnings from refining and logistics investments — — (4,359) (4,359) Acquisition and integration costs — 17,213 — 17,213 Par West redevelopment and other costs — 8,490 — 8,490 Gain on sale of assets, net — — — — Total operating expenses 22,687 5,525,269 (4,220) 5,543,736 Operating income (loss) (22,687) 523,109 4,286 504,708 Other income (expense) Interest expense and financing costs, net (37) (52,210) 273 (51,974) Debt extinguishment and commitment costs — (17,682) — (17,682) Other income (expense), net 53 248 — 301 Equity earnings (losses) from subsidiaries 465,053 — (465,053) — Equity earnings from Laramie Energy, LLC — — 10,706 10,706 Total other income (expense), net 465,069 (69,644) (454,074) (58,649) Income (loss) before income taxes 442,382 453,465 (449,788) 446,059 Income tax benefit (expense) (1) (3,064) (111,068) 107,391 (6,741) Net income (loss) $ 439,318 $ 342,397 $ (342,397) $ 439,318 Adjusted EBITDA $ (20,922) $ 588,980 $ 6,153 $ 574,211 56 Nine Months Ended September 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Revenues $ — $ 5,512,816 $ 94 $ 5,512,910 Operating expenses Cost of revenues (excluding depreciation) — 4,801,800 — 4,801,800 Operating expense (excluding depreciation) — 246,394 — 246,394 Depreciation and amortization 1,721 72,624 143 74,488 General and administrative expense (excluding depreciation) 14,147 33,403 — 47,550 Acquisition and integration costs 63 — — 63 Par West redevelopment and other costs — 5,681 — 5,681 Gain on sale of assets, net 27 (197) — (170) Total operating expenses 15,958 5,159,705 143 5,175,806 Operating income (15,958) 353,111 (49) 337,104 Other income (expense) Interest expense and financing costs, net 6 (51,683) 277 (51,400) Debt extinguishment and commitment costs — (5,329) — (5,329) Other income (expense), net (12) (138) 1 (149) Equity earnings (losses) from subsidiaries 295,434 — (295,434) — Total other income (expense), net 295,428 (57,150) (295,156) (56,878) Income (loss) before income taxes 279,470 295,961 (295,205) 280,226 Income tax benefit (expense) (1) — (72,616) 71,860 (756) Net income (loss) $ 279,470 $ 223,345 $ (223,345) $ 279,470 Adjusted EBITDA $ (13,808) $ 482,250 $ 95 $ 468,537 ________________________________________ (1) The income tax benefit (expense) of the Parent Guarantor and Issuer and Subsidiaries is determined using the separate return method. The Non-Guarantor Subsidiaries and Eliminations column includes tax benefits recognized at the Par consolidated level that are primarily associated with changes to the consolidated valuation allowance and other deferred tax balances. (2) The acquisition and integration expense related to the Billings Acquisition was pushed down from the Parent Guarantor to the Issuer and Subsidiaries upon consummation of the transaction. 57 Non-GAAP Financial Measures Adjusted EBITDA for the supplemental consolidating condensed financial information, which is segregated at the “Parent Guarantor,” “Issuer and Subsidiaries,” and “Non-Guarantor Subsidiaries and Eliminations” levels, is calculated in the same manner as for the Par Pacific Holdings, Inc. Adjusted EBITDA calculations. See “Results of Operations — Non-GAAP Performance Measures — Adjusted Net Income (Loss) and Adjusted EBITDA” above. The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income, on a historical basis for the periods indicated (in thousands): Three Months Ended September 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 171,415 $ 135,880 $ (135,880) $ 171,415 Inventory valuation adjustment — 72,823 — 72,823 Environmental obligation mark-to-market adjustments — (50,153) — (50,153) Unrealized loss (gain) on derivatives — (8,995) — (8,995) Acquisition and integration costs — 4,669 — 4,669 Par West redevelopment and other costs — 3,127 — 3,127 Debt extinguishment and commitment costs — — — — Severance costs 16 598 1 615 Depreciation and amortization 404 34,861 46 35,311 Interest expense and financing costs, net 11 20,895 (91) 20,815 Equity losses (earnings) from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — — — Equity losses (income) from subsidiaries (181,120) — 181,120 — Par's portion of interest, taxes, and depreciation expense from refining and logistics investments — — 1,519 1,519 Income tax expense (benefit) 2,151 43,708 (41,259) 4,600 Adjusted EBITDA (1) $ (7,123) $ 257,413 $ 5,456 $ 255,746 Three Months Ended September 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 267,396 $ 206,192 $ (206,192) $ 267,396 Inventory valuation adjustment — (91,135) — (91,135) Environmental obligation mark-to-market adjustments — (6,731) — (6,731) Unrealized loss on derivatives — 3,004 — 3,004 Acquisition and integration costs — — — — Debt extinguishment and commitment costs — (343) — (343) Severance costs — 9 — 9 Depreciation and amortization 517 24,561 47 25,125 Interest expense and financing costs, net (15) 16,958 (91) 16,852 Equity losses (income) from subsidiaries (273,119) — 273,119 — Income tax expense (benefit) — 66,917 (66,849) 68 Gain on sale of assets, net — (185) — (185) Adjusted EBITDA (1) $ (5,221) $ 219,247 $ 34 $ 214,060 58 Nine Months Ended September 30, 2023 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 439,318 $ 342,397 $ (342,397) $ 439,318 Inventory valuation adjustment — 126,799 — 126,799 Environmental obligation mark-to-market adjustments — (174,111) — (174,111) Unrealized loss (gain) on derivatives — (487) — (487) Acquisition and integration costs — 17,213 — 17,213 Par West redevelopment and other costs — 8,490 — 8,490 Debt extinguishment and commitment costs — 17,682 — 17,682 Severance costs 492 1,192 1 1,685 Depreciation and amortization 1,220 86,527 140 87,887 Interest expense and financing costs, net 37 52,210 (273) 51,974 Equity earnings from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives — — (10,706) (10,706) Equity losses (income) from subsidiaries (465,053) — 465,053 — Par's portion of interest, taxes, and depreciation expense from refining and logistics investments — — 1,726 1,726 Income tax expense 3,064 111,068 (107,391) 6,741 Adjusted EBITDA (1) $ (20,922) $ 588,980 $ 6,153 $ 574,211 Nine Months Ended September 30, 2022 Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries Net income (loss) $ 279,470 $ 223,345 $ (223,345) $ 279,470 Inventory valuation adjustment — (18,039) — (18,039) Environmental obligation mark-to-market adjustments — 83,119 — 83,119 Unrealized loss (gain) on derivatives — (10,151) — (10,151) Acquisition and integration costs 63 — — 63 Debt extinguishment and commitment costs — 5,329 — 5,329 Severance costs 351 1,921 — 2,272 Depreciation and amortization 1,721 72,624 143 74,488 Interest expense and financing costs, net (6) 51,683 (277) 51,400 Equity losses (income) from subsidiaries (295,434) — 295,434 — Income tax expense (benefit) — 72,616 (71,860) 756 Gain on sale of assets, net 27 (197) — (170) Adjusted EBITDA (1) $ (13,808) $ 482,250 $ 95 $ 468,537 ________________________________________ (1) For the three and nine months ended September 30, 2023 and 2022, there was no LIFO liquidation adjustment, change in value of contingent consideration, change in value of common stock warrants, change in valuation allowance or other deferred tax items, impairment expense, impairments associated with our investment in Laramie Energy, our share of Laramie Energy’s asset impairment losses in excess of our basis difference, or our share of Laramie Energy’s unrealized loss (gain) on derivatives. For the three and nine months ended September 30, 2022, there was no Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments. Liquidity and Capital Resources Our liquidity and capital requirements are primarily a function of our debt maturities and debt service requirements and contractual obligations, capital expenditures, turnaround outlays, and working capital needs. Examples of working capital needs include purchases and sales of commodities and associated margin and collateral requirements, facility maintenance 59 costs, and other costs such as payroll. Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets. Our liquidity position as of September 30, 2023 was $778.2 million and consisted of $769.7 million at Par Petroleum, LLC and subsidiaries, $8.5 million at Par Pacific Holdings, Inc., and an immaterial amount at all our other subsidiaries. As of September 30, 2023, we had access to the ABL Credit Facility, the LC Facility, the J. Aron Discretionary Draw Facility, the MLC receivable advances, and cash on hand of $347.1 million. In addition, we have the Supply and Offtake Agreement with J. Aron, which is used to finance the majority of the inventory at our Hawaii refinery. Generally, the primary uses of our capital resources have been in the operations of our refining and retail segments, payments related to acquisitions, and to repay or refinance indebtedness. On June 1, 2023 we closed the Billings Acquisition; please read Note 5—Acquisitions for further information. On April 26, 2023, we terminated the Prior ABL Credit Facility with certain lenders and Bank of America and entered into a new ABL Credit Facility. On July 26, 2023, we entered into a new LC Facility in connection with the July 2023 S&O Amendment. Please read Note 11—Debt for further information about the ABL Credit Facility and Note 9—Inventory Financing Agreements for further information about the July 2023 S&O Amendment and LC Facility. On October 4, 2023, we entered into the Second Amendment to the ABL Credit Facility and USOR entered into a Wind-Down and Termination Agreement; please read Note 20—Subsequent Events for further information. We believe our cash flows from operations and available capital resources will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for the next 12 months. We may seek to raise additional debt or equity capital to fund acquisitions and any other significant changes to our business or to refinance existing debt. We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost. We may from time to time seek to retire or repurchase our common stock through cash purchases, in open market purchases, privately negotiated transactions, or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. The Term Loan Credit Agreement may also require annual prepayments of principal with a variable percentage of our excess cash flow, 50% or 25% depending on our consolidated year end secured net leverage ratio (as defined in the Term Loan Credit Agreement). Cash Flows The following table summarizes cash activities for the nine months ended September 30, 2023 and 2022 (in thousands): Nine Months Ended September 30, 2023 2022 Net cash provided by operating activities $ 581,445 $ 369,053 Net cash used in investing activities (631,752) (37,661) Net cash used in financing activities (79,039) (34,522) Cash flows for the nine months ended September 30, 2023 Net cash provided by operating activities for the nine months ended September 30, 2023 was driven primarily by net income of $439.3 million, non-cash charges to operations and non-operating items of approximately $106.4 million, and net cash provided by changes in operating assets and liabilities of approximately $35.7 million. Non-cash charges to operations and non-operating items consisted primarily of the following adjustments: • depreciation and amortization expenses of $87.9 million, • debt commitment and extinguishment costs of $17.7 million, • stock based compensation costs of $9.0 million, partially offset by: • a gain of $10.7 million from our equity investment in Laramie Energy. 60 Net cash provided by changes in operating assets and liabilities resulted primarily from: • an increase in our accounts payable primarily driven by the contribution of our Billings business, and • a decrease in inventory driven by lower crude oil and refined product prices, lower inventory volumes, and a decrease in RINs assets at our Hawaii and Wyoming refineries, partially offset by: • an increase in our accounts receivable primarily driven by the contribution from our Billings Acquisition and higher accounts receivable balances across our legacy refining portfolio, and • a decrease in gross environmental credit obligations primarily related to retirements of a portion of our prior year obligations, partially offset by increased current period obligation. Net cash used in investing activities for the nine months ended September 30, 2023 consisted primarily of: • $595.4 million used for the Billings Acquisition, and • $53.7 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects, including construction of a flagship retail store in Washington, improved crude processing equipment at our Hawaii refinery, a co-processing unit at our Tacoma refinery, and various IT infrastructure improvements, partially offset by: • a $10.7 million cash distribution received from Laramie Energy in the first quarter of 2023. Net cash used in financing activities was approximately $79.0 million for the nine months ended September 30, 2023 and consisted primarily of the following activities: • net repayments under the J. Aron Discretionary Draw Facility and MLC receivable advances of $52.4 million, and • repurchases of common stock of $32.2 million, partially offset by: • net borrowings of debt of $12.7 million primarily driven by the refinancing and consolidation of our debt. Cash flows for the nine months ended September 30, 2022 Net cash provided by operating activities for the nine months ended September 30, 2022, was driven primarily by net income of $279.5 million, non-cash charges to operations of approximately $80.3 million, and net cash provided by changes in operating assets and liabilities of approximately $9.3 million. Non-cash charges to operations consisted primarily of the following adjustments: • depreciation and amortization expenses of $74.5 million, • stock based compensation costs of $7.4 million, and • debt commitment and extinguishment costs of $5.3 million, partially offset by: • unrealized gain on derivatives contracts of $10.2 million. Net cash provided by changes in operating assets and liabilities resulted primarily from: • net increases in our Supply and Offtake Agreement and Washington Refinery Intermediation Agreement obligations and accounts payable, and • an increase in gross environmental credit obligations primarily related to current period production volumes and increases in RINs prices, 61 partially offset by: • net increases in our inventories and accounts receivable resulting from higher crude oil and refined product prices and higher inventory volumes at our Hawaii refinery; and • increase in prepaid and other primarily driven by a $71.2 million increase in Advances to suppliers for crude purchases. Net cash used in investing activities for the nine months ended September 30, 2022 consisted primarily of: • $38.1 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude recovery and debottlenecking projects at our Tacoma refinery, maintenance and tank replacement projects at our Wyoming refinery, and co-generation engine and tank conversion projects at our Hawaii refinery. Net cash used in financing activities was approximately $34.5 million for the nine months ended September 30, 2022 and consisted primarily of the following activities: • net repayments of debt of $72.3 million primarily driven by the partial repurchase and cancellation of our 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, and • repurchases of common stock of $7.3 million, partially offset by: • net borrowings under the J. Aron Discretionary Draw Facility and MLC receivable advances of $48.2 million. Cash Requirements. There have been no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, outside the ordinary course of business except as follows: Debt Refinancing. On February 28, 2023, we entered into the Term Loan Credit Agreement. The proceeds were used to repurchase and cancel the then-outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes and terminate and repay all amounts outstanding under the Term Loan B Facility . As a result of this refinancing, our debt maturity was extended from 2026 to 2030 and, using interest rates that were in effect at March 31, 2023, our estimated undiscounted future interest payments increased to $344 million. On October 4, 2023, we entered into the Second Amendment to the ABL Credit Facility and the Wind-Down Agreement. Please read Note 11—Debt and Note 20—Subsequent Events for more information. Critical Accounting Estimates There have been no material changes to critical accounting estimates disclosed in our Annual Report on Form 10-K for the nine months ended September 30, 2023. Forward-Looking Statements Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (“PSLRA”), or in releases made by the SEC, all of which may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties, and other important factors including, without limitation, the conflict between Russia and Ukraine and certain developments in the global crude oil markets, on our business, our customers, and the markets where we operate; our beliefs regarding available capital resources; our beliefs regarding the likely results or impact of certain disputes or contingencies and any potential fines or penalties; our beliefs regarding the fair value of certain assets, and our expectations with respect to laws and regulations, including environmental regulations and related compliance costs and any fines or penalties related thereto; our expectations regarding the sufficiency of our cash flows and liquidity; our expectations regarding anticipated capital expenditures, including the timing and cost of compliance with consent decrees and other enforcement actions; our expectations regarding the impact of the adoption of certain accounting standards; our estimates regarding the fair value of certain indebtedness; estimated costs to settle claims from the Delta bankruptcy; the estimated value of, and our ability to settle, legal claims remaining to be settled against third parties; our expectations regarding the synergies or other benefits of our acquisitions; our expectations regarding certain tax liabilities and debt obligations; management’s assumptions about future events; our ability to integrate the recently acquired ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”) into our existing business, the anticipated synergies and other benefits of the Acquisition, including 62 renewable growth opportunities; anticipated liabilities and costs associated with the Acquisition; the anticipated financial and operating results of the Acquisition, and the effect on the Company’s cash flows and profitability (including Adjusted EBITDA and Adjusted Net Income); our ability to raise additional debt or equity capital; our ability to make strategic investments in business opportunities; and the estimates, assumptions, and projections regarding future financial condition, results of operations, liquidity, and cash flows. These and other forward-looking statements could cause the actual results, performance, or achievements of Par and its subsidiaries to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “may,” “will,” “would,” “could,” “should,” “seeks,” or “scheduled to,” or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act, and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. The forward-looking statements contained in this Quarterly Report on Form 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control, including those set out in our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q under “Risk Factors.” In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this Quarterly Report on Form 10-Q are not guarantees of future performance; and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described above and under Critical Accounting Estimates and Risk Factors included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q. All forward-looking statements speak only as of the date they are made. There can be no guarantee that the operational and financial measures the Company has taken, and may take in the future, will be fully effective. We do not intend to update or revise any forward-looking statements as a result of new information, future events, or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.