What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 244 added, 240 removed, 729 unchanged (40% of the section changed)

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Recent Events Affecting Comparability of Periods

Crude oil pricing increased in the first half of 2024 compared to the first half of 2023.

Brent crude oil pricing averaged $85.03 per barrel in the first half of 2024 compared to $77.73 per barrel in the first half of 2023.

retail gasoline prices remained relatively stable from $3.59 per gallon in the first half of 2023 to $3.52 per gallon in the first half of 2024.

Refined product crack spreads in the first half of 2024 decreased as compared to the first half of 2023.

Energy Information Administration (“EIA”) in its June 2024 short term energy outlook forecasts average Brent crude oil pricing of $85 per barrel in the second half of 2024 due to strong global inventory draws in the first half of 2024 driven by less Organization of the Petroleum Exporting Countries (“OPEC”) production.

Crude oil pricing decreased in the third quarter of 2024 compared to the third quarter of 2023.

Brent crude oil pricing averaged $78.71 per barrel in the third quarter of 2024 compared to $85.92 per barrel in the third quarter of 2023.

retail gasoline prices remained relatively stable from $3.69 per gallon in 2023 to $3.51 per gallon in 2024.

Refined product crack spreads decreased in 2024 as compared to 2023.

Energy Information Administration (“EIA”) in its September 2024 short term energy outlook forecasts average Brent crude oil pricing of $84 per barrel in 2025 due to strong global inventory draws in the first half of 2024 driven by less Organization of the Petroleum Exporting Countries (“OPEC”) production.

In addition, the International Energy Agency (“IEA”) reduced its forecast for global oil demand in 2024 and 2025 in its October report.

This is primarily driven by reduced demand in China.

In 2023, OPEC announced several voluntary production cuts.

Russia announced on February 10, 2023, that it would cut its oil production by 500,000 barrels a day (5% of its output), as a response to imposed sanctions on the country’s oil trade.

Russia announced on February 10, 2023, that it would cut its oil production by 500,000 barrels a day (5% of its output), in response to imposed sanctions on the country’s oil trade.

In June 2023, OPEC extended oil output cuts of 3.66 million barrels a day, or about 5% of daily global demand, until the end of 2024, including a Russian cut in oil exports of 300,000 barrels a day until the end of 2023.

In November 2023, OPEC announced additional voluntary production cuts of 1.7 million barrels a day, thus totaling about 2.2 million barrels a day, from January through March 2024.

On March 3, 2024, OPEC announced an extension of its November 2023 voluntary production cut through June 2024, driving down supply, as demand increases due to spring and summer travel seasons in the Northern Hemisphere.

On March 3, 2024, OPEC announced an extension of its November 2023 voluntary production cut through June 2024, driving down supply, as demand increased due to spring and summer travel seasons in the Northern Hemisphere.

On June 2, 2024, OPEC agreed to extend the latest cut of 2.2 million barrels a day until the end of September and gradually phase it out from October on a monthly basis.

Additionally, geopolitical tensions in the Middle East and the Red Sea region continued to escalate in the first half of 2024 putting upward pressure on prices.

Additionally, geopolitical tensions in the Middle East and Red Sea region continued to escalate in 2024 putting upward pressure on prices.

The overall effect of these conflicts and associated actions taken to limit the purchase of Russian petroleum products impacted freight movements and raised the operating costs of many European and other refineries.

Energy prices are, among other factors, indicators of inflation.

The overall energy price index increased 4.3% year over year as of June 30, 2024.

While inflation has worsened relative to the prior year, we do not believe that inflation has had a material effect on our business, financial condition, or results of operations in the first half of 2024.

The overall energy price index increased 3.4% year over year as of September 30, 2024.

While inflation has increased relative to the prior year, we do not believe that inflation has had a material effect on our business, financial condition, or results of operations in 2024.

Please read Item 1A.

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Results of Operations

Three months ended June 30, 2024 compared to the three months ended June 30, 2023

Our financial results for the second quarter of 2024 declined from net income of $30.0 million for the three months ended June 30, 2023 to $18.6 million for the three months ended June 30, 2024.

The decrease was primarily driven by a $5.5 million increase in interest expense and financing costs, net, a $4.7 million increase in income tax expense, a $2.9 million decrease in our refining segment operating income, a $2.7 million decrease in our logistics segment operating income, a $1.5 million increase in debt extinguishment and commitment costs, and a $1.4 million decrease in equity earnings from Laramie Energy, LLC, partially offset by a $7.4 million decrease in acquisition and integration expenses related to our Billings Acquisition.

Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Our financial results for the third quarter of 2024 declined from net income of $171.4 million for the three months ended September 30, 2023 to $7.5 million for the three months ended September 30, 2024.

The decrease was primarily driven by a $175.8 million decrease in our refining segment operating income and a $2.6 million increase in interest expense and financing costs, net, partially offset by a $5.5 million increase in our logistics segment operating income, a $5.0 million increase in our retail segment operating income, and a $4.7 million decrease in acquisition 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 three months ended June 30, 2024, Adjusted EBITDA was $81.6 million compared to $150.8 million for the three months ended June 30, 2023.

The $69.2 million decrease was primarily related to a $42.3 million increase in operating expenses and a decrease of $29.0 million in refining segment Adjusted Gross Margin.

Adjusted EBITDA and Adjusted Net Income (Loss).

For the three months ended September 30, 2024, Adjusted EBITDA was $51.4 million compared to $255.7 million for the three months ended September 30, 2023.

The $204.3 million decrease was primarily due to a decrease of $208.4 million in refining segment Adjusted Gross Margin, partially offset by an increase of $4.4 million in our retail segment Adjusted Gross Margin.

Please read the discussion of Adjusted Gross Margin by Segment and the Discussion of Consolidated Results below for additional information.

For the three months ended June 30, 2024, Adjusted Net Income was $28.5 million compared to $105.0 million for the three months ended June 30, 2023.

The decline was primarily related to the factors described above for the decrease in Adjusted EBITDA, an increase of $5.0 million in interest expense and financing costs, excluding unrealized interest rate derivative losses (gains), and an increase of $3.9 million of D&A, partially offset by a cash distribution of $1.5 million received from Laramie Energy, LLC in the second quarter of 2024.

Six months ended June 30, 2024 compared to the six months ended June 30, 2023

Our financial results declined from net income of $267.9 million for the six months ended June 30, 2023 to $14.9 million for the six months ended June 30, 2024.

The decrease was driven by a $243.5 million decrease in refining segment operating income, a $22.5 million increase in general and administrative expenses, and a $1.6 million decrease in retail segment operating income, partially offset by a $12.5 million decrease in acquisitions and integration expenses related to our Billings Acquisition and a $5.1 million increase in logistics segment operating income.

For the three months ended September 30, 2024, Adjusted Net Loss was $5.5 million compared to Adjusted Net Income of $193.4 million for the three months ended September 30, 2023.

The decline was primarily related to the factors described above for the decrease in Adjusted EBITDA, combined with an increase of $1.9 million in interest expense and financing costs, excluding unrealized interest rate derivative losses (gains), partially offset by a decrease of $3.8 million in income tax expense and a decrease of $3.4 million in D&A.

Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Our financial results declined from net income of $439.3 million for the nine months ended September 30, 2023 to $22.4 million for the nine months ended September 30, 2024.

The decrease was driven by a $419.3 million decrease in refining segment operating income, a $21.2 million increase in general and administrative expenses, a $9.7 million increase in Interest expense and financing costs, net, and a $7.8 million increase in Equity earnings from Laramie Energy, LLC, partially offset by a $17.1 million decrease in acquisitions and integration expenses related to our Billings Acquisition, a $16.3 million decrease in Debt extinguishment and commitment costs, and a $10.6 million increase in 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 six months ended June 30, 2024, Adjusted EBITDA was $176.3 million compared to $318.5 million for the six months ended June 30, 2023.

The $142.2 million decrease was primarily related to a $112.3 million increase in operating expenses and a decrease of $33.5 million in our refining segment Adjusted Gross Margin.

For the nine months ended September 30, 2024, Adjusted EBITDA was $227.7 million compared to $574.2 million for the nine months ended September 30, 2023.

The $346.5 million decrease was primarily due to a decrease of $241.9 million in our refining segment Adjusted Gross Margin, a $114.2 million increase in operating expenses, a $21.2 million increase in General and administrative expense (excluding depreciation),partially offset by increases of $13.1 million and $6.5 million in our logistics and retail segment Adjusted Gross Margins, respectively.

Please read the discussion of Adjusted Gross Margin by Segment and the Discussion of Consolidated Results below for additional information.

For the six months ended June 30, 2024, Adjusted Net Income was $70.2 million compared to $242.5 million for the six months ended June 30, 2023.

The decline was primarily related to the same factors described above for the decrease in Adjusted EBITDA, an increase of $12.2 million of D&A, a decrease of $9.2 million of cash distributions received from Laramie Energy, LLC, and an increase of $7.5 million of interest expense and financing costs, excluding unrealized interest rate derivative losses (gains) .

The following tables summarize our consolidated results of operations for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 (in thousands).

For the nine months ended September 30, 2024, Adjusted Net Income was $64.7 million compared to $435.9 million for the nine months ended September 30, 2023.

The decline was primarily related to the same factors described above for the decrease in Adjusted EBITDA, combined with an increase of $9.4 million of interest expense and financing costs, excluding unrealized interest rate derivative losses (gains), an increase of $8.8 million of D&A, and a decrease of $9.2 million of cash distributions received from Laramie Energy, LLC, partially offset by a decrease in Income tax expense, net of impacts due to changes in the valuation allowance and other deferred tax items of $5.5 million.

The following tables summarize our consolidated results of operations for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 (in thousands).

The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 $ Change % Change

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Interest expense and financing costs, net (23,402) (20,815) (2,587) 12%

Debt extinguishment and commitment costs (1,418) 38 (1,456) (3,832)%

Other income (expense), net 1,253 (43) 1,296 3,014%

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Net income $ 7,486 $ 171,415

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 $ Change % Change

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(1) NM - Not meaningful

The following tables summarize our operating income (loss) by segment for the three and six months ended June 30, 2024 and 2023 (in thousands).

The following tables summarize our operating income (loss) by segment for the three and nine months ended September 30, 2024 and 2023 (in thousands).

The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Three months ended June 30, 2024 Refining Logistics (1) Retail Corporate, Eliminations and Other (2) Total

Three months ended September 30, 2024 Refining Logistics (1) Retail Corporate, Eliminations and Other (2) Total

Revenues $ 2,080,546 $ 77,741 $ 150,213 $ (164,567) $ 2,143,933

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Operating income (loss) $ 19,005 $ 26,164 $ 18,274 $ (27,012) $ 36,431

Three months ended June 30, 2023 Refining Logistics (1) Retail Corporate, Eliminations and Other (2) Total

Three months ended September 30, 2023 Refining Logistics (1) Retail Corporate, Eliminations and Other (2) Total

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

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(1) Our logistics operations consist primarily of intercompany transactions which eliminate on a consolidated basis.

(2) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $165.1 million and $137.7 million for the three months ended June 30, 2024 and 2023, respectively.

Six months ended June 30, 2024 Refining Logistics (1) Retail Corporate, Eliminations and Other (2)

(2) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $164.6 million and $176.2 million for the three months ended September 30, 2024 and 2023, respectively.

Nine months ended September 30, 2024 Refining Logistics (1) Retail Corporate, Eliminations and Other (2)

Revenues $ 5,964,435 $ 222,058 $ 443,189 $ (487,446) $ 6,142,236

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Depreciation and amortization 66,584 19,893 8,471 1,731 96,679

Loss (gain) on sale of assets, net — 124 (10) — 114

General and administrative expense (excluding depreciation) — — — 87,322 87,322

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Par West redevelopment and other costs — — — 9,048 9,048

Loss (gain) on sale of assets, net — 124 (10) — 114

Operating income (loss) $ 82,811 $ 64,579 $ 45,323 $ (98,126) $ 94,587

Six months ended June 30, 2023 Refining Logistics (1) Retail Corporate, Eliminations and Other (2)

Nine months ended September 30, 2023 Refining Logistics (1) Retail Corporate, Eliminations and Other (2)

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

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(1) Our logistics operations consist primarily of intercompany transactions which eliminate on a consolidated basis.

(2) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $322.9 million and $255.9 million for the six months ended June 30, 2024 and 2023, respectively.

Below is a summary of key operating statistics for the refining segment for the three and six months ended June 30, 2024 and 2023:

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

(2) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $487.4 million and $432.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Below is a summary of key operating statistics for the refining segment for the three and nine months ended September 30, 2024 and 2023:

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

2024 2023 2024 2023

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D&A per bbl ($/throughput bbl) 1.82 1.63 1.69 1.69

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

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

2024 2023 2024 2023

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________________________________________________________

(1) Feedstocks throughput and sales volumes per day for the Montana refinery for the three and six months ended June 30, 2023 are calculated based on the 30-day period for which we owned the Montana refinery during the three and six months ended June 30, 2023.

As such, the amounts for the total refining segment represent the sum of the Hawaii, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the three and six months ended June 30, 2023, plus the Montana refinery’s throughput or sales volumes averaged over the period from June 1, 2023, to June 30, 2023.

The 2024 amounts for the total refining segment represent the sum of the Hawaii, Montana, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the three and six months ended June 30, 2024.

(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 and 122-day periods for which we owned the Montana refinery during the three and nine months ended September 30, 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.

(2) We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput.

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(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.

(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.

Below is a summary of key operating statistics for the retail segment for the three and six months ended June 30, 2024 and 2023:

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

(5) We believe the RVO Adjusted Pacific Northwest 3-1-1-1 Index (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.

(6) We believe the RVO Adjusted USGC 3-2-1 Index (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.

(7) ANS crude price influences the Hawaii Refinery’s financial performance.

Beginning in September 2024, the ANS index has been updated from a Platts marker to an Argus marker to better reflect the prompt ANS market.

Below is a summary of key operating statistics for the retail segment for the three and nine months ended September 30, 2024 and 2023:

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

2024 2023 2024 2023

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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.

our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure.

Beginning with financial results reported for the second quarter of 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 acquired on June 1, 2023, as part of the Billings Acquisition.

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The following tables present a reconciliation of Adjusted Gross Margin to the most directly comparable GAAP financial measure, operating income (loss), on a historical basis, for selected segments, for the periods indicated (in thousands):

Three months ended June 30, 2024 Refining Logistics Retail

Three months ended September 30, 2024 Refining Logistics Retail

Operating income $ 19,005 $ 26,164 $ 18,274

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Environmental obligation mark-to-market adjustments (4,432) — —

Unrealized loss on derivatives 21,141 — —

Unrealized gain on derivatives (31,772) — —

Loss on sale of assets, net — — —

Adjusted Gross Margin (1) $ 142,193 $ 36,284 $ 42,615

Three months ended June 30, 2023 Refining Logistics Retail

Three months ended September 30, 2023 Refining Logistics Retail

Operating income $ 194,847 $ 20,736 $ 13,315

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Environmental obligation mark-to-market adjustments (50,153) — —

Unrealized loss on derivatives 22,178 — —

Unrealized gain on derivatives (8,995) — —

Adjusted Gross Margin (1) $ 350,570 $ 35,277 $ 38,180

Six months ended June 30, 2024 Refining Logistics Retail

Nine months ended September 30, 2024 Refining Logistics Retail

Operating income $ 82,811 $ 64,579 $ 45,323

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Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments 2,037 2,550 —

Loss (gain) on sale of assets, net — 124 (10)

Inventory valuation adjustment (6,419) — —

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Unrealized loss on derivatives 34,061 — —

Loss (gain) on sale of assets, net — 124 (10)

Adjusted Gross Margin (1) $ 525,906 $ 98,993 $ 121,295

Six months ended June 30, 2023 Refining Logistics Retail

Nine months ended September 30, 2023 Refining Logistics Retail

Operating income $ 502,123 $ 54,035 $ 42,009

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Environmental obligation mark-to-market adjustments (174,111) — —

Unrealized loss on derivatives 8,508 — —

Unrealized gain on derivatives (487) — —

Adjusted Gross Margin (1) $ 767,774 $ 85,919 $ 114,752

____________________________________________________________________________

(1) For the three and six months ended June 30, 2024 and 2023, there was no impairment expense or LIFO liquidation adjustment recorded in Operating income.

For the three and six months ended June 30, 2023, there was no (gain) loss on sale of assets recorded in Operating income.

(1) For the three and nine months ended September 30, 2024 and 2023, there was no impairment expense in Operating income.

For the three months ended September 30, 2024 and the three and nine months ended September 30, 2023, there was no (gain) loss on sale of assets recorded in Operating income.

Adjusted Net Income (Loss) and Adjusted EBITDA

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• impairment expense associated with our investment in Laramie Energy;

• Par’s share of equity losses from Laramie Energy, LLC, excluding cash distributions.

• Par’s share of equity (earnings) losses from Laramie Energy, LLC, excluding cash distributions.

Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding:

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The following table presents a reconciliation of Adjusted Net Income and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income, on a historical basis for the periods indicated (in thousands):

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

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

2024 2023 2024 2023

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Environmental obligation mark-to-market adjustments (4,432) (50,153) (18,199) (174,111)

Unrealized loss on derivatives 21,104 21,635 64,952 7,965

Unrealized loss (gain) on derivatives (31,196) (9,116) 33,756 (1,151)

Par West redevelopment and other costs 4,006 3,127 9,048 8,490

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Loss on sale of assets, net — — 114 —

Equity earnings from Laramie Energy, LLC, excluding cash distributions

Equity (earnings) losses from Laramie Energy, LLC, excluding cash distributions

336 — (1,382) —

Adjusted Net Income (3) 28,544 105,027 70,212 242,545

Adjusted Net Income (Loss) (3) (5,549) 193,380 64,663 435,925

Depreciation and amortization 31,879 35,311 96,679 87,887

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________________________________________

(1) For the three and six months ended June 30, 2024, we recognized a non-cash deferred tax expense of $6.2 million and $3.5 million, respectively, related to deferred state and federal tax liabilities.

(1) For the three and nine months ended September 30, 2024, we recognized a non-cash deferred tax expense of $5.7 million and $9.2 million, respectively, related to deferred state and federal tax liabilities.

This tax benefit is included in Income tax expense (benefit) on our consolidated statements of operations.

For the three and six months ended June 30, 2023, we did not have any adjustments to our valuation allowance and other deferred tax items.

(2) For t he six months ended June 30, 2024, we incurred $13.1 million of stock-based compensation expenses associated with accelerated vesting of equity awards and modification of vested equity awards related to our CEO transition and $2.3 million f or an estimated legal settlement unrelated to current operating activities.

(3) For the three and six months ended June 30, 2024 and 2023, there was no change in value of contingent consideration, change in value of common stock warrants, impairment expense, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference.

Please read the Non-

GAAP Performance Measures discussion above for information regarding changes to the components of Adjusted Net Income (Loss) and Adjusted EBITDA made during the reporting periods.

For the three and nine months ended September 30, 2023, we did not have any adjustments to our valuation allowance and other deferred tax items.

(2) For t he nine months ended September 30, 2024, we incurred $13.1 million of stock-based compensation expenses associated with accelerated vesting of equity awards and modification of vested equity awards related to our CEO transition and $2.3 million f or an estimated legal settlement unrelated to current operating activities.

(3) For the three and nine months ended September 30, 2024 and 2023, there was no change in value of contingent consideration, change in value of common stock warrants, impairment expense, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference.

Please read the Non-GAAP Performance Measures discussion above for information regarding changes to the components of Adjusted Net Income (Loss) and Adjusted EBITDA made during the reporting periods.

Factors Impacting Segment Results

Operating Income

Three months ended June 30, 2024 compared to the three months ended June 30, 2023

Operating income for our refining segment was $41.2 million for the three months ended June 30, 2024, a decrease of $2.9 million compared to operating income of $44.1 million for the three months ended June 30, 2023.

The decrease was primarily driven by lower crack spreads across all the refineries in our legacy portfolio and higher feedstock costs, partially offset by an $11.2 million increase related to a full quarter contribution from the Billings Acquisition and an $8.1 million decrease in environmental costs incurred by our legacy refinery portfolio.

Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Operating income for our refining segment was $19.0 million for the three months ended September 30, 2024, a decrease of $175.8 million compared to operating income of $194.8 million for the three months ended September 30, 2023.

The decrease was primarily driven by lower crack spreads across all of our refineries combined with unfavorable FIFO impacts, partially offset by a favorable change of $126.6 million in the step-out obligations associated with our inventory intermediation agreements.

Please read the Adjusted Gross Margin discussion below for additional information.

Operating income for our logistics segment was $18.0 million for the three months ended June 30, 2024, a decrease of $2.7 million compared to $20.7 million for the three months ended June 30, 2023.

The decrease was primarily due to a decrease of $3.7 million in third-party contracts and vessel revenue, partially offset by a decrease in vessel and fuel costs of $1.3 million.

Operating income for our retail segment was $16.1 million for the three months ended June 30, 2024, an increase of $0.9 million compared to $15.2 million for the three months ended June 30, 2023.

The increase was primarily due to a $1.2 million increase in fuel margins, and increased merchandise sales of $0.8 million, partially offset by a $1.6 million increase in operating expenses driven by higher employee costs.

Six months ended June 30, 2024 compared to the six months ended June 30, 2023

Operating income for our refining segment was $63.8 million for the six months ended June 30, 2024, a decrease of $243.5 million compared to $307.3 million for the six months ended June 30, 2023.

Operating income for our logistics segment was $26.2 million for the three months ended September 30, 2024, an increase of $5.5 million compared to $20.7 million for the three months ended September 30, 2023.

The increase was primarily due to a decrease of $2.8 million in operating expenses and a $1.8 million decrease in depreciation and amortization.

The operating expense decrease primarily reflects lower outside services costs and repair and maintenance expenses, partially offset by lower rental expenses and employee costs.

Operating income for our retail segment was $18.3 million for the three months ended September 30, 2024, an increase of $5.0 million compared to $13.3 million for the three months ended September 30, 2023.

The increase was primarily due to a $3.4 million increase in fuel margins, increased merchandise margins of $0.7 million, and a $0.4 million decrease in operating expenses primarily driven by lower outside services costs.

Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Operating income for our refining segment was $82.8 million for the nine months ended September 30, 2024, a decrease of $419.3 million compared to $502.1 million for the nine months ended September 30, 2023.

The decrease in operating income was primarily driven by:

• a decrease of $221.0 million related to lower crack spreads at our refineries in our legacy portfolio and

• an increase of $124.3 million in consolidated environmental costs across all our refineries in our legacy portfolio, primarily associated with RIN settlement gains recorded in 2023 with no similar gains in 2024.

• a decrease of $394.4 million reflecting lower crack spreads at the refineries in our legacy portfolio,

• an increase of $133.0 million in consolidated environmental costs across all our refineries in our legacy portfolio, primarily associated with RIN settlement gains recorded in 2023 with no similar gains in 2024, and

• a decrease of $37.3 million driven by a 2.7% decline in refined product sales volumes primarily from our Washington and Hawaii refineries,

partially offset by:

• an increase of $98.8 million related to favorable changes in crude oil differentials at our refineries in our legacy portfolio.

Operating income for our logistics segment was $38.4 million for the six months ended June 30, 2024, an increase of $5.1 million compared to $33.3 million for the six months ended June 30, 2023.

The increase was primarily due to a $7.3 million increase in contribution from the Billings Acquisition logistics assets acquired in June 2023 partially offset by a $2.5 million decrease in third-party contracts for our logistics services.

Our legacy logistics portfolio consists of our logistics assets, excluding logistics assets from the Billings Acquisition.

Operating income for our retail segment was $27.0 million for the six months ended June 30, 2024, a decrease of $1.6 million compared to $28.7 million for the six months ended June 30, 2023.

The decrease in operating income was primarily due to higher operating expenses of $3.8 million driven by an increase in employee costs, partially offset by increased merchandise sales of $1.8 million, and a $0.5 million increase related to 6% higher fuel sales volumes in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

• an increase of $68.1 million related to a favorable change in our step-out obligations associated with our inventory intermediation agreements in Hawaii and Washington,

• an increase of $61.3 million related to favorable changes in crude oil differentials at the refineries in our legacy portfolio, and

• a net decrease of $32.2 million in our derivative costs associated with all our refineries.

Operating income for our logistics segment was $64.6 million for the nine months ended September 30, 2024, an increase of $10.6 million compared to $54.0 million for the nine months ended September 30, 2023.

The increase was primarily due to a $11.7 million increase in contribution from the Billings Acquisition logistics assets acquired in June 2023.

Operating income for our retail segment was $45.3 million for the nine months ended September 30, 2024, an increase of $3.3 million compared to $42.0 million for the nine months ended September 30, 2023.

The increase in operating income was primarily due to a $3.6 million increase in fuel volumes and increased merchandise revenues of $2.8 million, partially offset by higher operating expenses of $3.3 million driven by an increase in employee costs.

Adjusted Gross Margin

Three months ended June 30, 2024 compared to the three months ended June 30, 2023

For the three months ended June 30, 2024, our refining Adjusted Gross Margin was $176.6 million, a decrease of $29.0 million compared to $205.6 million for the three months ended June 30, 2023.

The decrease was primarily driven by a decrease of $29.8 million related to decreased crack spreads across our legacy refining portfolio and a $9.7 million

decline in refined product sales volumes primarily from our Hawaii and Washington refineries, partially offset by lower feedstock costs, and $4.7 million lower environmental expenses.

Other factors impacting refining results are described below.

• Adjusted Gross Margin for the Hawaii refinery decreased by $2.01 per barrel from $12.08 per barrel during the three months ended June 30, 2023 to $10.07 per barrel during the three months ended June 30, 2024.

Three months ended September 30, 2024 compared to the three months ended September 30, 2023

For the three months ended September 30, 2024, our refining Adjusted Gross Margin was $142.2 million, a decrease of $208.4 million compared to $350.6 million for the three months ended September 30, 2023.

The decrease was

primarily driven by a $164.4 million decrease due to lower crack spreads across our legacy refining portfolio and other factors described below.

• Adjusted Gross Margin for the Hawaii refinery decreased by $7.37 per barrel from $13.47 per barrel during the three months ended September 30, 2023 to $6.10 per barrel during the three months ended September 30, 2024.

The decrease in Adjusted Gross Margin was primarily due to declining crack spreads and a 3.9% decrease in refined product sales, partially offset by lower feedstock costs.

The Singapore 3-1-2 index declined from $13.72 in the second quarter of 2023 to $12.49 in the second quarter of 2024.

• Adjusted Gross Margin for the Washington refinery decreased by $1.70 per barrel from $6.37 per barrel during the three months ended June 30, 2023 to $4.67 per barrel during the three months ended June 30, 2024.

The Singapore 3-1-2 index declined from $23.39 in the third quarter of 2023 to $11.00 in the third quarter of 2024.

• Adjusted Gross Margin for the Montana refinery decreased by $14.07 per barrel from $26.49 per barrel during the three months ended September 30, 2023 to $12.42 per barrel during the three months ended September 30, 2024.

The decrease in Adjusted Gross Margin was primarily due to declining crack spreads.The RVO Adjusted USGC 3-2-1 index decreased from $29.65 in the third quarter of 2023 to $14.14 in the third quarter of 2024.

• Adjusted Gross Margin for the Washington refinery decreased by $10.54 per barrel from $12.30 per barrel during the three months ended September 30, 2023 to $1.76 per barrel during the three months ended September 30, 2024.

The decrease was primarily due to declining crack spreads, and a 4% decrease in refined product sales, partially offset by lower feedstock costs and favorable environmental costs.

The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $25.13 in the second quarter of 2023 to $22.54 in the second quarter of 2024.

• Adjusted Gross Margin for the Wyoming refinery decreased by $5.82 per barrel from $20.56 per barrel during the three months ended June 30, 2023 to $14.74 per barrel during the three months ended June 30, 2024, primarily due to lower regional crack spreads, partially offset by a 19% increase in refined product sales, and lower feedstock costs.

The RVO Adjusted USGC 3-2-1 index decreased from $21.65 in the second quarter of 2023 to $17.93 in the second quarter of 2024.

For the three months ended June 30, 2024, our logistics Adjusted Gross Margin was $30.8 million, an increase of $1.2 million compared to $29.6 million for the three months ended June 30, 2023.

The increase is primarily due to a $4.0 million increase in contribution from the Billings Acquisition logistics assets acquired in June 2023, partially offset by a decrease of $1.8 million driven by a 3% reduction in Hawaii throughput.

For the three months ended June 30, 2024, our retail Adjusted Gross Margin was $41.6 million, an increase of $2.4 million compared to $39.2 million for the three months ended June 30, 2023.

The increase was primarily due to 9% higher merchandise sales margins and 4% higher fuel sales volumes in the three months ended June 30, 2024 compared to the comparable period in 2023.

Six months ended June 30, 2024 compared to the six months ended June 30, 2023

For the six months ended June 30, 2024, our refining Adjusted Gross Margin was $383.7 million, a decrease of $33.5 million compared to $417.2 million for the six months ended June 30, 2023.

The decrease was primarily driven by a $157.3 million decline due to lower crack spreads, and a $27.0 million decrease related to a 5% decline in refined product sales volumes primarily from our Hawaii and Washington refineries, partially offset by increased Adjusted Gross Margin contributed by the Montana refinery of $66.6 million, $44.0 million lower purchased product expenses, $22.1 million benefit due to favorable derivative activities, and $12.7 million lower environmental expenses.

Other factors impacting refining results are described below.

• Adjusted Gross Margin for the Hawaii refinery declined by $3.39 per barrel from $15.41 per barrel during the six months ended June 30, 2023 to $12.02 per barrel during the six months ended June 30, 2024, inclusive of 10 days of reduced production for required maintenance in March 2024.

The decrease was primarily due to lower crack spreads, and a 4.4% decrease in sales volumes, partially offset by $44.0 million decrease of purchased product costs.

The Singapore 3-2-1 index declined from $17.45 in the six months ended June 30, 2023 to $15.58 in the six months ended June 30, 2024.

• Adjusted Gross Margin for the Wyoming refinery decreased by $9.22 from $24.05 per barrel during the six months ended June 30, 2023 to $14.83 per barrel during the six months ended June 30, 2024, primarily due to lower regional crack spreads and higher environmental expenses, partially offset by a 7% increase in refined product sales volumes, a favorable FIFO impact of $9.0 million, and an $8.0 million decline in feedstock costs.

The RVO Adjusted USGC 3-2-1 index declined from $24.09 in the six months ended June 30, 2023 to $19.63 in the six months ended June 30, 2024.

• Adjusted Gross Margin for the Washington refinery decreased by $3.36 per barrel from $8.66 per barrel during the six months ended June 30, 2023 to $5.30 per barrel during the six months ended June 30, 2024, inclusive of a 15-day planned maintenance event in March 2024.

The decrease was primarily due to declining crack spreads and an 11% decrease in refined product sales, partially offset by lower feedstock costs.

The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $25.21 in the six months ended June 30, 2023 to $21.51 in the six months ended June 30, 2024.

For the six months ended June 30, 2024, our logistics Adjusted Gross Margin was $62.7 million, an increase of $12.1 million compared to $50.6 million for the six months ended June 30, 2023.

The increase was primarily due to a $14.2 million increased contribution from the Billings Acquisition logistics assets acquired in June 2023 partially offset by an increase in cost of sales driven by $1.3 million of higher fees and variable expenses.

For the six months ended June 30, 2024, our retail Adjusted Gross Margin was $78.7 million, an increase of $2.1 million compared to $76.6 million for the six months ended June 30, 2023.

The increase was primarily due to a 2% increase in merchandise sales.

Other factors impacting results include a 6% increase in fuel sales volumes and a 34% decrease in fuel margins.

The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $35.00 in the third quarter of 2023 to $15.48 in the third quarter of 2024.

• Adjusted Gross Margin for the Wyoming refinery decreased by $23.36 per barrel from $37.01 per barrel during the three months ended September 30, 2023 to $13.65 per barrel during the three months ended September 30, 2024, primarily due to lower regional crack spreads.

The RVO Adjusted USGC 3-2-1 index decreased from $29.65 in the third quarter of 2023 to $14.14 in the third quarter of 2024.

For the three months ended September 30, 2024, our logistics Adjusted Gross Margin was $36.3 million, an increase of $1.0 million compared to $35.3 million for the three months ended September 30, 2023.

The increase is primarily due to higher throughput across our logistics system in the three months ended September 30, 2024 compared to the comparable period in 2023.

For the three months ended September 30, 2024, our retail Adjusted Gross Margin was $42.6 million, an increase of $4.4 million compared to $38.2 million for the three months ended September 30, 2023.

The increase was primarily due to a $3.4 million increase in fuel margins and increased merchandise margins of $0.7 million in the three months ended September 30, 2024 compared to the comparable period in 2023.

Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

For the nine months ended September 30, 2024, our refining Adjusted Gross Margin was $525.9 million, a decrease of $241.9 million compared to $767.8 million for the nine months ended September 30, 2023.

The decrease was primarily driven by a decrease of $394.4 million reflecting lower crack spreads at the refineries in our legacy portfolio, partially offset by an increase of $61.3 million related to favorable changes in crude oil differentials at the refineries in our legacy portfolio, favorable realized derivative gains and losses of $66.8 million, and other factors as described below.

• Adjusted Gross Margin for the Hawaii refinery declined by $4.68 per barrel from $14.74 per barrel during the nine months ended September 30, 2023 to $10.06 per barrel during the nine months ended September 30, 2024.

The decrease was primarily due to lower crack spreads partially offset by favorable derivative costs.

The Singapore 3-2-1 index declined from $19.45 in the nine months ended September 30, 2023 to $14.04 in the nine months ended September 30, 2024.

• Adjusted Gross Margin for the Washington refinery decreased by $5.88 per barrel from $9.91 per barrel during the nine months ended September 30, 2023 to $4.03 per barrel during the nine months ended September 30, 2024.

The decrease was primarily due to declining crack spreads and an 9% decrease in refined product sales, partially offset by favorable changes in crude oil differentials.

The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $28.51 in the nine months ended September 30, 2023 to $19.49 in the nine months ended September 30, 2024.

• Adjusted Gross Margin for the Wyoming refinery decreased by $14.46 from $28.88 per barrel during the nine months ended September 30, 2023 to $14.42 per barrel during the nine months ended September 30, 2024, primarily due to lower regional crack spreads.

The RVO Adjusted USGC 3-2-1 index declined from $25.96 in the nine months ended September 30, 2023 to $17.79 in the nine months ended September 30, 2024.

For the nine months ended September 30, 2024, our logistics Adjusted Gross Margin was $99.0 million, an increase of $13.1 million compared to $85.9 million for the nine months ended September 30, 2023.

The increase was primarily due to a $15.6 million increased contribution from the Billings Acquisition logistics assets acquired in June 2023.

For the nine months ended September 30, 2024, our retail Adjusted Gross Margin was $121.3 million, an increase of $6.5 million compared to $114.8 million for the nine months ended September 30, 2023.

The increase was primarily due to a $3.6 million increase in fuel volumes and increased merchandise margins of $2.8 million.

Discussion of Consolidated Results

Three months ended June 30, 2024 compared to the three months ended June 30, 2023

For the three months ended June 30, 2024, revenues were $2.0 billion, a $0.2 billion increase compared to $1.8 billion for the three months ended June 30, 2023.

The increase was primarily due to a $0.3 billion increased contribution from the Billings Acquisition, which closed June 1, 2023, and $0.1 billion due to higher crude oil prices discussed below, partially offset by a 4% decrease in refining sales volumes primarily driven by our Hawaii and Washington refinery operations during the quarter and a decrease in average product crack spreads also discussed below.

Average WTI crude oil prices increased 10% and average Brent crude oil prices increased 9% as compared to the prior period.

The RVO Adjusted USGC 3-2-1, RVO Adjusted Pacific Northwest 3-1-1-1, and 3-1-2 Singapore Crack Spread declined 17%, 10%, and 9%, respectively, compared to the second quarter of 2023.

Three months ended September 30, 2024 compared to the three months ended September 30, 2023

For the three months ended September 30, 2024, revenues were $2.1 billion, a $0.5 billion decrease compared to $2.6 billion for the three months ended September 30, 2023.

The decrease was primarily due to a $0.3 billion decrease to refining revenue reflecting lower average product crack spreads discussed below, $0.1 billion due to lower crude oil prices also discussed below.

These lower average crack spreads are reflective of larger market trends.

The IEA’s September 2024 report noted a slowdown in global and U.S.

oil demand growth post-pandemic and its October 2024 report noted declining refining margins, primarily driven by reduced demand in China.

The RVO Adjusted Pacific Northwest 3-1-1-1 index, 3-1-2 Singapore Crack Spread, and RVO Adjusted USGC 3-2-1 index declined 56%, 53%, and 52%, respectively, compared to the third quarter of 2023.

Average WTI crude oil prices decreased 8% and average Brent crude oil prices decreased 8% as compared to the prior period.

Please read our key operating statistics for further information.

Revenues at our retail segment increased $4.4 million primarily due to a 4% increase in fuel sales volumes.

Revenues at our retail segment decreased $8.3 million primarily due to an 8% decline in fuel sales prices.

Cost of Revenues (Excluding Depreciation).

For the three months ended June 30, 2024, cost of revenues (excluding depreciation) was $1.8 billion, an increase of $0.2 billion when compared to $1.6 billion for the three months ended June 30, 2023.

The increase was primarily driven by a $0.3 billion increased contribution from the Billings Acquisition due to a full quarter under our ownership and higher crude oil prices, partially offset by decreases due to lower refining sales volumes, as discussed above, and lower environmental expenses.

For the three months ended September 30, 2024, cost of revenues (excluding depreciation) was $1.9 billion, a decrease of $0.3 billion when compared to $2.2 billion for the three months ended September 30, 2023.

The decrease was primarily driven by lower crude oil prices, as discussed above, a favorable change of $0.1 billion related to the termination of the Washington Refinery Intermediation Agreement and Supply and Offtake Agreement, and favorable derivative activity of $0.1 billion, partially offset by $0.1 billion of unfavorable FIFO impacts.

Please read Note 9—Inventory Financing Agreements for more information on the Washington Refinery Intermediation Agreement and Supply and Offtake Agreement terminations.

Operating Expense (Excluding Depreciation).

For the three months ended June 30, 2024, operating expense (excluding depreciation) was $144.1 million, a $42.3 million increase when compared to $101.8 million for the three months ended June 30, 2023.

The increase was driven by a $41.1 million increased contribution from the Billings Acquisition.

For the three months ended September 30, 2024, operating expense (excluding depreciation) was $147.0 million, a $1.8 million increase when compared to $145.2 million for the three months ended September 30, 2023.

The increase was driven by a $4.1 million increase related to our Montana operations, primarily repairs and maintenance and outside service costs.

This increase was partially offset by a net decrease of $2.3 million across our legacy operations.

Depreciation and Amortization .

For the three months ended June 30, 2024, D&A was $32.1 million, an increase of $3.9 million compared to $28.2 million for the three months ended June 30, 2023.

The increase was primarily driven by the $5.0 million of D&A attributable to the Billings Acquisition, partially offset by a $0.9 million decrease in D&A from our Hawaii Refinery primarily driven by assets that became fully depreciated in the second half of 2023, partially offset by cogeneration equipment in Hawaii and other assets placed into service during the period.

For the three months ended September 30, 2024, D&A was $31.9 million, a decrease of $3.4 million compared to $35.3 million for the three months ended September 30, 2023.

The decrease was primarily driven by a $2.4 million decrease in D&A from our Hawaii Refinery primarily driven by assets that became fully depreciated in the second quarter of 2024.

General and Administrative Expense (Excluding Depreciation).

For the three months ended June 30, 2024, general and administrative expense (excluding depreciation) was $23.2 million, consistent with $23.2 million for the three months ended June 30, 2023.

For the three months ended September 30, 2024, general and administrative expense (excluding depreciation) was $22.4 million, a $1.3 million decrease when compared to $23.7 million for the three months ended September 30, 2023, driven by lower employee costs.

Equity earnings from refining and logistics investments.

During the three months ended June 30, 2024, Equity earnings from refining and logistics investments, related to YELP and YPLC, were $3.7 million, an increase of $3.3 million compared to $0.4 million for the three months ended June 30, 2023.

For the three months ended June 30, 2024, our proportionate share of YELP’s net income and YPLC’s net income was $2.3 million and $1.8 million, respectively.

During the three months ended June 30, 2023, Equity (earnings) from refining and logistics investments were $0.4 million related to YPLC.

There were no equity earnings from YELP for the three months ended June 30, 2023.

During the three months ended September 30, 2024, Equity earnings from refining and logistics investments, related to YELP and YPLC, were $3.0 million, a decrease of $0.9 million compared to $3.9 million for the three months ended September 30, 2023.

For the three months ended September 30, 2024, our proportionate share of YELP’s net income and YPLC’s net income was $1.4 million and $1.9 million, respectively.

For the three months 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 June 30, 2024, we incurred an immaterial amount of acquisition and integration costs.

For the three months ended June 30, 2023, we incurred $7.3 million of acquisition and integration costs related to the Billings Acquisition, which closed on June 1, 2023.

During the three months ended September 30, 2024, we incurred an immaterial amount of acquisition and integration costs.

For the three months ended September 30, 2023, we incurred $4.7 million of acquisition and integration costs related to the Billings Acquisition, which closed on June 1, 2023.

Please read Note 5—Acquisitions for further information.

Par West redevelopment and other costs.

For the three months ended June 30, 2024, Par West redevelopment and other costs were $3.1 million, an increase of $0.5 million compared to $2.6 million for the three months ended June 30, 2023, primarily due to an increase in redevelopment activities.

For the three months ended September 30, 2024, Par West redevelopment and other costs were $4.0 million, an increase of $0.9 million compared to $3.1 million for the three months ended September 30, 2023, primarily due to an increase in redevelopment activities.

Interest Expense and Financing Costs, Net .

For the three months ended June 30, 2024, our interest expense and financing costs were $20.4 million, an increase of $5.5 million compared to $14.9 million for the three months ended June 30, 2023.

The increase was primarily due to a $5.6 million increase in debt costs, mainly driven by higher interest expenses due to higher ABL Credit Facility balances in 2024 to fund certain inventory purchases at our Hawaii refinery and Washington refinery and a $4.0 million decrease in interest income from our investment accounts.

The increase was partially offset by a $4.2 million decrease in inventory financing costs due to the termination of the Washington Refinery Intermediation Agreement in the fourth quarter of 2023, and termination of our Supply and Offtake Agreement in the second quarter of 2024.

Please read Note 9—Inventory Financing Agreements and Note 11—Debt for further information.

Debt Extinguishment and Commitment Costs.

During the three months ended June 30, 2024, we incurred $1.4 million of debt extinguishment and commitment costs related to the repricing of our Term Loan Credit Agreement, the termination of our LC Facility and the expiration of our Supply and Offtake Agreement in the second quarter of 2024.

For the three months ended June 30, 2023, we incurred an immaterial amount of debt extinguishment and commitment costs.

For the three months ended September 30, 2024, our interest expense and financing costs were $23.4 million, an increase of $2.6 million compared to $20.8 million for the three months ended

September 30, 2023.

The increase was primarily due to a $6.3 million increase in debt costs, mainly higher interest expense due to higher ABL Credit Facility balances in 2024 used to fund certain inventory purchases at our Hawaii and Washington refineries and a $0.9 million decrease in interest income from our investment accounts.

The increase was partially offset by a $4.9 million of inventory financing costs incurred during the three months ended September 30, 2023, related to inventory financing agreements that were terminated in the fourth quarter of 2023 and the second quarter of 2024.

Please read Note 9—Inventory Financing Agreements and Note 11—Debt for further information.

Other income (expense), net.

For the three months ended September 30, 2024, other income was $1.3 million primarily due to a $1.5 million reduction of2024 expenses for a legal settlement unrelated to operating activities with no similar 2023 expenses.

For three months ended September 30, 2023, we incurred an immaterial amount of other expense.

Equity earnings (losses) from Laramie Energy, LLC.

For the three months ended June 30, 2024, Equity losses from Laramie Energy, LLC were $1.4 million.

For the three months ended June 30, 2024, our proportionate share of Laramie Energy’s net loss was $3.0 million, partially offset by $1.6 million of basis difference accretion.

There were no equity earnings from our investment in Laramie Energy, LLC, for the three months ended June 30, 2023.

For the three months ended September 30, 2024, Equity losses from Laramie Energy, LLC were $0.3 million.

For the three months ended September 30, 2024, our proportionate share of Laramie Energy’s net loss was $2.0 million, partially offset by $1.6 million of basis difference accretion.

There were no equity earnings from our investment in Laramie Energy, LLC, for the three months ended September 30, 2023.

Please read Note 4 — Investment in Laramie Energy for further discussion.

Income Taxes.

For the three months ended June 30, 2024, income tax expense was $6.7 million, an increase of $4.7 million compared to $1.9 million for three months ended June 30, 2023, primarily related to higher apportionment factors in the states in which we pay taxes.

For three months ended June 30, 2023, we recorded an income tax expense of $1.9 million primarily related to recording a valuation allowance on our deferred taxes.

For the three months ended September 30, 2024, income tax expense was $6.5 million, an increase of $1.9 million compared to $4.6 million for three months ended September 30, 2023, primarily related to no longer recording a valuation allowance on our deferred taxes coupled with permanent tax differences associated with non-deductible executive compensation.

For three months ended September 30, 2023, we recorded an income tax expense of $4.6 million primarily related to recording a valuation allowance on our deferred taxes.

Please read Note 18—Income Taxes for further discussion.

Six months ended June 30, 2024 compared to the six months ended June 30, 2023

For the six months ended June 30, 2024, revenues were $4.0 billion, a $0.5 billion increase compared to $3.5 billion for the six months ended June 30, 2023.

Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

For the nine months ended September 30, 2024, revenues were $6.1 billion, a $0.1 billion increase compared to $6.0 billion for the nine months ended September 30, 2023.

The increase was primarily due to an increase of $0.6 billion in the contribution from the Billings Acquisition, which closed on June 1, 2023.

When comparing our legacy refining operations, there were decreases of $0.2 billion in third-party revenues at our refining segment, $0.2 billion related to lower average crack spreads and $0.1 billion related to a 5% decrease in sales volumes primarily from our Hawaii and Washington refineries, partially offset by a $0.1 billion increase due to higher crude oil prices.

The RVO Adjusted USGC 3-2-1, RVO Adjusted Pacific Northwest 3-1-1-1, and 3-1-2 Singapore Crack Spread declined 19%, 15%, and 11%, respectively, compared to 2023.

Average WTI crude oil prices increased 5% and average Brent crude oil prices increased 4% as compared to the prior period.

Revenues at our retail segment increased $9.0 million primarily due to a 6% increase in fuel sales volumes and a $1.2 million increase in merchandise revenue, partially offset by a 3% decrease in fuel prices.

There was a decrease of $0.5 billion in third-party revenues when comparing our legacy refining operations, of which $0.4 billion was related to lower average crack spreads and $0.1 billion was related to a 3% decrease in sales volumes primarily at our Washington refinery.

The RVO Adjusted Pacific Northwest 3-1-1-1 index, RVO Adjusted USGC 3-2-1 index, and 3-1-2 Singapore Crack Spread declined 32%, 31%, and 28%, respectively, compared to 2023.

Please read our key operating statistics and our three months ended Cost of Revenues discussion above for further information regarding crack spread declines.

Revenues at our retail segment increased $0.7 million primarily due to a 4% increase in fuel sales volumes and a 6% increase in merchandise revenue, partially offset by a 5% decrease in fuel prices.

Cost of Revenues (Excluding Depreciation).

For the six months ended June 30, 2024, cost of revenues (excluding depreciation) was $3.5 billion, a $0.7 billion increase compared to $2.9 billion for the six months ended June 30, 2023, primarily driven by a $0.7 billion contribution from the Billings Acquisition.

For the nine months ended September 30, 2024, cost of revenues (excluding depreciation) was $5.4 billion, a $0.4 billion increase compared to $5.0 billion for the nine months ended September 30, 2023, primarily driven by a $0.6 billion contribution from the Billings Acquisition, partially offset by decreases in refining sales volumes and a decrease in intermediation costs related to two intermediation facilities terminated in 2023 and mid-year 2024, both discussed above.

Operating Expense (Excluding Depreciation).

For the six months ended June 30, 2024, operating expense (excluding depreciation) was $297.3 million, an increase of $112.3 million compared to $185.0 million for the six months ended June 30, 2023.

The increase was primarily driven by a $101.8 million increase in the contribution from the Billings Acquisition, coupled with $6.4 million of higher employee costs and a $4.8 million increase in outside services costs, partially offset by $1.9 million of lower utility and maintenance expenses.

For the nine months ended September 30, 2024, operating expense (excluding depreciation) was $444.4 million, an increase of $114.2 million compared to $330.1 million for the nine months ended September 30, 2023.

The increase was primarily driven by a $105.9 million increase in the contribution from the Billings Acquisition.

Depreciation and Amortization .

For the six months ended June 30, 2024, D&A was $64.8 million, an increase of $12.2 million compared to $52.6 million for the six months ended June 30, 2023.

The increase was primarily driven by $13.4 million of D&A attributable to the Billings Acquisition, partially offset by a $1.0 million decrease related to catalyst in Hawaii that was fully depreciated in 2023.

For the nine months ended September 30, 2024, D&A was $96.7 million, an increase of $8.8 million compared to $87.9 million for the nine months ended September 30, 2023.

The increase was primarily driven by $12.9 million of D&A attributable to the Billings Acquisition, partially offset by a $5.8 million decrease in D&A from our Hawaii Refinery reflecting fully depreciated assets in the second half of 2023 and the second quarter of 2024.

General and Administrative Expense (Excluding Depreciation).

For the six months ended June 30, 2024, general and administrative expense (excluding depreciation) was $64.9 million, an increase of $22.4 million compared to $42.5 million for the six months ended June 30, 2023.

The increase was primarily due to a $18.7 million increase in employee costs driven by $13.1 million of stock based compensation expenses related to CEO transition costs in the first quarter of 2024 and an increase

of $5.8 million in payroll expenses due to an increase in employee headcount, a $3.1 million increase in IT expenses, and $2.5 million of expenses related to development of our renewable projects.

For the nine months ended September 30, 2024, general and administrative expense (excluding depreciation) was $87.3 million, an increase of $21.2 million compared to $66.1 million for the nine months ended September 30, 2023.

The increase was primarily due to $13.1 million of stock based compensation expenses related to CEO transition costs in the first quarter of 2024 and a $4.0 million increase in payroll expenses, including an increase in employee headcount, a $3.5 million increase in IT expenses, and $2.8 million of expenses related to development of our renewable projects.

Equity earnings from refining and logistics investments.

For the six months ended June 30, 2024, equity earnings from refining and logistics investments were $9.8 million, an increase of $9.4 million compared to $0.4 million for the six months ended June 30, 2023.

For the six months ended June 30, 2024, our proportionate share of YELP’s net income and YPLC’s net income was $6.8 million and $3.7 million, respectively.

Our proportionate share of YPLC’s net income was $0.4 million for the six months ended June 30, 2023.

There were no equity earnings from YELP for the six months ended June 30, 2023.

For the nine months ended September 30, 2024, equity earnings from refining and logistics investments were $12.8 million, an increase of $8.4 million compared to $4.4 million for the nine months ended September 30, 2023.

For the nine months ended September 30, 2024, our proportionate share of YELP’s net income and YPLC’s net income was $8.2 million and $5.6 million, respectively.

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 six months ended June 30, 2024, we incurred an immaterial amount of acquisition and integration costs.

For the six months ended June 30, 2023, we incurred $12.5 million of acquisition and integration costs related to the Billings Acquisition, which closed on June 1, 2023.

During the nine months ended September 30, 2024, we incurred an immaterial amount of acquisition and integration costs.

For the nine months ended September 30, 2023, we incurred $17.2 million of acquisition and integration costs related to the Billings Acquisition, which closed on June 1, 2023.

Please read Note 5—Acquisitions for further information.

Par West redevelopment and other costs.

For the six months ended June 30, 2024, Par West redevelopment and other costs were $5.0 million, a decrease of $0.4 million compared to $5.4 million for the six months ended June 30, 2023, associated with the operation and decommissioning of our Par West facility.

The decrease was primarily due to a decrease in redevelopment activities.

For the nine months ended September 30, 2024, Par West redevelopment and other costs were $9.0 million, an increase of $0.5 million compared to $8.5 million for the nine months ended September 30, 2023, associated with the operation and decommissioning of our Par West facility.

The increase was primarily due to an increase in redevelopment activities.

Interest Expense and Financing Costs, Net .

For the six months ended June 30, 2024, our interest expense and financing costs were $38.3 million, an increase of $7.1 million compared to $31.2 million for the six months ended June 30, 2023.

The increase was primarily due to an $8.7 million increase in debt costs, mainly driven by higher interest expenses due to higher ABL Credit Facility balances in 2024 to fund certain inventory purchases at our Hawaii refinery and Washington refinery, and a $5.1 million decrease in interest income from our investment accounts opened in the first quarter of 2023, offset by a $6.7 million decrease in inventory financing costs, due to the termination of the Washington Refinery Intermediation Agreement in the fourth quarter of 2023, and termination of our Supply and Offtake Agreement in the second quarter of 2024.

For the nine months ended September 30, 2024, our interest expense and financing costs were $61.7 million, an increase of $9.7 million compared to $52.0 million for the nine months ended September 30, 2023.

The increase was primarily due to an $14.5 million increase in debt costs related to higher ABL Credit Facility balances in 2024 used to fund certain inventory purchases at our Hawaii and Washington refineries, and a $6.0 million decrease in interest income from our investment accounts opened in the first quarter of 2023, partially offset by an $11.6 million decrease in inventory financing costs incurred during the nine months ended September 30, 2023 related to inventory financing agreements that were terminated in the fourth quarter of 2023 and in the second quarter of 2024.

Please read Note 9—Inventory Financing Agreements and Note 11—Debt for further information.

Debt Extinguishment and Commitment Costs.

During the six months ended June 30, 2024, we incurred $1.4 million of debt extinguishment and commitment costs primarily related to the repricing of our Term Loan Credit Agreement, the termination of our LC Facility and the expiration of our Supply and Offtake Agreement in the second quarter of 2024.

For the six months ended June 30, 2023, we incurred debt extinguishment and commitment costs of $17.7 million in connection with the refinancing of our long-term debt in the first quarter of 2023.

During the nine months ended September 30, 2024, we incurred $1.4 million of debt extinguishment and commitment costs primarily related to the repricing of our Term Loan Credit Agreement, the termination of our LC Facility and the expiration of our Supply and Offtake Agreement in the second quarter of 2024.

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 9—Inventory Financing Agreements and Note 11—Debt for further information.

Other income (expense), net .

For the six months ended June 30, 2024, other expense was $2.7 million, a decrease of $3.0 million compared to $0.3 million of other income for the six months ended June 30, 2023.

For the nine months ended September 30, 2024, other expense was $1.4 million, a decrease of $1.7 million compared to $0.3 million of other income for the nine months ended September 30, 2023.

The decrease was primarily due to $1.5 million of 2024 legal expenses unrelated to operating activities with no similar 2023 expenses.

Equity Earnings from Laramie Energy, LLC.

For the six months ended June 30, 2024, Equity earnings from Laramie Energy, LLC were $3.2 million, a decrease of $7.5 million compared to $10.7 million for the six months ended June 30, 2023.

For the six months ended June 30, 2024, the accretion of basis difference was $3.2 million, partially offset by our proportionate share of Laramie Energy’s net loss which was immaterial.

For the nine months ended September 30, 2024, Equity earnings from Laramie Energy, LLC were $2.9 million, a decrease of $7.8 million compared to $10.7 million for the nine months ended September 30, 2023.

For the nine months ended September 30, 2024, the accretion of basis difference was $4.8 million, partially offset by our proportionate share of Laramie Energy’s net loss of $2.0 million.

On April 29, 2024, Laramie Energy made a one-time cash distribution to its owners, including us, based on ownership percentage.

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Our share of this distribution was $10.7 million.

There were no equity earnings from our investment in Laramie Energy, LLC for the six months ended June 30, 2023.

There were no equity earnings from our investment in Laramie Energy, LLC for the nine months ended September 30, 2023.

Please read Note 4 — Investment in Laramie Energy for further discussion.

Income Taxes.

For the six months ended June 30, 2024, income tax expense was $4.0 million, an increase of $1.9 million compared to $2.1 million for the six months ended June 30, 2023, primarily related to higher apportionment factors in the states in which we pay taxes.

For the six months ended June 30, 2023, we recorded an income tax expense of $2.1 million primarily related to recording a valuation allowance on our deferred taxes.

For the nine months ended September 30, 2024, income tax expense was $10.5 million, an increase of $3.8 million compared to $6.7 million for the nine months ended September 30, 2023, primarily related to no longer recording a valuation allowance on our deferred taxes coupled with permanent tax differences associated with non-deductible executive compensation.

For the nine months ended September 30, 2023, we recorded an income tax expense of $6.7 million primarily related to recording a valuation allowance on our deferred taxes.

Please read Note 18—Income Taxes for further discussion.

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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).

As of June 30, 2024

As of September 30, 2024

Parent Guarantor Par Borrower and Subsidiaries

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Stockholders’ equity

Preferred stock — — — —

Common stock 559 — — 559

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Total liabilities and stockholders’ equity $ 1,478,746 $ 3,610,241 $ (1,225,037) $ 3,863,950

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Parent Guarantor Par Borrower and Subsidiaries

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Adjusted EBITDA $ (7,210) $ 54,110 $ 4,528 $ 51,428

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Parent Guarantor Par Borrower and Subsidiaries

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Interest expense and financing costs, net (11) (20,895) 91 (20,815)

Debt extinguishment and commitment costs — 38 — 38

Other income (expense), net 19 (62) — (43)

Equity earnings (losses) from subsidiaries 181,120 — (181,120) —

Equity earnings (losses) from Laramie Energy, LLC — — — —

Total other income (expense), net 181,128 (20,957) (181,029) (20,858)

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Adjusted EBITDA $ (7,123) $ 257,413 $ 5,456 $ 255,746

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Depreciation and amortization 1,164 95,375 140 96,679

Impairment expense — — — —

General and administrative expense (excluding depreciation) 28,078 59,244 — 87,322

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Interest expense and financing costs, net (19) (61,966) 265 (61,720)

Interest income from subsidiaries — — — —

Debt extinguishment and commitment costs — (1,418) — (1,418)

Gain on curtailment of pension obligation — — — —

Other income (expense), net (24) (1,421) (2) (1,447)

Change in value of common stock warrants — — — —

Change in value of contingent consideration — — — —

Equity earnings (losses) from subsidiaries 51,658 — (51,658) —

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Adjusted EBITDA $ (20,748) $ 231,019 $ 17,456 $ 227,727

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income, on a historical basis for the periods indicated (in thousands):

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Parent Guarantor Par Borrower and Subsidiaries

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Environmental obligation mark-to-market adjustments — (4,432) — (4,432)

Unrealized loss on derivatives — 21,104 — 21,104

Unrealized loss (gain) on derivatives — (31,196) — (31,196)

Acquisition and integration costs — (23) — (23)

Par West redevelopment and other costs — 4,006 — 4,006

Debt extinguishment and commitment costs — 1,418 — 1,418

Severance costs and other non-operating expense (2)

(1,490) — — (1,490)

Loss (gain) on sale of assets, net

Equity losses from Laramie Energy, LLC, excluding cash distributions — — 336 336

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19 22,892 (85) 22,826

Laramie Energy, LLC cash distributions to Par

— — (1,485) (1,485)

Equity losses (income) from subsidiaries (13,663) — 13,663 —

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Adjusted EBITDA (1) $ (7,210) $ 54,110 $ 4,528 $ 51,428

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Parent Guarantor Par Borrower and Subsidiaries

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Environmental obligation mark-to-market adjustments — (50,153) — (50,153)

Unrealized loss on derivatives — 21,635 — 21,635

Unrealized loss (gain) on derivatives — (9,116) — (9,116)

Acquisition and integration costs — 4,669 — 4,669

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Severance costs and other non-operating expense (2)

476 594 — 1,070

Depreciation and amortization 404 34,861 46 35,311

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Adjusted EBITDA (1) $ (7,123) $ 257,413 $ 5,456 $ 255,746

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Adjusted EBITDA (1) $ (20,748) $ 231,019 $ 17,456 $ 227,727

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Parent Guarantor Issuer and Subsidiaries Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc.

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Environmental obligation mark-to-market adjustments — (174,111) — (174,111)

Unrealized loss on derivatives — 7,965 — 7,965

Unrealized loss (gain) on derivatives — (1,151) — (1,151)

Acquisition and integration costs — 17,213 — 17,213

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(1) Please read the Non-GAAP Performance Measures and Adjusted Net Income (Loss) and Adjusted EBITDA discussions above for information regarding the components of Adjusted Net Income (Loss) and Adjusted EBITDA.

(2) For the six months ended June 30, 2024, we incurred $13.1 million of stock-based compensation expenses associated with accelerated vesting of equity awards and modification of vested equity awards related to our CEO transition and $2.3 million for an estimated legal settlement unrelated to current operating activities.

(2) For the nine months ended September 30, 2024, we incurred $13.1 million of stock-based compensation expenses associated with accelerated vesting of equity awards and modification of vested equity awards related to our CEO transition and $2.3 million for an estimated legal settlement unrelated to current operating activities.

Liquidity and Capital Resources

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Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets.

Our liquidity position as of June 30, 2024 was $520.4 million, consisting of $179.7 million of cash and cash equivalents and $340.8 million of availability under the ABL Credit Facility.

As of June 30, 2024, we had access to the ABL Credit Facility and cash on hand of $179.7 million.

Our liquidity position as of September 30, 2024 was $632.5 million, consisting of $183.0 million of cash and cash equivalents and $449.5 million of availability under the ABL Credit Facility.

As of September 30, 2024, we had access to the ABL Credit Facility and cash on hand of $183.0 million.

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.

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The amounts involved may be material.

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 leverage ratio (as defined in the Term Loan Credit Agreement).

The following table summarizes cash activities for the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended June 30,

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 leverage ratio (as defined in the Term Loan Credit Agreement).

The following table summarizes cash activities for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

Net cash provided by operating activities $ 99,242 $ 581,445

Net cash used in investing activities (86,319) (631,752)

Net cash provided by (used in) financing activities (62,213) 13,812

Cash flows for the six months ended June 30, 2024

Net cash provided by operating activities for the six months ended June 30, 2024 was driven primarily b y net income of $14.9 million , non-cash charges to operations and non-operating items of approximately $153.2 million, and net cash used for changes in operating assets and liabilities of approximately $147.3 million.

Net cash used in financing activities (109,047) (79,039)

Cash flows for the nine months ended September 30, 2024

Net cash provided by operating activities for the nine months ended September 30, 2024 was driven primarily b y net income of $22.4 million , non-cash charges to operations and non-operating items of approximately $172.6 million, and net cash used for changes in operating assets and liabilities of approximately $95.7 million.

Non-cash charges to operations and non-operating items consisted primarily of the following adjustments:

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Net cash used for changes in operating assets and liabilities resulted primarily from:

• an $82.5 million decrease in Obligations under inventory financing agreements primarily related to the termination of the J.

Aron Supply and Offtake agreement and a decrease in crude oil prices,

• an increase in deferred turnaround expenditures of $57.8 million driven by expenditures related to the turnaround at the Montana refinery, and

• a $57.2 million increase in accounts receivable primarily related to the timing of collections and sales volumes,

• a $101.3 million increase in inventories primarily related to an increase in refined product, and

• an increase in deferred turnaround expenditures of $42.2 million driven by planned turnaround for our Montana refinery,

partially offset by:

• a $54.8 million decreases in prepaid and other expenses primarily related to advances to suppliers for crude purchases utilized in the first half of 2024, and a decrease in collateral for derivative instruments, and

• a net $52.0 million increase in our accounts payable, other accrued liabilities, and operating lease right-of-use assets and liabilities primarily driven by a $157.7 million increase in accounts payable partially offset by a $101.9 million decrease in environmental credit obligation liabilities.

Net cash used in investing activities for the six months ended June 30, 2024 consisted primarily of:

• a $72.7 million decrease in inventories primarily related to a $51.8 million decrease in crude oil and feedstock ending inventory, and

• a $24.8 million decreases in prepaid and other expenses.

Net cash used in investing activities for the nine months ended September 30, 2024 consisted primarily of:

• $87.9 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects

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• a $1.5 million cash distribution received from Laramie Energy in the second quarter of 2024.

Net cash used in financing activities was approximately $62.2 million for the six months ended June 30, 2024 and consisted primarily of the following activities:

Net cash used in financing activities was approximately $109.0 million for the nine months ended September 30, 2024 and consisted primarily of the following activities:

• payments of $547.6 million for changes in our deferred payment arrangement and the termination of our inventory financing agreement related to the expiration of our Supply and Offtake Agreement in the second quarter of 2024,

• net borrowings of debt of $392.8 million primarily driven by activity in our ABL Credit Facility,

• repurchases of common stock of $103.5 million during the first half of 2024, and

• deferred loan costs payments of $8.2 million related to the closing of the Inventory Intermediation Agreement, and the upsizing of the ABL Credit Facility,

• repurchases of common stock of $126.7 million, and

partially offset by:

• net borrowings of debt of $370.0 million primarily driven by activity in our ABL Credit Facility, and

• proceeds of $203.1 million received related to the step-in of the Inventory Intermediation Agreement in the second quarter of 2024.

Cash flows for the six months ended June 30, 2023

Net cash provided by operating activities for the six months ended June 30, 2023, was driven primarily by net income of $267.9 million, non-cash charges to operations and non-operating items of approximately $76.1 million, and net cash used for changes in operating assets and liabilities of approximately $31.8 million.

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 consisted primarily of the following adjustments:

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• debt commitment and extinguishment costs of $17.7 million,

• unrealized loss on derivatives contracts of $7.6 million, and

• stock based compensation costs of $9.0 million,

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• a gain of $10.7 million from our equity investment in Laramie Energy.

Net cash used for changes in operating assets and liabilities resulted primarily from:

• an increase in our accounts receivable due to the Billings Acquisition,

• a decrease in gross environmental credit obligations primarily related to retirements of a portion of our prior year obligations, partially offset by increase period obligations, and

• a decrease in our inventory financing agreement obligations,

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,

• an increase in our accounts payable primarily driven by the contribution of our Billings business, and

partially offset by:

• an increase in our accounts payable, and

• an increase in inventory driven by Washington CCA assets, partially offset by lower crude oil and refined product prices and lower inventory volumes at our Hawaii refinery.

Net cash used in investing activities for the six months ended June 30, 2023 consisted primarily of:

• an increase in our accounts receivable primarily driven by the contribution of 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 for the Billings Acquisition, and

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partially offset by:

• a $10.7 million cash distribution received from Laramie Energy, LLC in the first quarter of 2023.

Net cash provided by financing activities was approximately $13.8 million for the six months ended June 30, 2023 and consisted primarily of the following activities:

• net borrowings of debt of $61.3 million primarily driven by the refinancing and consolidation of our debt,

partially offset by:

• net repayment under the J.

• 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

• aggregate payments of $17.9 million of deferred loan costs and debt extinguishment costs related to our debt refinancing.

• 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 Requirements.

There have b een no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, outside the ordinary course of business except as follows:

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, 2023, outside the ordinary course of business except as follows:

Debt Refinancing.

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Critical Accounting Estimates

There have been no m aterial changes to critical accounting estimates disclosed in our Annual Report on Form 10-K for the six months ended June 30, 2024.

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, 2024.

Forward-Looking Statements

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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 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;

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our expectations regarding certain tax liabilities and debt obligations;

management’s assumptions about future events into our existing business, the anticipated synergies and other benefits of the recently acquired ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”), including renewable growth opportunities;

management’s assumptions about the impact of future events on our existing business, the anticipated synergies and other benefits of the recently acquired ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”), including renewable growth opportunities;

the anticipated financial and operating results of the Acquisition, and the effect on the Company’s cash flows and profitability (including Adjusted EBITDA and Adjusted Net Income);

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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 2. Management’s Discussion and Analysis