What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-02-29 · 399 added, 245 removed, 736 unchanged (47% of the section changed)

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Energy prices are, among other factors, indicators of inflation, and the U.S.

Federal Reserve (the “Fed”) has taken significant steps to curb inflation, and continued to increase interest rates in 2023, from near zero percent at the beginning of 2022 to a range of 5.25% to 5.5% in December 2023.

These actions by the Fed acted to lower U.S.

inflation rates, which have decreased 3.4% year over year as of the December inflation report released in January 2024.

In 2023, the U.S.

retail price for regular-grade gasoline averaged $3.52 per gallon, a decrease from gasoline price highs of approximately $5.01 per gallon in summer 2022.

This decline was due, in part, to lower crude oil prices in 2023 compared to 2022 and higher gasoline inventories in the second half of 2023.

The overall energy index decreased to negative 2.0% year over year as of December 2023.

Federal Reserve (the “Fed”) has taken significant steps to curb inflation.

After aggressively raising interest rates in 2022 and early 2023 to bring down inflation, the Fed cut interest rates in 2024 in response to positive indicators of economic growth, including easing labor market conditions and lower inflation.

Interest rates decreased to a range of 4.25% to 4.50% in December 2024 from 5.25% to 5.50% in December 2023.

Crude oil pricing decreased in 2024 compared to 2023.

Brent crude oil pricing averaged $79.86 per barrel in 2024 compared to $82.17 per barrel in 2023.

retail price for regular-grade gasoline averaged $3.30 per gallon in 2024 compared to $3.52 per gallon in 2023.

This decline was due, in part, to lower crude oil prices in 2024 compared to 2023, as noted above, as well as lower global demand primarily driven by decreased demand in China.

The International Energy Agency (“IEA”) revised its forecast in its February 2025 Oil Market Report, which projected higher global oil demand in 2025 citing China, India, and other emerging Asian economies as the primary sources of growth.

The overall energy index increased to 3.6% year over year as of December 2024.

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

If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases, or price increases could lead to a decline in demand for our products, which could have a material effect on our business, financial condition, or results of operations.

The COVID-19 Pandemic.

Subsequent to the pandemic, and various preventive and mitigating measures taken in response, refined product demand has largely returned to 2019 levels.

Despite global additions to refining capacity, the availability of refining capacity has not kept pace with demand, and global refinery utilization is above normal levels.

Consequently, refining product margins have been consistently above pre-pandemic margins since the spring of 2022.

Another pandemic event could cause a return to severe restrictions, leading to a deterioration of macroeconomic conditions and our industry.

For more information, please read “Item 1.

— Business — Markets” of this Form 10-K.

Geopolitical Conflicts.

Given the nature of our operations, including sourcing crude oil and feedstocks, geopolitical conflicts may affect our business and results of operations.

The Russia-Ukraine war, the Israel-Palestine conflict, Houthi attacks in the Red Sea, and Iranian activities in the Strait of Hormuz have all disrupted global trade patterns, increased crude oil price volatility, and increased freight costs and delivery times.

The Russia-Ukraine war, the Israel-Palestine conflict, Houthi attacks in the Red Sea, and Iranian activities in the Strait of Hormuz have all continued to disrupt global trade patterns, increase crude oil price volatility, and increase freight costs and delivery times.

The overall effect of these conflicts and actions taken to limit the purchase of Russian petroleum products in response to the Russia-Ukraine war have raised the operating costs of many European and other refineries.

We continue to actively monitor the impact of these and other global situations on our people, operations, financial condition, liquidity, suppliers, customers, and industry, and are actively responding to the impacts that these matters have on our business.

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— Risk Factors” for more information on risks and uncertainties, including those related to economic factors, and their potential impacts on our business.

For purposes of this section, “legacy portfolio” and “legacy refining operations” refer to our Hawaii, Wyoming, and Washington refineries, and exclude our Montana refinery acquired in June 2023.

Results of Operations

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Our financial results for the year ended December 31, 2023 improved from a net income of $364.2 million for the year ended December 31, 2022 to $728.6 million for the year ended December 31, 2023.

The increase was driven by a $274.3 million increase in refining segment operating income, an increase of $116.0 million in income tax benefit, and a $15.7 million increase in logistics segment operating income, partially offset by a $29.0 million increase in general and administrative expenses, a $13.8 million increase in acquisitions and integration expenses related to our Billings Acquisition,

and a $2.4 million increase in expenses related to Par West operations and redevelopment.

Net Income (Loss).

Our financial results for the year ended December 31, 2024, declined from a Net income of $728.6 million for the year ended December 31, 2023, to a Net loss of $33.3 million for the year ended December 31, 2024.

The decrease was driven by a $658.8 million decrease in refining segment Operating income, a $109.6 million decrease in Income tax benefit, a $25.3 million decrease in Equity earnings from Laramie Energy, LLC, and a $17.4 million increase in general and

administrative expenses, partially offset by a $19.7 million increase in logistics segment Operating income, a $17.5 million decrease in Debt extinguishment and commitment costs, and a $17.4 million decrease in Acquisition and integration costs related to our Billings Acquisition.

Please read the discussions of segment and consolidated results below for additional information.

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For the year ended December 31, 2024, Adjusted EBITDA was $238.7 million compared to $696.2 million for the year ended December 31, 2023.

The improvement was primarily related to an increase of $54.7 million in our refining segment, an increase of $22.3 million in our logistics segment, and an increase of $8.0 million in our retail segment, partially of fset by a decrease of $32.3 million in our corporate segment.

Please read the discussion of segment results below for additional information.

The decrease was primarily related to a $376.7 million decrease in our refining segment Adjusted Gross Margin and a $98.7 million increase in operating expenses, partially offset by increases of $14.6 million and $9.4 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 year ended December 31, 2024, Adjusted Net Income was $21.2 million compared to $501.2 million for the year ended December 31, 2023.

The improvement was primarily related to the same factors described above for the increase in Adjusted EBITDA partially offset by a $20.0 million increase in depreciation and amortization.

The decline was primarily related to the same factors described above for the decrease in Adjusted EBITDA, as well as a $12.0 million increase in interest expense and financing costs, excluding unrealized interest rate derivative losses (gains), an $11.8 million increase in Depreciation and amortization, and a $9.2 million decrease in 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 $13.3 million.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Net Income (Loss).

Our financial results for the year ended December 31, 2022 improved from a net loss of $81.3 million for the year ended December 31, 2021 to net income of $364.2 million for the year ended December 31, 2022.

The improvement was primarily driven by widened product crack spreads across all of our refineries and a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices.

These improvements were partially offset by unfavorable purchased product and crude oil differentials, unfavorable FIFO adjustments, increased intermediation fees of $79.0 million, and a $54.7 million increase in RINs expenses.

Other factors impacting our results period over period include a 2021 gain on sale of assets of $63.9 million related to the Hawaii sale-leaseback transactions with no such gain in 2022 and a 14% increase in operating expenses compared to 2021.

Adjusted EBITDA and Adjusted Net Income (Loss).

Our financial results for the year ended December 31, 2023, improved from a Net income of $364.2 million for the year ended December 31, 2022, to $728.6 million for the year ended December 31, 2023.

The increase was driven by a $274.3 million increase in refining segment Operating income, an increase of $116.0 million in Income tax benefit, and a $15.7 million increase in logistics segment Operating income, partially offset by a $29.0 million increase in general and administrative expenses, a $13.8 million increase in Acquisition and integration costs related to our Billings Acquisition, and a $2.4 million increase in expenses related to Par West redevelopment.

Please read the discussions of segment and consolidated results below for additional information.

Adjusted EBITDA and Adjusted Net Income.

For the year ended December 31, 2023, Adjusted EBITDA was $696.2 million compared to $643.4 million for the year ended December 31, 2022.

The improvement was primarily related to favorable realized refined product crack spreads at all our refineries, partially offset by unfavorable purchased product and crude oil differentials and unfavorable FIFO adjustments, unfavorable inventory financing and environmental compliance costs, and higher operating expenses compared to 2021.

For the year ended December 31, 2022, Adjusted Net Income was $474.7 million compared to an Adjusted Net Loss of $39.0 million for the year ended December 31, 2021.

The change was primarily related to the same factors described above for the increase in Adjusted EBITDA.

The improvement was primarily related to an increase of $54.7 million in our refining segment, an increase of $22.3 million in our logistics segment, and an increase of $8.0 million in our retail segment, partially offset by a decrease of $32.3 million in our corporate segment.

Please read the discussion of segment results below for additional information.

For the year ended December 31, 2023, Adjusted Net Income was $501.2 million compared to an Adjusted Net Income of $474.7 million for the year ended December 31, 2022.

The improvement was primarily related to the same factors described above for the increase in Adjusted EBITDA, partially offset by a $20.0 million increase in Depreciation and amortization.

The following table summarizes our consolidated results of operations for the years ended December 31, 2024, 2023, and 2022 (in thousands).

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Depreciation and amortization 131,590 119,830 99,769

Impairment expense — — 1,838

General and administrative expense (excluding depreciation) 108,844 91,447 62,396

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Par West redevelopment and other costs 12,548 11,397 9,003

Gain on sale of assets, net (59) (169) (64,697)

Loss (gain) on sale of assets, net 222 (59) (169)

Total operating expenses 7,926,829 7,551,949 6,883,882

Operating income (loss) 680,006 437,903 (7,619)

Operating income 47,628 680,006 437,903

Other income (expense)

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Debt extinguishment and commitment costs (1,688) (19,182) (5,329)

Gain on curtailment of pension obligation — — 2,032

Other income (expense), net (1,869) (53) 613

Equity earnings from Laramie Energy, LLC 24,985 — —

Equity earnings (losses) from Laramie Energy, LLC (296) 24,985 —

Total other expense, net (86,646) (66,700) (73,004)

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General and administrative expense (excluding depreciation) — — — 91,447 91,447

Equity earnings from refining and logistics investments

(7,363) (4,481) — — (11,844)

Acquisition and integration costs — — — 17,482 17,482

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Depreciation and amortization 65,472 20,579 10,971 2,747 99,769

Impairment expense 1,838 — — — 1,838

General and administrative expense (excluding depreciation) — — — 62,396 62,396

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Production costs per bbl ($/throughput bbl) (3)

12.42 10.78 —

D&A per bbl ($/throughput bbl) 1.83 1.45 —

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D&A per bbl ($/throughput bbl) 2.71 2.69 2.85

Market Indices (average $ per barrel)

3-1-2 Singapore Crack Spread (4)

Par Pacific Indices ($ per barrel)

Hawaii Index (4)

$ 7.21 $ 13.06 $ 19.21

RVO Adjusted Pacific Northwest 3-1-1-1 Index (5)

Montana Index (5)

14.39 23.71 26.84

RVO Adjusted USGC 3-2-1 Index (6)

Washington Index (6)

4.13 9.81 19.85

Crude Oil Prices (average $ per barrel)

Brent $ 82.17 $ 99.04 $ 70.95

WTI 77.60 94.33 68.11

Wyoming Index (7)

16.47 24.48 26.33

Bakken Clearbrook (7)

Market Cracks (average $ per barrel)

Singapore 3.1.2 Product Crack (4)

$ 13.36 $ 19.50 $ 25.43

WCS Hardisty (7)

Montana 6.3.2.1 Product Crack (5)

21.59 30.15 35.93

Washington 3.1.1.1 Product Crack (6)

12.11 17.91 29.58

Wyoming 2.1.1 Product Crack (7)

18.48 27.52 32.35

Crude Oil Prices (average $ per barrel) (8)

Brent $ 79.86 $ 82.17 $ 99.04

WTI 75.76 77.60 94.33

ANS (-) Brent 1.55 0.95 3.27

Bakken Guernsey (-) WTI (1.26) (0.65) 2.34

Bakken Williston (-) WTI (2.45) (0.09) 2.70

WCS Hardisty (-) WTI (13.90) (17.92) (19.14)

MSW (-) WTI (4.03) (3.70) (1.56)

Brent M1-M3 1.10 0.81 3.49

________________________________________________________

(1) 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 year ended December 31, 2024.

Feedstocks throughput and sales volumes per day for the Montana refinery for the year ended December 31, 2023, are calculated based on the 214-day period for which we owned the Montana refinery in 2023.

As such, the amounts for the total refining segment represent the sum of the Hawaii, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the year ended December 31, 2023, plus the Montana refinery’s throughput or sales volumes averaged over the period from June 1, 2023, to December 31, 2023.

The 2022 and 2021 amounts for the total refining segment represent the sum of the Hawaii, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the year ended December 31, 2022 and 2021.

The 2022 amounts for the total refining segment represent the sum of the Hawaii, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the year ended December 31, 2022.

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

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Adjusted Gross Margin for our other refineries is determined under the first-in, first-out (“FIFO”) inventory costing method.

The definition of Adjusted Gross Margin was modified beginning with the financial results reported for periods in

fiscal year 2022.

The definition of Adjusted Gross Margin was modified beginning with the financial results reported for periods in fiscal year 2022.

We have recast Adjusted Gross Margin for prior periods when reported to conform to the modified presentation.

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We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refineries, including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput.

Our production costs are included in Operating expense (excluding depreciation) on our consolidated statement of operations, which also includes costs related to our bulk marketing operations.

(4) We believe the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) is the most representative market indicator for our operations in Hawaii.

(5) We believe the RVO Adjusted Pacific Northwest 3-1-1-1 (or three barrels of WTI crude oil converted into one barrel of Pacific Northwest gasoline, one barrel of Pacific Northwest ULSD and one barrel of USGC VGO, less 100% of the RVO cost for gasoline and ULSD) is the most representative market indicator for our operations in Washington with improved historical correlations to our reported adjusted gross margin compared to prior reported indices.

(6) We believe the RVO Adjusted USGC 3-2-1 (or three barrels of WTI crude oil converted into two barrels of USGC gasoline and one barrel of USGC ULSD, less 100% of the RVO cost) is the most representative market indicator for our operations in Montana and Wyoming with improved historical correlations to our reported adjusted gross margin compared to prior reported indices.

(7) Crude pricing has been updated to reflect simple averages of outright prices during the relevant period.

Our production costs are included in Operating expense (excluding depreciation) on our consolidated statements of operations, which also includes costs related to our bulk marketing operations and severance costs.

(4) Beginning in 2025, we established the Hawaii Index as a new benchmark for our Hawaii operations.

We believe the Hawaii Index, which incorporates market cracks and landed crude differentials, better reflects the key drivers impacting our Hawaii refinery’s financial performance compared to prior reported market indices.

The Hawaii Index is calculated as the Singapore 3.1.2 Product Crack, or one part gasoline (RON 92) and two parts distillates (Sing Jet & Sing gasoil) as created from a barrel of Brent crude oil, less the Par Hawaii Refining, LLC (“PHR”) crude differential.

(5) Beginning in 2025, we established the Montana Index as a new benchmark for our Montana refinery.

We believe the Montana Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Montana refinery’s financial performance compared to prior reported market indices.

Beginning in 2025, market cracks have been updated to reflect local market product pricing, which better reflects our Montana refinery’s refined product sales price compared to prior reported market indices.

The Montana Index is calculated as the Montana 6.3.2.1 Product Crack less Montana crude costs, less other costs of sales, including inflation-adjusted product delivery costs, yield loss expense, taxes and tariffs, and product discounts.

The Montana 6.3.2.1 Product Crack is calculated by taking three parts gasoline (Billings E10 and Spokane E10), two parts distillate (Billings ULSD and Spokane ULSD), and one part asphalt (Rocky Mountain Rail Asphalt) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD.

Asphalt pricing is lagged by one month.

The Montana crude cost is calculated as 60% WCS differential to WTI, 20% MSW differential to WTI, and 20% Syncrude differential to WTI.

The Montana crude cost is lagged by three months and includes an inflation-adjusted crude delivery cost.

Other costs of sales and crude delivery costs are based on historical averages and management’s estimates.

(6) Beginning in 2025, we established the Washington Index as a new benchmark for our Washington refinery.

We believe the Washington Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Washington refinery’s financial performance compared to prior reported market indices.

Beginning in 2025, market cracks have been updated to reflect local market product pricing, which better reflects our Washington refinery’s refined product sales price compared to prior reported market indices.

The Washington Index is calculated as the Washington 3.1.1.1 Product Crack, less Washington crude costs, less other costs of sales, including inflation-adjusted product delivery costs, yield loss expense and state and local taxes.

The Washington 3.1.1.1 Product Crack is calculated by taking one part gasoline (Tacoma E10), one part distillate (Tacoma ULSD) and one part secondary products (USGC VGO and Rocky Mountain Rail Asphalt) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD.

Asphalt pricing is lagged by one month.

The Washington crude cost is calculated as 67% Bakken Williston differential to WTI and 33% WCS Hardisty differential to WTI.

The Washington crude cost is lagged by one month and includes an inflation-adjusted crude delivery cost.

Other costs of sales and crude delivery costs are based on historical averages and management’s estimates.

(7) Beginning in 2025, we established the Wyoming Index as a new benchmark for our Wyoming refinery.

We believe the Wyoming Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Wyoming refinery’s financial performance compared to prior

reported market indices.

Beginning in 2025, market cracks have also been updated to reflect local market product pricing, which better reflects our Wyoming refinery’s refined product sales price compared to prior reported market indices.

The Wyoming Index is calculated as the Wyoming 2.1.1 Product Crack, less Wyoming crude costs, less other cost of sales, including inflation adjusted product delivery costs and yield loss expense, based on historical averages and management’s estimates.

The Wyoming 2.1.1 Product Crack is calculated by taking one part gasoline (Rockies gasoline) and one part distillate (USGC ULSD and USGC Jet) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD.

The Wyoming crude cost is calculated as the Bakken Guernsey differential to WTI on a one-month lag.

(8) Beginning in 2025, crude oil prices have been updated and expanded to reflect regional differentials to Brent and WTI, which better reflect our refineries’ feedstock costs compared to prior crude oil pricing.

Below is a summary of key operating statistics for the retail segment for the years ended December 31, 2024, 2023, and 2022:

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Management uses certain financial measures to evaluate our operating performance that are considered non-GAAP financial measures.

The chief operating decision-maker (“CODM”) is the Chief Executive Officer (“CEO”), who uses certain non-GAAP financial measures and forecasts to allocate resources and evaluate our operating performance.

These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP.

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We believe Adjusted Gross Margin (as defined below) provides useful information to investors because it eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost and net realizable value adjustments to demonstrate the earnings potential of the business before other fixed and variable costs, which are reported separately in Operating expense (excluding depreciation) and Depreciation and amortization.

Management uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks.

We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure.

Beginning with financial results reported for periods in fiscal year 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude the mark-to-market losses (gains) associated with our net obligation related to the Washington Climate Commitment Act and Clean Fuel Standard, which became effective on January, 1, 2023.

Beginning with financial results reported for periods in fiscal year 2023, Adjusted Net Income (loss) and Adjusted EBITDA also exclude the redevelopment and other costs for our Par West facility, which was shut down in 2020.

This modification improves comparability between periods by excluding expenses incurred in connection with the strategic redevelopment of this non-operating facility.

We have recast Adjusted Net Income (Loss) and Adjusted EBITDA for prior periods when reported to conform to the modified presentation.

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.

Beginning with financial results reported for the fourth quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA excludes all hedge losses (gains) associated with our Washington ending inventory and LIFO layer increment impacts associated with our Washington inventory.

In addition, we have modified our environmental obligation mark-to-market adjustment to include only the mark-to-market losses (gains) associated with our net RINs liability and net obligation associated with the Washington Climate Commitment Act (“Washington CCA”) and Clean Fuel Standard.

Operating expense includes certain shared costs such as finance, accounting, tax, human resources, information technology, and legal costs that are not directly attributable to specific operating segments.

The criteria used to determine the allocation of these expenses generally reflect the time and resources required to provide the applicable service to other internal stakeholders.

Remaining expenses are included in the reconciliation of reportable segment Adjusted EBITDA to consolidated pre-tax income (loss) as unallocated corporate general and administrative expenses.

Management, including the CODM, 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 management and investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure.

Beginning with financial results reported for periods in fiscal year 2022, the inventory valuation adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in Hawaii.

This modification was made to better align Adjusted Net Income (Loss) and Adjusted EBITDA with the cash flow of the Hawaii refining business.

Beginning with financial results reported for the second quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA 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.

Beginning with financial results reported for the fourth quarter of 2023, Adjusted Gross Margin, Adjusted Net Income (Loss), and Adjusted EBITDA also exclude all hedge losses (gains) associated with our Washington ending inventory and LIFO layer increment impacts associated with our Washington inventory.

In addition, we have modified our environmental obligation mark-to-market adjustment to include only the mark-to-market losses (gains) associated with our net RINs liability and net

obligation associated with the Washington Climate Commitment Act (“Washington CCA”) and Clean Fuel Standard.

This modification was made as part of our change in how we estimate our environmental obligation liabilities.

Beginning with financial results reported for the fourth quarter of 2023, Adjusted Net Income (loss) excludes unrealized interest rate derivative losses (gains) and all Laramie Energy related impacts with the exception of cash distributions.

We have recast Adjusted Net Income (Loss) for prior periods when reported to conform to the modified presentation.

Please read Note 2—Summary of Significant Accounting Policies, Environmental Credits and Obligations section, for a discussion of the change in estimate.

Beginning with financial results reported for the first quarter of 2024, Adjusted Net Income (loss) also excludes other non-operating income and expenses.

This modification improves comparability between periods by excluding income and expenses resulting from non-operating activities.

Effective as of the fourth quarter of 2024, we have modified our definition of Adjusted Gross Margin, Adjusted Net Income (Loss) and Adjusted EBITDA to align the accounting treatment for deferred turnaround costs from our refining and logistics investments with our accounting policy.

Under this approach, we exclude our share of their turnaround expenses, which are recorded as period costs in their financial statements, and instead defer and amortize these costs on a straight-line basis over the period estimated until the next planned turnaround.

This modification enhances consistency and comparability across reporting periods.

Adjusted Gross Margin

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• depreciation and amortization (“D&A”);

• Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments;

• Par’s portion of interest, taxes, and D&A expense from refining and logistics investments;

• impairment expense;

• loss (gain) on sale of assets, net;

• Par's portion of accounting policy differences from refining and logistics investments;

• inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, hedge losses (gains) associated with our Washington ending inventory and intermediation obligation, purchase price allocation adjustments, and LIFO layer increment and decrement impacts associated with our Washington inventory);

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Depreciation and amortization 91,108 27,033 11,037

Par’s portion of interest, taxes, and depreciation expense from refining and logistics investments

Par’s portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments

2,493 3,651 —

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Environmental obligation mark-to-market adjustments (19,136) — —

Unrealized gain on derivatives (50,511) — —

Unrealized loss on derivatives 43,281 — —

Par's portion of accounting policy differences from refining and logistics investments 3,856 — —

Loss (gain) on sale of assets, net 8 124 (10)

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Depreciation and amortization 81,017 25,122 11,462

Par’s portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments 1,586 1,857 —

Inventory valuation adjustment 102,710 — —

Environmental obligation mark-to-market adjustments (189,783) — —

Unrealized loss on derivatives 9,336 — —

Par West redevelopment and other costs

Unrealized gain on derivatives (50,511) — —

Loss (gain) on sale of assets, net 219 — (308)

Adjusted Gross Margin (1) (2)

$ 995,011 $ 121,173 $ 155,282

Year ended December 31, 2022 Refining Logistics Retail

Operating income (loss) $ (88,799) $ 51,159 $ 81,249

Operating income $ 401,901 $ 54,049 $ 49,238

Operating expense (excluding depreciation) 236,989 14,988 81,229

Depreciation and amortization 65,472 20,579 10,971

Impairment expense 1,838 — —

Inventory valuation adjustment (15,712) — —

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Par West redevelopment and other costs

Gain on sale of assets, net (19,659) (19) (45,034)

Loss (gain) on sale of assets, net 1 (253) 56

Adjusted Gross Margin (1) (2)

$ 812,750 $ 89,363 $ 141,494

________________________________________

(1) For the years ended December 31, 2024, 2023, and 2022, there was no impairment expense.

(2) For the years ended December 31, 2023 and 2022, there was no impact in Operating Income from accounting policy differences at our refining and logistics investments.

Adjusted Net Income (Loss) and Adjusted EBITDA

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• changes in the value of contingent consideration and common stock warrants;

• severance costs;

• severance costs and other non-operating expense (income);

• (gain) loss on sale of assets;

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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;

• Par’s portion of accounting policy differences from refining and logistics investments.

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

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• cash distributions from Laramie Energy, LLC to Par;

• Par's portion of interest, taxes, and depreciation expense from refining and logistics investments;

• Par's portion of interest, taxes, and D&A expense from refining and logistics investments;

• income tax expense (benefit) excluding the increase in (release of) tax valuation allowance.

6 unchanged sentences

Unrealized loss (gain) on derivatives 42,485 (49,690) 9,336

(49,690) 9,336 (1,393)

Par West redevelopment and other costs

12,548 11,397 —

Acquisition and integration costs 100 17,482 3,663

1 unchanged sentence

Changes in valuation allowance and other deferred tax items (1) (3,315) (126,219) —

Severance costs 1,785 2,272 84

Impairment expense — — 1,838

Equity losses from Laramie Energy, LLC, excluding cash distributions

Gain on sale of assets, net (59) (169) (64,697)

Adjusted Net Income (Loss) (2) 501,168 474,668 (39,043)

Severance costs and other non-operating expenses (2)

14,802 1,785 2,272

Equity losses (earnings) from Laramie Energy, LLC, excluding cash distributions 1,781 (14,279) —

Par's portion of accounting policy differences from refining and logistics investments 3,856 — —

Loss (gain) on sale of assets, net 222 (59) (169)

Adjusted Net Income (2)(4) 21,219 501,168 474,668

Depreciation and amortization 131,590 119,830 99,769

2 unchanged sentences

Laramie Energy, LLC cash distributions to Par (1,485) (10,706) —

Par's portion of interest, taxes, and depreciation expense from refining and logistics investments 3,443 — —

Income tax expense 10,883 710 1,021

Par's portion of interest, taxes, depreciation and amortization expense from refining and logistics investments 6,144 3,443 —

Income tax expense (benefit) (2,381) 10,883 710

Adjusted EBITDA (3)

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________________________________________________________

(1) For the year ended December 31, 2023, recognized a non-cash deferred tax benefit of $126.2 million related to the release of a majority of the valuation allowance against our federal net deferred tax assets.

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

(2) For the years ended December 31, 2022 and 2021, there was no change in value of contingent consideration, change in value of common stock warrants, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference.

(1) For the years ended December 31, 2024 and 2023, we recognized a non-cash deferred tax benefit of $3.3 million and $126.2 million, respectively.

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

(2) For the year ended December 31, 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 $0.8 million f or a legal settlement unrelated to current operating activities.

(3) For the years ended December 31, 2024, 2023 and 2022, 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 2024.

(4) For the years ended December 31, 2023 and 2022, there was no impact in Net Income from accounting policy differences at our refining and logistics investments.

Adjusted EBITDA by Segment

Adjusted EBITDA by segment is defined as Operating income (loss) excluding:

• Environmental obligation mark-to-market adjustments (which represents the mark-to-market losses (gains) associated with our net RINs liability and net obligation associated with the Washington CCA and Clean Fuel Standard);

• unrealized (gain) loss on derivatives;

• acquisition and integration costs;

• redevelopment and other costs related to Par West;

• severance costs and other non-operating expense (income);

• (gain) loss on sale of assets;

• impairment expense;

• Par's portion of interest, taxes, and D&A expense from refining and logistics investments;

• Par's portion of accounting policy differences from refining and logistics investments.

Adjusted EBITDA by segment also includes Gain on curtailment of pension obligation and Other income (loss), net, which are presented below Operating income (loss) on our condensed consolidated statements of operations.

The following table presents a reconciliation of Adjusted EBITDA by segment to the most direct comparable GAAP financial measure, Operating income (loss) by segment, on a historical basis, for our operating segments, for the periods indicated (in thousands):

Year ended December 31, 2024 Refining Logistics Retail Corporate and Other

Operating income (loss) by segment $ 17,412 $ 89,351 $ 64,800 $ (123,935)

Depreciation and amortization 91,108 27,033 11,037 2,412

Inventory valuation adjustment (490) — — —

Environmental obligation mark-to-market adjustments (19,136) — — —

Unrealized loss on commodity derivatives 43,281 — — —

Acquisition and integration costs — — — 100

Severance costs and other non-operating expenses 642 — 154 14,006

Par West redevelopment and other costs — — — 12,548

Par's portion of accounting policy differences from refining and logistics investments 3,856 — — —

Loss (gain) on sale of assets, net 8 124 (10) 100

Par's portion of interest, taxes, depreciation and amortization expense from refining and logistics investments 2,493 3,651 — —

Other loss, net — — — (1,869)

Adjusted EBITDA (1) $ 139,174 $ 120,159 $ 75,981 $ (96,638)

Year ended December 31, 2023 Refining Logistics Retail Corporate and Other

Operating income (loss) by segment $ 676,161 $ 69,744 $ 56,603 $ (122,502)

Depreciation and amortization 81,017 25,122 11,462 2,229

Inventory valuation adjustment 102,710 — — —

Environmental obligation mark-to-market adjustments (189,783) — — —

Unrealized gain on commodity derivatives (50,511) — — —

Acquisition and integration costs — — — 17,482

Severance costs and other non-operating expenses 100 — 580 1,105

Par West redevelopment and other costs — — — 11,397

Loss (gain) on sale of assets, net 219 — (308) 30

Par's portion of interest, taxes, depreciation and amortization expense from refining and logistics investments 1,586 1,857 — —

Other loss, net — — — (53)

Adjusted EBITDA (1) (2)

$ 621,499 $ 96,723 $ 68,337 $ (90,312)

Year ended December 31, 2022 Refining Logistics Retail Corporate and Other

Operating income (loss) by segment $ 401,901 $ 54,049 $ 49,238 $ (67,285)

Depreciation and amortization 65,472 20,579 10,971 2,747

Inventory valuation adjustment (15,712) — — —

Environmental obligation mark-to-market adjustments 105,760 — — —

Unrealized loss on commodity derivatives 9,336 — — —

Acquisition and integration costs — — — 3,663

Severance costs and other non-operating expenses 40 13 22 2,197

Loss (gain) on sale of assets, net 1 (253) 56 27

Other income, net — — — 613

Adjusted EBITDA (1) (2)

$ 566,798 $ 74,388 $ 60,287 $ (58,038)

________________________________________________________

(1) For the years ended December 31, 2024, 2023, and 2022, 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 EBITDA made during 2024.

(2) For the years ended December 31, 2023 and 2022, there was no impact in Operating Income from accounting policy differences at our refining and logistics investments.

Discussion of Operating Income by Segment

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Operating income for our refining segment was $17.4 million for the year ended December 31, 2024, a decrease of $658.8 million compared to $676.2 million for the year ended December 31, 2023.

The decrease in Operating income was primarily driven by:

• a decrease of $532.5 million related to declining crack spreads at refineries in our legacy portfolio,

• a decrease of $134.7 million in environmental credit and related obligations income across refineries in our legacy portfolio, primarily associated with RIN settlement gains recorded in 2023 with no similar gains in 2024, and

• a decrease of $38.8 million driven by a 1% decrease in refined product sales volumes at our refineries in our legacy portfolio,

partially offset by:

• an increase of $58.3 million related to a favorable change in crude oil differentials at refineries in our legacy portfolio, and

• a favorable impact of $20.8 million related to our derivatives in Hawaii and Washington.

Operating income for our logistics segment was $89.4 million for the year ended December 31, 2024, an increase of $19.7 million compared to $69.7 million for the year ended December 31, 2023.

The increase was primarily due to a $16.2 million contribution from the Billings Acquisition logistics assets acquired in June 2023.

Excluding the contribution from the Billings Acquisition, the increase in operating income was driven by lower repair and maintenance costs of $3.4 million in our legacy portfolio .

Operating income for our retail segment was $64.8 million for the year ended December 31, 2024, an increase of $8.2 million compared to $56.6 million for the year ended December 31, 2023.

The increase in Operating income was primarily driven by an increase of $4.6 million related to higher fuel margins, $3.4 million related to higher merchandise sales, and $1.1 million reflecting higher fuel sales volumes, partially offset by $1.3 million of higher operating expenses driven by increases in employee costs during the year ended December 31, 2024, compared to the year ended December 31, 2023.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Operating income for our refining segment was $676.2 million for the year ended December 31, 2023, an improvement of $274.3 million compared to $401.9 million for the year ended December 31, 2022.

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• a decrease of $140.0 million in environmental credit and related obligations costs across our refineries in our legacy portfolio driven by favorable mark-to-market adjustments and a gain on retirement of prior year RINs,

• an increase of $106.0 million driven by a 6% increase in refined product sales volumes at our refineries in our legacy portfolio,

• an increase of $106.0 million driven by a 6% increase in refined product sales volumes at refineries in our legacy portfolio,

• a favorable change in step-out obligations related to our intermediation agreements of $79.5 million driven by changes in commodity prices,

2 unchanged sentences

• $37.0 million related to lower fuel burn costs at all our refineries, and

• an increase of $32.8 million related to a favorable change in crude oil differentials at our refineries in our legacy portfolio,

• an increase of $32.8 million related to a favorable change in crude oil differentials at refineries in our legacy portfolio,

partially offset by:

3 unchanged sentences

Operating income for our logistics segment was $69.7 million for the year ended December 31, 2023, an increase of $15.7 million compared to $54.0 million for the year ended December 31, 2022.

The increase is primarily due to an $8.5 million contribution from the Billings Acquisition logistics assets acquired in June 2023 and an $10.4 million increase in operating income driven by an increase in throughput volumes throughout our legacy logistics portfolio, partially offset by an increase in variable expenses of $5.5 million.

The increase is primarily due to an

$8.5 million contribution from the Billings Acquisition logistics assets acquired in June 2023 and a $10.4 million increase in Operating income driven by an increase in throughput volumes throughout our legacy logistics portfolio, partially offset by an increase in variable expenses of $5.5 million.

Operating income for our retail segment was $56.6 million for the year ended December 31, 2023, an increase of $7.4 million compared to Operating income of $49.2 million for the year ended December 31, 2022.

The increase in operating income was primarily driven by $10.6 million related to higher fuel sales volum es and $3.4 million associated with increased merchandise sales, partly offset by $6.3 million of higher operating expenses driven by i ncreases in employee costs and credit card fees in the year ended December 31, 2023 compared to the year ended December 31, 2022.

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Operating income for our refining segment was $401.9 million for the year ended December 31, 2022, an improvement of $490.7 million compared to an operating loss of $88.8 million for the year ended December 31, 2021.

The increase in profitability was primarily driven by widening product crack spreads across all our refineries, and a favorable change in the valuation of the embedded derivatives related to our intermediation agreements driven by changes in commodity prices, partially offset by unfavorable purchased product and crude differentials, unfavorable FIFO adjustments, higher inventory financing costs of $79.0 million, increased fuel burn costs related to higher crude oil costs as discussed below, increased RINs costs of $54.7 million, and unfavorable derivative costs.

Other factors impacting our results period over period include a 2021 gain on sale of assets of $19.7 million primarily related to the Sale-Leaseback Transactions we closed in the first quarter of 2021 and a 15% increase in operating expenses in 2022, primarily driven by increased utilities, maintenance, and employee costs.

Operating income for our logistics segment was $54.0 million for the year ended December 31, 2022, an increase of $2.8 million compared to operating income of $51.2 million for the year ended December 31, 2021.

The increase is primarily due to higher third party revenues partially offset by net 2% and 4% decreased throughput across our Hawaii and Wyoming logistics assets, respectively.

Operating income for our retail segment was $49.2 million for the year ended December 31, 2022, a decrease of $32.0 million compared to operating income of $81.2 million for the year ended December 31, 2021.

The decrease in profitability was primarily due to a gain on sale of assets of $45.0 million primarily related to the 2021 Hawaii sale-leaseback transactions we closed in the first quarter of 2021 with no such gain in 2022 and a 13% increase in operating expenses in the year ended December 31, 2022 primarily related to increased employee costs, higher credit card processing fees due to increased gasoline prices, rebranding fees in Hawaii, and higher rent expense related to the additional leases from our 2021 Hawaii sale-leaseback transactions, partially offset by a 31% increase in fuel margin.

The increase in Operating income was primarily driven by $10.6 million related to higher fuel sales volumes and $3.4 million associated with increased merchandise sales, partly offset by $6.3 million of higher operating expenses driven by increases in employee costs and credit card fees in the year ended December 31, 2023 compared to the year ended December 31, 2022.

Discussion of Adjusted Gross Margin by Segment

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

For the year ended December 31, 2023, our refining Adjusted Gross Margin was approximately $995.0 million, an increase of $182.2 million compared to $812.8 million for the year ended December 31, 2022.

The increase in profitability was primarily due to Adjusted Gross Margin contributed by the Montana refinery o f $246.1 million and 6.0% higher refined product sales margins across our legacy refining portfolio, partially offs et by $155.6 million higher environmental credit obligation costs, excluding the mark-to-market impacts, and lower crack spreads of $107.6 million .

• Adjusted Gross Margin for the Hawaii refinery improved by $1.26 per barrel from $13.99 per barrel during the year ended December 31, 2022, to $15.25 per barrel during the year ended December 31, 2023, primarily due to lower feedstock costs, a 6% increase in refined product sales volumes, a favorable change in realized derivatives, and higher yield, partially offset by $98.0 million higher purchased product costs and lower crack spreads.

The Singapore 3-1-2 index declined from $25.43 in the year ended December 31, 2022 to $19.50 during the year ended December 31, 2023.

• Adjusted Gross Margin for the Wyoming refinery decreased by $1.35 per barrel from $26.50 per barrel during the year ended December 31, 2022 to $25.15 per barrel during the year ended December 31, 2023.

The change is primarily due t o a 8% increase in refined product sales volumes, partially offset by lower crack spreads.

The RVO Adjusted USGC 3-2-1 index declined from $28.55 during the year ended December 31, 2022 to $22.87 in the year ended December 31, 2023.

• Adjusted Gross Margin for the Washington refinery decreased by $8.59 per barrel from $18.00 per barrel during the year ended December 31, 2022 to $9.41 per barrel during the year ended December 31, 2023, primarily due to higher environmental credit obligation expenses, declining crack spreads, and higher refined product delivery costs, partially offset by lower feedstock costs and 5% higher refined product sales volumes .

The RVO Adjusted Pacific Northwest 3-1-1-1 index declined from $35.27 in the year ended December 31, 2022 to $25.82 during the year ended December 31, 2023.

For the year ended December 31, 2024, our refining Adjusted Gross Margin was approximately $618.3 million, a decrease of $376.7 million compared to $995.0 million for the year ended December 31, 2023.

The decrease in profitability was primarily due to a decrease in Adjusted Gross Margin contributed by our legacy refining portfolio of $358.6 million reflecting lower crack spreads and a 1.3% decrease in refined product sales volumes, partially offset by favorable impacts from realized derivatives of $114.6 million, favorable changes in crude oil differentials at the refineries in our legacy portfolio, lower intermediation fees of $19.1 million and other factors as described below.

• Adjusted Gross Margin for the Hawaii refinery declined by $5.91 per barrel from $15.25 per barrel during the year ended December 31, 2023, to $9.34 per barrel during the year ended December 31, 2024.

The decrease was primarily due to lower crack spreads, partially offset by favorable changes in realized derivatives.

The Hawaii Index declined $5.85 per barrel, or 45%.

• Adjusted Gross Margin for the Washington refinery decreased by $6.16 per barrel from $9.41 per barrel during the year ended December 31, 2023, to $3.25 per barrel during the year ended December 31, 2024.

The decrease was primarily due to lower crack spreads and a 6% decrease in refined product sales volumes, partially offset by lower environmental costs, and favorable changes in crude oil differentials and realized derivatives.

The Washington Index declined $5.68 per barrel, or 58%.

• Adjusted Gross Margin for the Wyoming re finery decreased by $11.42 per barrel from $25.15 per barrel during the year ended December 31, 2023, to $13.73 per barrel during the year ende d December 31, 2024.

The decrease was primarily due t o lower crack spreads, partially offset by favorable changes in crude oil differentials.

The Wyoming Index declined $8.01 per barrel, or 33%.

• Adjusted Gross Margin for the Montana refinery decreased by $9.77 per barrel from $21.14 per barrel during December 31, 2023, to $11.37 per barrel during the year ende d December 31, 2024.

The decrease was primarily due t o lower crack spreads, partially offset by higher refined product sale volumes.

The Montana Index declined $9.32 per barrel, or 39%.

For the year ended December 31, 2024, our logistics Adjusted Gross Margin was approximately $135.8 million, an increase of $14.6 million compared to $121.2 million for the year ended December 31, 2023.

The increase was primarily due to Adjusted Gross Ma rgin of $23.8 million contributed from the Billings Acquisition logistics assets acquired in June 2023 and a 3% increase in throughput across our legacy assets, net of associated higher fees and variable expenses, and higher third-party revenue.

The increase was primarily due to a $14.7 million increased contribution from the Billings Acquisition logistics assets acquired in June 2023.

For the year ended December 31, 2024, our retail Adjusted Gross Margin was approximately $164.7 million, an increase of $9.4 million compared to $155.3 million for the year ended December 31, 2023.

The increase was primarily related to an 11% increase in sales volumes and a 33% increase in merchandise sales.

The increase was primarily related to a $4.1 million increase in fuel volumes and $3.5 million of increased merchandise margins.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

The increase in profitability was primarily driven by favorable realized product crack spreads across all our refineries partially offset by unfavorable purchased product costs, unfavorable FIFO adjustments, increased inventory financing costs of $79.0 million in Hawaii, unfavorable derivative costs, and increased costs related to fuel burn related to higher crude oil costs as discussed below.

• Adjusted Gross Margin for the Hawaii refinery improved from $4.56 per barrel in 2021 to $13.99 per barrel in 2022 primarily due to favorable product crack spreads, and a 1.7% increase in refined product sales volumes, partially offset by unfavorable purchased product and crude oil costs, unfavorable FIFO adjustments, a $78.8 million increase in intermediation fees driven primarily by $59.4 million higher market structure fees under the Supply and Offtake Agreement, increased fuel burn costs related to higher crude oil costs as discussed below, and unfavorable derivatives.

• Adjusted Gross Margin for the Washington refinery increased by $15.02 per barrel primarily due to favorable product crack spreads, partially offset by unfavorable feedstock costs and increased costs related to fuel burn.

• Adjusted Gross Margin for the Wyoming refinery increased by $12.03 per barrel primarily due to favorable product crack spreads, partially offset by unfavorable feedstock costs and increased RINs costs.

The increase in profitability was primarily due to Adjusted Gross Margin contributed by the Montana refinery of $246.1 million and 6.0% higher refined product sales margins across our legacy refining portfolio, partially offset by $155.6 million higher environmental credit obligation costs, excluding the mark-to-market impacts, and lower crack spreads of $107.6 million.

yield, partially offset by $98.0 million higher purchased product costs and lower crack spreads.

The Hawaii Index declined from $19.21 in the year ended December 31, 2022, to $13.06 during the year ended December 31, 2023.

• Adjusted Gross Margin for the Wyoming refinery decreased by $1.35 per barrel from $26.50 per barrel during the year ended December 31, 2022, to $25.15 per barrel during the year ended December 31, 2023.

The change is primarily due to an 8% increase in refined product sales volumes, partially offset by lower crack spreads.

The Wyoming Index declined from $26.33 in the year ended December 31, 2022, to $24.48 during the year ended December 31, 2023.

• Adjusted Gross Margin for the Washington refinery decreased by $8.59 per barrel from $18.00 per barrel during the year ended December 31, 2022, to $9.41 per barrel during the year ended December 31, 2023, primarily due to higher environmental credit obligation expenses, declining crack spreads, and higher refined product delivery costs, partially offset by lower feedstock costs and 5% higher refined product sales volumes.

The Washington Index declined from $19.85 in the year ended December 31, 2022, to $9.81 during the year ended December 31, 2023.

For the year ended December 31, 2023, our logistics Adjusted Gross Margin was approximately $121.2 million, an increase of $31.8 million compared to $89.4 million for the year ended December 31, 2022.

The increase was

primarily driven by higher third party revenues partially offset by net 2% and 4% decreased throughput across our Hawaii and Wyoming logistics assets, respectively.

The increase was primarily due to Adjusted Gross Margin of $23.8 million contributed from the Billings Acquisition logistics assets acquired in June 2023 and a 3% increase in throughput across our legacy assets, net of associated higher fees and variable expenses, and higher third-party revenue.

For the year ended December 31, 2023, our retail Adjusted Gross Margin was approximately $155.3 million, an increase of $13.8 million compared to $141.5 million for the year ended December 31, 2022.

The increase was primarily due to a 31% increase in fuel margins partially offset by a 3% decline in sales volumes.

The increase was primarily related to an 11% increase in sales volumes and a 33% increase in merchandise sales.

Discussion of Consolidated Results

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

For the year ended December 31, 2023, revenues were $8.2 billion, a $0.9 billion increase compared to $7.3 billion for the year ended December 31, 2022.

The Billings Acquisition contributed revenue s of $1.5 billion in the first seven months under our owne rship, partially offset by a decrease of $0.6 billion across our legacy refinery portfolio.

The decrease in our legacy refining revenue was primarily driven by a $0.8 billion decrease related to lower crude oil prices, partially offset by a 6% increase in sales volumes.

For the year ended December 31, 2024, revenues were $8.0 billion, a $0.2 billion decrease compared to $8.2 billion for the year ended December 31, 2023.

The decrease was primarily due to a $0.7 billion decrease in third-party revenues when comparing our legacy refining operations, of which $0.5 billion was related to lower average crack spreads, $0.1 billion was related to lower crude oil prices, and $0.1 billion was related to a 1% decrease in sales volumes.

This decrease was partially offset by an increase of $0.5 billion in contributions from the Billings Acquisition, which closed on June 1, 2023.

The Washington Index, Hawaii Index, Montana Index, and Wyoming Index declined 58%, 45%, 39%, and 33% respectively, compared to 2023.

Average Brent crude oil prices declined 3% and average WTI crude oil prices declined 2% as compared to the prior period.

Revenues at our retail segment increased $22.3 million primarily due to an 11% increase in sales volume and a 33% increase in merchandise sales, partially offset by an 8% decrease in fuel sales prices.

Revenues at our retail segment decreased $7.7 million primarily due to a 6% decrease in fuel sales prices, partially offset by a 3% increase in sales volumes and a 5% increase in merchandise sales.

Cost of Revenues (Excluding Depreciation).

For the year ended December 31, 2023, cost of revenues (excluding depreciation) was $6.8 billion, a $0.4 billion increase compared to $6.4 billion for the year ended December 31, 2022, inclusive of a $1.5 billion contribution from the Billings Acquisitio n.

There was a decrease of $1.0 billion of cost of revenues (excluding depreciation) across our legacy refining operations primarily due to decreases in crude oil prices as discussed above.

For the year ended December 31, 2024, cost of revenues (excluding depreciation) was $7.1 billion, a $0.3 billion increase compared to $6.8 billion for the year ended December 31, 2023, primarily driven by an additional $0.5 billion in contributions related to a full year of results from our Billings assets, partially offset by decreases in crude oil prices at our legacy refining locations as discussed above.

Operating Expense (Excluding Depreciation).

For the year ended December 31, 2023, operating expense (excluding depreciation) was approximately $485.6 million, an increase of $152.4 million compa red to $333.2 million for the year ended December 31, 2022.

$134.1 million of the increase was contributed by the Billings Acquisition.

Other factors that drove the increase include higher repair and maintenance and employee expenses.

For the year ended December 31, 2024, operating expense (excluding depreciation) was approximately $584.3 million, an increase of $98.7 million compared to $485.6 million for the year ended December 31, 2023.

The increase was primarily driven by a $96.2 million increase in expense from the Billings Acquisition.

Depreciation and Amortization .

For the year ended December 31, 2024, D&A expense was approximately $131.6 million, an increase of $11.8 million compared to $119.8 million for the year ended December 31, 2023.

The increase was primarily driven by the $21.7 million contribution from the Billings Acquisition.

The increase was primarily driven by $18.4 million of additional D&A attributable to the Billings Acquisition, partially offset by a $6.3 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 year ended December 31, 2024, General and administrative expense (excluding depreciation) was approximately $108.8 million, an increase of $17.4 million compared to $91.4 million for the year ended December 31, 2023.

The increase was prim arily due to a $12.1 million increase in employee costs, a $6.0 million increase in outside services, $5.8 million of expenses related to development of our renewable projects, and $3.9 million higher IT expenses.

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, $3.1 million higher Information Technology (“IT”) expenses, and a $2.1 million increase in employee costs.

Equity earnings from refining and logistics investments .

For the year ended December 31, 2023 , equity earnings from refining and logistics investments were $11.8 million.

As part of the Billings Acquisition, we acquired a 65% limited partnership ownership interest in YELP and a 40% ownership interest in YPLC.

For the year ended December 31, 2023, our proportionate share of YELP’s net income and YPLC’s net income was $8.1 million and $4.4 million, respectively.

For the year ended December 31, 2024, Equity earnings from refining and logistics investments were $11.9 million, which was relatively consistent with $11.8 million for the year

ended December 31, 2023.

Please read Note 3—Refining and Logistics Equity Investments to our consolidated financial statements under Item 8 of this Form 10-K for additional information.

Acquisition and integration costs.

For the year ended December 31, 2023 , we incurred $17.5 million of acquisition and integration costs related to the Billings Acquisition, compared to $3.7 million of acquisition and integration costs for the year ended December 31, 2022.

For the year ended December 31, 2024, we incurred an immaterial amount of Acquisition and integration costs.

For the year ended December 31, 2023, we incurred $17.5 million of Acquisition and integration costs related to the Billings Acquisition, which closed on June 1, 2023.

Please read Note 5—Acquisitions to our consolidated financial statements under Item 8 of this Form 10-K for more information.

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For the year ended December 31, 2024, Par West redevelopment and other costs were $12.5 million, an increase of $1.1 million compared to $11.4 million for the year ended December 31, 2023, associated with the operation and decommissioning of our Par West facility.

Increased redevelopment activity was the primary driver of the increase in costs.

Interest Expense and Financing Costs, Net .

For the year ended December 31, 2023, our interest expense and financing costs were approximately $72.5 million, an increase of $4.2 million compared to $68.3 million for the year ended December 31, 2022.

The increase was primarily due to higher outstanding debt balances and increased borrowings under our inventory financing agreements.

Please read Note 14—Debt and Note 12—Inventory Financing Agreements to our

consolidated financial statements under Item 8 of this Form 10-K for further discussion on our indebtedness and inventory financing, respectively.

For the year ended December 31, 2024, our Interest expense and financing costs, net were approximately $82.8 million, an increase of $10.3 million compared to $72.5 million for the year ended December 31, 2023.

$15.8 million of the increase in interest expense and financing costs, primarily related to higher ABL Credit Facility and Term Loan B Facility balances in 2024, and a $7.1 million decrease in interest income from our investment accounts.

This activity was offset by a $12.8 million net decrease in inventory financing costs related to the refinancing of our inventory financing agreements in 2023 and 2024.

Please read Note 14—Debt and Note 12—Inventory Financing Agreements to our consolidated financial statements under Item 8 of this Form 10-K for further discussion on our indebtedness and inventory financing, respectively.

Debt extinguishment and commitment costs.

For the year ended December 31, 2023, our debt extinguishment and commitment costs wer e approximately $19.2 million in connection with the refinancing of our long-term debt in the first quarter of 2023 and the termination of the Washington Refinery Intermediation Agreement in the fourth quarter of 2023.

For the year ended December 31, 2022, our debt extinguishment and commitment costs were approximately $5.3 million and prim arily represented extinguishment costs associated with the repurchase and cancellation of an additional $36.9 million of 12.875% Senior Secured Notes in the second quarter of 2022.

For the year ended December 31, 2024, our Debt extinguishment and commitment costs wer e approximately $1.7 million in connection 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 year ended December 31, 2023, our Debt extinguishment and commitment costs were approximately $19.2 million in connection with the refinancing of our long-term debt in the first quarter of 2023 and the termination of the Washington Refinery Intermediation Agreement in the fourth quarter of 2023.

Please read Note 14—Debt to our consolidated financial statements under Item 8 of this Form 10-K for further discussion.

Equity Earnings from Laramie Energy, LLC.

For the year ended December 31, 2023, equity earnings from Laramie Energy, LLC were $25.0 million .

Other expense, net .

For the year ended December 31, 2024, Other expense, net was $1.9 million, an increase of $1.8 million compared to $0.1 million for the year ended December 31, 2023.

2024 activity was primarily due to $0.8 million of 2024 legal expenses unrelated to operating activities with no similar 2023 activity.

Equity earnings (losses) from Laramie Energy, LLC.

For the year ended December 31, 2024, equity losses from Laramie Energy, LLC were $0.3 million, a decrease of $25.3 million compared to $25.0 million of equity earnings for the year ended December 31, 2023.

For the year ended December 31, 2024, our proportionate share of Laramie Energy’s net loss was $6.8 million, partially offset by $6.5 million of accretion of the basis difference.

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

Our share of this distribution was $1.5 million.

For the year ended December 31, 2023, our proportionate share of Laramie Energy’s net income was $19.5 million, and the accretion of basis was $5.5 million.

On March 1, 2023, following a refinancing of certain debt, Laramie Energy, LLC was permitted to make a one-time cash distribution to its owners based on ownership percentage.

Our share of this distribution was $10.7 million.

Effective February 21, 2023, we resumed the application of equity method accounting with respect to our investment in Laramie Energy.

In the fourth quarter of 2023 and due to Laramie Energy, LLC’s positive financial results, our share of net income from our investment in Laramie Energy exceeded our share of net losses recorded during the period that equity method accounting was suspended and we recorded equity earnings of $14.3 million.

There were no equity earnings from our investment in Laramie Energy, LLC, for the year ended December 31, 2022.

Please read Note 4—Investment in Laramie Energy to our consolidated financial statements under Item 8 of this Form 10-K for more information.

Income Taxes.

For the year ended December 31, 2023, we recorded an income tax benefit of $115.3 million primarily related to the release of the federal tax valuation allowance in the fourth quarter of 2024, partially offset by deferred tax expense from net operating loss utilization and state tax expense.

For the year ended December 31, 2022, we recorded an income tax expense of $0.7 million primarily driven by an increase in state taxable income.

For the year ended December 31, 2024, we recorded an income tax benefit of $5.7 million primarily due to a $5.5 million non-cash deferred tax benefit driven by our 2024 pre-tax losses.

Please read Note 22—Income Taxes to our consolidated financial statements under Item 8 of this Form 10-K for more information.

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For the year ended December 31, 2023, Revenues were $8.2 billion, a $0.9 billion increase compared to $7.3 billion for the year ended December 31, 2022.

The increase was primarily the result of an increase of $2.5 billion in third-party revenues at our refining segment primarily as a result of increases in Brent and WTI crude oil prices.

Brent crude oil prices rose to $99.04 per barrel for the year ended December 31, 2022 compared to $70.95 per barrel for the year ended December 31, 2021, and WTI crude oil prices averaged $94.33 per barrel during the year ended December 31, 2022 compared to $68.11 per barrel in the year ended December 31, 2021.

Other factors contributing to the increase in revenues at our refining segment include improved realized product crack spreads across all our refineries.

Revenues at our retail segment increased $113.8 million primarily due to a 36% increase in fuel prices slightly offset by a 3% decline in sales volume.

The Billings Acquisition contributed revenues of $1.5 billion in the first seven months under our ownership, partially offset by a decrease of $0.6 billion across our legacy refinery portfolio.

The decrease in our legacy refining revenue was primarily driven by a $0.8 billion decrease related to lower crude oil prices, partially offset by a 6% increase in sales volumes.

Average Brent crude oil prices declined 17% and average WTI crude oil

prices declined 18% as compared to the prior period.

Cost of Revenues (Excluding Depreciation).

For the year ended December 31, 2022, cost of revenues (excluding depreciation) was $6.4 billion, a $2.1 billion increase compared to $4.3 billion for the year ended December 31, 2021.

The increase was primarily due to increases in Brent and WTI crude oil prices as discussed above, unfavorable purchased products, higher feedstock costs, and higher inventory financing costs.

These increases were partially offset by a favorable change in the valuation of the embedded derivatives related to our inventory financing agreements driven by changes in commodity prices.

For the year ended December 31, 2023, Cost of revenues (excluding depreciation) was $6.8 billion, a $0.4 billion increase compared to $6.4 billion for the year ended December 31, 2022, inclusive of a $1.5 billion contribution from the Billings Acquisition.

There was a decrease of $1.0 billion of Cost of revenues (excluding depreciation) across our legacy refining operations primarily due to decreases in crude oil prices as discussed above.

Operating Expense (Excluding Depreciation).

For the year ended December 31, 2023, Operating expense (excluding depreciation) was approximately $485.6 million, an increase of $152.4 million compared to $333.2 million for the year ended December 31, 2022.

The increase was primarily due to higher utilities expenses, maintenance expenses at our Hawaii refinery and increased employee costs.

Other factors contributing to the increase include higher outside services expenses.

$134.1 million of the increase was contributed by the Billings Acquisition.

Other factors that drove the increase include higher repair and maintenance and employee expenses.

Depreciation and Amortization .

For the year ended December 31, 2023, D&A expense was approximately $119.8 million, an increase of $20.0 million compared to $99.8 million for the year ended December 31, 2022.

The increase was primarily due to amortization of our Washington refinery turnaround completed in 2022.

Impairment Expense.

During the year ended December 31, 2021, we recorded goodwill and asset impairment charges totaling $1.8 million primarily related to discontinued capital projects.

Please read Note 9—Property, Plant, and Equipment and Impairment of Long-Lived Assets to our consolidated financial statements under Item 8 of this Form 10-K for further discussion on our 2021 asset impairment charges.

There were no impairment charges during the year ended December 31, 2022.

Gain on Sale of Assets, Net.

For the year ended December 31, 2022, there was a $0.2 million gain on sale of assets, net, which resulted primarily from the sale of equipment.

For the year ended December 31, 2021, the gain on sale of assets, net was approximately $64.7 million and primarily related to the gain recognized as a result of the Sale-Leaseback Transactions we closed in the first quarter of 2021.

Please read Note 17—Leases to our consolidated financial statements under Item 8 of this Form 10-K for further discussion on the Sale-Leaseback Transactions.

The increase was primarily driven by the $21.7 million contribution from the Billings Acquisition.

General and Administrative Expense (Excluding Depreciation).

For the year ended December 31, 2023, General and administrative expense (excluding depreciation) was approximately $91.4 million, an increase of $29.0 million compared to $62.4 million for the year ended December 31, 2022.

The increase was primarily due to higher employee costs and an increase in the use of outside services.

The increase was primarily due to a $12.1 million increase in employee costs, a $6.0 million increase in outside services, $5.8 million of expenses related to development of our renewable projects, and $3.9 million higher IT expenses.

Equity earnings from refining and logistics investments.

For the year ended December 31, 2023, Equity earnings from refining and logistics investments were $11.8 million.

As part of the Billings Acquisition, we acquired a 65% limited partnership ownership interest in YELP and a 40% ownership interest in YPLC.

For the year ended December 31, 2023, our proportionate share of YELP’s net income and YPLC’s net income was $8.1 million and $4.4 million, respectively.

Please read Note 3—Refining and Logistics Equity Investments to our consolidated financial statements under Item 8 of this Form 10-K for additional information.

Acquisition and Integration Costs.

For the year ended December 31, 2022, we incurred approximately $3.7 million of acquisition and integration costs primarily related to costs incurred for the pending Billings Acquisition.

For the year ended December 31, 2021, we incurred an immaterial amount of acquisition and integration costs.

For the year ended December 31, 2023, we incurred approximately $17.5 million of Acquisition and integration costs primarily related to the Billings Acquisition, compared to $3.7 million of Acquisition and integration costs for the year ended December 31, 2022.

Please read Note 5—Acquisitions to our consolidated financial statements under Item 8 of this Form 10-K for more information.

Par West redevelopment and other costs.

For the year ended December 31, 2023, Par West redevelopment and other costs were $11.4 million, an increase of $2.4 million compared to $9.0 million for the year ended December 31, 2022, associated with the operation and decommissioning of our Par West facility.

Interest Expense and Financing Costs, Net .

For the year ended December 31, 2022, our interest expense and financing costs were approximately $68.3 million, an increase of $1.8 million compared to $66.5 million for the year ended December 31, 2021.

The increase was primarily due to an increase of $7.4 million related to increased borrowings under our inventory financing agreements and increased rates on our Term Loan B Facility.

These increases were partially offset by lower outstanding debt balances driven by the maturity of our outstanding 5.00% Convertible Senior Notes in June 2021, the repayment of the PHL, Mid Pac, and Retail Property Term Loans and interest rate swap related to the Retail Property Term Loan in the first quarter of 2021, and reduced interest on our 12.875% Senior Secured Notes driven by early repayment of these notes.

For the year ended December 31, 2023, our Interest expense and financing costs, net were approximately $72.5 million, an increase of $4.2 million compared to $68.3 million for the year ended December 31, 2022.

The increase was primarily due to higher outstanding debt balances and increased borrowings under our inventory financing agreements.

Please read Note 12—Inventory Financing Agreements and Note 14—Debt to our consolidated financial statements under Item 8 of this Form 10-K for further discussion on our inventory financing and indebtedness, respectively.

Debt extinguishment and commitment costs.

For the year ended December 31, 2022, our Debt extinguishment and commitment costs were approximately $5.3 million and primarily represented extinguishment costs associated with the repurchase and cancellation of an additional $36.9 million of 12.875% Senior Secured Notes in the second quarter of 2022.

For the year ended December 31, 2021, our debt extinguishment and commitment costs were approximately primarily $8.1 million and primarily represented $6.6 million in extinguishment costs associated with the redemption of $36.8 million of 12.875% Senior Secured Notes in June 2021 and $1.4 million in extinguishment costs associated with the early repayment of the Retail Property Term Loan on February 23, 2021.

Please read Note 14—Debt to our consolidated financial statements under Item 8 of this Form 10-K for further discussion.

Gain on curtailment of pension obligation.

During the year ended December 31, 2021, we recorded a gain on curtailment of pension obligation of $2.0 million related to the amendment to the Wyoming Refining defined benefit plan.

Please read Note 20—Benefit Plans to our consolidated financial statements under Item 8 of this Form 10-K for further discussion on the gain on curtailment of pension obligation.

There was no gain on curtailment of pension obligation for the year ended December 31, 2022.

Equity Earnings from Laramie Energy, LLC.

For the year ended December 31, 2023, Equity earnings from Laramie Energy, LLC were $25.0 million.

On March 1, 2023, following a refinancing of certain debt, Laramie Energy, LLC was permitted to make a one-time cash distribution to its owners based on ownership percentage.

Our share of this distribution was $10.7 million.

Effective February 21, 2023, we resumed the application of equity method accounting with respect to our investment in Laramie Energy.

equity method accounting was suspended, and we recorded equity earnings of $14.3 million.

There were no equity earnings from our investment in Laramie Energy, LLC, for the year ended December 31, 2022.

Please read Note 4—Investment in Laramie Energy to our consolidated financial statements under Item 8 of this Form 10-K for more information.

Income Taxes.

For the year ended December 31, 2022, we recorded an income tax expense of $0.7 million primarily driven by an increase in state taxable income.

For the year ended December 31, 2021, we recorded an income tax expense of $1.0 million primarily driven by foreign withholding taxes.

For the year ended December 31, 2023, we recorded an Income tax benefit of $115.3 million primarily related to the release of the federal tax valuation allowance in the fourth quarter of 2023, partially offset by state taxes.

For the year ended December 31, 2022, we recorded an Income tax expense of $0.7 million primarily driven by an increase in state taxable income and recording a valuation allowance against our net deferred tax assets.

Condensed Consolidating Financial Information

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The Term Loan Credit Agreement proceeds were used to refinance our existing Term Loan B and repurchase our outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, all three of which had similar guarantees that were replaced by those on the Term Loan Credit Agreement.

The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Borrower and its consolidated subsidiaries’ accounts (which are all guarantors of the Term Loan Credit Agreement), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the Term Loan Credit Agreement and consolidating

adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated.

For purposes of the following condensed consolidating information, the Parent’s investment in its subsidiaries is accounted for under the equity method of accounting (dollar amounts in thousands).

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Operating lease right-of-use (“ROU”) assets 7,005 339,449 — 346,454

Refining and logistics equity investments — — 87,486 87,486

Investment in Laramie Energy, LLC — — 14,279 14,279

Investment in subsidiaries 1,070,518 — (1,070,518) —

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Equity earnings (losses) from subsidiaries 1,975 — (1,975) —

Equity earnings from Laramie Energy, LLC — — 24,985 24,985

Equity earnings (losses) from Laramie Energy, LLC — — (296) (296)

Total other income (expense), net 1,904 (86,632) (1,918) (86,646)

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General and administrative expense (excluding depreciation) 29,258 62,189 — 91,447

Equity earnings from refining and logistics investments

— — (11,844) (11,844)

Acquisition and integration costs (2)

— 17,482 — 17,482

Par West redevelopment and other costs

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Equity earnings (losses) from subsidiaries 759,528 — (759,528) —

Equity earnings (losses) from Laramie Energy, LLC — — 24,985 24,985

Total other income (expense), net 759,548 (92,068) (734,180) (66,700)

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Depreciation and amortization 2,131 97,448 190 99,769

Impairment expense — 1,838 — 1,838

General and administrative expense (excluding depreciation) 17,882 44,514 — 62,396

Acquisition and integration costs

3,396 267 — 3,663

Par West redevelopment and other costs

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Debt extinguishment and commitment costs — (5,329) — (5,329)

Gain on curtailment of pension obligation — 2,032 — 2,032

Other income (expense), net (20) 634 (1) 613

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The Non-Guarantor Subsidiaries and Eliminations column includes tax benefits recognized at the Par consolidated level that are primarily associated with changes to the consolidated valuation allowance and other deferred tax balances.

(2) The acquisition and integration expense related to the Billings Acquisition was pushed down from the Parent Guarantor to the Issuer and Subsidiaries upon consummation of the transaction.

Non-GAAP Financial Measures

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Inventory valuation adjustment

— (490) — (490)

Environmental obligation mark-to-market adjustments — (19,136) — (19,136)

Unrealized loss (gain) on derivatives — (49,690) — (49,690)

Unrealized loss on derivatives — 42,485 — 42,485

Par West redevelopment and other costs — 12,548 — 12,548

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Debt extinguishment and commitment costs — 1,688 — 1,688

Severance costs 492 1,293 — 1,785

Severance costs and other non-operating expense (2)

7,354 7,448 — 14,802

Equity losses from Laramie Energy, LLC, excluding cash distributions — — 1,781 1,781

Par's portion of accounting policy differences from refining and logistics investments 3,856 3,856

Loss (gain) on sale of assets, net 100 122 — 222

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Laramie Energy, LLC cash distributions to Par — — (1,485) (1,485)

Par's portion of interest, taxes, and depreciation expense from refining and logistics investments — — 3,443 3,443

Par's portion of interest, taxes, depreciation and amortization expense from refining and logistics investments — — 6,144 6,144

Equity losses (income) from subsidiaries (1,975) — 1,975 —

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Environmental obligation mark-to-market adjustments — (189,783) — (189,783)

Unrealized loss on derivatives — 9,336 — 9,336

Unrealized gain on derivatives — (49,690) — (49,690)

Par West redevelopment and other costs

— 11,397 — 11,397

Acquisition and integration costs — 17,482 — 17,482

Debt extinguishment and commitment costs — 19,182 — 19,182

Severance costs 351 1,921 — 2,272

Severance costs and other non-operating expense

492 1,293 — 1,785

Equity earnings from Laramie Energy, LLC, excluding cash distributions

— — (14,279) (14,279)

Loss (gain) on sale of assets, net 30 (89) — (59)

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24 71,968 (363) 71,629

Laramie Energy, LLC cash distributions to Par

— — (10,706) (10,706)

Par's portion of interest, taxes, depreciation and amortization expense from refining and logistics investments — — 3,443 3,443

Equity losses (income) from subsidiaries (759,528) — 759,528 —

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Environmental obligation mark-to-market adjustments — 105,760 — 105,760

Unrealized gain on derivatives — (1,393) — (1,393)

Unrealized loss on derivatives — 9,336 — 9,336

Acquisition and integration costs 3,396 267 — 3,663

Debt extinguishment and commitment costs — 5,329 — 5,329

Severance costs — 84 — 84

Impairment expense — 1,838 — 1,838

Severance costs and other non-operating expense

351 1,921 — 2,272

Loss (gain) on sale of assets, net 27 (196) — (169)

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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.

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 December 31, 2023 was $644.5 million that consisted of $279.1 million of cash and cash equivalents, $355.0 million of availability under the ABL Credit Facility, and $10.4 million of availability under the J.

Aron Discretionary Draw Facility.

In addition, we had the ability to issue letters of credit of up to $107 million under our LC Facility.

As of December 31, 2023, we had access to the ABL Credit Facility, the LC Facility, the J.

Aron Discretionary Draw Facility, and cash on hand of $279.1 million.

In addition, we have the Supply and Offtake Agreement, which is used to finance the majority of the inventory at our Hawaii refinery.

Our liquidity position as of December 31, 2024, was $613.7 million that consisted of $191.9 million of cash and cash equivalents and $421.8 million of availability under the ABL Credit Facility.

Generally, the primary uses of our capital resources have been in the operations of our refining and retail segments, for payments related to acquisitions, and to repay or refinance indebtedness.

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Significant Developments

In the first quarter of 2021, we closed on the sale and leaseback of twenty-two (22) of our retail properties in Hawaii for an aggregate cash purchase price of approximately $112.8 million net of transaction fees (the “Sale-Leaseback Transactions”).

We used approximately $53.1 million of the net cash proceeds to repay the certain financing arrangements which were related to certain of the retail properties and the remainder for general corporate purposes.

Please read Note 17—Leases to our consolidated financial statements under Item 8 of this Form 10-K for additional discussion on the Sale-Leaseback Transactions.

On March 19, 2021, we sold 5.75 million shares of common stock in an underwritten public offering at a public offering price of $16.00 per share, resulting in net proceeds of approximately $87.2 million (the “Equity Offering”), after deducting underwriting discounts and commissions and offering expenses.

We used the net proceeds from the Equity Offering to repay the remaining $48.7 million in aggregate principal amount of 5.00% Convertible Senior Notes at maturity in June 2021 and $36.8 million in aggregate principal amount of 12.875% Senior Secured Notes, and the remainder for other general corporate purposes, including capital expenditures, and funding working capital.

Please read Note 19—Stockholders’ Equity to our consolidated financial statements under Item 8 of this Form 10-K for additional discussion on the Equity Offering.

On April 26, 2023, we terminated the prior ABL Credit Facility and entered into a new ABL Credit Facility.

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On October 4, 2023, we entered into the Second Amendment to the ABL Credit Facility and terminated the Washington Refinery Intermediation Agreement.

On March 22, 2024, we amended our asset-based loan to permit expanding its capacity from $900 million to $1.4 billion as we planned for the refinancing of our Supply and Offtake Agreement.

On May 31, 2024, our Supply and Offtake Agreement with J.Aron expired and we entered into an Inventory Intermediation Agreement with Citi and a Joinder Agreement as a borrower to the ABL Credit Facility.

We also early terminated our LC Facility.

On November 25, 2024, we amended the Term Loan Credit Agreement to increase the size of the term loan from $550.0 million to $650.0 million.

During the years ended December 31, 2024, 2023, and 2022, we had significant activity related to our inventory financing and debt agreements.

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

On February 21, 2025, the Board authorized and approved a share repurchase program authorizing the repurchase of up to $250 million of common stock, with no specified end date.

This repurchase program terminated and replaced the prior share repurchase authorization.

Please read Note 19—Stockholders’ Equity to our consolidated financial statements under Item 8 of this Form 10-K for additional discussion on the share repurchase program.

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2024 2023 2022

Net cash provided by (used in) operating activities $ 579,156 $ 452,606 $ (27,622)

Net cash provided by (used in) investing activities (659,039) (87,308) 74,628

Net cash provided by operating activities $ 83,776 $ 579,156 $ 452,606

Net cash used in investing activities (133,994) (659,039) (87,308)

Net cash provided by (used in) financing activities (36,961) (135,597) 13,407

Cash flows for the year ended December 31, 2024

Net cash provided by operating activities for the year ended December 31, 2024, was driven primarily by non-cash charges to operations of approximately $208.6 million, net cash used for changes in operating assets and liabilities of approximately $91.5 million, and a net loss of $33.3 million.

Non-cash charges to operations consisted primarily of the following adjustments:

• depreciation and amortization expenses of $131.6 million;

• unrealized loss on derivatives contracts of $42.5 million;

• stock based compensation costs of $25.7 million, including $13.1 million related to the accelerated vesting of equity awards and modification of vested equity awards related to our CEO;

• dividends received from our refining and logistics investments of $13.1 million

partially offset by

• $11.9 million of non-cash equity earnings from our refining and logistics investments.

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

• an increase in deferred turnaround assets of $73.5 million driven by the 2024 Montana refinery turnarounds,

• a $53.5 million decrease in Obligations under inventory financing agreements primarily related to the refinancing of our inventory financing agreements and a decrease in crude oil prices, and

• a decrease in our gross environmental credit obligations primarily related to the settlement of our 2023 RINs and CCA obligations combined with lower environmental credit values,

partially offset by

• a $62.9 million decrease in inventories, primarily related to the retirement of environmental credits and lower refined product and warehouse inventories.

Net cash used in investing activities for the year ended December 31, 2024, consisted primarily of:

• $135.5 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects.

Net cash used in financing activities was approximately $37.0 million for the year ended December 31, 2024, and consisted primarily of the following activities:

• payments of $547.6 million related to the expiration of our Supply and Offtake Agreement and related deferred payment arrangement in the second quarter of 2024,

• repurchases of common stock of $142.0 million, and

• aggregate payments of $9.6 million of deferred loan costs,

partially offset by

• net debt borrowings of $456.6 million primarily driven by activity in our ABL Credit Facility and the increase to the size of our Term Loan Credit Agreement , and

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

Cash flows for the year ended December 31, 2023

Net cash provided by operating activities for the year ended December 31, 2023, was driven primarily by Net income of $728.6 million, non-cash earnings from operations of approximately $53.2 million, and net cash used for changes in operating assets and liabilities of approximately $96.3 million.

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• a decrease in gross environmental credit obligations primarily related to the settlement of our 2020, 2021, and 2022 RINs obligations, and

• increase in prepaid and other primarily driven by a $65.5 million increase in Advances to suppliers for crude purchases.

• an increase in prepaid and other primarily driven by a $65.5 million increase in Advances to suppliers for crude purchases.

Net cash used in investing activities for the year ended December 31, 2023, consisted primarily of:

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

Net cash used in financing activities was approximately $135.6 million for the year ended December 31, 2023 and consisted primarily of the following activities:

• net repayments under the Discretionary Draw Facility and MLC receivable advances of $96.0 million,

Net cash used in financing activities for the year ended December 31, 2023, was approximately $135.6 million and consisted primarily of the following activities:

• net repayments under the Discretionary Draw Facility and Merrill Lynch Commodities, Inc.

(“MLC”) receivable advances of $96.0 million,

• aggregate payments of $23.1 million of deferred loan costs and debt extinguishment costs, related to our debt refinancing, and

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Non-cash charges to operations consisted primarily of the following adjustments:

• depreciation and amortization expenses of $99.8 million,

• deprecation and amortization expenses of $99.8 million,

• stock based compensation costs of $9.4 million,

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• net increases in our inventories and accounts receivable resulting from higher crude oil and refined product prices and higher inventory volumes at our Hawaii refinery, and

• increase in prepaid and other primarily driven by a $34.7 million increase in Collateral posted with broker for derivative instruments.

• an increase in prepaid and other primarily driven by a $34.7 million increase in Collateral posted with broker for derivative instruments.

Net cash used in investing activities for the year ended December 31, 2022, consisted primarily of:

• $53.0 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude recovery and debottlenecking projects at our Tacoma refinery, maintenance and tank replacement projects at our Wyoming refinery, and co-generation engine and tank conversion projects at our Hawaii refinery, and

• $53.0 million in additions to property, plant, and equipment driven by profit improvement and turnaround projects including crude recovery and debottlenecking projects at our Tacoma refinery, maintenance and tank replacements projects at our Wyoming refinery, and co-generation engine and tank conversion projects at our Hawaii refinery, and

• $35.5 million related to acquisitions, primarily comprised of a $30.0 million deposit on the Billings Acquisition and $5.5 million for a three-store expansion of our Washington retail footprint.

Net cash provided by financing activities for the year ended December 31, 2022 was approximately $13.4 million and and consisted primarily of the following activities:

Net cash provided by financing activities for the year ended December 31, 2022, was approximately $13.4 million and consisted primarily of the following activities:

• net borrowings under the J.

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• repurchases of common stock of $7.8 million.

Cash flows for the year ended December 31, 2021

Net cash used in operating activities was approximately $27.6 million for the year ended December 31, 2021, which resulted from a net loss of approximately $81.3 million, partially offset by non-cash charges to operations of approximately $41.6 million and net cash provided by changes in operating assets and liabilities of approximately $12.1 million.

Net cash provided by investing activities was approximately $74.6 million for the year ended December 31, 2021 and was primarily related to proceeds received from the Sale-Leaseback Transactions partially offset by additions to property, plant, and equipment totaling approximately $29.5 million.

Net cash used in financing activities for the year ended December 31, 2021 was approximately $1.1 million and consisted primarily of proceeds of $87.2 million from our March 2021 equity offering of common stock partially offset by net repayments on our debt agreements, J.

Aron deferred payment arrangement, and MLC receivable advances of $81.4 million and $5.6 million in extinguishment costs related to the repayment of the Retail Property Term Loan and a portion of the 12.875% Senior Secured Notes.

Cash Requirements

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On October 4, 2023, we terminated the Washington Refinery Intermediation Agreement in connection with the Second Amendment to the ABL Credit Facility that increased the borrowing base.

Please read Note 14—Debt to our consolidated financial statements under Item 8 of this Form 10-K for further discussion.

On March 22, 2024, we entered into the Third Amendment to the ABL Credit Facility, conditional upon the termination of the Company’s existing intermediation agreement with J.

Aron, to among other things, increase our total revolver commitment to $1.4 billion.

On May 31, 2024, we entered into the Inventory Intermediation Agreement with Citi.

Pursuant to the Inventory Intermediation Agreement, Citi will purchase and deliver crude oil to PHR for use at its refinery located in Kapolei, Hawaii.

The Inventory Intermediation Agreement replaces the Supply and Offtake Agreement between PHR and J.

Aron that was terminated on May 31, 2024.

On November 25, 2024, we amended the Term Loan Credit Agreement to increase the size of the term loan from $550.0 million to $650.0 million.

Please read Note 12—Inventory Financing Agreements and Note 14—Debt to our consolidated financial statements under Item 8 of this Form 10-K for further discussion.

Capital Expenditures and Turnaround Costs.

Our deferred turnaround costs and capital expenditures, including land and building purchases but excluding acquisitions, for the year ended December 31, 2023, totaled approximately $88.1 million and were primarily related to the 2023 turnaround and related scheduled maintenance work at our Montana refinery, capital projects at our Hawaii and Tacoma refineries, land purchases and new sites at our Retail and Hawaii Logistics businesses, and sustaining maintenance at each of our refineries.

Our deferred turnaround costs and capital expenditures, including land and building purchases but excluding acquisitions, for the year ended December 31, 2024, totaled approximately $209.0 million and were primarily related to the 2024 turnaround and related scheduled maintenance work at our Montana refinery, capital projects at our Hawaii and Tacoma refineries, our Retail businesses, and sustaining maintenance at each of our refineries.

Our capital expenditures and deferred turnaround costs budget for 2025 is approximately $210 to $240 million and primarily relates to scheduled maintenance, capital projects, and turnaround projects related to regulatory compliance, information technology, and growth across each of our businesses.

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As of December 31, 2024, we have material purchase commitments of $3.4 billion, with required cash outlays primarily expected in the next twelve months.

Supply and Offtake Agreement.

On June 1, 2021, we and J.

Aron entered into the second amended and restated supply and offtake agreement which expires on May 31, 2024.

Aron entered into amendments to the Supply and Offtake Agreement on April 25, 2022, and May 17, 2022, which, among other things, increased the capacity under the Discretionary Draw Facility.

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

Aron, subject to certain conditions.

Please read Note 12—Inventory Financing Agreements to our consolidated financial statements under Item 8 of this Form 10-K for more information.

On July 26, 2023, we entered into an LC Facility intended to finance and provide credit support for certain of PHR’s purchases of crude oil.

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

The amount available is $120.0 million with the right to request an increase up to $350.0 million in the aggregate, subject to certain conditions.

Please read Note 12—Inventory Financing Agreements to our consolidated financial statements under Item 8 of this Form 10-K for more information.

Environmental Matters.

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Please read Note 7—Inventories to our consolidated financial statements under Item 8 of this Form 10-K for additional information.

A portion of the crude oil utilized at the Hawaii refinery is financed by J.

Aron under procurement contracts.

The crude oil remains in the legal title of J.

Aron and is stored in our storage tanks governed by a storage agreement.

Legal title to the crude oil passes to us at the tank outlet.

After processing, J.

Aron takes title to the refined products stored in our storage tanks until they are sold to our retail locations or to third parties.

We record the inventory owned by J.

Aron on our behalf as inventory with a corresponding accrued liability on our balance sheet because we maintain the risk of loss until the refined products are sold to third parties and we have an obligation to repurchase it.

Crude oil held in storage tanks at, and certain crude oil in transit to, the Hawaii refinery are financed by Citi under procurement contracts.

The crude oil remains in the legal title of Citi and is stored in our storage tanks governed by a storage facilities agreement.

Legal title to the stored crude oil passes to us at the tank outlet.

After processing, Citi takes title to the refined products stored in our storage tanks until they are sold to third parties.

Citi takes legal title of crude oil in transit at the specified purchase location with the third party supplier.

We purchase the crude oil shipment from Citi at the SPM delivery point and we sell an equal quantity and quality of crude oil to Citi at the crude intake point.

Legal title to crude oil in transit passes to us at the SPM delivery point for the upstream leg, and legal title passes to Citi at the crude intake point for the downstream leg.

We record the inventory owned by Citi on our behalf as inventory with a corresponding obligation on our balance sheet in the amount we expect to pay to satisfy the repurchase obligation for the crude oil inventory then-owned by Citi following the expiration or termination of the Inventory Intermediation Agreement.

The valuation of our repurchase obligation requires that we make estimates of the prices and differentials assuming settlement occurs at the end of the reporting period.

On July 26, 2023, we entered into an LC Facility, intended to finance and provide credit support for certain of PHR’s purchases of crude oil.

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

The amount available is $120.0 million with the right to request an increase up to $350.0 million in the aggregate, subject to certain conditions.

Please read Note 12—Inventory Financing Agreements to our consolidated financial statements under Item 8 of this Form 10-K for additional information regarding our Hawaii inventory financing agreement and LC Facility.

Fair Value Measurements

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Significant judgment is required in estimating the fair value of assets acquired.

We obtain the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets based on available historical information and on expectations and assumptions about the future, considering the perspectives of marketplace participants.

We obtain the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets

based on available historical information and on expectations and assumptions about the future, considering the perspectives of marketplace participants.

These valuation methods require management to make estimates and assumptions regarding characteristics of the acquired property and future revenues and expenses.

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Please read Note 10—Goodwill and Intangible Assets to our consolidated financial statements under Item 8 of this Form 10-K for further information.

We review property, plant, and equipment, operating leases, and other long-lived assets whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable.

We review property, plant, and equipment, operating leases, deferred turnaround costs, and other long-lived assets whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable.

We use a cash flows model to estimate value because there is usually a lack of quoted market prices available for long-lived assets.

Future cash flow estimates used for impairment reviews are based on assessments requiring judgment, including future production volumes, commodity prices, operating costs, margins, discount rates, expected capital expenditures, and other factors based on all available information

available as of the date of the review.

Impairment is required when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying value.

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The fair value of long-lived assets is determined using the income approach.

Please read Note 9—Property, Plant, and Equipment and Impairment of Long-Lived Assets to our consolidated financial statements under Item 8 of this Form 10-K for further information.

Please read Note 9—Property, Plant, and Equipment to our consolidated financial statements under Item 8 of this Form 10-K for further information.

Environmental Matters and Asset Retirement Obligations

7 unchanged sentences

We use the asset and liability method of accounting for income taxes.

Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and NOL and tax credit carry forwards.

The realizability of deferred tax assets is evaluated quarterly based on a “more likely than not” standard and, to the extent this threshold is not met, a valuation allowance is recorded.

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We retain a partial valuation allowance on certain state deferred tax assets primarily as a result of apportionment factors from minimal activity in certain states impacting assessed likelihood of future realizability.

We will continue to reassess whether the balance of the valuation allowance is appropriate on a quarterly basis and, given the totality of the facts and circumstances, both positive and negative, will adjust the remaining valuation allowance in future periods if the evidence supports doing so.

We will continue to reassess whether the balance of the valuation allowance is appropriate on a yearly basis and, given the totality of the facts and circumstances, both positive and negative, will adjust the remaining valuation allowance in future periods if the evidence supports doing so.

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-K

Item 7. Management’s Discussion and Analysis