PAR PACIFIC HOLDINGS, INC. [PARR] Filings

10-Q 1 parr-20230630.htm 10-Q parr-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________________________________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-36550

________________________________________________________________________________________________________________________

PAR PACIFIC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________________________________________


Delaware			84-1060803
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)


825 Town & Country Lane, Suite 1500
Houston,	Texas	77024
(Address of principal executive offices)		(Zip Code)

(281) 899-4800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, $0.01 par value

PARR

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

61,067,032 shares of Common Stock, $0.01 par value, were outstanding as of August 4, 2023.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION		Page No.
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Cash Flows	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57
Item 4.	Controls and Procedures	58
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	62

The terms “Par,” “Company,” “we,” “our,” and “us” refer to Par Pacific Holdings, Inc. and its consolidated subsidiaries unless the context suggests otherwise.

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share data)


	June 30, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	190,951	$	490,925
Restricted cash	4,006		4,001
Total cash, cash equivalents, and restricted cash	194,957		494,926
Trade accounts receivable, net of allowances of $0.2 million and $0.3 million at June 30, 2023 and December 31, 2022, respectively	402,086		252,885
Inventories	1,241,494		1,041,983
Prepaid and other current assets	54,814		92,043
Total current assets	1,893,351		1,881,837
Property, plant, and equipment


Property, plant, and equipment	1,517,019		1,224,567
Less accumulated depreciation and amortization	(426,760)		(388,733)
Property, plant, and equipment, net	1,090,259		835,834
Long-term assets


Operating lease right-of-use assets	330,864		350,761


Refining and logistics equity investments	84,425		—

Intangible assets, net	12,247		13,577
Goodwill	129,275		129,325
Other long-term assets	69,549		69,313
Total assets	$	3,609,970	$	3,280,647
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	4,353	$	10,956
Obligations under inventory financing agreements	783,622		893,065
Accounts payable	351,320		151,395


Accrued taxes	48,474		32,099
Operating lease liabilities	69,053		66,081

Other accrued liabilities	513,131		640,494
Total current liabilities	1,769,953		1,794,090
Long-term liabilities
Long-term debt, net of current maturities	574,762		494,576


Finance lease liabilities	6,509		6,311
Operating lease liabilities	270,964		292,701
Other liabilities	68,471		48,432
Total liabilities	2,690,659		2,636,110
Commitments and contingencies (Note 15)
Stockholders’ equity
Preferred stock, $0.01 par value: 3,000,000 shares authorized, none issued	—		—
Common stock, $0.01 par value; 500,000,000 shares authorized at June 30, 2023 and December 31, 2022, 61,043,466 shares and 60,470,837 shares issued at June 30, 2023 and December 31, 2022, respectively	610		604
Additional paid-in capital	845,979		836,491
Accumulated earnings (deficit)	64,615		(200,687)
Accumulated other comprehensive income	8,107		8,129
Total stockholders’ equity	919,311		644,537
Total liabilities and stockholders’ equity	$	3,609,970	$	3,280,647

See accompanying notes to the condensed consolidated financial statements.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022




Revenues	$	1,783,927	$	2,106,332	$	3,469,136	$	3,456,625

Operating expenses
Cost of revenues (excluding depreciation)	1,574,806		1,808,925		2,863,826		3,159,174


Operating expense (excluding depreciation)	101,843		80,865		184,963		160,881
Depreciation and amortization	28,216		25,583		52,576		49,363

Loss on sale of assets, net	—		15		—		15
General and administrative expense (excluding depreciation)	23,168		15,438		42,454		31,331
Equity (earnings) from refining and logistics investments	(425)		—		(425)		—
Acquisition and integration costs	7,273		—		12,544		63
Par West redevelopment and other costs	2,613		1,477		5,363		2,865

Total operating expenses	1,737,494		1,932,303		3,161,301		3,403,692

Operating income	46,433		174,029		307,835		52,933

Other income (expense)
Interest expense and financing costs, net	(14,909)		(18,154)		(31,159)		(34,548)
Debt extinguishment and commitment costs	38		(5,672)		(17,682)		(5,672)

Other income, net	379		47		344		49


Equity earnings from Laramie Energy, LLC	—		—		10,706		—
Total other expense, net	(14,492)		(23,779)		(37,791)		(40,171)

Income before income taxes	31,941		150,250		270,044		12,762
Income tax expense	(1,928)		(1,125)		(2,141)		(688)
Net income	$	30,013	$	149,125	$	267,903	$	12,074

Income per share
Basic	$	0.50	$	2.51	$	4.45	$	0.20
Diluted	$	0.49	$	2.50	$	4.39	$	0.20
Weighted-average number of shares outstanding
Basic	60,399		59,479		60,255		59,449
Diluted	60,993		59,642		61,020		59,644

See accompanying notes to the condensed consolidated financial statements.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income	$	30,013	$	149,125	$	267,903	$	12,074
Other comprehensive income (loss):



Other post-retirement benefits loss, net of tax	(11)		—		(22)		—
Total other comprehensive income (loss), net of tax	(11)		—		(22)		—
Comprehensive income (loss)	$	30,002	$	149,125	$	267,881	$	12,074

See accompanying notes to the condensed consolidated financial statements.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net Income	$	267,903	$	12,074
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	52,576		49,363

Debt extinguishment and commitment costs	17,682		5,672
Non-cash interest expense	1,615		2,106
Non-cash lower of cost and net realizable value adjustment	—		(463)


Deferred taxes	1,226		615
Loss on sale of assets, net	—		15
Stock-based compensation	6,082		5,769
Unrealized (gain) loss on derivative contracts	7,621		(13,155)
Equity earnings from Laramie Energy, LLC	(10,706)		—
Equity earnings from refining and logistics investments	(425)		—
Dividends received from refining and logistics investments	425		—
Net changes in operating assets and liabilities:
Trade accounts receivable	(134,440)		(174,818)

Prepaid and other assets	4,630		(68,580)
Inventories	99,582		(369,846)
Deferred turnaround expenditures	—		(29,688)
Obligations under inventory financing agreements	(78,038)		309,396
Accounts payable, other accrued liabilities, and operating lease ROU assets and liabilities	76,507		299,197

Net cash provided by operating activities	312,240		27,657
Cash flows from investing activities:

Acquisition of business	(608,223)		—

Capital expenditures	(30,729)		(29,020)
Proceeds from sale of assets and other	50		68


Return of capital from Laramie Energy, LLC	10,706		—
Return of capital from refining and logistics investments	2,175		—
Net cash used in investing activities	(626,021)		(28,952)
Cash flows from financing activities:

Proceeds from borrowings	763,765		256,163
Repayments of borrowings	(702,499)		(313,143)
Net borrowings (repayments) on deferred payment arrangements and receivable advances	(31,405)		142,348
Payment of deferred loan costs	(9,127)		—
Purchase of common stock for retirement	(5,171)		(6,483)
Exercise of stock options	6,374		—




Payments for debt extinguishment and commitment costs	(8,742)		(3,983)
Other financing activities, net	617		350
Net cash provided by financing activities	13,812		75,252
Net increase in cash, cash equivalents, and restricted cash	(299,969)		73,957
Cash, cash equivalents, and restricted cash at beginning of period	494,926		116,221
Cash, cash equivalents, and restricted cash at end of period	$	194,957	$	190,178
Supplemental cash flow information:
Net cash paid for:
Interest	$	(37,969)	$	(30,735)
Taxes	(2,810)		(13)
Non-cash investing and financing activities:
Accrued capital expenditures	$	7,706	$	3,818

ROU assets obtained in exchange for new finance lease liabilities	944		594
ROU assets obtained in exchange for new operating lease liabilities	16,684		13,692

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

See accompanying notes to the condensed consolidated financial statements.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands)


								Accumulated
				Additional				Other
	Common Stock			Paid-In		Accumulated		Comprehensive		Total
	Shares	Amount		Capital		Deficit		Income		Equity
Balance, December 31, 2021	60,162	$	602	$	821,713	$	(559,117)	$	2,502	$	265,700



Stock-based compensation	412	3		3,655		—		—		3,658


Purchase of common stock for retirement	(462)	(4)		(1,431)		(4,955)		—		(6,390)


Net loss	—	—		—		(137,051)		—		(137,051)
Balance, March 31, 2022	60,112	601		823,937		(701,123)		2,502		125,917


Issuance of common stock for employee stock purchase plan	41	—		632		—		—		632
Stock-based compensation	3	—		2,017		—		—		2,017


Purchase of common stock for retirement	(1)	—		(94)		—		—		(94)
Exercise of stock options	65	1		1,131		—		—		1,132

Net income	—	—		—		149,125		—		149,125
Balance, June 30, 2022	60,220	$	602	$	827,623	$	(551,998)	$	2,502	$	278,729


								Accumulated
				Additional		Accumulated		Other
	Common Stock			Paid-In		(Deficit)		Comprehensive		Total
	Shares	Amount		Capital		Earnings		Income		Equity
Balance, December 31, 2022	60,471	$	604	$	836,491	$	(200,687)	$	8,129	$	644,537


Stock-based compensation	340	—		2,317		—		—		2,317


Purchase of common stock for retirement	(81)	—		(3,114)		—		—		(3,114)
Exercise of stock options	300	6		6,368		—		—		6,374
Other comprehensive loss	—	—		—		—		(11)		(11)
Net income	—	—		—		237,890		—		237,890
Balance, March 31, 2023	61,030	610		842,062		37,203		8,118		887,993



Issuance of common stock for employee stock purchase plan	27	—		726		—		—		726
Stock-based compensation	115	1		3,655		—		—		3,656
Purchase of common stock for retirement	(128)	(1)		(464)		(2,601)		—		(3,066)



Other comprehensive loss	—	—		—		—		(11)		(11)
Net income	—	—		—		30,013		—		30,013
Balance, June 30, 2023	61,044	$	610	$	845,979	$	64,615	$	8,107	$	919,311

See accompanying notes to the condensed consolidated financial statements.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Note 1—Overview

Par Pacific Holdings, Inc. and its wholly owned subsidiaries (“Par” or the “Company”) own and operate market-leading energy and infrastructure businesses. Our strategy is to acquire and develop businesses in logistically complex, niche markets. Currently, we operate in three primary business segments:

1) Refining - We own and operate four refineries in Hawaii, Wyoming, Washington, and Montana. Beginning June 1, 2023, we own and operate a refinery that processes Western Canadian and regional Rocky Mountain crude oil and a 65% interest in an adjacent cogeneration facility in Billings, Montana.

2) Retail - Our retail outlets in Hawaii, Washington, and Idaho sell gasoline, diesel, and retail merchandise through Hele and “76” branded sites, “nomnom” branded company-operated convenience stores, 7-Eleven operated convenience stores, other sites operated by third parties, and unattended cardlock stations.

3) Logistics - We operate an extensive multi-modal logistics network spanning the Pacific, the Northwest, and the Rocky Mountain regions to transport and store our crude oil and refined products for our refineries and transport refined products to our retail sites or third-party purchasers. Beginning June 1, 2023, we maintain ownership in distribution and logistics assets in the upper Rockies region, including the wholly owned Silvertip Pipeline, a 40% interest in the Yellowstone refined products pipeline, and four wholly owned and three joint venture refined product terminals.

As of June 30, 2023, we owned a 46.0% equity investment in Laramie Energy, LLC (“Laramie Energy”). Laramie Energy is focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado. As noted in the Refining and Logistics discussions above, as of June 30, 2023 through the Billings Acquisition (as defined in Note 5—Acquisitions), we own a 65% and a 40% equity investment in Yellowstone Energy Limited Partnership, (“YELP”) and Yellowstone Pipeline Company (“YPLC”), respectively.

Our Corporate and Other reportable segment primarily includes general and administrative costs and certain development expenses associated with our renewable fuel initiatives.

Note 2—Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of Par and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts previously reported in our condensed consolidated financial statements for prior periods have been reclassified to conform with the current presentation.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. The condensed consolidated financial statements contained in this report include all material adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the complete fiscal year or for any other period. The condensed consolidated balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements as of that date. These condensed consolidated financial statements should be read together with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosures. Actual amounts could differ from these estimates.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Allowance for Credit Losses

We are exposed to credit losses primarily through our sales of refined products. Credit limits and/or prepayment requirements are set based on such factors as the customer’s financial results, credit rating, payment history, and industry and are reviewed annually for customers with material credit limits. Credit allowances are reviewed at least quarterly based on changes in the customer’s creditworthiness due to economic conditions, liquidity, and business strategy as publicly reported and through discussions between the customer and the Company. We establish provisions for losses on trade receivables based on the estimated credit loss we expect to incur over the life of the receivable. We did not have a material change in our allowances on trade receivables during the three and six months ended June 30, 2023 or 2022.

Cost Classifications

Cost of revenues (excluding depreciation) includes the hydrocarbon-related costs of inventory sold, transportation costs of delivering product to customers, crude oil consumed in the refining process, costs to satisfy our Renewable Identification Numbers (“RINs”) and other environmental credit obligations, and certain hydrocarbon fees and taxes. Cost of revenues (excluding depreciation) also includes the unrealized gains and losses on derivatives and inventory valuation adjustments. Certain direct operating expenses related to our logistics segment are also included in Cost of revenues (excluding depreciation).

Operating expense (excluding depreciation) includes direct costs of labor, maintenance and services, energy and utility costs, property taxes, and environmental compliance costs, as well as chemicals and catalysts and other direct operating expenses.

The following table summarizes depreciation and finance lease amortization expense excluded from each line item in our condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenues	$	5,022	$	5,175	$	10,021	$	10,227
Operating expense	16,153		13,183		28,557		26,080
General and administrative expense	578		771		1,080		1,419

Recent Accounting Pronouncements

There have been no developments to recent accounting pronouncements, including the expected dates of adoption and estimated effects on our financial condition, results of operations, and cash flows, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Note 3—Refining and Logistics Equity Investments

Yellowstone Energy Limited Partnership

On June 1, 2023, we completed the Billings Acquisition (as defined in Note 5—Acquisitions) and acquired a 65% limited partnership ownership interest in YELP. YELP owns a cogeneration facility in Billings, Montana, that converts petroleum coke, supplied from our Montana refinery and other nearby third-party refineries, into power production for the local utility grid. As of June 30, 2023, our investment in YELP was $58.0 million. We account for our investment in YELP using the equity method as we have the ability to exert significant influence over, but do not control its operating and financial policies. Our proportionate share of YELP’s net income (loss) will be recorded on a one-month lag basis and included in Equity (earnings) from refining and logistics investments on our condensed consolidated statements of operations.

Yellowstone Pipeline Company

On June 1, 2023, we completed the Billings Acquisition (as defined in Note 5—Acquisitions) and acquired a 40% ownership interest in YPLC. YPLC owns a refined products pipeline that begins at our Montana refinery and transports refined product to Montana and the Pacific Northwest. As of June 30, 2023, our investment in YPLC was $26.4 million. We account for our ownership interest in YPLC using the equity method as we have the ability to exert significant influence over, but do not control its operating and financial policies. Our proportionate share of YPLC’s net income of $0.4 million for the three and six months ended June 30, 2023 is included in Equity (earnings) from refining and logistics investments on our condensed

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

consolidated statements of operations. Additionally, on June 28, 2023, YPLC made a cash dividend to its shareholders, of which our proportionate share was $2.6 million.

Note 4—Investment in Laramie Energy

Laramie Energy

As of June 30, 2023, we had a 46.0% ownership interest in Laramie Energy. Laramie Energy is focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado. The balance of our investment in Laramie Energy was zero as of June 30, 2023 and December 31, 2022.

Prior to February 21, 2023, Laramie Energy had a term loan agreement which provided a term loan secured by a lien on its natural gas and crude oil properties and related assets. Under the terms of the term loan, Laramie Energy was generally prohibited from making future cash distributions to its owners, including us, except for certain permitted tax distributions.

On February 21, 2023, Laramie Energy entered into a new term loan agreement which provides a $205 million first lien term loan facility with $160.0 million funded at closing and an optional $45 million delayed draw commitment, subject to certain terms and conditions. Laramie Energy used the proceeds from the term loan to repay the then-outstanding balance of $76.3 million on its prior term loan, including accrued interest and prepayment penalties, and fully redeem preferred equity of $73.5 million. After deducting transaction costs, net proceeds were $4.8 million. Under the terms of the new term loan, Laramie is permitted to make future cash distributions to its owners, including us, subject to certain restrictions. Laramie Energy’s term loan matures on February 21, 2027. As of June 30, 2023, the term loan had an outstanding balance of $155.0 million.

On March 1, 2023, pursuant to its new term loan agreement, Laramie Energy made a one-time cash distribution to its owners, including us, based on ownership percentage. Our share of this distribution was $10.7 million, which was reflected as Return of capital from Laramie Energy, LLC on our condensed consolidated statements of cash flows. We recorded the cash received as Equity earnings from Laramie Energy, LLC on our condensed consolidated statements of operations because the carrying value of our investment in Laramie Energy was zero at the time of such distribution.

Effective February 21, 2023, and concurrent with the new term loan agreement noted above, we resumed the application of equity method accounting with respect to our investment in Laramie Energy. At June 30, 2023, our equity in the underlying net assets of Laramie Energy exceeded the carrying value of our investment by approximately $76.4 million. This difference arose primarily due to other-than-temporary impairments of our equity investment in Laramie Energy.

Note 5—Acquisitions

Billings Acquisition

On October 20, 2022, we and our subsidiaries Par Montana, LLC (“Par Montana”), Par Montana Holdings, LLC (“Par Montana Holdings”), and Par Rocky Mountain Midstream, LLC (“Par Rocky Mountain”, and together with Par Montana and Par Montana Holdings, the “Purchasers”), entered into an equity and asset purchase agreement (the “Purchase Agreement”) with Exxon Mobil Corporation, ExxonMobil Oil Corporation, and ExxonMobil Pipeline Company LLC (collectively, the “Sellers”) to purchase (i) the high-conversion, complex refinery located in Billings, Montana and certain associated distribution and logistics assets, (ii) the Sellers’ 65% limited partnership equity interest in YELP, and (iii) the Sellers’ 40% equity interest in YPLC for a base purchase price of $310.0 million plus the value of hydrocarbon inventory and adjusted working capital at closing (collectively, the “Billings Acquisition”). The Billings Acquisition enhances our fully integrated downstream network in the upper Rockies and Pacific Northwest. The Billings Acquisition increases scale and geographic diversification on the U.S. mainland and allows for efficient access to alternative markets.

On June 1, 2023, we completed the Billings Acquisition for a total purchase price of approximately $638.2 million (before consideration of the preliminary working capital adjustment), consisting of a cash deposit of $30.0 million paid on October 20, 2022 upon execution of the Purchase Agreement and $608.2 million paid at closing on June 1, 2023. The preliminary working capital adjustment is $12.7 million, which will reduce the total purchase price. The Company funded the Billings Acquisition with cash on hand and borrowings from the ABL Credit Facility (as defined in Note 11—Debt) under the ABL Credit Facility (as defined in Note 11—Debt).

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

We accounted for the Billings Acquisition as a business combination whereby the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. A summary of the preliminary fair value of the assets acquired and liabilities assumed is as follows (in thousands):


Trade accounts receivable	$	2,395
Inventories	299,228

Property, plant, and equipment	259,088
Operating lease right-of-use assets	3,562
Investment in refining and logistics subsidiaries	86,600
Other long-term assets	4,094
Total assets (1)	654,967
Current operating lease liabilities	2,081
Other current liabilities	7,056
Environmental liabilities	18,869
Long-term operating lease liabilities	1,481
Total liabilities	29,487
Total	$	625,480

_______________________________________________________

(1)We allocated $531.7 million and $123.3 million of total assets to our refining and logistics segments, respectively.

We have recorded a preliminary estimate of the fair value of the assets acquired and liabilities assumed and expect to finalize the purchase price allocation during the first part of 2024. The primary areas of the purchase price allocation that are not finalized as of June 30, 2023 relate to inventory, property, plant, and equipment, and the environmental liabilities. Any final valuation adjustments could change the fair values assigned to the assets acquired and liabilities assumed, resulting in a change to our condensed consolidated financial statements, which could be material.

We incurred $5.1 million and $10.4 million of acquisition costs related to the Billings Acquisition for the three and six months ended June 30, 2023, respectively. These costs are included in Acquisition and integration costs on our condensed consolidated statements of operations.

We assumed certain environmental liabilities associated with the Billings Acquisition, including costs related to hazardous waste corrective measures, ground and surface water sampling and monitoring. We expect to incur these costs over a 20 to 30 year period.

The results of operations of the Montana refinery, newly acquired logistics assets in the Rockies region, and YELP and YPLC equity investments were included in our results beginning on June 1, 2023. For both of the three and six months ended June 30, 2023, our results of operations included revenues of $217.2 million and a net loss of $15.6 million related to these assets. The following unaudited pro forma financial information presents our consolidated revenues and net income (loss) as if the Billings Acquisition had been completed on January 1, 2022 (in thousands):


	Six Months Ended June 30,
	2023		2022
Revenues	$	4,410,002	$	4,733,450
Net income (loss)	419,113		(80,237)

These pro forma results were based on estimates and assumptions that we believe are reasonable. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the Billings Acquisition been effective as of the dates presented, nor is it indicative of future operating results of the combined company. Pro forma adjustments include (i) incremental depreciation resulting from the estimated fair value of property, plant, and equipment acquired, (ii) transaction costs which were shifted from the six months ended June 30, 2023 to the six months ended June 30, 2022 and (iii) elimination of historical transactions between Par and the Montana assets.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Note 6—Revenue Recognition

As of June 30, 2023 and December 31, 2022, receivables from contracts with customers were $367.7 million and $242.5 million, respectively. Our refining segment recognizes deferred revenues when cash payments are received in advance of delivery of products to the customer. Deferred revenue was $14.2 million and $11.5 million as of June 30, 2023 and December 31, 2022, respectively. We have elected to apply a practical expedient not to disclose the value of unsatisfied performance obligations for (i) contracts with an original expected duration of less than one year and (ii) contracts where the variable consideration has been allocated entirely to our unsatisfied performance obligation.

The following table provides information about disaggregated revenue by major product line and includes a reconciliation of the disaggregated revenues to total segment revenues (in thousands):


Three Months Ended June 30, 2023	Refining		Logistics		Retail





















Product or service:
Gasoline	$	603,598	$	—	$	109,265
Distillates (1)	700,048		—		12,368
Other refined products (2)	404,619		—		—

Merchandise	—		—		25,892
Transportation and terminalling services	—		64,709		—
Other revenue	276		—		871
Total segment revenues (3)	$	1,708,541	$	64,709	$	148,396


Three Months Ended June 30, 2022	Refining		Logistics		Retail





















Product or service:
Gasoline	$	614,942	$	—	$	112,231
Distillates (1)	896,601		—		11,224
Other refined products (2)	526,854		—		—
Merchandise	—		—		22,907
Transportation and terminalling services	—		50,633		—
Other revenue	6,058		—		849
Total segment revenues (3)	$	2,044,455	$	50,633	$	147,211


Six Months Ended June 30, 2023	Refining		Logistics		Retail





















Product or service:
Gasoline	$	1,053,922	$	—	$	209,453
Distillates (1)	1,479,101		—		23,967
Other refined products (2)	790,228		—		—

Merchandise	—		—		48,720
Transportation and terminalling services	—		117,097		—
Other revenue	702		—		1,828
Total segment revenues (3)	$	3,323,953	$	117,097	$	283,968

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022


Six Months Ended June 30, 2022	Refining		Logistics		Retail





















Product or service:
Gasoline	$	1,016,051	$	—	$	202,006
Distillates (1)	1,484,684		—		19,734
Other refined products (2)	830,461		—		—
Merchandise	—		—		43,722
Transportation and terminalling services	—		93,094		—
Other revenue	12,482		—		1,658
Total segment revenues (3)	$	3,343,678	$	93,094	$	267,120

_______________________________________________________

(1)Distillates primarily include diesel and jet fuel.

(2)Other refined products include fuel oil, vacuum gas oil, and asphalt.

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

Note 7—Inventories

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


	Titled Inventory		Supply and Offtake Agreement (1)		Total
June 30, 2023
Crude oil and feedstocks	$	152,175	$	216,782	$	368,957
Refined products and blendstock	337,097		158,509		495,606
Warehouse stock and other (2)	376,931		—		376,931
Total	$	866,203	$	375,291	$	1,241,494

December 31, 2022
Crude oil and feedstocks	$	112,082	$	265,536	$	377,618
Refined products and blendstock	188,040		168,624		356,664
Warehouse stock and other (2)	307,701		—		307,701
Total	$	607,823	$	434,160	$	1,041,983

________________________________________________________

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

(2)Includes $293.3 million and $258.2 million of RINs and environmental credits, reported at the lower of cost or net realizable value, as of June 30, 2023 and December 31, 2022, respectively. RINs and environmental credit obligations of $433.0 million and $549.8 million, reported at market value, are included in Other accrued liabilities on our condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, respectively. If we marked our RINs and environmental credits to fair market value, our net environmental credit obligations would have been $100.9 million and $152.6 million as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023 and December 31, 2022, there was no reserve for the lower of cost or net realizable value of inventory. As of June 30, 2023 and December 31, 2022, the excess of current replacement cost over the last-in, first-out (“LIFO”) inventory carrying value at the Washington refinery was approximately $41.1 million and $46.4 million, respectively.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Note 8—Prepaid and Other Current Assets

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


	June 30, 2023		December 31, 2022

Collateral posted with broker for derivative instruments (1)	$	29,973	$	40,788
Billings Acquisition deposit (2)	—		30,000
Prepaid insurance	7,718		15,639




Other	17,123		5,616
Total	$	54,814	$	92,043

_________________________________________________________

(1)Our cash margin that is required as collateral deposits on our commodity derivatives cannot be offset against the fair value of open contracts except in the event of default. Please read Note 12—Derivatives for further information.

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

Note 9—Inventory Financing Agreements

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



	June 30, 2023		December 31, 2022
Supply and Offtake Agreement	$	568,670	$	732,511
Washington Refinery Intermediation Agreement	214,952		160,554
Obligations under inventory financing agreements	$	783,622	$	893,065

Supply and Offtake Agreement

Under the Second Amended and Restated Supply and Offtake Agreement (as amended, the “Supply and Offtake Agreement”), J. Aron & Company LLC (“J. Aron”) finances the majority of the crude oil utilized at the Hawaii refinery, holds legal title to the crude oil stored in our storage tanks before processing until title passes to us at the tank outlet, and buys refined products produced at our Hawaii refinery, after which we repurchase the refined products prior to selling them to our retail locations or third parties. Under the Supply and Offtake Agreement, J. Aron may enter into agreements with third parties whereby J. Aron remits payments to these third parties for refinery procurement contracts for which we will become immediately obligated to reimburse J. Aron. The Supply and Offtake Agreement expires May 31, 2024 (as extended, the “Expiration Date”), subject to a one-year extension at the mutual agreement of the parties at least 120 days prior to the Expiration Date. The Supply and Offtake Agreement also makes available a discretionary draw facility (the “Discretionary Draw Facility”) to Par Hawaii Refining, LLC (“PHR”).

On April 25, 2022, we entered into an amendment (the “S&O Amendment”) to the Supply and Offtake Agreement which, among other things, amended the maximum commitment amount under the Discretionary Draw Facility from $165 million to $215 million. The S&O Amendment further increased the limit in the borrowing base for eligible hydrocarbon inventory from $82.5 million to $107.5 million. The S&O Amendment further requires a $5.0 million reserve against the borrowing base at any time more than $165 million is outstanding in discretionary draw advances made to PHR; the reserve may be reduced by the posting of cash collateral by PHR in accordance with the terms of the S&O Amendment. On February 13, 2023, we entered into an amendment to the Supply and Offtake Agreement to, among other things, facilitate entry into the Term Loan Credit Agreement. On June 21, 2023, we entered into an amendment (the June “2023 S&O Amendment”) to establish the Secured Overnight Financing Rate ("SOFR"), as defined in the Supply and Offtake Agreement, as the benchmark rate in replacement of the London Interbank Offered Rate ("LIBOR") and revise certain other terms and conditions, effective July 1, 2023.

Under the Supply and Offtake Agreement, we pay or receive certain fees from J. Aron based on changes in market prices over time. In 2021 and 2022, we entered into multiple contracts to fix certain market fees for the period from January 2022 through May 2022 for $8.7 million. For the three and six months ended June 30, 2023, we did not enter into any contracts to fix market fees related to our Supply and Offtake Agreement. We had no fixed market fees due to or from J. Aron as of June 30, 2023 and December 31, 2022. The amount due to or from J. Aron was recorded as an adjustment to our Obligations under inventory financing agreements as allowed under the Supply and Offtake Agreement. We did not recognize any fixed market fees for the three and six months ended June 30, 2023. We recognized fixed market fees of $1.6 million and $8.8 million for the three and six months ended June 30, 2022, respectively, which were included in Cost of revenues (excluding

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

depreciation) on our condensed consolidated statements of operations.

Washington Refinery Intermediation Agreement

The Washington Refinery Intermediation Agreement with Merrill Lynch Commodities, Inc. (“MLC”) provides a structured financing arrangement based on U.S. Oil & Refining Co. and certain affiliated entities’ crude oil and refined products inventories and associated accounts receivable. On May 9, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to increase the maximum borrowing capacity under the MLC receivable advances from $90 million to $115 million. On August 11, 2022, we and MLC entered into an amendment to the Washington Refinery Intermediation Agreement to establish the adjusted three-month term SOFR rate as the benchmark rate in replacement of the LIBOR rate and revise certain other terms and conditions. On November 2, 2022, we and MLC amended the Washington Refinery Intermediation Agreement to further extend the term through March 31, 2024 and reduce the maximum borrowing capacity to $110 million. On February 28, 2023, we and MLC amended the Washington Refinery Intermediation Agreement to facilitate entry into the Term Loan Credit Agreement, and on April 26, 2023, we and MLC amended the Washington Refinery Intermediation Agreement to facilitate entry into the ABL Credit Facility.

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


	June 30, 2023		December 31, 2022
Discretionary Draw Facility
Outstanding borrowings (1)	$	146,157	$	204,843
Borrowing capacity	146,157		204,843
MLC receivable advances
Outstanding borrowings (1)	83,882		56,601
Borrowing capacity	83,882		56,601


MLC issued letters of credit	75,830		115,001

______________________________________________________

(1)Borrowings outstanding under the Discretionary Draw Facility and MLC receivable advances are included in Obligations under inventory financing agreements on our condensed consolidated balance sheets. Changes in the borrowings outstanding under these arrangements are included within Cash flows from financing activities on the condensed consolidated statements of cash flows.

The following table summarizes the inventory intermediation fees, which are included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations, and Interest expense and financing costs, net related to the intermediation agreements (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net fees and expenses:
Supply and Offtake Agreement
Inventory intermediation fees (1)	$	12,628	$	28,522	$	26,627	$	39,445
Interest expense and financing costs, net	1,895		1,858		3,620		3,102
Washington Refinery Intermediation Agreement
Inventory intermediation fees	$	750	$	750	$	1,500	$	1,500
Interest expense and financing costs, net	3,313		2,943		5,972		4,897

___________________________________________________

(1)Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $1.8 million and $19.4 million for the three months ended June 30, 2023 and 2022 and $4.2 million and $23.8 million for the six months ended June 30, 2023 and 2022, respectively.

The Supply and Offtake Agreement and the Washington Refinery Intermediation Agreement also provide us with the ability to economically hedge price risk on our inventories and crude oil purchases. Please read Note 12—Derivatives for further information.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

Note 10—Other Accrued Liabilities

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


	June 30, 2023		December 31, 2022
Accrued payroll and other employee benefits	$	22,617	$	27,815

Gross environmental credit obligations (1)	433,031		549,791
Other	57,483		62,888

Total	$	513,131	$	640,494

___________________________________________________

(1)Gross environmental credit obligations are stated at market as of June 30, 2023 and December 31, 2022. Please read Note 13—Fair Value Measurements for further information. A portion of these obligations are expected to be settled with our RINs assets and other environmental credits, which are presented as Inventories on our condensed consolidated balance sheet and are stated at the lower of cost or net realizable value. The carrying costs of these assets were $293.3 million and $258.2 million as of June 30, 2023 and December 31, 2022, respectively. If we marked our RINs and environmental credits to fair market value, our net environmental credit obligations at market value would have been $100.9 million and $152.6 million as of June 30, 2023 and December 31, 2022, respectively.

Note 11—Debt

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


	June 30, 2023		December 31, 2022


ABL Credit Facility due 2028	$	41,000	$	—

Term Loan Credit Agreement due 2030	548,625		—
7.75% Senior Secured Notes due 2025	—		281,000
Term Loan B Facility due 2026	—		203,125
12.875% Senior Secured Notes due 2026	—		31,314
Other long-term debt	5,058		—





Principal amount of long-term debt	594,683		515,439
Less: unamortized discount and deferred financing costs	(15,568)		(9,907)
Total debt, net of unamortized discount and deferred financing costs	579,115		505,532
Less: current maturities, net of unamortized discount and deferred financing costs	(4,353)		(10,956)
Long-term debt, net of current maturities	$	574,762	$	494,576

As of June 30, 2023, we had $215.0 million in letters of credit outstanding under the ABL Credit Facility, as defined below. As of December 31, 2022, we had $19.5 million in letters of credit outstanding under the Prior ABL Credit Facility, as defined below. We had $70.0 million and $5.9 million in cash-collateralized letters of credit and surety bonds outstanding as of June 30, 2023 and December 31, 2022, respectively, under agreements with MLC and under certain other facilities.

Under the ABL Credit Facility and the Term Loan Credit Agreement, defined below, our subsidiaries are restricted from paying dividends or making other equity distributions, subject to certain exceptions.

ABL Credit Facility due 2028

On April 26, 2023, in connection with the Billings Acquisition, we repaid in full and terminated the loan and security agreements with certain lenders and Bank of America, N.A., as administrative agent and collateral agent (as amended from time to time, “Prior ABL Credit Facility”) and entered into an Asset-Based Revolving Credit Agreement with certain lenders, and Wells Fargo Bank, National Association, as administrative agent and collateral agent (as amended from time to time, the “ABL Credit Facility”), providing for a senior secured asset-based revolving credit facility in an initial aggregate principal amount of up to $150 million and secured by a first priority lien over certain of our assets and other personal property, subject to certain customary exceptions.

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

In accordance with ASC Topic 470, "Debt", we accounted for the ABL Credit Facility as a debt modification and unamortized deferred financing costs/modification costs of $0.7 million were rolled into the ABL Credit Facility which will be amortized over the remaining term of the ABL Credit Facility.

On May 30, 2023, the ABL Credit Facility was amended (“ABL Credit Facility Billings Amendment”) in order to, among other things, increase the principal amount to $450 million, adjust the borrowing base to account for the Billings Acquisition assets, and fund an escrow account to purchase a portion of the hydrocarbon inventory associated with the Billings Acquisition. Initially the ABL Credit Facility permitted the issuance of letters of credit of up to $65 million, with the ABL Credit Facility Billings Amendment this amount increased to $250 million. The ABL Credit Facility will mature, and the commitments thereunder will terminate on April 26, 2028. As of June 30, 2023, the ABL Credit Facility had $41.0 million outstanding revolving loans, $215.0 million in letters of credit outstanding, and a borrowing base of approximately $531.0 million.

The interest rates applicable to borrowings under the ABL Credit Facility is based on a fluctuating rate of interest measured by reference to either, at our option, (i) a base rate, plus an applicable margin, or (ii) an Adjusted Term SOFR rate, plus an applicable margin. The initial applicable margin for borrowings under the Facilities is 0.50% per annum with respect to base rate borrowings and 1.50% per annum with respect to SOFR borrowings, and the applicable margin for such borrowings after June 30, 2023 will be based on the our quarterly average excess availability as determined by reference to a borrowing base, ranging from 0.25% per annum to 0.75% per annum with respect to base rate borrowings and from 1.25% per annum to 1.75% per annum with respect to SOFR borrowings. We will also pay a de minimis fee for any undrawn amounts available under the ABL Credit Facility.

The ABL Credit Facility includes certain customary affirmative and negative covenants, including a minimum financial fixed charge coverage ratio and a minimum Borrower Group Fixed Charge Coverage Ratio. In addition, the covenants limit our ability and the ability of our restricted subsidiaries to incur indebtedness, grant liens, make investments, engage in acquisitions, mergers, or consolidations, engage in certain hedging transactions, and pay dividends and other restricted payments.

Term Loan Credit Agreement due 2030

On February 28, 2023, we entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (the “Agent”), and the lenders party thereto (“Lenders”). Pursuant to the Term Loan Credit Agreement, the Lenders made an initial senior secured term loan in the principal amount of $550.0 million at a price equal to 98.5% of its face value. The initial loan bears interest at SOFR, as defined below. The net proceeds were used to refinance our existing Term Loan B Facility and repurchase our outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes and any remaining net proceeds are expected to be used for general corporate purposes. We recognized an aggregate of $2.8 million in debt modification costs in connection with the refinancing, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the three and six months June 30, 2023.

The Term Loan Credit Agreement bears interest at a fluctuating rate per annum equal to either a SOFR rate or base rate “Base Rate”, provided that the Base Rate shall not be below 1.5%, as defined in the Term Loan Credit Agreement. The SOFR rate and Base Rate definitions are summarized below:



SOFR Rate loan			Secured overnight financing rate plus the applicable margin of 4.250% per annum with a stepdown in the applicable margin of 0.25% in the event the Company’s credit rating is upgraded to Ba3/BB-,
Base Rate loan			A per annum rate plus the applicable margin of 3.250%. The base rate is the greatest of:
•			a rate as calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depository institutions (“Federal Funds Rate”) for such day, plus 0.5%;
•			a rate equal to adjusted term SOFR for a one month interest period as of such day plus 1.0%; or
•			a rate as announced by Wells Fargo (the “Prime Rate”).

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

The Term Loan Credit Agreement requires quarterly payments of $1.4 million on the last business day of each March, June, September and December, commencing on June 30, 2023, with the balance due upon maturity. The Term Loan Credit Agreement matures on February 28, 2030.

7.75% Senior Secured Notes due 2025

On February 28, 2023, we repurchased and cancelled $260.6 million in aggregate principal amount of the 7.75% Senior Secured Notes at a repurchase price of 102.120% of the aggregate principal amount repurchased. On March 17, 2023, we repurchased and cancelled all remaining outstanding 7.75% Senior Secured Notes at a repurchase price of 101.938% of the aggregate principal amount repurchased. In connection with the termination of the 7.75% Senior Secured Notes, we recognized debt extinguishment costs of $5.9 million associated with debt repurchase premiums and $3.4 million associated with unamortized deferred financing costs, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the six months ended June 30, 2023. Our 7.75% Senior Secured Notes bore interest at a rate of 7.750% per year (payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2018) and were due to mature on December 15, 2025.

Term Loan B Facility due 2026

On February 28, 2023, we terminated and repaid all amounts outstanding under the Term Loan B Facility. We recognized debt extinguishment costs of $1.7 million associated with unamortized deferred financing costs, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the six months ended June 30, 2023. The Term Loan B Facility bore interest at a rate per annum equal to Adjusted LIBOR (as defined in the Term Loan B Facility) plus an applicable margin of 6.75% or at a rate per annum equal to Alternate Base Rate (as defined in the Term Loan B Facility) plus an applicable margin of 5.75%. In addition to the quarterly interest payments, the Term Loan B Facility required quarterly principal payments of $3.1 million. The Term Loan B Facility was due to mature on January 11, 2026.

12.875% Senior Secured Notes due 2026

On February 28, 2023, we repurchased and cancelled $29 million in aggregate principal amount of the 12.875% Senior Secured Notes at a repurchase price of 109.044% of the aggregate principal amount repurchased. On March 17, 2023, we repurchased and cancelled all remaining outstanding 12.875% Senior Secured Notes at a repurchase price of 108.616% of the aggregate principal amount repurchased. In connection with the termination of the 12.875% Senior Secured Notes, we recognized debt extinguishment costs of $2.8 million associated with debt repurchase premiums and $1.1 million associated with unamortized deferred financing costs, which were recorded in Debt extinguishment and commitment costs on our condensed consolidated statement of operations for the six months ended June 30, 2023. The 12.875% Senior Secured Notes bore interest at an annual rate of 12.875% per year (payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2021) and were due to mature on January 15, 2026.

Other long-term debt

On June 7, 2023, we entered into two promissory notes with a third-party lender to acquire land in Kahului, Hawaii, and Hilo, Hawaii totaling $5.1 million. The notes bear interest at a fixed rate of 4.625% per annum and are payable on the first day of each month, commencing on July 1, 2023, until maturity. The promissory notes are unsecured and mature on June 7, 2030.

Cross Default Provisions

Included within each of our debt agreements are affirmative and negative covenants, and customary cross default provisions, that require the repayment of amounts outstanding on demand unless the triggering payment default or acceleration is remedied, rescinded, or waived. As of June 30, 2023, we were in compliance with all of our debt instruments.

Guarantors

In connection with our shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission (“SEC”) and became automatically effective on February 14, 2022 (“Registration Statement”), we may sell non-convertible debt securities and other securities in one or more offerings with an aggregate initial offering price of up to $750.0 million. Any non-convertible debt securities issued under the Registration Statement may be fully and unconditionally guaranteed (except for customary release provisions), on a joint and several basis, by some or all of our subsidiaries, other than subsidiaries that are “minor” within the meaning of Rule 3-10 of Regulation S-X (the “Guarantor Subsidiaries”). We have

PAR PACIFIC HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Interim Periods Ended June 30, 2023 and 2022

excluded the summarized financial information for the Guarantor Subsidiaries as the assets and results of operations of the Company and the Guarantor Subsidiaries are not materially different than the corresponding amounts presented on our consolidated financial statements.

Note 12—Derivatives

Commodity Derivatives

Our condensed consolidated balance sheets present derivative assets and liabilities on a net basis. Please read Note 13—Fair Value Measurements for the gross fair value and net carrying value of our derivative instruments.

Our open futures and over-the-counter (“OTC”) swaps at June 30, 2023, will settle by December 2024. At June 30, 2023, our open commodity derivative contracts represented (in thousands of barrels):

Contract Type

Purchases

Sales

Net

Futures

45,493

(45,912)

(419)

PAR PACIFIC HOLDINGS, INC. [PARR] Filings
10-Q	[2023-08-09]
10-Q	[2023-05-05]
10-K	[2023-02-27]
10-Q	[2022-11-03]
10-Q	[2022-08-09]
10-Q	[2022-05-06]
10-K	[2022-02-25]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-07]
10-K	[2021-03-08]
10-Q	[2020-11-06]
10-Q	[2020-08-10]
10-Q	[2020-05-11]
10-K	[2020-03-02]
10-Q	[2019-11-06]
10-Q	[2019-08-08]
10-Q	[2019-05-10]
10-K	[2019-03-11]
10-Q	[2018-11-07]
10-Q	[2018-08-08]
10-Q	[2018-05-10]
10-K	[2018-03-12]
10-Q	[2017-11-08]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-03-07]
10-Q	[2016-11-04]
10-Q	[2016-08-09]
10-Q	[2016-05-05]
10-K	[2016-03-03]
10-Q	[2015-11-05]
10-Q	[2015-08-07]
10-Q	[2015-05-11]
10-K	[2015-03-12]
10-Q	[2014-11-12]
10-Q	[2014-08-11]
10-Q	[2014-06-02]
10-K	[2014-03-31]
S-1	[2013-11-25]
10-Q	[2013-11-14]
10-Q	[2013-08-14]
10-Q	[2013-05-14]
S-1	[2013-04-08]
10-K	[2013-03-27]
10-Q	[2012-11-14]
10-K	[2012-08-31]
10-Q	[2012-08-31]
10-Q	[2012-08-31]