PAR PACIFIC HOLDINGS, INC. - FORM 10-K/A

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EX-31.2 - EXHIBIT 31.2 - PAR PACIFIC HOLDINGS, INC.	a20151231ex31210-ka.htm
EX-31.1 - EXHIBIT 31.1 - PAR PACIFIC HOLDINGS, INC.	a20151231ex31110-ka.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________________________________________________________________________________________________________________

FORM 10-K/A

Amendment No. 1

________________________________________________________________________________________________________________________

(Mark One)



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

For the fiscal year ended December 31, 2015



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

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.)



800 Gessner Road, Suite 875
Houston, Texas	77024
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (281) 899-4800

Securities registered under Section 12(b) of the Act:



Title of each class		Name of Exchange on which registered
Common stock, par value $0.01 per share		NYSE MKT LLC

Securities registered under to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý

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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ý No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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



Large accelerated filer	¨		Accelerated filer	ý
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨

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

Indicate by check mark whether the registrant has filed all document and reports required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ý No ¨

The aggregate market value of voting common equity held by non-affiliates of the registrant was approximately $297,357,803 based on the closing sales price of the common stock on the NYSE MKT as of June 30, 2015. As of February 26, 2016, 41,078,097 shares of registrant’s Common Stock, $0.01 par value, were issued and outstanding.

Documents Incorporated By Reference

Certain information required to be disclosed in Part III of this report is incorporated by reference from the registrant's definitive proxy statement or an amendment to this report, which will be filed with the SEC not later than 120 days after the end of the fiscal year covered by this report.

TABLE OF CONTENTS



	PAGE

EXPLANATORY NOTE	1
PART II

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	25

EXPLANATORY NOTE

Par Pacific Holdings, Inc. (the “Company,” “we,” “our,” and “us”) is filing this Amendment No. 1 to Annual Report on Form 10-K/A (this “Amended Form 10-K”) to amend its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 3, 2016 (the “Original Form 10-K”), solely in response to comments received from the staff of the SEC. In response to the comments, the Company amended and restated the disclosures in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the Original Form 10-K to expand and revise its disclosures primarily with respect to its presentation of non-GAAP financial measures.

In accordance with Rule 12b-15 under the Securities and Exchange Act of 1934, as amended, Item 7 of Part II and Item 15 of Part III of the Original Form 10-K are hereby amended and restated in their entirety. As the Amended Form 10-K relates only to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 15, Exhibits, Financial Statement Schedules, the previously issued consolidated financial statements and footnotes to the Original Form 10-K are unchanged. This Amended Form 10-K does not amend or otherwise update any other information in the Original Form 10-K. Accordingly, this Amended Form 10-K should be read in conjunction with the Original Form 10-K and with our subsequent filings with the SEC. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Original Form 10-K.

PART II

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a growth-oriented company based in Houston, Texas that manages and maintains interests in energy and infrastructure businesses. We were created through the successful reorganization of Delta Petroleum Corporation ("Delta") in August 2012. The reorganization converted approximately $265 million of unsecured debt to equity and allowed us to preserve significant tax attributes. We changed our name from Par Petroleum Corporation to Par Pacific Holdings, Inc. effective October 20, 2015.

Our business is organized into three primary operating segments:

1) Refining - Our refinery in Kapolei, Hawaii produces ultra-low sulfur diesel, gasoline, jet fuel, marine fuel and other associated refined products primarily for consumption in Hawaii.

2) Retail - Our retail outlets sell gasoline, diesel and retail merchandise throughout the island of Oahu as well as the neighboring islands of Maui, Hawaii and Kauai. Our retail network includes Tesoro and "76" branded retail sites, company-operated convenience stores, sites operated in cooperation with 7-Eleven and other sites operated by third parties.

3) Logistics - We own and operate refined products terminals, pipelines, a single-point mooring and trucking operations to distribute refined products throughout the island of Oahu as well as the neighboring islands of Maui, Hawaii, Molokai and Kauai.

We also own an equity investment in Laramie Energy, a joint venture entity focused on producing natural gas in Garfield, Mesa and Rio Blanco Counties, Colorado. On December 17, 2015, we entered into an equity commitment letter with Laramie Energy, pursuant to which we agreed to purchase certain membership interests of Laramie Energy for an aggregate cash purchase price of $55 million, subject to certain financing commitments by various lenders and additional equity investors, in connection with the closing of a purchase and sale agreement whereby Laramie Energy agreed to acquire certain properties in the Piceance Basin for $157.5 million, subject to customary purchase price adjustments. The transaction closed on March 1, 2016 and, upon the closing of the transaction, Laramie Energy assumed ownership and operatorship of the purchased properties and our ownership interest in Laramie Energy increased from 32.4% to 42.3%.

The refining, retail and logistics segments were established through the acquisition of PHR from Tesoro on September 25, 2013. As a result, our results of operations for any period after September 30, 2013 will not be comparable to any period before September 30, 2013.

During 2015, we changed our reportable segments to separate our retail and logistics operations from our refining operations due to a change in senior leadership, organizational structure, the acquisition of Mid Pac and to reflect how we currently make financial decisions and allocate resources. We have five reportable segments: (i) Refining, (ii) Retail, (iii) Logistics, (iv) Texadian and (v) Corporate and Other. We previously reported results for the following three business segments: (i) Refining, Distribution and Marketing, (ii) Natural Gas and Oil Production and (iii) Commodity Marketing and Logistics. We have recast the segment information for the years ended December 31, 2014 and 2013 to conform to the current period presentation. Please read Note 19—Segment Information to our consolidated financial statements included in this Annual Report on Form 10-K for detailed information on our operating results by segment.

Recent Events

KeyBank Credit Agreement

On December 17, 2015, HIE Retail and Mid Pac entered into a credit agreement with KeyBank in the form of a revolving credit facility with a maximum principal amount of $5 million and term loans in the amount of $110 million. The proceeds of the term loans were used to repay and terminate the existing indebtedness under the HIE Retail and Mid Pac Credit Agreements and to pay transaction fees and expenses and to facilitate a cash distribution to their parent.

Registered Direct Offering

On November 25, 2015, we issued an aggregate of 3.4 million shares of our common stock to certain pre-existing investors and other investors in a registered direct offering (the “Offering”) at a purchase price of $22.00 per share. The total gross proceeds from the Offering were approximately $74.8 million, before deducting expenses of approximately $1.0 million, for net proceeds of approximately $73.8 million.

Inventory Financing Agreements

On June 1, 2015, we entered into several agreements with J. Aron & Company ("J. Aron") to support the operations of our refinery (the "Supply and Offtake Agreements"). The Supply and Offtake Agreements have a term of three years with two one-year extension options upon mutual agreement of the parties. The Supply and Offtake Agreements also include a deferred payment arrangement, whereby we can defer payments owed under the agreements up to the lesser of $125 million or 85% of the eligible accounts receivable and inventory.

Upon execution of the Supply and Offtake Agreements, we terminated our Supply and Exchange Agreements with Barclays on June 1, 2015, subject to certain obligations to reimburse Barclays for third-party claims, and the ABL Facility. During the year ended December 31, 2015, we recorded a loss of $19.2 million related to the termination of these financing agreements, which is included in Loss on termination of financing agreements on our consolidated statements of operations. Please read Note 10—Inventory Financing Agreements to our consolidated financial statements for more information.

Mid Pac Acquisition

On April 1, 2015, we completed the acquisition of Mid Pac for cash consideration of $74.4 million. In connection with the acquisition, Mid Pac's pre-existing debt was fully repaid on the closing date for $45.3 million. The acquisition and debt repayment were funded with cash on hand and $55 million of borrowings under the Mid Pac Credit Agreement. The results of operations of Mid Pac are included in our refining, retail and logistics segments effective April 1, 2015. Mid Pac distributes gasoline and diesel through over 80 locations across the State of Hawaii, and owns four terminals. In conjunction with the acquisition, we also obtained the exclusive rights to the "76" brand in Hawaii through 2024. Please read Note 4—Acquisitions to our consolidated financial statements for more information.

Results of Operations

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Net Loss. For the year ended December 31, 2015, our net loss was $39.9 million compared to a $47.0 million net loss for the year ended December 31, 2014. During the year ended December 31, 2015, we benefited from favorable market conditions with crack spreads above the five year average which improved our margins and declining crude prices which reduced our operating expenses. We continued the trend of commercial improvements with increased on-island sales mainly resulting from a contract with the military for jet fuel and additional fuel volumes as a result of our acquisition of Par Hawaii. The favorable market conditions were partially offset by losses related to the change in value of our common stock warrants and contingent consideration, equity losses from our investment in Laramie and losses on the termination of financing agreements as further discussed below.

Adjusted EBITDA and Adjusted Net Income (Loss). For the year ended December 31, 2015, Adjusted EBITDA was $110.4 million compared to a $9.2 million loss for the year ended December 31, 2014. The change was primarily related to improved crack spreads and lower energy costs resulting from lower crude oil prices.

For the year ended December 31, 2015, Adjusted Net Income (Loss) was $14.3 million compared to a $38.8 million loss for the year ended December 31, 2014. The change is primarily related to improved crack spreads and lower energy costs resulting from lower crude oil prices, offset by a decrease of $58.8 million in our equity earnings from Laramie Energy, largely due to an impairment of $41.1 million, higher depreciation, depletion and amortization expenses and higher interest expense and financing costs in 2015.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Net Loss. Our net loss decreased to $47.0 million for the year ended December 31, 2014 from $79.2 million for the year ended December 31, 2013. Our acquisition of PHR in September 2013 had a significant impact on our margins, particularly in our refining segment. During 2014, the Company focused on building its customer base in Hawaii and its back-office support functions. Also reducing our loss year over year were gains recognized in 2014 related to the change in the value of our common stock warrants and equity earnings from Laramie compared to losses in 2013 as further discussed below.

Adjusted EBITDA and Adjusted Net Income (Loss). For the year ended December 31, 2014, Adjusted EBITDA was a $9.2 million loss compared to a $30.9 million loss for the year ended December 31, 2013. For the year ended December 31, 2014, Adjusted Net Income (Loss ) was a $38.8 million loss compared to a $53.1 million loss for the year ended December 31, 2013. The change in Adjusted EBITDA and Adjusted Net Income (Loss) was primarily due to the acquisition of PHR in September 2013.

The following table summarizes our consolidated results of operations for the years ended December 31, 2015, 2014 and 2013. The following should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Annual Report.



	Year Ended December 31,
	2015			2014			2013
Revenues	$	2,066,337		$	3,108,025		$	886,014
Cost of revenues (excluding depreciation)	1,787,368			2,937,472			857,066
Operating expense (excluding depreciation)	141,621			146,573			32,927
Depreciation, depletion and amortization	19,918			14,897			5,982
Impairment expense	9,639			—			—
(Gain) loss on sale of assets, net	—			624			(50		)
Trust litigation and settlements	—			—			6,206
General and administrative expense	44,271			34,304			21,494
Acquisition and integration expense	2,006			11,687			9,794
Total operating expenses	2,004,823			3,145,557			933,419
Operating income (loss)	61,514			(37,532		)	(47,405		)
Other income (expense)
Interest expense and financing costs, net	(20,156		)	(17,995		)	(13,285		)
Loss on termination of financing agreements	(19,669		)	(1,788		)	(6,141		)
Other income (expense), net	(291		)	(312		)	758
Change in value of common stock warrants	(3,664		)	4,433			(10,159		)
Change in value of contingent consideration	(18,450		)	2,849			—
Equity earnings (losses) from Laramie Energy, LLC	(55,983		)	2,849			(2,941		)
Total other expense, net	(118,213		)	(9,964		)	(31,768		)
Loss before income taxes	(56,699		)	(47,496		)	(79,173		)
Income tax benefit	16,788			455			—
Net loss	$	(39,911	)	$	(47,041	)	$	(79,173	)

The following tables summarize our operating income (loss) by segment for the years ended December 31, 2015, 2014 and 2013. The following should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Annual Report.



For the year ended December 31, 2015	Refining		Logistics ⁽¹⁾		Retail		Texadian			Corporate, Eliminations and Other⁽²⁾			Total
Revenues	$	1,895,662	$	82,671	$	283,507	$	132,472		$	(327,975	)	$	2,066,337
Costs of revenue (excluding depreciation)	1,718,729		48,660		215,194		134,780			(329,995		)	1,787,368
Operating expense (excluding depreciation)	95,588		5,433		35,317		—			—			136,338
Lease operating expense	—		—		—		—			5,283			5,283
Depreciation, depletion and amortization	9,522		3,117		5,421		854			1,004			19,918
Impairment expense	—		—		—		9,639			—			9,639
General and administrative expense	—		—		—		—			44,271			44,271
Acquisition and integration expense	—		—		—		—			2,006			2,006
Operating income (loss)	$	71,823	$	25,461	$	27,575	$	(12,801	)	$	(50,544	)	$	61,514



For the year ended December 31, 2014	Refining			Logistics ⁽¹⁾		Retail		Texadian		Corporate, Eliminations and Other⁽²⁾			Total
Revenues	$	2,816,667		$	70,457	$	231,673	$	189,160	$	(199,932	)	$	3,108,025
Costs of revenue (excluding depreciation)	2,732,817			39,910		187,150		183,511		(205,916		)	2,937,472
Operating expense (excluding depreciation)	111,261			4,524		25,115		—		—			140,900
Lease operating expense	—			—		—		—		5,673			5,673
Depreciation, depletion and amortization	6,008			1,881		2,353		2,018		2,637			14,897
Loss on sale of assets, net	—			—		—		—		624			624
General and administrative expense	—			—		—		—		34,304			34,304
Acquisition and integration expense	—			—		—		—		11,687			11,687
Operating income (loss)	$	(33,419	)	$	24,142	$	17,055	$	3,631	$	(48,941	)	$	(37,532	)



For the year ended December 31, 2013	Refining			Logistics ⁽¹⁾		Retail		Texadian		Corporate, Eliminations and Other⁽²⁾			Total
Revenues	$	755,406		$	19,798	$	48,913	$	100,149	$	(38,252	)	$	886,014
Costs of revenue (excluding depreciation)	769,038			11,075		39,461		83,483		(45,991		)	857,066
Operating expense (excluding depreciation)	20,440			988		5,823		—		—			27,251
Lease operating expense	—			—		—		—		5,676			5,676
Depreciation, depletion and amortization	1,222			468		577		2,009		1,706			5,982
Gain on sale of assets, net	—			—		—		—		(50		)	(50		)
Trust litigation and settlements	—			—		—		—		6,206			6,206
General and administrative expense	—			—		—		—		21,494			21,494
Acquisition and integration expense	—			—		—		—		9,794			9,794
Operating (income) loss	$	(35,294	)	$	7,267	$	3,052	$	14,657	$	(37,087	)	$	(47,405	)

________________________________________________________


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


⁽²⁾	Includes eliminations of intersegment revenues and cost of revenues (excluding depreciation) of $330.0 million, $205.9 million and $46.0 million for the years ended December 31, 2015, December 31, 2014 and December 31, 2013, respectively.

Below is a summary of key operating statistics for the years ended December 31, 2015, 2014 and 2013:



	Year Ended December 31,
	2015			2014			2013
Refining segment
Total Crude Oil Throughput (Mbpd)	77.3			68.2			64.2
Source of Crude Oil:
North America	47.7		%	48.8		%	—		%
Asia	33.0		%	1.3		%	35.9		%
Africa	8.3		%	3.7		%	15.8		%
Latin America	8.0		%	23.4		%	7.1		%
Middle East	2.1		%	22.8		%	41.2		%
Europe	0.9		%	—		%	—		%
Total	100.0		%	100.0		%	100.0		%

Yield (% of total throughput)
Gasoline and gasoline blendstocks	26.2		%	24.5		%	26.6		%
Distillate	44.1		%	38.9		%	49.0		%
Fuel oils	22.0		%	30.7		%	21.3		%
Other products	4.7		%	2.9		%	0.2		%
Total yield	97.0		%	97.0		%	97.1		%

Refined product sales volume (Mbpd)
On-island sales volume	62.4			53.9			60.1
Exports sale volume	14.4			15.2			5.9
Total refined product sales volume	76.8			69.1			66.0

4-1-2-1 Singapore Crack Spread ⁽¹⁾	$	6.88		$	6.25		$	5.59
4-1-2-1 Mid Pacific Crack Spread⁽¹⁾	8.31			7.16			7.33
Mid Pacific Crude Oil Differential⁽²⁾	(1.50		)	(0.99		)	(2.04		)
Operating income (loss) per bbl ($/throughput bbl)	2.55			(1.34		)	(5.98		)
Adjusted Gross Margin per bbl ($/throughput bbl)⁽³⁾	6.82			3.37			(2.31		)
Production costs per barrel ($/throughput bbl)⁽⁴⁾	3.54			4.71			3.40
DD&A per bbl ($/throughput bbl)	0.34			0.24			0.21

Retail Segment
Retail sales volumes (thousands of gallons)	80,649			49,484			10,274

Logistics Segment
Pipeline throughput (Mbpd)
Crude oil pipelines	77.7			68.2			63.9
Refined product pipelines	68.9			61.5			58.1
Total pipeline throughput	146.6			129.7			122.0

_______________________________________________________

⁽¹⁾

The profitability of our Hawaii business is heavily influenced by crack spreads in both the Singapore and U.S. West Coast markets. These markets reflect the closest, liquid market alternatives to source refined products for Hawaii. We believe the Singapore 4-1-2-1 and Mid Pacific crack spreads (or four barrels of Brent crude converted into one barrel of gasoline, two barrels of distillate (diesel and jet fuel) and one barrel of fuel oil) best reflect a market indicator for our operations. The Mid Pacific crack spread is calculated using a ratio of 80% Singapore and 20% San Francisco indexes.


⁽²⁾	Weighted average differentials, excluding shipping costs, of a blend of crudes with an API of 31.98 and sulfur weight percentage of 0.65% that is indicative of our typical crude oil mix quality compared to Brent crude.


⁽³⁾	Please see discussion of Adjusted Gross Margin below. We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput.

⁽⁴⁾

Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are a variety of ways to calculate production costs per barrel; different companies within the industry calculate it in different ways. We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refinery 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 on our consolidated statement of operations, which also includes costs related to our bulk marketing operations.

Non-GAAP Performance Measures

Management uses certain financial measures to evaluate our operating performance that are considered non-GAAP financial measures. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and our calculations thereof may not be comparable to similarly entitled measures reported by other companies.

Adjusted Gross Margin

Adjusted Gross Margin is defined as (i) operating income (loss) plus operating expense (excluding depreciation), depreciation, depletion and amortization, impairment expense, inventory valuation adjustments (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments and the impact of the embedded derivative repurchase obligation) and unrealized gains (losses) on derivatives or (ii) revenues less cost of revenues (excluding depreciation) less inventory valuation adjustments, impairment expense and unrealized gains (losses) on derivatives. We define cost of revenues (excluding depreciation) as 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 RINS obligations and certain hydrocarbon fees and taxes. Cost of revenues (excluding depreciation) also includes the unrealized gains (losses) on derivatives and inventory valuation adjustments just that we exclude from Adjusted Gross Margin.

Management believes Adjusted Gross Margin is an important measure of operating performance and uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. Management believes Adjusted Gross Margin 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 agreement and lower of cost or 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, depletion and amortization.

Adjusted Gross Margin should not be considered an alternative to operating income (loss), net cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted Gross Margin presented by other companies may not be comparable to our presentation since each company may define this term differently as they may include other manufacturing costs and depreciation expense in cost of revenues.

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



For the year ended December 31, 2015	Refining		Logistics		Retail		Texadian
Operating income (loss)	$	71,823	$	25,461	$	27,575	$	(12,801	)
Operating expense (excluding depreciation)	95,588		5,433		35,317		—
Depreciation, depletion and amortization	9,522		3,117		5,421		854
Impairment expense	—		—		—		9,639
Inventory valuation adjustment	5,178		—		—		1,510
Unrealized loss on derivatives	10,284		—		—		612
Adjusted Gross Margin	$	192,395	$	34,011	$	68,313	$	(186	)



For the year ended December 31, 2014	Refining			Logistics		Retail		Texadian
Operating income (loss)	$	(33,419	)	$	24,142	$	17,055	$	3,631
Operating expense (excluding depreciation)	111,261			4,524		25,115		—
Depreciation, depletion and amortization	6,008			1,881		2,353		2,018
Inventory valuation adjustment	—			—		—		2,444
Unrealized loss (gain) on derivatives	—			—		—		(1,015		)
Adjusted Gross Margin	$	83,850		$	30,547	$	44,523	$	7,078



For the year ended December 31, 2013	Refining			Logistics		Retail		Texadian
Operating income (loss)	$	(35,294	)	$	7,267	$	3,052	$	14,657
Operating expense (excluding depreciation)	20,440			988		5,823		—
Depreciation, depletion and amortization	1,222			468		577		2,009
Adjusted Gross Margin	$	(13,632	)	$	8,723	$	9,452	$	16,666

Adjusted Net Income (Loss) and Adjusted EBITDA

Adjusted Net Income (Loss) is defined as net income (loss) excluding changes in the value of contingent consideration and common stock warrants, acquisition and integration expense, unrealized (gains) losses on derivatives, inventory valuation adjustment, impairment expense, loss on termination of financing agreements, release of valuation allowance due to Mid Pac acquisition and gains (losses) on sales of assets. Adjusted EBITDA is Adjusted Net Income excluding interest, taxes, depreciation, depletion and amortization and equity (earnings) losses from Laramie Energy. We believe Adjusted Net Income (Loss) and Adjusted EBITDA 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.

Adjusted Net Income (Loss) and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financing activities or other income or cash flow statement data prepared in accordance with GAAP. Adjusted Net Income (Loss) and Adjusted EBITDA presented by other companies may not be comparable to our presentation as other companies may define these terms differently.

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



	Year Ended December 31,
	2015			2014			2013
Net loss	$	(39,911	)	$	(47,041	)	$	(79,173	)
Gain (loss) on sale of assets, net	—			624			(50		)
Inventory valuation adjustment	6,689			2,444			—
Unrealized (gain) loss on derivatives	10,896			(1,015		)	—
Acquisition and integration expense	2,006			11,687			9,794
Release of valuation allowance due to Mid Pac acquisition	(16,759		)	—			—
Loss on termination of financing agreements	19,669			1,788			6,141
Change in value of common stock warrants	3,664			(4,433		)	10,159
Change in value of contingent consideration	18,450			(2,849		)	—
Impairment expense	9,639			—			—
Adjusted Net Income (Loss)	14,343			(38,795		)	(53,129		)
Depreciation, depletion and amortization	19,918			14,897			5,982
Interest expense and financing costs, net	20,156			17,995			13,285
Equity (earnings) losses from Laramie Energy, LLC	55,983			(2,849		)	2,941
Income tax benefit	(29		)	(455		)	—
Adjusted EBITDA	$	110,371		$	(9,207	)	$	(30,921	)

Factors Impacting Segment Results

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Refining. Operating income for our refining segment was $71.8 million for the year ended December 31, 2015, an increase of $105.2 million compared to an operating loss of $33.4 million for the year ended December 31, 2014. The increase in profitability was primarily driven by an 11% increase in refined product sales volumes, which was compounded by an 18% increase in the percentage of sales of higher margin products, particularly distillate and gasoline. Additionally, there was an improvement in crack spreads year over year. The 4-1-2-1 Mid Pacific Crack Spread was $8.31 per barrel in 2015 compared to $7.16 per barrel in 2014. A global decline in crude oil prices resulted in a reduction in production costs and operating costs. Brent crude oil prices averaged $99.45 per barrel during 2014 compared to $53.60 per barrel in 2015, with similar decreases experienced for WTI crude oil prices. The year ended December 31, 2015 also benefited from $9.8 million in gains on commodity derivatives and there was no such activity for the year ended December 31, 2014.

Logistics. Operating income for our logistics segment was $25.5 million for the year ended December 31, 2015, an increase of $1.3 million compared to operating income of $24.1 million for the year ended December 31, 2014. Profitability of the logistics business is primarily driven by throughput which increased from 129.7 Mbpd for the year ended December 31, 2014 to 146.6 Mpbd for the year ended December 31, 2015.

Retail. Operating income for our retail segment was $27.6 million for the year ended December 31, 2015, an increase of $10.5 million compared to operating income of $17.1 million for the year ended December 31, 2014. The increase in operating income was primarily due to the acquisition of Mid Pac which closed on April 1, 2015 and contributed $10.2 million of operating income in 2015 to our retail segment.

Texadian. Operating loss for our Texadian segment was $12.8 million for the year ended December 31, 2015, a decrease of $16.4 million compared to operating income of $3.6 million for the year ended December 31, 2014. The decrease in the profitability of this segment was primarily due to lower margins available for moving crude oil from Canada to the U.S. Gulf Coast due to market conditions which led to lower cash flows and resulted in impairment charges. As a result of these market conditions, we canceled the charter on barges used to move crude oil from Canada to the U.S Gulf Coast resulting in a $2.6 million impairment of intangible assets. These factors, along with the negative cash flows in 2015 and forecasted cash flows for 2016, also resulted in the recognition of a $7.0 million impairment of goodwill associated with the Texadian segment.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Refining. Operating loss for our refining segment was $33.4 million for the year ended December 31, 2014, a slight decrease of $1.9 million compared to an operating loss of $35.3 million for the year ended December 31, 2013. We purchased our refinery on September 25, 2013 and the results of operations were only included in our financial statements from that date forward. It took management a period of time build its on-island customer base and establish a normal crude supply chain as evidenced by the $4.02/bbl improvement in the Adjusted Gross Margin per barrel from 2013 to 2014. Additionally, operating expenses increased due to a full year of operations; however, there was a $3.5 million increase in insurance costs, $6.0 million increase in property and local taxes and $3.2 million increase in salaries and wages compared to 2013 annualized expenses. In addition, approximately $6.0 million of operating expenses were capitalized as inventory costs for the year ended December 31, 2013.

Logistics. Operating income for our logistics segment was $24.1 million for the year ended December 31, 2014, an increase of $16.9 million compared to operating income of $7.3 million for the year ended December 31, 2013. The logistics operations were acquired in the PHR acquisition on September 25, 2013; therefore, the primary driver of the increase in operating income was the inclusion of a full year of operations of PHR in 2014 compared to only three months in 2013; however some of the increase in 2014 was offset by lower bunkering volume due to fewer cruise ships in Hawaii in 2014.

Retail. Operating income for our retail segment was $17.1 million for the year ended December 31, 2014, an increase of $14.0 million compared to operating income of $3.1 million for the year ended December 31, 2013. The retail operations were acquired in the PHR acquisition on September 25, 2013; therefore, the primary driver of the increase in operating income was the inclusion of a full year of operations of PHR in 2014 compared to only three months in 2013. Additionally, management focused on increasing market share and merchandising efforts which resulted in improved results on a same store basis.

Texadian. Operating income for our Texadian segment was $3.6 million for the year ended December 31, 2014, a decrease of $11.0 million compared to operating income of $14.7 million for the year ended December 31, 2013. The decrease was primarily due to lower trading differentials on heavy Canadian crude oil and lower volumes.

Adjusted Gross Margin

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Refining. For the year ended December 31, 2015, our refining Adjusted Gross Margin was approximately $192.4 million an increase of $108.5 million compared to $83.9 million for the year ended December 31, 2014. The increase was primarily due to an increase in refined product sales volumes of approximately 11%, lower production costs due to lower crude oil prices and improved crack spreads. In addition, our product mix for 2015 had a higher percentage of sales of higher margin products, particularly distillate and gasoline, compared to 2014.

Retail. For the year ended December 31, 2015, our retail Adjusted Gross Margin was approximately $68.3 million, an increase of $23.8 million compared to $44.5 million for the year ended December 31, 2014. The increase is primarily due a 31 million gallon, or 63% increase, in sales volumes, of which 30 million gallons related to the acquisition of Mid Pac.

Logistics. For the year ended December 31, 2015, our logistics Adjusted Gross Margin was approximately $34.0 million, an increase of $3.5 million when compared to $30.5 million for the year ended December 31, 2014. The increase was primarily due to an increase in crude oil throughput and on-island sales volumes of approximately 14% and 16% in 2015 as compared to 2014, respectively.

Texadian. For the year ended December 31, 2015, our Texadian Adjusted Gross Margin was a loss of $0.2 million, a decrease of $9.3 million when compared to $7.1 million for the year ended December 31, 2014. The decrease was primarily due to lower rail car revenues and lower margins available for moving crude oil from Canada to the U.S. Gulf Coast due to market conditions.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Refining. For the year ended December 31, 2014, our refining Adjusted Gross Margin was approximately $83.9 million, an increase of $97.5 million compared to a loss of $13.6 million for the year ended December 31, 2013. The increase was primarily due to the acquisition of PHR in September 2013.

Retail. For the year ended December 31, 2014, our retail Adjusted Gross Margin was approximately $44.5 million, an increase of $35.0 million compared to $9.5 million for the year ended December 31, 2013. The increase was primarily due a 39 million gallon, or a 382% increase, in sales volumes primarily due to the acquisition of PHR in September 2013 and a renewed focus of retail management on increasing market share and merchandising efforts post-acquisition.

Logistics. For the year ended December 31, 2014, our logistics Adjusted Gross Margin was approximately $30.5 million, an increase of $21.8 million when compared to $8.7 million for the year ended December 31, 2013. The increase was primarily due to the acquisition of PHR in September 2013.

Texadian. For the year ended December 31, 2014, our Texadian Adjusted Gross Margin was approximately $7.1 million, a decrease of $9.6 million when compared to $16.7 million for the year ended December 31, 2013. The decrease was primarily due to lower trading differentials on heavy Canadian crude oil and lower volumes as the Cushing/Hardisty trading differential decreased from $13.31/bbl in 2013 to $10.42/bbl in 2014.

Discussion of Consolidated Results

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Revenues. For the year ended December 31, 2015, revenues were $2.1 billion, a $1.0 billion decrease compared to $3.1 billion for the year ended December 31, 2014. The decrease was primarily due to reductions of $921.0 million and $56.7 million in our refining and Texadian segments, respectively, and were primarily the result of global declines in crude oil prices. Brent crude oil prices averaged $99.43 per barrel during 2014 compared to $53.58 per barrel in 2015, with similar decreases experienced for WTI crude oil prices. The market decreases were partially offset by increases of $51.8 million and $12.2 million in our retail and logistics segments, respectively. The increase in the retail segment was driven by the Mid Pac acquisition, which helped to offset lower prices per gallon. The increase in the logistics segment was driven by higher total throughput which increased from 129.7 Mbpd for the year ended December 31, 2014 to 146.6 Mbpd for the year ended December 31, 2015, which is consistent with an increase in our refined product sales volume from 69.1 Mbpd for the year ended December 31, 2014 to 76.8 Mbpd for the year ended December 31, 2015. The Mid Pac acquisition closed on April 1, 2015 and contributed a total of $147.6 million in revenues during the year ended December 31, 2015 of which $54.3 million and $93.3 million was attributed to the refining and retail segments, respectively. Mid Pac also contributed $4.0 million in logistics revenues which eliminate on a consolidated basis.

Cost of Revenues (Excluding Depreciation). For the year ended December 31, 2015, cost of revenues (excluding depreciation) was $1.8 billion, a $1.2 billion decrease compared to $2.9 billion for the year ended December 31, 2014. The decrease was primarily due to reductions of $1.0 billion and $48.7 million in our refining and Texadian segments, respectively, and were primarily the result of global declines in crude oil prices as discussed above. These decreases were partially offset by increases of $28.0 million and $8.8 million in our retail and logistics segments, respectively. The increase in the retail segment was driven by the Mid Pac acquisition, which helped to offset lower prices per gallon on a cost basis. The increase in the logistics segment was driven by higher throughput as discussed above. The Mid Pac acquisition contributed a total of $115.4 million in cost of revenues (excluding depreciation) during the year ended December 31, 2015 of which $45.7 million and $69.7 million was attributed to the refining and retail segments, respectively. Mid Pac also contributed $3.7 million in logistics cost of revenues (excluding depreciation) which eliminate on a consolidated basis.

Operating Expense (Excluding Depreciation). For the year ended December 31, 2015, operating expense (excluding depreciation) was approximately $141.6 million, a decrease of $5.0 million compared to $146.6 million for the year ended December 31, 2014. The decrease was primarily due to lower energy costs resulting from lower crude oil prices due to market prices as discussed above. This decrease was partially offset by incremental operating expenses of $16.0 million as a result of the Mid Pac acquisition. Additionally, in 2015, we terminated our post-retirement medical plan and recognized a gain of $5.1 million which was included as a reduction of operating expense (excluding depreciation) on our consolidated statement of operations.

Depreciation, Depletion and Amortization. For the year ended December 31, 2015, DD&A expense was approximately $19.9 million, an increase of $5.0 million compared to $14.9 million for the year ended December 31, 2014. The increase was primarily due to $4.3 million of depreciation, depletion and amortization on assets acquired as part of the Mid Pac acquisition on April 1, 2015 and various capital projects put in service in 2014 as we built our back office support and information technology systems, partially offset by $2.1 million lower depletion expense for Point Arguello due to the asset being fully impaired as of December 31, 2014 and $1.1 million lower amortization of intangible assets due to certain assets being fully amortized as of December 31, 2014.

Impairment expense. For the year ended December 31, 2015, we recognized impairment charges of $7.0 million and $2.6 million related to goodwill and intangible assets in our Texadian segment, respectively. There was no impairment expense during the year ended December 31, 2014.

(Gain) Loss on Sale of Assets, Net. For the year ended December 31, 2014, loss on sale of assets, net was approximately $0.6 million. The prior period loss was the result of selling oilfield equipment.

General and Administrative Expense. For the year ended December 31, 2015, general and administrative expense was approximately $44.3 million, an increase of $10.0 million when compared to $34.3 million for the year ended December 31, 2014. The increase is primarily due to an increase in compensation and consulting costs. The increase in compensation costs were due to building our back office support as we exited the transition services agreement with Tesoro. Previously, the costs incurred under the transition services agreement were included in Acquisition and integration expense. In 2014, our consulting costs primarily related to acquisition and integration activities; however, in 2015, our consulting costs were included in general and administrative expense as they primarily related to system modifications and process improvements related to the Supply and Offtake Agreements.

Acquisition and Integration Expense. For the year ended December 31, 2015, acquisition and integration expense was approximately $2.0 million, a decrease of $9.7 million when compared to $11.7 million for the year ended December 31, 2014. The decrease was primarily due to no expenses related to the integration of PHR in the year ended December 31, 2015 partially offset by expenses incurred for the Mid Pac acquisition and integration.

Interest Expense and Financing Costs, Net. For the year ended December 31, 2015, our interest expense and financing costs were approximately $20.2 million, compared to $18.0 million for the year ended December 31, 2014. The increase was primarily due to a higher outstanding debt balance during the period as a result of the Mid Pac acquisition on April 1, 2015.

Loss on Termination of Financing Agreements. For the year ended December 31, 2015, our loss on the termination of financing agreements was approximately $19.7 million, which primarily consists of a loss of $17.4 million on the termination of the Barclays Supply and Exchange Agreement and a loss of $1.8 million on the termination of the ABL Facility. The loss of $17.4 million on the termination of the Supply and Exchange Agreement consists of a loss of $13.3 million for the cash settlement value of the liability and recognition of $5.6 million of deferred financing costs, partially offset by a $1.5 million exit fee received from Barclays. The loss on the termination of the ABL Facility consisted of the recognition of deferred financing costs. For the year ended December 31, 2014, our loss on the termination of financing agreements was approximately $1.8 million as a result of our termination of our bridge loan agreement entered into in 2014. Please read Note 11—Debt to our consolidated financial statements.

Change in Value of Common Stock Warrants. For the year ended December 31, 2015, the change in value of common stock warrants resulted in a loss of approximately $3.7 million, a change of $8.1 million when compared to a gain of $4.4 million for the year ended December 31, 2014. For the year ended December 31, 2015, our stock price increased from $16.25 per share as of December 31, 2014 to $23.54 per share as of December 31, 2015 which resulted in an increase in the fair value of the common stock warrants. During the year ended December 31, 2014, our stock price decreased from $22.30 per share on December 31, 2013 to $16.25 per share on December 31, 2014 which resulted in a decrease in the value of the common stock warrants. Additionally, the number of warrants outstanding has decreased over the two year period due to certain warrant holders exercising their warrants.

Change in Value of Contingent Consideration. For the year ended December 31, 2015, the change in value of our contingent consideration liability resulted in a loss of approximately $18.5 million, a change of $21.3 million when compared to a gain of $2.8 million for the year ended December 31, 2014. The contingent consideration relates to the acquisition of PHR which occurred on September 25, 2013 and the change in value during the year ended December 31, 2015 was due to an increase in our actual and expected cash flows related to PHR during the contingency period based on our actual results.

Equity Earnings (Losses) From Laramie Energy. For the year ended December 31, 2015, losses from Laramie Energy were approximately $56.0 million, a change of $58.8 million compared to earnings of $2.8 million for the year ended December 31, 2014. The decrease is due to losses recognized by Laramie Energy for the year ended December 31, 2015 due to lower sales prices for natural gas and condensate and an impairment of $41.1 million on our equity investment in Laramie Energy in 2015. Please read Note 3—Investment in Laramie Energy, LLC to the consolidated financial statements for further discussion.

Income Taxes. For the year ended December 31, 2015, we recorded a benefit for the release of $16.8 million of our valuation allowance as we expect to be able to utilize a portion of our net operating loss ("NOL") carryforwards to offset future taxable income of Mid Pac. Excluding the impact of releasing the valuation allowance related to the Mid Pac deferred tax liability, state tax expense was approximately $29 thousand, compared to $455 thousand of state tax benefit for the year ended December 31, 2014.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Revenues. For the year ended December 31, 2014, revenues were $3.1 billion, a $2.2 billion increase compared to $886.0 million for the year ended December 31, 2013. The increase was primarily driven by the timing of the PHR acquisition which closed on September 25, 2013, therefore, 2013 only included approximately three months of revenues. Brent crude oil prices averaged $99.45 per barrel during 2014 compared to $108.70 per barrel in 2013 and the 4-1-2-1 Mid Pacific Crack Spread was $7.16 per barrel in 2014 compared to $7.33 per barrel in 2013. The Texadian segment also contributed $89.0 million to the increase despite an overall decrease in margins as discussed below. The increase was primarily driven by an increase in sales reported on a gross versus net basis based on the nature of the transactions executed with counterparties.

Cost of Revenues (Excluding Depreciation). For the year ended December 31, 2014, cost of revenues (excluding depreciation) were $2.9 billion, a $2.1 billion increase compared to $857.1 million for the year ended December 31, 2013. The increase was primarily driven by the timing of the PHR acquisition which closed on September 25, 2013, therefore 2013 only included approximately three months of activity as discussed above. The Texadian segment also contributed $100.0 million to the increase in cost of revenues (excluding depreciation). The increase was primarily due to an increase in purchases reported on a gross basis as discussed above.

Operating Expense (Excluding Depreciation). For the year ended December 31, 2014, operating expense (excluding depreciation) was approximately $146.6 million, an increase of $113.7 million compared to $32.9 million for the year ended December 31, 2013. The increase is primarily due to the acquisition of PHR in September 2013. Additionally, during 2014, expenses were higher when comparing annualized 2013 PHR expenses to 2014 due to a $3.5 million increase in insurance costs, $6.0 million increase in property and local taxes and $3.2 million increase in salaries and wages. In addition, $6.0 million of operating expenses were capitalized as inventory costs for the year ended December 31, 2013.

Depreciation, Depletion and Amortization. For the year ended December 31, 2014, DD&A expense was approximately $14.9 million, an increase of $8.9 million compared to $6.0 million for the year ended December 31, 2013. Approximately $8.0 million of the increase related to PHR and primarily related to the closing of the acquisition of PHR in September 2013.

Loss (Gain) on Sale of Assets, Net. For the year ended December 31, 2014, the loss on sale of assets, net, was approximately $624 thousand as a result of selling oilfield equipment within our natural gas and oil production segment. There was no significant activity during the year ended December 31, 2013.

Trust Litigation and Settlements. For the year ended December 31, 2014, there was no trust litigation and settlement expense, compared to $6.2 million for the year ended December 31, 2013. There was no significant activity during the year ended December 31, 2014, as we moved further away from the date of our emergence from bankruptcy.

General and Administrative Expense. For the year ended December 31, 2014, general and administrative expense was approximately $34.3 million, an increase of $12.8 million when compared to $21.5 million for the year ended December 31, 2013. The increase was primarily due to higher consulting expenses related to process improvements and the strengthening of internal controls and $2.8 million in higher stock-based compensation expense.

Acquisition and Integration Expense. For the year ended December 31, 2014, acquisition and integration expense was approximately $11.7 million, an increase of $1.9 million when compared to $9.8 million for the year ended December 31, 2013. The increase was primarily due to expenses incurred to exit the transition service agreement with Tesoro, further integration efforts related to the acquisition of PHR and approximately $7 million of Mid Pac related expenses.

Interest Expense and Financing Costs, Net. For the year ended December 31, 2014, our interest expense and financing costs were approximately $18.0 million, compared to $13.3 million for the year ended December 31, 2013. The increase was primarily due to an increase in outstanding debt balance during 2014 due to additional borrowings under the Delayed Draw Term Loan Credit Agreement. Please read Note 11—Debt to the consolidated financial statements.

Loss on Termination of Financing Agreements. For the year ended December 31, 2014, our loss on termination of financing agreements was approximately $1.8 million, compared to $6.1 million for the year ended December 31, 2013. During 2014, we recognized a loss of $1.8 million due to the termination of the Bridge Loan. During 2013, we recognized a loss of $6.1 million due to the termination of our obligations under the Delayed Draw Term Loan Credit Agreement.

Other Income (Expense), Net. For the year ended December 31, 2014, other expense was approximately $312 thousand, a decrease of $1.1 million when compared to other income of $758 thousand for the year ended December 31, 2013. Other income for the year ended December 31, 2013 included a $0.5 million franchise tax refund and $0.2 million in income from a legal settlement that were both nonrecurring. There were no individually significant items during the year ended December 31, 2014.

Change in Value of Common Stock Warrants. For the year ended December 31, 2014, the change in value of common stock warrants resulted in a gain of approximately $4.4 million, a change of $14.6 million when compared to a loss of $10.2 million for the year ended December 31, 2013. During the year ended December 31, 2014, our stock price decreased, which resulted in a decrease in the fair value of the common stock warrants. Conversely, our stock price increased during the year ended December 31, 2013, which resulted in a loss as the value of the common stock warrants also increased.

Change in Value of Contingent Consideration. For the year ended December 31, 2014, the change in value of our contingent consideration liability was approximately $2.8 million. The contingent consideration relates to the acquisition of PHR which occurred on September 25, 2013 and the change in value was due to a decrease in our expected cash flows related to PHR during the contingency period.

Equity Earnings (Losses) From Laramie Energy. For the year ended December 31, 2014, earnings from Laramie Energy were approximately $2.8 million, a change of $5.7 million compared to a loss of $2.9 million for the year ended December 31, 2013. The favorable change was primarily due to higher realized natural gas prices and derivative gains.

Income Taxes. For the year ended December 31, 2014, we recorded approximately $455 thousand of state tax benefit. The 2014 effective tax rate of 1.0% differs from the statutory rate of 35% primarily due to a full valuation allowance against the tax benefit generated by our current operating loss and various state deferred tax activity. The 2013 effective tax rate was 0.0% and differed from the statutory rate primarily due to a full valuation allowance against the tax benefit generated by the operating loss.

Liquidity and Capital Resources

Our liquidity and capital requirements are primarily a function of our debt maturities and debt service requirements, fixed capacity payments and contractual obligations, capital expenditures and working capital needs. Examples of working capital needs include purchases and sales of commodities and associated margin and collateral requirements, facility maintenance costs and other costs such as payroll. Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements and access to capital markets.

The following tables summarize our liquidity position as of February 26, 2016 and December 31, 2015 (in thousands):



February 26, 2016	Par Hawaii Refining		HIE Retail		Mid Pac		KeyBank Credit Agreement		Texadian		Corporate and Other		Total
Cash and cash equivalents	$	49,108	$	10,567	$	10,090	$	—	$	18,088	$	31,242	$	119,095
Revolver availability	—		—		—		5,000		—		—		$	5,000
Deferred Payment Arrangement availability⁽¹⁾	51,035		—		—		—		—		—		51,035
Total available liquidity	$	100,143	$	10,567	$	10,090	$	5,000	$	18,088	$	31,242	$	175,130

________________________________________________________

⁽¹⁾ Please read Note 10—Inventory Financing Agreements to our consolidated financial statements for further discussion.



December 31, 2015	Par Hawaii Refining		HIE Retail		Mid Pac		KeyBank Credit Agreement		Texadian		Corporate and Other		Total
Cash and cash equivalents	$	46,041	$	7,178	$	7,113	$	—	$	16,433	$	91,023	$	167,788
Revolver availability	—		—		—		5,000		28,125		—		33,125
Deferred Payment Arrangement availability⁽¹⁾	28,281		—		—		—		—		—		28,281
Total available liquidity	$	74,322	$	7,178	$	7,113	$	5,000	$	44,558	$	91,023	$	229,194

________________________________________________________

⁽¹⁾ Please read Note 10—Inventory Financing Agreements to our consolidated financial statements for further discussion.

The change in our liquidity position from December 31, 2015 to February 26, 2016 was primarily attributable to the expiration of our Texadian credit agreement in February, our investment in Laramie Energy of $55 million in February, increased availability under our J. Aron deferred payment arrangement and operating results and normal working capital changes for the period.

As of December 31, 2015, we had access to the J. Aron Deferred Payment Arrangement, the KeyBank Credit Agreement, the Texadian Uncommitted Credit Agreement and cash on hand of $167.8 million. In addition, we have Supply and Offtake Agreements with J. Aron, which are used to finance the majority of the inventory of our refinery. Generally, the primary uses of our capital resources have been in the operations of our refining segment, our retail segment, our Texadian segment, payments related to the acquisition of Mid Pac, cash capital contributions to Laramie Energy and payments of operating expenses related to our natural gas and crude oil assets.

We believe our cash flows from operations and available capital resources will be sufficient to meet our current capital expenditures, working capital and debt service requirements for the next 12 months. The funds for the $55 million Laramie Energy capital contribution were raised through our November 25, 2015 registered direct offering. The refinery turnaround costs will be funded through operating cash flows. Additionally, we may seek to raise additional debt or equity capital to fund any other significant changes to our business or to refinance existing debt. We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost.

Rights Offering

In July 2014, we issued, at no charge, one transferable subscription right with respect to each share of our common stock then outstanding. Holders of subscription rights were entitled to purchase 0.21 shares of our common stock for each subscription right held at an exercise price of $16.00 per whole share. The rights offering was fully subscribed and we issued approximately 6.4 million shares of our common stock resulting in net proceeds of approximately $101.5 million in August 2014.

Registered Direct Offering

On November 25, 2015, we issued an aggregate of 3.4 million shares of our common stock to certain pre-existing investors and other investors in an offering at a purchase price of $22.00 per share. The total gross proceeds from the offering were approximately $74.8 million, before deducting expenses of approximately $1.0 million, for net proceeds of approximately $73.8 million.

KeyBank Credit Agreement

On December 17, 2015, HIE Retail and Mid Pac entered into the KeyBank Credit Agreement in the form of a revolving credit facility up to $5 million ("KeyBank Revolving Credit Facility"), which provides for revolving loans and for the issuance of letters of credit and a term loan agreement (“KeyBank Term Loans”), which provided term loans totaling $110 million. The proceeds of the KeyBank Term Loans were used to repay existing indebtedness under the HIE Retail, Mid Pac Credit and Term Loan and Bridge Loan Credit Agreements and to pay transaction fees and expenses and to facilitate a cash distribution to their parent. As of December 31, 2015, we have not executed any borrowings under the KeyBank Revolving Credit Facility.

The KeyBank Term Loans mature in seven years and are fully payable on December 17, 2022. Principal on the KeyBank Term Loans will be repaid quarterly over the term of the loans. The KeyBank Revolving Credit Facility matures on December 17, 2020 and no more than seven borrowings of Eurodollar loans may be outstanding at any time. Letters of credit issued under the KeyBank Revolving Credit Facility are not to expire later than 30 days prior to the maturity date of the KeyBank Revolving Credit Facility.

The KeyBank Term Loans and advances under the KeyBank Revolving Credit Facility bear interest at a fluctuating rate equal to (i) during the periods such revolving loan or term loan, as applicable, is a Base Rate Loan, the Base Rate plus the Applicable Margin and (ii) during the periods such revolving loan or term loan, as applicable, is a Eurodollar Loan, the relevant Adjusted Eurodollar Rate for such Eurodollar Loan for the applicable interest period plus the Applicable Margin.

Pursuant to the KeyBank Credit Agreement, we are required to comply with various affirmative and negative covenants affecting our business and operations, including compliance with an interest coverage ratio of less than 2.50 to 1.00, a debt service coverage ratio of less than 1.25 to 1.00, and a maximum leverage ratio.

The loans and letters of credit issued under the KeyBank Credit Agreement are secured by a security interest in and lien on substantially all of the assets of HIE Retail and Mid Pac, a pledge by Par Petroleum, LLC of 100% of its ownership interest in HIE Retail and a pledge by Par Hawaii Inc. of 100% of its ownership interest in Mid Pac.

Please read Note 11—Debt in our consolidated financial statements for additional discussion.

Term Loan

On July 11, 2014, we and certain subsidiaries entered into a Delayed Draw Term Loan and Bridge Loan Credit Agreement ("Credit Agreement"), amending and restating a previous borrowing arrangement with the lenders, to provide us with a term loan of up to $50 million ("Term Loan") and a bridge loan of up to $75 million ("Bridge Loan"). The lenders under the Credit Agreement include ZCOF Par Petroleum Holdings, LLC and Highbridge International, LLC, who are also our stockholders. Proceeds from the Term Loan were used to fund the additional deposit required by the Mid Pac merger agreement, to pay transaction costs, and for working capital and general corporate purposes.

In July 28, 2014, the Credit Agreement was amended and we borrowed an additional $35 million ("Advance") under the Term Loan and on September 10, 2014, we extended the repayment date of the Advance to March 31, 2015.

We had no borrowings under the Bridge Loan and on September 3, 2014, we terminated the Bridge Loan and expensed approximately $1.8 million of financing costs associated with this loan that is included in Loss on termination of financing agreements in our consolidated statement of operations for the year ended December 31, 2014.

On March 11, 2015, we entered into a Third Amendment to the Credit Agreement whereby we extended the repayment date of the Advance to March 31, 2016. Upon the execution of the KeyBank Credit Agreement on December 17, 2015, we repaid the full amount outstanding under the Advance on December 22, 2015.

The Term Loan matures on July 11, 2018 and bears interest at either 10% per annum if paid in cash or 12% per annum if paid in kind, at our election and has an original issue discount of 5%. The Term Loan is secured by a lien on substantially all of our assets and our subsidiaries, excluding Texadian, Texadian Energy Canada Limited (“Texadian Canada”), certain of our

immaterial subsidiaries and Par Petroleum, LLC and its subsidiaries (collectively “the Guarantors”). All our obligations under the Term Loan are unconditionally guaranteed by the Guarantors.

HIE Retail Credit Agreement

On November 14, 2013, HIE Retail, LLC ("HIE Retail") entered into a Credit Agreement (“Retail Credit Agreement”) in the form of a senior secured loan of up to $30 million and a senior secured revolving line of credit of up to $5 million. On May 15, 2015, HIE Retail entered into an amendment to the Retail Credit Agreement that terminated the retail revolver, extended the maturity date of $22 million of the existing term loan until March 31, 2022, and provided additional term loan borrowings of up to $7.9 million, on the same terms as the previous term loan. We repaid in full and terminated the Retail Credit Agreement in December 2015 upon entering into the KeyBank Credit Agreement and expensed $58 thousand of financing costs associated with the agreement, which is included within Loss on termination of financing agreements on our consolidated statements of operations for the year ended December 31, 2015.

Texadian Uncommitted Credit Agreement

On February 20, 2015, Texadian Energy, Inc. ("TEI") and its wholly-owned subsidiary Texadian Energy Canada Limited, amended and restated their uncommitted credit agreement. The amended agreement increased the uncommitted loans and letters of credit capacity to $200 million and extended the maturity date. The agreement expired in February 2016.

Mid Pac Credit Agreement

On April 1, 2015, PHI and Mid Pac entered into the Mid Pac Credit Agreement in the form of a senior secured term loan in the amount of $50 million and a senior secured revolving line of credit in the aggregate principal amount of up to $5 million scheduled to mature on April 1, 2018. We borrowed the full amount of the loans at the closing. The proceeds of the loans were used to repay certain existing debt of PHI and Mid Pac totaling $45.3 million, pay a portion of the acquisition consideration and for general corporate purposes. We repaid in full and terminated the Mid Pac Credit Agreement upon entering into the KeyBank Credit Agreement and expensed $381 thousand of financing costs associated with the agreement, which is included within Loss on termination of financing agreements on our consolidated statements of operations for the year ended December 31, 2015.

Guarantors

In connection with our shelf registration statement on Form S-3, which was filed with the SEC on June 1, 2015 and declared effective on June 23, 2015 (“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 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”). The Company has no “independent assets or operations” within the meaning of Rule 3-10 of Regulation S-X and certain of the Guarantor Subsidiaries may be subject to restrictions on their ability to distribute funds to the Company, whether by cash dividends, loans or advances. On November 25, 2015, we issued 3.4 million shares of common stock in a registered direct offering which reduced the amount of securities available for issuance under the Registration Statement to approximately $675 million.

Cash Flows

The following table summarizes cash activities for the year ended December 31, 2015, 2014 and 2013 (in thousands):



	Years Ended December 31,
	2015			2014			2013
Net cash provided by (used in) operating activities	$	132,358		$	(54,604	)	$	(35,677	)
Net cash used in investing activities	(114,205		)	(24,299		)	(564,500		)
Net cash provided by financing activities	60,425			130,052			632,053

Net cash provided by operating activities was approximately $132.4 million for the year ended December 31, 2015, which resulted from a net loss of approximately $39.9 million offset by non-cash charges to operations of approximately $133.8 million and net cash provided by changes in operating assets and liabilities of approximately $38.5 million. Net cash used in operating activities was approximately $54.6 million for the year ended December 31, 2014, which resulted from a net loss of approximately $47.0 million offset by non-cash charges to operations of approximately $23.3 million and net cash used for changes in operating assets and liabilities of approximately $30.9 million. Net cash used in operating activities was approximately $35.7 million for

the year ended December 31, 2013, which resulted from a net loss of approximately $79.2 million offset by non-cash charges to operations of approximately $37.1 million and net cash provided by changes in operating assets and liabilities of approximately $6.4 million.

For the year ended December 31, 2015, net cash used in investing activities was approximately $114.2 million and primarily related to $64.3 million for the acquisition of Mid Pac, an investment in Laramie Energy of $27.5 million and additions to property and equipment totaling approximately $22.3 million. Net cash used in investing activities was approximately $24.3 million for the year ended December 31, 2014 and was primarily related to the Mid Pac acquisition deposit of $10.0 million and additions to property and equipment of approximately $14.3 million. Net cash used in investing activities was approximately $564.5 million for the year ended December 31, 2013 and was primarily related to the acquisition of PHR for approximately $559.3 million and additions to property and equipment totaling approximately $7.8 million, offset by proceeds from the sale of assets of $2.9 million.

Net cash provided by financing activities for the year ended December 31, 2015 was approximately $60.4 million and consisted primarily of proceeds from the sale of common stock totaling $76.1 million and net proceeds from inventory financing agreements of $13.2 million, offset by net repayments of borrowings and deferred payment arrangement of $20.5 million and deferred loan costs of $7.3 million. Net cash provided by financing activities for the year ended December 31, 2014 of approximately $130.1 million consisted primarily of proceeds from the sale of common stock totaling $103.9 million and $26.0 million of borrowings under the Term Loan which were used to fund the Mid Pac acquisition deposit and general corporate and working capital purposes. Net cash provided by financing activities for the year ended December 31, 2013 of approximately $632.1 million resulted from advances from our supply and exchange agreements totaling approximately $378.2 million, the sale of common stock totaling approximately $199.2 million, additional net borrowings of approximately $35.6 million and the release of approximately $19.0 million from restricted cash held to secure letters of credit.

Capital Expenditures

Our capital expenditures excluding acquisitions for the year ended December 31, 2015 totaled approximately $22.3 million and were primarily related to our refinery and information technology systems. Our capital expenditure budget for 2016, including major maintenance costs, ranges from $45 to $50 million and primarily relates to scheduled turnaround expenditures, as well as projects to improve our refinery reliability and efficiency and upgrades to our information technology systems. We also committed to fund approximately $55 million for investments in Laramie Energy.

Additional capital may be required to maintain our interests at our Point Arguello Unit offshore California, but production is not economic in the current low-price environment and we are not able to estimate the amount of any potential capital requirement. We also continue to seek strategic investments in business opportunities, but the amount and timing of those investments are not predictable.

Contractual Obligations

We have various contractual obligations and financial commitments in the normal course of our operations and financing activities. Contractual obligations include future cash payments required under existing contractual arrangements, such as debt and lease agreements. These obligations may result from both general financing activities and from commercial arrangements that are directly related to our operating activities. The following table summarizes the contractual obligations of the Company and its consolidated subsidiaries as of December 31, 2015. Cash obligations reflected in the table below are not discounted.



	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
	(in thousands)
Long-term debt (including current portion)	$	171,349	$	12,230	$	82,119	$	22,000	$	55,000
Interest payments on debt	32,455		8,826		16,590		4,548		2,491
Operating leases	98,924		27,443		31,133		16,156		24,192
Capital leases	2,395		712		1,250		433		—
Purchase commitments	201,009		199,636		1,298		75		—
Laramie Energy equity commitment	55,000		55,000		—		—		—

Long-Term Debt (including Current Portion). Long-term debt includes the scheduled principal payments related to our outstanding debt obligations and letters of credit. Please read Note 11—Debt to our consolidated financial statements for further discussion.

Interest Payments on Debt. Interest payments on debt represent estimated periodic interest payment obligations associated with our outstanding debt obligations using interest rates in effect as of December 31, 2015. Please read Note 11—Debt to our consolidated financial statements for further discussion.

Operating Leases. Operating leases include minimum lease payment obligations associated with certain retail sites, office space and office equipment leases. Also included in operating leases are two charter agreements associated with our logistics operations.

Capital Leases. Capital leases include minimum lease payment obligations associated with certain retail sites.

Purchase Commitments. Primarily consists of contracts executed as of December 31, 2015 for the purchase of crude oil for use at our refinery that are scheduled for delivery in 2016.

Laramie Energy Equity Commitment. On December 17, 2015, we entered into an equity commitment letter with Laramie Energy, pursuant to which we agreed to purchase certain membership interests of Laramie Energy for an aggregate cash purchase price of $55 million in support of an acquisition Laramie Energy completed on March 1, 2016.

Commitments and Contingencies

Inventory Financing Agreements. On June 1, 2015, we entered into several agreements with J. Aron & Company ("J. Aron") to support the operations of our refinery, (the "Supply and Offtake Agreements"). The Supply and Offtake Agreements have a term of three years and two one-year extension options at the mutual agreement of the parties. Please read Note 10—Inventory Financing Agreements to our consolidated financial statements for more information.

Pursuant to the Supply and Offtake Agreements, J. Aron holds title to quantities of crude oil and refined products in exchange for the Company's obligation to legally repurchase the crude oil and refined products at a later date. Substantially all of the crude oil and refined products inventory in the refinery storage tanks are titled to J. Aron. Primarily all of the crude and refined products inventory outside the refinery, except for one location, are owned and titled by the Company. In addition, the Company holds title to inventory contained in the process units during the refining process. The Company purchases the crude oil from J. Aron as it is discharged from the storage tanks into the process units. After processing, J. Aron takes title to the refined products stored in our storage tanks until the products are transferred to our retail locations or to third parties. We currently market and sell the refined product independently to third parties.

While title to the crude oil and certain refined product inventories will reside with J. Aron, the Supply and Offtake Agreements will be accounted for similar to a product financing arrangement; therefore, the crude oil and refined products inventories will continue to be included on our consolidated balance sheet until processed and sold to a third party. Each reporting period, we record a liability in an amount equal to the amount we expect to pay to repurchase the inventory held by J. Aron based on current market prices.

Environmental Matters. Our petroleum refining operations and third-party oil and gas exploration and production operations in which we have a working interest are subject to extensive and periodically changing federal, state and local environmental laws and regulations governing air emissions, wastewater discharges and solid and hazardous waste management activities. Many of these laws and regulations are becoming increasingly stringent and the cost of compliance can be expected to increase over time. Our policy is to accrue environmental and clean-up related costs of a non-capital nature when it is probable that a liability has been incurred and the amount can be reasonably estimated. Such estimates may be subject to revision in the future as regulations and other conditions change.

Periodically, we receive communications from various federal, state and local governmental authorities asserting violations of environmental laws and/or regulations. These governmental entities may also propose or assess fines or require corrective actions for these asserted violations. We intend to respond in a timely manner to all such communications and to take appropriate corrective action. We do not anticipate that any such matters currently asserted will have a material impact on our financial condition, results of operations or cash flows.

Regulation of Greenhouse Gases

The EPA has begun regulating GHG under the CAA. New construction or material expansions that meet certain GHG emissions thresholds will likely require that, among other things, a GHG permit be issued in accordance with the Clean Air Act regulations and we will be required in connection with such permitting to undertake a technology review to determine appropriate controls to be implemented with the project in order to reduce GHG emissions.

Furthermore, the EPA is currently developing refinery-specific GHG regulations and performance standards that are expected to impose GHG emission limits and/or technology requirements. These control requirements may affect a wide range of refinery operations. Any such controls could result in material increased compliance costs, additional operating restrictions for our business and an increase in cost of the products we produce, which could have a material adverse effect on our financial position, results of operations and liquidity.

On September 29, 2015, the EPA announced a final rule updating standards that control toxic air emissions from petroleum refineries, addressing, among other things, flaring operations, fenceline air quality monitoring and additional emission reductions from storage tanks and delayed coking units. Affected existing sources will be required to comply with the new requirements no later than 2018, with certain refiners required to comply earlier depending on the relevant provision and refinery construction date. We do not anticipate that compliance with this rule will have a material impact on our financial condition, results of operations or cash flows.

In 2007, the State of Hawaii passed Act 234, which required that GHG emissions be rolled back on a statewide basis to 1990 levels by the year 2020. Although delayed, the Hawaii Department of Health has issued regulations that would require each major facility to reduce CO₂ emissions by 16% by 2020 relative to a calendar year 2010 baseline (the first year in which GHG emissions were reported to the EPA under 40 CFR Part 98). Those rules are pending final approval by the Government of Hawaii. The refinery’s capacity to reduce fuel use and GHG emissions is limited. However, the state’s pending regulation allows and we anticipate the refinery will be able to demonstrate, that additional reductions are not cost-effective or necessary in light of the state’s current GHG inventory and future year projections. The pending regulation allows for “partnering” with other facilities (principally power plants) which have already dramatically reduced greenhouse emissions or are on schedule to reduce CO₂ emissions in order to comply with the state’s Renewable Portfolio Standards.

Fuel Standards

In 2007, the U.S. Congress passed the Energy Independence and Security Act (“EISA”) which, among other things, set a target fuel economy standard of 35 miles per gallon for the combined fleet of cars and light trucks in the U.S. by model year 2020 and contained a second Renewable Fuel Standard (the “RFS2”). In August 2012, the EPA and National Highway Traffic Safety Administration jointly adopted regulations that establish an average industry fuel economy of 54.5 miles per gallon by model year 2025. The RFS2 requires an increasing amount of renewable fuel usage, up to 36.0 billion gallons by 2022. In the near term, the RFS2 will be satisfied primarily with fuel ethanol blended into gasoline. The RFS2 may present production and logistics challenges for both the renewable fuels and petroleum refining and marketing industries in that we may have to enter into arrangements with other parties or purchase credits from the EPA to meet our obligations to use advanced biofuels, including biomass-based diesel and cellulosic biofuel, with potentially uncertain supplies of these new fuels.

In October 2010, the EPA issued a partial waiver decision under the Clean Air Act to allow for an increase in the amount of ethanol permitted to be blended into gasoline from 10% (“E10”) to 15% (“E15”) for 2007 and newer light duty motor vehicles. In January 2011, the EPA issued a second waiver for the use of E15 in vehicles model years 2001-2006. There are numerous issues, including state and federal regulatory issues, which need to be addressed before E15 can be marketed on a large scale for use in traditional gasoline engines. Consequently, qualified Renewable Identification Numbers (“RINS”) will be required to fulfill the federal mandate for renewable fuels.

In March 2014, the EPA published a final Tier 3 gasoline standard that lowers the allowable sulfur level in gasoline to 10 parts per million ("ppm") and also lowers the allowable benzene, aromatics and olefins content of gasoline. The effective date for the new standard, January 1, 2017, gives refiners nationwide little time to engineer, permit and implement substantial modifications; however, approved small volume refineries have until January 1, 2020 to meet the standard. The American Petroleum Institute and American Fuel and Petrochemical Association may challenge the final regulation. In September 2015, our refinery was granted small volume refinery status by the EPA. Along with credit and trading options, potential capital upgrades for the refinery are being evaluated.

Beginning on June 30, 2014, new sulfur standards for fuel oil used by marine vessels operating within 200 miles of the US coastline (which includes the entire Hawaiian Island chain) was lowered from 10,000 ppm (1%) to 1,000 ppm (0.1%). The sulfur standards began at the refinery and were phased in so that by January 1, 2015, they were to be fully aligned with the International Marine Organization ("IMO") standards and deadline. The more stringent standards apply universally to both US

and foreign flagged ships. Although the marine fuel regulations provided vessel operators with a few compliance options such as installation of on-board pollution controls and demonstration unavailability, many vessel operators will be forced to switch to a distillate fuel while operating within the Emission Control Area ("ECA"). Beyond the 200 mile ECA, large ocean vessels are still allowed to burn marine fuel with up to 3.5% sulfur. Our refinery is capable of producing the 1% sulfur residual fuel oil that was previously required within the ECA. Although our refinery remains in a position to supply vessels traveling to and through Hawaii, the market for 0.1% sulfur distillate fuel and 3.5% sulfur residual fuel is much more competitive.

There will be compliance costs and uncertainties regarding how we will comply with the various requirements contained in the EISA and other fuel-related regulations. We may experience a decrease in demand for refined petroleum products due to an increase in combined fleet mileage or due to refined petroleum products being replaced by renewable fuels.

Environmental Agreement. On September 25, 2013 (“Closing Date”), Hawaii Pacific Energy (a wholly-owned subsidiary of Par created for purposes of the acquisition of PHR), Tesoro and PHR entered into an Environmental Agreement (“Environmental Agreement”), which allocated responsibility for known and contingent environmental liabilities related to the acquisition of PHR, including the Consent Decree as described below.

Consent Decree

Tesoro is currently negotiating a Consent Decree with the EPA and the DOJ concerning alleged violations of the federal Clean Air Act related to the ownership and operation of multiple facilities owned or formerly owned by Tesoro and its affiliates ("Consent Decree"), including the Hawaii refinery. It is anticipated that the Consent Decree will be finalized sometime during 2016 and will require certain capital improvements to our refinery to reduce emissions of air pollutants.

We estimate the cost of compliance with the final Consent Decree could be $20 million to $30 million. However, Tesoro is responsible under the Environmental Agreement for reimbursing us for all reasonable third-party capital expenditures incurred for the construction, installation and commissioning of such capital projects and for the payment of any fines or penalties imposed on us arising from the Consent Decree to the extent related to acts or omission of Tesoro or us prior to the Closing Date. Tesoro’s obligation to reimburse us for such fines and penalties is not subject to a monetary limitation; however, the obligation relating to fines and penalties terminates on the third anniversary of the Closing Date.

Indemnification

In addition to its obligation to reimburse us for capital expenditures incurred pursuant to the Consent Decree, Tesoro agreed to indemnify us for claims and losses arising out of related breached of Tesoro’s representations, warranties and covenants in the Environment Agreement, certain defined “corrective actions” relating to pre-existing environmental conditions, third-party claims arising under environmental laws for personal injury or property damage arising out of or relating to releases of hazardous materials that occurred prior to the Closing Date, any fine, penalty or other cost assessed by a governmental authority in connection with violations of environmental laws by us prior to the Closing Date, certain groundwater remediation work, the replacement of underground storage tanks located at certain retail assets and fines or penalties imposed on us by the Consent Decree related to acts or omissions of Tesoro prior to the Closing Date and to the Pearl City Superfund Site.

Tesoro’s indemnification obligations are subject to certain limitations as set forth in the Environmental Agreement. These limitations include a deductible of $1 million and a cap of $15 million for certain of Tesoro’s indemnification obligations related to certain pre-existing conditions as well as certain restrictions regarding the time limits for submitting notice and supporting documentation for remediation actions.

Bankruptcy Matters. We emerged from the reorganization of Delta Petroleum on August 31, 2012 ("Emergence Date") when the plan of reorganization ("Plan") was consummated. On the Emergence Date, we formed the Delta Petroleum General Recovery Trust (“General Trust”). The General Trust was formed to pursue certain litigation against third parties, including preference actions, fraudulent transfer and conveyance actions, rights of setoff and other claims or causes of action under the U.S. Bankruptcy Code and other claims and potential claims that the Debtors hold against third parties. The General Trust was funded with $1 million each pursuant to the Plan.

The General Trust is pursuing all bankruptcy causes of action, claim objections and resolutions and all other responsibilities for winding up the bankruptcy. The General Trust is overseen by a three-person General Trust Oversight Board and our General Counsel is currently the trustee (“Recovery Trustee”). Costs, expenses and obligations incurred by the General Trust are charged against assets in the General Trust. To conduct its operations and fulfill its responsibilities under the Plan and the trust agreements, the Recovery Trustee may request additional funding from us. Any litigation pending at the time we emerged from Chapter 11 was transferred to the General Trust for resolution and settlement in accordance with the Plan and the order confirming the Plan. We are the beneficiary of the General Trust, subject to the terms of the trust agreement and the Plan. Since the Emergence Date, the General Trust has filed various claims and causes of action against third parties before the Bankruptcy Court, which actions

are ongoing. Upon liquidation of the various claims and causes of action held by the General Trust, the proceeds, less certain administrative reserves and expenses, will be transferred to us. It is unknown at this time what proceeds, if any, we will realize from the General Trust’s litigation efforts.

As of December 31, 2015, a total of twelve claims totaling approximately $23.1 million remain to be resolved by the Recovery Trustee. We have agreed to settle six of these claims for aggregate consideration of approximately $666 thousand, subject to final documentation and payment, and have filed or will file notices of objection with respect to liability for the other claims.

The largest remaining proof of claim was filed by the U.S. Government for approximately $22.4 million relating to ongoing litigation concerning a plugging and abandonment obligation in Pacific Outer Continental Shelf Lease OCS-P 0320, comprising part of the Sword Unit in the Santa Barbara Channel, California. We believe the probability of issuing stock to satisfy the full claim amount is remote, as the obligations upon which such proof of claim is asserted are joint and several among all working interest owners and Delta, our predecessor, owned a working interest in the unit of approximately 2.4% .

The settlement of claims is subject to ongoing litigation and we are unable to predict with certainty how many shares will be required to satisfy all claims. Pursuant to the Plan, allowed claims are settled at a ratio of 54.4 shares per $1,000 of claim. At December 31, 2015, we have reserved approximately $1.1 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end.

Operating Leases. We have various cancelable and noncancelable operating leases related to land, vehicles, office and retail facilities and other facilities used in the storage, transportation and sale of crude oil and refined products. The majority of the future lease payments relate to retail stations and facilities used in the storage, transportation and sale of crude oil and refined products. We have operating leases for most of our retail stations with primary terms of up to 32 years and generally containing renewal options and escalation clauses. Leases for facilities used in the storage, transportation and sale of crude oil and refined products have various expiration dates extending to 2044.

In addition, with our Texadian segment and our logistics segment, we have various agreements to lease storage facilities, primarily along the Mississippi River, railcars, and towboats and other equipment. These leasing agreements have been classified as operating leases for financial reporting purposes and the related rental fees are charged to expense over the lease term as they become payable. The leases generally range in duration of five years or less and contain lease renewal options at fair value. Our railcar leases contain an empty mileage indemnification provision whereby if the empty mileage exceeds the loaded mileage, we are charged for the empty mileage at the rate established by the tariff of the railroad on which the empty miles accrued.

Minimum annual lease payments extending to 2044 for operating leases to which we are legally obligated and having initial or remaining noncancelable lease terms in excess of one year are as follows (in thousands):



2016	$	27,443
2017	18,269
2018	12,864
2019	10,351
2020	5,805
Thereafter	24,192
Total minimum rental payments	$	98,924

Capital Leases. We have capital lease obligations related primarily to the leases of five retail stations with initial terms of 17 years, with four five-year renewal options. Minimum annual lease payments including interest, for capital leases are as follows (in thousands):



2016	$	712
2017	672
2018	578
2019	433
2020	—
Thereafter	—
Total minimum lease payments	$	2,395
Less amount representing interest	308
Total minimum rental payments	$	2,087

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as of December 31, 2015.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations were based on the consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Our significant accounting policies are described in Note 2—Summary of Significant Accounting Policies of our audited consolidated financial statements included herein. We have identified certain of these policies as being of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by management. We analyze our estimates on a periodic basis, including those related to fair value, impairments, natural gas and crude oil reserves, bad debts, natural gas and oil properties, income taxes, derivatives, contingencies and litigation and base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Inventory

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out accounting method. We value merchandise along with spare parts, materials and supplies at average cost. Estimating the net realizable value of our inventory requires management to make assumptions about the timing of sales and the expected proceeds that will be realized for the sales.

Our refining segment acquires substantially all of its crude oil from 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 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. The valuation of our repurchase obligation requires that we make estimates of the prices and differentials assuming settlement at the end of the reporting period. Please read Note 10—Inventory Financing Agreements for additional information.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. In estimating fair value, we use discounted cash-flow projections, recent comparable market transactions, if available or quoted prices. We consider assumptions that third parties would make in estimating fair value, including the highest and best use of the asset. The assumptions used by another party could differ significantly from our assumptions.

We classify fair value balances based on the classification of the inputs used to calculate the fair value of a transaction. The inputs used to measure fair value have been placed in a hierarchy based on priority. The hierarchy gives the highest priority to unadjusted, readily observable quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis. We use a variety of methods to estimate the fair value of assets and liabilities acquired in business combinations and evaluating goodwill and other long-lived assets for impairment. These methods include the cost approach, the sales approach and the income approach. These methods require management to make judgments regarding characteristics of the acquired property, future revenues and expenses. There is a significant amount of judgment involved in cash-flow estimates. Changes in these estimates would result in different amounts allocated to the related assets and liabilities.

At December 31, 2015, we conducted an impairment test related to our equity investment in Laramie Energy. As a result of the decline in commodity prices during 2015, we concluded that our equity investment in Laramie Energy was impaired and recognized an other-than-temporary impairment charge of $41.1 million on our consolidated statement of operations for the year ended December 31, 2015. We primarily used a market approach to determine the fair value of our equity investment in Laramie Energy as of December 31, 2015.

At September 30, 2015, we conducted an interim goodwill impairment test of our Texadian reporting unit due to (i) a reduction in the forecasted results of operations during our annual budgeting process; (ii) the decision to cancel the charter on the barges used to move crude oil from Canada to the U.S. Gulf Coast due to lower forecasted commodity prices and (iii) negative cash flows from the business during 2015. Upon completion of the goodwill impairment test, we determined the goodwill associated

with the Texadian reporting unit was fully impaired resulting in a charge of $7.0 million in our consolidated statement of operations for the year ended December 31, 2015. In assessing the value of the reporting unit, we primarily used an income approach with a weighted-average discount rate of 15%.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis. In the valuation of the liability for the contingent consideration to be paid for the acquisition of PHR and of our outstanding warrants, we use simulation models which require management to make estimates of future gross margin, gross margin volatility and expected volatility of our stock price and a present value factor. Different estimates would result in a change in the fair value of the amounts presented in our consolidated financial statements.

Derivatives and Other Financial instruments. We are exposed to commodity price risk related to crude oil and refined products. We manage this exposure through the use of various derivative commodity instruments. These instruments include exchange traded futures and over-the-counter swaps, forwards and options.

For our forward contracts that are derivatives, we have elected the normal purchase normal sale exclusion, as it is our policy to fulfill or accept the physical delivery of the product and we will not net settle. Therefore, we did not recognize the unrealized gains or losses related to these contracts in our consolidated financial statements. We apply the accrual method of accounting to contracts qualifying for the normal purchase and sales exemption.

All derivative instruments not designated as normal purchases or sales, are recorded in the balance sheet as either assets or liabilities measured at their fair values. Changes in the fair value of these derivative instruments are recognized currently in earnings. We have not designated any derivative instruments as cash flow or fair value hedges and therefore, do not apply hedge accounting treatment.

In addition, we may have other financial instruments, such as warrants or embedded debt features, that may be classified as liabilities when either (a) the holders possess rights to net cash settlement, (b) physical or net equity settlement is not in our control or (c) the instruments contain other provisions that cause us to conclude that they are not indexed to our equity. Our former delayed draw term loan facility contained certain puts that were accounted for as embedded derivatives. We have also accounted for our obligation to repurchase crude oil and refined products from J.Aron at the termination of the Supply and Offtake Agreements as an embedded derivative. These liabilities were initially recorded at fair value and subsequently adjusted to fair value at the end of each reporting period through earnings.

Asset Retirement Obligations. We record asset retirement obligations (“AROs”) at fair value in the period in which we have a legal obligation, whether by government action or contractual arrangement, to incur these costs and can make a reasonable estimate of the fair value of the liability. Our AROs arise from our refining, retail and logistics operations, as well as plugging and abandonment of wells within our natural gas and crude oil operations. AROs are calculated based on the present value of the estimated removal and other closure costs using our credit-adjusted risk-free rate. When the liability is initially recorded, we capitalize the cost by increasing the book value of the related long-lived tangible asset. The liability is accreted to its estimated settlement value and the related capitalized cost is depreciated over the asset’s useful life and both expenses are recorded in Depreciation, depletion and amortization in the consolidated statements of operations. The difference between the settlement amount and the recorded liability is recorded as a gain or loss on asset disposals in our consolidated statements of operations. We estimate settlement dates by considering our past practice, industry practice, management’s intent and estimated economic lives.

We cannot currently estimate the fair value for certain AROs primarily because we cannot estimate settlement dates (or ranges of dates) associated with these assets. These AROs include hazardous materials disposal (such as petroleum manufacturing by-products, chemical catalysts and sealed insulation material containing asbestos) and removal or dismantlement requirements associated with the closure of our refining facility, terminal facilities, or pipelines, including the demolition or removal of certain major processing units, buildings, tanks, pipelines or other equipment.

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

INDEX TO EXHIBITS



2.1	Third Amended Joint Chapter 11 Plan of Reorganization of Delta Petroleum Corporation and Its Debtor Affiliates dated August 13, 2012. Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on September 7, 2012.

2.2	Contribution Agreement, dated as of June 4, 2012, among Piceance Energy, LLC, Laramie Energy, LLC and the Company. Incorporated by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K filed on June 8, 2012.

2.3	Purchase and Sale Agreement dated as of December 31, 2012, by and among the Company, SEACOR Energy Holdings Inc., SEACOR Holdings Inc. and Gateway Terminals LLC. Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on January 3, 2013.

2.4	Membership Interest Purchase Agreement dated as of June17, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC and Hawaii Pacific Energy, LLC Incorporated by reference to Exhibit 2.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed on August 14, 2013.

2.5	Agreement and Plan of Merger dated as of June 2, 2014, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc. and Bill D. Mills, in his capacity as the Shareholders’ Representative. Incorporated by reference to Exhibit 2.5 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed on August 11, 2014.

2.6	Amendment to Agreement and Plan of Merger dated as of September 9, 2014, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc. and Bill D. Mills, in his capacity as the shareholders’ representative. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 10, 2014.

2.7	Second Amendment to Agreement and Plan of Merger dated as of December 31, 2014, by and among Par Petroleum Corporation, Bogey, Inc., Koko'oha Investments, Inc. and Bill D. Mills, in his capacity as the shareholder's representative. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 7, 2015.

2.8	Third Amendment to Agreement and Plan of Merger dated as of March 31, 2015, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc. and Bill D. Mills, in his capacity as the shareholders’ representative. Incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K filed on April 2, 2015.

3.1	Restated Certificate of Incorporation of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on October 20, 2015.

3.2	Second Amended and Restated Bylaws of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.3 to the Company's Current Report on Form 8-K filed on October 20, 2015.

4.1	Form of the Company's Common Stock Certificate. Incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K filed on March 31, 2014.

4.2	Registration Rights Agreement effective as of August 31, 2012, by and among the Company, Zell Credit Opportunities Master Fund, L.P., Waterstone Capital Management, L.P., Pandora Select Partners, LP, Iam Mini-Fund 14 Limited, Whitebox Multi-Strategy Partners, LP, Whitebox Credit Arbitrage Partners, LP, HFR RVA Combined Master Trust, Whitebox Concentrated Convertible Arbitrage Partners, LP and Whitebox Asymmetric Partners, LP. Incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on September 7, 2012.

4.3	Warrant Issuance Agreement dated as of August 31, 2012, by and among the Company and WB Delta, Ltd., Waterstone Offshore ER Fund, Ltd., Prime Capital Master SPC, GOT WAT MAC Segregated Portfolio, Waterstone Market Neutral MAC51, Ltd., Waterstone Market Neutral Master Fund, Ltd., Waterstone MF Fund, Ltd., Nomura Waterstone Market Neutral Fund, ZCOF Par Petroleum Holdings, L.L.C. and Highbridge International, LLC. Incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed on September 7, 2012.



4.4	Form of Common Stock Purchase Warrant dated as of June 4, 2012. Incorporated by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed on September 7, 2012.

4.5	Par Petroleum Corporation 2012 Long Term Incentive Plan. Incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8 filed on December 21, 2012.

4.6	Registration Rights Agreement dated as of September 25, 2013, by and among the Company and the Purchasers party thereto. Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on September 27, 2013.

4.7	Form of Par Petroleum Corporation Shareholder Subscription Rights Certificate. Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on July 22, 2014.

4.8	Stockholders Agreement dated April 10, 2015. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 13, 2015.
4.9	Amendment to Par Pacific Holdings, Inc. 2012 Long Term Incentive Plan. *

10.1	Delayed Draw Term Loan and Bridge Loan Credit Agreement dated as of July 11, 2014, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 14, 2014.

10.2	First Amendment to Delayed Draw Term Loan and Bridge Loan Credit Agreement dated as of July 28, 2014, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 28, 2014.

10.3	Second Amendment to Delayed Draw Term Loan and Bridge Loan Credit Agreement dated as of September 10, 2014, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 10, 2014.

10.4	Third Amended and Restated Limited Liability Company Agreement of Laramie Energy, LLC dated February 22, 2016, by and among Laramie Energy II, LLC, Par Piceance Energy Equity LLC and the other members party thereto. *

10.5	Credit Agreement dated as of June 4, 2012 among Piceance Energy, LLC, the financial institutions party thereto, JPMorgan Chase Bank, N.A., as administrative agent and Wells Fargo Bank, National Association, as syndication agent. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

10.6	First Amendment to Credit Agreement dated August 31, 2012, by and among Piceance Energy, LLC, the financial institutions party thereto and JPMorgan Chase Bank, N.A. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

10.7	Delta Petroleum General Recovery Trust Agreement dated August 27, 2012, by and among the company, DPCA LLC, Delta Exploration company, Inc., Delta Pipeline, LLC, DLC, Inc., CEC, Inc., Castle Texas Production Limited. Partnership, Amber Resources company of Colorado, Castle Exploration company, Inc. and John T. Young. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

10.8	Pledge Agreement dated August 31, 2012, by Par Piceance Energy Equity LLC in favor of Jefferies Finance LLC. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

10.9	Intercreditor Agreement dated August 31, 2012, by and among JP Morgan Chase Bank, N.A., as administrative agent for the First Priority Secured Parties (as defined therein), Jefferies Finance LLC, as administrative agent for the Second Priority Secured Parties (as defined therein), the Company and Par Piceance Energy Equity LLC. Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

10.10	Pledge and Security Agreement, dated August 31, 2012, by the company and certain of its subsidiaries in favor of Jefferies Finance LLC. Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

10.11	Form of Indemnification Agreement between the company and its Directors and Executive Officers. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2012.***



10.12	Letter Agreement dated as of September 17, 2013 but effective as of January 1, 2013, by and between Equity Group Investments and the company. Incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2013.

10.13	Framework Agreement dated as of September 25, 2013, by and among Hawaii Pacific Energy, LLC, Tesoro Hawaii, LLC and Barclays Bank PLC. Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 8-K filed on September 27, 2013.

10.14	Storage and Services Agreement dated as of September 25, 2013, by and among Tesoro Hawaii, LLC and Barclays Bank PLC. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.15	Agency and Advisory Agreement dated as of September 25, 2013, by and among Tesoro Hawaii, LLC and Barclays Bank PLC. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.16	Inventory First Lien Security Agreement dated as of September 25, 2013, by and among Tesoro Hawaii, LLC and Wells Fargo Bank, N.A, as inventory collateral agent. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.17	First Lien Mortgage dated as of September 25, 2013, by and among Tesoro Hawaii, LLC and Wells Fargo Bank, N.A, as inventory collateral agent. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.18	Intercreditor Agreement dated as of September 25, 2013, by and among Barclays Bank PLC, Wells Fargo Bank, N.A, as inventory collateral agent, Deutsche Bank AG New York Branch, as ABL loan collateral agent and as administrative agent pursuant to the ABL Credit Agreement, Hawaii Pacific Energy, LLC and Tesoro Hawaii, LLC. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.19	Membership Interests First Lien Pledge Agreement dated as of September 25, 2013, by and between Hawaii Pacific Energy, LLC and Wells Fargo Bank, N.A, as inventory collateral agent. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.20	ABL Credit Agreement dated as of September 25, 2013, by and among Tesoro Hawaii, LLC and other borrowers party thereto, Hawaii Pacific Energy, LLC, the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent and ABL loan collateral agent. Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.21	ABL Loan Second Lien Security Agreement dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Wells Fargo Bank, National Association, as inventory collateral agent. Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.22	ABL Loan First Lien Security Agreement dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Deutsche Bank AG New York Branch, as ABL loan collateral agent. Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.23	Second Lien Mortgage dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Deutsche Bank AG New York Branch, as collateral agent. Incorporated by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.24	Membership Interests Second Lien Pledge Agreement dated as of September 25, 2013, by and between Hawaii Pacific Energy, LLC and Deutsche Bank AG New York Branch, as ABL loan collateral agent. Incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.25	Inventory Second Lien Security Agreement dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Deutsche Bank AG New York Branch, as collateral agent. Incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K filed on September 27, 2013.

10.26	Environmental Agreement dated as of September 25, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC and Hawaii Pacific Energy, LLC. Incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2013.

10.27	Credit Agreement dated as of November 14, 2013, by and among the company, the Lenders party thereto and Bank of Hawaii, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 19, 2013.

10.28	Employment Offer Letter with William Monteleone dated September 25, 2013. Incorporated by reference to Exhibit 10.43 to the Company’s Amendment No. 3 to Annual Report on Form 10-K/A filed on July 2, 2014.***



10.29	Employment Offer Letter with Christopher Micklas dated December 9, 2013***.

10.30	Award Notice of Restricted Stock with William Monteleone dated December 31, 2012. Incorporated by reference to Exhibit 10.46 to the Company’s Amendment No. 3 to Annual Report on Form 10-K/A filed on July 2, 2014.***

10.31	Award Notice of Restricted Stock with William Monteleone dated December 31, 2013. Incorporated by reference to Exhibit 10.49 to the Company’s Amendment No. 3 to Annual Report on Form 10-K/A filed on July 2, 2014.***

10.32	Award Notice of Restricted Stock with Christopher Micklas dated December 9, 2013.***

10.33	Employment Offer Letter with Joseph Israel dated December 12, 2014. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 17, 2014. ***

10.34	Award Notice of Restricted Stock with Joseph Israel dated January 5, 2015. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 7, 2015.***

10.35	Nonstatutory Stock Option Agreement with Joseph Israel dated January 5, 2015. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on January 7, 2015.***

10.36	Form of Subscription and Lock-Up Agreement. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.37	Form of Award of Restricted Stock (Stock Purchase Plan). Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.38	Form of Nonstatutory Stock Option Agreement (Stock Purchase Plan). Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.39	Par Petroleum Corporation Discretionary Long Term Incentive Plan for 2014 dated June 12, 2014. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.40	Form of Award of Restricted Stock (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.41	Form of Award of Restricted Stock Units (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.42	Par Petroleum Corporation NAV (Net Asset Value) Unit Plan dated June 12, 2014. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.43	Form of NAV Units Plan Award. Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.44	Par Petroleum Corporation Directors’ Deferred Compensation Plan dated June 12, 2014. Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.45	Deferral Election Form. Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on July 11, 2014.***

10.46	Amended and Restated Uncommitted Credit Agreement dated as of February 20, 2015, by and among Texadian Energy, Inc., Texadian Energy Canada Limited, BNP Paribas and the other lenders from time to time party thereto and BNP Paribas, as the administrative agent and collateral agent for the lenders and as an issuing bank, daylight overdraft bank and swing line lender. Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on February 25, 2015.

10.47	Third Amendment to Delayed Draw Term Loan and Bridge Credit Agreement dated as of March 11, 2015, by and among the Company, the Guarantors party thereto, the Term Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 11, 2015.


10.48	Credit Agreement dated as of April 1, 2015, by and among Koko’oha Investments, Inc., Mid Pac Petroleum, LLC, Bank of Hawaii and the other lenders party thereto, and Bank of Hawaii, as administrative agent. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 2, 2015.

10.49	Pledge Agreement dated as of April 1, 2015, by Hawaii Pacific Energy, LLC in favor of Jefferies Finance LLC. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 2, 2015.



10.50	Limited Recourse Guaranty dated as of April 1, 2015, by Hawaii Pacific Energy, LLC. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 2, 2015.

10.51	Fourth Amendment to Delayed Draw Term Loan and Bridge Loan Credit Agreement dated as of April 1, 2015, by and among the Company, the Guarantors party thereto, the Term Lenders party thereto and Jefferies Finance LLC, as administrative agent for the lenders. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 2, 2015.

10.52	Second Amendment and Waiver to ABL Credit Agreement dated as of March 30, 2015, by and among Hawaii Independent Energy, LLC, Hawaii Pacific Energy, LLC, the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent and collateral agent for the Lenders. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on April 2, 2015.

10.53	First Amendment to Credit Agreement dated as of March 30, 2015 among HIE Retail, LLC, Bank of Hawaii, American Savings Bank, F.S.B. and Central Pacific Bank, and Bank of Hawaii, as administrative and collateral agent for the Lenders. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on April 2, 2015.

10.54	Form of Award of Restricted Stock (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 2, 2015. ***

10.55	Form of Award of Restricted Stock Units (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 2, 2015. ***

10.56	Form of Nonstatutory Stock Option Agreement (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 2, 2015. ***

10.57	Termination of Stockholders Agreement dated April 10, 2015 by and among Par Petroleum Corporation, Zell Credit Opportunities Fund, L.P., ZCOF Par Petroleum Holdings, LLC, Pandora Select Partners, LP, Whitebox Multi-Strategy Partners, LP, Whitebox Credit Arbitrage Partners, LP, Whitebox Concentrated Convertible Arbitrage Partners, LP, and Whitebox Asymmetric Partners, LP. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 13, 2015.

10.58	Par Petroleum (and subsidiaries) Incentive Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 12, 2015. ***

10.59	Letter Agreement dated as of December 30, 2014, among HIE Retail, LLC, Bank of Hawaii, American Savings Bank, F.S.B. and Central Pacific Bank. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 15, 2015.

10.60	Second Amendment to Credit Agreement dated as of May 15, 2015, among HIE Retail, LLC, Hawaii Pacific Energy, LLC, Bank of Hawaii, American Savings Bank, F.S.B. and Central Pacific Bank, and Bank of Hawaii, as administrative and collateral agent for the Lenders. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed May 15, 2015.

10.61	Supply and Offtake Agreement dated as of June 1, 2015, between Hawaii Independent Energy, LLC and J. Aron & Company. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 2, 2015.

10.62	Storage Facilities Agreement dated as of June 1, 2015, between Hawaii Independent Energy, LLC and J. Aron & Company. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 2, 2015.

10.63	Marketing and Sales Agreement dated as of June 1, 2015, between Hawaii Independent Energy, LLC and J. Aron & Company. Incorporated as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed June 2, 2015.

10.64	Pledge and Security Agreement dated as of June 1, 2015, between Hawaii Independent Energy, LLC and J. Aron & Company. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed June 2, 2015.

10.65	Equity Pledge Agreement dated as of June 1, 2015, between Hawaii Pacific Energy, LLC and J. Aron & Company. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed June 2, 2015.



10.66	Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of June 1, 2015, by Hawaii Independent Energy, LLC for the benefit of J. Aron & Company. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed June 2, 2015.

10.67	Environmental Indemnity Agreement dated as of June 1, 2015, by Hawaii Independent Energy, LLC in favor of J. Aron & Company. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed June 2, 2015.

10.68	Fifth Amendment to Delayed Draw Term Loan and Bridge Loan Credit Agreement dated as of June 1, 2015, by and among of Par Petroleum Corporation, the Guarantors party thereto, the Term Lenders party thereto and Jefferies Finance LLC, as administrative agent for the lenders. Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed June 2, 2015.

10.69	Employment Offer Letter with William C. Pate dated October 12, 2015. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed October 14, 2015. ***

10.70	Initial Award with William C. Pate dated October 12, 2015. Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed October 14, 2015. ***

10.71	Amendment to Employment Offer Letter with Joseph Israel dated October 12, 2015. Incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed October 14, 2015. ***

10.72	Credit Agreement, dated as of December 17, 2015, among Mid Pac Petroleum, LLC, HIE Retail, LLC, the Subsidiary Guarantors party thereto, the lending institutions named therein, and KeyBank National Association, as the administrative agent and as a letter of credit issuer. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 18, 2015.

10.73	Sixth Amendment to Delayed Draw Term Loan and Bridge Loan Credit Agreement dated as of December 17, 2015, among Par Pacific Holdings, Inc., the Guarantors party thereto, the Term Lenders party thereto and Jefferies Finance LLC, as administrative agent for the lenders. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 18, 2015.

10.74	Unit Purchase Agreement dated February 22, 2016, by and among Laramie Energy, LLC, Par Piceance Energy Equity LLC, and the other parties thereto. *
10.75	Equity Commitment Letter dated December 17, 2015, by and between Par Pacific Holdings, Inc. and Piceance Energy, LLC. *

14.1	Par Pacific Holdings, Inc. Code of Business Conduct and Ethics for Employees, Executive Officers and Directors, effective December 3, 2015. *

21.1	Subsidiaries of the Registrant.*

23.1	Consent of Deloitte & Touche LLP*

23.2	Consent of EKS&H LLLP*

23.3	Consent of Netherland, Sewell & Associates, Inc.*

23.4	Consent of Deloitte & Touche LLP related to the financial statements of Laramie Energy, LLC as of and for the year ended December 31, 2015. *

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. +

31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. +

32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.*

32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350. *

99.1	Report of Netherland, Sewell & Associates, Inc. regarding the registrants Proved Reserves as of December 31, 2015.*

99.2	Laramie Energy, LLC Financial Statements and Independent Auditors' Report, for the fiscal years ended December 31, 2015, 2014, and 2013. *

101.INS	XBRL Instance Document.**



101.SCH	XBRL Taxonomy Extension Schema Documents.**

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.**

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.**

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.**

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.**

* Previously filed with the Annual Report on Form 10-K filed on March 3, 2016. Schedules and similar attachments to Exhibits 10.4 and 10.74 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.

** Previously filed with the Annual Report on Form 10-K filed on March 3, 2016. These interactive data files are furnished and deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.

*** Management contract or compensatory plan or arrangement.

+ Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange of Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on August 11, 2016.



	PAR PACIFIC HOLDINGS, INC.

	By:	/s/ William Pate
		William Pate
		President and Chief Executive Officer

	By:	/s/ Christopher Micklas
		Christopher Micklas
		Chief Financial Officer

PAR PACIFIC HOLDINGS, INC. - FORM 10-K/A - August 11, 2016

Attached files

PAR PACIFIC HOLDINGS, INC. Reports