5 unchanged sentences
3) Logistics - We operate an extensive multi-modal logistics network spanning the Pacific, the Northwest, and the Rockies that primarily transports and stores our crude oil and refined products for our refineries and transports refined products to our retail sites or third-party purchasers.
−Removed: As of June 30, 2020 , we owned a 46.0% equity investment in Laramie Energy .
+Added: As of September 30, 2020 , we owned a 46.0% equity investment in Laramie Energy .
Laramie Energy is focused on producing natural gas in Garfield, Mesa, and Rio Blanco Counties, Colorado.
7 unchanged sentences
We continue to actively respond to the impacts that these matters are having on our business.
−Removed: We decreased throughput rates at our Hawaii and Wyoming refineries in response to reduced refined product demand, idled certain refining units at our Hawaii refineries, and have delayed the timing of our planned turnaround in Hawaii until the third quarter of 2020.
+Added: We decreased throughput rates at our Hawaii and Wyoming refineries in response to reduced refined product demand, idled certain refining units at our Hawaii refineries, reduced the scope of our Washington turnaround scheduled in the first quarter of 2021, and delayed the timing of our planned turnaround in Hawaii until the third quarter of 2020.
In addition, we have adjusted production of certain refined products to meet the changing local demand profile.
We continue to maintain an ample supply of refined product to meet the refined product needs in the regions in which we operate.
−Removed: On May 5, 2020, we announced that 29 employees were furloughed in response to the previously announced decline in throughput rates at our refineries in Kapolei, Hawaii, and our President and Chief Executive Officer and the independent members of the Company’s Board of Directors have reduced their cash salaries by 75% .
+Added: On May 5, 2020 , we announced that 29 employees were furloughed in response to the previously announced decline in throughput rates at our refineries in Kapolei, Hawaii, and our President and Chief Executive Officer and the independent members of the Company’s Board of Directors reduced their cash salaries by 75% .
+Added: In response to sustained decreased demand for refined products in Hawaii, we significantly reduced discretionary spending company-wide and, in early October 2020 , we reduced headcount in our refining segment in Hawaii.
In addition, we are taking measures to address our liquidity, including deferring or delaying certain capital expenditures originally planned for 2020 and early 2021 related to turnaround activities at three of our refineries and, in early June 2020, accessing the capital markets to issue $105 million aggregate principal amount of senior secured notes due 2026 .
Interest rates associated with our inventory financing arrangements and borrowings under those inventory financing arrangements have also declined.
−Removed: We have also taken actions to reduce operating expenses across our business.
We believe the steps we have taken have strengthened our ability to conduct our operations through current conditions.
1 unchanged sentence
We continue to maintain existing processes and procedures, including but not limited to processes and procedures around protection of our technology systems and proprietary data, even though a significant number of our employees are working from home.
−Removed: During this time of uncertainty, the health and wellbeing of our employees and customers are our top priorities as we continue navigating the challenges presented by the COVID-19 pandemic.
−Removed: The financial results contained in this Quarterly Report on Form 10-Q reflect the reduced activity experienced in the second quarter of 2020 in the regions in which we operate.
+Added: time of uncertainty, the health and wellbeing of our employees and customers are our top priorities as we continue navigating the challenges presented by the COVID-19 pandemic.
+Added: The financial results contained in this Quarterly Report on Form 10-Q reflect the reduced activity experienced in the second and third quarters of 2020 in the regions in which we operate.
The COVID-19 pandemic is ongoing and the impacts of the virus on people and businesses continue to evolve as of the date of this report.
−Removed: In Hawaii and Washington, for example, mandatory self-quarantine orders or significant limitations on public gatherings have been extended into the third quarter of 2020.
+Added: In Washington, for example, mandatory self-quarantine orders have been lifted and replaced by recommended self-quarantines for travelers arriving from areas of high COVID-19 activity.
+Added: Beginning October 15, 2020, U.S.
+Added: travelers to the state of Hawaii have an option to take a rapid COVID-19 test as an alternative to a 14-day quarantine.
+Added: If travelers test negative, they will not be required to quarantine.
+Added: Prohibitions on international travel to the U.S.
+Added: have been extended into the fourth quarter of 2020.
We continue to actively monitor the impact of the global situation on our people, operations, financial condition, liquidity, suppliers, customers, and industry.
1 unchanged sentence
Results of Operations
−Removed: Three months ended June 30, 2020 compared to the three months ended June 30, 2019
−Removed: Net Income (Loss) .
−Removed: Our financial results for the second quarter of 2020 were primarily driven by lower refining sales volumes related to COVID-19 demand destruction, unfavorable crude differentials, unfavorable crack spreads, and increased RINs expenses, partially offset by favorable lower of cost or net realizable value adjustments of $158.4 million .
−Removed: Our net income (loss) decreased from net income of $28.2 million for the three months ended June 30, 2019 to a net loss of $40.6 million for the three months ended June 30, 2020 .
+Added: Three months ended September 30, 2020 compared to the three months ended September 30, 2019
+Added: Our financial results for the third quarter of 2020 improved from a net loss of $83.9 million for the three months ended September 30, 2019 to a net loss of $14.3 million for the three months ended September 30, 2020 .
+Added: The increase was primarily driven by our 2019 other-than-temporary impairment of $81.5 million related to our equity investment in Laramie Energy, partially offset by unfavorable refining crack spreads, lower retail sales volumes related to COVID-19 demand destruction, and an approximately $6.2 million increase in expense from an expected liquidation of a LIFO inventory layer.
+Added: Other factors impacting our results period over period include cost reductions across our businesses in response to COVID-19, partially offset by an increase in RINs expenses and a $5.5 million unfavorable change in lower of cost or net realizable value adjustments.
Adjusted EBITDA and Adjusted Net Income (Loss) .
−Removed: For the three months ended June 30, 2020 , Adjusted EBITDA was a loss of $50.3 million compared to earnings of $68.5 million for the three months ended June 30, 2019 .
−Removed: The decrease was primarily related to lower refining sales volumes related to COVID-19 demand destruction, unfavorable crude differentials, and unfavorable crack spreads.
−Removed: For the three months ended June 30, 2020 , Adjusted Net Income (Loss) was a loss of $90.8 million compared to income of $22.4 million for the three months ended June 30, 2019 .
−Removed: The change was primarily related to the same factors described above for the decrease in Adjusted EBITDA, partially offset by lower interest expense and financing costs.
−Removed: Six months ended June 30, 2020 compared to the six months ended June 30, 2019
+Added: For the three months ended September 30, 2020 , Adjusted EBITDA was a loss of $16.1 million compared to earnings of $47.0 million for the three months ended September 30, 2019 .
+Added: The decrease was primarily related to unfavorable crack spreads and lower sales volumes across our operating segments related to COVID-19 demand destruction, partially offset by favorable crude oil differentials in Hawaii and cost reductions across our businesses in response to COVID-19.
+Added: For the three months ended September 30, 2020 , Adjusted Net Income (Loss) was a loss of $56.5 million compared to income of $4.0 million for the three months ended September 30, 2019 .
+Added: The decrease was primarily related to the factors described above for the decrease in Adjusted EBITDA, partially offset by a $2.2 million decrease in our Equity earnings from Laramie Energy, excluding our share of unrealized gains or losses on derivatives and excluding impairment changes associated with our investment in Laramie Energy.
+Added: Nine months ended September 30, 2020 compared to the nine months ended September 30, 2019
Net Income (Loss) .
−Removed: During 2020 , our results were primarily driven by goodwill impairments of $67.9 million , unfavorable crude differentials, an other-than-temporary impairment of $45.3 million related to our equity investment in Laramie Energy, unfavorable crack spreads, increased RINs expenses, and lower refining sales volumes at our Hawaii and Wyoming refineries related to COVID-19 demand destruction, partially offset by lower operating expense and higher retail fuel margins.
−Removed: Our net income decreased from $89.3 million for the six months ended June 30, 2019 to a net loss of $262.9 million for the six months ended June 30, 2020 .
−Removed: Other factors impacting our results period over period include a $45.6 million reduction in our income tax benefit and lower debt extinguishment and commitment costs.
+Added: Our net income decreased from $5.4 million for the nine months ended September 30, 2019 to a net loss of $277.2 million for the nine months ended September 30, 2020 .
+Added: The decrease was primarily driven by unfavorable crack spreads, goodwill impairments of $67.9 million , increased RINs expenses and derivative costs, and an unfavorable change in lower of cost or net realizable value adjustments, partially offset by cost reductions across our businesses in response to COVID-19 and higher retail fuel margins.
+Added: In addition, we incurred an other-than-temporary impairment of $45.3 million related to our equity investment in Laramie Energy in 2020, as compared to an other-than-temporary impairment of $81.5 million in 2019.
+Added: Other factors impacting our results period over period include a $48.1 million reduction in our income tax benefit, lower debt extinguishment and commitment costs, and an approximately $6.2 million increase in expense from an expected liquidation of a LIFO inventory layer.
Adjusted EBITDA and Adjusted Net Income (Loss) .
−Removed: For the six months ended June 30, 2020 , Adjusted EBITDA was a loss of $36.7 million compared to earnings of $119.0 million for the six months ended June 30, 2019 .
−Removed: The change was primarily related to unfavorable crude differentials, unfavorable crack spreads, and lower refining sales volumes at our Hawaii and Wyoming refineries related to COVID-19 demand destruction, partially offset by lower operating expense and higher retail fuel margins.
−Removed: For the six months ended June 30, 2020 , Adjusted Net Income (Loss) was a loss of $118.0 million compared to income of $31.7 million for the six months ended June 30, 2019 .
−Removed: The decrease was primarily related to the same factors described above for the decrease in Adjusted EBITDA.
−Removed: The following tables summarize our consolidated results of operations for the three and six months ended June 30, 2020 compared to the three and six months ended June 30, 2019 (in thousands).
+Added: For the nine months ended September 30, 2020 , Adjusted EBITDA was a loss of $52.7 million compared to earnings of $166.0 million for the nine months ended September 30, 2019 .
+Added: The change was primarily related to unfavorable crack spreads and lower refining sales volumes at our Hawaii and Wyoming refineries related to COVID-19 demand destruction, partially offset by lower operating expense and higher retail fuel margins.
+Added: For the nine months ended September 30, 2020 , Adjusted Net Income (Loss) was a loss of $174.5 million compared to income of $35.7 million for the nine months ended September 30, 2019 .
+Added: The decrease was primarily related to the same factors described above for the decrease in Adjusted EBITDA, partially offset by a $4.7 million decrease in interest expense and financing costs and a $3.7 million decrease in our Equity earnings from Laramie Energy, excluding our share of unrealized gains or losses on derivatives and excluding impairment changes associated with our investment in Laramie Energy.
+Added: The following tables summarize our consolidated results of operations for the three and nine months ended September 30, 2020 compared to the three and nine months ended September 30, 2019 (in thousands).
The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report.
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
Cost of revenues (excluding depreciation)
4 unchanged sentences
Total operating expenses
−Removed: Operating income (loss)
+Added: Operating income
Other income (expense)
Interest expense and financing costs, net
−Removed: Debt extinguishment and commitment costs
Other income, net
Change in value of common stock warrants
−Removed: Equity earnings (losses) from Laramie Energy, LLC
+Added: Equity losses from Laramie Energy, LLC
Total other income (expense), net
−Removed: Income (loss) before income taxes
−Removed: Income tax benefit
−Removed: Net income (loss)
−Removed: Six Months Ended June 30,
+Added: Loss before income taxes
+Added: Income tax benefit (expense)
+Added: Nine Months Ended September 30,
Cost of revenues (excluding depreciation)
11 unchanged sentences
Change in value of common stock warrants
−Removed: Equity earnings (losses) from Laramie Energy, LLC
+Added: Equity losses from Laramie Energy, LLC
Total other income (expense), net
−Removed: Income (loss) before income taxes
+Added: Loss before income taxes
Income tax benefit
2 unchanged sentences
(1) NM - Not meaningful
−Removed: The following tables summarize our operating income (loss) by segment for the three and six months ended June 30, 2020 and 2019 (in thousands).
+Added: The following tables summarize our operating income (loss) by segment for the three and nine months ended September 30, 2020 and 2019 (in thousands).
The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report.
−Removed: Three months ended June 30, 2020
+Added: Three months ended September 30, 2020
Corporate, Eliminations and Other (1)
5 unchanged sentences
Operating income (loss)
−Removed: Three months ended June 30, 2019
+Added: Three months ended September 30, 2019
Corporate, Eliminations and Other (1)
6 unchanged sentences
________________________________________________________
−Removed: Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $61.8 million and $109.0 million for the three months ended June 30, 2020 and 2019 , respectively.
−Removed: Six months ended June 30, 2020
+Added: Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $69.9 million and $107.2 million for the three months ended September 30, 2020 and 2019 , respectively.
+Added: Nine months ended September 30, 2020
Corporate, Eliminations and Other (1)
6 unchanged sentences
Operating income (loss)
−Removed: Six months ended June 30, 2019
+Added: Nine months ended September 30, 2019
Corporate, Eliminations and Other (1)
6 unchanged sentences
________________________________________________________
−Removed: Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $167.8 million and $208.8 million for the six months ended June 30, 2020 and 2019 , respectively.
−Removed: Below is a summary of key operating statistics for the refining segment for the three and six months ended June 30, 2020 and 2019 :
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $237.7 million and $316.0 million for the nine months ended September 30, 2020 and 2019 , respectively.
+Added: Below is a summary of key operating statistics for the refining segment for the three and nine months ended September 30, 2020 and 2019 :
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Total Refining Segment
24 unchanged sentences
DD&A per bbl ($/throughput bbl)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Wyoming Refinery
14 unchanged sentences
________________________________________________________
−Removed: Feedstocks throughput and sales volumes per day for the Washington refinery for the three and six months ended June 30, 2019 are calculated based on the 91 and 171 -day periods for which we owned the Washington refinery in 2019.
−Removed: As such, the amounts for the total refining segment represent the sum of the Hawaii and Wyoming refineries’ throughput or sales volumes averaged over the three and six months ended June 30, 2019 plus the Washington refinery’s throughput or sales volumes averaged over the periods from April 1, 2019 to June 30, 2019 and January 11, 2019 to June 30, 2019 , respectively.
−Removed: The 2020 amounts for the total refining segment represent the sum of the Hawaii, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the three and six months ended June 30, 2020 .
+Added: Feedstocks throughput and sales volumes per day for the Washington refinery for the three and nine months ended September 30, 2019 are calculated based on the 92 and 263 -day periods for which we owned the Washington refinery in 2019, respectively.
+Added: As such, the amounts for the total refining segment represent the sum of the Hawaii and Wyoming refineries’ throughput or sales volumes averaged over the three and nine months ended September 30, 2019 plus the Washington refinery’s throughput or sales volumes averaged over the periods from July 1, 2019 to September 30, 2019 and January 11, 2019 to September 30, 2019 , respectively.
+Added: The 2020 amounts for the total refining segment represent the sum of the Hawaii, Washington, and Wyoming refineries’ throughput or sales volumes averaged over the three and nine months ended September 30, 2020 .
We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput.
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After completing the acquisition of the Par West Hawaii refinery in December 2018, we began shifting our Hawaii production profile to supply the local utilities with low sulfur fuel oil and significantly reduced our high sulfur fuel oil yield.
−Removed: following the implementation of IMO 2020, we established the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) as a new benchmark for our Hawaii operations.
+Added: In 2020, following the implementation of IMO 2020, we established the 3-1-2 Singapore Crack Spread (or three barrels of Brent crude oil converted into one barrel of gasoline and two barrels of distillates (diesel and jet fuel)) as a new benchmark for our Hawaii operations.
By removing the high sulfur fuel oil reference in the index, we believe the 3-1-2 Singapore Crack Spread is the most representative market indicator of our current operations in Hawaii.
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The Pacific Northwest 5-2-2-1 Index is computed by taking two parts gasoline (sub-octane), two parts middle distillates (ULSD and jet fuel), and one part fuel oil as created from five barrels of Alaskan North Slope (“ANS”) crude oil.
−Removed: The 2019 price for the three and six months ended June 30, 2019 represents the price averaged over the periods from April 1, 2019 to June 30, 2019 and January 11, 2019 to June 30, 2019 , respectively.
+Added: The 2019 price for the three and nine months ended September 30, 2019 represents the price averaged over the periods from July 1, 2019 to September 30, 2019 and January 11, 2019 to September 30, 2019 , respectively.
The profitability of our Wyoming refinery is heavily influenced by crack spreads in nearby markets.
2 unchanged sentences
Pricing is based 50% on applicable product pricing in Rapid City, South Dakota, and 50% on applicable product pricing in Denver, Colorado.
−Removed: Below is a summary of key operating statistics for the retail segment for the three and six months ended June 30, 2020 and 2019 :
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Below is a summary of key operating statistics for the retail segment for the three and nine months ended September 30, 2020 and 2019 :
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Retail Segment
15 unchanged sentences
This change to our non-GAAP information was made to reflect the favorable or unfavorable impact of the market structure on the profitability of our Washington refinery consistent with the presentation of such impacts on our other refineries.
−Removed: We have recast the non-GAAP information for the three and six months ended June 30, 2019 to conform to the current period presentation.
+Added: Beginning in the third quarter of 2020, Adjusted Gross Margin excludes the LIFO layer liquidation impacts associated with our Washington inventory.
+Added: We have recast the non-GAAP information for the three and nine months ended September 30, 2019 to conform to the current period presentation.
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.
−Removed: 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 agreements 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 .
+Added: Management believes Adjusted Gross Margin provides useful information to investors because it eliminates the gross
+Added: impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost 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), cash flows from operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP.
1 unchanged sentence
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):
−Removed: Three months ended June 30, 2020
+Added: Three months ended September 30, 2020
Operating income (loss)
2 unchanged sentences
Inventory valuation adjustment
+Added: LIFO liquidation adjustment
RINs loss in excess of net obligation
1 unchanged sentence
Adjusted Gross Margin (1)
−Removed: Three months ended June 30, 2019
+Added: Three months ended September 30, 2019
Operating income
2 unchanged sentences
Inventory valuation adjustment
−Removed: RINs loss in excess of net obligation
−Removed: Unrealized loss on derivatives
+Added: LIFO liquidation adjustment
+Added: RINs gain in excess of net obligation
+Added: Unrealized gain on derivatives
Adjusted Gross Margin (1)
−Removed: Six months ended June 30, 2020
+Added: Nine months ended September 30, 2020
Operating income (loss)
3 unchanged sentences
Inventory valuation adjustment
+Added: LIFO liquidation adjustment
RINs loss in excess of net obligation
−Removed: Unrealized loss on derivatives
+Added: Unrealized gain on derivatives
Adjusted Gross Margin
−Removed: Six months ended June 30, 2019
+Added: Nine months ended September 30, 2019
Operating income
2 unchanged sentences
Inventory valuation adjustment
+Added: LIFO liquidation adjustment
RINs gain in excess of net obligation
2 unchanged sentences
________________________________________
−Removed: For the three months ended June 30, 2020 and the three and six months ended June 30, 2019 , there was no impairment expense recorded in Operating income (loss).
+Added: For the three months ended September 30, 2020 and the three and nine months ended September 30, 2019 , there was no impairment expense recorded in Operating income (loss).
Adjusted Net Income (Loss) and Adjusted EBITDA
3 unchanged sentences
This change to our non-GAAP information was made to reflect the favorable or unfavorable impact of the market structure on the profitability of our Washington refinery consistent with the presentation of such impacts on our other refineries.
−Removed: We have recast the non-GAAP information for the three and six months ended June 30, 2019 to conform to the current period presentation.
+Added: Beginning in the third quarter of 2020, Adjusted Net Income (Loss) excludes the LIFO layer liquidation impacts associated with our Washington inventory.
+Added: We have recast the non-GAAP information for the three and nine months ended September 30, 2019 to conform to the current period presentation.
Adjusted EBITDA is Adjusted Net Income (Loss) excluding interest expense and financing costs, income taxes, DD&A, and equity losses (earnings) from Laramie Energy, excluding Par’s share of unrealized loss (gain) on derivatives, the impairment of Par’s investment, and our share of Laramie Energy ’s asset impairment losses in excess of our basis difference.
6 unchanged sentences
The following table presents a reconciliation of Adjusted Net Income (Loss) and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss) , on a historical basis for the periods indicated (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Net income (loss)
Inventory valuation adjustment
+Added: LIFO liquidation adjustment
RINs loss (gain) in excess of net obligation
11 unchanged sentences
Interest expense and financing costs, net
−Removed: Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives and impairment losses
−Removed: Income tax expense (benefit)
+Added: Equity losses (earnings) from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives and impairment losses
+Added: Income tax expense
Adjusted EBITDA
1 unchanged sentence
Includes increases in (releases of) our valuation allowance associated with business combinations and changes in deferred tax assets and liabilities that are not offset by a change in the valuation allowance.
−Removed: These tax expenses (benefits) are included in Income tax benefit on our condensed consolidated statements of operations.
−Removed: Included in Equity earnings (losses) from Laramie Energy, LLC on our condensed consolidated statements of operations.
−Removed: For the three and six months ended June 30, 2020 and 2019 , there was no (gain) loss on sale of assets or change in value of contingent consideration.
+Added: These tax expenses (benefits) are included in Income tax benefit (expense) on our condensed consolidated statements of operations.
+Added: Included in Equity losses from Laramie Energy, LLC on our condensed consolidated statements of operations.
+Added: For the three and nine months ended September 30, 2020 and 2019 , there was no (gain) loss on sale of assets or change in value of contingent consideration.
Factors Impacting Segment Results
−Removed: Three months ended June 30, 2020 compared to the three months ended June 30, 2019
−Removed: Operating loss for our refining segment was $36.8 million for the three months ended June 30, 2020 , a decrease of $70.0 million compared to operating income of $33.2 million for the three months ended June 30, 2019 .
−Removed: The decrease in profitability was primarily driven by unfavorable crude differentials, lower refining sales volumes, and unfavorable crack spreads, partially offset by favorable lower of cost or net realizable value adjustments of $158.4 million and lower maintenance costs and other operating expenses.
−Removed: Operating income for our logistics segment was $6.3 million for the three months ended June 30, 2020 , a decrease of $10.1 million compared to operating income of $16.4 million for the three months ended June 30, 2019 .
−Removed: The decrease is primarily due to a net 27% lower throughput across the logistics fleet, including terminal and pipelines, related to COVID-19 demand destruction and higher DD&A expense, partially offset by higher storage margins.
−Removed: Operating income for our retail segment was $16.2 million for the three months ended June 30, 2020 , an increase of $4.2 million compared to operating income of $12.0 million for the three months ended June 30, 2019 .
−Removed: The increase was primarily due to a 61% increase in fuel margins, partially offset by a 29% decline in sales volumes.
−Removed: Six months ended June 30, 2020 compared to the six months ended June 30, 2019
−Removed: Operating loss for our refining segment was $205.3 million for the six months ended June 30, 2020 , a decrease of $252.8 million compared to operating income of $47.5 million for the six months ended June 30, 2019 .
−Removed: The decrease in profitability was primarily driven by unfavorable crude differentials, lower sales volumes, goodwill impairment charges of $38.1 million , increased RINs expenses, and lower of cost or net realizable value adjustments of $24.0 million .
−Removed: Operating income for our logistics segment was $25.1 million for the six months ended June 30, 2020 , a decrease of $3.7 million compared to operating income of $28.8 million for the six months ended June 30, 2019 .
−Removed: The decrease is primarily due to a net 8% lower throughput across our logistics assets, including terminal and pipelines, related to COVID-19 demand destruction.
−Removed: Operating loss for our retail segment was $1.9 million for the six months ended June 30, 2020 , a decrease of $24.0 million compared to operating income of $22.1 million for the six months ended June 30, 2019 .
−Removed: The decrease in profitability is primarily due to goodwill impairment charges of $29.8 million and a decrease in sales volumes of 17% , partially offset by an increase in fuel margins of 38% .
+Added: Three months ended September 30, 2020 compared to the three months ended September 30, 2019
+Added: Operating loss for our refining segment was $5.1 million for the three months ended September 30, 2020 , a decrease of $8.4 million compared to operating income of $3.3 million for the three months ended September 30, 2019 .
+Added: The decrease in profitability was primarily driven by unfavorable crack spreads at our Hawaii, Wyoming, and Washington refineries, partially offset by favorable crude oil differentials in Hawaii and operating expense reductions across our refineries in response to COVID-19.
+Added: Other factors impacting our results period over period include an increase in RINs expenses, a $5.5 million unfavorable change in lower of cost or net realizable value adjustments, and a $6.2 million unfavorable impact from the liquidation of a LIFO inventory layer in Washington.
+Added: Operating income for our logistics segment was $6.4 million for the three months ended September 30, 2020 , a decrease of $7.2 million compared to operating income of $13.6 million for the three months ended September 30, 2019 .
+Added: The decrease is due to a net 42% and 23% lower throughput across our Hawaii and Wyoming logistics assets, respectively, primarily due to decreased demand as a result of the COVID-19 pandemic and higher operating expense and DD&A.
+Added: Operating income for our retail segment was $12.1 million for the three months ended September 30, 2020 , a decrease of $2.3 million compared to operating income of $14.4 million for the three months ended September 30, 2019 .
+Added: The decrease was primarily due to a 21% decline in sales volumes, partially offset by an 8% increase in fuel margins.
+Added: Nine months ended September 30, 2020 compared to the nine months ended September 30, 2019
+Added: Operating loss for our refining segment was $210.4 million for the nine months ended September 30, 2020 , a decrease of $261.2 million compared to operating income of $50.8 million for the nine months ended September 30, 2019 .
+Added: The decrease in profitability was primarily driven by lower refining sales volumes at our Hawaii and Wyoming refineries related to COVID-19 demand destruction, unfavorable crude oil differentials in Hawaii and Wyoming, and increased derivative costs and RINs expenses, goodwill impairment charges of $38.1 million , and unfavorable lower of cost or net realizable value adjustments of $22.3 million , partially offset by improved crude oil differentials in Washington and operating expense reductions across our refineries in response to COVID-19.
+Added: Operating income for our logistics segment was $31.5 million for the nine months ended September 30, 2020 , a decrease of $10.9 million compared to operating income of $42.4 million for the nine months ended September 30, 2019 .
+Added: The decrease is primarily due to a net 28% and 15% lower throughput across our Hawaii and Wyoming logistics assets, respectively, related to COVID-19 demand destruction and higher DD&A, partially offset by increased throughput in Washington.
+Added: Operating income for our retail segment was $10.1 million for the nine months ended September 30, 2020 , a decrease of $26.4 million compared to operating income of $36.5 million for the nine months ended September 30, 2019 .
+Added: The decrease in profitability is primarily due to goodwill impairment charges of $29.8 million and a decline in sales volumes of 18% , partially offset by an increase in fuel margins of 27% .
Adjusted Gross Margin
−Removed: Three months ended June 30, 2020 compared to the three months ended June 30, 2019
−Removed: For the three months ended June 30, 2020 , our refining Adjusted Gross Margin was a loss of $22.3 million , a decrease of $120.5 million compared to income of $98.2 million for the three months ended June 30, 2019 .
−Removed: The decrease was primarily driven by unfavorable crack spreads and crude differentials, and lower refining sales volumes.
−Removed: Adjusted gross margin for the Hawaii refineries decreased from $3.46 per barrel in 2019 to $(6.96) per barrel in 2020 primarily due to unfavorable crude differentials and crack spreads.
−Removed: Adjusted gross margin for the Wyoming refinery decreased $10.56 per barrel primarily due to a decrease in crack spreads and higher RINs costs.
−Removed: Adjusted gross margin for the Washington refinery decreased $5.98 per barrel primarily due to unfavorable crack spreads.
−Removed: For the three months ended June 30, 2020 , our logistics Adjusted Gross Margin was $14.5 million , a decrease of $8.9 million compared to $23.4 million for the three months ended June 30, 2019 .
−Removed: The decrease was primarily driven by a net 27% lower throughput across the logistics fleet, including terminal and pipelines, related to COVID-19 demand destruction and higher DD&A expense, partially offset by increased inventory in storage in Washington.
−Removed: For the three months ended June 30, 2020 , our retail Adjusted Gross Margin was $34.2 million , an increase of $3.2 million when compared to $31.0 million for the three months ended June 30, 2019 .
−Removed: The increase was primarily due to a 61% increase in fuel margins, partially offset by a 29% decline in sales volumes.
−Removed: Six months ended June 30, 2020 compared to the six months ended June 30, 2019
−Removed: For the six months ended June 30, 2020 , our refining Adjusted Gross Margin was $17.2 million , a decrease of $169.6 million compared to $186.8 million for the six months ended June 30, 2019 .
−Removed: The decrease was primarily due to unfavorable crude differentials, reduced sales volumes, and unfavorable crack spreads.
−Removed: Adjusted gross margin for the Hawaii refineries decreased from $3.60 per barrel in 2019 to $(2.73) per barrel in 2020 primarily due to unfavorable crude differentials.
−Removed: Adjusted gross margin for the Wyoming refinery decreased $13.33 per barrel primarily due to a decrease in crack spreads and higher RINs costs.
−Removed: Adjusted gross margin for the Washington refinery decreased $2.75 per barrel primarily due to unfavorable crack spreads.
−Removed: For the six months ended June 30, 2020 , our logistics Adjusted Gross Margin was $42.2 million , an increase of $0.1 million compared to $42.1 million for the six months ended June 30, 2019 .
−Removed: The increase was primarily driven by increased inventory in storage and increased rail throughput in Washington, partially offset by lower throughput volumes that decreased 47% in Hawaii and 19% in Wyoming related to COVID-19 demand destruction.
−Removed: For the six months ended June 30, 2020 , our retail Adjusted Gross Margin was $65.6 million , an increase of $6.1 million when compared to approximately $59.5 million for the six months ended June 30, 2019 .
−Removed: The increase was primarily due to an increase in fuel margins of 38% , partially offset by a decrease in sales volumes of 17% .
+Added: Three months ended September 30, 2020 compared to the three months ended September 30, 2019
+Added: For the three months ended September 30, 2020 , our refining Adjusted Gross Margin was $16.3 million , a decrease of $69.8 million compared to $86.1 million for the three months ended September 30, 2019 .
+Added: The decrease was primarily driven by a 32% decline in refining sales volumes and unfavorable crack spreads.
+Added: Adjusted gross margin for the Hawaii refineries decreased from $0.98 per barrel during the three months ended September 30, 2019 to $(0.47) per barrel during the three months ended September 30, 2020 primarily due to unfavorable crack spreads and an increase in RINs expenses.
+Added: Adjusted gross margin for the Wyoming refinery decreased $17.12 per barrel primarily due to a decrease in sales volume and unfavorable crack spreads and crude oil differentials.
+Added: Adjusted gross margin for the Washington refinery decreased $8.40 per barrel primarily due to declining crack spreads and an increase in RINs expenses.
+Added: For the three months ended September 30, 2020 , our logistics Adjusted Gross Margin was $15.3 million , a decrease of $5.6 million compared to $20.9 million for the three months ended September 30, 2019 .
+Added: The decrease is due to a net 42% and 23% lower throughput across our Hawaii and Wyoming logistics assets, respectively, primarily due to decreased demand as a result of the COVID-19 pandemic.
+Added: For the three months ended September 30, 2020 , our retail Adjusted Gross Margin was $31.0 million , a decrease of $3.6 million when compared to $34.6 million for the three months ended September 30, 2019 .
+Added: The decrease was primarily due to a 21% decline in sales volumes, partially offset by an 8% increase in fuel margins.
+Added: Nine months ended September 30, 2020 compared to the nine months ended September 30, 2019
+Added: For the nine months ended September 30, 2020 , our refining Adjusted Gross Margin was $33.5 million , a decrease of $239.3 million compared to $272.8 million for the nine months ended September 30, 2019 .
+Added: The decrease was primarily due to a 19% decline in sales volumes and declines in crack spreads.
+Added: Adjusted gross margin for the Hawaii refineries decreased from $2.82 per barrel in 2019 to $(2.17) per barrel in 2020 primarily due to 27% lower sales volumes, unfavorable crude oil differentials, and an increase in RINs expenses.
+Added: Adjusted gross margin for the Wyoming refinery decreased $14.71 per barrel primarily due to a 19% decline in sales volumes, a decrease in crack spreads, and unfavorable crude oil differentials.
+Added: Adjusted gross margin for the Washington refinery decreased $4.71 per barrel primarily due to unfavorable crack spreads and higher derivative costs and RINs expenses, partially offset by improved crude oil differentials.
+Added: For the nine months ended September 30, 2020 , our logistics Adjusted Gross Margin was $57.5 million , a decrease of $5.5 million compared to $63.0 million for the nine months ended September 30, 2019 .
+Added: The decrease was primarily driven by 28% and 15% decreases in throughput in Hawaii and Wyoming, respectively, related to COVID-19 demand destruction.
+Added: For the nine months ended September 30, 2020 , our retail Adjusted Gross Margin of $96.6 million was relatively consistent with $94.1 million for the nine months ended September 30, 2019 .
Discussion of Consolidated Results
−Removed: Three months ended June 30, 2020 compared to the three months ended June 30, 2019
−Removed: For the three months ended June 30, 2020 , revenues were $0.5 billion , a $0.9 billion decrease compared to $1.4 billion for the three months ended June 30, 2019 .
−Removed: The decrease was primarily due to a decrease of $0.9 billion in third-party
−Removed: refining segment revenue as a result of decreases in Brent and WTI crude oil prices and a 32% decrease in refining sales volumes related to COVID-19 demand destruction.
−Removed: Brent and WTI crude oil prices averaged $33.39 and $28.00 per barrel during the second quarter of 2020 compared to $68.47 and $59.91 per barrel during the second quarter of 2019 , respectively.
+Added: Three months ended September 30, 2020 compared to the three months ended September 30, 2019
+Added: For the three months ended September 30, 2020 , revenues were $0.7 billion , a $0.7 billion decrease compared to $1.4 billion for the three months ended September 30, 2019 .
+Added: The decrease was primarily due to a decrease of $0.7 billion in third-party refining segment revenue as a result of decreases in Brent and WTI crude oil prices and a 32.2% decrease in refining sales volumes related to COVID-19 demand destruction.
+Added: Brent crude oil prices averaged $43.34 per barrel during the third quarter of 2020 compared to $62.03 per barrel during the third quarter of 2019 , with similar decreases experienced for WTI crude oil prices.
Revenues at our retail segment decreased $30.5 million primarily due to a 21% decline in sales volumes and a 22% decline in fuel prices.
Cost of Revenues (Excluding Depreciation).
−Removed: For the three months ended June 30, 2020 , cost of revenues (excluding depreciation) was $0.4 billion , a $0.9 billion decrease compared to $1.3 billion for the three months ended June 30, 2019 .
−Removed: The decrease was primarily driven by decreases in Brent and WTI crude oil prices as discussed above, lower refining volumes related to COVID-19 demand destruction, and a favorable change in the lower of cost or net realizable value adjustment of $171.8 million , partially offset by unfavorable crude differentials.
+Added: For the three months ended September 30, 2020 , cost of revenues (excluding depreciation) was $0.6 billion , a $0.7 billion decrease compared to $1.3 billion for the three months ended September 30, 2019 .
+Added: The decrease was primarily driven by decreases in Brent and WTI crude oil prices and lower refining volumes related to COVID-19 demand destruction as discussed above.
Cost of revenues at our retail segment decreased $26.9 million primarily due to lower fuel costs and a 21% decline in sales volumes.
Operating Expense (Excluding Depreciation).
−Removed: For the three months ended June 30, 2020 , operating expense (excluding depreciation) was $67.0 million , a $7.8 million decrease when compared to $74.8 million for the three months ended June 30, 2019 .
−Removed: The decrease was primarily due to lower operating expenses at our refineries driven by lower repairs and maintenance expenses, partially offset by increased utilities expenses.
+Added: For the three months ended September 30, 2020 , operating expense (excluding depreciation) was $69.5 million , a $13.7 million decrease when compared to $83.2 million for the three months ended September 30, 2019 .
+Added: The decrease was primarily due to cost reductions across our businesses and the idling of certain refining units at our Hawaii refineries in response to COVID-19 demand destruction.
Depreciation, Depletion, and Amortization .
−Removed: For the three months ended June 30, 2020 , DD&A was $22.1 million , which was relatively consistent with $21.9 million for the three months ended June 30, 2019 .
+Added: For the three months ended September 30, 2020 , DD&A was $22.8 million , which was relatively consistent with $22.2 million for the three months ended September 30, 2019 .
General and Administrative Expense (Excluding Depreciation).
−Removed: For the three months ended June 30, 2020 , general and administrative expense (excluding depreciation) was approximately $10.2 million , a $1.2 million decrease when compared to $11.4 million for the three months ended June 30, 2019 .
+Added: For the three months ended September 30, 2020 , general and administrative expense (excluding depreciation) was approximately $9.8 million , a $1.6 million decrease when compared to $11.4 million for the three months ended September 30, 2019 .
The decrease was primarily driven by a reduction in the use of outside services and COVID-19-related reductions in travel and employee costs.
Acquisition and Integration Costs.
−Removed: For the three months ended June 30, 2020 , we incurred $0.1 million of costs primarily related to integration costs associated with the Washington Acquisition .
−Removed: For the three months ended June 30, 2019 , we incurred $0.8 million of integration costs primarily related to the Washington Acquisition , which closed on January 11, 2019 .
+Added: Acquisition and integration costs for the three months ended September 30, 2020 and 2019 were immaterial.
Interest Expense and Financing Costs, Net .
−Removed: For the three months ended June 30, 2020 , our interest expense and financing costs were $16.4 million , a $3.9 million decrease when compared to $20.3 million for the three months ended June 30, 2019 .
−Removed: The decrease was primarily driven by a $1.2 million decrease in interest expense associated with our inventory financing agreements, a $1.2 million decrease in interest expense associated with our 5.00% Convertible Senior Notes , and a $1.1 million decrease in interest rate swap losses.
+Added: For the three months ended September 30, 2020 , our interest expense and financing costs were $17.5 million , a $0.8 million decrease when compared to $18.3 million for the three months ended September 30, 2019 .
+Added: The decrease was primarily driven by a $0.7 million decrease in interest expense and financing costs due to the exchange of a portion of our outstanding 5.00% Convertible Senior Notes during 2019, a decrease of $1.6 million due to reduced borrowings under our inventory financing agreements, and a decrease of $2.3 million due to the reduced principal and lower variable interest rates on our Term Loan B Facility and Retail Property Term Loan , net of the impact from our interest rate swap.
These decreases were partially offset by interest expense of $3.6 million related to the 12.875% Senior Secured Notes issued in June 2020.
1 unchanged sentence
Change in Value of Common Stock Warrants .
−Removed: For the three months ended June 30, 2019 , the change in value of common stock warrants resulted in a loss of approximately $1.0 million .
−Removed: During the three months ended June 30, 2020 , there was no change in value of common stock warrants.
+Added: For the three months ended September 30, 2019 , the change in value of common stock warrants resulted in a loss of approximately $0.8 million .
+Added: During the three months ended September 30, 2020 , there was no change in value of common stock warrants.
During January and March 2020 , one of our stockholders and its affiliates exercised the remaining 354,350 common stock warrants in exchange for 350,542 shares of common stock.
We estimated the fair value of our outstanding common stock warrants using the difference between the strike price of the warrant and the market price of our common stock.
−Removed: During the three months ended June 30, 2019 , our stock price increased from $17.81 per share as of March 31, 2019 to $20.52 per share as of June 30, 2019 .
−Removed: Debt Extinguishment and Commitment Costs.
−Removed: For the three months ended June 30, 2019 , our debt extinguishment costs were $3.7 million and represent the extinguishment loss associated with the repurchase and cancellation of a portion of our outstanding 5.00% Convertible Senior Notes in 2019.
−Removed: Please read Note 10—Debt to our condensed consolidated financial statements for further discussion.
−Removed: No such costs were incurred for the three months ended June 30, 2020 .
+Added: During the three months ended September 30, 2019 , our stock price increased from $20.52 per share as of June 30, 2019 to $22.86 per share as of September 30, 2019 .
Equity Losses from Laramie Energy, LLC .
−Removed: For the three months ended June 30, 2020 , equity losses from Laramie Energy were $1.9 million , a decrease of $2.4 million compared to equity earnings of $0.5 million for the three months ended June 30, 2019 .
−Removed: The decrease was primarily due to Laramie Energy’s net loss associated with lower realized natural gas prices.
+Added: For the three months ended September 30, 2020 , there were no equity earnings (losses) from Laramie Energy, compared to equity losses of $85.6 million for the three months ended September 30, 2019 .
+Added: During the three months ended September 30, 2019, we recorded an impairment charge of $81.5 million due to the significant decline in natural gas prices over the second quarter of 2019 and continued deterioration in the third quarter of 2019.
As of June 30, 2020, we have discontinued the application of the equity method of accounting for our investment in Laramie Energy because the book value of such investment has been reduced to zero.
1 unchanged sentence
Income Taxes.
−Removed: For the three months ended June 30, 2020 , we recorded an income tax benefit of $2.7 million primarily related to an increase in our net operating loss carryforwards.
−Removed: For the three months ended June 30, 2019 , we recorded an income tax benefit of $1.8 million primarily driven by a $2.3 million benefit associated with a partial release of our valuation allowance in connection with the Washington Acquisition .
−Removed: Six months ended June 30, 2020 compared to the six months ended June 30, 2019
−Removed: For the six months ended June 30, 2020 , revenues were $1.7 billion , a $0.9 billion decrease compared to $2.6 billion for the six months ended June 30, 2019 .
+Added: For the three months ended September 30, 2020 , we recorded an income tax expense of $0.1 million primarily related to current state income taxes.
+Added: For the three months ended September 30, 2019 , we recorded an income tax benefit of $2.4 million primarily driven by a $2.8 million benefit associated with a partial release of our valuation allowance in connection with indefinite-lived deferred tax assets from interest expense carryforwards with no expiration.
+Added: Nine months ended September 30, 2020 compared to the nine months ended September 30, 2019
+Added: For the nine months ended September 30, 2020 , revenues were $2.4 billion , a $1.6 billion decrease compared to $4.0 billion for the nine months ended September 30, 2019 .
The decrease was primarily due to a decrease of $1.5 billion in third-party revenues at our refining segment primarily as a result of decreases in Brent and WTI crude oil prices and lower sales volumes related to COVID-19 demand destruction.
−Removed: Refined product sales volumes decreased 13% from 171.1 Mbpd in the six months ended June 30, 2019 to 149.5 Mbpd in the six months ended June 30, 2020 .
−Removed: Average Brent prices decreased from $66.16 per barrel in the six months ended June 30, 2019 to $42.10 per barrel in the six months ended June 30, 2020 , with similar decreases experienced for WTI crude oil prices.
−Removed: Revenues in our retail segment decreased $38.2 million primarily due to a 17% decrease in sales volumes and a 13% decrease in fuel prices.
+Added: Refined product sales volumes decreased 19% from 175.1 Mbpd in the nine months ended September 30, 2019 to 141.2 Mbpd in the nine months ended September 30, 2020 .
+Added: Average Brent crude oil prices decreased from $64.77 per barrel in the nine months ended September 30, 2019 to $42.52 per barrel in the nine months ended September 30, 2020 , with similar decreases experienced for WTI crude oil prices.
+Added: Revenues at our retail segment decreased $68.6 million primarily due to an 18% decline in sales volumes and a 16% decrease in fuel prices.
Cost of Revenues (Excluding Depreciation).
−Removed: For the six months ended June 30, 2020 , cost of revenues (excluding depreciation) was $1.7 billion , a $0.6 billion decrease compared to $2.3 billion for the six months ended June 30, 2019 .
−Removed: The decrease was primarily due to decreases in Brent and WTI crude oil prices as discussed above and overall lower refining and retail volumes related to COVID-19 demand destruction.
−Removed: These decreases were partially offset by unfavorable crude differentials in Hawaii and an increase in RINs expense of approximately $33.7 million.
+Added: For the nine months ended September 30, 2020 , cost of revenues (excluding depreciation) was $2.2 billion , a $1.4 billion decrease compared to $3.6 billion for the nine months ended September 30, 2019 .
+Added: The decrease was primarily due to decreases in Brent and WTI crude oil prices as discussed above and lower refining sales volumes related to COVID-19 demand destruction, partially offset by unfavorable crude oil differentials, higher RINs expenses, increased derivative costs, and an unfavorable lower of cost or net realizable value adjustment of $22.3 million .
+Added: Cost of revenues at our retail segment decreased $71.3 million primarily due to lower fuel costs and an 18% decline in sales volumes.
Operating Expense (Excluding Depreciation).
−Removed: For the six months ended June 30, 2020 , operating expense (excluding depreciation) was $140.4 million , a decrease of $8.1 million compared to $148.5 million for the six months ended June 30, 2019 .
−Removed: The decrease was primarily due to lower utilities expenses, and repairs and maintenance expenses.
+Added: For the nine months ended September 30, 2020 , operating expense (excluding depreciation) was $209.9 million , a decrease of $21.8 million compared to $231.7 million for the nine months ended September 30, 2019 .
+Added: The decrease was primarily due to lower utilities and repairs and maintenance expenses and COVID-19-related reductions in travel, employee costs, and the use of outside services.
Depreciation, Depletion, and Amortization .
−Removed: For the six months ended June 30, 2020 , DD&A was $43.4 million , which was relatively consistent with $42.9 million for the six months ended June 30, 2019 .
+Added: For the nine months ended September 30, 2020 , DD&A was $66.2 million , which was relatively consistent with $65.1 million for the nine months ended September 30, 2019 .
Impairment Expense.
−Removed: During the six months ended June 30, 2020 , we recorded goodwill impairment charges of $67.9 million related to our Refining and Retail segments.
+Added: During the nine months ended September 30, 2020 , we recorded goodwill impairment charges of $67.9 million related to our Refining and Retail segments.
Please read Note 8—Goodwill to our condensed consolidated financial statements for further discussion on the goodwill impairment.
−Removed: There was no impairment expense for the six months ended June 30, 2019 .
+Added: There was no impairment expense for the nine months ended September 30, 2019 .
General and Administrative Expense (Excluding Depreciation).
−Removed: For the six months ended June 30, 2020 , general and administrative expense (excluding depreciation) was $22.0 million , which was relatively consistent with $23.0 million for the six months ended June 30, 2019 .
+Added: For the nine months ended September 30, 2020 , general and administrative expense (excluding depreciation) was $31.8 million , a decrease of $2.6 million compared to $34.4 million for the nine months ended September 30, 2019 .
+Added: The decrease was primarily due to COVID-19-related reductions in travel and employee costs and a reduction in the use of outside services.
Acquisition and Integration Costs.
−Removed: For the six months ended June 30, 2020 , we incurred $0.8 million of integration costs primarily related to the Washington Acquisition .
−Removed: For the six months ended June 30, 2019 , we incurred $3.7 million of acquisition and integration costs related to the Washington Acquisition and the Par West Hawaii refinery acquisition.
+Added: For the nine months ended September 30, 2020 , we incurred $0.6 million of integration costs primarily related to the Washington Acquisition .
+Added: For the nine months ended September 30, 2019 , we incurred $4.3 million of acquisition and integration costs related to the Washington Acquisition and the Par West Hawaii refinery acquisition.
Interest Expense and Financing Costs, Net .
−Removed: For the six months ended June 30, 2020 , our interest expense and financing costs were $35.1 million , a decrease of $3.9 million when compared to $39.0 million for the six months ended June 30, 2019 .
−Removed: The decrease was primarily due to a decrease in interest expense and financing costs of $2.8 million due to the exchange of a portion of our outstanding 5.00% Convertible Senior Notes during 2019 and a decrease of $1.2 million due to reduced borrowings under our Supply and Offtake Agreements and Washington Refinery Intermediation Agreement .
+Added: For the nine months ended September 30, 2020 , our interest expense and financing costs were $52.6 million , a decrease of $4.7 million when compared to $57.3 million for the nine months ended September 30, 2019 .
+Added: The decrease was primarily due to a $3.5 million decrease in interest expense and financing costs due to the exchange of a portion of our outstanding 5.00% Convertible Senior Notes during 2019, a decrease of $3.2 million due to reduced borrowings under our inventory financing agreements, and a decrease of $3.1 million due to the reduced principal and lower variable interest rates on our Term Loan B Facility and Retail Property Term Loan , net of the impact from our interest rate swap.
These decreases were partially offset by interest expense of $4.6 million related to the 12.875% Senior Secured Notes issued in June 2020.
1 unchanged sentence
Change in Value of Common Stock Warrants .
−Removed: For the six months ended June 30, 2020 , the change in value of common stock warrants resulted in a gain of $4.3 million , a change of $6.5 million when compared to a loss of $2.2 million for the six months ended June 30, 2019 .
+Added: For the nine months ended September 30, 2020 , the change in value of common stock warrants resulted in a gain of $4.3 million , a change of $7.4 million when compared to a loss of $3.1 million for the nine months ended September 30, 2019 .
During January and March 2020 , one of our stockholders and its affiliates exercised the remaining 354,350 common stock warrants in exchange for 350,542 shares of common stock.
We estimated the fair value of our outstanding common stock warrants and the income recognized upon exercise using the difference between the strike price of the warrant and the market price of our common stock.
−Removed: For the three months ended March 31, 2020, our stock price decreased from $23.24 per share as of December 31, 2019 to $7.10 per share as of March 31, 2020.
−Removed: During the six months ended June 30, 2019 , our stock price increased from $14.18 per share on December 31, 2018 to $20.52 per share on June 30, 2019 .
+Added: For the three months ended March 31, 2020, our stock price decreased
+Added: from $23.24 per share as of December 31, 2019 to $7.10 per share as of March 31, 2020.
+Added: During the nine months ended September 30, 2019 , our stock price increased from $14.18 per share on December 31, 2018 to $22.86 per share on September 30, 2019 .
Debt Extinguishment and Commitment Costs.
−Removed: For the six months ended June 30, 2019 , our debt extinguishment and commitment costs were $9.2 million and primarily represent the commitment and other fees associated with the financing of the Washington Acquisition and the extinguishment costs associated with the repurchase and cancellation of a portion of our outstanding 5.00% Convertible Senior Notes .
+Added: For the nine months ended September 30, 2019 , our debt extinguishment and commitment costs were $9.2 million and primarily represented the commitment and other fees associated with the financing of the Washington Acquisition and the extinguishment costs associated with the repurchase and cancellation of a portion of our outstanding 5.00% Convertible Senior Notes .
Please read Note 10—Debt to our condensed consolidated financial statements for further discussion.
−Removed: No such costs were incurred for the six months ended June 30, 2020 .
+Added: No such costs were incurred for the nine months ended September 30, 2020 .
Equity Losses from Laramie Energy, LLC .
−Removed: For the six months ended June 30, 2020 , equity losses from Laramie Energy were $46.9 million , a decrease of $47.7 million compared to equity earnings of $0.8 million for the six months ended June 30, 2019 .
−Removed: During the three months ended March 31, 2020, we recorded an other-than-temporary impairment charge of $45.3 million related to our investment in Laramie Energy.
−Removed: The remaining decrease was primarily due to Laramie Energy’s net loss associated with lower realized prices.
+Added: For the nine months ended September 30, 2020 , equity losses from Laramie Energy were $46.9 million , a difference of $37.9 million compared to equity losses of $84.8 million for the nine months ended September 30, 2019 .
+Added: During the three months ended March 31, 2020 and the three months ended September 30, 2019, we recorded other-than-temporary impairment charges of $45.3 million and $81.5 million related to our investment in Laramie Energy, respectively.
As of June 30, 2020, we have discontinued the application of the equity method of accounting for our investment in Laramie Energy because the book value of such investment has been reduced to zero.
1 unchanged sentence
Income Taxes.
−Removed: For the six months ended June 30, 2020 , we recorded an income tax benefit of $21.0 million primarily driven by an increase in our net operating loss carryforwards and the change in our indefinitely-lived goodwill due to the impairments.
−Removed: For the six months ended June 30, 2019 , we recorded an income tax benefit of $66.6 million primarily driven by a $67.7 million benefit associated with a partial release of our valuation allowance in connection with the Washington Acquisition .
+Added: For the nine months ended September 30, 2020 , we recorded an income tax benefit of $20.9 million primarily driven by an increase in our net operating loss carryforwards and the change in our indefinitely-lived goodwill due to the impairments.
+Added: For the nine months ended September 30, 2019 , we recorded an income tax benefit of $69.0 million primarily driven by a $67.0 million benefit associated with a partial release of our valuation allowance in connection with the Washington Acquisition .
Consolidating Condensed Financial Information
8 unchanged sentences
For purposes of the following condensed consolidating information, the Parent’s investment in its subsidiaries is accounted for under the equity method of accounting (dollar amounts in thousands).
−Removed: As of June 30, 2020
+Added: As of September 30, 2020
Parent Guarantor
93 unchanged sentences
Total liabilities and stockholders’ equity
−Removed: Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2020
Parent Guarantor
15 unchanged sentences
Equity earnings (losses) from subsidiaries
−Removed: Equity earnings (losses) from Laramie Energy, LLC
Total other income (expense), net
3 unchanged sentences
Adjusted EBITDA
−Removed: Three Months Ended June 30, 2019
+Added: Three Months Ended September 30, 2019
Parent Guarantor
7 unchanged sentences
Depreciation, depletion, and amortization
−Removed: Loss (gain) on sale of assets, net
General and administrative expense (excluding depreciation)
4 unchanged sentences
Interest expense and financing costs, net
−Removed: Debt extinguishment and commitment costs
Other income, net
1 unchanged sentence
Equity earnings (losses) from subsidiaries
−Removed: Equity earnings (losses) from Laramie Energy, LLC
+Added: Equity losses from Laramie Energy, LLC
Total other income (expense), net
3 unchanged sentences
Adjusted EBITDA
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
Parent Guarantor
14 unchanged sentences
Interest expense and financing costs, net
−Removed: Debt extinguishment and commitment costs
Other income, net
1 unchanged sentence
Equity earnings (losses) from subsidiaries
−Removed: Equity earnings (losses) from Laramie Energy, LLC
+Added: Equity losses from Laramie Energy, LLC
Total other income (expense), net
3 unchanged sentences
Adjusted EBITDA
−Removed: Six Months Ended June 30, 2019
+Added: Nine Months Ended September 30, 2019
Parent Guarantor
18 unchanged sentences
Equity earnings (losses) from subsidiaries
−Removed: Equity earnings (losses) from Laramie Energy, LLC
+Added: Equity losses from Laramie Energy, LLC
Total other income (expense), net
11 unchanged sentences
The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss) , on a historical basis for the periods indicated (in thousands):
−Removed: Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2020
Parent Guarantor
5 unchanged sentences
Inventory valuation adjustment
+Added: LIFO liquidation adjustment
RINs loss (gain) in excess of net obligation
1 unchanged sentence
Acquisition and integration costs
−Removed: Changes in valuation allowance and other deferred tax items (1)
−Removed: Severance costs
Depreciation, depletion, and amortization
Interest expense and financing costs, net
−Removed: Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized loss (gain) on derivatives
Equity losses (income) from subsidiaries
1 unchanged sentence
Adjusted EBITDA (3)
−Removed: Three Months Ended June 30, 2019
+Added: Three Months Ended September 30, 2019
Parent Guarantor
6 unchanged sentences
RINs loss (gain) in excess of net obligation
−Removed: Unrealized loss on derivatives
+Added: Unrealized loss (gain) on derivatives
Acquisition and integration costs
−Removed: Debt extinguishment and commitment costs
Changes in valuation allowance and other deferred tax items (1)
Change in value of common stock warrants
−Removed: Loss (gain) on sale of assets, net
−Removed: Par’s share of Laramie Energy’s unrealized gain on derivatives (2)
+Added: Impairment of Investment in Laramie Energy, LLC (2)
+Added: Par’s share of Laramie Energy’s unrealized loss on derivatives (2)
Depreciation, depletion, and amortization
Interest expense and financing costs, net
−Removed: Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized gain on derivatives
+Added: Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized loss on derivatives and impairment losses
Equity losses (income) from subsidiaries
1 unchanged sentence
Adjusted EBITDA (3)
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
Parent Guarantor
5 unchanged sentences
Inventory valuation adjustment
+Added: LIFO liquidation adjustment
RINs loss (gain) in excess of net obligation
−Removed: Unrealized loss on derivatives
+Added: Unrealized loss (gain) on derivatives
Acquisition and integration costs
11 unchanged sentences
Adjusted EBITDA (3)
−Removed: Six Months Ended June 30, 2019
+Added: Nine Months Ended September 30, 2019
Parent Guarantor
12 unchanged sentences
Loss (gain) on sale of assets, net
+Added: Impairment of Investment in Laramie Energy, LLC (2)
Par’s share of Laramie Energy’s unrealized gain on derivatives (2)
1 unchanged sentence
Interest expense and financing costs, net
−Removed: Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized gain on derivatives
+Added: Equity losses from Laramie Energy, LLC, excluding Par’s share of unrealized gain on derivatives and impairment losses
Equity losses (income) from subsidiaries
2 unchanged sentences
________________________________________
−Removed: Included in Income tax benefit on our condensed consolidated statements of operations.
+Added: Included in Income tax benefit (expense) on our condensed consolidated statements of operations.
Included in Equity earnings (losses) from Laramie Energy, LLC on our condensed consolidated statements of operations.
−Removed: For the three and six months ended June 30, 2019 , there were no severance costs or impairment expense.
−Removed: For the three months ended June 30, 2020, there were no debt extinguishment costs, impairment expense, or common stock warrants outstanding.
+Added: For the three and nine months ended September 30, 2019 , there were no severance costs or LIFO liquidation adjustments.
+Added: For the three months ended September 30, 2020, there was no impairment expense, earnings (losses) attributed to Laramie, change in valuation allowance and other deferred tax items, or common stock warrants outstanding.
Liquidity and Capital Resources
2 unchanged sentences
Our primary sources of liquidity are cash flows from operations, cash on hand, amounts available under our credit agreements, and access to capital markets.
−Removed: Our liquidity position as of June 30, 2020 was $203.8 million and consisted of $198.5 million at Par Petroleum, LLC and subsidiaries, $5.3 million at Par Pacific Holdings, and an immaterial amount at all our other subsidiaries.
−Removed: As of June 30, 2020 , we had access to the J.
+Added: Our liquidity position as of September 30, 2020 was $190.6 million and consisted of $188.2 million at Par Petroleum, LLC and subsidiaries, $2.3 million at Par Pacific Holdings, and an immaterial amount at all our other subsidiaries.
+Added: As of September 30, 2020 , we had access to the J.
Aron Deferred Payment Arrangement, the ABL Credit Facility , the MLC receivable advances , and cash on hand of $127.3 million .
5 unchanged sentences
We cannot offer any assurances that such capital will be available in sufficient amounts or at an acceptable cost.
−Removed: We may from time to time seek to retire or repurchase our outstanding 5.00% Convertible Senior Notes , our 7.75% Senior Secured Notes , our 12.875% Senior Secured Notes , or our common stock through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, or otherwise.
−Removed: Such repurchases or exchanges, if any, will
−Removed: depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
+Added: We may from time to time seek to retire or repurchase our 5.00% Convertible Senior Notes , our 7.75% Senior Secured Notes , our 12.875% Senior Secured Notes , or our common stock through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, or otherwise.
+Added: Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
The amounts involved may be material.
−Removed: The following table summarizes cash activities for the six months ended June 30, 2020 and 2019 (in thousands):
−Removed: Six Months Ended June 30,
+Added: The following table summarizes cash activities for the nine months ended September 30, 2020 and 2019 (in thousands):
+Added: Nine Months Ended September 30,
Net cash provided by operating activities
1 unchanged sentence
Net cash provided by financing activities
−Removed: Net cash provided by operating activities was approximately $33.8 million for the six months ended June 30, 2020 , which resulted from a net loss of approximately $262.9 million , offset by net cash provided by changes in operating assets and liabilities of approximately $130.9 million and non-cash charges to operations of approximately $165.7 million .
−Removed: The change in our operating assets and liabilities for the six months ended June 30, 2020 was primarily due to:
−Removed: 1) decrease in our trade receivables of $114.2 million , 2) decrease in inventories of $164.2 million , and 3) a net decrease in our Supply and Offtake Agreements and Washington Refinery Intermediation Agreement obligations of $150.4 million .
−Removed: These decreases in operating assets and liabilities were primarily driven by the decline in crude oil prices in 2020.
−Removed: Net cash provided by operating activities was approximately $24.2 million for the six months ended June 30, 2019 , which resulted from net income of approximately $89.3 million and non-cash charges to operations of approximately $25.3 million , offset by net cash used for changes in operating assets and liabilities of approximately $90.3 million .
−Removed: For the six months ended June 30, 2020 , net cash used in investing activities was approximately $30.2 million and primarily related to additions to property, plant, and equipment totaling approximately $30.2 million .
−Removed: Net cash used in investing activities was approximately $312.3 million for the six months ended June 30, 2019 and primarily related to $274.3 million net cash consideration paid for the Washington Acquisition and additions to property and equipment totaling approximately $41.4 million .
−Removed: Net cash provided by financing activities for the six months ended June 30, 2020 was approximately $13.2 million , which consisted primarily of net debt and insurance premium borrowings of approximately $92.7 million , offset by net repayments associated with the J.
+Added: Net cash provided by operating activities was approximately $26.0 million for the nine months ended September 30, 2020 , which resulted from a net loss of approximately $277.2 million , offset by net cash provided by changes in operating assets and liabilities of approximately $117.5 million and non-cash charges to operations of approximately $185.6 million .
+Added: The change in our operating assets and liabilities for the nine months ended September 30, 2020 was primarily due to a decrease in our trade receivables of $112.2 million and a decrease in inventories of $98.8 million , partially offset by a net decrease in our Supply and Offtake Agreements and Washington Refinery Intermediation Agreement obligations of $124.4 million .
+Added: Net cash provided by changes in operating assets and liabilities also includes an increase of $40.6 million in deferred turnaround costs associated with the Hawaii and Wyoming planned turnarounds.
+Added: These decreases in accounts receivable, inventory, and Supply and Offtake Agreements were primarily driven by the decline in crude oil prices in 2020 and overall decline in sales and inventory volumes resulting from COVID-19 demand destruction.
+Added: Net cash provided by operating activities was approximately $98.6 million for the nine months ended September 30, 2019 , which resulted from net income of approximately $5.4 million and non-cash charges to operations of approximately $113.2 million primarily related to a $81.5 million non-cash impairment of our Investment in Laramie Energy, offset by net cash used for changes in operating assets and liabilities of approximately $19.9 million .
+Added: For the nine months ended September 30, 2020 , net cash used in investing activities was approximately $42.4 million and primarily related to additions to property, plant, and equipment totaling approximately $42.5 million .
+Added: Net cash used in investing activities was approximately $334.3 million for the nine months ended September 30, 2019 and primarily related to $274.3 million net cash consideration paid for the Washington Acquisition and additions to property and equipment totaling approximately $64.1 million .
+Added: Net cash provided by financing activities for the nine months ended September 30, 2020 was approximately $17.4 million , which consisted primarily of net debt and insurance premium borrowings of approximately $85.5 million , offset by net repayments associated with the J.
Aron deferred payment and MLC receivable advances of approximately $60.8 million and payments of $6.3 million in deferred loan costs primarily related to the issuance of the 12.875% Senior Secured Notes .
−Removed: Net cash provided by financing activities for the six months ended June 30, 2019 was approximately $320.9 million , which consisted primarily of net debt borrowings of approximately $270.0 million and net borrowings associated with the J.
−Removed: Aron deferred payment and MLC receivable advances of approximately $71.4 million , offset by the payments of $13.4 million in deferred loan costs and $7.1 million in commitment and other fees related to the funding for the Washington Acquisition and the financing costs related to the repurchase and cancellation of a portion of our 5.00% Convertible Senior Notes.
+Added: Net cash provided by financing activities for the nine months ended September 30, 2019 was approximately $273.0 million , which consisted primarily of net debt borrowings of approximately $263.4 million and net borrowings associated with the J.
+Added: Aron deferred payment and MLC receivable advances of approximately $27.8 million , offset by the payments of $13.5 million in deferred loan costs and $7.1 million in commitment and extinguishment costs related to the funding for the Washington Acquisition and the financing costs related to the repurchase and cancellation of a portion of our 5.00% Convertible Senior Notes.
Capital Expenditures and Turnaround Costs
−Removed: Our deferred turnaround costs and capital expenditures, excluding acquisitions, for the six months ended June 30, 2020 totaled approximately $36.6 million and were primarily related to equipment purchases and engineering work in preparation for the third quarter 2020 turnaround at our Par East Hawaii refinery, the second phase of a Washington renewables project, tank compliance construction and repairs within our Wyoming logistics network, and scheduled maintenance.
+Added: Our deferred turnaround costs and capital expenditures, excluding acquisitions, for the nine months ended September 30, 2020 totaled approximately $83.0 million and were primarily related to equipment purchases and engineering work for the 2020 turnarounds at our Par East Hawaii and Wyoming refineries, the second phase of a Washington renewables project, tank compliance construction and repairs within our Wyoming logistics network, and scheduled maintenance.
Our capital expenditure and deferred turnaround cost budget for 2020 ranges from $95 million to $115 million and primarily relates to the second phase of a Washington renewables project, equipment purchases and engineering work related to the execution of the 2020 turnarounds at our Par East Hawaii and Wyoming refineries, tank compliance construction and repairs within our Wyoming logistics network, and scheduled maintenance and other capital projects.
6 unchanged sentences
Aron amended the Supply and Offtake Agreements and extended the term through May 31, 2021 with a one -year extension option upon mutual agreement of the parties.
−Removed: 2018, we and J.
+Added: On June 27, 2018, we and J.
Aron amended the Supply and Offtake Agreements to increase the amount that we may defer under the deferred payment arrangement.
1 unchanged sentence
Aron amended the Supply and Offtake Agreements to account for additional processing capacity expected to be provided by the Par West Hawaii refinery.
+Added: We are evaluating options to extend or replace the Supply and Offtake Agreements.
Please read Note 9—Inventory Financing Agreements for more information.
2 unchanged sentences
On November 1, 2019 , we and MLC amended the Washington Refinery Intermediation Agreement and extended the term through June 30, 2021 , with an option for us to early terminate as early as March 31, 2021 .
+Added: We are evaluating options to extend or replace the Washington Refinery Intermediation Agreement.
Please read Note 9—Inventory Financing Agreements for more information.
30 unchanged sentences
and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur.
−Removed: Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described above and under Critical Accounting Policies and Risk Factors included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q.
+Added: Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described above and under Critical Accounting Policies and Risk Factors included in our most recent Annual Report on Form 10-K and in
+Added: this Quarterly Report on Form 10-Q.
All forward-looking statements speak only as of the date they are made.
Additionally, significant uncertainties remain with respect to COVID-19 and its economic effects.
−Removed: Due to the unpredictable and unprecedented nature of
−Removed: the COVID-19 pandemic, we cannot identify all potential risks to, and impacts on, our business, including the ultimate adverse economic impact to the Company’s business, results of operations, financial condition, and liquidity.
+Added: Due to the unpredictable and unprecedented nature of the COVID-19 pandemic, we cannot identify all potential risks to, and impacts on, our business, including the ultimate adverse economic impact to the Company’s business, results of operations, financial condition, and liquidity.
However, the adverse impact of COVID-19 on the Company has been and will likely continue to be material.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.