Item 2. Management’s Discussion and Analysis
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a growing energy company based in Houston, Texas, that provides both renewable and conventional fuels to the western United States. For more information, please read Note 1—Overview to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Recent Events Affecting Comparability of Periods
Operational Update
Our Wyoming refinery experienced an operational incident on the evening of February 12, 2025, and remained safely idled during repair and recovery work through the end of the quarter ended March 31, 2025. The 47 days of idle time impacted comparability between the three months ended March 31, 2025, and March 31, 2024.
Economic Update
Energy prices are, among other factors, indicators of inflation. Crude oil pricing decreased in the first quarter of 2025 compared to the first quarter of 2024. Brent crude oil pricing averaged $74.98 per barrel in the first quarter of 2025 compared to $81.76 per barrel in the first quarter of 2024. Average U.S. retail gasoline prices decreased to $2.99 per gallon in the first quarter of 2025 compared to $3.24 per gallon in the first quarter of 2024. The overall energy price index increased 4.2% year over year as of March 31, 2025. The U.S. Energy Information Administration (“EIA”) in its April 2025 short term energy outlook forecasts average Brent crude oil pricing to decrease to $68 per barrel in 2025 and $61 per barrel in 2026 due to increased global oil inventories driven by Organization of the Petroleum Exporting Countries (“OPEC”) reversing production cuts and weak global demand growth. On March 5, 2025, OPEC agreed to gradually increase oil production, starting in April 2025, after a period of voluntary output cuts, with the plan being to reverse the 2.2 million barrels per day cuts over an 18-month period. On April 3, 2025, OPEC agreed to phase out oil output cuts by increasing output by 411,000 barrels per day beginning in May 2025. While inflation has increased relative to the prior year, we do not believe that inflation has had a material effect on our business, financial condition, or results of operations in the first quarter of 2025.
Geopolitical tensions in the Middle East and Red Sea region continue in 2025 putting upward pressure on prices. The overall effect of these conflicts and associated actions taken to limit the purchase of Russian petroleum products impacted freight movements and raised the operating costs of many European and other refineries.
The U.S. has adopted new and increased tariffs on countries and specific goods, subject to evolving exemptions, with additional tariff increases proposed but currently on pause. Those policies, along with retaliatory actions by some trading partners and ongoing negotiations around trade policy, have led to increased volatility and unpredictability for global trade.
Please read Item 1A. — Risk Factors on our Annual Report on Form 10-K for the year ended December 31, 2024 for further information.
Results of Operations
Three months ended March 31, 2025 compared to the three months ended March 31, 2024
Net Loss. Our financial results for the first quarter of 2025 declined from a net loss of $3.8 million for the three months ended March 31, 2024, to a net loss of $30.4 million for the three months ended March 31, 2025. The decrease was primarily driven by a $47.3 million decrease in our refining segment operating income partially offset by a $17.6 million decrease in general and administrative expenses. Please read the discussions of segment and consolidated results below for additional information.
Adjusted EBITDA and Adjusted Net Income (Loss). For the three months ended March 31, 2025, Adjusted EBITDA was $10.1 million compared to $94.7 million for the three months ended March 31, 2024. The $84.6 million decrease was primarily due to a decrease of $102.8 million in refining segment Adjusted Gross Margin, partially offset by a $9.1 million decrease in operating expenses and an increase of $2.7 million in our retail segment Adjusted Gross Margin. Please read the discussion of Adjusted Gross Margin by Segment and the Discussion of Consolidated Results below for additional information.
For the three months ended March 31, 2025, Adjusted Net Loss was $50.3 million compared to Adjusted Net Income of $41.7 million for the three months ended March 31, 2024. The decline was primarily related to the factors described above
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for the decrease in Adjusted EBITDA, combined with an increase of $3.9 million in D&A and an increase of $3.0 million in interest expense and financing costs, excluding unrealized interest rate derivative losses (gains).
The following tables summarize our consolidated results of operations for the three months ended March 31, 2025, compared to the three months ended March 31, 2024 (in thousands). The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
Three Months Ended March 31,
2025 2024 $ Change % Change
Revenues $ 1,745,036 $ 1,980,835 $ (235,799) (12)%
Cost of revenues (excluding depreciation) 1,559,360 1,747,478 (188,118) (11)%
Operating expense (excluding depreciation) 144,154 153,260 (9,106) (6)%
Depreciation and amortization 36,586 32,656 3,930 12%
General and administrative expense (excluding depreciation) 24,243 41,755 (17,512) (42)%
Equity earnings from refining and logistics investments (7,514) (6,094) (1,420) (23)%
Acquisition and integration costs — 243 (243) (100)%
Par West redevelopment and other costs 3,982 1,971 2,011 102%
Loss on sale of assets, net 1 51 (50) (98)%
Total operating expenses 1,760,812 1,971,320
Operating income (loss) (15,776) 9,515
Other income (expense)
Interest expense and financing costs, net (21,848) (17,884) (3,964) 22%
Debt extinguishment and commitment costs (25) — (25) NM (1)
Other expense, net (371) (2,576) 2,205 (86)%
Equity earnings from Laramie Energy, LLC 726 4,563 (3,837) (84)%
Total other expense, net (21,518) (15,897)
Loss before income taxes (37,294) (6,382)
Income tax benefit 6,894 2,631 4,263 162%
Net loss $ (30,400) $ (3,751)
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(1) NM - Not meaningful
The following tables summarize our operating income (loss) by segment for the three months ended March 31, 2025 and 2024 (in thousands). The following should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
Three months ended March 31, 2025 Refining Logistics (1) Retail Corporate, Eliminations and Other (2) Total
Revenues $ 1,686,129 $ 71,415 $ 136,432 $ (148,940) $ 1,745,036
Cost of revenues (excluding depreciation) 1,571,122 40,567 96,639 (148,968) 1,559,360
Operating expense (excluding depreciation) 118,620 4,365 21,169 — 144,154
Depreciation and amortization 26,397 6,819 2,662 708 36,586
General and administrative expense (excluding depreciation) — — — 24,243 24,243
Equity earnings from refining and logistics investments (5,289) (2,225) — — (7,514)
Acquisition and integration costs — — — — —
Par West redevelopment and other costs — — — 3,982 3,982
Loss on sale of assets, net — — 1 — 1
Operating income (loss) $ (24,721) $ 21,889 $ 15,961 $ (28,905) $ (15,776)
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Three months ended March 31, 2024 Refining Logistics (1) Retail Corporate, Eliminations and Other (2) Total
Revenues $ 1,926,616 $ 71,842 $ 140,134 $ (157,757) $ 1,980,835
Cost of revenues (excluding depreciation) 1,759,395 42,797 103,052 (157,766) 1,747,478
Operating expense (excluding depreciation) 126,468 3,812 22,980 — 153,260
Depreciation and amortization 22,270 6,775 3,116 495 32,656
General and administrative expense (excluding depreciation) — — — 41,755 41,755
Equity earnings from refining and logistics investments (4,117) (1,977) — — (6,094)
Acquisition and integration costs — — — 243 243
Par West redevelopment and other costs — — — 1,971 1,971
Loss (gain) on sale of assets, net — 61 (10) — 51
Operating income (loss) $ 22,600 $ 20,374 $ 10,996 $ (44,455) $ 9,515
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(1) Our logistics operations consist primarily of intercompany transactions which eliminate on a consolidated basis.
(2) Includes eliminations of intersegment Revenues and Cost of revenues (excluding depreciation) of $148.9 million and $157.8 million for the three months ended March 31, 2025 and 2024, respectively.
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Below is a summary of key operating statistics for the refining segment for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
2025 2024
Total Refining Segment
Feedstocks Throughput (Mbpd)
176.0 180.9
Refined product sales volume (Mbpd)
184.6 192.9
Adjusted Gross Margin per bbl ($/throughput bbl) (1) $ 6.59 $ 12.58
Production costs per bbl ($/throughput bbl) (2) 7.41 7.59
D&A per bbl ($/throughput bbl) 1.67 1.35
Hawaii Refinery
Feedstocks Throughput (Mbpd) 79.4 79.4
Yield (% of total throughput)
Gasoline and gasoline blendstocks 25.8 % 25.0 %
Distillates 34.4 % 38.2 %
Fuel oils 32.4 % 34.0 %
Other products 4.0 % (1.2) %
Total yield 96.6 % 96.0 %
Refined product sales volume (Mbpd) 88.6 87.6
Adjusted Gross Margin per bbl ($/throughput bbl) (1)
$ 8.90 $ 14.00
Production costs per bbl ($/throughput bbl) (2)
4.81 4.89
D&A per bbl ($/throughput bbl) 0.23 0.60
Montana Refinery
Feedstocks Throughput (Mbpd)
51.7 53.1
Yield (% of total throughput)
Gasoline and gasoline blendstocks 45.3 % 47.7 %
Distillates 32.5 % 32.7 %
Asphalt 11.2 % 9.9 %
Other products 3.2 % 4.1 %
Total yield 92.2 % 94.4 %
Refined product sales volume (Mbpd)
47.4 51.5
Adjusted Gross Margin per bbl ($/throughput bbl) (1)
$ 5.04 $ 13.82
Production costs per bbl ($/throughput bbl) (2)
10.56 12.44
D&A per bbl ($/throughput bbl) 2.34 1.40
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Three Months Ended March 31,
2025 2024
Washington Refinery
Feedstocks Throughput (Mbpd) 38.6 31.4
Yield (% of total throughput)
Gasoline and gasoline blendstocks 24.3 % 23.6 %
Distillates 35.9 % 33.5 %
Asphalt 15.4 % 21.0 %
Other products 20.5 % 17.9 %
Total yield 96.1 % 96.0 %
Refined product sales volume (Mbpd) 36.5 36.3
Adjusted Gross Margin per bbl ($/throughput bbl) (1)
$ 2.09 $ 6.13
Production costs per bbl ($/throughput bbl) (2)
4.16 6.07
D&A per bbl ($/throughput bbl) 2.01 2.44
Wyoming Refinery
Feedstocks Throughput (Mbpd) 6.3 17.0
Yield (% of total throughput)
Gasoline and gasoline blendstocks 50.5 % 49.8 %
Distillates 45.7 % 45.9 %
Fuel oils 2.3 % 1.9 %
Other products 1.1 % 1.0 %
Total yield 99.6 % 98.6 %
Refined product sales volume (Mbpd) 12.1 17.5
Adjusted Gross Margin per bbl ($/throughput bbl) (1)
$ 19.83 $ 14.84
Production costs per bbl ($/throughput bbl) (2)
34.35 7.86
D&A per bbl ($/throughput bbl) 12.25 2.77
Market Indices (average $ per barrel)
Hawaii Index (3)
$ 8.13 $ 12.07
Montana Index (4)
7.07 17.09
Washington Index (5)
4.15 5.16
Wyoming Index (6)
20.31 17.23
Combined Index (7)
7.38 12.83
Market Cracks (average $ per barrel)
Singapore 3.1.2 Product Crack (3)
$ 13.12 $ 18.67
Montana 6.3.2.1 Product Crack (4)
17.02 19.17
Washington 3.1.1.1 Product Crack (5)
12.01 11.50
Wyoming 2.1.1 Product Crack (6)
21.74 18.06
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Crude Oil Prices (average $ per barrel) (8)
Brent $ 74.98 $ 81.76
WTI 71.42 76.91
ANS (-) Brent 2.18 0.68
Bakken Guernsey (-) WTI (1.81) (2.02)
Bakken Williston (-) WTI (3.08) (2.30)
WCS Hardisty (-) WTI (12.45) (17.00)
MSW (-) WTI (5.20) (6.50)
Syncrude (-) WTI (1.96) (3.24)
Brent M1-M3 1.22 1.06
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(1) We calculate Adjusted Gross Margin per barrel by dividing Adjusted Gross Margin by total refining throughput. Adjusted Gross Margin for our Washington refinery is determined under the last-in, first-out (“LIFO”) inventory costing method. Adjusted Gross Margin for our other refineries is determined under the first-in, first-out (“FIFO”) inventory costing method.
(2) 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 refineries, including personnel costs, repair and maintenance costs, insurance, utilities, and other miscellaneous costs, by total refining throughput. Our production costs are included in Operating expense (excluding depreciation) on our condensed consolidated statements of operations, which also includes costs related to our bulk marketing operations and severance costs.
(3) Beginning in 2025, we established the Hawaii Index as a new benchmark for our Hawaii operations. We believe the Hawaii Index, which incorporates market cracks and landed crude differentials, better reflects the key drivers impacting our Hawaii refinery’s financial performance compared to prior reported market indices. The Hawaii Index is calculated as the Singapore 3.1.2 Product Crack, or one part gasoline (RON 92) and two parts distillates (Sing Jet & Sing gasoil) as created from a barrel of Brent crude oil, less the Par Hawaii Refining, LLC (“PHR”) crude differential.
(4) Beginning in 2025, we established the Montana Index as a new benchmark for our Montana refinery. We believe the Montana Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Montana refinery’s financial performance compared to prior reported market indices. Beginning in 2025, market cracks have been updated to reflect local market product pricing, which better reflects our Montana refinery’s refined product sales price compared to prior reported market indices. The Montana Index is calculated as the Montana 6.3.2.1 Product Crack less Montana crude costs, less other costs of sales, including inflation-adjusted product delivery costs, yield loss expense, taxes and tariffs, and product discounts. The Montana 6.3.2.1 Product Crack is calculated by taking three parts gasoline (Billings E10 and Spokane E10), two parts distillate (Billings ULSD and Spokane ULSD), and one part asphalt (Rocky Mountain Rail Asphalt) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD. Asphalt pricing is lagged by one month. The Montana crude cost is calculated as 60% WCS differential to WTI, 20% MSW differential to WTI, and 20% Syncrude differential to WTI. The Montana crude cost is lagged by three months and includes an inflation-adjusted crude delivery cost. Other costs of sales and crude delivery costs are based on historical averages and management’s estimates.
(5) Beginning in 2025, we established the Washington Index as a new benchmark for our Washington refinery. We believe the Washington Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Washington refinery’s financial performance compared to prior reported market indices. Beginning in 2025, market cracks have been updated to reflect local market product pricing, which better reflects our Washington refinery’s refined product sales price compared to prior reported market indices. The Washington Index is calculated as the Washington 3.1.1.1 Product Crack, less Washington crude costs, less other costs of sales, including inflation-adjusted product delivery costs, yield loss expense and state and local taxes. The Washington 3.1.1.1 Product Crack is calculated by taking one part gasoline (Tacoma E10), one part distillate (Tacoma ULSD) and one part secondary products (USGC VGO and Rocky Mountain Rail Asphalt) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD. Asphalt pricing is lagged by one month. The Washington crude cost is calculated as 67% Bakken Williston differential to WTI and 33% WCS Hardisty differential to WTI. The Washington
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crude cost is lagged by one month and includes an inflation-adjusted crude delivery cost. Other costs of sales and crude delivery costs are based on historical averages and management’s estimates.
(6) Beginning in 2025, we established the Wyoming Index as a new benchmark for our Wyoming refinery. We believe the Wyoming Index, which incorporates local market cracks, regional crude oil prices, and management’s estimates for other costs of sales, better reflects the key drivers impacting our Wyoming refinery’s financial performance compared to prior reported market indices. Beginning in 2025, market cracks have also been updated to reflect local market product pricing, which better reflects our Wyoming refinery’s refined product sales price compared to prior reported market indices. The Wyoming Index is calculated as the Wyoming 2.1.1 Product Crack, less Wyoming crude costs, less other cost of sales, including inflation adjusted product delivery costs and yield loss expense, based on historical averages and management’s estimates. The Wyoming 2.1.1 Product Crack is calculated by taking one part gasoline (Rockies gasoline) and one part distillate (USGC ULSD and USGC Jet) as created from a barrel of WTI crude oil, less 100% of the RVO cost for gasoline and ULSD. The Wyoming crude cost is calculated as the Bakken Guernsey differential to WTI on a one-month lag.
(7) Beginning in 2025, we established the Combined Index as a new benchmark for our refining segment. The Combined Index provides a wholistic view of key drivers impacting our refining segment’s financial performance and is calculated as the throughput-weighted average of each regional index for periods under our ownership.
(8) Beginning in 2025, crude oil prices have been updated and expanded to reflect regional differentials to Brent and WTI, which better reflect our refineries’ feedstock costs compared to prior crude oil pricing.
Below is a summary of key operating statistics for the retail segment for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
2025 2024
Retail Segment
Retail sales volumes (thousands of gallons) 29,431 29,431
Non-GAAP Performance Measures
Management uses certain financial measures and forecasts to evaluate our operating performance and allocate resources that are considered non-GAAP financial measures. These measures should not be considered in isolation or as substitutes or alternatives to their most directly comparable GAAP financial measures or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures used by other companies since each company may define these terms differently.
We believe Adjusted Gross Margin (as defined below) provides useful information to investors because it eliminates the gross impact of volatile commodity prices and adjusts for certain non-cash items and timing differences created by our inventory financing agreements and lower of cost and net realizable value adjustments to demonstrate the earnings potential of the business before other fixed and variable costs, which are reported separately in Operating expense (excluding depreciation) and Depreciation and amortization. Operating expense includes certain shared costs such as finance, accounting, tax, human resources, information technology, and legal costs that are not directly attributable to specific operating segments. Remaining expenses are included in the reconciliation of reportable segment Adjusted EBITDA to consolidated pre-tax income (loss) as unallocated corporate general and administrative expenses.
Management uses Adjusted Gross Margin per barrel to evaluate operating performance and compare profitability to other companies in the industry and to industry benchmarks. We believe Adjusted Net Income (Loss) and Adjusted EBITDA (as defined below) are useful supplemental financial measures that allow management and investors to assess the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis, the ability of our assets to generate cash to pay interest on our indebtedness, and our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure.
Beginning with financial results reported for the first quarter of 2024, Adjusted Net Income (loss) also excludes other non-operating income and expenses. This modification improves comparability between periods by excluding income and expenses resulting from non-operating activities.
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Effective as of the fourth quarter of 2024, we have modified our definition of Adjusted Gross Margin, Adjusted Net Income (Loss) and Adjusted EBITDA to align the accounting treatment for deferred turnaround costs from our refining and logistics investments with our accounting policy. Under this approach, we exclude our share of their turnaround expenses, which are recorded as period costs in their financial statements, and instead defer and amortize these costs on a straight-line basis over the period estimated until the next planned turnaround. This modification enhances consistency and comparability across reporting periods.
Adjusted Gross Margin
Adjusted Gross Margin is defined as Operating income (loss) excluding:
• operating expense (excluding depreciation);
• depreciation and amortization (“D&A”);
• Par’s portion of interest, taxes, and D&A expense from refining and logistics investments;
• impairment expense;
• loss (gain) on sale of assets, net;
• Par's portion of accounting policy differences from refining and logistics investments;
• inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, hedge losses (gains) associated with our Washington ending inventory and intermediation obligation, purchase price allocation adjustments, and LIFO layer increment and decrement impacts associated with our Washington inventory);
• Environmental obligation mark-to-market adjustment (which represents the mark-to-market losses (gains) associated with our net RINs liability and our net obligation associated with the Washington Climate Commitment Act and Clean Fuel Standard); and
• unrealized loss (gain) on derivatives.
The following tables present a reconciliation of Adjusted Gross Margin to the most directly comparable GAAP financial measure, operating income (loss), on a historical basis, for selected segments, for the periods indicated (in thousands):
Three months ended March 31, 2025 Refining Logistics Retail
Operating income (loss) $ (24,721) $ 21,889 $ 15,961
Operating expense (excluding depreciation)
118,620 4,365 21,169
Depreciation and amortization 26,397 6,819 2,662
Par’s portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
1,152 966 —
Inventory valuation adjustment (11,687) — —
Environmental obligation mark-to-market adjustments 4,954 — —
Unrealized gain on derivatives (9,442) — —
Par's portion of accounting policy differences from refining and logistics investments (945) — —
Loss on sale of assets, net — — 1
Adjusted Gross Margin (1) $ 104,328 $ 34,039 $ 39,793
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Three months ended March 31, 2024 Refining Logistics Retail
Operating income $ 22,600 $ 20,374 $ 10,996
Operating expense (excluding depreciation)
126,468 3,812 22,980
Depreciation and amortization 22,270 6,775 3,116
Par’s portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments
718 928 —
Inventory valuation adjustment 625 — —
Environmental obligation mark-to-market adjustments (10,263) — —
Unrealized loss on derivatives 44,692 — —
Loss (gain) on sale of assets, net — 61 (10)
Adjusted Gross Margin (1) (2)
$ 207,110 $ 31,950 $ 37,082
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(1) For the three months ended March 31, 2025 and 2024, there was no impairment expense in Operating income (loss).
(2) For the three months ended March 31, 2024, there was no impact in Operating income from accounting policy differences at our refining and logistics investments.
Adjusted Net Income (Loss) and Adjusted EBITDA
Adjusted Net Income (Loss) is defined as Net income (loss) excluding:
• inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, hedge losses (gains) associated with our Washington ending inventory and intermediation obligation, purchase price allocation adjustments, and LIFO layer increment and decrement impacts associated with our Washington inventory);
• Environmental obligation mark-to-market adjustments (which represents the mark-to-market losses (gains) associated with our RINs and Washington CCA and Clean Fuel Standard);
• unrealized (gain) loss on derivatives;
• acquisition and integration costs;
• redevelopment and other costs related to Par West;
• debt extinguishment and commitment costs;
• increase in (release of) tax valuation allowance and other deferred tax items;
• changes in the value of contingent consideration and common stock warrants;
• severance costs and other non-operating expense (income);
• (gain) loss on sale of assets;
• impairment expense;
• impairment expense associated with our investment in Laramie Energy;
• Par’s share of equity (earnings) losses from Laramie Energy, LLC, excluding cash distributions; and
• Par’s portion of accounting policy differences from refining and logistics investments.
Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding:
• D&A;
• interest expense and financing costs, net, excluding interest rate derivative loss (gain);
• cash distributions from Laramie Energy, LLC to Par;
• Par's portion of interest, taxes, and D&A expense from refining and logistics investments; and
• income tax expense (benefit) excluding the increase in (release of) tax valuation allowance.
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The following table presents a reconciliation of Adjusted Net Income and Adjusted EBITDA to the most directly comparable GAAP financial measure, Net loss, on a historical basis for the periods indicated (in thousands):
Three Months Ended March 31,
2025 2024
Net Loss $ (30,400) $ (3,751)
Inventory valuation adjustment (11,687) 625
Environmental obligation mark-to-market adjustments 4,954 (10,263)
Unrealized loss (gain) on derivatives (9,357) 43,848
Par West redevelopment and other costs 3,982 1,971
Acquisition and integration costs — 243
Debt extinguishment and commitment costs 25 —
Changes in valuation allowance and other deferred tax items (1)
(6,894) (2,631)
Severance costs and other non-operating expense (2)
726 16,138
Loss on sale of assets, net 1 51
Equity earnings from Laramie Energy, LLC, excluding cash distributions
(726) (4,563)
Par's portion of accounting policy differences from refining and logistics investments (945) —
Adjusted Net Income (Loss) (3) (4) (50,321) 41,668
Depreciation and amortization 36,586 32,656
Interest expense and financing costs, net, excluding unrealized interest rate derivative loss (gain)
21,763 18,728
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments 2,118 1,646
Income tax expense — —
Adjusted EBITDA (3)
$ 10,146 $ 94,698
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(1) For the three months ended March 31, 2025 and 2024, we recognized a non-cash deferred tax benefit of $6.9 million and $2.6 million, respectively, related to deferred state and federal tax liabilities. This tax benefit is included in Income tax expense (benefit) on our condensed consolidated statements of operations.
(2) For the three months ended March 31, 2025 and 2024, we incurred $0.3 million and $13.1 million of stock-based compensation expenses associated with equity awards modifications, respectively. For the three months ended March 31, 2024, we incurred $2.3 million for an estimated legal settlement unrelated to current operating activities.
(3) For the three months ended March 31, 2025 and 2024, there was no change in value of contingent consideration, change in value of common stock warrants, impairment expense, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference. Please read the Non-GAAP Performance Measures discussion above for information regarding changes to the components of Adjusted Net Income (Loss) and Adjusted EBITDA made during the reporting periods.
(4) For the three months ended March 31, 2024, there was no impact in Operating income from accounting policy differences at our refining and logistics investments.
Adjusted EBITDA by Segment
Adjusted EBITDA by segment is defined as Operating income (loss) excluding:
• D&A;
• inventory valuation adjustment (which adjusts for timing differences to reflect the economics of our inventory financing agreements, including lower of cost or net realizable value adjustments, the impact of the embedded derivative repurchase or terminal obligations, hedge losses (gains) associated with our Washington ending inventory and intermediation obligation, purchase price allocation adjustments, and LIFO layer increment and decrement impacts associated with our Washington inventory);
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• Environmental obligation mark-to-market adjustments (which represents the mark-to-market losses (gains) associated with our net RINs liability and net obligation associated with the Washington CCA and Clean Fuel Standard);
• unrealized (gain) loss on derivatives;
• acquisition and integration costs;
• redevelopment and other costs related to Par West;
• severance costs and other non-operating expense (income);
• (gain) loss on sale of assets;
• impairment expense;
• Par's portion of interest, taxes, and D&A expense from refining and logistics investments; and
• Par's portion of accounting policy differences from refining and logistics investments.
Adjusted EBITDA by segment also includes Gain on curtailment of pension obligation and Other income (loss), net, which are presented below Operating income (loss) on our condensed consolidated statement of operations.
The following table presents a reconciliation of Adjusted EBITDA by segment to the most directly comparable GAAP financial measure, Operating income (loss), on a historical basis, for our operating segments for the periods indicated (in thousands):
Three Months Ended March 31, 2025 Refining Logistics Retail Corporate and Other
Operating income (loss) by segment $ (24,721) $ 21,889 $ 15,961 $ (28,905)
Depreciation and amortization 26,397 6,819 2,662 708
Inventory valuation adjustment (11,687) — — —
Environmental obligation mark-to-market adjustments 4,954 — — —
Unrealized gain on commodity derivatives (9,442) — — —
Par West redevelopment and other costs — — — 3,982
Severance costs and other non-operating expense
— — — 726
Par's portion of accounting policy differences from refining and logistics investments (945) — — —
Loss on sale of assets, net — — 1 —
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments 1,152 966 — —
Other loss, net — — — (371)
Adjusted EBITDA (1) $ (14,292) $ 29,674 $ 18,624 $ (23,860)
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Three Months Ended March 31, 2024 Refining Logistics Retail Corporate and Other
Operating income (loss) by segment $ 22,600 $ 20,374 $ 10,996 $ (44,455)
Depreciation and amortization 22,270 6,775 3,116 495
Inventory valuation adjustment
625 — — —
Environmental obligation mark-to-market adjustments (10,263) — — —
Unrealized loss on commodity derivatives 44,692 — — —
Acquisition and integration costs — — — 243
Par West redevelopment and other costs
— — — 1,971
Severance costs and other non-operating expenses 642 — — 15,496
Loss (gain) on sale of assets, net — 61 (10) —
Par's portion of interest, taxes, depreciation and amortization expense from refining and logistics investments
718 928 — —
Other loss, net — — — (2,576)
Adjusted EBITDA (1) (2)
$ 81,284 $ 28,138 $ 14,102 $ (28,826)
________________________________________
(1) For the three months ended March 31, 2025 and 2024, there was no change in value of contingent consideration, change in value of common stock warrants, impairment expense, impairments associated with our investment in Laramie Energy, or our share of Laramie Energy’s asset impairment losses in excess of our basis difference.
(2) For the three months ended March 31, 2024, there was no impact in Operating income (loss) from accounting policy differences at our refining and logistic investments.
Factors Impacting Segment Results
Operating Income
Three months ended March 31, 2025 compared to the three months ended March 31, 2024
Refining. Operating loss for our refining segment was $24.7 million for the three months ended March 31, 2025, a decrease of $47.3 million compared to operating income of $22.6 million for the three months ended March 31, 2024. The decrease was primarily driven by lower crack spreads at our Hawaii and Montana refineries, unfavorable changes in crude oil differentials across all our refineries, and unfavorable FIFO impacts at Montana, partially offset by a favorable change of $49.0 million in the step-out obligations associated with our inventory intermediation agreements and favorable derivative impacts of $44.6 million. Please read the Adjusted Gross Margin discussion below for additional information.
Logistics. Operating income for our logistics segment was $21.9 million for the three months ended March 31, 2025, an increase of $1.5 million compared to $20.4 million for the three months ended March 31, 2024. The increase was primarily due to a decrease in cost of revenues of $2.2 million reflecting lower environmental and repair and maintenance costs, partially offset by a decrease in third-party revenues of $0.9 million driven by lower throughput, storage and transportation volumes.
Retail. Operating income for our retail segment was $16.0 million for the three months ended March 31, 2025, an increase of $5.0 million compared to $11.0 million for the three months ended March 31, 2024. The increase was primarily due to a $2.6 million increase in fuel margins, a $1.8 million decrease in operating expenses primarily driven by lower employee costs and repair and maintenance expenses, and increased merchandise margins of $0.6 million.
Adjusted Gross Margin
Three months ended March 31, 2025 compared to the three months ended March 31, 2024
Refining. For the three months ended March 31, 2025, our refining Adjusted Gross Margin was $104.3 million, a decrease of $102.8 million compared to $207.1 million for the three months ended March 31, 2024. The decrease was driven by a $71.8 million decrease in crack spreads primarily at our Hawaii and Montana refineries, a $23.1 million decrease due to
36
unfavorable changes in feedstock differentials, and an unfavorable FIFO impact of $13.0 million, and other factors described below.
• Adjusted Gross Margin for the Montana refinery decreased by $8.78 per barrel from $13.82 per barrel during the three months ended March 31, 2024, to $5.04 per barrel during the three months ended March 31, 2025. The decrease in Adjusted Gross Margin was primarily due to unfavorable environmental costs, changes in crude oil differentials, and FIFO impacts combined with declining crack spreads. The Montana Index declined $10.02 per barrel, or 59%, in the first quarter of 2025 compared to the comparable period in 2024.
• Adjusted Gross Margin for the Hawaii refinery decreased by $5.10 per barrel from $14.00 per barrel during the three months ended March 31, 2024, to $8.90 per barrel during the three months ended March 31, 2025. The decrease in Adjusted Gross Margin was primarily due to declining crack spreads partially offset by a 1.1% increase in refined product sales and lower inventory intermediation costs. The Hawaii Index declined $3.94 per barrel, or 33%, in the first quarter of 2025 compared to the comparable period in 2024.
• Adjusted Gross Margin for the Washington refinery decreased by $4.04 per barrel from $6.13 per barrel during the three months ended March 31, 2024, to $2.09 per barrel during the three months ended March 31, 2025. The decrease was primarily due to unfavorable changes in crude oil differentials and unfavorable environmental costs, partially offset by a 1% increase in refined product sales. The Washington Index declined $1.01 per barrel, or 20%, in the first quarter of 2025 compared to the comparable period in 2024.
• Adjusted Gross Margin for the Wyoming refinery was $11.2 million for the three months ended March 31, 2025, an $11.8 million decrease compared to $23.0 million for the three months ended March 31, 2024. The decrease in Adjusted Gross Margin was primarily due to a 31% decrease in refined product sales due to unplanned downtime as a result of the February operational incident, unfavorable changes in crude oil differentials and unfavorable environmental costs. The Wyoming Index improved $3.08 per barrel, or 18%, in the first quarter of 2025 compared to the comparable period in 2024.
Logistics. For the three months ended March 31, 2025, our logistics Adjusted Gross Margin was $34.0 million, an increase of $2.0 million compared to $32.0 million for the three months ended March 31, 2024. The increase is primarily due to lower environmental costs, partially offset by lower throughput across our Wyoming and Montana logistics assets in the three months ended March 31, 2025, compared to the comparable period in 2024.
Retail. For the three months ended March 31, 2025, our retail Adjusted Gross Margin was $39.8 million, an increase of $2.7 million compared to $37.1 million for the three months ended March 31, 2024. The increase was primarily due to a $2.6 million increase in fuel margins in the three months ended March 31, 2025, compared to the comparable period in 2024.
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Discussion of Consolidated Results
Three months ended March 31, 2025 compared to the three months ended March 31, 2024
Revenues. For the three months ended March 31, 2025, revenues were $1.7 billion, a $0.3 billion decrease compared to $2.0 billion for the three months ended March 31, 2024. The decrease was primarily driven by lower refining revenue due to a $0.1 billion decrease reflecting lower crude oil prices, a $0.1 billion decrease due to lower average product crack spreads and a 4.3% decrease in product sales volumes. Average Brent crude oil prices decreased 8% and average WTI crude oil prices decreased 7% as compared to the prior period. The Combined Index declined 42% compared to the first quarter of 2024. Please read our key operating statistics for further information. Revenues at our retail segment decreased $3.7 million primarily due to a 3% decline in fuel sales prices in the Pacific northwest.
Cost of Revenues (Excluding Depreciation). For the three months ended March 31, 2025, cost of revenues (excluding depreciation) was $1.6 billion, a decrease of $0.1 billion when compared to $1.7 billion for the three months ended March 31, 2024. The decrease was primarily driven by lower crude oil prices, as discussed above, lower inventory intermediation costs, favorable derivative activity, and 4.3% lower crude sales volumes, partially offset by unfavorable feedstock costs. Please read Note 8—Inventory Financing Agreements for more information on the Supply and Offtake Agreement terminations.
Operating Expense (Excluding Depreciation). For the three months ended March 31, 2025, operating expense (excluding depreciation) was $144.2 million, a $9.1 million decrease when compared to $153.3 million for the three months ended March 31, 2024. The decrease was driven by lower repairs and maintenance and utilities expenses at our Montana and Washington refineries, partially offset by higher repair and maintenance costs, employee costs, and other operating expenses as in response to our Wyoming operational incident.
Depreciation and Amortization . For the three months ended March 31, 2025, D&A was $36.6 million, an increase of $3.9 million compared to $32.7 million for the three months ended March 31, 2024. The increase was primarily driven by a $4.1 million increase in Montana and a $2.6 million increase in Wyoming related to equipment damaged as a result of the February operational incident, partially offset by a $2.6 million decrease at the Hawaii refinery reflecting fully amortized turnaround assets. The Montana refinery completed two turnarounds in 2024 and a Hawaii refinery turnaround is planned for 2026.
General and Administrative Expense (Excluding Depreciation). For the three months ended March 31, 2025, general and administrative expense (excluding depreciation) was $24.2 million, a $17.6 million decrease when compared to $41.8 million for the three months ended March 31, 2024, primarily due to $13.1 million of stock based compensation expenses related to CEO transition costs in the first quarter of 2024 with no similar 2025 expenses and lower renewable development costs of $4.5 million.
Equity earnings from refining and logistics investments. During the three months ended March 31, 2025, Equity earnings from refining and logistics investments, related to YELP and YPLC, were $7.5 million, an increase of $1.4 million compared to $6.1 million for the three months ended March 31, 2024. For the three months ended March 31, 2025, our proportionate share of YELP’s net income and YPLC’s net income was $5.6 million and $2.2 million, respectively. For the three months ended March 31, 2024, our proportionate share of YELP’s net income and YPLC’s net income was $4.5 million and $1.9 million, respectively. Please read Note 3—Refining and Logistics Equity Investments for further information.
Par West redevelopment and other costs. For the three months ended March 31, 2025, Par West redevelopment and other costs were $4.0 million, an increase of $2.0 million compared to $2.0 million for the three months ended March 31, 2024, primarily due to an increase in redevelopment activities.
Interest Expense and Financing Costs, Net . For the three months ended March 31, 2025, our interest expense and financing costs were $21.8 million, an increase of $3.9 million compared to $17.9 million for the three months ended March 31, 2024, primarily due to an increase in interest expense due to higher outstanding balances under our ABL Credit Facility. Please read Note 8—Inventory Financing Agreements and Note 10—Debt for further information.
Other expense, net. For the three months ended March 31, 2025, other expense was $0.4 million, a decrease of $2.2 million compared to $2.6 million of other expense for the three months ended March 31, 2024, primarily due to $2.3 million of 2024 expenses for a legal settlement unrelated to operating activities with no similar 2025 expenses.
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Equity earnings from Laramie Energy, LLC. For the three months ended March 31, 2025, Equity earnings from Laramie Energy, LLC were $0.7 million compared to $4.6 million for the three months ended March 31, 2024. For the three months ended March 31, 2025, the accretion of basis difference was $1.6 million, partially offset by our proportionate share of Laramie Energy’s ne t loss of $0.9 million . For three months ended March 31, 2024, our proportionate share of Laramie Energy’s net income and accretion was $2.9 million and $1.6 million, respectively. Please read Note 4 — Investment in Laramie Energy for further discussion.
Income Taxes. For the three months ended March 31, 2025, our income tax benefit was $6.9 million, an increase of $4.3 million compared to $2.6 million for three months ended March 31, 2024, primarily related to our first quarter of 2025 pre-tax net loss. Please read Note 17—Income Taxes for further discussion.
Consolidating Condensed Financial Information
On February 28, 2023, Par Petroleum, LLC (“Par Borrower”) entered into the Term Loan Credit Agreement (the “Term Loan Credit Agreement”) due 2030 with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. The Term Loan Credit Agreement was co-issued by Par Petroleum Finance Corp. (together with the Par Borrower, the “Term Loan Borrowers”), which has no independent assets or operations. The Term Loan Credit Agreement is guaranteed on a senior unsecured basis only as to payment of principal and interest by Par Pacific Holdings, Inc. (the “Parent”) and is guaranteed on a senior secured basis by all of the subsidiaries of Par Borrower. The Term Loan Credit Agreement proceeds were used to refinance our existing Term Loan B Facility and repurchase our outstanding 7.75% Senior Secured Notes and 12.875% Senior Secured Notes, all three of which had similar guarantees that were replaced by those on the Term Loan Credit Agreement.
The following supplemental condensed consolidating financial information reflects (i) the Parent’s separate accounts, (ii) Par Borrower and its consolidated subsidiaries’ accounts (which are all guarantors of the Term Loan Credit Agreement), (iii) the accounts of subsidiaries of the Parent that are not guarantors of the Term Loan Credit Agreement and consolidating adjustments and eliminations, and (iv) the Parent’s consolidated accounts for the dates and periods indicated. For purposes of the following condensed consolidating information, the Parent’s investment in its subsidiaries is accounted for under the equity method of accounting (dollar amounts in thousands).
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As of March 31, 2025
Parent Guarantor Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries
ASSETS
Current assets
Cash and cash equivalents $ 9,287 $ 124,460 $ — $ 133,747
Restricted cash 347 — — 347
Trade accounts receivable — 384,303 — 384,303
Inventories — 1,059,592 — 1,059,592
Prepaid and other current assets 7,976 38,065 — 46,041
Due from related parties 540,458 — (540,458) —
Total current assets 558,068 1,606,420 (540,458) 1,624,030
Property, plant, and equipment
Property, plant, and equipment 25,033 1,735,274 3,956 1,764,263
Less accumulated depreciation and amortization (17,727) (579,576) (3,546) (600,849)
Property, plant, and equipment, net 7,306 1,155,698 410 1,163,414
Long-term assets
Operating lease right-of-use (“ROU”) assets
7,270 443,532 — 450,802
Refining and logistics equity investments — — 93,825 93,825
Investment in Laramie Energy, LLC — — 13,224 13,224
Investment in subsidiaries 760,878 — (760,878) —
Intangible assets, net — 9,276 — 9,276
Goodwill — 126,678 2,597 129,275
Other long-term assets 726 138,625 130,058 269,409
Total assets $ 1,334,248 $ 3,480,229 $ (1,061,222) $ 3,753,255
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt $ — $ 4,767 $ — $ 4,767
Obligations under inventory financing agreements — 211,471 — 211,471
Accounts payable 4,418 406,250 — 410,668
Accrued taxes 12 33,221 — 33,233
Operating lease liabilities 97 88,242 — 88,339
Other accrued liabilities 3,263 290,392 301 293,956
Due to related parties 204,067 217,474 (421,541) —
Total current liabilities 211,857 1,251,817 (421,240) 1,042,434
Long-term liabilities
Long-term debt, net of current maturities — 1,148,912 — 1,148,912
Finance lease liabilities 431 15,015 (4,042) 11,404
Operating lease liabilities 10,150 368,126 — 378,276
Other liabilities — 125,420 (65,001) 60,419
Total liabilities 222,438 2,909,290 (490,283) 2,641,445
Commitments and contingencies
Stockholders’ equity
Common stock 523 — — 523
Additional paid-in capital 886,747 47,822 (47,822) 886,747
Accumulated earnings (deficit) 214,260 514,941 (514,941) 214,260
Accumulated other comprehensive income (loss) 10,280 8,176 (8,176) 10,280
Total stockholders’ equity 1,111,810 570,939 (570,939) 1,111,810
Total liabilities and stockholders’ equity $ 1,334,248 $ 3,480,229 $ (1,061,222) $ 3,753,255
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As of December 31, 2024
Parent Guarantor Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries
ASSETS
Current assets
Cash and cash equivalents $ 7,095 $ 184,826 $ — $ 191,921
Restricted cash 346 — — 346
Trade accounts receivable — 398,131 — 398,131
Inventories — 1,089,318 — 1,089,318
Prepaid and other current assets 12,355 80,172 — 92,527
Due from related parties 368,222 — (368,222) —
Total current assets 388,018 1,752,447 (368,222) 1,772,243
Property, plant, and equipment
Property, plant, and equipment 24,536 1,702,474 3,956 1,730,966
Less accumulated depreciation and amortization (17,240) (553,918) (3,499) (574,657)
Property, plant, and equipment, net 7,296 1,148,556 457 1,156,309
Long-term assets
Operating lease right-of-use (“ROU”) assets
7,369 420,751 — 428,120
Refining and logistics equity investments — — 86,311 86,311
Investment in Laramie Energy, LLC — — 12,498 12,498
Investment in subsidiaries 993,901 — (993,901) —
Intangible assets, net — 9,520 — 9,520
Goodwill — 126,678 2,597 129,275
Other long-term assets 726 111,206 123,163 235,095
Total assets $ 1,397,310 $ 3,569,158 $ (1,137,097) $ 3,829,371
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt $ — $ 4,885 $ — $ 4,885
Obligations under inventory financing agreements — 194,198 — 194,198
Accounts payable 4,257 432,538 — 436,795
Accrued taxes — 36,027 — 36,027
Operating lease liabilities 4 80,170 — 80,174
Other accrued liabilities 1,796 342,062 330 344,188
Due to related parties 189,232 156,619 (345,851) —
Total current liabilities 195,289 1,246,499 (345,521) 1,096,267
Long-term liabilities
Long-term debt, net of current maturities — 1,108,082 — 1,108,082
Finance lease liabilities 464 15,313 (4,087) 11,690
Operating lease liabilities 10,255 351,837 — 362,092
Other liabilities — 131,813 (71,875) 59,938
Total liabilities 206,008 2,853,544 (421,483) 2,638,069
Commitments and contingencies
Stockholders’ equity
Preferred stock — — — —
Common stock 552 — — 552
Additional paid-in capital 884,548 161,642 (161,642) 884,548
Accumulated earnings (deficit) 295,846 545,720 (545,720) 295,846
Accumulated other comprehensive income (loss) 10,356 8,252 (8,252) 10,356
Total stockholders’ equity 1,191,302 715,614 (715,614) 1,191,302
Total liabilities and stockholders’ equity $ 1,397,310 $ 3,569,158 $ (1,137,097) $ 3,829,371
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Three Months Ended March 31, 2025
Parent Guarantor Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries
Revenues $ — $ 1,745,009 $ 27 $ 1,745,036
Operating expenses
Cost of revenues (excluding depreciation) — 1,559,360 — 1,559,360
Operating expense (excluding depreciation) — 144,154 — 144,154
Depreciation and amortization 487 36,051 48 36,586
General and administrative expense (excluding depreciation) 7,302 16,941 — 24,243
Equity earnings from refining and logistics investments — — (7,514) (7,514)
Acquisition and integration costs (2) — — — —
Par West redevelopment and other costs — 3,982 — 3,982
Loss on sale of assets, net — 1 — 1
Total operating expenses 7,789 1,760,489 (7,466) 1,760,812
Operating income (loss) (7,789) (15,480) 7,493 (15,776)
Other income (expense)
Interest expense and financing costs, net (31) (21,904) 87 (21,848)
Debt extinguishment and commitment costs — (25) — (25)
Other income (expense), net (8) (363) — (371)
Equity earnings (losses) from subsidiaries (22,572) — 22,572 —
Equity earnings from Laramie Energy, LLC — — 726 726
Total other income (expense), net (22,611) (22,292) 23,385 (21,518)
Income (loss) before income taxes (30,400) (37,772) 30,878 (37,294)
Income tax benefit (expense) (1) — 6,993 (99) 6,894
Net income (loss) $ (30,400) $ (30,779) $ 30,779 $ (30,400)
Adjusted EBITDA $ (7,129) $ 8,561 $ 8,714 $ 10,146
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Three Months Ended March 31, 2024
Parent Guarantor Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries
Revenues $ — $ 1,980,831 $ 4 $ 1,980,835
Operating expenses
Cost of revenues (excluding depreciation) — 1,747,478 — 1,747,478
Operating expense (excluding depreciation) — 153,260 — 153,260
Depreciation and amortization 349 32,260 47 32,656
General and administrative expense (excluding depreciation) 17,785 23,983 (13) 41,755
Equity earnings from refining and logistics investments — — (6,094) (6,094)
Acquisition and integration costs (2) — 243 — 243
Par West redevelopment and other costs — 1,971 — 1,971
Loss on sale of assets, net — 51 — 51
Total operating expenses 18,134 1,959,246 (6,060) 1,971,320
Operating income (loss) (18,134) 21,585 6,064 9,515
Other income (expense)
Interest expense and financing costs, net 30 (18,004) 90 (17,884)
Debt extinguishment and commitment costs — — — —
Other income (expense), net (8) (2,567) (1) (2,576)
Equity earnings (losses) from subsidiaries 14,360 — (14,360) —
Equity earnings from Laramie Energy, LLC — — 4,563 4,563
Total other income (expense), net 14,382 (20,571) (9,708) (15,897)
Income (loss) before income taxes (3,752) 1,014 (3,644) (6,382)
Income tax benefit (expense) (1) — 189 2,442 2,631
Net income (loss) $ (3,752) $ 1,203 $ (1,202) $ (3,751)
Adjusted EBITDA $ (9,487) $ 96,429 $ 7,756 $ 94,698
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Non-GAAP Financial Measures
Adjusted EBITDA for the supplemental consolidating condensed financial information, which is segregated at the “Parent Guarantor,” “Par Borrower and Subsidiaries,” and “Non-Guarantor Subsidiaries and Eliminations” levels, is calculated in the same manner as for the Par Pacific Holdings, Inc. Adjusted EBITDA calculations. See “Results of Operations — Non-GAAP Performance Measures — Adjusted Net Income (Loss) and Adjusted EBITDA” above.
The following tables present a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net loss, on a historical basis for the periods indicated (in thousands):
Three Months Ended March 31, 2025
Parent Guarantor Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries
Net income (loss) $ (30,400) $ (30,779) $ 30,779 $ (30,400)
Inventory valuation adjustment — (11,687) — (11,687)
Environmental obligation mark-to-market adjustments — 4,954 — 4,954
Unrealized loss (gain) on derivatives — (9,357) — (9,357)
Par West redevelopment and other costs — 3,982 — 3,982
Debt extinguishment and commitment costs — 25 — 25
Severance costs and other non-operating expense (2)
181 545 — 726
Loss (gain) on sale of assets, net
— 1 — 1
Equity earnings from Laramie Energy, LLC, excluding cash distributions — — (726) (726)
Par's portion of accounting policy differences from refining and logistics investments — — (945) (945)
Depreciation and amortization 487 36,051 48 36,586
Interest expense and financing costs, net, excluding unrealized
interest rate derivative loss (gain)
31 21,819 (87) 21,763
Equity losses (income) from subsidiaries 22,572 — (22,572) —
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments — — 2,118 2,118
Income tax expense
— (6,993) 99 (6,894)
Adjusted EBITDA (1) $ (7,129) $ 8,561 $ 8,714 $ 10,146
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Three Months Ended March 31, 2024
Parent Guarantor Par Borrower and Subsidiaries
Non-Guarantor Subsidiaries and Eliminations Par Pacific Holdings, Inc. and Subsidiaries
Net income (loss) $ (3,752) $ 1,203 $ (1,202) $ (3,751)
Inventory valuation adjustment — 625 — 625
Environmental obligation mark-to-market adjustments — (10,263) — (10,263)
Unrealized loss on derivatives — 43,848 — 43,848
Acquisition and integration costs — 243 — 243
Par West redevelopment and other costs — 1,971 — 1,971
Severance costs and other non-operating expense (2)
8,306 7,832 — 16,138
Loss on sale of assets, net — 51 — 51
Equity earnings from Laramie Energy, LLC, excluding cash distributions — — (4,563) (4,563)
Depreciation and amortization 349 32,260 47 32,656
Interest expense and financing costs, net, excluding unrealized
interest rate derivative loss (gain)
(30) 18,848 (90) 18,728
Equity losses (income) from subsidiaries (14,360) — 14,360 —
Par's portion of interest, taxes, and depreciation and amortization expense from refining and logistics investments — — 1,646 1,646
Income tax expense (benefit) — (189) (2,442) (2,631)
Adjusted EBITDA (1) $ (9,487) $ 96,429 $ 7,756 $ 94,698
________________________________________
(1) Please read the Non-GAAP Performance Measures and Adjusted Net Income (Loss) and Adjusted EBITDA discussions above for information regarding the components of Adjusted Net Income (Loss) and Adjusted
(2) For the three months ended March 31, 2025 and 2024, we incurred $0.3 million and $13.1 million of stock-based compensation expenses associated with equity awards modifications, respectively. For the three months ended March 31, 2024, we incurred $2.3 million for an estimated legal settlement unrelated to current operating activities.
Liquidity and Capital Resources
Our liquidity and capital requirements are primarily a function of our debt maturities and debt service requirements and contractual obligations, capital expenditures, turnaround outlays, 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.
Our liquidity position as of March 31, 2025, was $525.4 million, consisting of $133.7 million of cash and cash equivalents and $391.7 million of availability under the ABL Credit Facility. Generally, the primary uses of our capital resources have been in the operations of our refining and retail segments, for payments related to acquisitions, and to repay or refinance indebtedness.
We believe our cash flows from operations and available capital resources will be sufficient to meet our current capital and turnaround expenditures, working capital, and debt service requirements for the next 12 months. We may seek to raise additional debt or equity capital to fund acquisitions and 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.
We may from time to time seek to retire or repurchase our common stock through cash purchases, in open market purchases, privately negotiated transactions, or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. On February 21, 2025, the Board authorized and approved a share repurchase program authorizing the repurchase of up to $250 million of common stock, with no specified end date. This repurchase program terminated and replaced the prior share repurchase authorization. Please read Note 15—Stockholders’ Equity to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional discussion on the share repurchase program. The Term Loan Credit Agreement may also require annual prepayments of principal with a variable percentage of our excess cash flow, 50%, 25%, or 0% depending on our consolidated year end secured leverage ratio (as defined in the Term Loan Credit Agreement).
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Cash Flows
The following table summarizes cash activities for the three months ended March 31, 2025 and 2024 (in thousands):
Three Months Ended March 31,
2025 2024
Net cash provided by (used in) operating activities $ (1,399) $ 25,431
Net cash used in investing activities (40,921) (22,632)
Net cash used in financing activities (15,853) (53,606)
Cash flows for the three months ended March 31, 2025
Net cash used in operating activities for the three months ended March 31, 2025, was primarily driven by a net loss of $30.4 million, non-cash charges to operations and non-operating items of approximately $14.9 million, and net cash provided by changes in operating assets and liabilities of approximately $14.1 million. Non-cash charges to operations and non-operating items consisted primarily of the following adjustments:
• depreciation and amortization expenses of $36.6 million and
• stock based compensation expenses of $3.5 million,
partially offset by:
• unrealized gain on derivatives contracts of $9.4 million,
• equity earnings of $7.5 million from our refining and logistic investments,
• a $6.9 million change in deferred tax assets driven by our net income during the period, and
• a $2.3 million benefit from changes in our inventory reserve for the lower of cost or net realizable value.
Net cash provided by changes in operating assets and liabilities resulted primarily from:
• a $40.3 million decrease in prepaid and other expenses, primarily driven by decreases in derivative collateral,
• a $31.9 million decrease in inventories primarily related to a $57.0 million decline in RINs and environmental credits inventory partially offset by a $13.3 million increase in crude inventory and an $8.3 million increase in refined products and blendstock inventory,
• a $17.3 million increase in Obligations under inventory financing agreements primarily due to increases in the step-out liability driven by higher volumes, and
• a $13.8 million decrease in accounts receivable primarily related to lower volumes and the timing of collections,
partially offset by:
• a decrease in Accounts payable and other accrued liabilities of $61.0 million primarily driven by timing of payments, a $9.7 million decrease in advances from customers, and a $14.2 million decrease in RINs and other environmental credit obligations.
• an increase in deferred turnaround expenditures of $28.2 million driven by expenditures related to Montana refinery turnaround activities.
Net cash used in investing activities for the three months ended March 31, 2025, consisted primarily of $40.9 million of additions to property, plant, and equipment driven by profit improvement and maintenance projects at our refineries, including our Hawaii renewable hydrotreater project, planned maintenance at our Montana refinery, and repair and replacement work related to our Wyoming operational incident.
Net cash used in financing activities was approximately $15.9 million for the three months ended March 31, 2025, and consisted primarily of repurchases of common stock of $51.1 million partially offset by net borrowings of debt of $35.3 million primarily driven by ABL Credit Facility activity.
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Cash flows for the three months ended March 31, 2024
Net cash provided by operating activities for the three months ended March 31, 2024, was driven primarily by a Net loss of $3.8 million, non-cash charges to operations and non-operating items of approximately $86.4 million, and net cash used for changes in operating assets and liabilities of approximately $57.2 million. Non-cash charges to operations consisted primarily of the following adjustments:
• unrealized loss on derivatives contracts of $43.8 million,
• depreciation and amortization expenses of $32.7 million,
• stock based compensation costs of $16.4 million, and
• non-cash interest and financing costs of $1.4 million,
partially offset by:
• a $2.6 million change in deferred tax assets driven by our net loss during the period, and
• equity earnings of $6.1 million from our YELP and YPLC investments partially offset by $5.3 million of dividends received from YELP.
Net cash used for changes in operating assets and liabilities resulted primarily from:
• an $81.6 million increase in crude and refined products inventory driven by higher ending volumes, and
• an $81.2 million increase in accounts receivable primarily driven by timing of collections and sales volumes,
partially offset by:
• decreases in prepaid and other expenses primarily driven by prepayments for crude and
• net increases in our Supply and Offtake Agreement obligations and accounts payable.
Net cash used in investing activities for the three months ended March 31, 2024, consisted primarily of $22.6 million in additions to property, plant, and equipment driven by maintenance projects at our refineries and various profit improvement projects.
Net cash used in financing activities was approximately $53.6 million for the three months ended March 31, 2024, and consisted primarily of the following activities:
• repurchases of common stock of $34.1 million,
• net borrowings of debt of $18.6 million primarily driven by ABL Credit Facility activity, and
• payments of $3.4 million of deferred loan costs,
partially offset by:
• net repayment under the J. Aron Discretionary Draw Facility of $2.4 million.
Cash Requirements. There have been no material changes to the cash requirements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, outside the ordinary course of business except as follows:
Debt Refinancing. Please read Note 8—Inventory Financing Agreements and Note 10—Debt to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information.
Critical Accounting Estimates
There have been no material changes to critical accounting estimates disclosed in our Annual Report on Form 10-K for the three months ended March 31, 2025.
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Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (“PSLRA”), or in releases made by the SEC, all of which may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties, and other important factors including, without limitation, the Russia-Ukraine war, Israel-Palestine conflict, Houthi attacks in the Red Sea, Iranian activities in the Strait of Hormuz and certain developments in the global crude oil markets, on our business, our customers, and the markets where we operate; the impact of tariffs and potential disruptions in international trade on our business; our beliefs regarding available capital resources; our beliefs regarding the likely results or impact of certain disputes or contingencies and any potential fines or penalties; our beliefs regarding the fair value of certain assets, and our expectations with respect to laws and regulations, including environmental regulations and related compliance costs and any fines or penalties related thereto; our expectations regarding the sufficiency of our cash flows and liquidity; our expectations regarding anticipated capital expenditures, including the timing and cost of compliance with consent decrees and other enforcement actions; our expectations regarding the impact of the adoption of certain accounting standards; our estimates regarding the fair value of certain indebtedness; estimated costs to settle claims from the Delta bankruptcy; the estimated value of, and our ability to settle, legal claims remaining to be settled against third parties; our expectations regarding the synergies or other benefits of our acquisitions; our expectations regarding certain tax liabilities and debt obligations; management’s assumptions about the impact of future events on our existing business, the anticipated synergies and other benefits of the recently acquired ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”), including renewable growth opportunities; the anticipated financial and operating results of the Acquisition, and the effect on the Company’s cash flows and profitability (including Adjusted EBITDA and Adjusted Net Income); our ability to raise additional debt or equity capital; our ability to make strategic investments in business opportunities; and the estimates, assumptions, and projections regarding future financial condition, results of operations, liquidity, and cash flows. These and other forward-looking statements could cause the actual results, performance, or achievements of Par and its subsidiaries to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “may,” “will,” “would,” “could,” “should,” “seeks,” or “scheduled to,” or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act, and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control, including those set out in our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q under “Risk Factors.”
In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this Quarterly Report on Form 10-Q are not guarantees of future performance; and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described above and under Critical Accounting Estimates and Risk Factors included in our most recent Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q. All forward-looking statements speak only as of the date they are made. There can be no guarantee that the operational and financial measures the Company has taken, and may take in the future, will be fully effective. We do not intend to update or revise any forward-looking statements as a result of new information, future events, or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.