INVESTOR PRESENTATION I JANUARY 2023 - Par Pacific
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INVESTOR PRESENTATION I JANUARY 2023
Forward-Looking Statements / Disclaimers
The information contained in this presentation has been prepared to assist you in making your own evaluation of the company and does not purport to contain all of the information you may consider important. Any estimates or
projections with respect to future performance have been provided to assist you in your evaluation, but should not be relied upon as an accurate representation of future results. Certain statements, estimates and financial information
contained in this presentation constitute forward-looking statements.
Such forward-looking statements involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from the results implied or expressed in such forward-looking statements. While
presented with numerical specificity, certain forward-looking statements are based (1) upon assumptions that are inherently subject to significant business, economic, regulatory, environmental, seasonal and competitive
uncertainties, contingencies and risks including, without limitation, our ability to maintain adequate liquidity, our ability to realize the potential benefit of our net operating loss tax carryforwards, our ability to obtain sufficient debt and
equity financing, our capital costs and operating costs, anticipated commodity pricing, anticipated refinery closures, differentials or crack spreads, anticipated or projected pricing information related to oil, NGLs, and natural gas, our ability
to realize the potential benefits of our supply and offtake agreements, assumptions related to our investment in Laramie Energy, LLC, Laramie Energy, LLC’s financial and operational performance and plans, including estimated production
growth and Adjusted EBITDAX, our ability to meet environmental and regulatory requirements, our ability to increase refinery throughput and profitability, estimated production, our ability to evaluate and pursue strategic and growth
opportunities, our estimates of anticipated Adjusted EBITDA, Adjusted Net income per share, and Adjusted earnings per share, the amount and scope of anticipated capital expenditures and turnaround activities, expectations related to our
potential renewable fuels projects, other maintenance and growth capital projects, anticipated 10 year and next 12 months turnaround schedule and expenditures, including costs, timing, and benefits, anticipated throughput, production
costs, on-island and export sales expectations in Hawaii, anticipated throughput and distillate yield expectations in Wyoming, our estimates related to the annual gross margin impact of changes in RINs prices, our expectations regarding
RINs prices and related small refinery exemptions, estimates related to the impact of COVID-19 on our business, results of operations, financial position, and liquidity, the conflict between Russia and Ukraine and its potential impacts on the
global crude oil market and our business, estimated impact on annual free cash flow of key drivers, expectations regarding Par Pacific’s posted market indices and the other metrics we utilize, (including free cash flow, Adjusted EBITDA,
Adjusted Net income per share, and Adjusted earnings per share), the effects and timing of the closing of the acquisition of the ExxonMobil Billings refinery and associated marketing and logistics assets (the “Acquisition”), the anticipated
cash on hand and other financing for the Acquisition and the acquisition of hydrocarbon inventory, the anticipated synergies and other benefits of 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 and Free Cash Flow per share) and other known and unknown risks (all of which are
difficult to predict and many of which are beyond the company's control), some of which are further discussed in the company’s periodic and other filings with the SEC and (2) upon assumptions with respect to future business decisions
that are subject to change.
There can be no assurance that the results implied or expressed in such forward-looking statements or the underlying assumptions will be realized and that actual results of operations or future events will not be materially different from
the results implied or expressed in such forward-looking statements. Under no circumstances should the inclusion of the forward-looking statements be regarded as a representation, undertaking, warranty or prediction by the company or
any other person with respect to the accuracy thereof or the accuracy of the underlying assumptions, or that the company will achieve or is likely to achieve any particular results. The forward-looking statements are made as of the date
hereof and the company disclaims any intent or obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable
law. Recipients are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, recipients are expressly cautioned not to put undue reliance on forward-looking statements due to the inherent
uncertainty therein.
This presentation contains non-GAAP financial measures, such as Adjusted EBITDA, Adjusted Net Income (loss), and Laramie Energy Adjusted EBITDAX. Beginning with financial results reported for periods in fiscal year 2022, the inventory
valuation adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in Hawaii. This modification was made to better align Adjusted Net Income (Loss) and
Adjusted EBITDA with the cash flow of the Hawaii refining business. Prior to 2022, the impacts of FIFO inventory gains (losses) associated with Hawaii titled manufactured inventory were eliminated through the inventory valuation
adjustment. Our calculation of Adjusted Gross Margin is also adjusted for the inventory valuation adjustment. Beginning with financial results reported for the second quarter of 2022, Adjusted Net Income and Adjusted EBITDA also exclude
the mark-to-market losses (gains) associated with our net RINs liability. This modification was made to better reflect our operating performance and to improve comparability between periods. Adjusted Net Income and Adjusted EBITDA
have been recast for prior periods when reported to conform to the modified presentation. We have recast Adjusted Gross Margin, Adjusted Net Income (Loss) and Adjusted EBITDA for prior periods when reported to conform to the
modified presentation. Please see the Appendix for the definitions and reconciliations to GAAP of the non-GAAP financial measures that are based on reconcilable historical information.
1
Company Highlights
• Owner & operator of essential energy infrastructure in PADD IV and V
markets
• 155,000 bpd operating petroleum refining capacity
• Integrated logistics network with 9 MMbbls of storage, and marine, rail
and pipeline assets
• Logistics system in Tacoma includes unit train and terminalling
capabilities for renewable fuels and feedstocks
• Announced Billings Acquisition significantly enhances refining and
logistics system; transaction expected to close in Q2 2023
• 121 fuel retail locations in Hawaii and the Pacific Northwest
• 46% ownership interest in Laramie Energy, a natural gas E&P company
• $1.6 billion in federal tax attributes as of December 31, 2021
Disciplined Focus on Increasing Adjusted EPS and Free Cash Flow
2
Improving Financial Performance
LTM Consolidated Adj. EBITDA $496
$340
$268
$203
$126 $124
$86
$47
$20
$(30)
$(107)
$(128)
Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22
1. See appendix for non-GAAP reconciliations.
3
Financial Metrics
Q3-22
2019 2020 2021 As of Sep 30, 2022
LTM
Adjusted EBITDA ($ millions)
Share Price 1 $22.17
Refining $176 $(210) $53 $429
Logistics 76 57 73 78
Enterprise Value 1 $1,449
Retail 59 65 47 46
Corporate & Other (44) (40) (48) (57) Net Debt $109
Adjusted EBITDA $268 $(128) $126 $496
Liquidity $495
Diluted Adj. Earnings per Share $1.93 $(5.47) $(0.62) $5.51
Currently trading at P/E multiple of 3.1x for 2022 and 5.5x for 2023 2
Note: Adjusted EBITDA totals may not foot due to rounding.
1 Equity value of approximately $1,340 MM reflects share price of $22.17 and outstanding share count of approximately 60.4 MM as of December 28, 2022.
2 Price/earnings multiples reflect share price of $22.17 and analyst consensus 2022 & 2023 Adjusted EPS estimates as of December 28, 2022.
See appendix for non-GAAP reconciliations.
4
Refining Overview
Refining Segment Highlights Refinery Crude Capacity Mbpd
• Focus on process safety, environmental compliance and Hawaii 94
operational reliability
• System-wide crude capacity expected to increase to 218,000 Washington 42
bpd post-closing of Billings Acquisition
Wyoming 19
• Distillate-oriented yield profile
• Throughput and yield optimized to serve local market needs Par Pacific System 155
• Expected 20% system-wide exposure to attractive Western
Canadian heavy crude post-closing of Billings Acquisition
9/30 YTD Crude Sourcing 9/30 YTD Combined Product Yield
11% Powder 40% Distillates
46% Other River Basin
Waterborne 7% Other
Inland exposure
Products
Waterborne exposure
6% Asphalt
20% Bakken
29% Gasoline
14% ANS 18% LSFO
9% Cold Lake 5
Distillate-Oriented Yield Profile
Distillate Cracks ($/bbl) 9/30 YTD System-wide Yield
58% Distillates &
Low Sulfur Fuel Oil
13% Asphalt,
VGO & Other
29% Gasoline
58% distillate & LSFO yield system-wide
compared to US industry average of 37% 1
6 1. Source: https://www.eia.gov/dnav/pet/pet_pnp_pct_dc_nus_pct_a.htm;
US industry average comparison includes 2021 Kerosene Jet Fuel + Kerosene + Distillate Fuel Oil +
Residual Fuel Oil.Multimodal Logistics System
Western
Canada
11 Kauai
Seattle
WA REFINERY
Oahu
31
WA Spokane
HI REFINERY Molokai Bakken
Maui
Portland MT ND
Global Crude 61
6
Sourcing
Billings
OR
Boise
Hawaii ID
PRB SD
Rapid City
12
WY REFINERY
Asset Detail WY
Hawaii (1) Wyoming Washington Par Pacific
Storage Capacity (MMBbls) 5.4 0.7 2.8 8.9 Cheyenne
NE
NV Salt Lake City
Marine Assets (2) 2 - 1 3
Denver
Miles of Pipeline 27 138 14 179 UT
CO
Rail Facility ✓ ✓ 2
Marine Terminal ✓ ✓ 2
Las Vegas
Renewables System ✓ 1
Truck Rack ✓ ✓ ✓ 3
Refinery Retail Locations Renewables
Diverse logistics assets enable flexibility and development
of integrated downstream system Trucks Rail Barge Movements
1 Owned storage capacity. Crude Inflows Refined Products Inflows/Outflows
2 Leased marine barges and ships. 7
Renewable Fuels Inflows/OutflowsLeading Retail Position in Attractive Markets
Hawaii Retail
• 90 locations across four islands
• 34 company-operated convenience stores
• Dual-branded retail network to attract and retain broad customer base
• Hele – proprietary local brand
• 76 – exclusive license
• High real estate costs, scarcity of land, and logistics complexity strengthen
competitive position
• Expanding private label merchandise and food service offerings
• New Hawaii location broke ground in Q4 2022
Northwest Retail
• 31 company-operated locations in Washington and Idaho
• Proprietary nomnom brand
• Attractive fuel supply opportunities enhancing margins
• Expanding merchandising assortment and food offerings including private
label merchandise to drive and increase margin capture
• Closed acquisition of three locations in Q4 2022
• New Spokane location broke ground in Q4 2022
• ExxonMobil wholesale exclusive arrangement with approximately 300
locations expected post-closing of Billings Acquisition
8Stable Contribution from Retail and Logistics Segments
Trending Retail & Logistics Adj. EBITDA ($MM)
$135
$122 $121 $123
59
47 46
65
76 73 78
57
2019 2020 2021 Q3-22 LTM
Logistics Retail
Totals may not foot due to rounding. See appendix for non-GAAP reconciliations.
9Capital Expenditure and Turnaround Summary
$113
$94 $85-95
$10 $50
$30 $60-70
$55 $19 $20
$39 $25
$9
$45 $45
$29 $29 $35
2019 2020 2021 2022 Guidance 2023 Guidance
Chart in $ millions. Maintenance, Regulatory, and IT Growth Turnaround
Turnaround Estimated Outlay Cycle Last Turnaround
Hawaii $40 million 3-5 years Q3 2020
Washington $35 million 3-5 years Q1 2022
Wyoming $15 million 4-5 years Q4 2020
10 year estimated turnaround outlay of $180-200 million; next planned turnaround in 2024
10Trending Net Debt
Debt Balances ($ millions) 12/31/2019 12/31/2020 12/31/2021 3/31/2022 6/30/2022 9/30/2022
7.75% Senior Secured Notes $300 $300 $296 $296 $291 $281
12.875% Senior Secured Notes - 105 68 68 31 31
Term Loan B 241 228 216 213 209 206
Retail Loans 45 50 - - - -
ABL Credit Facility - - - 25 - -
Total Secured Debt 586 683 580 602 532 519
5% Convertible Notes 49 49 - - - -
Total Debt 635 732 580 602 532 519
Cash 126 68 112 141 186 409
Net Debt $509 $664 $468 $461 $346 $109
Note: Totals may not foot due to rounding.
11Laramie Energy
Asset Highlights Key Performance Indicators 2
• Par Pacific has a 46.0% ownership interest in Laramie Energy
• Given the improvement in the natural gas market, Par Pacific is
evaluating strategic options regarding its investment in Laramie Energy
• Largely contiguous acreage position with ~190,000 net leasehold acres
(~84% NRI) and ~20,000 net fee mineral acres in Western Colorado and
25,000 owned surface acres
• Laramie’s Net Debt to Hedged Adjusted EBITDAX reduced from 4.4x at
year-end 2020 to 0.5x in Q3 2022
• Forecasted production is currently hedged 71% in 2022, 58% in 2023,
and 33% in 2024
• $0.53 free cashflow 1 per share that is not reflected in Par Pacific’s Q3
2022 LTM adjusted net income
• Single rig program commenced in Q2 2022 driving expected net
production growth of 20-25% over the next twelve months
1 Laramie free cashflow is defined as Adjusted EBITDAX less Capital Expenditures. Free cashflow per share calculation
• 2022 equivalent production is forecasted to average 100-105 Mmcfe/day incorporates Par Pacific’s 46% ownership interest and weighted average shares outstanding for Q3 2022 LTM period.
2 See slide 20 for non-GAAP reconciliations.
12Energy Transition Strategy
Leverage local resources and policies to meet local needs
Short Term Renewable Opportunities
Washington Co-feed Project Hawaiian Airlines Alliance
• Opportunity to invest a small amount of capital and co-feed low • Announced alliance with Hawaiian Airlines to explore conversion of
carbon feedstocks like soybean oil at our Washington refinery units in Hawaii to produce sustainable aviation fuel (SAF)
• Quickly actionable project which allows flexibility to toggle between • Targeting capital expenditures of < $1.50/gallon for a project to
renewables and hydrocarbons produce approximately 70% SAF, 20% renewable naphtha, and 10%
renewable diesel
Long Term Projects
Washington Hydrogen Hawaii Carbon Capture & Sequestration
• Washington LCFS and Cap & Trade programs provide incentives for • Hawaii does not currently have policies in place to incentivize
decarbonization decarbonization
• Low-cost hydroelectric power makes Tacoma an advantaged region to • We are focused on opportunities to lower our carbon footprint through
deploy electrolyzer technology and produce green hydrogen carbon capture & sequestration
• U.S. Oil’s unique logistics infrastructure and positioning in the Port of • Hawaii hydrogen plant produces a high-purity vent stream of CO2 which
Tacoma makes it a prime candidate within the region is ideal for capturing and our team is evaluating a number of
13 sequestration opportunitiesCompany Highlights 1
• Improving regional market fundamentals
• Benefiting from regional refining closures and improving global mobility trends
• Industry-leading distillate production of approximately 50% 2 post-closing of Billings Acquisition
Improving Refining &
• Expected 20% system-wide exposure to attractive Western Canadian heavy crude post-closing of Billings
Logistics Position
Acquisition
• Logistics assets serve as essential energy infrastructure to fulfill refined product demand
• Actively pursuing decarbonization opportunities across Hawaii and mainland refineries
• Steady earnings from retail segment balances refining cyclicality
• Successful rebranding of Northwest retail locations to nomnom brand with new store scheduled and
Strong Retail expanded food service offerings
Franchise • Expanding food service offerings provides opportunity for increased margin capture
• ExxonMobil wholesale exclusive arrangement with approximately 300 locations expected post-closing of
Billings Acquisition
• Strong liquidity position with significant free cash flow generation expected
• Expected to be within targeted gross debt level post-closing of Billings Acquisition
Financial Profile
• $1.6 billion in tax attributes enhances cash flow
• Improving fundamentals in minority-owned interest in Laramie Energy
14
1. Slide reflects management expectations post-closing of Billings Acquisition in Q2 2023.
2. Including LSFO.Appendix 15
Singapore 3.1.2 Crack Spread
$40
Singapore 3.1.2 Crack
$35
5-Yr Average
$30
$25 5-Yr Average 1 = $11.32
$20
$15
$10
$5
$0
($5)
4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22
($/bbl)
Singapore 3.1.2 Crack $12.12 $8.11 ($0.14) $1.92 $2.63 $3.80 $4.38 $6.20 $10.49 $16.21 $36.80 $26.43 $22.84
Average Brent Price $62.42 $50.82 $33.39 $43.34 $45.26 $61.32 $69.08 $73.23 $79.66 $97.90 $111.98 $97.70 $88.63
1 Company calculation based on a rolling five-year quarterly average
Singapore 3-1-2 Daily: computed by taking 1 part gasoline (RON 92) and 2 parts middle distillates (Sing Jet & Sing Gasoil) as created from a barrel of Brent Crude.
Month (CMA): computed using all available pricing days for each marker.
Quarter/Year: computed using calendar day weighted CMAs for each marker.
16Wyoming 3.2.1 Crack Spread
$60
Wyoming 3.2.1 Crack
5-Yr Average 1 = $27.18
$50 5-Yr Average
$40
$30
$20
$10
$0
4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22
($/bbl)
Wyoming 3.2.1 Crack $28.26 $15.86 $17.39 $19.63 $18.45 $20.97 $30.04 $41.78 $23.67 $26.53 $54.55 $45.78 $37.90
Average WTI Price $56.87 $45.98 $28.00 $40.92 $42.70 $58.14 $66.17 $70.52 $77.10 $95.01 $108.52 $91.43 $82.64
1 Company calculation based on a rolling five-year quarterly average
Rapid City Daily: Computed by taking 2 parts gasoline and 1 part distillate (ULSD) as created from three barrels of West Texas Intermediate Crude (WTI).
Denver Daily: Computed by taking 2 parts gasoline and 1 part distillate (ULSD) as created from three barrels of WTI.
Wyoming 3-2-1 Daily: computed using a weighted average of 50% Rapid City and 50% Denver.
Month (CMA): computed using all available pricing days for each marker.
Quarter/Year: computed using calendar day weighted CMAs for each marker.
17Pacific Northwest 5.2.2.1 Crack Spread
$50 Pacific Northwest 5.2.2.1
$45 5-Yr Average
$40
$35 5-Yr Average 1 = $17.88
$30
$25
$20
$15
$10
$5
$0
4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22
($/bbl)
Pacific Northwest 5.2.2.1 $16.58 $13.24 $11.92 $9.39 $11.26 $11.46 $16.05 $18.59 $17.64 $21.88 $46.16 $33.21 $28.09
Average ANS Price $65.51 $52.27 $28.17 $43.11 $43.68 $61.65 $69.44 $73.83 $80.61 $99.56 $115.84 $103.80 $91.02
1 Company calculation based on a rolling five-year quarterly average.
Pacific Northwest 5-2-2-1 Daily: computed by taking 2 parts gasoline (PNW Suboctane), 2 parts middle distillates (PNW ULSD & PNW Jet), and 1 part fuel oil (SF 180 Waterborne) as created from a barrel of Alaskan North Slope Crude.
ANS price: calculated using the Argus ANS-Brent differential beginning in July 2017. Prior to July 2017, a blended Platts and Argus ANS-WTI differential was used.
Month (CMA): computed using all available pricing days for each marker.
Quarter/Year: computed using calendar day weighted CMAs for each marker.
18Corporate Structure
Par Pacific Holdings Inc.
NYSE: PARR
ABL Revolver
due 2/2/2025 1
$281 MM 7.75% Senior Secured Notes
due 12/15/2025
$206 MM L + 6.75% Term Par Petroleum, LLC
Loan B due 1/11/2026
$31 MM 12.875% Senior Secured Notes
due 1/15/2026
Hermes
Laramie Energy,
Supply and Offtake Par Hawaii Consolidated, LLC U.S. Oil & Refining
Agreement Par Hawaii, LLC LLC
Refining, LLC d/b/a Wyoming Co.
46% Interest
Refining Company
Intermediation
Note: Chart omits certain intermediate subsidiaries between parent and operating subsidiaries for brevity. Debt balances outstanding as of September 30, 2022, unless otherwise stated.
Agreement
1. $142.5 mm ABL Revolver with a sublimit of $15 mm for swingline loans and a sublimit of $65 mm for the issuance of standby or commercial letters of credit. Co-borrowers are Par Petroleum, LLC, a
Delaware limited liability company, Par Hawaii, LLC, a Delaware limited liability company, Hermes Consolidated, LLC (d/b/a Wyoming Refining Company), a Delaware limited liability company, and
Wyoming Pipeline Company LLC, a Wyoming limited liability company.
19Laramie Energy Adjusted EBITDAX
Laramie Energy Net Income (Loss) Reconciliation to Adjusted EBITDAX (1) ($ in thousands)
Twelve Months Ended
12/31/2019 12/31/2020 12/31/2021 9/30/2022
Net income (loss) $ (380,474) $ (22,589) $ 32,476 $ (3,919)
Commodity derivative (gain) loss 1,193 2,201 42,995 89,395
Gain (loss) on settled derivative instruments (5,476) 2,045 (10,578) (41,261)
Interest expense 11,879 9,402 17,155 15,963
Gain on extinguishment of debt - - (695) -
Non-cash preferred dividend 4,115 6,810 7,224 9,276
Depreciation, depletion, amortization, and accretion 85,189 37,960 28,860 25,140
Impairment loss 355,220 - - -
Exploration and geological and geographical expense 330 275 342 -
Bonus accrual, net (2,154) 436 602 -
Equity based compensation expense 122 16 - -
(Gain) loss on disposal of assets 1,478 (102) (6) 710
Pipeline deficiency accrual (1,162) - - -
Abandoned property and expired acreage 3,536 4,099 2,667 2,249
Total Adjusted EBITDAX $ 73,796 $ 40,553 $ 121,042 $ 97,551
(1) Laramie Adjusted EBITDAX is defined as net income (loss) excluding commodity derivative (gains)/losses, gains/(losses) on settled derivative instruments, interest expense, gain on extinguishment of
debt, non-cash preferred dividends, depreciation, depletion, amortization, and accretion, impairment loss, exploration and geological and geographical expense, bonus accrual, net, equity-based
compensation expense, loss (gain) on disposal of assets, pipeline deficiency accrual, and abandoned property and expired acreage (non-cash). We believe Adjusted EBITDAX is a useful supplemental
financial measure to evaluate the economic and operational performance of exploration and production companies such as Laramie Energy. Adjusted EBITDAX presented by other companies may not
be comparable to our presentation as other companies may define these terms differently.
20Non-GAAP Financial Measures
Twelve Months Ended Consolidated Adjusted EBITDA and Adjusted Net Income Reconciliation (1)
($ in thousands) 2019 2020 2021 Q3 2022
Net income (loss) $ 40,809 $ (409,086) $ (81,297) $ 287,556
Adjustments to Net Income (loss):
Inventory valuation adjustment 19,436 9,994 31,841 (41,725)
RINs mark-to-market adjustments (1,992) 6,433 66,350 90,496
Unrealized loss (gain) on derivatives 8,988 (4,804) 1,517 (16,254)
Acquisition and integration costs 4,704 614 87 63
Debt extinguishment and commitment costs 11,587 — 8,144 5,329
Changes in valuation allowance and other deferred tax items (2) (68,792) (20,896) — —
Change in value of common stock warrants 3,199 (4,270) — —
Severance costs — 512 84 2,281
Gain on sale of assets, net — — (64,697) (467)
Impairment expense — 85,806 1,838 1,838
Impairments of Laramie Energy, LLC (3) 83,152 45,294 — —
Par's share of Laramie Energy's unrealized loss (gain) on derivatives (1,969) (1,110) — —
Adjusted Net Income (Loss) 99,122 (291,513) (36,133) 329,117
Depreciation and amortization 86,121 90,036 94,241 98,683
Interest expense and financing costs, net 74,839 70,222 66,493 67,182
Equity losses from Laramie Energy, LLC, excluding Par's share of
unrealized loss (gain) on derivatives and impairment losses 8,568 2,721 — —
Income tax expense (benefit) (897) 176 1,021 584
Adjusted EBITDA $ 267,753 $ (128,358) $ 125,622 $ 495,566
_____________________________________________
(1) We believe Adjusted Net Income (Loss) and Adjusted EBITDA are useful supplemental financial measures that allow investors to assess: (1) The financial performance of our assets without regard to financing methods, capital structure or historical cost basis, (2) The ability of our
assets to generate cash to pay interest on our indebtedness, and (3) Our operating performance and return on invested capital as compared to other companies without regard to financing methods and capital structure. Adjusted Net Income (Loss) and Adjusted EBITDA should not
be considered in isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Adjusted Net Income (Loss) and
Adjusted EBITDA presented by other companies may not be comparable to our presentation as other companies may define these terms differently. Beginning with financial results reported for periods in fiscal year 2022, the inventory valuation adjustment was modified to include
the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in Hawaii. Beginning with financial results reported for the second quarter of 2022, Adjusted Net Income and Adjusted EBITDA also exclude the mark-to-market losses (gains)
associated with our net RINs liability. This modification was made to better reflect our operating performance and to improve comparability between periods. Adjusted Net Income and Adjusted EBITDA have been recast for prior periods when reported to conform to the modified
presentation. For the twelve months ended 2019, 2020, 2021, and Q3 2022, there was no change in value of contingent consideration or LIFO liquidation adjustment.
(2) 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. These tax expenses (benefits) are included in Income tax expense on our
condensed consolidated statements of operations.
(3) Included in Equity losses from Laramie Energy, LLC on our condensed consolidated statements of operations. 21Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment Reconciliation (1)
For the twelve months ended September 30, 2022
($ in thousands)
Corporate and
Refining Logistics Retail Other
Operating income (loss) $ 331,336 $ 56,558 $ 34,932 $ (61,971)
Adjustments to operating income (loss):
Depreciation and amortization 63,739 21,225 10,872 2,847
Inventory valuation adjustment (41,725) — — —
RINs mark-to-market adjustments 90,496 — — —
Unrealized loss on derivatives (16,254) — — —
Acquisition and integration costs — — — 63
Severance costs 48 14 22 2,197
Loss (gain) on sale of assets, net (64) (253) (192) 42
Impairment expense 1,838 — — —
Other income/expense — — — (204)
Adjusted EBITDA $ 429,414 $ 77,544 $ 45,634 $ (57,026)
_____________________________________________
(1) Adjusted EBITDA by segment is defined as Operating income (loss) by segment excluding depreciation and amortization expense, 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,
contango (gains) and backwardation losses associated with our Washington inventory and intermediation obligation, and purchase price allocation adjustments), the LIFO layer liquidation impacts
associated with our Washington inventory, RINs mark-to-market adjustments (which represents the income statement effect of reflecting our RINs liability on a net basis), unrealized loss (gain) on
derivatives, acquisition and integration costs, severance costs, loss (gain) on sale of assets, and impairment expense. Adjusted EBITDA by segment also includes Gain on curtailment of pension obligation
and Other income (expense), net, which are presented below operating income (loss) on our condensed consolidated statements of operations. Beginning with financial results reported for periods in
fiscal year 2022, the inventory valuation adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in Hawaii. Beginning
with financial results reported for the second quarter of 2022, the RINs mark-to-market adjustments were modified to include the mark-to-market losses (gains) associated with our net RINs liability. This
modification was made to better reflect our operating performance and to improve comparability between periods. Adjusted EBITDA by Segment has been recast for prior periods when reported to
conform to the modified presentation. Adjusted EBITDA by segment presented by other companies may not be comparable to our presentation as other companies may define these terms differently.
For the twelve months ended September 30, 2022, there was no gain on curtailment of pension obligation or LIFO liquidation adjustment.
22Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment Reconciliation (1)
For the twelve months ended December 31, 2021
($ in thousands)
Corporate and
Refining Logistics Retail Other
Operating income (loss) $ (88,799) $ 51,159 $ 81,249 $ (51,228)
Adjustments to operating income (loss):
Depreciation and amortization 58,258 22,044 10,880 3,059
Inventory valuation adjustment 31,841 — — —
RINs mark-to-market adjustments 66,350 — — —
Unrealized loss on derivatives 1,517 — — —
Acquisition and integration costs — — — 87
Severance costs 61 23 — —
Loss (gain) on sale of assets, net (19,659) (19) (45,034) 15
Impairment expense 1,838 — — —
Gain on curtailment of pension obligation 1,802 228 2 —
Other income/expense — — — (52)
Adjusted EBITDA $ 53,209 $ 73,435 $ 47,097 $ (48,119)
_____________________________________________
(1) Please read slide 22 for the definition of Adjusted EBITDA by segment used herein. Beginning in the third quarter of 2020, Adjusted EBITDA by
segment excludes the LIFO layer liquidation impacts associated with our Washington inventory. There was no LIFO liquidation adjustment for the
twelve months ended December 31, 2020. Beginning with financial results reported for periods in fiscal year 2022, the inventory valuation
adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in
Hawaii. Beginning with financial results reported for the second quarter of 2022, the RINs mark-to-market adjustments were modified to include
the mark-to-market losses (gains) associated with our net RINs liability. This modification was made to better reflect our operating performance
and to improve comparability between periods. Adjusted EBITDA by Segment has been recast for prior periods when reported to conform to the
modified presentation.
23Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment Reconciliation (1)
For the twelve months ended December 31, 2020
($ in thousands)
Corporate and
Refining Logistics Retail Other
Operating income (loss) $ (331,826) $ 35,044 $ 24,211 $ (45,427)
Adjustments to operating income (loss):
Depreciation and amortization 53,930 21,899 10,692 3,515
Inventory valuation adjustment 9,994 — — —
RINs mark-to-market adjustments 6,433 — — —
Unrealized loss on derivatives (4,804) — — —
Acquisition and integration costs — — — 614
Severance costs 312 8 — 192
Impairment expense 55,989 — 29,817 —
Other income/expense — — — 1,049
Adjusted EBITDA $ (209,972) $ 56,951 $ 64,720 $ (40,057)
_____________________________________________
(1) Please read slide 22 for the definition of Adjusted EBITDA by segment used herein. Beginning in the third quarter of 2020, Adjusted EBITDA by
segment excludes the LIFO layer liquidation impacts associated with our Washington inventory. There was no LIFO liquidation adjustment for the
twelve months ended December 31, 2020. Beginning with financial results reported for periods in fiscal year 2022, the inventory valuation
adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in
Hawaii. Beginning with financial results reported for the second quarter of 2022, the RINs mark-to-market adjustments were modified to include
the mark-to-market losses (gains) associated with our net RINs liability. This modification was made to better reflect our operating performance
and to improve comparability between periods. Adjusted EBITDA by Segment has been recast for prior periods when reported to conform to the
modified presentation. For the twelve months ended December 31, 2020, there was no gain on curtailment of post retirement medical plan
obligation.
24Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment Reconciliation (1)
For the twelve months ended December 31, 2019
($ in thousands)
Corporate and
Refining Logistics Retail Other
Operating income (loss) $ 93,781 $ 59,075 $ 49,245 $ (54,121)
Adjustments to operating income (loss):
Depreciation and amortization 55,832 17,017 10,035 3,237
Inventory valuation adjustment 19,436 — — —
RINs mark-to-market adjustments (1,992) — — —
Unrealized loss on derivatives 8,988 — — —
Acquisition and integration costs — — — 4,704
Other income/expense — — — 2,516
Adjusted EBITDA $ 176,045 $ 76,092 $ 59,280 $ (43,664)
_____________________________________________
(1) Please read slide 22 for the definition of Adjusted EBITDA by segment used herein. Beginning with financial results reported for periods in fiscal
year 2022, the inventory valuation adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our
titled manufactured inventory in Hawaii. Beginning with financial results reported for the second quarter of 2022, the RINs mark-to-market
adjustments were modified to include the mark-to-market losses (gains) associated with our net RINs liability. This modification was made to
better reflect our operating performance and to improve comparability between periods. Adjusted EBITDA by Segment has been recast for prior
periods when reported to conform to the modified presentation. For the twelve months ended December 31, 2019, there was no severance costs,
impairment expense, or gain on curtailment of post retirement medical plan obligation.
25Non-GAAP Financial Measures
Consolidated Adjusted EBITDA and Adjusted Net Income Reconciliation (1) For the trailing fourteen quarters ended Q3 2022
($ in thousands) Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022
Net income (loss) $ 28,169 $ (83,891) $ 35,439 $(222,337) $ (40,560) $ (14,271) $(131,918) $ (62,227) $(108,958) $ 81,802 $ 8,086 $(137,051) $ 149,125 $ 267,396
Adjustments to Net Income (loss):
Inventory valuation adjustment (23,568) 22,367 11,340 56,626 (30,238) (40,509) 24,115 23,086 29,657 2,784 (23,686) 80,653 (7,557) (91,135)
LIFO liquidation inventory adjustment — — — — — 6,211 (6,211) 1,888 2,263 (4,151) — — — —
RINs mark-to-market adjustments 2,075 (1,851) 1,486 3,932 5,030 (5,755) 3,226 76,902 54,158 (72,087) 7,377 11,302 78,548 (6,731)
Unrealized loss (gain) on derivatives 14,335 (15,154) 3,465 22,876 (22,431) (4,952) (297) (4,012) 1,404 10,228 (6,103) 15,452 (28,607) 3,004
Acquisition and integration costs 818 623 379 665 90 (155) 14 438 (352) 1 — 63 — —
Debt extinguishment and commitment
costs 3,690 — 2,401 — — — — 1,507 6,628 9 — — 5,672 (343)
Changes in valuation allowance and other
deferred tax items (2) (2,318) (2,751) 1,628 (18,373) (2,714) — 191 — — — — — — —
Change in value of common stock warrants 957 826 134 (4,270) — — — — — — — — — —
Change in value of contingent
consideration — — — — — — — — — — — — — —
Severance costs — — — 149 96 — 267 16 — 59 9 2,228 35 9
Gain on sale of assets, net — — — — — — — (64,912) 510 2 (297) — 15 (185)
Impairment expense — — — 67,922 — — 17,884 — — — 1,838 — — —
Impairments of Laramie Energy, LLC (3) — 81,515 1,637 45,294 — — — — — — — — — —
Par's share of Laramie Energy's unrealized
loss (gain) on derivatives (3) (3,859) 1,961 1,160 (1,110) — — — — — — — — — —
Adjusted Net Income (Loss) 20,299 3,645 59,069 (48,626) (90,727) (59,431) (92,729) (27,314) (14,690) 18,647 (12,776) (27,353) 197,231 172,015
Depreciation and amortization 21,919 22,227 21,018 21,283 22,128 22,821 23,804 22,880 23,548 23,618 24,195 23,780 25,583 25,125
Interest expense and financing costs, net 20,278 18,348 17,503 18,674 16,414 17,523 17,611 18,151 17,186 15,374 15,782 16,394 18,154 16,852
Equity losses from Laramie Energy, LLC,
excluding Par's share of unrealized loss
(gain) on derivatives and impairment losses 3,368 2,157 2,113 847 1,874 — — — — — — — — —
Income tax expense (benefit) 513 323 (2,315) 126 (2) 108 (56) — 607 586 (172) (437) 1,125 68
Adjusted EBITDA $ 66,377 $ 46,700 $ 97,388 $ (7,696) $ (50,313) $ (18,979) $ (51,370) $ 13,717 $ 26,651 $ 58,225 $ 27,029 $ 12,384 $ 242,093 $ 214,060
_____________________________________________
1. Please read slide 21 for more information on Adjusted Net Income (Loss) and Adjusted EBITDA used herein. Beginning in the third quarter of 2020, Adjusted EBITDA by segment excludes the LIFO layer liquidation impacts associated with our Washington inventory. Beginning
with financial results reported for periods in fiscal year 2022, the inventory valuation adjustment was modified to include the first-in, first-out (“FIFO”) inventory gains (losses) associated with our titled manufactured inventory in Hawaii. Beginning with financial results
reported for the second quarter of 2022, the RINs mark-to-market adjustments were modified to include the mark-to-market losses (gains) associated with our net RINs liability. This modification was made to better reflect our operating performance and to improve
comparability between periods. Adjusted EBITDA by Segment has been recast for prior periods when reported to conform to the modified presentation
2. 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. These tax expenses (benefits) are included in Income tax expense on
our condensed consolidated statements of operations.
3. Included in Equity losses from Laramie Energy, LLC on our condensed consolidated statements of operations.
26Non-GAAP Financial Measures
Diluted Adjusted Net Income per Share for the Twelve Months Ended
(in thousands, except per share amounts)
2019 2020 2021 Q3 2022
Adjusted Net Income (Loss) 99,122 (291,513) (36,133) $ 329,117
Undistributed Adjusted Net Income allocated to participating securities (1) 1,063 — — —
Adjusted Net Income (Loss) attributable to common stockholders 98,059 (291,513) (36,133) 329,117
Plus: effect of convertible securities 8,998 — — —
Numerator for diluted Adjusted Net Income (Loss) per common share $ 107,057 $ (291,513) $ (36,133) $ 329,117
Basic weighted-average common stock shares outstanding 50,352 53,295 58,268 59,501
Add dilutive effects of common stock equivalents (2) 5,240 — — 240
Diluted weighted-average common stock shares outstanding 55,592 53,295 58,268 59,741
Basic Adjusted Net Income (Loss) per common share $ 1.95 $ (5.47) $ (0.62) $ 5.53
Diluted Adjusted Net Income (Loss) per common share $ 1.93 $ (5.47) $ (0.62) $ 5.51
_____________________________________________
(1) Participating securities include restricted stock that has been issued but had not yet vested. These shares vested during the year ended December 31, 2019.
(2) Entities with a net loss from continuing operations are prohibited from including potential common shares in the computation of diluted per share amounts.
We have utilized the basic shares outstanding to calculate both basic and diluted Adjusted Net Loss per common share for the twelve months ended
December 31, 2020 and December 31, 2021.
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